“VOO-DOO ECONOMICS” IS BEING RE-BRANDED AS “DYNAMIC SCORING”

During the 1980 Republican Presidential Primary Debates, Candidates Ronald W. Reagan and George H.W. Bush disagreed on Economic Policy.  (Now former President) Reagan asserted that Supply-Side Economics, which is based on lowering the higher Income Tax Rates, and expecting that there would be a “trickle down” effect, would benefit the Average Wage Earner–and the Economy overall.  Bush nailed it, however, when he proclaimed that it was just “Voo-Doo Economics”.

Now, 34 years later, Congressman Paul D. Ryan (R-WI) will assume the Chairmanship of the powerful House Ways and Means Committee.  Ways and Means is the Arm of Congress that drafts Tax Legislation. And, wouldn’t you know it, he is focused on that same Supply-Side concept; however, he has re-branded it as Dynamic Scoring.

Ryan explains that his Plan would not raise the National Debt, since the offsets would include privatizing the Medicare Accounts for new Retirees, repealing “Obamacare”, significantly reducing Domestic Programs that are intended to sustain the Poor, and various other Social Programs.  Really?

The Income Disparity between the Wealthy and the Poor is increasing exponentially in America, as it is in many other Nations, as well.  Since President Barack Obama took Office (January 20, 2009), Unemployment declined from 7.2% to 5.8%, during a period when the economies of many other Industrialized Countries have barely begun to recover from The (Global) Great Recession.

Why do the Wealthy need more help at all?  The Dow Jones Industrial Average grew by 177% since it bottomed on March 9, 2009, through Tuesday’s close at 17,983.  Remember that the Wealthy are Investors; so, their additional Income merely adds top their Portfolios, which should already be quite substantial.

The Poor, many of whom, are working in Low-Income jobs, do not have the Financial Assets to have benefitted financially through the past six years.  Thus, Congressman Ryan’s claim that his Plan will create jobs, at least to me, seems to be pie-in-the-sky.  Shifting assistance to the Poor, who are the Spenders, to the Wealthy, who will invest it just seems to be counter-productive, on an economic basis.  It would contract the Economy even further.

Congressman Ryan also fails to explain the inconsistencies in the American Economy, which: expanded significantly during the Term of President Bill Clinton who raised the higher Income Tax Brackets; contracted during the Term of President George W. Bush, who lowered Taxes on the Wealthy and, now, we have seen the Economy in an on-going Recovery under President Obama, who raised those rates back up to the Clinton Levels.  Am I missing something here, Congressman Ryan?

It looks to me like Congressman Ryan is merely acting as the GOP’s economic alchemist, throwing his Plan out to the Public, distracting them with promises of jobs, and assuming that that will make it so. As yet, I don’t believe that there are any non-biased economists who truly believe there are any benefits with Trickle Down.  So, whether you call it Supply-Side Economics or Dynamic Scoring, it is still an unproven, politically-biased concept.  Perhaps George H.W. Bush, before he was President, said it best when he declared it to be: “Voo-Doo Economics”.

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  1. #1 by John Michael Brummer on December 31, 2014 - 8:39 AM

    Glad you are one of the few americans who listened to Piketty………

    • #2 by cheekos on January 1, 2015 - 12:53 AM

      John Michael, I did not read Thomas Picketty’s most recent book, but we seem to agree on the same economic prognosis. To me, however, this is just basic ECON 101. Too bad that Paul Ryan must have opted-out of the course!

  2. #3 by R. Denning Gearhart on December 31, 2014 - 7:00 PM

    Pope Francis joins with you and with the pre-VP George H. W. Bush. In the “Compendium of the Social Doctrine of the Church,” Pope Francis writes:

    “In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.
    AND
    “While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation. Consequently, they reject the right of states, charged with vigilance for the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power. To all this we can add widespread corruption and self-serving tax evasion, which have taken on worldwide dimensions. The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule.”

    • #4 by cheekos on January 1, 2015 - 12:52 AM

      Denning, you could have saved yourself quite a bit of typing. Surely, wee all know that Frasnkie is on our side. He and I go back a long, long way. But, thanks for visiting my Blog, and for commenting.

      • #5 by R. Denning Gearhart on January 1, 2015 - 12:56 AM

        not much typing, just ‘drop and drag’ and Dragon NaturallySpeaking!

    • #6 by cheekos on January 1, 2015 - 4:37 AM

      Mr. Gearhart thanks for visiting my Blog, and for adding your Encyclical.

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