Political Animal

Blog

June 11, 2011 11:15 AM Failing to learn the right lessons

By Steve Benen

It seems hard to believe but, just a decade ago, the deficit didn’t exist and there were surpluses as far as the eye could see. The United States was on track to eliminate the national debt altogether by 2010, making the country debt free for the first time in nearly two centuries.

Then 2001 happened. In fact, a year ago this week, George W. Bush’s tax policy became law, and to honor the occasion, Slate’s Annie Lowrey tried to “find something redeeming” to say about them. Alas, she came up empty, concluding that they’ve “been a failure in every conceivable way.”

Ten years ago this week, the policy’s conservative champions made bold predictions about what the tax cuts would do — massive job growth, vast new wealth, higher incomes, smaller government, and balanced budgets. None of these predictions proved to be even remotely true.

The fine folks at the Center on Budget and Policy Priorities put together several worthwhile charts this week to mark the 10th anniversary of this tragic mistake, but this one’s my favorite.

But the spectacular failure of the policy is really only part of the story. Indeed, to a certain extent, looking back at recent history only helps provide a salient foundation for the more important problem: the fact that we haven’t learned anything from the mistake.

Well, perhaps “we” is the wrong word. Some of us have learned quite a bit. But in the Republican Party, we have lawmakers who continue to insist that their votes in support of this monstrosity were fully justified. They won’t apologize, they have no regrets, and they’d rather cause a deliberate recession than any allow a single penny of tax increases to be imposed on anyone.

And on the presidential campaign trail, it’s arguably even worse. Tim Pawlenty is pushing a tax-cut plan that’s triple the size of Bush’s tax-cut package, convinced that it will — you guessed it — generate massive job growth, vast new wealth, higher incomes, smaller government, and balanced budgets.

Worse, in the process, Pawlenty is setting a bar and challenging his presidential rivals to follow him. He wants $11.6 trillion in tax cuts — will other candidates match that? Surpass it? The race is on to see which Republican presidential candidate can be the most ridiculously irresponsible, and the competition will no doubt be fierce.

We are, in other words, talking about a party that tried an ambitious and radical experiment, saw it fail, and decided what’s needed now is significantly more failure.

I mind that Republicans got this wrong and we’ll be dealing with the consequences for many years to come, but I really mind that Republicans think they were right. As Ezra noted the other day, the party not only “hasn’t learned anything from the failure of the Bush tax cuts,” it’s actually managed to “unlearn some things, too.”

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

Post a comment
  • mtboy on June 11, 2011 11:29 AM:

    The real question is: What have the voters learned from the Bush tax cuts? I'm not optimistic.

  • c u n d gulag on June 11, 2011 11:33 AM:

    More tax cuts?

    NO!!!

    Uhm, I mean, no thank you.

    We've got sooooo many jobs, and soooo much money in our pockets, I mean, ha-ha, what would we do with more? It's overkill.

    So, no, thank you...
    Hey, wait!
    I've got an idea!!!
    Why don't to move to another country?
    I'm sure there's another country out there that'd be happy to have a politician just like you.
    Make sure to pick a rich one, so you can steal, ehr, uhm, get more money.
    Oh, and make sure it's not one with a death penalty for economic crimes.
    I hear China doesn't, so how about you move there?

  • majun on June 11, 2011 11:38 AM:

    ...massive job growth, vast new wealth, higher incomes, smaller government, and balanced budgets. None of these predictions proved to be even remotely true.

    That's not entirely correct. The "vast new wealth" part is very true, for the intended beneficiaries that is. And they haven't given up on the "smaller government" promise yet either. Actually that was the whole point of the exercise from day one, if you ask me. Grover Norquist wants smaller, much smaller, government, at all costs, so he can install an unelected corporate oligarchy to rule us. All that stuff abotu massive job growth, higher incomes and balanced budgets, just soft soap to close the deal with a bunch of useful idiots.

  • Gandalf on June 11, 2011 11:50 AM:

    majun I beleive you hit the nail right on the head. the whole outcome would be like the Simpsons episode where the scene is in the future and Mr Burns is riding a wagon brandishing a whip at the team of Homers pulling the wagon.
    Besides that Mr economic expert Tpaw left the state of Minn a 5 billion dollar deficit to deal with.

    IT SEEMS POLITICAL ANIMAL WON'T LEARN THAT IT'S READERS HATE CAPTCHA!!

