The basic position of the Republicans in Congress is that the National Debt is out of control, being currently over sixteen trillion dollars, and that it must be reduced. The current Ryan Plan is their general roadmap to achieving this objective. They have generally ignored the 2008 Recession, the effects of which still exist and the massive problem of unemployment. What they want to do is cut discretionary spending, this includes Social Security and Medicare, reduce the size and costs of government, raise military spending, not raise any taxes, this includes not cutting any subsidies, and reduce taxes on those earning four hundred thousand dollars or more a year. With the income from this they want to overbalance the National Budget, spend less that is taken in and thus help reduce the debt. This to the Republicans will bring about prosperity in the United States.
What would be the effects if they were able to achieve this? The consumer base for purchasing goods and services would be decreased considerably lowering overall demand for much of what is produced and bringing about a shrinkage in productivity and a substantial increase in unemployment. The money taken out of the economy would have a multiplier effect, beginning a cycle of economic shrinkage that would cause an ever-growing level of misery for a goodly percentage of the population. Money, the National incomes, would have been moved upward to the upper few percent of the population leaving and ever decreasing amount for the lower echelons of our society and allowing far more to be stored, probably outside the country, because there would be far less worth investing into in the United States. The level of economic misery among a goodly percentage of the population would continue to grow. This is what the Republicans would achieve if they could successfully bring about their Congressional aims.
Because the Republicans have not successfully been able to achieve this we are currently dealing with a dysfunctional Congress. The Republicans, with control of the House of Representatives and a filibustering Senate, have been successful in not allowing any fiscal (job creating) bills.
The Federal Reserve, which is separate and not under the control of Congress, has continually and very creatively added money to the economy helping to bring about a slow recovery through monetary policy. Government, on both state and Federal levels, has continually shrunk lowering both tax revenues and services but the private level has very gradually grown and continues to grow. It has more or less offset a part of the public shrinkage.
Today corporate profits are up; industries profits are continually growing, Ford Motors is currently in the process of expanding one of its plants and hiring two thousands additional workers to expand its truck-building capacity; CEOs and upper echelon executives salaries are growing exponentially but unemployment is still at a 7.6% level; many people are doing without. The GDP is currently growing at the slow level of 2 1/2%. Population, according to the Senses Population Clock is growing at the rate of one person every eleven seconds; that is 3,063,273 people per year. The GDP has to grow enough to accommodate over three million additional people each year before any real growth can occur.
A large percentage of these increased profits are moving to the upper few percent of our society. This money is not being invested in any form of economic growth because the money available to the consumer base is actually decreasing, continuingly lowering the base for consumer consumption. Overall demand is decreasing because there is less and less money available for the purchase of goods and services. The upper echelon is storing its ever-growing incomes, probably a goodly percent of it overseas where it can accrue a better rate of interest and be largely except from domestic taxes. While consumption is up for the upper middle class and above, it is decreasing for the rest of the population.
While all this is going on the Republicans in the House of Representatives and in the filibustering Senate are working vigorously to shrink the government by reducing its expenditures. They consider the National Debt, most of which Republican Administrations have created since 1981, too high and obscene. They have all become, since Barak Oboma was elected president, fiscal conservatives. Consequently they are attempting to limit government expenditures by decreasing Federal expenses. The result of this is for the Federal Government to gradually employ less people and shrink the economic base, making less money available in the GDP.
It is difficult to understand the thinking of the Republican leaders. Are they more interested in achieving control of Congress and the Presidency than in the welfare of the country, than in following their oath to the Constitution, in having a Democratic President fail even at the cost of large-scale human misery? If they follow the logic of their thinking through to its conclusion it leads to endless austerity, intense economic shrinkage, recession and depression. And while this is going on the military will grow and the upper echelon of society will become phenomenally richer with taxes that run the country being paid by the ever-shrinking resources of the bottom rung of society. The nation would end up with privation, starvation, and probably violence.
Is this the Republican objective or don’t they understand that everything in the economy effects everything else, that seemingly minor changes can lead eventually to horrible disasters.
It would seem that the Republicans are their own worst enemies. Their so-called reforms could eventually lead to ultimate chaos.