Category Archives: Government

Teapublican Lie #13.

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“Social Security is a Ponzi scheme.”

Governor Rick Perry must have scraped this BS off the bottom of his cowboy boots, because it smells a lot like Texas fertilizer.

You see, far from being a Ponzi scheme, Social Security is insurance – insurance that guarantees a dignified retirement for hard-working Americans in our old age. Without it, we would likely be treated to scenes of the elderly living in cardboard boxes and digging through dumpsters for their meals.

The premiums for this insurance are paid by withholding less than six percent of an individual’s annual income up to $106,000 per year.

Currently, Social Security has a $2.5 trillion surplus, but given the impending retirement of Baby Boomers, it’s estimated that the program will not be able to make full benefit payments in 25 or 30 years. However, contrary to what Teapublicans would have you believe, Social Security can be easily fixed with relatively minor tweaking. (As with all insurance plans, the premiums for Social Security need to be increased from time to time.)

One option is to raise the income cap to include income above $106,000. (This hasn’t been done since the Reagan administration in the 1980s.) Another option is to remove the cap altogether, which would assure the solvency of Social Security far into the future. Yet another is to limit benefits to only those who actually need them – retirees with annual household incomes of less than $30,000, for example.

Social Security can be fixed.  But not if the media and voters keep listening to Teapublican lies.

Teapublican Lie #12.

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“The US government is going broke.”

In May 25, 2001, Grover Norquist of Americans for Tax Reform told National Public Radio’s Mara Liasson, “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”

Teapublicans have been trying to bankrupt the government ever since.

Yet, despite their efforts, the United States still has the world’s largest economy with a Gross Domestic Product (GDP) estimated at nearly $14.7 trillion in 2010. That represents approximately one quarter of the global GDP.

Our current problem, as economist Paul Krugman has stated, is “insufficent aggregate demand.” As a result, we do not have enough revenue to cover our spending.  Moreover, much of the money spent is misallocated. To fix our economy, we need to increase tax revenue from those who can most afford it. And we need to create jobs by spending on necessary projects while interest rates are at all-time lows.

But, instead of dealing with the real issues, Teapublicans are using the debt crisis they created to destroy labor unions, to eliminate employee benefits, to depress salaries and eliminate our safety nets (the so-called entitlements).

Contrary to Teapublican accusations, these programs are not responsible for our growing national debt. Social Security and Medicare are funded by payroll taxes while our defense spending is not. 

According to estimates, our annual military/security budget is $1.1-$1.2 trillion, or 70-75 percent of the federal budget deficit. It has doubled since 9/11. And much of the defense budget is squandered through poor oversight, lack of planning and corruption. In fact, the Commission on Wartime Contracting stated that as much as $60 billion was lost to waste and fraud in Iraq and Afghanistan over the past decade!

The US is not broke.  But if we keep electing Teapublicans, we soon may be.

Teapublican Lie #11.

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“Obama is anti-business.”

Since Obama was elected president, the stock markets are up more than 31 percent and profits for large corporations are at all time highs.

That’s anti-business?

When CNBC’s Jim Cramer was interviewed on Hardball with Chris Matthews, he said he couldn’t understand why big corporations hate Obama. He said he asked corporations what they dislike. They mentioned taxes and regulations, but taxes under Obama are the same as they were when Bush was in office. And they couldn’t name a single regulation they want changed.

“There’s never been a better guy in Treasury than Tim Geithner,” Cramer said. “I really don’t understand why they don’t like Obama. They just don’t.”

Cramer may not know. But I think I can tell you why big corporations don’t like Obama. He hasn’t sold out to them like Teapublicans have. And like most Democrats, he still represents working people and the middle class.

Teapublican Lie #10.

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“President Obama’s Jobs Plan is Class Warfare.”

Teapublicans haul this one out every time a Democrat talks about raising taxes on the wealthy. It sounds terrible, doesn’t it? How could anyone be for dividing America into classes based on privilege and wealth?

Oh, wait! Teapublicans have been pursuing policies of class warfare for decades!

Thanks to Teapublican policies, 400 people now control 50 percent of the nation’s wealth, a combined $1.5 trillion. Their average net worth is $3.8 billion – a 12 percent increase from last year! Meanwhile, the bottom 90 percent have an average annual income of just $31,244 per household.

