The cliché is alluring: A rising tide lifts all boats. Former Republican presidents Ronald Reagan and George W. Bush promised it would be true as they cut taxes on the rich.
If the rich got richer, Reagan and Bush contended, some of their extra cash would trickle down and float everyone else’s boat. The gist of this economic theory is that the mission of government is to serve big business and the wealthy, who then, occasionally, bequeath to the middle class and poor hand-me-down benefits.
The problem is that it doesn’t work. The rich got richer, alright. But everyone else got nada. Then the wealthy gamblers on Wall Street crashed the economy, swamping everyone else’s little skiff in a whirlpool of underwater mortgages, lost jobs and dashed hope. Now, a Democratic president has proposed a different economic path. Barack Obama said in a speech last week that America should invest in itself and build out from the middle class. In his economic model, government directly serves the vast majority of Americans in the middle while offering a hand to the poor so they can pull themselves up out of the drink.
His ideas so frighten Republicans that they’re threatening to wreck the U.S. economy — and possibly provoke another financial crisis worldwide — by refusing, once again, to raise the debt ceiling so Congress can pay the bills it already has incurred. If President Obama doesn’t agree to GOP demands to repeal Obamacare, which helps 50 million Americans who need health insurance, Republicans say they’ll kill the U.S. economy.