Monday, February 02, 2009

Republicans turn their backs on the middle class

Joe Biden is right. It's time to put the middle class front and center. That's the goal of the Obama administration which seeks to put people back to work immediately and create economic growth, and long-term make sure the benefits of that growth reach the people responsible for it - the lower and middle class workers.

I have a question for Republicans. Why are you treating us like the enemy? Some of you are threatening to filibuster the recovery bill and others are complaining the plan is too expensive and could be done cheaper (ergo, the middle class is only worthy of crumbs). Meanwhile, Sen. Jim DeMint (R-SC) offers an alternative plan that would actually cost 3.5 times as much as Obama's. I guess it's okay to spend trillions more if corporations and the rich are the main beneficiaries, eh?
The only comprehensive alternative being offered by Senate conservatives is DeMint’s “American Option: A Jobs Plan That Works,” a series of permanent tax breaks for corporations and wealthy Americans. A new analysis from the Center for American Progress Action Fund finds that the DeMint plan would cost over $3.1 trillion over ten years — more than three times the amount of President Barack Obama’s plan — and be largely ineffective at creating jobs.

The DeMint plan includes permanently cutting the corporate tax rate, totally eliminating the Alternative Minimum Tax, lowering income tax rates for the wealthiest Americans, and eliminating scores of tax deductions that help students pay for college, sick families pay medical bills, and teachers purchase supplies for their classrooms.
How many times does this need to be repeated?
Permanent tax cuts are one of the least effective ways of stimulating the economy according to both Moody’s and the Congressional Budget Office. Furthermore, slashing government revenues this permanently would leave deep structural deficits for generations to come.
The whole purpose of DeMint's plan is to make the tax policy changes of 2001 and 2003 permanent. Let's revisit that era, shall we?
"The economy has slowed down, in which case we need to accelerate tax cuts," Bush said in a March 2001 radio address. "You see, tax relief will put money in people's pockets, which will help give the economy a second wind." "By ensuring that Americans have more to spend, to save and to invest, this legislation is adding fuel to an economic recovery," announced Bush in 2003, as he signed his tax cut legislation.
That's not how ten Nobel Laureates saw it. They signed a letter saying the Bush tax cuts were wrong, and 450 economists across the nation agreed.

They were right and Bush and the Republicans were wrong. Bush's tax cuts didn't work.
As Center for American Progress Senior Fellows Christian Weller and John Halpin noted in 2006, the outcome of the 2001 tax cuts was "the weakest employment growth in decades." The 2003 tax cuts didn't fare much better, resulting in job creation that was "well below historical averages." When Bush's White House proposed the 2003 cuts, they promised that it would add 5.5 million new jobs between June 2003 and the end of 2004. But "by the end of 2004, there were only 2.6 million more jobs than in June 2003." As Paul Krugman has pointed out, the belief that Bush's tax cuts successfully stimulated the economy is a form of mythology. CAP's Michael Ettlinger and John Irons wrote in September, "Economic growth as measured by real U.S. gross domestic product was stronger following the tax increases of 1993 than in the two supply-side eras" that followed Reagan's 1981 tax cuts and Bush's 2001 tax cuts. Indeed, employment growth was much stronger post-1993 than post-2001. The average annual employment growth was 2.5 percent after 1993 and just 0.6 percent after 2001. Unfortunately, the supply-side myth that tax cuts cure all still lives on today, as conservatives complain about progressive approaches to fixing the mess left by Bush.
Middle class misery is real. We need real solutions, not mythological ones of the sort being pushed by Republicans. If they really cared about the pain being felt by families across America, they'd stop the games, grow up and get serious about helping us. That hasn't happened and leads me to believe they don't give a damn.

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