That Rumbling Sound Your Hear Is Conservative Economics Collapsing Under Its Own Weight, Part II

There's one more core principle of conservative economics that's becoming incoherant: supply-side fiscal policy. The stimulus bill, though far from ideal, was a relatively progressive tax cut that principally targets the middle and working class. Turns out that encouraging them to go out and spend money isn't just fair- it's the best way to keep the economy growing. And making it more progressive would have been even better for the economy.

Supply-side-ism actually started coming undone under President Clinton. When he raised taxes on the wealthy, the sky didn't fall, and the economy grew faster than it has this decade. But new revenues weren't followed by increased spending. This, in a way, reinforced conservative economics, or stopped short of putting the nail in the coffin. After all, the argument for tax cuts for the rich is built on a trade-off. Letting the rich keep their money is supposed to be preferable to the government spending it. They would invest wisely but the government wouldn't. Clinton left this belief untouched by failing to invest in anything but deficit reduction.

Now it's clear that there are things more important than reducing the deficit, and that includes redistributing money downward. Out of fear of causing a deep recession, conservatives have lined up behind this agenda and abandoned their principles (though as Shawn has pointed out, they've never been all that true to them anyway). They've lost faith in their ideas, I think, and it's time progressives stood up forcefully for theirs.

Progressives can't rely on the deficit to save them from tax cuts for the rich, particularly in the middle of a recession. If we want to advance an agenda that matters, we have to find rhetorical ground that defends and advances, that affirms our basic beliefs and denies theirs. That may begin by asserting that tax cuts for the rich aren't good because, as the stimulus package begins to show, we can spend it better together than they can on their own.