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House Republicans

It's been good to hear that Barack Obama now feels less pressure to accept bad compromises following his successful re-election bid, but as we approach the coming 'fiscal cliff', my biggest concern is not the President's tendency to triangulate.

What worries me far more is the likelihood that Congressional Democrats will miss out on a golden opportunity to seriously damage the Republican brand in the next several weeks, which is the very thing they must do if they want to regain control of the House of Representatives in 2014.

It is something they will be able to do if they can find a way to get themselves all on the same page regarding THE BLAME THAT THE REPUBLICAN PARTY DESERVES FOR CREATING THE CURRENT GOVERNMENT DEBT CRISIS.

They need to direct the attention of the media to the irony that while the Republicans are sounding the alarm about government debt, calling it a crisis, it is they who created the problem to begin with, back when they irresponsibly reduced the tax obligations of America's millionaires and billionaires during the George Bush Administration.

Democratic leaders should not hesitate to announce to the press that they have one very simple message they want to deliver to the Republicans in the House:

"First undo what your party did to create this budget crisis.  Then, with your credibility at least partly restored, we can talk about your ideas on government spending."

It was, after all, House Republicans who created the current crisis a decade ago when they decided to reduce the higher tax rates that the Top Two Percent of income earners in our country had paid throughout the Clinton Boom Years without any ill effects.

If the Republicans had not written those rate cuts into the Tax Code, the total amount of revenues the federal government would have collected since that time would have been so substantial (one estimate: $5.9 trillion) that very little borrowing would have been necessary to cover the federal government's spending throughout Obama's first term.

Tax cuts for rich people cause tax revenues to drop

Democrats can now say---without any doubts whatsoever---that the 'Debt Crisis' was created by the tax-cut gift that The Republicans decided to give to their wealthiest campaign contributors when George Bush was President.

Every elected Democrat in Congress needs to repeat this message to the media in hiser own way: Restore the higher tax rates that rich people paid during the Bill Clinton administration [the last time we experienced economic prosperity as a nation] and the debt crisis will automatically be fixed.

Of course, if and when the Democrats do this, the Republicans will loudly protest that raising the taxes of the 'Job Creators' will hurt the economy during a period of high unemployment.

It is this predictable response that will provide Democrats with an excuse to review for the media the indisputable historical failure of the Republican Party's Economic Agenda to do what they said it would do.

Democrats need to make it clear that the entire package of Republican economic theory was put to the test during the Bush Administration in conditions that were ideally favorable for them and it still failed to deliver.

THE EXPERIMENT WAS TRIED...

THE RESULTS ARE NOW IN:

THE REPUBLICAN PARTY'S APPROACH TO GENERATING ECONOMIC PROSPERITY FAILED IN SPECTACULAR FASHION.

IF REPUBLICAN POLITICIANS HAD ANY SENSE OF DECENCY, THEY'D FEEL HUMILIATED BY THE RESULT.

If this approach works, one will be able to tune into news broadcasts and hear:

"Are the Democrats right when they say that the Republican's tax-cutting economic philosophy is a demonstrated failure?  We took an in-depth look at this question and found that the evidence does, indeed, suggest that the Republican approach to job creation just doesn't work..."
Whether or not Republican economic policies work is no longer a 'matter of opinion' or open speculation.  It is now a proven historical fact that Republican Economic policies do not actually achieve what their proponents have long claimed they would achieve.

THE GRAND EXPERIMENT

Although it wasn't depicted as such at the time, a Grand Experiment to demonstrate the effectiveness of Republican economic policies was actually conducted between 2001 and 2009.  They had everything going for them.  They controlled all branches of government, so there was nothing that the Democrats could do to thwart the execution of their grand design.

They not only cut the tax rates of the Top Two Percent of income-earners, but did so at a time when interest rates were at historical lows.  Add to this the fact that Bush Era Republicans also increased government spending using borrowed money.

In spite of all their efforts to 'stack the deck' in their favor, we now know the results of this Grand Experiment.

private-sector job growth Bush vs. Obama

THE central tenet of Republican economic mythology is the belief that cutting the tax rates of the wealthiest two percent of income-earners (the 'Job Creators') will stimulate vigorous economic growth through private-sector job creation.

