Conservative Thinking Is Dead in the Water
27 June 2017 | Pago Pago, American Samoa
The cornerstones of conservatism are 1) reducing taxes on the rich will result in more economic growth and the resulting prosperity will trickle down to the middle and lower classes. By now, we know this is wrong, But conservatives still believe it. In fact, reducing such taxes a) only increases income inequality b) does not result in more growth and c) the benefits of the cuts all pour, if not trickle, up, not down.
The second cornerstone of conservatism is 2) big government is bad because it is wasteful of tax dollars, inefficient and it impairs freedom. This is also now shown to be quite wrong. The truth is, as the data now show, countries (and even states and provinces) with proportionally larger government sectors tend to have a) greater prosperity, b) more personal freedom and c) higher indicators of education, health, and personal safety."
The third cornerstone of conservative is governement should not interfere in free markets. This too is disproved. Keynesian economic intervention have eliminated depressions and moderated recessions since WWII in all countries which have adopted such policies.
The bulwark of conservatism is crushed by the facts, but facts that conservatives, as is their want, all ignore or quibble with endlessly. The core truth of these matters, in light of these facts, is simple: conservatives are selfish and don’t want to pay taxes that help all.
Turning to 1) reducing taxes on the rich, does not increase growth and national prosperity. A new study from the Congressional Research Service, "Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945,” shows that, from the last six decades of data, changes in the top marginal tax rates "have had little association with saving, investment, or productivity growth." That is, cutting taxes on the rich does not lead to economic growth and prosperity. Other studies have shown almost as much. What it does is it leads to is greater income inequality. The rich hoard the extra cash and there is no increased consumption or investment results.
The study specifically found “that reductions of capital gains taxes and top marginal rate taxes have led to greater income inequality” for that reason. Almost 80 percent of the income of the super rich is in the form of capital gains and the rich and super rich get most of the taxable income in America.This destroys the first core principle of conservatives. Cutting taxes does not increase national income or growth and only worsens inequality.
Turning to 2) we learn first, that the stock ploy of conservatives is to show some aspect of some government program is wasteful or inefficient and then to argue all of government is wasteful or inefficient. This is patent nonsense, of course. In 2016, total federal spending was $3.54 trillion, including deficit spending. The last time it looked, the GAO in 2014 found that government waste came to $125 billion. That comes to less than less than 4% of government outlays. The waste argument is bullshit.
The truth of the matter is conservatives don't like our federal government spending money on people to help them because they are selfish and greedy and want to keep that money to themselves in the form of lower taxes. For an example of government's efficiency at helping people, Medicare’s overhead (3.7% with 0% profits), for example, compared to private insurers’ unrestrained and unregulated early numbers (14% overhead and 10 % profits) alone makes the contrary case.
From the argument government is wasteful or inefficient, conservatives leap to the further mistaken conclusion that government must be reduced in size and function, . . . not that any waste be eliminated or any inefficiency deal with, but eliminated by greater reductions in the scope and size of government. This is a major non sequitur. A lapse in logic.
The third argument of no interference in the economy is in shreds as well. Before Keynesian economic interventions, we had frequent depressions and many more serious recessions. Since then, no Depressions and far fewer and far less severe recessions. See chart attached.
Government regulations are not adopted in a vacuum or needlessly. They are adopted to curb abuses and misbehavior in markets which require such regulations for their proper function. Such regulation is not always optimal but the need is undeniable. The intelligent goal is better, more efficient regulation not reduced or eliminated regulation. This is just common sense.
If the conservative argument to here has become threadbare, to this point, it gets worse. A new study by Edwin G. Dolan, a PhD in economics from Yale University, entitled “They Go Together: Freedom, Prosperity, and Big Government,” Dolan proves that the data across well over 125 countries do not support the notion that a larger government is detrimental to either freedom or prosperity. On the contrary, countries, with proportionally larger government sectors tend to have more personal freedom, greater prosperity and higher indicators of education, health, and personal safety than other countries.
But this should come as no surprise. It can be seen in state and provincial governments even without a study. In the US, poorer states have proportionally smaller state governments. Indeed, many (Kansas, Oklahoma and other red states) are now complaining that the prescription urged on them by conservatives of lower taxes and smaller state governments, have really hurt their economies and people. In Kansas, school is held only four days a week. That the injury is no surprise. These states are reversing their policies, hiking taxes, re expanding state government and doing more in and with their economies.
But worst of all, conservatives can cite no reliable collective data nor a group of good examples to refute these propositions and support the argument that proportionally smaller government, lower taxes and less intervention leads to greater economic prosperity and more economic and personal freedom. They are left quibbling and then whistling in the wind. So much for the conservative mantra of Grover Norquist that we should chop government down so small, we can then drown the rest of it in the bathtub.
These facts destroy the core positions of libertarians and other conservatives and leave them with nothing to defend their dogmatic positions, EXCEPT, most greedily and selfishly, they just want to keep all their money to themselves and pay lower or no taxes. Hardly wonderful people. Better countries have different attitudes
Of course, conservatives will refuse to hear any of this. Their stock response to this sort of thing is to ignore it or to quibble with it endlessly by ad hoc logic, but they never come to grips with the core truths of these matters. However, the truth will out in the long run, leaving them to change the subject and scramble for higher ground, running naked in the wind. "Trickle down" from tax cuts has already become a national joke, reversing that fraudulent claim to the truth of the matter, "trickle up economics."