Posts Tagged ‘The slowest job growth in half a century’

Obama Speech Filled With ‘Significant factual error and/or obvious contradictions’ Even According To Überliberal Washington Post

December 8, 2011

When even the Washington Post says Obama lied, Obama lied up a blue streak and straight down to hell.

Here’s a “fact checker” finding from the reliably überlib WaPo:

Posted at 09:40 PM ET, 12/06/2011
Obama’s Kansas speech: some suspect facts
By Glenn Kessler

“I mean, understand, it’s not as if we haven’t tried this theory. Remember in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history. And what did they get us? The slowest job growth in half a century.”

— President Obama, Dec. 6, 2011

Channeling his inner Teddy Roosevelt, President Obama on Tuesday gave a feisty speech in Osawatomie, Kan., that sought to rebut Republican arguments that he is waging class warfare. He argued that the issue was one of fairness for the broad middle class, drawing repeated contrasts to the presidency of George W. Bush.

We’ll leave the politics to others, but how accurate were some of his facts?

“I mean, understand, it’s not as if we haven’t tried this theory. Remember in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history. And what did they get us? The slowest job growth in half a century. Massive deficits that have made it much harder to pay for the investments that built this country and provided the basic security that helped millions of Americans reach and stay in the middle class: things like education and infrastructure, science and technology, Medicare and Social Security.”Inserting the words “for the wealthy” was interesting phrasing by the president, since he suggests these tax cuts were intended to benefit only the rich.

The bulk of the 2001 tax cuts were marginal rate cuts, which extended to all taxpayers, while the 2003 tax cuts included a reduction in taxes on dividends and capital gains.

But the 2001 tax cuts also included tax changes that benefited the middle class, such as a reduced marriage penalty and expanded tax credits, along with an instant tax rebate. Still, it is correct that most of the benefits of the tax cuts flowed to the wealthy (who, let’s not forget, pay the largest share of income taxes).

Obama has said repeatedly he wants to keep the Bush tax cuts for people making less than $250,000; he wants to reinstate higher tax rates only for the wealthy. (In fact, he would retain about 70 percent of the overall tax cut.) But he should not suggest that the Bush tax cuts were aimed only at the wealthy, since that is not correct.

The Bush tax cuts were certainly large. To compare tax cuts over the decades, it is best to ignore raw numbers but instead focus on the size of the tax cut as a percentage of national income. Under that measure, the John F. Kennedy tax cut of 1964 (-1.90 percent) and the Ronald Reagan tax cut of 1981 (-1.40 percent) were larger than Bush’s 2001 tax cut (-0.80 percent.) But all of Bush’s tax cuts in 2001, 2002 and 2003 combined would equal -2.00 percent.

The Bush tax cuts have been roundly criticized for being inefficient and poorly designed, but it is a stretch for Obama to blame slow job growth on the tax cuts. That are many factors that affect job growth, and it is silly to directly link the 10-year-old tax cut to today’s job growth — just as it is silly to claim that Bill Clinton’s tax increases resulted in a gain of 23 million jobs.

Obama’s claim of the “slowest job growth,” in fact, includes the loss of jobs under his administration. The White House provided as evidence a report on a New York Times blog that was based on gross domestic product data through 2010, or the first two years of Obama’s administration.

The White House also cited a Center on American Progress report on job growth through 2007, which showed monthly job growth of 68,000 jobs during the Bush business cycle. But, since the recession ended, job growth has been even more anemic under Obama — just 40,500 jobs a month, according to the Bureau of Labor Statistics.

An administration official responded that Bush only faced a traditional recession (though one affected by the Sept. 11 attacks), compared to the Great Recession. He also asserted that there is evidence that higher income disparity can affect economic growth.

Obama certainly inherited an economic mess, and we have argued he does not deserve blame for the massive loss of jobs early in his administration. But it seems odd to keep blaming poor job growth on the Bush tax cuts, especially because Obama himself pushed through a nearly $1 trillion stimulus and took other actions that have affected the economy, for better or worse.

