A long time ago in what seems like a parallel galaxy far, far away, our country ran a surplus. A big one. So big, in fact, that the Chairman of the Federal Reserve worried about paying down the national debt too fast. Something had to be done, quickly.
And yet it was not so long ago. Just over a decade actually. In this time of apparent milk and honey, the Dark Side (The GOP) had a plan for what to do with the gobs of excess bullion clogging Fort Knox’s vaults. The Emperor, George W. Bush, put it succinctly: “The surplus is not the government’s money. The surplus is the people’s money.” Not the people’s money, really. Just some people. The rich, mostly.
It turned out that the surplus really wasn’t a surplus. It was a phantom menace: the country thought it had money it didn’t have. Much of the “excess” federal revenues, projected a decade ago by the Congressional Budget to exceed $5.5 trillion by now, derived from Social Security, which was taking in more in payroll taxes than paying out in benefits. The remaining non-Social Security surplus, though still ample—around $86 billion in fiscal year 2000—was also illusory. It quickly disappeared when federal receipts plunged with the bursting of the Internet bubble. But the Dark Side would not be deterred.
The GOP’s gambit was breathlessly brazen. “Surplus” revenues from a relatively regressive source, payroll taxes, which are levied at a flat 12 percent rate on a wage earner’s first $106,000 of income (high-income earners thus pay a smaller percentage of their overall income in these taxes than those making less) were given to the wealthiest Americans in the form of tax cuts. Nobel Prize-winning economist Joseph Stiglitz notes the move’s impact. When the successive tax cuts from this period are fully implemented, he points out, “The average reduction for an American in the bottom 20 percent [in 2012] will be a scant $45, while those with incomes of more than $1 million will see their tax bills reduced by an average of $162,000.”
This sad saga of class warfare has many sequels. Ten years after the supply-side mayhem visited fiscal catastrophe on the nation (thirty years if you go back to the Reagan era), the Empire is striking back. Much has changed in the interim. We now have massive deficits, not supposed surpluses. Forty-one cents of every federal dollar spent is borrowed. The nation’s debt is growing fast, with no end in sight. And economic inequality is at Gilded Age levels. Yet the right’s prescriptions during this period of austerity are carbon copied from an earlier era of prosperity: reward the wealthy at the expense of everyone else.
In this attack of the cloned policies, the GOP has recycled discredited ideas of yore, repackaged this time by Representative Paul Ryan. Ryan’s plan would slash government appropriations by $6 trillion over the next decade. Such tough medicine, he says, is required to address the nation’s fiscal woes—the same ones that are largely of his party’s own making (Ryan, for one, told columnist Robert Novak in 2001 that Bush’s first tax cut was “too small”).
It should not surprise that two-thirds of Ryan’s cost cutting comes from low-income programs, according to the Center on Budget and Policy Priorities. Nor should it surprise that he would permanently extend Bush’s tax cuts for those making $250,000 a year and lower the top tax rate from 35 percent to 25 percent. Or that Ryan’s plan eliminates taxes on capital gains, which go overwhelmingly to the wealthiest Americans, while also reducing the corporate tax rate. Robbing Penurious Peter to fatten Prosperous Paul is how the Dark Side rolls.
It would be comforting if the forces of fiscal fairness were marshaled against the GOP’s shameless greed, but unlike Hollywood blockbusters, which pit good versus evil, no righteous army exists in Washington fighting the good fight. Democrats also raise heaps of corrupting cash, often from the same sources that fund Republicans, and they happily sashay through the same revolving door that ushers the elected elite from government to corporate America and back again. There are few genuine Jedis here.
Perhaps the absence of heroism in public life explains why we turn to the silver screen for fictional representations of valor. Better to get lost in inspiring fables set eons ago in galaxies far, far away than face what’s actually happening in the here and now.
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