It’s official. I can finally say “I told you so,” on a couple of critical points that I got into arguments with people about a few years ago.
Two recent studies illustrate the impact of the 2017 Tax Cuts and Jobs Act and the invasion of Iraq – both of which were heralded by the GOP as highlights of its leadership but turned out quite disastrously.
Bottom Line: the tax cuts didn’t come remotely close to “paying for themselves by turbocharging the economy” as President Trump repeatedly promised. They did substantially lower effective corporate tax rates and generate a flood of stock buybacks and dividends for shareholders.
Jane Gravelle and Donald Marples, who studied the tax cuts, are a lot like those who looked so hard to find Iraq’s weapons of mass destruction. They searched but found almost nothing.
Trump’s tax cut for his millionaire buddies reduced federal revenue by about $170 billion in Fiscal Year 2018, with corporations benefitting most from the tax cuts.
He sold it by telling us that companies would invest in new products and facilities, eventually growing the wages of everyday men and women. Gravelle and Marples note that the reported bonuses were equivalent to about $28 per US worker. And many were announced so firms could deduct the cost at their higher 2017 tax rate of 35 percent instead of the 2018 rate of 21 percent. Republicans made hay of anecdotal stories of some firms giving workers bonuses to suggest that this was happening widespread.
Instead, multinational corporations took advantage of their rates being cut in half to apply $1 trillion to stock buybacks to make it rain for shareholders rather than taking that extra money and applying it in a way that benefitted their workers.
Fox News regularly repeated the right-wing talking points and showcased anecdotal stories of some firms giving workers bonuses to suggest that this was happening widespread. Voters mostly bought it, although the Republicans did lose their majority in the US House of Representatives in the Mid-Term Elections.
Just ahead of that vote, President Trump suggested another tax cut (this one aimed at the middle class) was in the works and promised the details would be revealed soon after people re-elected Republicans.
Mysteriously, any talk of such an additional tax cut for the middle class evaporated once the votes were cast. It was replaced by a pseudo-admission that the existing tax cuts had failed to pay for themselves and cuts to Social Security and Medicare might be needed to make up the difference.
The 2017 Tax Cuts and Jobs Act was not the revenue-neutral tax reform that congressional Republicans promised us it would be. Instead, it has created a huge dip in tax revenue and led to increased deficits through at least 2026. Our grandchildren will have to pay the money back with interest after borrowing from China to keep things running.
The resulting deficits have added nearly $2 trillion to the federal debt, according to official estimates, not including the amount it will take to service that debt. The increase in debt will be larger if some of TCJA’s temporary tax cuts are extended.
The Republicans really had no choice on voting in tax cuts. Their wealthy donors pretty much gave them an ultimatum to do it or else lose their huge campaign contributions.
They Knew The Tax Cuts Wouldn’t Work. They Never Really Have.
In the late 1990s, an unusual circumstance presented itself to federal lawmakers: for several years in a row, the federal government ran a budget surplus during the Clinton Presidency. President George W. Bush pushed for tax cuts in 2001 and 2003. A 2012 Congressional Budget Office analysis found that the tax cut reduced federal tax receipts by $1.2 trillion over 10 years.
“Despite promises from proponents of the (Bush) tax cuts, evidence suggests that they did not improve economic growth or pay for themselves, but instead ballooned deficits and debt and contributed to a rise in income inequality,” wrote Emily Horton in a 2017 article for the Center on Budget and Policy Priorities.
No less than Bush’s father warned us in 1980 that trickle-down economics “won’t work.” That was before he became Reagan’s Vice President, then dared reporters to find evidence that he’d ever said it. When the video was shared, he pulled a Donald Trump and insisted he was “only kidding.”
You can forgive Bush for gambling that no one would be able to find the indisputable video proof. Politicians can’t get away with that in the age of 4K video on ubiquitous smartphones. These days, their defense is usually that it was just locker room guy-talk or you can’t believe what you hear with your own ears.
The results of Reaganomics are still debated. Critics point to the widening income gap, what they described as an atmosphere of greed, and the national debt tripling in 8 years. Like our current economy under Trump, it’s easy to stimulate the economy in the short-term by borrowing money by selling Treasury Bonds to China like there’s no tomorrow.
But there is a tomorrow, and it will come with 9% interest.