That is really the ONLY way a tax cut could conceivably lead to an increase in tax revenue, if it directly led to more jobs being created (more jobs means more people paying taxes = more tax revenues collected).  That is how the tax cuts were supposed to 'pay for themselves.'  But it didn't happen.  The Grand Republican Tax Cut Experiment was tried, and it failed.

As can be seen in the graph above, no wondrous surge in private-sector job creation occurred after the Republicans cut the taxes of rich people.  Indeed, the growth in private-sector job creation was weaker following the Bush tax cuts than the growth we saw in that sector during the first four years of the Obama Administration, even though Obama gave no additional tax cut to the 'Job Creators.'

The Republicans threw hundreds of billions of dollars at millionaires and billionaires and did only as much 'governing' as they felt they absolute had to do (which in the case of the financial sector of the economy, was virtually nothing) and none of the good things they said would happen did happen.

So what did happen to all those hundreds of billions of dollars that were thrown at the 'Job Creators', if they were not used to create jobs?  Well, if we follow the money we can see precisely what happened to it.

THE REPUBLICAN TAX CUTS FOR THE WEALTHY CAUSED THE SPECULATIVE BUBBLE THAT CRASHED THE ECONOMY

Virtually all of the extra money that the Republicans gave to the Top Two Percent of income-earners was pumped into the asset markets within the FIRE Sector of the economy (i.e., the Finance, Insurance, and Real Estate markets).

We're talking about the stock market but also---especially---the real estate market.  Very few of the dollars thrown at these secondary markets ever ended up in the real economy.

No matter what financial investments the Two Percent happened to pour their tax-cut dollars into, it all eventually ended up in banks, which means of course that banks were suddenly awash with extra cash to lend (just as they had expected).

As one might also expect, this sudden glut of lendable dollars provided the typical profit-maximizing banker with a potent incentive to pour increasing amounts of this extra money into ever-riskier lending schemes opportunities.

Higher-risk-lending yields higher [interest] rates of return to banks = higher profit margins.  In this way, the Republican tax cuts for the wealthy gave bankers a perverse incentive to put the entire financial sector at risk.

Given the freedom-from-scrutiny that they expected from Republican politicians, bankers felt free to create some fantastical paper asset schemes, like bundled variable-risk loan packages, which enabled them to disseminate excessively risky 'assets' throughout the financial sector of the world economy.

Not to be outdone by their banking cousins, Insurance companies innovated some novel assets created out of nothing (well, effectively nothing, since they knew full well that there was never a chance that they would ever be able to pay off their obligations if real-estate inflation ever stopped in its tracks).

So the answer to the question...

"What happened to all those billions of dollars the Republicans borrowed in the name of the American taxpayer to give to the Job Creators?"
...is simply this:
The lion's share of it was wasted on an utterly useless Inflation Event that occurred almost exclusively within the Upper-Upper-Class.
In a runaway inflation event like this (too many dollars chasing too few luxury goods & financial assets), little or no actual improvement occurs in the standard-of-living of the ultra-rich.  No improvements, that is, that wouldn't have occurred anyway--at lower prices--even if the Republicans hadn't given them a big reduction in their tax rates.

Inflation for The Two Percent

This much we know with absolute certainty: without the big tax cuts the wealthy received from the Republicans, the big run-up in real-estate prices would never have occurred.  In other words, there would have been no real estate bubble.

If that money had remained on the federal government's balance sheet, fewer dollars would have been borrowed by the federal government and we would not now be talking about a 'Debt Crisis' and the possibility of possibly devastating government spending cuts.

It is now clear that the Republicans have been making their optimistic claims about tax cuts simply because they've really, really, really wanted to believe that it would work the magic that they predicted it would.  But now we know--and they know--that it was all just wishful thinking.

INCREASING THE TAX BURDEN OF MILLIONAIRES AND BILLIONAIRES WILL STIMULATE ECONOMIC GROWTH AND CREATE JOBS

Contrary to everything the Republicans have been telling us for years, increasing taxes during a recession increases job creation when the increased tax revenue is collected from the richest of the rich (the biggest savers in the economy) and it is spent on true economic investments like infrastructure and human capital.

That is what the Balanced Budget Multiplier teaches students in Econ 101 classes, but for some unexplained reason, most economics professors forget about it as soon as they get to the chapters on Expansionary Fiscal Policy.

