Wednesday, February 29, 2012

Political perspective? True then, true now

I created this post in 2010, and then forgot to publish it. I find the arguments as appropriate now as they were two years ago.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I have added a certain amount of emphasis

There are a number things the public "knows" as we head into the election that are just false. If people elect leaders based on false information, the things those leaders do in office will not be what the public expects or needs.
Here are eight of the biggest myths that are out there:
  1. President Obama tripled the deficit.
    Reality: Bush's last budget had a $1.416 trillion deficit. Obama's first reduced that to $1.29 trillion.
  2. President Obama raised taxes, which hurt the economy.
    Reality: Obama cut taxes. 40% of the "stimulus" was wasted on tax cuts which only create debt, which is why it was so much less effective than it could have been.
  3. President Obama bailed out the banks.
    Reality: While many people conflate the "stimulus" with the bank bailouts, the bank bailouts were requested by President Bush and his Treasury Secretary, former Goldman Sachs CEO Henry Paulson. (Paulson also wanted the bailouts to be "non-reviewable by any court or any agency.") The bailouts passed and began before the 2008 election of President Obama.
  4. The stimulus didn't work.
    Reality: The stimulus worked, but was not enough. In fact, according to the Congressional Budget Office, the stimulus raised employment by between 1.4 million and 3.3 million jobs.
  5. Businesses will hire if they get tax cuts.
    Reality: A business hires the right number of employees to meet demand. Having extra cash does not cause a business to hire, but a business that has a demand for what it does will find the money to hire. Businesses want customers, not tax cuts.
  6. Health care reform costs $1 trillion.
    Reality: The health care reform reduces government deficits by $138 billion.
  7. Social Security is a Ponzi scheme, is "going broke," people live longer, fewer workers per retiree, etc.
    Reality: Social Security has run a surplus since it began, has a trust fund in the trillions, is completely sound for at least 25 more years and cannot legally borrow so cannot contribute to the deficit (compare that to the military budget!) Life expectancy is only longer because fewer babies die; people who reach 65 live about the same number of years as they used to.
  8. Government spending takes money out of the economy.
    Reality: Government is We, the People and the money it spends is on We, the People. Many people do not know that it is government that builds the roads, airports, ports, courts, schools and other things that are the soil in which business thrives. Many people think that all government spending is on "welfare" and "foreign aid" when that is only a small part of the government's budget.
This stuff really matters.
If the public votes in a new Congress because a majority of voters think this one tripled the deficit, and as a result the new people follow the policies that actually tripled the deficit, the country could go broke.
If the public votes in a new Congress that rejects the idea of helping to create demand in the economy because they think it didn't work, then the new Congress could do things that cause a depression.
If the public votes in a new Congress because they think the health care reform will increase the deficit when it is actually projected to reduce the deficit, then the new Congress could repeal health care reform and thereby make the deficit worse. And on it goes.


Anonymous said...

Lin, one must ask: would you allow a point by point refutation to remain on your blog? The claim that Soc Sec is solvent ranks with flat earthism; the idea that the 16 Trillion dollar deficit-debt is a harmless something "we owe to ourselves" is so circular that it may be refuted by logic even before the actual data need to be deployed. So, would a refutation - more than just my snippy comments but actual facts - be allowed to remain on the site?

Lin Daniel said...

I am always interested in a well thought out and presented discussion. It's the ad hominem attacks, the... nevermind, I have a feeling you know the type I mean.

I suspect that some of our disagreement is on definition of terms. For example, the blog post never said Social Security was solvent, only that it has run a surplus since it began. It won't stay that way without help, I agree.

Anonymous said...

I totally get the "no ad hom" - we should make it a bumper sticker. I appreciate your open mind, Lin.

Okay, point 1:

"Myth: President Obama tripled the deficit.
Reality: Bush's last budget had a $1.416 trillion deficit. Obama's first reduced that to $1.29 trillion. President Obama raised taxes, which hurt the economy."

Analysis: this "reality" did not rebut the charge that the deficit has tripled and that Mr. Obama is responsible for it, in that he signed budgets that included these deficits. Whether Obama's "first budget" reduced a deficit by a tiny percentage is irrelevant to the fact of the tripled deficit now.
To the extent Obama raised taxes as indicated, you're right, that hurt the economy.

I'll grant you there is some ambiguity in the term "deficit." If your response will involve clarifying the use of that term in a factual way, then that could help. Clarifying the term, however, will not erase, or even dent, the $16 Trillion dollar cumulative Debt we are facing with no end in sight under Obama.

Point 2:

"Reality: Obama cut taxes. 40% of the 'stimulus' was wasted on tax cuts which only create debt, which is why it was so much less effective than it could have been. President Obama bailed out the banks."

Analysis: There is no palpable reduction of taxes under Obama; we barely hung on to some of the Bush tax cuts. Obama did not "bail out the banks" - the so-called bank bailout was initiated under Bush and signed by Bush. Obama signed the "stimulus" - many 100s of Billions of dollars whose favorable effects on the economy are, shall we say, hiding ... demure ... shy ... invisible ... how about nonexistent.

To claim that "tax cuts only create debt" is to state a demonstrable falsehood. Spending money you don't have creates debt. Taking out loans creates debt. But forbearing from coercing people to give you money does not create your debt.

Lin, I'll take a breather here to allow you to evaluate whether this kind of response satisfactorily falls under the acceptable category :-)

(I'm sorry I can't employ a more interesting font ;-)

Lin Daniel said...

Apologies for not replying yet. Fast glance at your comment tells me we're going to have fun with this.

I'm out of town from the 4th until the 18th, as I am going to go to Albuquerque for BALLOOOOOOON FIESTA! It's fun! (and sans laptop)