China’s huge Treasury position leaves the United States economically vulnerable to the decisions of a foreign government. The federal government’s total debt stands at $22 trillion ($22,000,000,000,000). Net interest payments on the debt are estimated to total $393 billion this fiscal year, or 8.7% of all federal outlays.
As any business owner will tell you, how to manage debt is critical to long-term success. Donald Trump appears to be operating the federal government the same way he ran the companies he bankrupted.
The next time Republicans try to sell you on all the ways you’ll benefit by cutting their taxes, tell them they are liars and you aren’t gullible enough to be fooled again.
“Bush lied, people died.”
The Invasion of Iraq was another example of Republican lies and incompetence.
In August 2002, Vice President Dick Cheney said, “There is no doubt that Saddam Hussein now has weapons of mass destruction. There is no doubt he is amassing them to use against our friends, against our allies, and against us.”
Except that wasn’t true.
Such alarmist predictions persuaded most Americans that Saddam Hussein had WMDs, and “preventive” military action was necessary. Cheney reassured us that American troops would be “greeted as liberators.”
When no such WMD stockpiles were found, the Bush administration simply shifted gears the justify the war in Iraq as critical to the larger “global war on terror.” It was a lie to say that Iraq either gave substantial support to al-Qaeda or was involved in the 9/11 terrorist attacks.
Amidst these manipulative psychological appeals to exploit our fears, there was a surge of nationalist rhetoric. To question the war, for some, was the equivalent of being a traitor to the United States of America. Critics of Bush were labeled unpatriotic. This resulted in tremendous pressure to fall in line and conform to the March to War.
I was a newspaper editor in a small southern town where people prided themselves as the most patriotic of Americans (while ironically also displaying the flag of the Confederacy). I wrote some newspaper columns that critically examined what was going on in those days.
Despite being a strong supporter of George H.W. Bush’s actions to expel Saddam Hussein from Kuwait and supporting his son’s decision to retaliate for the 9/11 attacks in Afghanistan, some people in the town strongly disliked my expressed lack of enthusiasm for going into Iraq and pointing out how things weren’t going well once we did just that. Conservatives dismissed growing crowds of protestors as simply being disloyal. One citizen told me I had “gigantic balls” for questioning what we were getting into and cautioned me to be careful.
I left the newspaper before the Second Iraq War truly became a quagmire that even those wrapping themselves in the flag (the American one) had to accept.
What was the REAL reason for invading Iraq?
The Republican Party’s standard line is that Bush had been innocently misled by “faulty intelligence.” In a Republican Presidential Primary Debate, then-candidate Donald Trump broke ranks and declared:
“They lied. They said there were weapons of mass destruction, there were none. And they knew there were none. There were no weapons of mass destruction.”
Others suggest the real motivation for the war was a neoconservative obsession with Saddam Hussein’s Iraq and…
“A messianic faith in the transformative virtue of American military force, as well as a deep fear of an outside world seen as threatening and morally compromised. This ideology stated that authoritarian states were inherently destabilizing and dangerous; that it was both a moral good and a strategic necessity for America to replace those dictatorships with democracy — and to dominate the world as the unquestioned moral and military leader.”
According to an article on the website Oil & Gas Journal “politics surrounding a few Middle East oil pipelines played a part in US motivations for the 2003 war in Iraq.”
The executives and largest shareholders in companies like Cheney’s former company Halliburton and vendors like General Dynamics, Lockheed Martin, and ExxonMobil garnered huge war profits through no-bid defense contracts, oil sales, environmental cleanup, infrastructure repair, prison services, and private security. Republicans, however, will never admit they sent boys to die as a way to make money off the American taxpayer.
The difficult truths are starting to come to light.
Earlier this year, the U.S. Army released a report by co-editors, Col. Joel Rayburn and Col. Frank Sobchak examining America’s invasion of Iraq and ouster of Saddam Hussein. Rayburn and Sobchak crafted their document with formidable and critical in-depth accounts by former military officers and journalists alike.
This new two-volume study was written by active-duty military officers with nearly full access to internal documents and decision-makers. Such reports are critical to acquiring “the best possible objective record of strategic and operational decisions for a specific military campaign and offer lessons for future commanders,” according to an article by Ellen Laipson on WorldPoliticsReview.com.
According to the Director of National Intelligence, the underlying factors that led to the emergence of the Islamic State still persist in Iraq today despite a huge investment of treasury and American and Iraqi lives lost.
