We have in this country an essentially unchanging disagreement about what model of governance will produce the best economic and social results. Democrats advocate what we might call weak social democracy: relatively high taxes (though lower than those of our peer countries), combined with a relatively strong safety net (though again, not as strong as other countries), spending on needs like education and health care, and economic regulation to protect workers, consumers and the environment.
Republicans, on the other hand, advocate low taxes, less social spending and less regulation. Both sides have moral arguments for why their models are better, but they also make practical arguments. They say that their model works, and that when it is implemented, we see positive results.
While the moral argument may not be resolvable, the practical argument can be tested. And right now we’re seeing tests take place all over the country. I want to focus on one such test, in the deep-red state of Oklahoma, and what it says about what Republicans are doing in Washington.
Like many states controlled by Republicans, Oklahoma has for some time been putting the GOP theory into practice: low taxes, little regulation and weak social spending. On the tax front, it has been particularly aggressive, since state law mandates that no tax increase can pass without a three-quarters majority in the state legislature. This has created a one-way ratchet, in which any tax cut is effectively permanent and taxes can only go down.
And has it produced the boundless prosperity Republicans predict? Well, no. In fact, the state is now in a full-blown fiscal crisis. Here’s a summary of the situation from NPR:
Riding high on the oil boom of the late 2000s, the state followed the Kansas model and slashed taxes. But the promised prosperity never came. In many cases, it was just the opposite.Around 20 percent of Oklahoma’s schools now hold classes just four days a week. Last year, highway patrol officers were given a mileage limit because the state couldn’t afford to put gas in their tanks. Medicaid provider rates have been cut to the point that rural nursing homes and hospitals are closing, and the prisons are so full that the director of corrections says they’re on the brink of a crisis.
Just to reiterate: The state has so little money that 1 in 5 schools is open only four days a week. Gov. Mary Fallin and Republicans in the state legislature are debating a plan to increase taxes to try to address some of these problems, including giving a raise to teachers. Which is sorely needed, because Oklahoma pays its teachers less than any other state in the country.
That’s not to mention the other problems the state could be addressing, but isn’t. For instance, like many Republican states, Oklahoma refused to accept the Affordable Care Act’s expansion of Medicaid, and partly as a result it ranks eighth on the list of states with the highest proportion of its population without health insurance.
So if you suddenly became governor of a state somewhere, would you say, “We really need to duplicate what they did in Oklahoma”? Before you answer, consider that Oklahoma ranks 43rd in household income. And if you look at that list, you’ll find that of the top 10 states with the highest income, seven are strong Democratic states, two are states where Democrats and Republicans share power (Virginia and New Hampshire), and only one, Alaska, could be described as a red state. At the other end, nine of the 10 poorest states are Republican-controlled (New Mexico is the exception), where somehow their genius governing model has failed to produce the results they predict.
If Oklahoma’s experience sounds familiar, it’s because something similar happened recently in Kansas. Sam Brownback was elected governor in 2010 and promised a grand “experiment” in Republican economics that would turn the state into a paradise of prosperity. Taxes were slashed, particularly for the wealthy, including the elimination of state taxes on “pass-through” income, not dissimilar from a provision in the tax cut Republicans in Congress recently passed (though in the latter case it was a giant deduction, not a complete elimination of the tax).
What was the result? Something resembling a catastrophe. Revenues plummeted, requiring brutal cutbacks in social services. The state’s bond rating got downgraded. The promised growth didn’t materialize — in fact, the state grew at a lower rate than the rest of the country through the recovery of the Obama years. Job growth in the state between the time the tax cuts were enacted and when they were scaled back in 2017 — after saner Republicans in the state revolted against the governor — was less than half of what it was in the rest of the country, and lower than every one of Kansas’s neighbors except one. Want to guess which state had lower job growth even than Kansas? That’s right: Oklahoma.
There are two lessons here. The first is that trickle-down economics just doesn’t work. Giving benefits to the wealthy and corporations doesn’t produce prosperity for all. It just doesn’t. Every time Republicans propose a tax cut, they say that this time will be different, but it never is. And second, people actually value the services government provides — like having schools that stay open five days a week. When you slash revenue so that you can’t afford those things, the public isn’t happy about it.
So is the same thing going to happen to the whole country now that the Kansas/Oklahoma model is being implemented at the federal level? The answer is, it’s complicated. Unlike states, the federal government doesn’t have to balance its budget every year, which means you can slash revenue without having to cut spending to compensate, at least not immediately. Which is exactly what Republicans just did: Because of their tax cut, the deficit in 2019 is projected to exceed a trillion dollars, a level it hasn’t hit since 2012. And we’re approaching a budget agreement that will increase spending, which will limit the damage.
Nevertheless, Republicans are still going to try to implement the spending side of their governing model: They’re trying to make Medicaid harder to get, and they’d like to privatize Medicare and cut back on things such as food stamps. That combines with a deregulatory agenda that will take away workers’ rights, make our air and water dirtier, and pull back on efforts to address climate change.
So on the whole, while Republicans in Washington won’t be able to turn the entire country into Oklahoma overnight, they’re going to give it their best shot. And they’ll keep saying that if we just cut taxes for the wealthy and slash social spending, everything will work out great. No matter how many times they’re proved wrong.
