Avoiding the Principles of Economics

The year 2000. Neo-conservatives control the legislative and, with the questionably constitutional assistance of the judiciary, the executive branch of the federal government. It was immediately declared that the fundamental principles of classical economics would be applied: a highly regressive tax policy in which the use of capital and the gains would be minimally taxed with the result being economic growth, the General Welfare.

The year 2008. The government announces the need for a massive economic stimulus package. Congress passes the stimulus package. John McCain is campaigning for president to make the tax cuts permanent so that we may enjoy the benefits of the fundamental principles of economics and the government is preparing to legislate an economic rescue plan.

We went from the promise of robust economic growth to a massive stimulus package to the need for an economic rescue. I do believe that neo-conservative economic principles have proven to be a complete failure. Unfortunately, principles are something to be believed in despite the verifiable evidence because they are fundamental, enduring, disprovable ideals. Not believing is just un-American.

While the results of applying the classic conservative principles of economics was easily predictable, critics were deemed socialists and fearmongers, and despite the principles resulting in measures needed described by conservatives as socialism and the need to alleviate the fear of economic collapse, these critics are still deemed wrongheaded disbelievers, implying that the principles have not been disconfirmed, just temporarily out of political favor at worst.

The stimulus package, despite its massive size, was no match for the detriment built into the regressive tax policy being argued as the solution to the problem. Conservatives argue to make the tax cuts, the problem, permanent. Nobody can possibly be that stupid?

The reason the stimulus package did not work is because the lack of consumer demand is an effect of illiquidity caused by a regressive tax burden and its magnified, leveraged, effect--consolidation of the capital. The remedy was a symptomatic treatment that could not overcome a massive consolidation of wealth not seen since just before the Great Depression.

Despite the overwhelming evidence against it, the "principles" of the classic economic model are, by their very rhetorical nature, fundamentally sound. Foremost, conservatives argue, is the principle of welfare for the rich in priority because without it, the economy will collapse (a testable hypothesis).

We have entered a realm of complete absurdity where we are to believe in principles that lead to economic collapse if we do not adhere in theory, and economic collapse if we do in practice.

Are we to "believe" that the impending rescue plan will be the General Welfare because Republicans are being sure it includes the fundamental principles of classical economic theory?

We are going to have a legislative validation of a disconfirmed hypothesis; a complete methodological and practical absurdity!

Disbelief, a complete reversal of the regressive tax code, and deconsolidation of the capital is fully in order toward an economy that is not only fundamentally believable, but verifiably sound.