The Scarcity Myth & Other GOP Fairy Tales (with Vince Scafaria)
Lies Republicans tell so they can gut entitlements and cut services.
One of the fairy tales the GOP loves to tell the American people is that Democrats, when in power, spend money like those Sicilian prostitutes in White Lotus, leaving it to the fiscally responsible Republicans to take the credit cards away and impose fiscal restraint. Because the spending by Democrats has been so out of control, they tell us, austerity measures must be taken.
Needless to say, this is complete bullshit. Go look at the federal deficit for the last 50 years. Republican presidents are drunken sailors, pushing us to the precipice; Democrats come in and soberly clean up the mess. While it’s true that Obama spent the most, much of that outlay was early in his first term, to stave off global economic collapse because Bush II was so reckless. The same folks who cut taxes for the mega-rich while simultaneously financing a war on credit accuse Democrats of being bad with money!
Not only that, but the GOP denounce “spending” as if the federal government is blowing cash on cocaine, happy-ending massages, and money-line parlays involving the Green Bay Packers. When someone like Rand Paul says we have to “rein in spending,” what he’s really saying is, “My insanely wealthy donors no longer wish to subsidize the cost of food stamps for peasants who had the misfortune of not being heirs to a large cosmetics fortune.”
“Spending” is Obamacare. “Spending” is Social Security and Medicare. “Spending” is infrastructure. “Spending” is covid-19 tests and vaccines. “Spending” is teachers and books and school supplies. “Spending” is IRS analysts who make sure rich assholes aren’t screwing the government out of money. When Republicans invoke “fiscal responsibility,” what they really mean is that they want the federal government to stop paying for services—including entitlements.
The GOP has made clear that, if they take control of Congress, they intend to go after Social Security and Medicare. Their plan is to hijack the debt ceiling negotiations to get their way. In other words, they will threaten to send the United States into default unless Democrats cave and allow them to cut those programs. If the federal government stops paying its debts because of Kevin McCarthy, the adverse economic impact that results will make Elon Musk buying Twitter look like me blowing four bucks on Powerball tickets. The U.S. will be fucked—forever. But we’re the ones being reckless!
In order to sell the wildly unpopular idea of entitlement cuts to the American people, Republicans need to advance what Vince Scafaria—the tech entrepreneur, pro-social capitalism evangelist, and my guest on today’s PREVAIL podcast—calls “the scarcity myth.”
“For 99.8% of history, the most reliable way to improve one’s lot in life was to take stuff from others. We are evolutionarily wired to divide the world into “us” and “them” using religion, race, ethnicity, and other tribal cues,” he explained in a recent thread.
“Fascists exploit us-vs-them brain wiring to fracture society for political gain. ‘Fuse your identity with me, the strong leader, so that “we” can prevail over “them.” We need to keep “our” stuff (property, women, etc.) away from the alien “them,”’ he continues. “Libertarians exploit us-vs-them brain wiring for economic gain. ‘There is a limited amount of stuff! Only those who “deserve” prosperity should be entitled to it.’”
Republicans, and libertarian Republicans in particular, want us to think that the supply of dollars is limited—that the budget of the federal government works exactly the same as a household budget. The plane is going down, and there are ten of us but only four parachutes! We have to make hard choices!
But that’s not a valid analogy. The government of the United States pays off its debt in U.S. dollars. And who determines how many dollars are in circulation? The government of the United States, via the Federal Reserve. We create the cash we spend. That’s a very cushy arrangement. As long as we don’t overdo it printing too much money—looking at you, Weimar Republic—we’ll be fine. As Scafaria points out, no less an authority than Alan Greenspan—former chairman of the Federal Reserve and Ayn Rand fanboy—admitted that there’s no functional way the U.S. would ever not be able to fund Social Security and Medicare. The only guardrail, Scafaria explains, is inflation (which is why Republicans love to harp on inflation).
The money funneled into programs like Social Security goes back into the economy. Elderly Americans on fixed incomes use their Social Security payments to buy what they need. Economies are healthy when money moves around; one of the causes of the Great Depression was that so much cash was hoarded. FDR’s deficit spending got us out of that mess by putting more money into circulation. As Scafaria tells me, “An economy is what we do together.”
We all want a better America, where no one starves, where no one goes broke because of medical issues, where the elderly can retire and not have to take a job at the local fast food restaurant to make ends meet, where everyone has access to a quality education—where our government works for us.
“I think that we all want that,” Scafaria says, reflecting on how his grandfather’s pension as a service worker allowed his grandmother to live comfortably into her nineties. “And we’re just told that we can’t have that. And it’s just so full of shit. I mean, how did we make the road system? How did we get a man on the moon? Did we suddenly run out of plutonium? It’s such bullshit.”
It’s such bullshit: a perfect three-word synopsis of the GOP economic platform.
LISTEN TO THE PODCAST
S4 E9: The Scarcity Myth & Other GOP Fairy Tales (with Vince Scafaria)
After sharing his thoughts about Election Day and Merrick Garland, Greg Olear talks to Vince Scafaria, the CEO of DotAlign and an evangelist for pro-social capitalism, about neoliberal economics, Republican financial myths, Social Security, the future of decentralized internet, surveillance capitalism, Russia, China, goldbugs, and more. Plus: a new low-cost service for political candidates.
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Photo credit: Great Dpression via Wikipedia.
Thanks so much, Greg! I really enjoyed our interview. Hope to buy you another beer soon!
It's insane that any reasonable person would ever vote republican but then I noticed Uvalde county in Texas voted overwhelmingly for Greg Abbott (77%). Only white votes were counted for sure!