Why a Mixed Economy is Good for the United States

When I was a kid, I was interested in science fiction, astronomy, and space exploration; an interest that has stayed with me throughout my life.  I remember staying up late at night to watch America’s first lunar probe (Ranger 7) crash land on the Moon (July 1964).[1]  When I was in junior high school, I saved up my lunch money to buy a telescope (a 4” Criterion Dynascope reflector for those in the know).  And I was an avid fan of our country’s manned space program.  Growing up in Washington D.C., one of my junior high trips was to Congress where we sat in on a committee hearing to review NASA’s budget.  To my delight, several of the Mercury 7 astronauts came in to testify in support of the Mercury space missions.

All of these memories came flooding back as I’ve been watching PBS documentaries commemorating the 50th anniversary of Apollo 11 when Neil Armstrong and Ed Aldrin landed on the Moon (July 20, 1969).  Not only was it a scientific and engineering success, it was testament to the benefits of a mixed economy, when government and the private sector work together for the benefit of the nation and its citizens.  In this case, NASA planned, organized, managed, and funded the manned space program and private contractors built the hardware.  To appease politicians, contracts went out to companies with manufacturing plants across the U.S., thereby creating jobs and spreading money throughout country and the economy.  For example, in one of the PBS documentaries, a commentator notes that the population of Coco Beach Florida, which is just south of Kennedy Space Center, increased by more than 300% as new jobs were created to support the space program.

As I noted in a previous blog article, Americans of my generation equate the years that America was great (as in Make America Great Again) to those years when our nation’s economy was based on a strong mixed economy.  Deficits were low and the economy was expanding.  The current economic situation only began 40 years ago when Ronald Reagan became President and Republicans became the majority party in Congress.  Don’t believe me?  Just take a look at the following graph.

Notice that from 1957, when the “space race” began through 1981, when Reagan became President, the national deficit never got very high.  Throughout the 1960s, when the U.S. was engaged in sending men to the Moon (yes, it was a sexist enterprise) as well as being bogged down in the War in Vietnam, the deficit was in single figures (e.g., just $9 billion in 1967).  The deficit rose in the mid-1970s in response to a recession but began to go down by the late 70s.  Then Reagan and the Republicans came into office and cut the top marginal tax rate for the wealthiest Americans.  This was based on the idea of trickle-down economics: when the rich have more money to spend, they buy more things which creates demand, which produces jobs and improves the finances of individuals lower down the economic ladder.  There’s only one problem with trickle-down economics: it doesn’t work. 

For trickle-down economics to work, someone like billionaire Warren Buffet would have to buy 10,000 or more new cars a year, year in and year out, to even begin to equal the buying power of middle class consumers.  The rich and super rich just can’t purchase enough goods and services to stimulate the economy as much as the tens of millions of middle and lower middle income workers.  Consequently, these tax cuts starved government revenues, contributing to increasing deficits from lost tax revenues and less money for the government to invest in the economy as they did in the 1960s (the mixed economy). 

Take a look at the graph again.  The deficit rises during Reagan’s administration and then sinks in the 1990s after Clinton and the Democrats come into office.  It goes up again under George W. Bush, spirals into the $trillions when Obama inherits the housing crisis and “great recession’, declines under Obama’s leadership, and then goes up again as soon as Republicans come back into power.  Think maybe there’s a pattern here?[2]

It’s not just the deficit that’s affected by Republican economics.  Wages have been stagnant for the majority of American workers since the beginning of this century.  The Republican tax cuts of 2017 were great for the rich, but barely helped the rest of us keep up with inflation.  Other than military expenditures, Republicans use deficits to cut social programs, which is why Social Security, Medicare, Medicaid, and SCHIP are always under the threat of being cut or worse, privatized.  And, of course, privatization is the answer to everything.  Just ask Secretary of Education Betsy DeVos who would love to see the end of public education as we know it.  And what about the mixed economy that made American great?  The mixed economy that helped put men on the Moon and kept deficits low.  Republicans might answer, “Look what the private sector, like SpaceX, is doing.  They’re planning to return to the Moon by the mid-2020s!”  Right, just half a century after NASA did it.[3]

If you’ve read my other blogs, you know why I keep harping on this topic: universal health care is based on a mixed economic model.  The program is supported by taxes, but health providers, like NASA contractors, are independent entities.  The Department of Health Services which I have proposed to administer the program will, like NASA, determine the broad parameters of operation, but providers will be free to operate independently with little interference regarding their clinical decision-making.[4]  This is not socialism nor socialized medicine, terms Republicans like to use to scare their supporters away from universal health care and the benefits it would provide them (like assuring accessibility and lowering the amount they pay for health care).  Americans are poorly informed about these issues, which is why they often vote against their own best, personal interests.  Let’s work toward a smarter electorate; please share this information.

[1] This was after many, many failures: https://en.wikipedia.org/wiki/List_of_lunar_probes  In 1964 NASA didn’t have the equipment to make a soft landing on the Moon; something they accomplished just five years later with the Apollo 11 landing.

[2] BTW, the deficit has risen every year since Trump took office.  His and his party’s legacy may very well be that, like his businesses, he bankrupts the United States.

[3] To his credit, Elon Musk, SpaceX’s founder, has hired hundreds of young scientists and engineers, science fiction, astronomy, and space exploration enthusiasts, who are living out their dreams and aspirations.  Nonetheless, much if not most of SpaceX’s funding comes from U.S. government contracts.

[4] Mechanisms will be in place to reduce overuse and misuse, while encouraging evidence-based medical practices.

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