  • James Lee on June 11, 2011 11:53 AM:

    Not just in the Republican Party but the Democratic Pary too. Judging by Nancy Pelosi's responses on Face the Nation this past Sunday, any message or any mention of raising taxes, even on the very rich, is still seen as political taboo in the conventional, Beltway wisdom. She could have easily hammered Haley Barbour for refusing to raise taxes and for protecting the wealthy (remember the Koch Brothers anybody?). I think that could be a winning message for the Democrats. Instead, all we are hearing from the Democrats and Administration is more talk of deficit cutting, belief in the confidence fairy, and more adoption of absurd Republican talking points.

  • Davis X. Machina on June 11, 2011 12:02 PM:

    We are, in other words, talking about a party that tried an ambitious and radical experiment, saw it fail, and decided what’s needed now is significantly more failure.

    The experiment didn't fail. It can't fail. The logic is impeccable. As tax rates asymptotically approach zero, job growth, new wealth, and incomes will all approach infinity.

    Tax rates just weren't cut enough.

    I find your lack of faith disturbing.

  • m2 on June 11, 2011 12:19 PM:

    the Bush W tax cuts succeeded. This is what they do.
    They put them in for 10 years intentionally. Fucking Duh.
    That they forced wages down and household debt up? Fucking Fucking Duh.

  • bleh on June 11, 2011 12:27 PM:

    I agree with several comments upthread -- they didn't "fail" and they didn't get it "wrong." They accomplished exactly what they intended to do, and what their constituents wanted them to do: transfer wealth upward.

    When you transfer wealth upward, those on the downward side lose it. They lose jobs, they lose purchasing power, they lose health care, they lose their homes. That's part of the equation.

    I'll say this slowly. The Republicans Do. Not. Care.

    Why do the discussions here continue, at least implicitly, to suppose that they do care? It's like climate-change denial. It's a false belief, held against all relevant evidence.

  • JW on June 11, 2011 1:20 PM:

    In other words, despite the ruin they've wreaked, the GOP is resolved to rule.

    I think you have a point.

  • max on June 11, 2011 1:23 PM:

    In the end the next election is about turnout to cancel out the low informaton voters, i.e., the useful idiots for those pushing these failed economic ideas. The Economics community in academia has moved on from the disastrous Chicago School ideas of the late 1970s. Even Allan Greenspan is advocating tax increases.

  • phillygirl on June 11, 2011 1:29 PM:

    Only echoing what others here have said, but for our congresscritters and party organizations there is no such thing as a policy failure. There is only failure to achieve goals --- in the Repubs' case, Grover Norquist's goals --- and power. To my eyes, the Repubs succeeded spectacularly. Heavens, they've even gotten Barack Obama to advance Grover Norquist's goals. They are, in the meantime, advancing their own electoral goals by crippling the economy. Am I missing something?

  • rob on June 11, 2011 1:36 PM:

    So the question is "Do Republicans care that their 'sacred' right wing ecnomic policies have destroyed the middle class and greatly expanded national debt thus weakening the Federal government?"

    Really, the question is did those dominating Republican policy decisions cause this severe damage intentionally or was it stupenous negligence?

    Well the evidence-their denial of any harm done despite overwhelming contrary evidence and their dogged intention to do more of the same or worse-clearly indicates intentionality.

    Why? Obviously because the destruction of the middle class and weakening of the Federal government and all government indirectly serves the interests of the oligarchial class - the 'monied interests'- the right wing Republican party actually serves, which of course have largely done well. We have witnessed over the last 30 years a slow moving but successful right wing coup that has moved the center of actual power decidely to the right. The people are just as moderate as they were 30 years ago, but the people have less effective voice in their government today than they had 30 years ago.

  • marty on June 11, 2011 1:37 PM:

    And in addition to the spectacular failure of the tax cuts, don't forget the massive deceit in how they were potrayed. Does anyone else remember how, when it started to be pointed out how skewed to the rich the cuts were, the Bushies instantly started to refer the package as a "jobs and growth" package. I can remember many an Administration lackey admonishing reporters not to refer to the "tax cuts" - it was a "jobs and growth" package...

    How ANYONE puts an oounce of faith in these lying frauds is beyond belief!

