Republicans say we don’t need revenue to run this country, we need to cut spending. This is why they worship Saint Reagan by suggesting that the rich and corporations shouldn’t have to be burdened with taxes. Reagan called it trickle down when he “lowered” tax rates to rates far exceeding what they are today. This little fact goes unacknowledged by the current Republican Party. It didn’t work under Reagan and it didn’t work under Bush.
Most tellingly, it isn’t working for the Republican Party itself.
In Minnesota, the Republican Party is unable to pay the rent for their headquarters. They are $1,232,341.50 in debt according to Politico.
The GOP’s Secretary Treasurer (since Republicans like to make analogies to running our government like we run our families, this would be the person in your home who writes the checks and balances the checkbook) wrote in a report first obtained by Politico,
“… we continue to be in a precarious working capital position. Consequently, please note that we are not paying our office lease rent payment currently (but have been in discussions with our landlord) and have not yet negotiated long-term payment schedules and/or negotiated settlements relating to most of the vendors on the accounts payable aging (see accompanying financial statements and schedules for summary accounts payable aging reports as of February 29 and January 31, 2012).”
We continue to be in a precarious working capital position….
Hmmm. What is working capital? Working capital is a measure of both a company’s efficiency and its short-term financial health. The working capital ratio is calculated as: Working Capital = Current Assets – Current Liabilities.
Current assets are things that can be converted into cash this year and current liabilities are debt or obligations that are owed within the year. Negative working capital means the company might have a hard time paying its debts and in the worst case, may go bankrupt.
Now, how would you go about getting assets as a Minnesota Republican Party treasurer? Well, you’d need to generate some revenue. In the government, our biggest revenue generator is taxes. Republicans think that they can keep cutting revenue like Bush did, and yet at the same time spend more (liabilities like wars cost a lot of money). They are obviously conducting their party finances much like they ran the country, and they are now unable to meet their obligations.
If the Republican Party were a person, Fox News would be scornfully telling them to pull themselves up by their bootstraps and that they shouldn’t have gotten those headquarters in the first place, since they obviously couldn’t afford them.
“But we could afford them when we got the place!” The GOP would cry back. Right. Welcome to the American dilemma, Republicans — brought on by your fiscal policies, I might add. Maybe some Occupiers will help the Minnesota GOP in its “talks” with the landlord.
In their report, they detail:
A key fact to take away from the accompanying Statements of Revenues and Expenses is that while net revenues(contributions and other income, net of related fund raising expenses) are substantially below budget for the fiscal month of February and on a year-to-date basis ($155,000 and $125,000 negative variances, respectively), total expenses are also below budget ($74,000 and $66,000 for the month and year-to-date ended February 29, 2012, respectively), partially offsetting the negative net revenue variance. Such financial results caused a negative variance in net earnings for the year as actual earnings were less than the budget on a year-to-date basis by approximately $58,000 ($81,000 for the month of February 2012.
Read the entire report here:
Now, why on earth would a Republican be concerned that their net revenues were down, when they keep telling us we can cure the deficit by cutting spending?
If the Republican ideology were in fact the way to fiscal health, the Republican Party of Minnesota would not need revenues. No, they would be able to pay their bills sans revenues. They would simply cut spending, which they have to some degree, but not enough to completely offset their revenue problem.
Of course, this is common sense, and yet we never hear a reporter ask Republicans how we are going to pay our bills without revenue. Perhaps everyone in this country thought Republicans had a magic accounting tool that created revenue out of spending cuts, but alas, if they had such a tool, then the Minnesota GOP would be able to pay its bills and they cannot.
The issue here isn’t that the Republican Party can’t pay its bills, as this happens on both sides of the aisle. The issue is that they can’t pay their bills because they don’t have the revenue to pay them and even they know the truth that you can’t cut your way out of debt and into fiscal health without revenue that exceeds your bills.
And yet, this is what they tell the American public to do, and this is how they propose to run the government.
It doesn’t work for them, but they think it will work for the country?
Or the truth is, they prefer to shift the burden of revenue generating to the middle and lower class, which simply can’t bear the burden, under the guise that tax breaks for the rich will trickle down. If that theory were true, wouldn’t the Minnesota Republican Party be able to pay its bills? What gives?
Is it possible that just because corporations don’t have to pay their fair share and a certain kind of wealth enjoyed by the elite of the 1% isn’t taxed at the same rate as the rest of us pay (Mitt Romney), this magic formula doesn’t lower the rent for the Republican Party and doesn’t help them generate revenue or income, much in the same way as it doesn’t help you and me generate income?
The truth is that any real fiscal conservative will tell you that fiscal health comes from generating revenues that outpace your bills, keeping spending under control, and managing money well.
An adult might say to a Republican, “Gee, honey, I know you really want that war with Iran, but how are you going to pay for it? You still owe all of that money from your other two wars that you never paid for.”
Mitt Romney and the current crop of Republican officials are no fiscal conservatives. They are con artists of the highest order, monkeying with the books in a pyramid scheme where only those at the top hit the jackpot. How do they keep convincing the American people to buy into the scheme, when anyone who took accounting 101 knows better?
Lots of razzle dazzle social issues, finger pointing about the deficit, and scare tactics about weapons of mass destruction and Kenyan socialists.
Ask any honest Republican how the current Republican “ideas” about taxes work, and their face will redden because they know the truth. It doesn’t work; it’s irresponsible and reckless.
Listen to Sarah on the PoliticusUSA Pod on The Daily newsletter podcast here.
Sarah has been credentialed to cover President Barack Obama, then VP Joe Biden, 2016 Democratic presidential candidate Hillary Clinton, and exclusively interviewed Speaker Nancy Pelosi multiple times and exclusively covered her first home appearance after the first impeachment of then President Donald Trump.
Sarah is two-time Telly award winning video producer and a member of the Society of Professional Journalists.
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