One of the big advantages that President Obama has, as he plays
“chicken” with the Congressional Republicans along the “fiscal
cliff,” is that Obama is a master of the plausible lie, which will
never be exposed by the mainstream media — nor, apparently, by the
Republicans.
A key lie that has been repeated over and over, largely
unanswered, is that President Bush’s “tax cuts for the rich” cost
the government so much lost tax revenue that this added to the
budget deficit — so that the government cannot afford to allow the
cost of letting the Bush tax rates continue for “the rich.”
It sounds very plausible, and constant repetition without a
challenge may well be enough to convince the voting public that, if
the Republican-controlled House of Representatives does not go
along with Barack Obama’s demands for more spending and higher tax
rates on the top 2 percent, it just shows that they care more for
“the rich” than for the other 98 percent.
What is remarkable is how easy it is to show how completely
false Obama’s argument is. That also makes it completely
inexplicable why the Republicans have not done so.
The official statistics which show plainly how wrong Barack
Obama is can be found in his own “Economic Report of the President”
for 2012, on page 411. You can look it up.
You may be able to find a copy of the “Economic Report of the
President” for 2012 at your local public library. Or you can buy a
hard copy from the Government Printing Office or download an
electronic version from the Internet.
For those who find that “a picture is worth a thousand words,”
they need only see the graphs published in the November 30th issue
of Investor’s Business Daily.
What both the statistical tables in the “Economic Report of the
President” and the graphs in Investor’s Business Daily
show is that (1) tax revenues went up — not down — after tax
rates were cut during the Bush administration, and (2) the budget
deficit declined, year after year, after the cut in tax rates that
have been blamed by Obama for increasing the deficit.
Indeed, the New York Times reported in 2006: “An
unexpectedly steep rise in tax revenues from corporations and the
wealthy is driving down the projected budget deficit this
year.”
While the New York Times may not have expected this,
there is nothing unprecedented about lower tax rates leading to
higher tax revenues, despite automatic assumptions by many in the
media and elsewhere that tax rates and tax revenues automatically
move in the same direction. They do not.
The Congressional Budget Office has been embarrassed repeatedly
by making projections based on the assumption that tax revenues and
tax rates move in the same direction.
This has happened as recently as the George W. Bush
administration and as far back as the Reagan administration.
Moreover, tax revenues went up when tax rates went down, as far
back as the Coolidge administration, before there was a
Congressional Budget Office to make false predictions.
The bottom line is that Barack Obama’s blaming increased budget
deficits on the Bush tax cuts is demonstrably false. What caused
the decreasing budget deficits after the Bush tax cuts to suddenly
reverse and start increasing was the mortgage crisis. The deficit
increased in 2008, followed by a huge increase in 2009.
So it is sheer hogwash that “tax cuts for the rich” caused the
government to lose tax revenues. The government gained tax
revenues, not lost them. Moreover, “the rich” paid a larger amount
of taxes, and a larger share of all taxes, after the tax rates were
cut.
That is because people change their economic behavior when tax
rates are changed, contrary to what the Congressional Budget Office
and others seem to assume, and this can stimulate the economy more
than a government “stimulus” has done under either Bush or
Obama.
Yet there is no need to assume that Barack Obama is mistaken
about the way to get the economy out of the doldrums. His top
priority has always been increasing the size and scope of
government. If that means sacrificing the economy or the truth,
that is no deterrent to Obama. That is why he is willing to play
chicken with Republicans along the fiscal cliff.
COPYRIGHT 2012 CREATORS.COM