Finally, Obama blames the Bush tax cuts for “massive deficits.” It is certainly true that the Bush tax cuts helped blow a hole in the budget. But they did not do it all by themselves. We looked at length at this issue earlier this year, assisted by new Congressional Budget Office data.

The data showed that the biggest contributor to the disappearance of projected surpluses was increased spending, which accounted for 36.5 percent of the decline in the nation’s fiscal position, followed by incorrect CBO estimates, which accounted for 28 percent. The Bush tax cuts (along with some Obama tax cuts) were responsible for just 24 percent.

Thus it is simply wrong to blame only the Bush tax cuts for the deficits now faced by the country, especially three years into another presidential term.

“Some billionaires have a tax rate as low as 1 percent — 1 percent. That is the height of unfairness.”This is a striking statistic. But the only evidence that the White House could offer for it was a clip of a conversation on Bloomberg TV, in which correspondent Gigi Stone made this assertion during a discussion about the tax strategies that the very wealthy use to avoid paying taxes. The TV clip was promoted by the left-leaning Web site Think Progress.

Stone quoted from a Bloomberg News article last month that reported on such tax strategies, which mostly involve complicated ways to defer paying capital gains taxes. But the article never made the 1-percent claim. It also noted that the IRS had gotten more hostile to such transactions in recent years.

An administration official conceded the White House had no actual data to back up the president’s assertion, but argued that other reports showed that some of the wealthy pay little in taxes.

Frankly, when it comes to taxes, let’s not forget the legendary statement of Judge Learned Hand — as long as it is not illegal, people can try to lower their taxes as much as possible:

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes.
Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands.”The most recent data that we can find on the top 400 taxpayers — all billionaires — show that in 2008, 30 billionaires paid an average tax rate of between zero and 10 percent. Certainly “some” might have paid as little as 1 percent on income. But we are talking about a very tiny number. By contrast, 59 billionaires paid an average tax rate of 30 to 35 percent. And 238 faced a marginal tax rate of 35 percent and above; only 17 had a marginal rate of zero to 26 percent. (The marginal tax rate is what people pay on each additional dollar they earn.)

The average tax paid by the top 400 taxpayers was nearly $50 million. It is impossible to know the financial circumstances of the handful of billionaires who may have lowered their taxes to 1 percent, but there may be reasonable explanations. For instance, the person may be retired and generating no new income, while keeping investments in tax-deferred entities.

The Pinocchio Test

The president does not need to lard his case with such suspect data. There are few independent tax analysts who have much good to say about the Bush tax cuts. But it is difficult for Obama to justify blaming those tax cuts for being mostly responsible for today’s slow job growth, especially when he wants to retain a good chunk of those tax cuts.

To bolster his case about unfairness, the president is also relying on a suspect statistic about billionaires paying as little as 1 percent in taxes. Even if true, it is a clearly a rare event. Moreover, it is certainly surprising that the White House would rely on such a dubious, unverified source for a major presidential address.

Three Pinocchios



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And when you click on the above “rating scale” link, you find out that three Pinnochios is equivlaent to Obama having made “Significant factual error and/or obvious contradictions.”

The Washington Post essentially calling Obama a liar is tantamount to my own mother telling me I’m a pretty horrible person.  Which, I state for the record, my mom hasn’t done.

Allow me to point out a number of facts that the Washington Post never has and probably never will.

George Bush took over in a situation very similar to what Barack Obama encountered.  Bill Clinton created the Dotcom bubble which wiped out $7.1 trillion dollars in American wealth and wiped out 78% of the Nasdaq portfolio.  If that wasn’t bad enough, Bill Clinton also invited in all the terrorists who blew up the World Trade Center on 9/11 having previously gutted our military budget and having dismantled our intelligence capability.

Here’s a little more on that:

Author James Risen won the Pulitzer Prize on Tuesday for his much ballyhooed New York Times report last December that revealed President Bush’s previously secret terrorist surveillance program – a revelation he uncovered while researching his book “State of War.”

