I was innocently watching TV yesterday and I saw it… The big lie commercial that I knew was coming. Bill Clinton repeating the (pardon my epithet) bullshit line that the Republicans want to return to “the same solutions that got us into this mess in the first place. Reduced regulations and tax cuts for the rich.”
Here’s the problem: People believe that. It’s a complete and total alteration of the facts, but people believe it.
As you can see, the blue line in the chart above shows government revenue beginning with the Bush Tax Cuts. The red line is spending.
Revenue grew substantially, from $1,783 billion in 2003 when the tax cuts were enacted, to a high of $2,568 billion in 2007, prior to the recession, which dinged it a bit in 2008 (the crash was at the end of that year), but dropped revenues more drastically in 2009 and 2010. Obviously, the tax cuts were not the cause of the reduced revenues in 2009 and 2010. One might even speculate that it was the recession combined with Obama and the Dems ham handed attempts to bring us into recovery utilizing the progressive model that reduced revenues so drastically. The increase in revenues between the implementation of the tax cuts and 2007 was 44%. Even with the recession, revenues were up from $1,783 billion in 2003 to $2,165 billion in 2010, a 21.42% increase.
The rub, of course, is that red line. Spending has increased since 2003 (as we were just coming out of the recession caused by the tech bubble bursting, and exacerbated by 9/11) 72.27%, from $2,160 billion to $3,721 billion.
Also note how close the red and the blue lines got in 2007. Revenues were up, spending was increasing, but not as fast as revenues, and then… Reid/Pelosi!!! Jump forward the next few years when we include a Democrat president and look at that mess. Keep in mind that 2009 included the supposed one time stimulus. It doesn’t seem to disappear in 2010, does it? It didn’t in 2011 or 2012 either. It’s part of the baseline now.
How do you argue that the Bush tax cuts caused the recession when revenues increased that much? And, the percentage of the tax burden that “the rich” (let’s call it the top 5% of earners) pay went UP, not down. In 2000, still in Bill Clinton’s term, prior to the dreaded Bush tax cuts, the top 5% of earners paid 56.47% of taxes collected. In 2007 (prior to the recession) the top 5% paid 60.63% of the taxes. In 2009 the top 5% paid 58.66% of the taxes. At the same time, the really rich (the guys the Democrats really claim to hate–when they’re not taking big donations from them) paid 37.42% of the taxes under the Clinton rates in 2000, and were up to 40.42% in 2007 before the crash, but down a bit to 36.73 in 2009. Interestingly, the percentage of income earned by the top 1% was 20.81% in 2000, 22.83% in 2007, but dropped, post recession, to 16.93%. So they were still paying within a percentage point of the same amount of the overall tax burden in 2009 as they were in 2000, but they were doing it while making almost 4% less of the income.
But… Wait! How did they get this big tax cut for the rich, and end up paying more of the total tax burden? In the static model (the model that ignores reality) of tax revenue, supposedly paying a higher rate results in higher revenue. In the real world, paying a lower rate results in less tax avoidance and paying more.
Could it be that the problem is not the blue lines, which indicate that with the Bush tax cuts increased revenue substantially, but in the red lines that indicate that Federal spending exploded? I don’t think Clinton will talk about this.
In 2000 spending was $1,789 billion. In 2007 spending was $2,728.7 billion. Bush’s deficit had reached a high of $412 billion in 2004, but was down to $160.4 billion in 2007. In 2008, the first Pelosi/Reid budget, which was the last budget Bush actually signed, spending grew to $2,982.6 with the highest deficit of all of the budgets Bush signed at $458.6 billion. In 2009, Bush never signed a budget, because Pelosi/Reid kept it out of his hands through continuing resolutions, then had Obama sign it after he was inaugurated. This is the budget that contained the stimulus (which was obviously not Bush’s work). The 2009 budget, which Democrats put under Bush’s spending column, despite the truth of which party voted on it, and which president signed it, increased spending to $3,517.7 billion with a deficit of $1,412.7 billion. Obama’s 2010 spending (did they have a budget that year? It’s been so long I can’t remember) was $3,456.2 billion with a deficit of $1,293.5 billion, and the 2011 spending was $3,603.1 billion with a deficit of $1299.6 billion.
The total deficits (debt added) in the seven budgets that Bush signed was $2,133.9 billion (remember, Bush never signed 2009, because of the shenanigans by Pelosi/Reid holding out for Obama to sign it… whereupon he immediately signed it, then disclaimed it. The first incredible hint that the man had no integrity at all). If you count all of the deficits that Obama has signed off on (including 2009) he added $4,005.8 billion through 2011. The estimate for the 2012 budget was another trillion in deficit, but we clearly exceeded that because we already hit $16 trillion in total debt (and the estimate had us only at $15.6 trillion through 2012). It gets tough to keep track of this administration, since Democrats have decided that they don’t need to budget anything anymore.
Isn’t it clear from those numbers that the problem wasn’t tax breaks, but spending? Was Bush bad? Yes. Terrible. $2.133 trillion worth of not good. But, c’mon! Counting just over 3 years, rather than Bush’s seven, Obama and the Dems have added more than $5 trillion in debt. They’ve more than doubled Bush. And Bush was, as I’ve admitted, not good!
Naturally, Clinton will never admit that the real cause of the crash when the housing bubble burst was his administration’s aggressiveness in enforcing the Community Reinvestment Act, forcing banks to give mortgages to people who could not afford them. And, of course, that repository of Democrat cronies, Fanny Mae and Freddy Mac, which Barney Frank defended as completely solvent and nothing to worry about… Again, Bush wasn’t a whole lot better, as he got swept up in his “ownership society” and also bragged about increased home ownership, though he did issue several warnings about Fanny and Freddie.
Clinton was also the guy who repealed Glass-Steagall, which he referred to as “irrelevent.” People may argue about whether or not it would’ve made any difference, but for Clinton to bemoan Republicans as deregulation crazy after that? Takes a lot of cajones, and, of course, the typical Democrat reliance on people having very short memories.
The other funny thing is that when Democrats are defending Obama when Republicans say that he has gone regulation crazy, they argue that Bush regulated at a faster clip than Obama. But, when you talk about deregulation, suddenly deregulation was the thing that caused the recession. Please explain the logic to me. Republican deregulation caused the recession, but Bush was a bigger regulator than Obama. What? That Bush… I tell ya… He’s the magic man.
Finally, Clinton tells us that Obama will bring us out of this recession by investment in jobs training, education, and alternative energy. So… exactly how does training people for jobs that don’t exist provide more jobs? Seriously. You could train me tomorrow to be the first astronaut on Europa (one of Jupiter’s moons) and that doesn’t mean I could get a job doing anything.
Haven’t we reached the conclusion that wind and solar and other alternatives are not going to be big job creators yet? Do Democrats not understand that those things are economic losers? Even when the government forces them on an economy, they are an economic drag that costs jobs rather than creates them.
So the Clinton ad makes false claims about the cause of the recession and the difficulty in recovering from it, then provides Obama’s ridiculous, unworkable, and government-centered solutions. I hope the Republicans rebut it effectively.