The president's jobs bill doesn't have a chance in Congress -- and the occupiers on Wall Street and elsewhere can't become a national movement for a more equitable society -- unless more Americans know the truth about the economy.
Here's a short (2 minute 30 second) effort to rebut the seven biggest whoppers now being told by those who want to take America backwards. The major points:
1. Tax cuts for the rich trickle down to everyone else. Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans' wages (measured by the real median wage) began flattening under Reagan and has dropped since George W. Bush. Trickle-down economics is a cruel joke.
2. Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they've been since. Yet the economy grew faster during those years than it has since. (Don't believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.)
3. Shrinking government generates more jobs. Wrong again. It means fewer government workers -- everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. And fewer government contractors, who would employ fewer private-sector workers. According to Moody's economist Mark Zandi (a campaign advisor to John McCain), the $61 billion in spending cuts proposed by the House GOP will cost the economy 700,000 jobs this year and next.
4. Cutting the budget deficit now is more important than boosting the economy. Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They'll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.
5. Medicare and Medicaid are the major drivers of budget deficits. Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that's because the nation's health-care costs are rising so fast. One of the best ways of slowing these costs is to use Medicare and Medicaid's bargaining power over drug companies and hospitals to reduce costs, and to move from a fee-for-service system to a fee-for-healthy outcomes system. And since Medicare has far lower administrative costs than private health insurers, we should make Medicare available to everyone.
6. Social Security is a Ponzi scheme. Don't believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.
7. It's unfair that lower-income Americans don't pay income tax. Wrong. There's nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else.
Demagogues through history have known that big lies, repeated often enough, start being believed -- unless they're rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth -- and spread it on.
Follow Robert Reich on Twitter: www.twitter.com/RBReich
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We know the GOP is the enemy. But instead of standing up to them with open, forthright, and loud denunciations, such as Reich does in this article, the Dems allow the GOP to define the terms of the debate.
It's not a "failing" on the part of the Dems. Except for a minority who are somewhat principled, the Democratic Party does not represent the working class. Both parties -- and that thoroughly duped offshoot of the GOP, the Tea Party -- are in thrall to Wall Street and the corporations.
Why not? Many have profited from the downturn. Some of that group CREATED the downturn, stolen "rainy day" funds, and increased our deficit. They are now enjoying double-profits through reduced labor/goods/services costs, consequences of their economic sabotage. If I have 10% increased business, and have reduced costs 10%, an 8% tax hike still results in a 12% profit.
And, yes, I'm being over general and sarcastic. But I really do get tired of how this whole John Wayne, rugged individualism claptrap nonsense is continually touted. IT'S A MYTH! That is portrayed as reality in the same vein as a child believes in a tooth fairy, Santa or an invisible playmate. It's fun to place faith in such things .... when one is a child.
It is definitely not for the faint of heart. The trouble with some on the left is that they truly believe that there policies are good because if not for those policies they would be accountable to help themselves. If you lack the talent and the ability and the intellect to be productive then socialism is your only real hope for survival.
Fact: The majority of capital gain income relates to buying and selling of stocks, which is a passive activity. If I buy an existing share of IBM and sell it at a profit, I have not invested one dollar in IBM's business. I have simply taken temporary ownership of an investment that was previously made. If a capital gains preference is to make sense, it must only apply to new investments such as an IPO offering, where the company is raising cash to invest. Also, taxing capital gains at a lower rate than ordinary income results in an income redistribution from middle class and the poor to the wealthy class, which generates 95% of all capital gain income. Any tax break for one party redistributes income from other parties. Anyone in favor of a capital gains tax also supports income redistribution by definition.
Fact: If a wealthy business person shuts down his business because he takes home less profit, other businesses and new businesses will fill the void. Competitors (like me) will be glad to assume the incremental profits and market share. Businesses don't make decisions as a group. If one makes a stupid misstep, another will swallow them up.
If you reduce the tax rate from 20% down to 10% , one is still losing money.
Obviously, lowering taxes lets the rich keep more of what they amass, thus makng them richer.
Buy only Made In America!!!!!!!!!!!!!!!!1
And guess what? A lot of us wouldn't mind spending a little more on the American product.
And of course now, we need to cute medicare, social security, the federal government to put people back to work!
And now the jobs bill the President is proposing will not create very many jobs!
And they wonder why people are demonstrating in the streets?
Keep telling it like it is Robert
These aren't radical points, that Mr. Reich is making! In fact most of these "Lies" have been proven as such in real life over the last 30 years. They weren't valid then and no amount of wishing will make them valid now. The 'Trickle Down' idea alone has failed miserably on several occasions, yet someone always trots it back out every couple years. Number 4 (Deficit over Economy) is just completely counter to simple common sense, as Mr. Reich points out quite succinctly. As I've said before, right now the deficit is A problem, but it's not THE problem.
Unfortunately I don't know what can be done, since the GOP has no incentive to actually address the economy at this point. As long as the economy is a lead weight they can hang around Obama's neck they will continue to let the economy burn as they argue about cutting funding for NPR and Planned Parenthood!
Erik
http://eaprince.blogspot.com
I also am a big supporter of the infrastructure plan to not only help with employment but as a long term investment in the nation as a whole. It's bad for EVERYONE if our roads, bridges, dams, levies, etc, fall into disrepair.
Erik
http://eaprince.blogspot.com