Republican Party Platform Expedition Part I: Economic Policy

by Benjamin Studebaker

I have found the complete 2012 Republican Party platform on pdf. It is a long, lengthy document, and consequently will need to be analysed in multiple posts. Today, I invite you to join me in beginning this expedition to discover the nature of the Republican Party, to see what is particularly agreeable or disagreeable about it and its platform. You can read the entire platform at the above link–I will be quoting interesting or compelling sections from it and discussing them below.

A party’s platform is that party’s official programme or set of positions on various political issues. Members of the party are, by virtue of their membership, obliged to advance the party platform. If politicians in a party do not advance its platform, one or the other is dishonest–either the politician does not believe what he claims to believe, or the platform has been written as propaganda rather than as a statement of intent. It is therefore safe to assume that republican candidates stand by their platform unless you believe them to be dishonest.

There are six core sections to the Republican Party platform:

  • “Restoring the American Dream: Rebuilding the Economy and Creating Jobs”
  • “We the People: A Restoration of Constitutional Government”
  • “America’s Natural Resources: Energy, Agriculture, and the Environment”
  • “Reforming Government to Serve the People”
  • “Renewing American Values to Build Healthy Families, Great Schools and Safe Neighborhoods”
  • “American Exceptionalism”

To simplify, let’s call them “Economic Policy”, “Constitution Policy”, “Energy Policy”, “Miscellaneous”, “Social Policy”, and “Foreign Policy”, since these names simply and accurately convey what is discussed in each section. I am dividing it up into multiple sections, covering economic policy today by itself, because it is both lengthy and filled with interesting passages.

Economic Policy:

Most of what we find here is what we would expect to find. Take this, for instance:

Reform the tax code by reducing marginal tax rates by 20 percent across-the-board in a revenue-neutral manner; Eliminate the taxes on interest, dividends, and capital gains altogether for lower and middle-income taxpayers; End the Death Tax; and Repeal the Alternative Minimum Tax.

This reads more or less like the Romney tax policy or the Ryan budget, in that it contains a large tax cut that is supposed to be revenue neutral. As with those plans, this would necessitate “base broadening”, or the closing of many deductions and loopholes. However, it rejects eliminating any tax breaks on investment and in fact proposes to lower taxes on investment further, which means, in order to be revenue neutral, numerous loopholes on the poor and middle classes would need to be closed. The Tax Policy Centre has in the past calculated that similar proposals would raise net taxes on the bottom 95% of Americans. Unsurprisingly quite regressive.

A far more interesting and surprising passage is this one:

In any restructuring of federal taxation, to guard against hypertaxation of the American people, any value added tax or national sales tax must be tied to the simultaneous repeal of the Sixteenth Amendment, which established the federal income tax.

With these lines, the Republican Party calls for the repeal of the 16th Amendment and consequently the income tax. This is an extremely radical and regressive policy that would restore the tax system to 1913 conditions, moving America backwards a century. It would make sustaining current spending near impossible barring an extremely punitive sales tax, and sales taxes are far more regressive than income taxes.

There is a section raving about the size of the national debt, too long for a direct quotation, which we know to be deeply flawed because of our monetary system’s ability to control the money supply, and because interest rates on government debt remain extremely low, below 2%, indicating market confidence in the current level of debt.

Then there is this section:

We call for a Constitutional amendment requiring a super-majority for any tax increase, with exceptions for only war and national emergencies, and imposing a cap limiting spending to the historical average percentage of GDP so that future Congresses cannot balance the budget by raising taxes.

This is a deeply disturbing suggestion that would make it near impossible to raise taxes even to pay off debts that the republicans themselves claim be deeply concerned about. It would arrest American progress, making it impossible for the United States to move to the left even if that were the will of the president and majorities in both houses of congress, unless a super-majority was possessed in both.

Even more harrowing, however, is this:

Determined to crush the double-digit inflation that was part of the Carter Administration’s economic legacy, President Reagan, shortly after his inauguration, established a commission to consider the feasibility of a metallic basis for U.S. currency. The commission advised against such a move. Now, three decades later, as we face the task of cleaning up the wreckage of the current Administration’s policies, we propose a similar commission to investigate possible ways to set a fixed value for the dollar.

First of all, it should be noted that, at under 2%, inflation is totally negligible, that present circumstances are in now ways similar to the early eighties. More importantly, however, this is more or less a republican endorsement of renewing, or at least considering renewing, the gold standard or something similar. Nations with fixed currencies cannot engage in conventional monetary policy–they lose effective control of the power of the press, of the power of interest rates, of the ability to devalue their currencies in the event of debt crises. Spain, a Eurozone nation, finds itself in such a situation presently, unable to control its own currency. As a result, despite having a more or less equivalent level of debt to the United Kingdom, Spain runs around a 7% interest rate on its debt, while the UK runs less than 2%. The gold standard was historically a grave source of global financial instability, routinely producing debt and currency crises. It is fundamentally irresponsible for the Republican Party to resurrect this zombie idea.

There’s a bit on the housing market, too long to quote, that proposes that we are in a supply side rather than demand side crisis in which the problem is that lenders have been discouraged from lending by onerous regulations. We know this is not the case because, in a supply-side recession, the federal reserve’s quantitative easing programme would have resulted in higher inflation due to the piles of money that lenders would have suddenly found themselves possessing. The problem is instead that there is insufficient demand and consumption, which makes further investment by lenders unprofitable, no matter how much money they have or how loose the regulations are.

There’s a bit on infrastructure spending that attacks the left for prioritising public transport (i.e. high speed rail) and high density urban planning over highways and roads.  All infrastructure spending is good stimulus and makes the economy more efficient, so it’s really just a matter of cost-benefit on specific projects and whether we want to develop into a more urban or suburban society, of which the former is more energy efficient but less in line with the traditional preferences of the right.

There’s an section promoting free trade, which, given current global economic market relations, is a code word for outsourcing. Outsourcing lowers costs for companies and for commercial products, but debilitates American industrial productivity and eliminates American jobs.

The section on economic policy closes with some anti-union rhetoric, of which the most interesting bit is this:

We salute the Republican Governors and State legislators who have saved their States from fiscal disaster by reforming their laws governing public employee unions.

This is a nod to governors like Wisconsin’s Scott Walker, who passed laws striping public sector unions of much of their power, severely penalising teachers, police officers, firefighters, and so on. I would elaborate further, but this post is already too long as it stands.

When we return to our expedition, exploring every nook and cranny of the Republican Party’s platform, we’ll explore constitutional policy.