The reason why tax increases generate a net increase in GDP, is because money that would otherwise would have been removed from the economy by savers gets spent, instead, by the government.

That is why, when Paul Krugman decided to chart the economy's job-creation record following major tax hike/cuts over the past couple of decades, it ended up looking like this:


Now that we know for sure what doesn't work, it should be rather obvious that if we increase the tax obligations of the Top Two Percent and then use those billions to increase government spending on real economic investments, like infrastructure and human capitol, a net increase in the percentage of Americans working is guaranteed to happen.

(With a tax increase, the Super Wealthy may decrease some of their consumption--even though they could easily afford to buy whatever they want AND pay the higher tax bill--but that drop in consumption spending will be slight---since most of their 'extra' money is not spent on consumption anyway, but only on paper assets.  The government's increased spending on investment more than makes up for the drop in rich people's consumption spending.  Result: a net increase in aggregate spending, which is equivalent to saying GDP will increase.)

Democrats should not hesitate to point out that the Republicans have been wrong about almost everything they've claimed about the economy over the past few decades.  They need to insist that the media acknowledge the indisputable facts of recent history, that the Republicans failed utterly to create jobs with their now discredited "Tax-Cuts-For-The-Job-Creators!" theory.

Looking ahead to the 2014 mid-term Congressional elections, the Democrats have two years to drive home the message that The Republican Way was tried and it failed spectacularly.  Ridicule [of Republican economic myths] is the Prime Directive that Democrats need to follow if they want to become The Majority Party again.

If the Democrats cannot execute this fairly simple political strategy, then perhaps they really are 'in the wrong business.'

(Cross-posted at Nontrivial Pursuits)

Originally posted to James Kroeger on Mon Dec 03, 2012 at 06:01 PM PST.

Also republished by Community Spotlight.

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Comment Preferences

  •  The dregs of Reagan's fiscal policy met the (12+ / 0-)

    dregs of Nixon's social policy-- or was it the other way around?

    Matters not: the country has suffered nonetheless.

    Democrats: stand tall. Blue dogs: get with it.

  •  Perfect Analysis (16+ / 0-)

    And even better political talking points. Now, if only Democrats are willing to seize on this narrative and not run away from it.

    Oh, and Third-ways don't get their panties in a bunch and try and sabotage it.

    •  Indeed (5+ / 0-)
      Recommended by:
      elwior, smiley7, 207wickedgood, wbr, NonnyO
      Now, if only Democrats are willing to seize on this narrative and not run away from it.
      I'm sure that some will run away from it, but I can't begin to guess why they would...old habits, perhaps?
      •  There are poker players (not very good ones) who (8+ / 0-)

        will fold a winning hand because they get taken in by a bluffer.
          It seems to me though that the president (who is rumored to play some poker himself) has this hand figured out fairly well.
          He's seeing this one through to the end because he knows his cards beat theirs.
          So long as he does that, the GOP will either have to, at some point, show their hand, or simply figure out when to fold 'em.

           They would like to take the pot simply by telling what's in their hand, not showing it. They want for the People to simply "trust them."
            But the People won't buy it. Not this time.

            The only thing we got to watch for now is for them trying to turn over the table, accusing our side of cheating.
            You got to keep your eye on these "varmints!"

        "We the People of the United States...." -U.S. Constitution

        by elwior on Mon Dec 03, 2012 at 06:30:10 PM PST

        [ Parent ]

      •  Bribes from corporations... (6+ / 0-)
        I'm sure that some will run away from it, but I can't begin to guess why they would...old habits, perhaps?
        $COTU$ made corporations people and in that disguise, corporations can use money as a form of "free speech."

        Ergo, corporate lobbyists have free access to our Congress Critters where We The People (who elected these monkey farts) don't even stand a chance of being acknowledged until election time rolls around..., and then we are flattered and cajoled into voting for them so they can go back to DC and get more $$$$$$$ from corporations when they "dial for dollars" - as Senator Sanders put it in a televised interview with Bill Moyers (Sanders is the only person worth his salt in the Senate).

