A cursory examination of the American economy suggests we are closer than ever before to a total collapse. A massive devaluation of our currency is likely on the horizon, and neither the Democrats nor the mainstream Republicans seem to have any plausible plan to reverse this trend. In recent decades, both sides have offered competing theories of how to maintain and increase our prosperity, and the theories offered by both sides have evolved over time. Never before, however, have both the Republicans and Democrats offered such ludicrous platforms. To see how we got here, we should briefly consider the progression of American economic thought. To that end, I offer my own short history on the evolution of progressive and mainstream conservative economic policies.
Stage 1 (Starting in Great Depression)
Progressives: Promote government intervention in the economy. Fight for a social safety, paid for with taxes. Believe Keynes’ argument and declare that, during economic downturns, the government should engage in (ostensibly temporary) deficit spending to get capital moving again. In one phrase: raise taxes on the wealthy, spend, run deficits with the promise to pay it back when the economy turns around
Conservatives: Note that the government should live within its means, and that the best thing it can do for the economy is stay out of the way. Understand that long-term budget deficits are bad for the nation, just as they are bad for individuals. In one phrase: keep taxes low, don’t spend more than you have, and trust the market to work itself out over time.
Stage II (1970s-1990s)
Progressives: The same as above, but be more aggressive in spending increases.
Conservatives: Come to embrace Reagan’s winning political (but not long-term economic) formula: Cut taxes, don’t stop spending, declare that the tax cuts will somehow pay for the spending because Arthur Laffer’s napkin told you so.
Stage III (George W. Bush years)
Progressives: Briefly pretend to care about deficits for sole purpose of fighting tax cuts. Push for more spending.
Conservatives: Push for more tax cuts, try to outspend the liberals, and join Dick Cheney in declaring, “Deficits don’t matter.” Celebrate economic bubbles and pretend they represent real economic growth. If a bubble bursts, create a new one.
Stage IV (Where we are now):
Progressives: Raise taxes, drop money out of helicopters, borrow to make up the difference, and assume the rest of the world will pay for our idiocy indefinitely.
Conservatives: Offer no plan. Throw out red-herrings about earmarks. Whenever possible, try to change the subject so you can go back to bragging about “The Surge” in Iraq. In one phrase: ineffectually flail about, and hope the other side screws up so bad you get power again — even though you clearly don’t deserve it.Published in