President George Bush Sr., once called the Reagan tax cut, supply-side economics, “Voodoo economics.” Bush did not believe that if you showered money on the wealthiest individuals and the biggest corporations, that the benefits would “trickle” down to the masses. In the intervening 30 years we have learned that President Bush, the senior, was correct, Reaganomics, or trickle down economics was a disaster for the vast majority of Americans.
Here are just a few facts to expose the trickle down voodoo: Between 1980 and 1989, the Reagan years, the average wage in the US increased 3%, but for the top 1% income bracket, the increase was 80%. The average family income growth during that time barely rose at all, and for the poorest, it actually dropped by 10%. But for the richest 1%, their family income increased by a whopping 74%. Looks like trickle UP to me.
Now, consider the national debt. When Reagan took office the debt was $994 million. But, when President Reagan left office the national debt was $2.6 billion. That’s “billion” with a “B.” No rocket science is needed to explain this; he reduced taxes, especially for the upper brackets, by over 50%. This loss of revenue far exceeded any cuts in spending.
Why does this matter today? Every Republican from the new House members to the Chairman of the local Republican Party, believes that the only way to deal with the debt crises is to cut spending. Not one word about creating revenue. When asked about taxes, their response is always the same: we need more tax cuts for the rich and we need more tax breaks for big corporations. Doing so, they believe, will create good economic times: just like the good old Reagan days.
Now, this is true for the upper economic class. But for the vast majority, those in the middle and the poorer classes, it means something completely different. It will mean less money for schools, less money for health care, less money for the environmental protection, less money for meat inspection, less money for weather services, less money for unemployment insurance, less money for veterans. You get the point.
What about the huge debt? Yes we have to fix that. Billions will have to be cut, but cutting alone cannot fix the problem. Revenue must be increased. Just eliminating the Bush Tax cuts would wipe out most of the debt. There must be a balance in this process.
Republicans now, have simply refused to remove tax breaks for oil companies,. And they refuse to negotiate any tax increase on a debt limit deal. They adamantly refuse to increase any tax even on the wealthiest among us!
Republicans once again want to sprinkle money on their rich friends in the false belief that it will grow the U.S. economy, even after 30 years of proof that trickle down does not work. It appears that the Voodoo has taken hold once again.
Louis Vitale — Franklin, N.C.