While the wealthy pay a federal tax rate of 15 percent on profits from their investments, middle class families pay a federal income tax rate of 25-33 percent on their salaries. While the corporations’ share of federal tax revenues has dropped from more than 30 percent in the 1950s to less than 10 percent now, individuals’ share has remained at more than 40 percent. At the same time, payroll taxes (for Social Security and Medicare) have gone from 10 percent to more than 40 percent!

But there has been even more bad news for the poor and middle class. In the past 10 years, incomes for the top 20 percent of Americans have increased dramatically while incomes for the bottom 80 percent of Americans have dropped! And while the Great Recession forced millions of American workers into unemployment lines, corporate CEOs and bankers have paid themselves multi-million dollar bonuses.

No, John Boehner, Mitch McConnell, Mitt Romney, Rick Perry and Michelle Bachmann, making those who have benefited the most from our country pay their fair share is not class warfare. Continuing the Teapublican policies from the past 30 years is.

Teapublican Lie #9.

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“Cutting taxes on the wealthy creates jobs.”

This lie could only have been generated by wealthy contributors to political campaigns. But let’s examine it anyway.

Both political parties acknowledge that the vast majority of jobs are created by small businesses and, most especially, by new businesses. Yet, for investors, these businesses often entail a great deal of risk – something the wealthy are generally adverse to. So the wealthiest Americans tend to invest their money, instead, in large corporations which offer greater security.

Moreover, most of the incomes for the wealthy are the result of capital gains (generated by selling stocks for more money than they paid for them). This income is now taxed at the unbelievably low rate of 15 percent. That’s lower than the income tax rate for most of the middle class! It begs the questions, “How much farther can we cut taxes for the wealthy?” and, “How will that create jobs?”

Teapublican Lie #8.

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“Most Americans don’t pay taxes.”

Lately, Teapublicans have been saying that 51% of Americans don’t pay any taxes at all. They say that those Americans should be forced to “have some skin in the game.” They call them the “Freeloader Class.” And they blame them for the nation’s economic woes.

While it is true that 51 percent of Americans did not pay federal income taxes for tax year 2009, it is not true that they did not pay taxes. It’s not even true (as Teapublicans suggest) that they are lazy, welfare recipients content to sponge off society. In fact, many of those who paid no federal income taxes in 2009 were among the wealthy and the upper middle class!

From an article by PolitiFact.com, Bob Williams, a tax policy specialist at the nonpartisan Urban Institute-Brookings Institution Tax Policy Center, said there are lots of popular tax breaks, which are sometimes called tax expenditures. “We estimate they total more than a trillion dollars a year in reduced taxes and, in fact, the bulk of those go to the top end of the income distribution,” said Williams.

As for the rest, they are mostly the elderly living on Social Security and those working at minimum wage jobs that don’t make enough to pay federal income taxes. (According to the 2010 Census, one in six Americans now lives below the poverty line.) Yet these people still pay taxes. Many pay payroll taxes for Social Security and Medicare. All pay sales taxes. Many pay state income taxes and property taxes (even if they rent). And most pay gasoline taxes, beer and liquor taxes, etc. So they do, indeed, “have some skin in the game.”

The real freeloaders are those who are living off the hard work of others – those who have inherited fortunes from their ancestors, Wall Street bankers who are paid enormous bonuses to gamble with others’ money, and those who, by a stroke of luck, have found themselves in a position of power – and taking advantage of a host of tax shelters created by politicians to protect their benefactors.

Teapublican Lie #7.

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“Raising taxes on millionaires will hurt small business.”

After all, most small businesses are owned by millionaires, right? Rrrrright!

This whopper seems to stem from the Teapublican definition of small business. You see, they define small business by ownership rather than brands, offices, employees or income. In other words, since Cargill is a closely held, privately-owned company, Teapublicans define it as a “small” business. Similarly, they define Koch Industries as a “small” business. In case you don’t already know, these are the two largest privately-held corporations in the world! Both measure their profits by the billions. Yet Teapublicans lump them into the same category as the owners of the small clothing store on Main Street or the corner café!

In the interest of full disclosure, I’ve been a small business owner since 1987. Moreover, I’ve served hundreds of small businesses as clients. As it happens, I have also completed projects for Cargill and Koch Industries. I can tell you beyond the shadow of a doubt that those companies have absolutely nothing in common with small businesses. And I can tell you that 99 percent of the other clients are not owned by millionaires, let alone billionaires.

So, President Obama and Congress, go ahead, raise taxes on millionaires and billionaires. Most small business owners will thank you for it.

