Tax plan is repeat of voodoo economics

Congressman Ryan Costello recently announced that he voted in favor of the Tax Reform and Jobs Act passed by the House of Representatives.

According to Costello, the critical question for him was “Do you accept the status quo, or do you vote for a bill that’s going to give an overwhelming majority of your constituents a tax cut, along with projected economic growth?”

Perhaps the Congressman needs to revisit Ferris Bueller’s Day Off.

In that 1986 film classic, a teacher tries unsuccessfully to get any response from his students during a lecture on economics.

The students simply stare vacantly at him, totally bored and completely uncomprehending.

“In 1930, the Republican controlled House of Representatives, in an effort to alleviate the effects of..Anyone? Anyone? ... the great Depression, passed the .. Anyone? Anyone? .. the tariff bill? The Hawley-Smoot Tariff Act? Which, Anyone? .. raised or lowered ... Anyone? ... raised tariffs in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone? It did not work.”

He then moves the discussion forward in time .... “Anyone seen this before? ... The Laffer Curve? .. Does anyone know what Vice President Bush called this in 1980? Something ---doo economics. Voodoo Economics.” George H.W. Bush famously called it “Voodoo Economics” when he ran against Reagan in the Republican primary in 1980. He was right!

The Tax Reform and Jobs Act is simply Voodoo Economics under a different name.

The theory in support of the Act is that by cutting taxes, more money is available for business investment, which will lead to more jobs and a growing economy, which will result in higher tax revenues for the government and a general increase in the economic well being of the middle and lower economic classes.

In practice, the theory, also known as the “trickle down” theory, has proven to be completely bogus.

President Reagan’s tax cuts failed to create any increase in job growth or revenue. Instead they produced the predicted massive increase in federal debt.

Under Reagan the federal debt grew from 997 billion dollars to 2.85 trillion dollars. According to the Bureau of Labor Statistics real wages didn’t rise.

They began a decline that lasted for 16 straight years. Despite the fact that the application of the theory was a fiscal disaster under Reagan, President George W. Bush claimed that the increase in productivity which was going to theoretically result from his tax cuts in 200 I and 2003 would completely offset the decline in revenue.

It did not. The Congressional Budget Office has consistently reported that the Bush cuts not only did not pay for themselves, they resulted in a significant decline in government revenues and added another 1.5 trillion to the national debt.

The incontrovertible fact is that tax policy based upon the “trickle down” theory only serves to increase income inequality by providing much more economic benefit to those who are already wealthy, while doing little if anything for the middle and lower economic segments of the population.

And that is exactly what is going to happen under the Tax Reform and Jobs Act.

The middle and lower economic classes are going to get a temporary gift of a couple of hundred bucks, the rich are permanently going to get millions ... in short, bread crusts for the middle class, porterhouse steak for the rich, and at least another 1.5 trillion dollars of debt for our children and grandchildren.

Congressman Costello would do well to remember that Albert Einstein defined insanity as doing the same thing over and over again, but expecting different results.

The “trickle down” claim that tax cuts are going to pay for themselves through increased economic growth and that everyone will benefit was made by the Reaganites and then the Busbies.

It was hogwash then, and it is hogwash now. The Republicans have followed the Voodoo Economics plan twice.

It failed miserably both times, leaving the Country with massive debt, and shattering the myth that Republicans were actually fiscally responsible.

And who do you think is going to ultimately pay for it .... Anyone? Anyone?