In my last column, I was particularly negative toward the Republican Party’s trickle-down economics tax policy. I have been asked to explain how increasing taxes on the wealthy and giving a tax rebate to those who are too poor to pay income tax is not socialism.
Liberal views on economics are not simply the antithesis of conservative views which tend toward unregulated, free market capitalism. Thus, liberal economic philosophy would not be market regulation and government control of banking, property and investment, as I think the Republicans are attempting to allege.
This is my perspective on the liberal views of economics with a historical perspective on the Democratic Party, and I think it will help address the question I received.
Since Franklin Delano Roosevelt, the middle class and poor have been a traditional focus of the Democratic Party, and a very foundational shift in the public view on the role of government occurred in America while FDR was in office. For the first time the government was seen as the protector of the poor and the economically burdened, and out of this fresh perspective came the New Deal.
In his Nomination Speech July 2, 1932 Roosevelt attacks the Republican trickle-down economics theory which were in place in the Hoover administration. “There are two ways of viewing the government’s duty in matters affecting economic and social life. The first sees to it that a favored few are helped and hopes that some of their prosperity will leak through, sift through, to labor, to the farmer, to the small business man.
“But it is not and never will be the theory of the Democratic Party,” he continued.
In this same speech, Roosevelt articulates what he believes the true role of government should be. “The welfare and the soundness of a nation depend first upon what the great mass of the people wish and need; and second, whether or not they are getting it.”
So the idea that the future of America depends on the quality of the lives of average people was just emerging in government policy.
Now to address the question I received. As I see it, there are only two groups of people not paying their share of taxes: the wealthy and the poor.
The government paid into the accounts of the wealthy during the infamous Hoover administration and they hoped that it would trickle down to the very poor, at that time those involved in agriculture. Today, the infamous Bush administration has done the same thing, but the very poor are those on the serving end of our consumer-based economy.
The Great Depression in 1929 was the breaking point for the early trickle-down economic policy and the recent recession is the second breaking point. Twice in history the Republican tax policy has been ineffective and actually revealed to be destructive.
So I want to return this question to the questioner: How is having the middle class and working class pay higher taxes than the wealthy, and then giving tax breaks to the very wealthy not ignorant?
Obama’s policies more closely resemble the policies of the New Deal rather than a government control of the market or redistribution of wealth.
According to a LA Times article, “McCain seeks to portray Obama as an extreme liberal… About 40 percent of workers do not make enough to pay income taxes. Obama argues that they deserve relief because they pay other levies, such as payroll taxes, which fund Social Security and Medicare.” The relief Obama will give these workers is a $1,000 tax rebate.
According to his Web site, Obama also plans to create jobs through investing in a green economy. He proposes to invest in renewable energy and clean car industries, creating 5 million jobs in environmentally conscious manufacturing – an industry so far left on the sidelines in America. This will not only help the job market, but also the manufacturing industries in America.
Obama’s Web site further explains his job stimulus plan, noting that he will also create a National Reinvestment Bank to rebuild America’s “national transportation infrastructure – its highways, bridges, roads, ports, air and train systems – to strengthen user safety, bolster our long-term competitiveness and ensure our economy continues to grow.” Obama’s Web site predicts that his plan could create up to 2 million new direct and indirect jobs, as well as generate up to $35 billion per year in new economic activity.
I don’t see anything socialist about Obama’s economic proposals. His view of government is the same as FDR’s; that it’s the government’s job to help offset the adverse affects of economic downturns and raise the quality of life in America.
This renewal of hope and energy is what America needs in order to undo the negative view of government that has been built into our generation by the policies of the Bush administration, and it will take an new ambitious overhaul of Bush’s economic policies not seen since the New Deal.
Stephanie England is an English junior and a Mustang Daily politcal columnist.