“Today the debt is $934 billion, and now I’ve been forced to ask for another increase in the debt ceiling…Before we reach the day when we can reduce the debt ceiling, we may in spite of our best efforts see a national debt in excess of a trillion dollars. Now, this is a figure that’s literally beyond our comprehension. …It’s time to recognize that we’ve come to a turning point. We’re threatened with an economic calamity of tremendous proportions... Together, we must chart a different course…I shall ask for a 10-percent reduction across the board in personal income tax rates for each of the next 3 years.”
--Ronald Reagan, February 5, 1981
It took 200 years for the national debt to reach $1 trillion by 1981. The debt quadrupled to $4 trillion in the next 12 years under Reagan and Bush Sr. Under Bush Jr. we added another $5 trillion to the national debt. That's a total of $9 trillion of debt added by GOP presidents. How did this happen? They cut taxes substantially, with most of the benefit going to the wealthiest Americans, and they paid for the tax cuts by borrowing.
If you read the above quote from Reagan you may detect the flaw in his rationale for cutting taxes by 30% over 3 years. He believed that huge tax cuts would reduce the debt. That is equivalent to claiming that the best way to save money is by reducing one's income. Unfortunately, gullible Americans applauded the new mathematics developed by the GOP. That is because everyone likes tax cuts, and most people could care less about the national debt. It has been the key to GOP electoral politics since Reagan and that is why he has been elevated to sainthood.
After the 2008 elections when the democrats took over government, the GOP went back to its "old fashioned religion" that it uses when they are out of office. They accuse democrats of being tax and spend liberals and they blame democratic spending for producing our national debt. You may have guessed what their solution is today for reducing the national debt. You guessed it. They insist upon extending the Bush tax cuts which will add $4 trillion to the national debt by the end of the decade since they have no intention of ending them after they take office in 2012. Of course, this will make our debt problem even worse, but they will use the debt problem to their advantage. They will continue their attack on social security, and government funded healthcare, by telling us we can't afford to continue government spending on social problems during a debt emergency. Of course, raising taxes is against their religion unless the taxes are raised on the middle class. That is exactly what they did under Reagan when social security taxes were increased. This is a very regressive tax because only the first $105,000 of income is taxed. That means that the tax rate is lower for those with incomes above the $105,000 cap. Moreover, the tax only applies to wages. It does not apply to capital gains or to dividend income.
Visitors from another planet might wonder how such an illogical political strategy can be sold to the middle class. The answer is that every nation has its myths. Moreover, for the first time in US history a political party has its own news organizations that have effectively linked GOP strategy to several of the myths. In the meantime, their opponents are struggling because they do not know how to effectively counter the propaganda without being accused of questioning the mythology.
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