The above tax cuts known as the "Bush Tax Cuts" are set to expire at the end of 2010 and the subject of debate. President Obama wants to retain them for certain people making less than $200,000.00 and 250,000.00 and let the rest expire which mainly affect the wealthy. Obama said the status quo on the taxes is bad fiscal policy in light of the governments decrease in revenues, economic conditions and budget deficits.
The republicans want to keep the tax cuts and recently Minnesota Governor Tim Pawlenty said congress should extend the tax cuts but want to offset them with government reductions in spending. Republicans in congress think the tax cuts are a stimulus to the economy(wrong again) and do not need to be paid for by cutting the budget. It should be noted that Pawlenty was silent at the time the tax cuts were passed and said nothing about paying for them. He now wants to cut back on entitlement programs such as social security to pay for the extension.
Bush and the republican party said the tax cuts at the time of passage would create a sustained economy and job creation but it did no such thing and in fact contributed to the economic meltdown, the loss of jobs in record numbers, deficit spending and a decrease in federal revenues. It is the same "trickle down economics" of the Reagan administration that Bush 41 inherited and then lost the election to Bill Clinton. Remember, it was "the economy, stupid."
Gov. Pawlenty statement he would cut entitlements such as social security confirms what this writer commented on many occasions here in politidose that the 20 year record deficit spending and debt of republicans Reagan, Bush 41 and Bush 43 was to bankrupt the federal government of needed revenue so programs like medicare and social security would have to be canceled or reduced to nothing.
The American people fell for "trickle down economics" twice, once under Reagan and once under Bush 43 and are still paying the price. "Trickle down economics" stops as soon as it hits the pockets of the wealthy. Why should the wealthy take a chance and reinvest their large tax breaks when there is no incentive to do so. Why would they take a risk on a sure thing when they are already wealthy?
David Stockman, Treasury Secretary under the Reagan administration is the author of a just released commentary where he blames the republican party for the fiscal and economic mess the country is now going through because of the past republican President's fiscal policies on tax cuts that deprive the federal government of revenue and did not make cuts to offset the difference. Mr. Stockman resigned as Reagan's treasury secretary after he said the administration "cooked the books." That led to eight straight years of record federal deficits during Reagan's two terms. In his latest commentary Mr. Stockman said the republicans have crippled the economy.
Congress should follow Obama's advice and let the tax cuts expire in line with his proposal. Twenty years of failed fiscal policy by Reagan, Bush 41 and Bush 43 that produced record deficits and debt says enough is enough. There should be no doubt of the conservative republicans record: Bankrupt the federal government and deprive it of the needed revenue to do those things that really matter and make a difference for its people. They do not believe in a middle class. That says it all. The past is still the key to the future for those who are willing to learn from past mistakes.
