Economic Disinformation Continues

Another day, and another hyperbolic rant from Rush Limbaugh. Contending that President Obama has been trying to destroy the middle class, Limbaugh asked rhetorically

Was it pushing a tax increase on people earning $200,000 that will results in yet another wave of layoffs and business closings? What has he done for the middle class? Who in the private sector has more disposal income under the leadership of Barack Obama?

Syndicated columnist Eleanor Clift on September 11 wrote

Crunching the numbers at the liberal think tank the Center for American Progress, analyst Michael Linden found that if one compares the cost of tax cuts in just the first four years of Bush’s term (2001–04) to the first four years of Obama's (2009–12), Obama’s tax cuts are bigger. The value of the Bush tax cuts were about $475 billion in those first four years, or about 1.1 percent of GDP. Obama’s total about $1 trillion, or 1.6 percent of GDP.

Obama has cut taxes to lower levels than Bush did, says Linden. This is because, of course, Obama thus far has extended all of the Bush tax cuts and then cut taxes on top of that. His original stimulus bill in 2009 had $290 billion in Making Work Pay tax cuts. His speech Thursday night before Congress advocated for another $175 billion in payroll tax cuts, which come on top of $110 billion from last December’s budget deal. Speeded-up expensing for business adds another $10 billion or so.

Admittedly, extending the Bush-era tax cuts and adding tax credits of his own hasn't done much for President Obama's effort to reverse the economic slump. But he thus far has cut taxes more than GWB did in an equivalent amount of time. With tax increases on high-end earners and on 'Cadillac' health plans due in a few years, by 2018 the total value of Obama's tax cuts over ten years is projected to be slightly less than those of President Bush, $2.2 trillion to $2.1 trillion. That is, of course, in the future and is subject to change.

Jared Bernstein, former economic adviser to Vice-President Biden, believes that Obama's image as a tax raiser, rather than tax cutter, results from the small increase in the paychecks of workers characterizing the credits implemented by the incumbent compared to the "single wallop" on April 15" (in Clift's words) which would be displayed on April 15.

But of greater impact is the rhetoric of GOP pundits and strategists who eschew statistics, facts, details, or anything substantive to imply incessantly that the crux of President Obama's economic strategy has been to raise taxes. Acknowledging that the President's strategy has been, in part, to cut taxes to spur spending and so encourage hiring would be tantamount to acknowledging, in the face of 9% unemployment, that reducing taxes does little to raise the nation out of the economic slump. It also would undermine the constant drumbeat of GOP criticism against the economic stimulus of 2009, roughly 35% of which amounted to tax credits and/or cuts.

Limbaugh, though, is in a class of his own. Few individuals have so little respect for their audience as to ask "Who in the private sector has more disposal income under the leadership of Barack Obama?"

Quite a few, it turns out. Fortunately, the 17,000 (net) individuals who found employment in the private sector in August presumably have more disposable income (cancelled out by the 17,000 who lost a public sector job, but Rush generally argues that employment is going up in the public sector). Chief Economic Officers on Standard& Poor's 500 index on average received $11.4 million in total compensation in 2010, a 23% increase in one year and now are paid 343 times more than the average worker. Three-quarters of CEOs received raises in 2011, while even the others increased their net worth. As their companies make record profits, layoffs continue, something beyond the control of the President.

Not everyone buys the Repub web of distortion, manipulation and, occasionally, lies. Somewhat echoing the patriotic Warren Buffett, Philadelphia Phillies shortstop Jimmy Rollins

says it’s time for rich people like him to start paying more. “Warren Buffet pays less taxes percentage-wise than his secretary, you catch that?” Rollins asks. “How can that be?”

“I’m blessed to pay a lot in taxes, ” Rollins says. “I have friends and relatives that go day-to-day. Every American deserves to feel secure at the end of their life. So if it’s going to lift two families up, go ‘head, tax me more, I can handle it. Best I know, everyone’s going to die. No one’s taking money to the afterlife.”

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