“Beyond the particulars of Iraq and the ongoing coming-to-terms with this costly and consequential policy failure, these public exercises in evaluation and self-criticism should provide some small comfort that truth-telling is still possible in Washington,” wrote Laipson, who directs the International Security Program at George Mason University’s Schar School of Policy and Government.
“It is not clear what America has actually learned from Iraq,” write Hal Brands and Peter Feaver in National Review.
“Former Iraq War supporters — mostly but not exclusively Republicans — have hesitated to admit some hard truths: that the war was a strategic mistake, that it was flawed not just in initial execution but in conception, that it inflicted an enormous human and financial toll (far beyond what its supporters predicted), and that it set off a cascade of damaging consequences that plagued U.S. policy in the Middle East and far beyond. A more honest reckoning with the Iraq War begins with the long-overdue recognition that neither the war’s supporters nor its critics have had a monopoly on either wisdom or folly.”
“As premises and illusions collapsed following the invasion, the United States found that it had stumbled into a conflict in which the benefits were lower than expected and the costs were far higher. Those costs, in lives and treasure alike, made punch lines of the Bush administration’s pre-war optimism. Matters only got worse for years after March 2003, as the administration’s failure to adequately prepare for or rapidly adapt to the challenges of stabilizing Iraq left American forces stuck in an intensifying maelstrom,” Brands and Feaver wrote.
“The Iraq War served as a rallying point for al-Qaeda and its partners, reviving a jihadist movement that had been pummeled in Afghanistan. Meanwhile, Iran achieved unprecedented influence within Iraq and throughout much of the Middle East, filling the vacuum the war had created. After briefly pausing when the Iraq War looked like it might be a rapid success and Iran might be the next target, Tehran also accelerated its nuclear program, taking advantage of American distraction. The regional Sunni–Shia split became fiercer and more violent, exacerbating a conflict that continues to threaten regional stability. And as the military situation deteriorated in Afghanistan, the United States — increasingly consumed by the turmoil in Iraq — could not spare the resources or attention to stabilize that country, either,” Brands and Feaver wrote.
“North Korea drew the lesson that Saddam’s mistake had been in moving too slowly to develop nuclear weapons. The Kim dynasty ramped up its nuclear program, confident that a distracted United States could not make it stop. Because of the U.S. commitment in Iraq, President Bush found his options limited in dealing with several other major crises that erupted on his watch, from mass atrocities in Sudan to Russia’s invasion of Georgia. The fact that the Iraq War had caused bitter disputes within NATO, and dramatically depleted American prestige and soft power, made these and other problems still more difficult to manage. Not least, Iraq diverted resources — including the most precious resource of a senior leader: focus — from the Bush administration’s effort to hedge against the rise of an assertive, autocratic China.”
“Over time, the struggle in Iraq contributed to a growing doubt about America’s capacity for competent leadership and effective action, pessimism about the vitality of American values and ideals, a weakening of foreign-policy bipartisanship in Congress and among the public, and a powerful feeling of exhaustion and even decline within the country as a whole — a sense, as Condoleezza Rice later acknowledged, that America was simply ‘out of steam.’ All this was before the Great Recession added its own body blow to the confidence of Americans and further weakened domestic enthusiasm for a globally engaged foreign policy.”
Problems like the security vacuum after the collapse of the Iraqi state, the failure of occupying forces to rapidly provide key services to the Iraqi people, and others might have been avoided with better pre-war planning and wiser decision-making following the invasion.
No, instead we got a rush to never-ending war. But hey, at least the first years of the 21st century have meant killer profits for the military-industrial complex that Eisenhower warned us about in 1961.
Are There Lessons to Learn Here?
I take little enjoyment in declaring how I was right and others were wrong knowing how many of my fellow Americans bravely fought and died in Iraq. Their valor and love of our country goes without saying, and I deeply appreciate them. It is our duty to make sure they get the enduring support they earned by serving our nation.
No doubt we will get further proposals to cut taxes for the wealthiest people so the little guy gets to feast on their crumbs while getting stuck with the eventual bill, plus interest, down the road. That’s kind of the only policy idea that the Republicans have in their toolkit.
Maybe the take-away from this is to not to automatically dismiss me when I try to tell you something. Maybe consider every angle before suspending logic and rushing headlong into whatever catastrophe the GOP creates to siphon off your money.