305. Proof Of The Pudding

A year ago the government shut down because of Republican demands for deep cuts to social programs in order to reduce the federal deficit. Though Republicans blithely ran up the highest deficits in history during the Reagan, Bush I and Bush II administrations, since then they’ve undergone a philosophical reversal. Their fervor for reducing the deficit reached a fever pitch last fall when they held the government hostage in an unsuccessful attempt to get their way.

But it isn’t just in America where deficit reduction has become a cornerstone of the political Right. Several countries in Europe – most notably Greece – have run up large deficits. And conservatives in Europe have demanded draconian cuts to social programs in order to cut these deficits.

Progressive economists warned that this would increase the danger of another recession. But in Europe, unlike in Washington, conservatives carried the day, and riot-inducing cuts were imposed.

So how has that been working? Now, after imposing austerity on certain member nations, the entire Eurozone economy is at a standstill and its three largest economies – Germany, France, and Italy – are all contracting. Europe is on the verge of deflation, a condition that can be as bad as too much inflation. As The New York Times recently observed, instead of demanding deficit reduction, European governments should be “increasing spending to kick-start their economies.”

In addition to demanding deficit reductions, conservatives also advocate cutting unemployment benefits for the long-term unemployed, maintaining that the only reason these people don’t have jobs is because they’d rather live on unemployment. Republicans in the state of North Carolina have taken up this cause with a passion and last February cut off benefits to 170,000 people.

And how has this worked? The unemployment rate has dropped, but mostly because a significant number of people have given up looking for a job. Unemployment benefits require recipients to actively look for work. Once this incentive was removed North Carolina saw its workforce – those either working or seeking work – drop much more than its unemployment rate did. Cutting deficits in Europe and cutting unemployment benefits in North Carolina have both done much more economic harm than good.

But when it comes to doing economic harm, it’s hard to beat Kansas. In 2012 Kansas’ Republican governor, Sam Brownback, championed tax cuts of 24% on top earners in conjunction with a host of other dramatic revenue cuts. “Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy,” Brownback wrote in an op-ed that July. But instead of reviving the economy it’s done just the opposite. In April Moody’s Investment Services downgraded Kansas’ bond rating in response to a $93 million revenue shortfall. The Leavenworth Times observed that “the ‘great experiment’ is falling flat. In five years’ time, the (revenue) loss is predicted to rise to 16 percent. Kansas, in effect, will self-impose its own economic depression.”

Political parties love to debate what is and isn’t sound economic policy, but it’s a lot easier to say a certain set of economic policies will result in growth than it is to prove it. Conservatives on both sides of the Atlantic, though, are doing a great job of proving that their ideas don’t work. This would all be very instructive if anyone was actually paying attention. The “proof of the pudding,” is, after all, in the eating. But ideas are much tastier than facts, and one fears that no matter how much harm they end up causing, conservatives will continue to push policies that are already damaging millions of lives.

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