Really. How much longer do we have to keep going over this stuff?
So here’s the meme. Every time a Republican goes on the campaign stump they must use some version of the “Tax and Spend Liberal” staple of conservative politics. Democrats are all tax and spend liberals. They are going to take your money, give it and more to welfare queens who refuse to work (of course the insinuation will be “black” welfare queens).1
Everybody knows, at least everybody who watches Fox News, that taxes are skyrocketing under Democrats while spending is through the roof. We have to get these reckless Democrats out of office before they run the deficit so high it will wreck the economy.
And the bottom line is, this meme works. It’s been so drummed into our consciousness that we don’t even bother to question it any more. Well we should question it. As we know, conservatives are not necessarily bound by the evidence when they make their claims.
In fact, taxes haven’t and are not scheduled to “go through the roof” as is often the claim made by conservatives. The Obama Administration and the Democrat controlled (which does not mean liberal controlled) congress have passed a number of tax breaks since 2009. Even the much reviled stimulus included over $200 billion in tax cuts. Unfortunately, Obama and congressional Democrats receive no credit for this
because what amounts to $4o0 in tax breaks to individuals was delivered in the most cost effective way to maximize its impact on the economy, by simply eliminating it from federal withholdings. The tax cut appeared in all of our checks spread out throughout the year. This is the most meaningful way to encourage spending. This in contrast to President Bush, who spent millions in taxpayer dollars and tasked the federal bureaucracy with cutting checks for millions of Americans, much of which went to paying up credit card balances. In other words, Obama’s method was sensible, but not visible; Bush’s method was good, visible politics, but certainly insensible.
That’s not to say that there were and will be no tax increases, but we certainly can’t make the claim taxes are skyrocketing. Yes, if you make over $200,000 a year you experienced a tax increase. But then, you make $200,000 a year! Congratulations! You are financially stable and, even if your taxes doubled (which they didn’t) you would still be financially stable. And if you were a business owner, you got to take advantage of a number of tax credits from the very stimulus conservatives decry. Yes, there were some loopholes closed, but making it more difficult to squirm out of paying taxes is not a tax increase. The bottom line is that the vast majority of Americans saw their tax burdens go down.
Now, of course, there’s the debate about extending the Bush Tax Cuts. Conservatives refer to this as the greatest tax increase in history. All right. In fact, congressional Democrats and the Administration are planning on extending, even increasing, most of the Bush tax cuts
again, except for those who are in the best position to pay, rich people. For the rich, the tax increase isn’t exactly going to skyrocket. It will go back to the 2000 rates, about a 4% increase at the top marginal tax rate. This is not a new tax; it’s the old tax that is set to be reinstated as legislated by the Bush White House and a Republican congress. Remember this evil old tax? Back when the unemployment rate was around 3% and the United States had a budget surplus for the first time in over thirty years? Conservatives can’t make the claim that canceling the devastating tax cuts for the richest Americans is an economy killer.
Indeed, if conservatives wish to make the claim that our rising deficits are destroying the economy, then extending the Bush tax cuts would be devastating. Conservatives cannot be in favor of making the tax cuts permanent and claim they want to reduce the deficit unless they can find $3 trillion dollars to cut from the budget over the next ten years. Let me guess, the Defense Department isn’t worried. Conservatives have been reluctant to suggest what they would cut from the budget. I’ll give you a hint
Medicaid, Medicare, Social Security, Welfare, Education subsidies, college loans, unemployment insurance, enforcement of environmental and OSHA regulations, etc.
So the next case is that Federal spending is going through the roof. To make this case many conservatives use a measure of federal spending as a percentage of GDP. Well, yeah, when you look at it that way federal spending is soaring. But you have to understand that when such a comparative is made one must take two variables into account, GDP and federal spending. I’m lucky enough to be able to steal a graph from Nobel Economist Paul Krugman that effectively illustrates this case.
As you can see from the graph (click the graph to go to Paul Krugman’s Blog) federal expenditures as compared to the years 2001-2007 have changed little. Yes, a slight increase, largely representing greater demands on unemployment and programs like Medicaid. Certainly not the skyrocketing federal spending that conservatives complain about. Notice that the 2007-2010 timeframe includes the infamous Obamacare. Expenditures hardly budged. What did change was GDPit collapsed. So yes, if you are comparing something against GDP it will look like it’s rising more than it is. As Krugman states, fractions have denominators. Perhaps conservatives skipped that day of math class. Or perhaps they’re just lying.
We also see that revenues have gone down. Now the responsible conservative would suggest that if revenues go down, then expenditures should go down. All right, that makes sense for a household, or a business. But imagine what would happen in the event the government reduced expenditures to match revenues? That’s right. Public works projects would grind to a halt, public employees would be put on the unemployment line and the overall unemployment rate would go up. Businesses that rely on such things as good roads or effective public services, or those that cater to public servant clientele like police officers or teachers (the coffee industry would certainly collapse) would founder. Then who do you think would be blamed?
You don’t have to look very far for an answer. The administration received a great deal of grief for the unemployment statistics last month. That’s not to say the administration didn’t deserve this grief, but all of the increase in unemployment was in the public sector.
There are plenty of legitimate criticisms of how the Obama administration and the Democrats have handled this inherited economic crisis. It is obvious that maintaining the status quo of an elite, corporate aristocracy was paramount to the Obama agenda (which is the opposite of the socialist agenda he is accused of perpetuating). More money could have been invested in the demand side, the part of the economy composed of working Americans rather than blowing wads of funds on corporate bribery without a return on that investment. The Obama administration fell for the same old yarn that enough funds pushed into the hands of the wealthy will translate into jobs for the working class. This has instilled anger, even in erstwhile liberal supporters as we see corporate profits rise and jobs stagnate. Democrats could have been more forceful with a progressive jobs program. Yes, there are all kinds of things we can criticize the Democrats for.
But we should not accept the old canard of the “tax and spend” liberal. When we hear this we must understand that those who make such claims are either being dishonest, or they are delusional. Either way, we should not vote for them.