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”.