The newspapers gave us PEARL HARBOR-sized headlines telling us that we had a new tax law.
In the fine print, it said that the new law would generate a $1 trillion deficit. It was Everett Dirksen, an iconic senator from Illinois, who famously said, "A million here and a million there, and the first thing you know it will run into real money."
Dirksen had other things to say that were quote-worthy as well.
"I am a man of fixed and unbending principles, the first is to be flexible at all times," he said. It seems that the Republican Party has taken that statement to heart. After years of fighting the deficit, citing the inevitability of economic disaster if the national debt, now at the $20 trillion level, continues to rise, the GOP has capitulated and promoted a major tax cut.
Perhaps, as former Vice President Dick Chaney (R) said, "Deficits don’t matter." Actually, the full quotation was, "Reagan proved that deficits don’t matter. We won the elections of ’84 and ’88 and the mid-terms in between when the deficit ballooned after the (Reagan) tax cuts."
Evidently, his success/failure criteria related not to the economy but to winning elections.
President Reagan was an advocate of "trickle-down" economics. He believed that if you gave tax savings to industries that are run by the wealthy, they would spread the money to their workers. Thus, price increases would be held down, research and development would be enhanced and the total economy would benefit.
Did it work in the 1980s? Unfortunately, it worked for a time, and then brought us a major recession.
In contrast, getting more money to the masses has always fueled the economy. That was true whether it was government efforts during the depression years or in the 1950s when unions were in their heyday demanding higher pay and benefits for their members. In short, the approach some refer to as "trickle-up" has been shown to work over and over in past years.
What has been proven is when you give large numbers of people more money to spend, they spend it. In contrast, if you give more money to those who have large financial reserves, they tend to keep it. The former stimulates the economy; the latter doesn’t. As old Casey Stengle, former manager of the New York Yankees, used to say, "You could look it up."
I confess to being a long-time registered Republican. Why am I out of step with the majority of my party here in 2018? The answer is in my natural inclination, which is to be an historian. I love history, studied history, and at this age have lived a good bit of it. I have watched the economy boom and tank over the years. We generally have a strong economy for several years and then, on the average, we enter a recession about once a decade. Economists tell us that recession is a natural adjustment made in a capitalistic (free) economy from time to time. I have been watching this wolf and warp for about 60 years now.
When we artificially stimulate the economy as we are currently trying to do, we generally find ourselves in recession a few years later. Seemingly, the harder we try to stimulate the economy the deeper the recession that follows. Our economy works better when the natural business cycles are allowed to ebb and flow as opposed to being artificially stimulated. The highs are not as high but the lows are not as low.
Along with the Pearl Harbor headlines about pending deficits are articles about who won and who lost in the newly minted tax law. The consensus is that the wealthy won and the middle and lower economic classes lost.
Considering "winners" and "losers," another Everett Dirksen quotation is appropriate here: "The winners never remember and the losers never forget."
For sure, history never forgets.
Dr. Mark L. Hopkins writes for More Content Now and the Anderson Independent-Mail in South Carolina. He is past president of colleges and universities in four states. Contact him at firstname.lastname@example.org.