Monday, April 24, 2017
Voodoo Economics Never Dies In The Republican Party
Donald Trump is not really a Republican. He has no fixed ideas about anything. He will support any idea as long as he can declare victory. However, he won the election as a Republican. He has a Republican congress and he is surrounded by Republicans in the White House. Consequently, his policies are based upon an economic idea that George H. Bush called voodoo economics. Some call it zombie economics because, just like a zombie, it never dies. It doesn't die because the Republican Party has two contradictory goals. It wants to cut taxes for its super rich donors but it also tries to sell itself as the fiscally conservative party. That means that it cannot run large federal budget deficits. Consequently, it argues it can reduce federal tax revenues and still pay the bills without borrowing money. It can do this because the tax cuts will stimulate the economy and actually increase federal tax revenues. The problem with this idea is that it has never worked in the past. Its a zombie idea because it continues to live in the Republican Party. Trump's treasury secretary just invoked voodoo economics to defend his tax plan. He can cut taxes for the super rich without increasing the federal budget deficit. Trump, of course, doesn't understand any of this. He just wants to cut taxes and make everyone happy. Moreover, Trump's business model is based upon carrying large amounts of debt. Real estate developers call that leverage. He could care less about federal budget deficits.