Wednesday, January 26, 2011

Republicans Economic Policy: Take from the poor and middle class and give to the rich

The Republican party has been waging class warfare since Reagan and they have been so effective that they have all but destroyed America's middle class. Here are two important Republican code phrases everyone should understand:

Cut Spending -- When Republicans talk about cutting spending they're not talking about that welfare program for corporations and the rich called the Defense Budget. They're not talking about ending the military adventures overseas. They're not talking about cutting subsidies for huge agribusiness like ethanol. And they're not talking about the hugely expensive and failed War on Drugs that has left America with dubious distinction of having the highest incarceration rate in the entire world.

No, they're only talking about cutting "entitlements."  Republicans would steal from the middle class by taking money they've spent their working lives paying for through payroll deductions for Social Security and Medicare.

Actually the money has already been stolen. Republicans and Democrats have spent the money that was put aside to pay for the Baby Boomers' retirement. That money was supposed to be held in a trust fund, but both parties raided the trust fund to cover short-term budget shortfalls because they couldn't be honest about budget deficits. But only Republicans are now proposing to resolve this problem by cutting benefits that mean the difference between poverty and security for the middle class in retirement.

Tax breaks are good for the economy -- Tax breaks add a huge additional debt burden, but that kind of debt is OK by Republicans because they have fought for and won tax cuts that are heavily weighted towards the wealthy.

Republicans claimed that extending the tax cuts would be a good way to stimulate the economy but that's simply not true. Most of the tax cuts go to high-income households, and they don't spend as much of their income as the middle class and the poor. The government could more effectively stimulate the economy by only cutting taxes for the middle and lower classes and using the money for aid to the states, extensions of unemployment insurance benefits and tax credits favoring job creation. Dollar for dollar, each of these measures would have about three times the impact on GDP as continuing the Bush tax cuts.

Republicans want to eliminate Social Security and Medicare

Phase one was to "starve the beast" by cutting taxes while at the same time spending so much money that budget deficits and the interest on the debt cause a crisis that cannot be ignored.  That has already been accomplished.

Phase two is to propose massive cuts in Social Security and privatization. The amount of guaranteed retirement income would be reduced to a pittance, and folks would have to invest in the stock market and accept the risks involved. This would be a great boon for Wall Street speculators as they fleece millions of unsophisticated investors out of their retirement money.

Republicans are also now proposing vouchers for Medicare so that people could supposedly buy health insurance on their own. Another "free market" solution by Republicans that sounds promising till one examines the details. The vouchers would start out being totally inadequate, and according to the schedule proposed by Republicans, the value of Medicare vouchers would eventually dwindle down to almost nothing.   

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