The Republican Economic Anti-Government Argument

Dave Johnson

Haley Barbour articulated Republican economic thinking yesterday, saying “government sucks money out of the economy.” Apparently he thinks it puts tax money under a big mattress.

During yesterday’s Clinton Global Initiative (CGI) — America, Mississippi Governor and former Chair of the Republican National Committee participated in the opening plenary session. Stepping outside of the normal protocol for this event, Barbour took advantage of his position on the stage to lecture the audience, saying, first, responding to President Clinton talking about creating jobs, “…don’t raise taxes, improve quality of workforce, tort reform.”

And then more lengthy comments, (approx., from notes.) (Some in the crowd applauded.)

… the private sector creates jobs government doesn’t. Government’s role is to have an environment in which the private sector creates jobs. But a bigger government means a smaller economy. Government sucks money out of economy, 25% of GDP goes to the federal government. This is a huge barrier to employment. When businesses are told they are going to raise taxes on employers, or a health insurance mandate, running deficits, all these are impediments to main street and whole economy.

This is not some kook who hasn’t been taking his meds. This is a “serious” person — a Governor and former Chair of the Republican Party!

We hear this position stated from a number of Republicans, basically saying “taxes take money out of the economy.” This is a variation of the “rich people create jobs” argument, basically saying that if wealthy people have more money, it will trickle down to the rest of us. According to Ayn Randian “producer” ideology “rich people create jobs” for the rest of us, and therefore should receive most of the benefits of our economy.

Republican Speaker of the House John Boehner, another “serious” person, said just yesterday, “tax hikes destroy jobs.” Previously he has talked about “job creators.” See his press release, Speaker Boehner Highlights Plan for America’s Job Creators

Government, democracy, taxes and basic economics used to be well understood, but over time understanding of these concepts has eroded. So instead of just mocking Barbour’s ridiculous statement, it is better to understand its roots and counter it in some detail.

When Barbour says “Government sucks money out of economy, 25% of GDP goes to the federal government,” he is actually misstating the fact that government is a percentage of the GDP, but wording it in a way that might trick less-informed people into thinking this means it is a drain on that GDP. The public sector provides the infrastructure that enables us to have businesses. Laws, courts, schools, roads, ports, police, firefighters and scientific research all play a role in that and add up to a fairly significant component of the national economy.

When Republicans advocate cutting back on the schools, police, firefighters, etc that make up the government’s share of the economy, they are actually advocating the removal of the public-funded education, research, law-enforcement, regulatory apparatus etc. that enable us to start businesses, thereby providing an advantage to already-existing large businesses that have secured a lock on a segment of the economy. They are advocating cutbacks in the ability of We, the People to compete with these wealthy, powerful forces.

The fact is that government is We, the People. In a democracy our government enables We, the People to all have the opportunity to start businesses and complete in the economy. It is We, the People making the decisions to have a clean environment, good wages, safety and dignity on the job. Cutting back on government means cutting back on those benefits of democracy, and instead letting the wealthy and powerful control what we do.

Here is the full video from yesterday’s opening plenary session at CGI-America:

Watch live streaming video from cgi_plenary at livestream.com

P.S. Go to OurFuture.org/SharedSacrifice to demand your House and Senate representatives draw a firm line in the sand: for every dollar cut on services for all, a dollar in higher taxes on the richest Americans.

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