Re: First real test of "Starve the Beast"
- From: mg <mgkelson@xxxxxxxxx>
- Date: Wed, 19 Aug 2009 08:39:10 -0700 (PDT)
On Aug 19, 9:14 am, Islander <nos...@xxxxxxxxxxx> wrote:
The "Starving the Beast" economic theory which emerged during the Reagan
administration sought to limit government by cutting taxes. Bush 43
described it as a fiscal straitjacket for Congress.
Until now, it failed simply because it was much easier to spend money to
meet current needs, incurring debt and postponing payment rather than
increase taxes to pay the inevitable bills. The Reagan and Bush 43 tax
cuts only succeeded in the most massive increases in debt since WWII, $12T.
Now, the current debate over health care seems crippled by a version of
the "Starve the Beast" argument. Even some Democrats cite the fear of
incurring additional debt and Obama insists that it be fiscally neutral.
Have we reached the point where a significant social program, one badly
needed for our future economic health, is in danger of being defeated
because the Republicans have finally built up enough debt that America
is afraid of implementing any new social program, no matter how
important? Is "Starving the Beast" finally working?
The solution is simple, but requires some courage in the midst of our
ruined economy. Return to a pre-Reagan progressive tax policy. For 20
years following WWII we had a dramatically improving economic situation
despite paying off much of the WWII debt, our industries flourished
despite powerful labor unions, our exports exceeded imports, our middle
class prospered, AND the top marginal tax rate was 90%! We even rebuilt
much of the rest of the war-torn world with the Marshal Plan.
Our current administration could take a lesson from Truman who put in
place many of the policies that gave us two decades of prosperity.
Truman stressed a government that served the people saying, "Every
segment of our population and every individual has the right to expect
from our government a fair deal." Truman too, had to fight the
Republicans and many of his programs had to wait until his reelection in
1948, but "Give em Hell Harry" persevered and we prospered.
Reaganomics and Starve the Beast have been thoroughly discredited. The
only way out of the mess the Republicans left us with is large tax
increases for the wealthy and tax cuts for the Middle Class.
.
- References:
- First real test of "Starve the Beast"
- From: Islander
- First real test of "Starve the Beast"
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