During the 1980 campaign for the Republican nomination, George H.W. Bush called Reagan’s supply-side theories “voodoo economics.” These supply-side theories included the wishful notion that tax cuts are so potently stimulative that they are self-financing. Although the resulting gargantuan deficits of the Reagan and the George W. Bush years have amply demonstrated the calamitous falsity of that notion, the notion itself lives on in the brains of present-day Republicans. All of which goes to show you that — although Cheney famously said that Reagan proved that “deficits don’t matter” — what Reagan actually proved is that facts don’t matter. Facts don’t matter at all.
Carly Fiorina recently showed her belief in the Tax Cut Fairy:
“Let me propose something that may seem crazy to you: you don’t need to pay for tax cuts. They pay for themselves, if they are targeted, because they create jobs.” ((Political Animal, by Steve Benen, Washington Monthly, July 19, 2010. ))
Here Arizona Senator Jon Kyl distinguishes between “spending” (such as extending jobless benefits for the unemployed) and “tax cuts” (such as keeping the Bush tax cuts in place for the wealthy):
“You do need to offset the cost of increased spending. And that’s what republicans object to. But you should never have to offset cost of a deliberate decision to reduce tax rates on Americans.” ((“Deficit Fraud Jon Kyl: ‘You should never have to offset tax cuts.'”))
Contrary to the analysis of the CBO and most budget experts, Mitch McConnell recently repeated the “potent stimulus meme” to Talking Points Memo:
“ … there’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.” ((“Tax Cuts and Mitch McConnell’s ‘Puzzling Evidence’“))
OK, so ideologues are unmoved by facts.
On the face of it, this bill would seem to be entirely in keeping with the GOP’s professed principles. Could it be that Dean Baker was right when he said that Republicans are trying to make the economy worse in time for the midterm election in November?
Here Rachel Maddow discusses these issues with Senator Jeff Merkley: