Two Santa Clauses had gone mainstream. Never again would Republicans worry about the debt or deficit when they were in office; and they knew well how to scream hysterically about it as soon as Democrats took power.
George W. Bush embraced the Two Santa Claus Theory with gusto, ramming through huge tax cuts -- particularly a cut to the capital gains tax rate on people like himself who made their principle income from sitting around the mailbox waiting for their dividend or capital gains checks to arrive -- and blew out federal spending.
Bush, with his wars, even out-spent Reagan, which nobody had ever thought would again be possible. And it all seemed to be going so well, just as it did in the early 1920s when a series of three consecutive Republican presidents cut income taxes on the uber-rich from over 70 percent to under 30 percent.
In 1929, pretty much everybody realized that instead of building factories with all that extra money, the rich had been pouring it into the stock market, inflating a bubble that -- like an inexorable law of nature -- would have to burst.
But the people who remembered that lesson were mostly all dead by 2005, when Jude Wanniski died and George Gilder celebrated the Reagan/Bush supply-side-created bubble economies in a Wall Street Journal eulogy:
"...Jude's charismatic focus on the tax on capital gains redeemed the fiscal policies of four administrations. ... Unbound by zero-sum economics, Jude forged the golden gift of a profound and passionate argument that the establishments of the mold must finally give way to the powers of the mind. ... He audaciously defied all the Buffetteers of the trade gap, the moldy figs of the Phillips Curve, the chic traders in money and principle, even the stultifying pillows of the Nobel Prize."
In reality, his tax cuts did what they have always done over the past 100 years -- they initiated a bubble economy that would let the very rich skim the cream off the top just before the ceiling crashed in on working people. Just like today.
The Republicans got what they wanted from Wanniski's work. They held power for 30 years, made themselves trillions of dollars, and cut organized labor's representation in the workplace from around 25 percent when Reagan came into office to around 6 [percent] of the non-governmental workforce today.
Over time, and without raising the cap, Social Security will face an easily-solved crisis, and the GOP's plan is for force Democrats to become the anti-Santa, yet again. If the GOP-controlled Congress continues to refuse to require rich people to pay into Social Security (any income over $128,000 is SS-tax-free), either benefits will be cut or the retirement age will have to be raised to over 70.
The GOP plan is to use this unnecessary, manufactured crisis as an opening to "reform" Social Security -- translated: cut and privatize. Thus, forcing Democrats to become the Social Security anti-Santa a different way.
When this happens, Democrats must remember Jude Wanniski, and accept neither the cut to disability payments nor the entree to Social Security "reform." They must demand the "cap" be raised, as Bernie Sanders proposed and the Democratic Party adopted in its 2016 platform.
And, hopefully, some of our media will begin to call the GOP out on the Two Santa Clauses program. It's about time that Americans realized the details of the scam that's been killing wages and enriching billionaires for nearly four decades.
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