“If you do not change direction, you may end up where you are heading.”
                                          - Lao Tzu
Remember the GOP tax cut mantras?

“…every major tax cut in this century has strengthened the economy, generated renewed productivity and ended up yielding new revenues for the government by creating new investment, new jobs and more commerce among our people.”
                                             Ronald Reagan
                                            Detroit, Michigan, July 17, 1980

 “I think when people take a look back at this moment in our economic history, they’ll recognize tax cuts work.  They have made a difference.”
                                          George W. Bush
                                          Washington, DC, March 12, 2008

“…tax cuts, starting with Kennedy, as we all know, increase revenues.”
                                         John McCain
                                         National Review, March 6, 2007

Since the introduction of Reganomics, the GOP has consistently argued that cutting taxes, especially for the wealthy, is the way to improve the U.S. economy.  In parallel, Republicans have argued that the Democrats will increase taxes, so it is no surprise the Republicans have overlooked an aspect of the economic stimulus package Barack Obama signed into law last week, a fact that has received very little attention by the press.

Here are the facts –

• A Democratic president, who had been labeled a tax-and-spend liberal during the 2008 Presidential campaign, signed into law the largest two-year federal tax cut in history.
• The total tax cuts mandated by the stimulus bill amounts to $282 billion over two years.
• In his first two years as President, George W. Bush, the picture boy for Republican tax cutting policies, passed tax cuts totaling $174 billion over two years.

Yet, of the 219 Republicans in Congress, only three voted for the stimulus package.  So here we have the party who’s ideological mantra for the past thirty years has been “cut taxes” voting against the most significant tax cut in history.

Republican behavior since Obama’s inauguration has been nothing short of moronic.  While they blow their own horns and become the party of NO; while they tell themselves that in losing they are actually winning; while they convince themselves, and their conservative supporters, that knee-jerk reactive opposition is true wisdom; the Democrats have at last accomplished a major political coup and beaten the Republicans at their own “tax cut” game.

The most interesting aspect of all this is the manner in which the Republicans are already bumbling the 2010 and 2012 elections.  It seems that for the GOP, just saying “No” is more important than their future political viability.

In his campaign for President, Obama promised a huge tax cut for the American people; within weeks of his inauguration, Obama and the Democrats, delivered a huge tax cut for the American people.  And virtually all the Republicans on Capitol Hill voted against it.

Democratic congressmen in swing districts that might be the target of Republicans in 2010 can use this argument to defend themselves.  Perhaps more importantly, Democratic challengers in swing districts can use the argument against vulnerable Republican incumbents, pointing to the record.  In 2012, Obama, in a re-election campaign, can use this argument to remind voters that his party delivered the big tax cut with no help from the other side.

Of course, the Republicans no doubt will argue that the big tax cut was subsumed by all the big expenditures, and was, therefore, not really a tax cut worthy of their haughty support.  They’ll argue that they refused to be hoodwinked by a massive socialist spending package that burdens our children and our children’s children and all children beyond.  (They’ll overlook the fact that the stimulus bill was backed by the eminently capitalist U.S. Chamber of Commerce, and the National Association of Manufacturers.)  But the big flaw in this likely GOP argument is obvious: the minority party - by spending so lavishly and spreading so much red ink on the federal ledger during the Bush era, thereby burdening future generations - has forfeited its image as the party of fiscal prudence.

And the worst part of this tax cut for the GOP is that it is heavily targeted to working and middle class families, just as Obama promised in his campaign -   unlike the Bush tax cuts, which were skewed toward the more affluent.  According to the exit polls last November, Obama easily outperformed John McCain among voters earning between $30,000 and $75,000.  It’s hard to see how the Democrats will lose ground among those workers in 2010 by arguing that they delivered a promised, targeted tax cut - and that the Republicans voted against it.

If Obama’s recovery efforts start to pay off down the road, Republicans won’t even be able to argue that it’s the good ol’ Republican-style tax cut which is really fueling the recovery…because they did nothing to make the tax cut happen.

One would think the Republicans would begin to recognize their predicament, but they appear to have their auto-pilot turned on while their wings are icing up.  Lookout for the crash ahead.