Does anyone remember Reaganomics? If you recall, Ronald Reagan believed in supply-side or "trickle down" economics. The theory was that government should cut expensive social programs, like Medicare. Instead, the money would be spent on even more expensive defense programs, such as the Strategic Defense Initiative, or "Star Wars" defense system. SDI was the perfect Republican program, as it would have cost endless billions and no one was even sure if it would ever work, much like Bloomberg's CityTime scandal. As a result, the federal government could funnel unlimited tax payer funds into the pockets of defense contractors for the rest of eternity without making us any safer. Rather like Homeland Security.
Republicans have been beating the trickle-down drum ever since, but lately they've run into a problem. Middle class and working class families have begun to notice that no money or jobs are actually trickling down to them. Despite a drop in the marginal tax rate for the rich from 70% to 28% (and 15% for hedge funds), the middle class has shrink to almost nothing and the country has hit new highs in unemployment. Republicans, of course, are calling for more tax cuts, on the theory that if something doesn't work, it may as well make the rich even richer. But people are beginning to catch on, and the Republicans need something even more bold, even more recklessly stupid than Reaganomics. NJ Governor Chris Christie has piloted this new idea in his dealings with teachers unions and pension costs in his state.
I'm coining a new phrase for this daring fiscal move, which I'm calling Amnesia-nomics. It works like this. States like New Jersey have historically refused to pay teachers and other state workers the wages they deserve. Instead, over the years, they have agreed to contracts with unions promising pension and health benefits. So rather than actually funding those contractual obligations, people like Christie spent the money on other, more important things, such as flying the governor in a helicopter to see his son play baseball. So, to make ends meet, Christie began to "forget" to pay some of his bills. For example, last year, he forgot to make a three billion dollar payment to the state's pension fund. Today, he is signing historic legislation that will, essentially, "forget" most of the contractual promises New Jersey has made in the past to its workers. Thus, Amnesia-nomics was born.
It's a great concept. Imagine if we all could use it in our own lives? Imagine if we could "forget" to pay the cable bill, and the cell phone bill, and the mortgage, and still got to keep our TV shows, our iPhones, and our McMansions? Wouldn't that be great? Of course, if you try it, you will be forced into bankruptcy and have all your possessions taken away by Dog the Bounty Hunter. Luckily for the states, all they have to do to renege on their promises is to pass a bill!
Amnesia-nomics, as practiced by Christie, has proven hugely popular with Republicans, who now want to duplicate it nationally. For example, Paul Ryan got the ball rolling by suggesting that the US should forget about its obligations to its citizens who have been paying into Medicare for decades. Then, Republican presidential candidate Ron Paul really upped the ante by suggesting that the United States should declare bankruptcy, starting by defaulting on over a trillion dollars of debt to the Federal Reserve. Why pay your debts when you can just let them slip your mind, Chris Christie style?
If Amnesia-nomics works, imagine where we can go with it. America can "forget" to pay all 14 trillion of its debt and start with a clean slate! Then, to make sure we never get ourselves into this kind of trouble again, we can "forget" about a lot of our other obligations, like health care, Medicaid, social security, and so on. On a local level, states could "forget" about your pensions, union contracts, unemployment benefits, etc. The possibilities are endless.
Skeptics might ask how all of this will affect the middle and working class who depend on these government agreements to survive. I think I know how Republican would respond.
Forget about it.