Print this post.ROBERT REICH
Reich (center) beaming off in the presence of Obama.
The President’s Jobs Bill doesn’t have a chance in Congress — and the Occupiers on Wall Street and elsewhere can’t become a national movement for a more equitable society – unless more Americans know the truth about the economy.
Here’s a short (2 minute 30 second) effort to rebut the seven biggest whoppers now being told by those who want to take America backwards.
http://www.youtube.com/watch?v=mM5Ep9fS7Z0&feature=player_embedded
The major points:
1. Tax cuts for the rich trickle down to everyone else. Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans’ wages (measured by the real median wage) began flattening under Reagan and have dropped since George W. Bush. Trickle-down economics is a cruel joke.
2. Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they’ve been since. Yet the economy grew faster during those years than it has since. (Don’t believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.)
3. Shrinking government generates more jobs. Wrong again. It means fewer government workers – everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. And fewer government contractors, who would employ fewer private-sector workers. According to Moody’s economist Mark Zandi (a campaign advisor to John McCain), the $61 billion in spending cuts proposed by the House GOP will cost the economy 700,000 jobs this year and next.
4. Cutting the budget deficit now is more important than boosting the economy. Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They’ll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.
5. Medicare and Medicaid are the major drivers of budget deficits. Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that’s because the nation’s health-care costs are rising so fast. One of the best ways of slowing these costs is to use Medicare and Medicaid’s bargaining power over drug companies and hospitals to reduce costs, and to move from a fee-for-service system to a fee-for-healthy outcomes system. And since Medicare has far lower administrative costs than private health insurers, we should make Medicare available to everyone.
6. Social Security is a Ponzi scheme. Don’t believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.
7. It’s unfair that lower-income Americans don’t pay income tax. Wrong. There’s nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else.
Demagogues through history have known that big lies, repeated often enough, start being believed — unless they’re rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth – and spread it on.
Editor’s Note about the author
Robert Reich is an American political economist, professor, author, and political commentator. He served in the administrations of Gerald Ford and Jimmy Carter and was Secretary of Labor under Bill Clinton from 1993 to 1997. Since that time he has moved consistently leftward, but without ever going beyond the invisible left-liberal boundary line. As such he can be defined as a “progressive Democrat” with all the good and bad that such a label entails. At one time he also preached that improving education and technical skills could resolve the capitalist unemployment crisis, which is false, since the unemployment crisis originates largely in the constant elimination of jobs in the US due to corporate relocation to cheaper-wage zones (essentially not an economic but a global political problem); the effects of automation, growing inequality, and the resulting underconsumption by the masses. Still, we’re glad he’s mostly on our side.
And, by the way, we’re happy the much ballyhooed “Jobs Bill” is going nowhere since it’s another Obama sham, comparable to his healthcare “reform”—too little, too late, and sure to be watered down even further if it were to be enacted. The labor bureaucracy, of course, unable to think beyond the old parameters and easily hoodwinked, is backing the bill.
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