WASHINGTON: In the past, Americans seemed to understand a difference in economic policy between the two parties. Democrats, we thought, supported deficit spending and, with the embrace of labor unions, tariffs upon foreign products, to protect American manufacturers from competition. Republicans and conservatives, on the other hand, call for balanced budgets and free trade.
Now, with Republicans in control of both houses of Congress and the White House, they seem to have abandoned both free trade and fiscal responsibility. Given an opportunity to implement the philosophy they have long advocated, they have moved in an entirely different direction.
In mid-September, the Congressional Budget Office (CBO) calculated the federal deficit at $895 billion for the first 11 months of fiscal 2018. The Republican Party’s old deficit hawks completely abandoned their traditional views.
Last year and early this year, former opponents of huge budget deficits such as House Speaker Paul Ryan (R-WI) pushed through a massive tax cut despite CBO projections of a surge in federal borrowing.
The tax cut, with no accompanying cuts in spending, produced a $1.5 trillion shortfall over the next decade. Our overall debt has now reached $21 trillion.
Public perception of Republicans and deficits has not yet caught up with reality. A June survey by the Pew Research Center found that voters trust Republicans over Democrats 41 percent to 35 percent, to do a better job with deficits. Speaker Ryan, who used to preach about the evil of debt, now makes light of the fact that the debt has skyrocketed under his watch—from about $430 billion in 2015, when he became Speaker, to almost $1 trillion as he approaches retirement three years later.
In the recent past, Republicans in Congress tried to limit government spending and reduce deficits.
In 2011 and 2012, House Speaker John Boehner (R-Ohio) staged several fiscal showdowns with President Barack Obama that led to some deficit reduction, through spending caps on annual federal agency budgets and higher taxes on families with more than $400,000 income.
Those deals essentially came to an end by the December passage of the tax cuts. Along with an accompanying increase in spending for both defense and domestic agencies.
At the same time, President Trump has rejected traditional Republican support for free trade and has embarked upon a trade war with China and a number of other countries.
In addition to the tariffs he initially imposed on China, in mid-September, he announced an additional $200 billion in tariffs on imports, about half of the $505 billion in products that Americans buy from the Chinese each year.
The Chinese responded by raising China’s tariffs on American exports.
Politics are upside down. Business interests, which thought they had a friend in the Republican Party, are expressing dismay over the tariffs. Among them the National Association of Manufacturers, the U.S.Chamber of Commerce and the National Retail Federation. Economist Gary Hufbauer of the Peterson Institute for International Economics, says that,
“…we’re just headed for an economic Cold War with China. Down this path, we will see a limitation of all economic contact.”
There seems to be some confusion about who pays these tariffs. President Trump says that,
“China is now paying us billions of dollars in tariffs.” In fact, it is American consumers who will pay these tariffs—-it will raise prices on imported goods, notes economist Satyam Panday of S & P Global Ratings, “…and hurt all consumers, especially poor and middle-class families.”
The Business Insider’s Mary Hansbury declares that,
Conservative columnist Donald Lambro, writing in The Washington Times, points to the political irony of Republicans endorsing tariffs:
It is a serious misunderstanding of our political life to believe that the parties differ dramatically in political philosophy. What the really differ about is who should wield power. The public relations teams on each side promote their own side as virtuous and their opponents as enemies of everything right and proper. Once in power, however, they act in much the same way.
Even at the beginning of the Republic, perceptive observers such as John Calhoun predicted that government would inevitably grow, that those in power would always advocate a “broad” use of power and those out of power would always argue for a “narrow” use of power, and that no one would ever turn back government authority which had once been assumed.
Calhoun was all too prophetic when he wrote the following in A Disquisition On Government:
Calhoun pointed out that,
“It would then be construction against construction, the one to contract and the other to enlarge the powers of the government to the utmost. But of what possible avail could the strict construction of the minor party be against the liberal interpretation of the major when the one and the other be deprived of all means of enforcing its construction.
In a contest so unequal, the result would not be doubtful. The party in favor of the restrictions would be overpowered. The end of the contest would be the subversion of the Constitution. The restrictions would ultimately be annulled and the government is converted into one of unlimited power.”
Consider our history.
Republicans opposed big government when Democrats were in power but spoke of concepts such as “executive privilege” when their own party held positions of authority. The Democrats have done exactly the same thing.
The growth of government and the accompanying decline in freedom has been a steady process since 1789, regardless of who was in office, Federalist, Democrat, Republican or Whig, liberal or conservative.
Our constitutional system of checks and balances and division of powers is broken.
The Constitution says it is Congress which must declare war. However, Executive Authority alone has the U.S. in conflicts around the world on the basis of executive authority alone.
Both Republican and Democratic presidents govern by executive order when our elected representatives will not do their will. In the case of today’s tariffs and trade wars, one individual, the president, has acted solely on his own.
We now know that the Republican Party no longer believes in free trade or balanced budgets. What it does believe in, other than wielding power, is anybody’s guess.
Lead Image: CSCL Globe on her maiden voyage arriving at Felixstowe - By Keith Skipper, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=37741003