Teapublican Lie #6.

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“President Obama’s economic stimulus failed.”

You’ve heard this over and over again from the mouths of virtually every Teapublican. They all loudly proclaim President Obama’s stimulus plan “a complete and utter failure.” They make it sound as if Democrats wasted $787 billion of taxpayer money. But as you’ll see, it’s just another Teapublican lie. To learn the truth, I turned to the non-partisan Congressional Budget Office (CBO).

In the second quarter of 2010 (one year after it’s passage), CBO estimated that the American Recovery and Reinvestment Act (ARRA) had:

– Raised the level of real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.5 percent
– Lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points
– Increased the number of people employed by between 1.4 million and 3.3 million
– Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 4.8 million

Similarly, in the second quarter of 2011, the CBO estimated that ARRA’s policies had the following effects compared with what would have occurred otherwise:

– Raised real (inflation-adjusted) gross domestic product by between 0.8 percent and 2.5 percent
– Lowered the unemployment rate by between 0.5 percentage points and 1.6 percentage points
– Increased the number of people employed by between 1.0 million and 2.9 million
– Increased the number of full-time-equivalent (FTE) jobs by 1.4 million to 4.0 million

And even though CBO has said that the employment effects will wane in 2012, it estimates “ARRA will raise real GDP in 2012 by between 0.3 percent and 0.8 percent and will increase the number of people employed in 2012 by between 0.4 million and 1.1 million.”

Some failure!

The real question about the economic stimulus is, “Where would we now be without it?”

Teapublican Lie #5.

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“Regulations are bad for business.”

Teapublicans have been slinging this bovine excrement around for years. “Businesses face mountains of government red tape that make it impossible for them to operate,” they say. I admit it sounds plausible, but it’s just not true.

Certainly, every industry faces government regulations. But those regulations are not necessarily bad. For example, food growers must meet food safety regulations. They must maintain sanitary conditions and monitor the use of pesticides and chemicals. Not exactly onerous regulations, unless you don’t mind getting food borne illnesses. Similarly, restaurants must pass inspections for cleanliness and food preparation. Hotels must meet standards for safety and cleanliness…the list of such examples is long.

Contrary to the Teapublican talking point, a recent study by McClatchy Newspapers found that small business owners don’t feel that regulations and taxes are strangling their businesses at all. As a matter of fact, many of the business owners surveyed felt that the regulations actually create consumer confidence which is good for business.

So, if small business owners don’t oppose government regulations, who does?

One can conclude that the businesses most harmed by government regulation are those that don’t care about consumer safety. Companies that want to trash our environment without repercussions. Companies that want to cut corners to save money. Companies like BP, which apparently cut corners on a blowout preventer resulting in the worst environmental tragedy in history. Companies that buy toys painted with lead because they’re cheaper. Companies that purchase ingredients for pet food without testing them.

These aren’t small businesses. They’re huge, multi-national conglomerates that are more concerned about their bottom lines than their customers. If they don’t care about us, why on Earth should we care about them?

Teapublican Lie #4.

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“The national debt was created by President Obama.”

I’ve addressed this figment of the Teapublican imagination before. They know it’s a lie, but they’re fond of saying it anyway. Indeed, they’re fond of blaming President Obama for everything bad and taking credit for everything good.

Who created the Great Recession? According to Teapublicans, it wasn’t Bush. It was Obama.

Who’s responsible for the high unemployment rate? Why Obama, of course, even though 8 million jobs were lost on Bush’s watch while the Obama administration has overseen a net increase in jobs.

Who was responsible for tracking down Osama bin Laden? According to Teapublicans it was certainly not Obama. Bin Laden’s death was the direct result of Bush/Cheney policies. You’ve heard all these lies and more.

Now, back to the national debt:

No less an authority than Bruce Bartlett, Ronald Reagan’s former policy adviser, has said that of the more than $14 trillion national debt, more than $7 trillion is a direct result of George W. Bush’s policies – most especially his tax cuts and the wars in Afghanistan and Iraq. Only $1.4 trillion is the result of President Obama’s attempts to get our economy moving in the right direction! The remainder can be credited to all of the presidents prior to Bush.

I’ll finish by quoting David Stockman, Reagan’s Director of the Office of Management and Budget who began a NY Times op-ed by stating, “How my GOP destroyed the US economy.”

Apparently, at least some Republicans are willing to speak the truth.