Short answer, yours. Long answer, Reaganomics professed that by decreasing taxes, the economy would be stimulated to grow faster and create a larger revenue base for taxation to draw upon. So Reagan lowers taxes for some of the people and actually raises taxes for the poor working classes and the vaunted burgeoning economic growth that would offset the tax decreases never happened. A huge spurt in government indebtedness happened overnight because we were forced to borrow to operate the government.

Under Bush, it is Reaganomics all over again. A problem you say?

Not if you are a Republican. It turns out that both of these guys have subscribed, whether they ever admitted it or not they have acted as if they did, to the idea that bankrupting government will justify sweeping cuts in government programs up to and including public education, Social Security and Medicare. To what end? To line the pockets of the wealthy, by stripping away the social and economic reforms of the Progressive era.

This may be a stretch for many, but a similar rationale is behind the most destructive mergers and acquisitions. In the certain knowledge that no one could figure it out, T. Boone Pickens launched his corporate raiding career in the 1980s. His private joke and secret code was that he was “good for American business because the potential for takeovers made management more efficient”. The joke is that when you take over a company in a Leveraged Buyout (LBO) that you borrow money against its assets and future earnings to do so, and that the object company is left with heavy crushing debt. Often, they cease to operate after a few years. According to Booz Allen Hamilton, a management consulting firm, two thirds of all mergers fail. So the lesson to management is that to keep a raider from taking the assets you have worked hard to build, you should keep no liquidity and borrow your company into ruin. Because, if you don’t Pickens will.

The parallel is this, a corporate Raider comes to buy your country. The object of his affection is the assets of the government, specifically, the Social Security trust fund, the revenue streams of Medicare/Medicaid and public schools. To his eye, these are simply sources of money that can be taken, just like the assets of a corporation. To get at them, in a maneuver as shrewd as the LBO, he simply arranges to lower his own taxes. Done deal. Now government is insolvent and must thrash away at these systems to stay afloat. Once they have been dismantled, the Raider’s reward is assured.

Continued…Has lowering taxes ever stimulated the economy?

Educate the public as to the antithetical nature of the relationship between business and the public. Confusing the issue with platitudes and rationales serves no purpose other than to deflect an otherwise substantive discourse on the subject of wages and profits. Everyone can or should know that labor does not do as well without investment and the reciprocal. For some reason, the powers that be, call it egocentrism, believe that the people are too stupid to appreciate their point of view. On the other hand, if their point of view is that they can get away with more if they keep you stupid then they should not be in charge of any ventures of consequence to the public. The people that you should be most suspicious of are, as always, those that will not disclose what they intend to do.

Curtail military spending and get out of Iraq and Afghanistan. As Iraq has driven home to yet another generation, war is much more expensive and tricky than goodwill and diplomacy. Failing diplomacy, war will always be necessary. It is never to be undertaken with any assumptions other than the worst case for the outcome. The worst case for getting out is a lot better scenario than staying. See Why is our foreign policy failing?

Roll back the Bush tax cuts. We have a progressive tax structure for a reason. Somewhere, lost in the mediocrity of the evening news is the explanation for why it its progressive, the rich pay more than the poor. The most cited rationale is that they are the most able to afford it. Does not seem quite fair, and that is why it is most often cited. The original and real reason taxes are progressive is that the rich benefit more than any others from the existence of government. On the face of it, if there were no government to enforce law, the rich would have to employ their own armies to protect their wealth. Glance at the environment that is provided by government and you see a transportation infrastructure to transport goods and information, a school system to train employees, and even a safety net for failing business, the Savings and Loan bailout of the 80s or Chrysler. Government in fact exists to support the well being of commerce, that being in the interest of all the people. Make no mistake, the wealthy want you to pay for all the benefits that government brings to them. The only question for them is how much they want you to pay.