UW News

December 19, 2007

GOP policies ruining the economy, UW political scientists say in new book

With the Iowa caucuses only weeks away and Wall Street fearing a recession, two University of Washington political scientists say too many politicians and their constituencies hang onto bad economic ideas, even when they’ve been shown wrong.

“In America, nothing attracts attention so much as a get-rich-quick scheme, and the tax cut proposals and their justifying ideologies have all the characteristics of such a scheme in a market bubble,” write Bryan Jones and Walter Williams in their new book.

“The Politics of Bad Ideas: The Great Tax Cut Delusion and the Decline of Good Government in America” focuses on the harm caused by George W. Bush’s 2001 and 2003 tax cuts. The book is the latest of seven in the “Great Questions in Politics” series published by Pearson Longman.

Often, politicians latch onto an appealing but wrong idea, believing it can save the world, “and they identify so strongly with the idea that it becomes almost part of their identities,” write Jones and Williams. Such is the case with leaders of the Bush administration, who believe tax cuts pay for themselves or cause government to get smaller.

“These ideas are not just wrong,” say Jones and Williams, “they defy both common sense and the reality of public finance.”

The biggest problems, which the authors lay out in great detail, start with honest numbers bent into political weapons by the Bush administration to sell the 2001 tax cut.

After World War II, federal agencies relied more and more on fact-based, numerically grounded systems of policy analysis. Beginning with Ronald Reagan, however, ideological decision making took hold, and bad economic ideas found more hospitable environments.

Jones and Williams show that the two tax cuts ballooned the national debt, pushing the nation toward fiscal insolvency and threatening middle-class standards of living.

“Tax cuts in a time of national emergency are not normal; indeed, Bush’s refusal to raise taxes during a war is unprecedented in America,” Jones and Williams write.

They also lay out evidence that on wages and salaries, gross domestic product, median family income and tax revenues, the Bush administration fares poorly compared to previous administrations.

This past September, Bush nevertheless reiterated his claim that tax cuts had yielded more tax revenues.

The federal budget belies that claim, the authors note.

But solutions are possible. Jones and Williams advocate statute-based, pay-as-you-go rules similar to the constitutional requirements adopted by a number of states. They also say the budget function should be separated from the management function at the Office of Management and Budget, with a non-partisan director similar to the director of the Congressional Budget Office.

Good numbers are pivotal in restoring sound government, the authors say. Ideology has to take a back seat to hard analysis if the American middle class is to maintain its standard of living.

###


For more information, contact Jones at (206) 543-6493 or bdjones@u.washington.edu or Williams at (206) 322-4197 or wwms@u.washington.edu.