In the same book, however, Risen makes an equally explosive claim about President Clinton’s relationship with the CIA – which his editors at the Times have so far declined to cover.

Upon taking power in 1993, Risen reports, the Clinton administration “began slashing the intelligence budget in search of a peace dividend, and Bill Clinton showed almost no interest in intelligence matters.”

The agency cutbacks combined with presidential disinterest took their toll almost immediately.

“Over a three-or-four-year period in the early-to-mid 1990s,” reports Risen, “virtually an entire generation of CIA officers – the people who had won the Cold War – quit or retired. One CIA veteran compared the agency to an airline that had lost all of is senior pilots . . . “

After Clinton CIA Director John Deutch cashiered several senior officers over a scandal in Guatamala, the situation got even worse.

“Morale [at the CIA] plunged to new lows, and the agency became paralyzed by an aversion to high-risk espionage operations for fear they would lead to political flaps. Less willing to take big risks, the CIA was less able to recruit spies in dangerous places such as Iraq.”

Because of that dismantling, and directly because of Clinton’s fiaso in Somalia in which he crawled away with America’s tail between it’s legs, an emboldened Osama bin Laden said:

“Our boys no longer viewed America as a superpower. So, when they left Afghanistan, they went to Somalia and prepared themselves carefully for a long war. They had thought that the Americans were like the Russians, so they trained and prepared. They were stunned when they discovered how low was the morale of the American soldier. America had entered with 30,000 soldiers in addition to thousands of soldiers from different countries in the world. … As I said, our boys were shocked by the low morale of the American soldier and they realized that the American soldier was just a paper tiger. He was unable to endure the strikes that were dealt to his army, so he fled, and America had to stop all its bragging and all that noise it was making in the press…”

And Osama bin Laden proceeded to begin a massive attack on America the planning and preparation for which was entirely carried out during the Clinton presidency.

That attack, combined with the huge recession we were already in, combined for a knock-out punch of the U.S. economy.

Bush took office in a very big economic hole.

And then he passed his tax cut and turned the economy around.

For the record, President George Bush’s 2003 tax cuts:

raised federal tax receipts by $785 billion, the largest four-year revenue increase in U.S. history. In fiscal 2007, which ended last month, the government took in 6.7% more tax revenues than in 2006.

These increases in tax revenue have substantially reduced the federal budget deficits. In 2004 the deficit was $413 billion, or 3.5% of gross domestic product. It narrowed to $318 billion in 2005, $248 billion in 2006 and $163 billion in 2007. That last figure is just 1.2% of GDP, which is half of the average of the past 50 years.

Lower tax rates have be so successful in spurring growth that the percentage of federal income taxes paid by the very wealthy has increased. According to the Treasury Department, the top 1% of income tax filers paid just 19% of income taxes in 1980 (when the top tax rate was 70%), and 36% in 2003, the year the Bush tax cuts took effect (when the top rate became 35%). The top 5% of income taxpayers went from 37% of taxes paid to 56%, and the top 10% from 49% to 68% of taxes paid. And the amount of taxes paid by those earning more than $1 million a year rose to $236 billion in 2005 from $132 billion in 2003, a 78% increase.

Bush proceeded to generate an unprecedented 52 consecutive months of job growth.  And in spite of the giant hole he started in, Bush finished his presidency with an unemployment rate that was statististically tied with Bill Clinton’s (and we all know the streets were paved with gold during the Clinton era, even though Republicans deserve most of the credit and received NONE from liberal media such as the Washington Post).

But barring the fact that I had to go back and fact check the fact checker to show all the stuff they conveniently left out in their analysis that included subjective remarks such as, “There are few independent tax analysts who have much good to say about the Bush tax cuts” (i.e., what qualifies as an “independent” tax analyst?), I can’t walk away without saying that it is refreshing that a historically liberal newspaper would finally take Barack Obama to task for being a lying demagogue. Hats off to WaPo for trying to point out Obama’s dishonesty even through the filter of their own well-known prejudices.