Wednesday, April 13, 2011

NYTimes Mythology

Budget Battles - Tax and Spending Myths and Realities -

The NYTimes is expert on mythology. In this particular version, the KEY myth to keep in mind is that the budget is done by the president. In case you are recently returned from another dimension, the last couple of weeks ought to have that firmly in any mind that operates in this universe, but we can see that the Times is exempt from that designation.

Let's start at the top:

Here are two numbers to keep in mind when thinking about the House Republicans’ budget plan: They want to cut spending on government programs over the next decade by $4.3 trillion. And they want to cut tax revenues over the same period by $4.2 trillion.

Actually, the Republicans don't plan to cut ANY government programs over the next decade. They just aim to grow them a lot less rapidly than the Democrats. To claim they want to cut tax REVENUES is just completely stupid -- they want to cut tax RATES and INCREASE tax revenues. ALL the budget assumptions from BOTH sides make assumptions and projections about GROWTH. The fundamental disagreement is about "where does growth come from"? Democrats believe that taxes are a magic form of expense (to the people paying them) that will not affect behavior. While giving people benefits modifies their behavior to vote for those they see as providing the benefit, or increasing the minium wage encourages people to work, and more money given to teachers gives both votes for Democrats and causes the teachers to teach better, taxes are the ONE exception -- no matter how much you raise them, nobody is affected to try to avoid them. Taxes are the magic elixir of Democrats! (well, taxes, union campaign contributions and abortion).

We’ve seen this play before. President Ronald Reagan promised that tax cuts would spur more economic growth and pay for themselves. During his tenure, the deficit hit what was then a peacetime high of 6 percent of gross domestic product, and he eventually decided that he had no other alternative but to raise taxes to try to close the gap.

Remember who controls the budget. Democrats were firmly entrenched in the house from '55 - '95. Anyone that knows enough to ignore the three-card Monty of the Dems and the MSM realizes that "blaming the president" is just done to confuse the rubes. Revenues DID rise under Reagan as he had predicted -- but the Democrats made sure that SPENDING rose even faster. Even crazier,  the "bi-partisan FICA agreement" was a goose that dumped golden eggs on the floor from the early '80s until the early '00s ... one of the reasons for the trouble in the '00s is that the cozy double Ponzi on top of the granddaddy of ponzi schemes (Social Security) of stealing FICA money from BOTH the elderly and the young at the same time is running out. Even scams that are "too big to fail" ala Madoff, have to come to an end. The 900lb invisible gorilla (to the NYT) in this whole discussion is the fantasy of FICA / medicare. 
The Clinton years disproved the notion that higher taxes would inevitably stifle economic growth, or cost politicians their jobs. Taxes were raised in 1993, including higher income tax rates on the wealthiest. The economy was strong, and the stock market surged. Taxes were then cut in 1997 in a deal with the Republican-controlled Congress, but by then the combination of higher tax rates on the wealthy, a strong economy and a rising stock market was boosting revenues significantly.

"The economy was strong, and the stock market surged". Well, no more than the housing market "surged" under Bush. The stock market "bubbled", and it crashed in '00, and Bush came into office in a recession that double dipped on 9/11/2001 -- a small factor that the NYTs seems to have missed, even though given they are in the same city as Wall Street and the now absent WTC, one would think that at least that much of reality would have seeped into their lefty skulls. I guess the Clinton years proved that higher taxes don't inevitably stifle a stock market bubble in the same way that the Bush years proved that lower taxes and a housing bubble don't automatically provide a surplus. From where we are now though, the $167 Billion deficit in '07 that is 10% of what BOs deficits are running makes one wistful for those "failed Bush policies". 

President George W. Bush and Congress undid that progress with $1.65 trillion in tax cuts, heavily skewed to high earners. The economic recovery of the Bush years was extraordinarily weak by historical standards. By early 2009, shortly before Mr. Obama took office, the Congressional Budget Office projected a budget deficit for that year of more than $1 trillion.

One has to be solidly in the left camp to think that "progress" is $1,65 Trillion in extra taxes over a 10 year period. BO and the Democrats must agree, because they haven't raised those taxes even now. One gasps just a bit to think that after 8 years of the illustrious Clinton, we needed a "recovery", but of course those are the facts, plus 9/11/2001. Were that to have happened on a Democrats watch, it would be the excuse to end all excuses -- no level of spending, no level of economic depth would be too much to escape the all-purpose coverage of the 9-11 excuse. 

"heavily skewed to high earners" ... the people over $250K that pay 95% of taxes got 25% of the relief,  the people under $250K that pay 5% of the tax got 75% of the relief.  How is that "skewed"? If you pay over $50K a year in income taxes, your personal amount of tax relief was higher than that for folks that paid $1k. Get it? To a Democrat, that isn't "fair". 

So did we have any elections in '06? Did anything change? Oh, wait -- Congress DID manage to get a budget through in both '07 and '08. What kind of congress was it??? Hmm, a DEMOCRAT Congress. True, Bush signed the budgets, but one would have to agree that he was the lamest of lame ducks by then and in '08, does one REALLY think it was going to help anything to shut down the government to negotiate with Nancy and Harry about lower spending? 

So we don't quote the $167 Billion Deficit in '07 -- Republican President, Republican Congress created. We wait for the '09!!!! budget -- both houses Democrat creating and passing, Bush signing as a lame duck in a bad economy in an election year. Yea, the Democrats and the MSM know all about "fairness" ... not to mention propaganda! 

No comments:

Post a Comment