JONATHAN CHAIT AUGUST 24, 2011
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In 2001, as the economy slowed, Republicans endorsed temporary payroll tax cuts in order to boost demand. And again in 2008, when the economy slowed, they endorsed payroll tax cuts to boost demand:
Giving temporary tax rebate checks to families, as important as that is, is not the same as economic growth,” said Representative Jeb Hensarling of Texas, chairman of the Republican Study Committee. “If you’re going to have an economic stimulus package, it ought to contain some economic stimulus.”
The current Republican position, when faced with far higher unemployment than in those previous situations, is to oppose temporary payroll tax cuts. Paul Ryan, the party's new economic thought leader, now argues that demand-side stimulus merely provides a "sugar high." That didn't stop him from voting for temporary payroll tax cuts in 2001 and 2008. He was okay with giving the candy bar to the mildly hungry fellow in 2001 and to the same, hungrier guy in 2008, but not to the same, now starving man today.
James Fallows sees boundless, unfathomable cynicism:
I had thought that Republican absolutism about taxes, while harmful to the country and out of sync with even the party's own Reaganesque past, at least had the zealot's virtue of consistency. Now we see that it can be set aside when it applies to poorer people, and when setting it aside would put maximum drag on the economy as a whole. So this means that its real guiding principle is... ??? You tell me.
I actually think there are two guiding principles here. One is that Republicans favor a more regressive tax code, and resent the middle- and low-income earners' lower tax rate than faced by the rich. Cutting taxes for the rich is always the party's highest priority. But a second principle is a desire to boost economic growth under Republican presidents. Republicans are willing to support demand-side stimulus if a fellow Republican occupies the White House, but doing the same thing under a Democratic president is merely to stimulate his reelection prospects.
I don't think that Republicans consciously think in these terms. As I've argued, I think that under a Democratic president, the long-term costs of short-term stimulus just suddenly appear to be far less worth it than they appear under a Republican president.
In any case, this does seem to be an incredibly powerful political message for Democrats, one they ought to highlight from now until the election in order to demonstrate the real nature of the GOP's position on taxes.
18 comments
Actually, the Republicans are challenging, daring, Obama to pick a fight over a payroll tax holiday. Of course, Obama has already signaled that he won't pick a fight over the payroll tax. Why? I suspect it's a sincere concern over social security funding. And it's also a concern over being charged with bankrupting social security. Here's what I'd do. I'd propose that all of the amounts borrowed from the social security trust fund be repaid. Now. That's $2.7 trillion. More than enough surplus to support a temporaty payroll tax holiday. Of course, the fight I want is whether the Republicans will block repayment of the amounts borrowed from the social security trust fund with income tax receipts. McConnell has signaled that he will. I'm ready for that fight. Now.
- rayward
August 24, 2011 at 5:19pm
Well I think they do consciously think in those terms.
- roidubouloi
August 24, 2011 at 5:30pm
Rayward, directly or indirectly, the only way the trust fund gets paid in cash is by selling the debt it holds. What's the point of that? What is it going to do with the cash? Why, buy Treasuries of course.
- roidubouloi
August 24, 2011 at 5:31pm
I once read a sentence about the English Reformation under Henry VIII to the effect that, "Viewed purely in its socio-economic terms, the Reformation was an uprising of the rich against the poor." I get that same feeling in reading the news about today's Republican Party. A nice electoral smack-down across the board would be in order, but alas we probably won't get that in 2012 under any circumstances.
- wildboy
August 24, 2011 at 5:31pm
I have to agree with Roi. I think the Republicans are quite consciously thinking in terms of partisanship and realpolitik.
- GSpinks
August 24, 2011 at 5:57pm
"I don't think that Republicans consciously think in these terms." Oh I do, I think Paul Ryan is an evil imp let loose from the darkest recesses of hell. Gov. Goodhair is explicitly railing against the poor "lucky duckies" I also think this is two sided, I think during the Iraq war I think some far leftists rooted for the insurgency. The difference is none of them were running the country. Chait far, far, far underestimates people's inherent nihilistic streak.
- blackton
August 24, 2011 at 5:57pm
I'm with roid on the consciously thinking in those terms idea. Jon may be wanting to avoid being considered spreading conspiracy when there's not enough proof. The drawback to taking that line is that Republicans would be hurting themselves too, by deliberately keeping the economy running poorly.
