I named this blog Pragmatic Economics in part because of my desire to avoid politics. That?s why my tag line is, ?I want to explain how things work, not what you should believe.? However, I am so distressed by the 2012 platform released by the Texas Republican Party that I find it impossible not to comment. While I am hardly in agreement with everything forwarded by the Democrats (and have taken aim at President Obama on a number of occasions, especially with respect to his desire to balance the federal budget), it is difficult to believe that what the Republicans put together during their convention in Fort Worth was even written in the 21st century. It is anything but pragmatic.
The document (available here) has already made headlines with the portion that opposes the ?teaching of Higher Order Thinking Skills? and ?critical thinking skills.? Although a partial retraction followed, this was in terms of the wording, not the general meaning. It appears that their fear is that these ?focus on behavior modification and have the purpose of challenging the student?s fixed beliefs and undermining parental authority.? Think about that for a moment. First off, do they really and truly believe that teachers and school boards across the State of Texas are designing curricula specifically aimed at training children to challenge their parents? Second, do you know which values and concepts are rejected in the absence of higher order and critical thinking? None! Therefore, depending on the time and place when we decide to stop challenging ideas and meekly accept what we are told, we might thereafter and forever be racists, sexists, communists, fascists, democrats, capitalists, Christians, Buddhists, Lutherans, geocentrists, pacifists, Wiccans, or whatever the prevailing views of that day were. Nothing would ever again be questioned. Were we to implement such a policy, we?d have to be certain that we had already identified the concepts and values that were ?correct? (whatever that really means). Even a cursory reading of their platform makes it very clear that this is precisely what Texas Republicans believe and what those concepts and values are. This begs the question, who is really aiming to force their beliefs on our children, Texas schools or Texas Republicans? Personally, I prefer what I learned during my twelve years of Catholic school and eight years of public higher education: if a belief cannot stand up to scrutiny, then we shouldn?t believe it; and if it does, we will hold it all the more strongly for the very reason that it withstood our challenge.
Another disturbing feature of the document is that while they ?urge the Legislature to direct expenditures to academics as the first priority,? they also contend that ?Since data is (sic) clear that additional money does not translate into educational achievement, and higher education costs are out of control, we support reducing taxpayer funding to all levels of education institutions? (emphasis added). Not only is the second statement inconsistent with the first (not to mention rather frightening), it isn?t true. The implications of the data are far from clear. In point of fact, economists have found that?not surprisingly?it matters how the money is spent (see here for a survey of the relevant literature). For example, reducing class sizes and adding remedial help appear to be particularly cost effective. Thus, contrary to the Texas GOP?s assertion, there are programs that both add to costs AND increase educational achievement. Furthermore, the most significant finding in the literature over the years has been that teacher quality is the absolute, number one factor driving student attainment. Surely the Texas GOP is not arguing that higher salaries would not tend to attract higher quality teachers or that funds for training and apprenticeship would not be well spent? The bottom line is, the actual evidence flies in the face of their claim that the research shows unequivocally that there is no connection between funding and outcomes. It simply isn?t true. A cynic might be tempted to conclude that the real goal of the Texas Republican Party is simply to find a means of circumventing Article VII of the Texas Constitution, requiring the State to ?establish and make suitable provision for the support and maintenance of an efficient system of public free schools? (wherein, according to the Texas Supreme Court in Edgewood ISD vs. Kirby, efficient is not equivalent to ?economical,? ?inexpensive,? or ?cheap?). I hope that?s not the case.
The economic policies recommended by the document are equally impractical and ill-considered. Bearing in mind that the fundamental problem faced in an advanced capitalist economy is insufficient demand to generate employment for all those willing to work (see Why Do Recessions Happen?), the following recommendations would operate to make this problem even worse:
? We urge state and federal legislators to reduce spending.
? We urge Congress to adopt balanced budgets by cutting spending and not increasing tax rates.
? We recommend repeal of the Sixteenth Amendment of the U.S. Constitution, with the goal of abolishing the I.R.S and replacing it with a national sales tax collected by the States. In the interim we urge the income tax be changed to a flatter, broader, lower tax with only minimal exemptions such as home mortgage interest deductions.
? We favor abolishing the capital gains tax.
? State Tax Reform ? We encourage: Abolishing property taxes?Shifting the tax burden to a consumption-based tax
The first two would directly reduce the demand for goods and services, thus causing contraction and unemployment, while the last three would create a much more regressive tax system that shifted the burden onto the sector of the economy that would otherwise generate the highest level of demand per dollar of income: the poor and middle class (the top 20% of Americans spend 62% of their income, as compared to 87% for the rest). In other words, those who don?t spend would be left with relatively more after-tax income than those who do, creating yet another drag on the economy. Note, too, that the second point above (regarding balanced budgets) is based on a false premise, i.e., that the federal government is budget constrained (see The Big Danger in Cutting the Deficit). One of the least understood economic facts today is that it isn?t, the reason being that the entire debt is owed in something we and only we are permitted to print: US dollars. Nor is this inflationary except when the economy is near full employment?-at which point there is no need for the government to continue deficit spending (see Money Growth Does Not Cause Inflation).
The Texas Republican Party Platform also argues that, in contradiction to my last blog post (The Real Job Creators: Consumers), lower business taxes and deregulation will solve our jobs problem. This is false. What we really need is increased demand, which comes via consumers. In addition, they believe that the Federal Reserve system should be abolished and that the US should return to the gold standard:
Our founding fathers warned us of the dangers of allowing central bankers to control our currency because inflation equals taxation without representation. We support the return to the time tested precious metal standard for the U.S. dollar.
Source: http://www.forbes.com/sites/johntharvey/2012/07/01/texas-gop-platform/
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