        Why else would they vote to give the insurance, medical, and pharmaceutical corporations the power to fine us and/or have the force of law behind making us buy their crappy private insurance which goes toward paying executive bonuses and shareholders...., instead of buying into Medicare where the program is running efficiently, there is no overhead to worry about for profits or paying shareholders or bonuses...???  "All" that would have been necessary is to hire more employees and add office space to handle the extra paperwork to add everyone on to Medicare insurance; the economic impact of more jobs right here in America would have proved nearly instantaneous to the US Treasury with tax revenue, not to mention the buying power with those who had an income and could buy products (hopefully made in America).  From the president on down, very nearly all Congress Critters adamantly refused to discuss a not-for-profit single-payer option for medical insurance.  What a travesty!!!

        I'm sick of attempts to steer this nation from principles evolved in The Age of Reason to hallucinations derived from illiterate herdsmen. ~ Crashing Vor

        by NonnyO on Tue Dec 04, 2012 at 05:45:37 AM PST

        [ Parent ]

        •  You make many... (1+ / 0-)
          Recommended by:
          NonnyO

          ...really good points, here.  Thank you for emphasizing them...

          •  In particular... (3+ / 0-)
            Recommended by:
            valkyrry, NonnyO, offgrid
            From the president on down, very nearly all Congress Critters adamantly refused to discuss a not-for-profit single-payer option for medical insurance.
            There is nothing that has bothered me more over the years than the failure of this country to follow Britain's example and embrace truly socialized medicine, taking the profit motive out of the health care industry entirely.

            Perhaps if a growing number of elected Democrats were able to conceptualize the superiority of a solidly progressive Democratic Economic Agenda over the embarrassing foolishness of Republican nostrums, they would be less likely to buy into all of that crap that Insurance Company lobbyists have been telling them at every opportunity.

            That is my hope, anyway...

            •  Thank you.... (1+ / 0-)
              Recommended by:
              James Kroeger

              That one particularly pissed me off, too!  I was so angry I couldn't speak about this stuff for months without flying into a rant.  I still can barely restrain my rants to something coherent.  Our Congress Critters and the President were nucking futz idiots for voting for the corporate plans!!!

              I want to adopt the health insurance/care versions adopted by the three Scandinavian countries.  Paid parental leave, in particular, which is over a year long for BOTH parents to bond with their child(ren).  Jobs waiting for them when they go back to work (from parental leave or paid sick leave).  No one goes bankrupt from catastrophic illnesses.  If someone has to stay home to take care of a sick relative, the leave is paid.  In all cases, their jobs are waiting for them when they can return to work.  Childcare for working parents is provided.

              Sweden: Land of the Stay-At-Home Dad
              Note: In the video, the fathers are "expected" to take their parental leave!  If they don't, it's a mark of shame.  How much better are the hands-on skills of fathers who bond with their kids early?

              Gloria Riviera embarrassed all women by being stupid enough to ask a father what baby items she was holding.  Sheesh.  Since she hadn't had her baby at that point, I'm quite sure the father knew a heckuva lot more than she did about it all.

              Another old video:
              Sweden's Health Care System [w/Lou Dobbs]

              I'm a senior citizen.  The monthly cost of Medicare that started when I was in the working world continues when on Social Security because it's deducted before Soc Sec is deposited in my account (just as it is for all senior citizens or those who are disabled and receiving Soc Sec)..., but at least I don't have to be concerned about paying for corporate insurance executive bonuses or shareholders for the Medicare deduction.  Medicare is actually working efficiently, believe it or not.  That's why I advocate everyone buying into Medicare and caps put on the medical costs that doctors can charge..., and I further advocate no additional charges..., mandated by law.  The hospitals and clinics used to "justify" their increases to 'new machinery' - but those new high tech machines must be paid for ten or twenty times over by now.

              The US is a backward country compared to the civilized countries in the world who have excellent - and "free" - medical care and educational systems.  [Not free, high taxes, but everyone benefits and no one has to fork over money, by law, to pay for corporate executive bonuses and shareholder profits, the other part that grates on my last shredded nerve.]  Heck, we're even behind some third world countries in other surveys!  How humiliating!

              The three Scandinavian countries also have free education from kindergarten through high school and/or college, and they start their kids learning English as a second language in grade school through whatever highest grade of school they complete.  If they attend college away from their home, they get a living stipend so they can devote their time to their studies.  [No tuition debt upon leaving college.  Education, like medical care, is considered a right.  Everyone pays into the system; everyone from king to commoner, benefits.]