  • dj spellchecka on June 11, 2011 1:39 PM:

    in "bailout nation" barry ritholtz wrote that 43% of the job creation during the expansion was related to the housing construction and financing boom. in addition,he noted that if you take the part of gdp growth that was made possible by rising house prices and owners using their increasing home values as an atm, the entire period's gdp increase was under 2% ....

    two other things about the "expansion"....gdp went up as wages went flat and the number of people living below the poverty line grew

  • LRM on June 11, 2011 1:58 PM:

    I heard one of the new Tea Party congressmen on MSNBC yesterday. He was asked if he would extend the Bush tax cuts. A resounding YES!.....and he would make the cuts larger.....then he went into the usual jobgrowthmorerevenueblahblah. We MUST get these people out of power.

  • jjm on June 11, 2011 2:00 PM:

    Whatever expansion there was under Bush was almost entirely fueled with PRIVATE PEOPLE taking on huge debts on the assumption that their equity was both there to begin with and would continue to grow.

    The only real growth was in the financial sector, raking in the interest.

    The GOP approach to the economy is always based on YOU taking on way too much debt: after all, since the GOP is allergic to giving people living wages, how else can people actually live (you know, eat, put a roof over their head, see the doctor when necessary, etc.) unless they borrow for their day to day expenses?

    It is a fantasy world that benefits no one but the rentiers, as Krugman recently pointed out, and is a house of cards for those who absolutely must borrow now, day to day, to live (you know, eat, put a roof over their head, see the doctor when necessary).

    And the GOP seems ready to fight to the death any proposal that might allow people to pay their debts down, not take on more unnecessary and risky loans, and allow people to work at decent wages so they don't need financing.

    The fact that the GOP wants to default on the country's borrowing is even more troubling, because it means they are REALLY WORKING FOR THE LENDERS. Even a technical one day default in the 1960's (accidental) raised interest rates to the US by quite a bit for years. (They certainly aren't putting country first, are they?)

  • Grumpy on June 11, 2011 2:09 PM:

    ...the more important problem: the fact that we haven’t learned anything from the mistake.

    Agreed. It's easy in retrospect to point out how wrong the predictions of 2001 turned out to be (though the predictions were pretty flimsy at-the-time-spect, too). But I wouldn't hold a failed prediction against anyone if, after the prediction comes up short, the mistake leads to more accurate predictions. The real sin comes from denying the mistake entirely.

  • Eric on June 11, 2011 2:15 PM:

    G W Bush once said that the "haves and the have-mores" were his base. From that - elite - point of view, I don't think this policy is seen as a failure. It has served their interests. From their perspective, so what if it harms everyone else?

  • nemisten on June 11, 2011 2:31 PM:

    Ditto what bleh and others say: it was a HUGE SUCCESS for the uber-rich for whom the GOP serves. Steve, you're surprised they want to double-down? C'mon.

    The failure was -- and is -- in a spineless 'opposition' party that can't or won't stand up to these lying, hypocritical scumbags.

    Steve, I applaud you for calling attention to this issue, but am frankly disappointed if you truly believe "they haven't learned anything."

  • Jon on June 11, 2011 2:37 PM:

    I have to agree with the 1st comment from mtboy; the GOP will do what it can get away with, the fault here lies with the voters. There couldn't be a clearer case for which party is economically responsible and which is not, but the voters consistently fall for the same bait and switch.

    We have met the enemy, and he is us. We need to revise the famous quote to, "you can fool most of the people most of the time."

  • Mr Serf Man on June 11, 2011 3:03 PM:

    From the threads above Stupid or Evil

    About Faux Nooze ...but applies just the same

    A Daily Show Classic
    http://tpmlivewire.talkingpointsmemo.com/2010/08/the-daily-show-debates-is-fox-news-evil-or-stupid-video.php

    I really need to laugh because these evil KochSuckers are no joke.

  • JW on June 11, 2011 3:14 PM:

    Let me pile on.

    If (and that's a big "if") Greenspan was as credulous as he professed to be when the economy tanked in 2008, you are equally so.

    That is, if you credit the GOP with concern for the general welfare of the American people, i.e., of possessing a sense of patriotism. Even a misguided sense. It doesn't.

  • Mike on June 11, 2011 3:15 PM:

    Since the POTUS does not make law, it was the Democratic controlled congress that is to blame for the current state of the nation. It has only taken the DCC 4 years to drive the nation into the poor house. I am one of the lucky ones. Under Bush I was able to take my family from "entitlement" (unemployed, welfare, etc) to being a home owning non-union white collar worker. After the first 2 years of this administration I find myself wondering if I will be able to continue my family's present lifestyle.