- jet
August 24, 2011 at 6:00pm
"I don't think that Republicans consciously think in these terms. As I've argued, I think that under a Democratic president, the long-term costs of short-term stimulus just suddenly appear to be far less worth it than they appear under a Republican president." I find it easy to believe that they justify it to themselves that way. But I find it hard to believe that they don't also know that it's just a hollow justification.
- ironyroad
August 24, 2011 at 6:08pm
I agree with Roi here as well. I don't know why JC keeps making the point the GOP is doing these things on an unconsciouss level, when they are quite explicit about it. When they let their id out, they feel quite truly that 98% of America is undertaxed. Stephen Moore has said that the bottom rates must go up to fund top rate cuts. Fraud boy Ryan's budget provides for tax hikes by closing tax expendiutres on poor and middle class and only cutting corporate and upper income rates. The John Galts of the world are living under horrible oppression. The real question is not do they really believe in stimulus or not. The only stimulus they believe in at all times is upper income marginal tax cuts and capital gains tax cuts. I mean ask fraud boy if it was a "sugar high" when he voted for the temp. 2 year extension of the Bush tax cuts.
- MikeB.
August 24, 2011 at 6:12pm
I agree with Roi here as well. I don't know why JC keeps making the point the GOP is doing these things on an unconsciouss level, when they are quite explicit about it. When they let their id out, they feel quite truly that 98% of America is undertaxed. Stephen Moore has said that the bottom rates must go up to fund top rate cuts. Fraud boy Ryan's budget provides for tax hikes by closing tax expendiutres on poor and middle class and only cutting corporate and upper income rates. The John Galts of the world are living under horrible oppression. The real question is not do they really believe in stimulus or not. The only stimulus they believe in at all times is upper income marginal tax cuts and capital gains tax cuts. I mean ask fraud boy if it was a "sugar high" when he voted for the temp. 2 year extension of the Bush tax cuts.
- MikeB.
August 24, 2011 at 6:12pm
Whether they do it consciously or not hardly matters. If you assume that GOP leaders are motivated by two things only--power for themselves and money for their rich patrons--you will seldom go wrong in predicting their actions. I don't care if they're consciously evil or just cosmically self-deluded and self-justifying. The result is the same either way, as is the imperative to get them the hell out of office.
- Dausuul
August 24, 2011 at 6:25pm
"I don't think that Republicans consciously think in these terms. " You don't think Mitch McConnell does? I bet lots do.
- RHSerlin
August 24, 2011 at 6:51pm
I can't fathom why Chait feels he has to be constantly pulling his punches with regard to Republican motivations. OF COURSE they "consciously think in these terms." They think in these terms all the time. Their every move is aimed at bringing Obama down and increasing the wealth of the top 2 percent, regardless of what harm they're causing to the middle class and the economy. The Republicans care absolutely nothing about the general welfare of the nation, only about the welfare of the rich and the corporate sector. I guess Chait, like most mainstream journalists, feels that he needs to show "balance" in his writing. The same sort of balance that we get from Fox News, Rush Limbaugh, et al.
- DAVIDDREIER@EARTHLINK.NET-old
August 24, 2011 at 7:13pm
I think the tax hypocrisy pales next to the balanced budget hypocrisy. For 6 years of pure Republican rule, they acted like "deficits don't matter." Of course, if you have that attitude long enough, the national debt will have to matter at the end, but who can be so stupid that they can't see that coming? Deficits only matter if it is not your political party that benefits from spending.
- Nusholtz
August 24, 2011 at 8:22pm
Just like Obama does, Jonathan Chait is always pulling his punches. In their mind, they are staying above the fray, I guess.
- scrubby
August 24, 2011 at 8:43pm
Nah - he's pulling our legs. I'm convinced JC's wide-eyed punch pulling is sarcasm.
- WandreyCer
August 25, 2011 at 8:33am
Doesn't sarcasm need a sharper tone and more direct expression so that it's obvious to all? Sarcasm can't be nuanced and ambiguous like irony, you know.
- ironyroad
August 25, 2011 at 10:28am
nice one :)
- GSpinks
August 25, 2011 at 2:26pm