Wednesday, January 28, 2009

The Bush Tax Cuts Got Us Here. Republicans Want More of the Same

It’s almost unbelievable.
Fox News: House Republican leaders … have proffered a bill of their own to put on the negotiating table. The counter-package, would shift focus entirely from spending to tax relief.
Good god. What do you have to do to these people to get their attention. Hello, your economic policies created this disaster. This isn’t partisan, it’s idiocy. "
People are recognizing very quickly that's it's not one, stimulative, and two, it's full of all sorts of things that are sort of favorite political projects of the Democrat majority," said Rep. Tom Price, R-Ga., chairman of the Republican Study Committee.
Since the Democrats were chosen by the people to represent the majority interests and mood of the country, their campaign issues won the hearts and votes of the American people who want us to go in a different direction. Republicans represent the conservative values of their constiuents, they will not change their stripes, which is why they will oppose anything the Democratic majority comes up with. But their time in Congress was a massive failure. Tax cuts failed. Period. Now they want to do what they did before, regardless of getting the same result, and expect to convince the public they know best. Get a load of their counter proposal:
Their bill, called the Economic Recovery and Middle-Class Tax Relief Act of 2009, promises a host of tax-cutting measures. It includes a 5 percent "across the board" income tax cut; a freeze on capital gains and dividends tax rates at 15 percent; and a number of other measures targeted toward businesses. The Republicans authoring the alternative bill did not have an estimate for the cost of their counter-proposal.
Anyone surprised there was no cost estimate? Apparently, nothing else matters.
House Minority Leader John Boehner dismissed the Democratic proposal as a partisan grab bag driven by "old liberal spending priorities."

Well, those “old conservative tax cutting priorities” brought this country to its knees, and rippled around the world.

From the archives, I’ve clipped a few lines from a plethora of stories documenting how we got here. Many of the stories lack attribution, saved before I started to save that information, so my apology to those who contributed to this short history:
Aug. 2003: What caused a projected surplus of $5.6 trillion to become a projected deficit of $4.4 trillion? Of this extraordinary $10 trillion deterioration, approximately 36 percent comes from enacted or expected tax cuts, 31 percent from budget increases, especially for defense and homeland security … President Bush's tax cuts since 2001 have shifted more of the tax burden from the nation's rich to middle-class families, according to the Congressional Budget Office … The tax rate declined across all income levels - but more so in the top brackets, the report said. People in the top 20 percent of incomes, averaging $182,700 a year, saw their share of federal taxes decline from 65.3 percent in 2001 to 63.5 percent this year … In contrast, middle-class taxpayers - with incomes ranging from $51,500 to $75,600 - bear a greater tax burden. Those making an average of $75,600 had the biggest jump in their share of taxes, from 18.5 percent of all payments in 2001 to 19.5 percent this year … The study found that the effective tax rate for the top 1 percent of taxpayers dropped from 33 percent in 2001 to 26.7 percent this year, a decline of 19 percent. The middle 20 percent of taxpayers saw a decline of 4 percent.

2004: What we have here is a form of looting." So says George Akerlof, a Nobel laureate in economics of the Bush administration's budget policies. The government is simply borrowing to make up for the loss of revenue. In 2004, the typical family will pay about $700 less in taxes than it would have --- but meanwhile, the government will run up about $1500 in debt on that family's behalf.

2004: Three years into an administra­tion on whose watch spending has mushroomed by 23. 7 per­cent the fastest pace in a dec­ade … What has vexed conserva­tives most is the 31.5 percent growth since Bush took office in discretionary spending. Such spending grew by an annual average of 3.4 percent during Clinton's eight years … Mounting spending has combined with the recession and two major tax cuts to turn a four-year string of annual surpluses into deficits that last year hit $374 billion, the worst ever in dollar terms.

Feb 2004: According to the non-partisan Congressional Budget Office, the single biggest cause of the deficit is the president's massive tax cuts for the wealthy -- which he conveniently did not mention. Specifically, 36% of the deficit comes from the tax cuts, while only 31% comes from defense/war related spending increases, And as the president starves veterans health care, low-income housing, and health care programs of funding, he is pushing more than $1 trillion in new tax cuts, primarily for the wealthy.

2005: Bush is faced with an embarrassing deficit that for the first time in 50 years a Republican president could not blame on Congress, since members of Mr. Bush's party control both the House and the Senate. Halving the deficit in five years … Bush projects will be achieved with a 2009 shortfall of $237 billion. Senator Jon Corzine, a New Jersey Democrat and former chairman of the Goldman Sachs investment banking firm, was even more pointed. "Asserting that we're going to cut this in half by 2008 is right in there with Richard Nixon saying `I've got a secret plan to end the war.' "

February 10, 2004 NY Times: The movement of American factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said … in the president's annual report to Congress on the health of the economy. "Outsourcing is just a new way of doing international trade," said N. Gregory Mankiw, chairman of Bush's Council of Economic Advisors. "More things are tradable than were tradable in the past. And that's a good thing."

His advisors acknowledge that international trade and foreign outsourcing have contributed to the job slump. Although trade expansion inevitably hurts some domestic workers, the benefits eventually will outweigh the costs as Americans are able to buy cheaper goods and services and as new jobs are created in growing sectors of the economy, the report said. "Maybe we will outsource a few radiologists," Mankiw told reporters. "What does that mean? Well, maybe the next generation of doctors will train fewer radiologists and will train more general practitioners or surgeons…. Maybe we've learned that we don't have a comparative advantage in radiologists. Mankiw said, "The market is the best determinant of where the jobs should be," he said.

Social Security also must be restructured to let workers put part of their retirement funds in private accounts, the report argues. Doing so could add nearly $5 trillion to the national debt by 2036, the president's advisors note, but the additional borrowing would be repaid 20 years later and the program's long-term health would be more secure.

September 24, 2004: Responding to an election­ season request by Demo­crats, the Congressional Bud­get Office estimated that some of Presi­dent Bush's budget policies, plus other costs would add $1.3 trillion to federal deficits over the next decade.

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