After Joe Biden was elected, South Dakota Sen. John Thune said:
“The one thing that concerns me that nobody seems to be talking about anymore is the massive amount of debt that we continue to rack up as a nation and in fact, the president-elect has proposed a couple trillion dollars fiscal plan on top of that which we’ve already done. Nobody seems to care much about it.”
Wyoming Sen. Mike Enzi added:
“Our grandkids will find all their money has been spent, and all they can do is pay more taxes.”
Colorado Rep. Ken Buck contributed:
“[Public debt is] the greatest threat to our country right now. It is our national debt that will take us down.”
Right on cue, Republicans have started screaming again about the national debt.
Why “right on cue”?
Because this is a decade-old pattern that started with the election of Ronald Reagan in 1980 and has framed so-called “deficit hawks'” outrage over “wasteful government spending” ever since.
Here’s the thing, though.
It isn’t about “wasteful government spending.”
It never was.
It’s a con Republicans have been perpetrating on the American people since the 1970s when GOP strategist Jude Wanniski created his “Two Santa Clauses Theory,” what came to be known as “supply side economics.”
Here’s how it goes.
Wanniski noticed that since Franklin Roosevelt’s New Deal of the 1930s, the Democratic party has been the party of Santa Claus.
It strengthened unions, brought us Social Security, Medicare, Medicaid, the minimum wage, workplace health and safety regulations, public education, the GI Bill, infrastructure projects, environmental standards, civil rights, voting rights, and–at least until Reagan dropped the marginal tax rate down to 28 percent from 74 percent–high taxes on the wealthy.
That left the Republican party the “party of Scrooge.”
Progressive taxation?
“Corporations will leave!” they cry.
Environmental regulations?
“They stifle innovation!”
Raise the minimum wage?
“It will cost jobs!”
Middle-class tax breaks?
“People won’t work!”
Build an immigration pathway to citizenship?
“Democrats want ‘open borders’!”
A national healthcare system?
“We can’t afford it! It’s Socialism!”
Jeremiads abound.
So Wanniski proclaimed, “The only thing wrong with the U.S. economy is the failure of the Republican Party to play Santa Claus,” and proposed that when a Republican is in the White House, Republicans in Congress should hemorrhage money (mostly on the military and tax breaks to their billionaire donors) like it falls from the sky.
This way when a Democrat inevitably sits again in the Oval Office, the debt will be so high Democrats will be forced to “shoot Santa Claus”–or cut social safety nets that primarily benefit the poor and middle class.
We didn’t hear a peep about the debt the past four years, did we?
In 2017, Republicans passed into law the “Tax Cuts and Jobs Act,” a $1.5 trillion-dollar permanent tax cut to corporations and the wealthy.
Every Republican supported it.
Now that Joe Biden has proposed $1.9 trillion worth of new spending on direct payments to households, unemployment benefits, and a national COVID-19 vaccination program, we’re starting to hear repeated rumblings about how we “need to run the government like a household.”
Republicans have sold a large percentage of the population on the lie they are the fiscally responsible ones.
But the facts speak for themselves.
Under eight years of Ronald Reagan, the federal deficit grew from about $78.9 billion to $152.6 billion.
In the three years between 1983 and 1986, it was at some points actually more than $175 billion.
His successor, George H.W. Bush, in four years took us to $255 billion.
1992, his final year in office, it jumped to $290.3 billion.
Then came Democrat Bill Clinton, who zeroed out the deficit and left the next president a $128.2 billion surplus.
But that next president was another Republican, George W. Bush.
In his eight years, he managed to take us all the way from zero to $1.41 trillion.
Barack Obama, a Democrat, was next.
He left in 2017 with a deficit of about $584.6 billion–half of what Bush left him.
In 2015, it had actually fallen to $441.9 billion.
Donald Trump jacked it back up to a trillion by his second year in office.
Four months before leaving office, it was nearly $7 trillion.
Joe Biden’s $2 trillion rescue package to repair and rebuild the economy is indeed a lot of money.
So are the relief packages to assist Americans who have lost income during the pandemic.
So is his environmental policy.
So is his plan to provide health insurance for 97% of Americans within a decade.
So is the $1.3 trillion he proposes spending over ten years to improve our infrastructure.
But these are not no-strings-attached giveaways to the wealthy and corporations.
They’re investments in the fiscal and social foundations upon which the working class is built.
Unlike the wealthy who pocket their gains, or corporations who use their tax breaks to pay off their shareholders, the middle class and the poor spend every cent they earn, which cycles back into the economy.
One way Biden intends to accomplish his goals is through his “Buy American” policies to use subsidies, federal matching, and incentives to increase American products’ competitiveness.
Biden also intends to raise the top tax rate to 39.6%, the corporate tax rate to 28%, tax capital gains at ordinary rates, which will generate $4 trillion in tax revenue.
Clean energy jobs will reduce unemployment, which, of course, will put money in more Americans’ pockets while combating climate change.
So, will the debt rise under Biden?
Most definitely.
The difference is what we will do to decrease it once unemployment drops, the infrastructure improves, and we raise the minimum wage.
In 1956, Dwight Eisenhower, the last Republican president to actually invest in people instead of corporations, borrowed $25 billion to build the American Interstate Highway System.
We made back every penny of it, as John Fernald, Federal Reserve Bank of Chicago senior economist attests:
“Building an Interstate system that tied the economy together turned out to be extraordinarily productive. Highways complemented the flexibility of the internal combustion engine, so that firms found it much easier to do business away from train lines or natural ports.”
When Republicans belly-ache over the debt, what they’re really saying is, “We don’t want to spend a dime on those people“–namely, the poor or minorities.
It’s a dog whistle, like “states’ rights.”
Interestingly, though, Republicans seldom, if ever, voice the same outrage whenever we feel the need to increase the military budget, print money to provide $2 trillion in economic relief to keep corporations afloat, dole out perpetual subsidies to the world’s most profitable corporations, or permanently cut taxes on those same corporations and their overlords to the tune of $1.5 trillion.
Image credit: Progressive Charlestown
