The Tax Cut Cargo Cult

There are Pacific Islanders who have built a religion around the expected return of the American military who will once again bring rich “cargo” to their land.  These religions have early roots, but they blossomed in and after World War II as the strange foreigners arrived seemingly at random bringing wonders, then just as quickly departed.

Reportedly, these islanders have built airfields out of the jungle complete with replica control towers and crude imitations of other equipment like radios and aircraft.  In spite of the consistent failure of the cargo to return and the increasing sophistication of the islanders in growing contact with the outside world, some of the religions continue to thrive (see John Frum).

It’s important to understand that these practices are not a product of ignorance, at least not any longer.  One of the leaders of the John Frum cult has been to the US.  The islanders have plenty of access to information about the genuine source of the “cargo.”  The magical, apocalyptic pursuit of the cargo cult is an article of faith, divorced from reason.  Their belief in the return of the cargo is no less rational than Shia’s belief in the return of the 12th Mahdi or American Evangelicals’ expectation of The Rapture.  It is religion.

We are witnessing the birth a new political religion rooted in similar misunderstandings, frustrations, and Messianic hopes.  No reason can penetrate it.  No facts can undermine the fervor of the faithful.  And like the islanders’ bizarre faux airports, it is diverting valuable resources away from productive pursuits and into destructive fantasy.

Bow down before the Tax Cut.

I’m not going to bother posting links to economic studies or even laying out common sense arguments.  My posts are already too long (I still read the comments).  Besides, anyone who is going to be moved by reason is already off this bus.  George Bush, Sr. once famously described the idea that tax cuts could reduce deficits as “Voodoo Economics.”  He had no idea how right he was.  Endless tax cuts for everyone, especially rich people, will solve all our problems, period.  Argue and you’ll be ignored or worse.

This began of course with Reagan, and like the origins of any religion the history is shrouded in myth.  Reagan did in fact manage to pass a massive tax cut at the height of a terrible recession.  At the same time, he failed to rein in spending, hoping to tackle that later – a goal he never achieved.  So the country basically borrowed its way out of the 80’s recession in classic Keynesian, Democratic fashion and left a future generation to pay for it.

A cargo cult is built around a refusal to substitute hard facts for shiny magic.  The airfields and radios that seemed to bring the cargo cannot be replicated with coconut husks formed into clever shapes.   In the postwar period top tax rates ranged from the upper 60’s to 90% at different times.  When Reagan passed his tax cut the top rate (income tax alone) was a whopping 70%.  We no longer face those high taxes and their consequences.  If anything, our taxes are irresponsibly, even childishly low.  But the mysterious big man, he cut the taxes.  It seemed to bring the cargo, so we’ll do it again.

The magical Reagan also raised taxes in many ways through the ’80’s in his efforts to restructure the system.  He rescued Social Security in 1983 with a massive tax hike that continues to operate today and he did a lot of other pragmatic, real-world things that sensible leaders do and mythical figures do not.  Those subtleties are all forgotten in the cult.

So the cult has come down to us without context or reason.  Cut taxes.  Cut taxes.  Cut taxes.  Taxes are too high.  Remove the terrible injustice of the Estate Tax so that Paris Hilton can lead us all to prosperity.  If Steinbrenner’s heirs have to pay taxes to get hold of his hundreds of millions of dollars that they did not earn that’s tyranny.  Cut this tax, that tax, and all taxes.

How will we pay for government?  That’s a lefty, progressive, Communist, Fascist question to ask.  All good believers understand that the only thing government does is take money from me and give it to Blacks and Mexicans.

George Bush, Jr. took office in 2001 facing annual budgets that had just been balanced for the first time in a generation.  It would have been a great time to pay down the already staggering debt and develop of new culture of fiscal responsibility.  Or…we could cut taxes.

Our aggressive redistribution of wealth from middle and working class families to the wealthy has fed repeated asset bubbles, constant capital inflation, and undermined the public faith in our institutions.  Meanwhile, the infrastructure of capitalism in this country – schools, roads, airports, and social services, are crumbling.  The cure?  Let’s keep doing the same absurd thing it until it works.

It is time to stop trying to “stimulate” the economy by passing bills in Washington.  It’s not that Keynes was fundamentally wrong, but politics has made his strategies ineffective.  Washington is only capable of doing the easy – cut taxes and continue spending.  It can’t do the hard parts of Keynesian economics.

And as Republicans we seem to believe that if we keep doing what our prophets say Michael Jackson will come back in his pre-creepy, jerry-curled glory; MTV will play music; thin ties will be back; Lee Greenwood won’t be cliché anymore;, and we can relive the glory of His Age.  We’ll all once again be singing “Born in USA” and not listening too closely to the lyrics.  Reagan will return and lead us once more.

The cargo isn’t coming.  Sooner or later we will have to make hard, adult choices and pay these bills.  Let’s start now.

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