This is the first of ten installments examining the biggest and fattest, most unapologetic out-and-out whoppers that Republicans will be running on this November. It was hard to narrow the list down to just ten (I could have done volumes on Michele Bachmann alone), but after extensive study and fact checking, these are the winners of “The Ten Biggest Republican Lies.”
Extending the Bush Tax Cuts Will Reduce the Deficit
To grow the economy, I, King Russell of Buchania, have decided to extend a 5% tax reduction to my subjects. For most Buchanians the 5% reduction will merely postpone the wolf’s scratching at the door, but for my fellow aristocrats the cuts will result in a doubloon windfall—a cascade of cash that they will then invest in Buchania businesses and the creation of jobs for my many unemployed subjects.
I will then be able to collect enough taxes from my happy, gainfully employed people that I will be able to replace the amount Buchania’s treasury lost by cutting taxes in the first place. The Deficit of the Realm will be reduced, and I, their beloved sovereign, will then be able to pay for better roads and better education for their children.
The deficit reduction caused by my tax cuts will also calm the fears of our creditor kingdoms, Chinathia and Germandria, whose growing nervousness about our out-of-control spending might have eventually caused them to dump—for pennies on the doubloon—the trillion in Buchania Treasury Notes they now hold… a situation so devastating we would long for the relatively good old days of the Black Plague.
However, when Buchania’s unemployment reaches 20% and my subjects have discovered that my tax cuts only fattened the deficit and the bank accounts of my fellow aristocrats, their love for me will diminish. When it is further discovered that instead of investing in Buchania’s economy, my wealthy chums used their tax cuts to purchase fine country estates and caviar for their polo ponies, it will not sit well with the Great Unwashed. After losing their livestock, thatched huts and sanity, they will storm my castle and hang me from the outstretched arm of my beautiful, jewel-encrusted statue of Adam Smith.
The Voodoo They Do
“Voodoo Economics” is what Bush Sr. called this particular piece of “supply-side” theory eventually signed into law by his Voodoo-friendly son. Before Senator John McCain became “Weather Vane” McCain, he too loudly inveighed against this obviously unworkable scheme.
N. Gregory Mankiw, former chair of Bush Jr.’s Council of Economic Advisers, broke it down like this: The money kept in the private sector by cuts in capital gains taxes generates only about half of the government revenue lost by the cuts, while payroll tax cuts replace about 17% of what the government would have collected without the cuts.
In other words, continuing across-the-board tax-slashing while our deficit turns into a fiscal version of “The Blob” is economic madness; only a fraction of the money kept in the private sector due to tax cuts finds its way back into government coffers.
Economists with impeccable conservative bona fides, including Alan Greenspan and Reagan budget chief David Stockman, predict fiscal disaster if the Bush tax cuts don’t expire when they’re supposed to at midnight, December 31, 2010.
Bush’s Folly in Perpetuity and the “Small Business” Canard
If Bush’s tax cuts are allowed to continue, the wealthiest Americans–by far the major beneficiaries of the cuts–would simply pile those millions on top of the money they’re already hoarding. The only jobs created: crews for their new yachts.
Small business owners–the folks Republicans claim are in Obama’s “over $250,000 ” bracket — AREN’T. John McCain can shout, “23 million small-business owners will see their taxes go up under Obama’s scheme” all he wants, but he can’t make it true. In fact, a number of those business owners will see their taxes go down.
According to FactCheck.com’s analysis, “McCain is counting mostly ‘business owners’ with no workers, including those who simply report small amounts of income from sideline or freelance work. McCain is arguing that Obama’s tax increase would “destroy jobs,” but he’s counting mostly firms that don’t produce any.”
Business Week tells us that “8.9% of individuals who report small business income or loss (including self-employment income, income from S-corps, partnerships and limited liability companies, farm income and income from rental property and royalties) have household income greater than $250,000. But fewer than 2% of those filers fall into the top two tax brackets.” From Business Week, no less–not exactly a champion of wealth redistribution.
According to the Joint Committee on Taxation, extending Bush’s tax cuts would add $2.6 trillion to the deficit over the next 10 years.
We’d have to really hate our kids and grandkids to leave them holding that kind of bag.
When you add to the Bush tax cuts our current policy of continual war, our red ink begins to take on biblical proportion–plague, locusts and the American deficit. According to the Center on Budget and Policy Priorities, “Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion added to the deficit in 2009 and will account for almost $7 trillion of the deficit from 2009 through 2019, including the associated debt-service costs. These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the [unpaid for] Medicare drug benefit) do not fade away as the economy recovers.”
Republican Whoppers
We’ve gotten used to Republican end runs around the truth with “death panels,” global warming-as-hoax, Iraq’s WMDs, etc., but those claims at least offered some sort of plausible deniability, i.e., “Everybody thought Saddam had WMDs,” or “Obamacare does mention ‘panels’ and ‘death’ at different points in the legislation.” But the bold assertion that tax cuts will reduce the deficit is not only the biggest and fattest of big fat Republican lies, it leaves no credible dance steps toward the wings for its minstrels.
Once Americans see the original Bush tax cuts and their extension as tragic fiscal policy, Boehner and crew could try, “You heard us wrong, we said, ‘Let’s end, not extend,’ ” but somehow I don’t think anybody will buy it…or prevent us rabble from carrying our pitchforks and torches to the voting booth.
Click here for next Republican Whopper: “We are the Party of Family Values”
Click the “Sign me up” button on the left for email alerts of Buchanan’s latest screeds
Russ Buchanan 