  • ameshall on June 11, 2011 3:15 PM:

    Actually, Steve, from the perspective of the GOP, these tax cuts were a smashing success. The Bush tax cuts created an enormous deficit, which allows the GOP to argue that any government spending, especially by a Democratic president, is reckless. Cutting taxes further only makes the deficit worse, allowing them to fulfill their lifelong dream of dismantling the social safety net of Medicare, Medicaid, and Social Security. They will argue, as they do now, that we just "can't afford it."

    Democrats have to stop thinking that somewhere buried deep inside their souls, Republicans care whether the poor and disabled have their basic needs met, or the elderly obtain medical coverage. They do not care, and nothing would please them more than to adopt third-world social policies that can best be summed up as "I'm OK, you're screwed."

  • Goldilocks on June 11, 2011 3:38 PM:

    So, if their strategy succeeds - which requires winning at elections - the end result will be a microscopic proportion of the population languishing in ridiculously wealth, while living in a country of paupers, which latter won't eventually be able to live at all. It's a very strange scenario.

  • Sam Simple on June 11, 2011 4:15 PM:

    It is really difficult to feel good about or optimistic in a country where delusion is considered "conservative" and recklessness is considered "patriotic".

  • David Martin on June 11, 2011 6:20 PM:

    Osama bin Laden wanted to bankrupt the United States. He largely succeeded.

  • Ken Doran on June 11, 2011 7:30 PM:

    You are remembering more hype than reality about "just a decade ago." The talk of paying off the national debt looked severely overblown to those who looked closely at the facts, such as scholars Alan Auerbach and William Gale; http://elsa.berkeley.edu/~auerbach/ftp/ag-3d.pdf Remember, they were writing this in blissful ignorance of the Bush tax cuts and Bush wars. I probably would never have known about it, except that I was even then following Paul Krugman, pre-NYT. It was then as now one of the smarter things I do.

  • gary middleton on June 11, 2011 7:50 PM:

    Agree with Ken. The biggest thing being ignored here is that we had a stock market bubble. That is why we had surpluses. The bubble burst, as they all do. Then we went back to deficits.

    Yeah, the war and the tax cuts weren't bright, but this is a really lazy column.

  • pea on June 11, 2011 8:00 PM:

    Ok, we "get" it. Now are we all doing anything to change this US-becomes-a-central-American-country scenario? Steve, how about giving some discussion and visibility to various good efforts to make the next election go our way? Eg, where can we start helping likely new Dem voters (the elderly, the students, minorities) register NOW, bc we KNOW the Repugs are putting lots of hurdles in place and there won't be time to fix the problem if we don't start soon. Who is trying to find and counter possible hacking of election computers or other local sources of fraud, and how can we help? Since the Repugs are always accusing Dems of voter fraud, it really means THEY are doing it. Is anyone tracking likely operatives like Rove et al or the uberwealthy Kochs etc to figure out what dastardly new machinations they are readying? Can you educate us about which Dem-oriented organizations and candidates are worth donating to (i.e. they will strongly support the little guy instead of following the current "go along, don't rock the boat" path) and which are really a sham (a service like those orgs that rate charities on what % of our donations really go to the stated purpose). We really need to harness our knowledge, indignation/fear, and energy to DO things that might have a hope of making a difference. We do have numbers on our side, but we have to organize and not wander off muttering in all directions. People like you, Bernie Sanders, and Krugman are great at calling it what it is. And we need that to continue. But we also need some leaders or organization(s) to help organize our efforts so they are truly effective and we don't just elect the same ole do-nothing type of Dems again. So Steve, please help people not just see the light but think about what to DO about it. Thanks!

  • John L. on June 11, 2011 8:28 PM:

    The problem isn't the Republicans in Congress – it's the fools who elected them.

    Until the voters wise up, come to understand the situation (if they can), and begin to vote in their own interests, we'll have a continuing disaster on The Hill.

    There is no chance of reprogramming the members of Congress. Our only hope is to reach those who elected them.

  • Glidwrith on June 11, 2011 10:36 PM:

    @pea: For what it's worth, Blue America and ActBlue are very actively engaging in finding people that will fight for us and they live on grassroots donations. They've succeeded more than once in getting their candidate, rather than the establishment DCCC's pick, into office. The Bradblog also follows all kinds of election fraud. ACORN is also not dead - it was and is a truly grassroots organization; they've got 18 chapters under different names throughout the states.

