Wednesday, August 29, 2018

Republicans haven’t been fiscally responsible since Eisenhower


According to recent polling, more people have confidence in Republicans to solve our economic problems than Democrats. I can’t imagine why. For while there might be other reasons for voting Republican, all economic reasons , every single one of them, favor voting for Democrats.

Republicans crow constantly about the need for a balanced budget, but the truth is it’s all talk. They have never voted for one. Even when one of their own, then Senator John Kasich introduced legislation, not a single republican voted for it.

Not since Eisenhower has a Republican balanced a budget. He balanced budgets in 1956, 1957 and 1960. Johnson balanced the budget in 1969 and Clinton did so in 1998 through 2001. In fact, during the last 40 years there have been six budget surpluses , and all six were under Democratic Presidents: 1969, 1998, 1999, 2000, 2001 and 2013. But the debt continues to rise because the surpluses are not applied against the outstanding balance.
Nothing speaks more to Republican economic incompetence than the fact that Republicans held the presidency at the onset of the last NINE (9) economic downturns, including the two greatest economic collapses in our history.

1. The Great Depression: Herbert Hoover (Republican)
2. Recession of 1953: Dwight D. Eisenhower (Republican)
3. Recession of 1957: Dwight D. Eisenhower (Republican)
4. Recession of 1960: Dwight D. Eisenhower (Republican)
5. The Oil Crisis: Richard Nixon (Republican)
6. 1980's Recession: Ronald Reagan (Republican)
7. 1990 Recession: George H.W. Bush (Republican)
8. 2002 Recession: George W. Bush (Republican)
9. The Second Great Depression: George W. Bush (Republican)

Republicans like to remind us that the debt is higher than ever before. And it’s true. But the same thing could have been said during Grant’s presidency, and Woodrow Wilson’s, FDR's, Reagan’s and even Clinton’s, because the debt is an accumulation of the policies of previous administrations...all of them! From January, 1789 through January, 1981, through 39 presidents, the United States debt only totaled $997 billion. When Reagan left office the debt totaled $2.8 trillion.

As President Obama said, “ Ronald Reagan changed the trajectory of America ....”. And indeed he did. He was the first President to borrow money, turning the country from a creditor nation to a debtor nation, and that should be his claim to fame. 

The last Republican president who cut the deficit was Eisenhower, but as you can see, doing so did not stop the country from going into recession three times during his presidency. That’s because most government spending occurs automatically, increasing the debt, without any action by the Congress or the President. The debt is a result of policies that have been enacted through many years and many presidents. 

The Debt and the Deficit

Still, today's Republicans continue to blame President Obama for deficits and the debt. Clearly, anyone who knows basic math or can merely read knows better. A budget deficit is when spending is greater than the revenue received for that year. The national debt is the accumulation of each year's deficit.  It is important to know the president doesn't have much control over the debt added during his first year in office because the budget for that fiscal year was already set by the previous president.

For example, Trump took office in January 2017, but his first budget covered Fiscal Year 2018, so for the first nine months of his new term, Trump had to live with President Obama's last budget because Obama’s fiscal year didn't end until September 30, 2017. Because of this timing difference, no new president is accountable for the budget deficit or gains in his first year in office.

In President Obama's case, there were necessary adjustments in the first year because he immediately undertook measures to save the economy. In Trump's case, no adjustments are required because he didn't pass a single piece of legislation until the tax cut in December… after his fiscal year began. His first budget wasn’t signed until February of 2018.
Employment is Key 

Finally, the public seems to disconnect the importance of employment in resolving our financial crisis. Unemployment is not just a personal tragedy, it's a national tragedy Employment not only boosts revenue collections, but contributes to Medicare and Social Security. When people are unemployed, we not only suffer a shortfall in these programs, but the need for safety-net programs escalates... unemployment benefits must be paid, food stamp rolls increase along with other supportive programs.

So, if people can’t work, they can’t pay rent or a mortgage and the housing industry suffers. If workers have no income, they can’t support businesses, their bottom line suffers and then they can’t afford to hire. While, workers who are underpaid must be supplemented, because they have to eat. It’s a vicious cycle because employed, tax-paying consumers, not rich people and corporations, are the foundation of the economy.

Employment is the key. As it was to emerge from the Great Depression and when the debt to GDP was even greater than it is today...after World War II. Remember Rosie the Riveter? So, the ire many feel for government workers is the most self-defeating nonsense I can imagine. They pay taxes into the coffers that support all those grey-haired tea-baggers who complain about them.

President Obama called on Congress to approve a $21 billion jobs bill to repair America’s ports, roads and bridges. Instead, Republicans squandered $24 billion, hundreds of thousands of jobs and America’s international reputation with an unnecessary government shutdown. They could have put Americans to work with change to spare.

Americans who are genuinely concerned about the economic welfare of this country and its citizens, who can be honest with themselves and can indulge in basic math, would never follow the Republican model, because Republicans haven’t been fiscally responsible since Eisenhower.

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