Bush tax cuts and the decline of U.S. as a serious world power


Commentary: Bush tax cuts and the decline of U.S. as a serious world power

By Dennis Jett | McClatchy Newspapers

The lame ducks had not even flown the coop before the assessments of the 111th Congress started to pour in. After months of partisan bickering and foot dragging, the achievements in the final days of the legislative session were truly impressive.

There are two feats that have been generally unrecognized by the Washington’s chattering class however. Both deserve acknowledgment because they will affect the country’s future more than anything else this session of Congress accomplished.

The legislators affected the course of history by ensuring two future events will occur — the reelection of President Obama and the decline of the United States as a serious world power. That may seem counter-intuitive given that the leader of the Republicans in the Senate, Mitch McConnell, said not too many weeks ago that ensuring the President did not get a second term was his highest priority.

McConnell only needed to glance at the potential Republican candidates for 2012 to discover why he had to forego that dream. While all the party’s presidential aspirants use their platforms on Fox News to ignite the Republican base, they repel pretty much everyone else. More ominous is the fact there will be little chance to oust the incumbent if the economy continues to improve. There is one statistic that will determine that &mash; the unemployment rate. If it is significantly lower than it is now, he will win. If it is not, he won’t.

McConnell could have refused to do anything to help the economy and prayed for a double dip recession severe enough to sweep his party into the White House. Republicans are about to take ownership of the other House, however, and can’t avoid some responsibility for prolonged economic stagnation without there being negative implications for the Republicans in Congress. “Just say no” would therefore be no more effective a strategy than it was in the war on drugs. So McConnell and company signed off on tax cuts that will probably stimulate the economy enough to determine the outcome of the election in the President’s favor.

The tax cuts will also ensure the decline of the United States. Republicans insisted that all those poor starving people with seven figure annual incomes and above could not possibly be asked to pay more. Given the generous provisions of the estate tax, apparently not even dead multimillionaires can be expected to ante up. To ensure tax cuts for such people, the Republicans held hostage the long-term unemployed and their favorite props for photo ops — 9/11 first responders.

The cuts that resulted will not only balloon the deficit, but will also require dismantling a good bit of government at the state and federal level. Education will be hollowed out and infrastructure left to decay as the United States becomes increasingly indebted to other countries and unable to compete in the global marketplace. Future debates on public policy will be forced to focus on how much to gut Social Security and Medicare.

Are the cuts justified by the weight of the tax burden? Studies done by the Organization for Economic Cooperation and Development demonstrate otherwise. The 34 countries in the OECD comprise the developed democracies of what used to be called the First World and a few successful developing countries from those in the Third World.

These studies show taxes as a percentage of Gross Domestic Product in the U.S. are at their lowest level since at least 1965 and are the lowest in the OECD except for Mexico and Chile. At the same time, income inequality and poverty are higher in the U.S. than any other country in the OECD except Mexico and Turkey. As for the accusations that socialism is sweeping the land, only in Korea does the redistribution of income by government have a smaller effect.

The griping about taxes will continue nonetheless. The ability of Americans to have a rational discussion on the subject was long ago put to death by Ronald Reagan’s sound bites. Government became evil and greed became a virtue.

No country can be great if its citizens are unwilling to pay for it. No country will remain great if it neglects the health and education of those citizens who lack lobbyists. The tax cuts may have assured the President’s reelection, but they also ensure America will grow more separate and unequal, not unlike the proverbial banana republics. As a result the U.S. will slowly slip from the leader of the First World to an honorary member of the Third, unless Americans stop believing their exceptionalism stems only from their virtue and requires no sacrifice.


Dennis Jett, a former U.S. ambassador to Mozambique and Peru, is a professor of international affairs at Penn State’s School of International Affairs.

McClatchy Newspapers did not subsidize the writing of this column; the opinions are those of the writer and do not necessarily represent the views of McClatchy Newspapers or its editors.

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