              Corporations who sell medical supplies are not allowed to gouge the system for additional money, and what they can charge is set by the government (fair, but not extravagant).  If they do any price gouging to patients, they're in violation of the law and they are prosecuted. [What a novel idea: prosecuting a corporation to the fullest extent of the law....]

              Not surprisingly, all three Scandinavian countries made the top five in list of best places to live again:
              Best Places to Be Born in 2013 | Healthy Living
              The top ten best places to be born in 2013:
              1. Switzerland
              2. Australia
              3. Norway
              4. Sweden
              5. Denmark
              6. Singapore
              7. New Zealand
              8. Netherlands
              9. Canada
              10. Hong Kong
              [US & Germany tied for 16th place.]

              I'm sick of attempts to steer this nation from principles evolved in The Age of Reason to hallucinations derived from illiterate herdsmen. ~ Crashing Vor

              by NonnyO on Tue Dec 04, 2012 at 02:05:21 PM PST

              [ Parent ]

        •  mmm... (0+ / 0-)

          I am in favor of a tax increase (back to 1990 levels) for the purposes of reducing debt.  However, this post is full of the kind of arguments that I cannot take seriously.  The very first graph shows a gap of about 300 billion dollars per year from 2002-2008.  This was caused by a combination of the recession, the wars in Iraq and Afghanistan AND tax cuts.  Even if the entire gap could be attributed to tax cuts and the Iraq war only, 300bn per year times 6 years (2002-2008) adds up to 1.8 billion with is a figure completely disconnected from the 5.9 trillion number.  At the very least, the graphs and the numbers should add up.   It’s all well and good to point out that the 5.9 trillion came from only one estimate, but why even use that figure if it is totally disconnected from the graph below.  In other words, I can troll around the internet and find all kinds of facts, figures and graphs from places like the CATO institute website, which, if I string them all together the right way, makes it appear that the Democrats caused the Great Recession.  However, that doesn’t mean it is close to being true.  

          For another example, look at the Employment-population ratio graph.  The Clinton Tax increase occurred right as we were recovering from a recession.  The Bush tax cuts occurred right after we entered a recession.  Does anyone expect stimulus in the form a higher spending or tax increases to have an instantaneous affect?   Of course the Bush tax cuts occurred on a downward trend on that graph.  If the trend hadn’t been going down, the cuts never would have occurred in the first place.  You don’t enact stimulus (either in the form of spending increase or tax cut) when the economy is doing well.        

          There are sites you can go to really dig into the numbers and figure out what is going on.  However, most of the time, I am forced to read from a variety of sites and news sources, and, even more importantly, read the dissenting comments attached to those articles to figure out what is really going on.  This is especially true for sites like volokh.com or autobloggreen.com where the best information is contained in the comments.    Bring on the disapproval clicks.      

  •  Good writing and thinking, I enjoyed this. (11+ / 0-)

    "Lets show the rascals what Citizens United really means."

    by smiley7 on Mon Dec 03, 2012 at 06:25:38 PM PST

  •  BTW, this is a TERRIFIC diary!!! (9+ / 0-)

    Thank you JK for posting it.

    "We the People of the United States...." -U.S. Constitution

    by elwior on Mon Dec 03, 2012 at 06:32:49 PM PST

  •  Came to this late in the day. (6+ / 0-)

    Very cogent and successful posting.
    One thing though is that you have to take into acount the Dems who are owned by the $$ in Wall$treet.

    Chuck Schumer comes to mind as a good example. As Dr. Krugman states, the VSP [Very Serious People] who have a vested interest in misunderstanding your information will not do anything with it.

    When your paycheck depends on how well you rob Peter to pay Paul, you would be amazed by what doesn't get considered as "serious" information.
    PS -"paycheck" in this instance refers to the -bribe- campaign donations that grease the wheels of the great sausage machine in D.C.

    Fingers crossed - I'd be overjoyed to be proven wrong but I am pretty well convinced that the Dems will cave on this as they have so many times before.

    "You can tell 'Monopoly' is an old game, it has a Luxury Tax and rich people can go to jail." - George Takei

    by daddybunny on Mon Dec 03, 2012 at 09:50:17 PM PST

  •  Great diary and really clear analysis. A pleasure (6+ / 0-)

    to read. You've been able to put a stake through the hearts of a lot of right-wing talking points. This needs exposure. Have you thought about getting it published?