  • Big River Bandido on June 12, 2011 7:33 AM:

    If a foreign foe called for an event that would harm the United States, Democrats and Republicans together would be outraged and would resolve to destroy the menace.

    Republicans are out to destroy America. What will the Democrats do?

  • Anonymous on June 12, 2011 7:49 AM:

    Not stupid, but -- at least if they're middle- or working-class -- ignorant.

    Ignorant of where the money went during the Bush era (over 100% of GDP growth went to the wealthy, ie, everyone else ended up with less than they started with, even during a time of general growth). Ignorant of how Republicans run government when they're really in charge (think of the 1809s through 1920s, when the working class lived in Dickensian conditions while the government employed armed force to support corporations). Ignorant of the benefits middle- and working-class citizens receive every day thanks to the government (you think the free market is going to give you nice roads, clean water, healthy food, safe drugs, clear air, basic scientific research, and perhaps most importantly, basic medical and financial security for your parents or grandparents, or for you when you get old?).

    Many of the resentful middle and working class -- who think government takes their money and gives it to the undeserving (who somehow never seem to look like them but rather are typically of a different race or color) -- are simply ignorant of how bad things really would be for themselves if it weren't for the historical achievements of government, and of the Democrats and their allies in particular.

    Read some economics. Read some history.

  • TW on June 12, 2011 1:35 PM:

    I agree the tax cuts were a costly faiure & would further argue they weren't even truly tac cuts (because they've been debt-financed, they're really just a loan - and the tea party alarmism about 'the debt' is just thr easily forseeable next act of enzuring that those who've benefitted most from the loan won't have to help repay it).

    But the argument about failing to learn from policies that didn't work will surely be turned against liberals who favored more stimulus, right? Is it so self-evident that when something has been tried & not worked as well as hoped, then it must've been a fundamentally wrong idea? The case against the tax cuts needs to be made on a different basis than this.

  • Doug on June 12, 2011 8:18 PM:

    Aimee @ 7:12 and 7:15 AM
    I would suggest you study some economic history before attempting any more economic-related posts. It has been correlated that, depending on how they are structured, increasing taxes does NOT hurt an economy and can, in fact, actually help an economy to grow.
    Regarding your actual posts, however, I offer the following:
    30-40% of the current deficit is due to GWB's tax cuts, you know, the ones for which the Republicans threatened to shut down the government last winter? Another 20-30% of the deficit is due to the wars in Iraq and Afghanistan which, by the way, were the FIRST occurrences ever for this country where NO taxes were increased to pay for military operations. Yet another gift from the Republicans.
    The remainder of the deficit is caused by two things: the money spent to bail out Wall Street and prevent a complete economic collapse and the decrease in revenues that happens any time there's a recession.
    Nor is the deficit the same as your being overdrawn. The former is due to Republicans' refusal to raise taxes, while the latter is sheer irresponsibility on your part. While cuts have already been made to the budget, they haven't, and won't, be enough to close the gap which means the deficit now needs to be attacked from the revenue side; ie, increased taxes.
    Returning tax levels to those under President Clinton would cut the deficit by nearly 50%. Spending on Iraq is declining as we depart. The costs of maintaining troops in Afghanistan will continue for another 2-3 years. I think a "war tax" surcharge of 10% on all yearly incomes over $1 million, something that should have been done by GWB, is appropriate.
    Your 7:15 post is particularly incoherent (your careless use of pronouns makes it especially hard to understand), but this is what I got from it:
    You consider any taxes to be theft, "take other people's money, and give it to them(the government, I presume)". You believe that any money going to the government is wasted, "How can people not see that this is not in their economic interests?" I think the next two sentences are supposed to be bitingly sarcastic, but they come across as just more hyperbole. However, you did nail it with your last sentence concerning the intelligence of Republican voters.
    Overall, you get an "F" for being arch and another "F" for failing Economics...

  • Groucho on June 13, 2011 1:28 PM:

    Don't know who said it first:

    "There are only two kinds of Republicans - millionaires and suckers."

  • goterpsgo on June 15, 2011 4:28 PM:

    Who is this Grover Norquist? Is he on Fock Snooze?

    Did anyone vote for him? No? Then he should go f*** himself.

  •  
  •  
  •