Sorcerer and apprentice
John McCain’s Voodoo
It’s a performance requirement. Miss America contestants dream of world peace. Republican presidential candidates promise balanced budgets on top of enormous tax cuts. No one takes the Miss America contestants seriously. The same can’t be said of the candidates. They promise the impossible. They deliver worse. Still, they get elected.
John McCain is running a fantastically dull campaign. His ideas have the grayed optimism of 1950s television commercials pegged to the fear factor of 1980s cold war hysterics. He’s a 20 th-century museum piece, as good a fit in the Senate’s gilded chumminess as it is an anachronism beyond it (which is just what makes Barack Obama such a lousy fit in the Senate). But McCain’s got this much going for him—a promise to make the Bush tax cuts permanent, to pile on gargantuan tax cuts and tax credits of his own, rebuild the military while it wages its usual quota of wars and still balance the budget by the end of his first term.
Sham promises like that have been getting Republicans elected going back 30 years. In 1980, Ronald Reagan promised the biggest tax cut in the nation’s history, a doubling of the military budget, and an end to the budget deficit, at the time a manageable $73 billion. That’s what the first George Bush was calling “voodoo economics” before Reagan snagged him as his vice president. A few years of voodoo later, the deficit had tripled, the United States had become a debtor nation for the first time, and the national debt, below $1 trillion before Reagan took office, more than doubled before he left it. The first Bush, who lied his way to office with a “no new taxes” pledge he broke, had only one term to worsen the damage, and did. But it was his son who’d make Reagan seem like an amateur con. Banking on the surpluses he inherited from the Clinton cleanup years, Bush went turbo-Reagan. He promised tax cuts enough to dwarf the 1981 package, promised to pay down the national debt -- $5.7 trillion when he took office—and still have money left over to fix Medicare and Social Security.
“The big lesson of this year’s campaign,” columnist Paul Krugman wrote the day before the 2000 election, “is that a candidate can get away with saying things that are demonstrably untrue, as long as the untruths involve big numbers.” Proof is in the consequences. Reckless fiscal policy leading to the current meltdown aside, we got historic budget deficits and a national debt that’ll hit $10 trillion when Bush leaves office. The interest alone on that debt in 2007 was $237 billion—more than the wars in Iraq and Afghanistan, $47 billion more than the entire cost of Medicaid (the federal health insurance for the poor), $147 billion more than the entire cost of Veterans Affairs.
Krugman also noted in that 2000 column that Bush’s seductive lies would be “a lesson that we can be sure politicians will take to heart.” Cue John McCain. Here’s what he’s proposing: Make the Bush tax cuts permanent and eliminate (not fix) the Alternative Minimum Tax altogether. The AMT was created in 1969 to ensure that the richest Americans, who often find ways to evade taxes, paid their share. It’s been creeping down the income table and nullifying parts of the Bush tax cuts on upper-middle-class incomes. The combined cost of making the Bush tax cuts permanent and eliminating the AMT: $490 billion a year, according to the Congressional Budget Office and the Center for American Progress.
McCain also wants to cut the corporate tax rate from 35 percent to 25 percent (even though this decade saw record-breaking corporate profits year after year). Slash an additional $100 billion in Treasury revenue. He also wants to make it easier for corporations to deduct expenses. Cost: $75 billion. So far, that’s $665 billion in lost revenue per year, most of it benefiting corporations and the richest 5 percent to 10 percent of Americans. He also wants to double the exemption for children and dependents from $3,500 to $7,000, which would swell lost revenue past the $750 billion mark.
How would he make it all up? His campaign foresees $20 billion a year in new revenue from economic growth, $30 billion a year from closing corporate tax loopholes and $160 billion a year in undefined spending cuts. Even assuming those imaginary figures to be true, by his campaign’s own accounting, McCain—that fiscally prudent GOP “maverick”—proposes a budget blueprint that begins with an annual deficit of a half-trillion dollars. And we’re supposed to take the guy seriously as a presidential candidate?
It worked for Reagan. It worked for both Bushes. It just might work for McCain, who’s making sure that his Fast-Talk Express always stays many delusions ahead of what his economic adviser calls “a nation of whiners.”