    •  Thanks for the compliment (1+ / 0-)
      Recommended by:
      Creosote
      Have you thought about getting it published?
      You mean in the form of a book?  Nothing would make me happier, but you see, I'd need an advance to work full-time on putting it together.  :)

      As it is, I have 'published' much of this on my website: Nontrivial Pursuits.  The problem with that option is getting members of Congress to spend some time reading through my website.

      It would be nice if there were other options available (that I am not currently aware of)...

      •  Maybe in a magazine, newspaper, or other format (0+ / 0-)

        that gives it a wider distribution. I've written op-eds in my local paper in a conservative state and had surprisingly favorable results in presenting arguments that challenge the conservative meme. I plan to use some of the points in your diary. I'll credit you as the source and it may widen your sphere of influence.

         A lot of conservatives are not bat shit crazy and realize something is not right. Many are just  swamped by RW talking points and there is not enough push back for an alternative explanation to a slow recovery. Your diary is very good at pushing back.  

  •  excellent diary (3+ / 0-)
    Recommended by:
    stratdan, hooper, James Kroeger

    I agree & have rec'd tipped & shared

    ...inspiration moves me brightly

    by wbr on Tue Dec 04, 2012 at 04:55:55 AM PST

  •  But (1+ / 0-)
    Recommended by:
    James Kroeger
    THE REPUBLICAN PARTY'S APPROACH TO GENERATING ECONOMIC PROSPERITY FAILED IN SPECTACULAR FASHION.
    It succeeded spectacularly for the one to two percenters.

    I keep wondering if they know something we don't. Surely it would have leaked out by now. Is there a meteor coming?

  •  Bush tax cuts for wealthy have cost $Trillion (3+ / 0-)
    Recommended by:
    J M F, Icicle68, James Kroeger

    over the past ten years. Restoring the tax rate to what it was before the Bush tax breaks would mean that it will take ten years just to pay back what they've already syphoned away from the nation.
    The extra tax breaks for the wealthy have been invested in politicians to get an even larger share of the nation in the hands of a plutocracy that is strangling the nation's future.

    •  Well, you're right... (2+ / 0-)
      Recommended by:
      JohnB47, offgrid

      Once people are listening to you about the stupidity of Republican economic reasoning, they should be more receptive to the logic of a couple of other ways to collect $$ from the Two Percent: e.g., a 'Tobin Tax' on all sales of securities and a complete elimination of the favorable treatment that capital gains income receives from the federal tax code.

  •  Drive a stake through the heart (3+ / 0-)
    Recommended by:
    sabredance, offgrid, James Kroeger

    .. of "Trickle Down" and then burn the remains.

    The Republicans in DC will look pretty ridiculous kissing up to the ashes.

    The dire straits facing America are not due poor people having too much money

    by Anthony Page aka SecondComing on Tue Dec 04, 2012 at 08:48:18 AM PST

  •  A small change is needed in your diary (0+ / 0-)

    ""Tax-Cuts-For-The-Job-Creators!" theory" should be downgraded to a hypothesis for the reasons below.

    A hypothesis consists either of a suggested explanation for an observable phenomenon or of a reasoned proposal predicting a possible causal correlation among multiple phenomena. In science, a theory is a well-substantiated, unifying explanation for a set of verified, proven hypotheses. As opposed to theory, a hypothesis needs to be testable and falsifiable.

    So it is not a theory, it is a disproven hypothesis now.

  •  The other rejoinder is - we already gave on SS & (4+ / 0-)

    other benefit programs - then you welched on both deals, creating the current mess.

    We gave on Social Security when (saint) Ronnie and Tip O'Neill engineered a hike in retirement age.

    We already gave on other social programs when the surplus generating budgets of Bill Clinton were put into play.

    We have no need to acquiesce to additional carve-outs from either program - till they:

    First undo what your party did to create this budget crisis.  Then, with your credibility at least partly restored, we can talk about your ideas on government spending.
  •  well, but... (3+ / 0-)
    Recommended by:
    madame damnable, jgumby, offgrid

    I like this article but its misleading.  The bulk of the Bush tax cuts did not go to the upper 2% but something like one quarter did.  Sadly Obama is only talking about the top earners.  Bu the other 3/4 of the Bush tax cuts are even more important long term.

