In this post, I’d like to address a few myths that have been circulating the past couple of years. Let first examine the rhetoric surrounding the battle over extending the Bush tax-cuts. With unemployment continuing to climb, businesses are very hesitant to hire workers because of the huge tax increases that they will incur should the extensions fail to pass by the end of this year. Mr Obama and his liberal friends continue to oppose extending the tax cuts to those who create the most jobs, continually insisting that the “rich” need to pay their fair share. The latest data released by the IRS however, reveals that the top 1% of earners already pay 40% of all federal income taxes, and the top 5% pay 60%. Almost half of all wage earners pay no tax at all, and many receive "refunds" as earned income credit. We'll discuss the topics of redistribution of wealth and charity in an upcoming post.
A second argument is that we can’t afford to extend the tax cuts because it would drive up the deficit, citing the Bush administration as an example. This argument is also false, since tax revenues actually went up about 40% after the tax cuts were enacted. How can this be? Due to the lower tax rates, businesses hired more workers and paid out more in salaries, thus the increased workforce paid more total taxes even at the lower rates. Similarly, liberals always want to raise federal revenue by increasing taxes on large corporations, but the feds lose money because the workforce shrinks. The deficits during the Bush years were due to increased spending, not decreased taxation. Mr Bush was not exactly a fiscal conservative, although he would certainly be considered one when compared to the current administration. Mr Obama and company have incurred more debt in his brief time that all other presidents combined.
Mr Obama frequently blames the slow economy on former President Bush, and his lapdogs in the media dutifully and gladly echo these accusations. His favorite line is that the Republicans drove the economy into a ditch and he’s working hard to get it out. Never mind that many top economists have maintained that we would already be out of this crisis had the government not felt obligated to fix it. Unfortunately, socialists trust in the government rather than free enterprise to grow the economy.
Another common claim is that Mr Bush took eight years to get us into this mess, so it is argued that we should allow Mr Obama a similar amount of time to repair the damage. After all, he’s only in his second year in office. This assumes that Mr Bush actually caused the recession, and it also ignores that fact that the Democrats took control of congress in January of 2007. Thus, Mr Obama, Ms Pelosi and Mr Reid have controlled the purse strings for almost four years (only congress can pass legislation authorizing spending). Many indicators of the economic downturn can be directly traced to the takeover by the socialist Democratic Party (see the attached charts for a couple of examples).
For the sake of argument however, let’s assume that Mr Bush and the Republicans drove us into a ditch by the time that they lost control of congress (January 2007). Revisiting Mr Bush’s ditch, we find the National unemployment rate at 4.5% (December 2006), an average GDP growth of 3.4% (2006), and an average annual deficit of about $105 billion (during Republican controlled congress, 1994-2006). The DJIA was almost 13,000 and the federal debt was about 65% of the GDP.
In contrast, looking at Mr Obama’s highway, we see an unemployment rate that has more than doubled at 9.6% (~17% including those who have given up looking for work), a GDP finally inching up to 2% and an annual deficit of about $1.5 trillion. In addition, the national debt is approaching $14 trillion at a rate of about 3.5 billion dollars a day, and has now exceeded 90% of the GDP.
As if this wasn't enough, we also have the vast amount of eroding wealth under the Dem's watch. According to the Wall Street Journal, total residential real estate values lost $4 trillion from the beginning of the Dem takeover through March 2009 (WSJ-8-20-09), and net worth of US households dropped 18% or over $11 trillion in 2008 alone, the biggest loss since the Federal Reserve began tracking shortly after WWII (WSJ3-13-09). An estimated 20% (about $2 trillion) vanished from our retirement plans from August 2007 to October 2008 (WSJ 8-20-09). In 2009, the first year of Mr Obama's administration, the federal government ran a budget deficit for every month of the year, the first time this has happened in almost 30 years of record keeping. In fact, as of May 2010, the government's record deficit string had reached 19 consecutive months (Reuters 5-12-2010). We could also mention the many large institutions that failed or was "bailed out" by the government, including Fannie Mae and Freddie Mac, who contributed heavily to the Dems, most notably House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd.
Facing the facts, it’s no wonder that the Dems and their media friends are talking about everything except the issues. A study released earlier this week by the Wesleyan Media Project at Weslayan University found that both Repubs and Dems ran negative ads at about the same rate, but the majority of Republican ads focused on the issues while the majority of Democratic ads were personal attacks, often involving events or quotes (many from anonymous sources) from up to 30 years ago. It’s also worth mentioning that any ad that mentioned the facts about a Dem’s voting record is considered a negative or attack ad.
Rather than take responsibility for their failures, the liberal Democrats continue to blame everyone but themselves. The latest strategy appears to be blaming the potential voters. The American people are told that we’re just too dumb to realize and appreciate all that the Dems have done for us. According to the liberals, if we were better informed, we would realize that runaway spending and entitlements, higher taxes, government takeovers of private industry, and flushing the constitution is all done for our benefit.
Mr Obama, Mr Biden, John Kerry (D-Ma) and others have complained that the lack of their popularity is due to the fact that voters are not paying attention. While idealism can sound good for awhile, sooner or later, one must live in reality. The truth is, the inattentive voter is what got Mr Obama elected in the first place. Rather than checking his record, many were caught up in the media's worship and in “making history”. Now that Mr Obama’s disastrous policies have gotten the voter’s attention however, most folks are realizing that they were a lot better off in the Bush ditch than on the Obama superhighway. When comparing the results of Mr Obama’s socialism, many are longing to “Bring back the Ditch”.
Update: A special thank you to our friend Doug Ross for linking to this article.