    While I appreciate Obama's stand and would like to see it rolled back immediately on those over 250K, I think its a huge mistake to permanently enshrine the Bush tax cuts for the rest of america.

    Because ultimately, once we are a little further out of the recession, its real important to roll back ALL OF THEM.  

    Otherwise we stay in a permanent morass.  Its mathematically impossible to sustain what will remain of the Bush tax cuts.

    And It bothers me that this is rarely discussed.

    •  Good point (0+ / 0-)

      It's easy to say "tax the 1%" right now, but all taxes need to be raised once we get out of the recession.

      We had much higher tax rates for everyone in past prosperous time periods (during Clinton and the "Golden Years"), and we need to get back to that.

    •  Different framing is required (0+ / 0-)

      We should let all of "the Bush tax cuts" expire by going over the fiscal bump.

      Then introduce a "stimulus package" consisting of a temporary reduction of the tax rates for people earning less than $250k. Make it sunset in three years, where it can be extended if the economy hasn't fully recovered.

      Yes, it's a "tax cut", and yes Dems will have to use that term when confronting Republicans (how can they vote against a tax cut?), but the People need to know that this is only a temporary rate cut designed to stimulate the economy. After the economy is restored, we will have to pay back the debt with higher taxes from everybody. Tell people that we are only returning to the Clinton rates, which most people remember as a generally good economy.

  •  Excellent post! (3+ / 0-)
    Recommended by:
    James Kroeger, OldDragon, jgumby

    Ending the Bush Tax Cuts for the top 2% is just the start and clearly not enough. A Robin Hood Tax which taxes all stock transactions, would kick in billions annually and falls most heavily on automatic computer trading and speculation. Also, removing the cap on Social Security taxes would be the easiest and most sensible way to fix it. Next, allow Medicare to negotiate with Big Pharma for lower drug prices and, MY BIG IDEA which is to end subsidies for any corporation that gives dividends. If they have enough profit to give dividends then they should pay back any subsidies before they distribute the remaining profit.

    All of these fixes strengthen and protect our Earned Benefits and draw from those who created the problems and have benefited the most in recent years.

    Oh yeah, and severely cut the military budget to what is realistically needed. Bring our troops home from Afghanistan, Germany, Okinawa and Guantanamo.

    "Seed corn. It's what's for dinner!" Republican philosophy of governance

    by madame damnable on Tue Dec 04, 2012 at 09:36:44 AM PST

    •  I really like your idea (1+ / 0-)
      Recommended by:
      James Kroeger

      of removing subsidies from companies that pay out dividends. If you can give money to shareholders on a regular basis, then you can pay back subsidies. Unfortunately, what I think this will lead to is many public companies that get subsidies will no longer pay dividends. That will have consequences on its own, but at least it will make companies think harder about whether to take subsidies.

    •  Don't forget Diego Garcia, Kuwait, Bahrain, (0+ / 0-)

      Greenland, South Korea,  etc etc etc -- all the other foreign bases that total more than bases inside the US.
      Hell, pull the bases out of Texas, too ... they got enough guns down there to defend themselves.

      Ash-sha'b yurid isqat an-nizzam!

      by fourthcornerman on Tue Dec 04, 2012 at 06:04:32 PM PST

      [ Parent ]

  •  unfortunately (1+ / 0-)
    Recommended by:
    James Kroeger

    most elected dems haven't been inclined to speak truthfully about repug policies and for their part the media deliberately ignores those truths. The one person who can get a clear message out regardless of the media - the President via the "bully pulpit" - has also proven largely not inclined to be so impolite as to tackle repug bs head on. It would be grand to see President Obama cut repugs off at the knees and call out their hogwash but I don't hold out much hope. And as far as repugs ever admitting they were wrong wrong wrong? Forget it.

    when I see a republican on tv, I always think of Monty Python: "Shut your festering gob you tit! Your type makes me puke!"

    by bunsk on Tue Dec 04, 2012 at 12:00:27 PM PST

  •  So I look at the first chart (0+ / 0-)

    And I see tax cuts followed by increased revenue? But even more increases in spending. Until the financial crisis of Fall '08.

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