The Daily Switch

Common Misconceptions

Posted by Ender on April 24, 2009

Recently, a commenter in this post voiced a few common misconceptions about Bush and Obama. Here is the quote: “As I said, taxes would have needed to be increased anyway as a result of the Bush’s spending. I know this sounds like I am saying [Obama’s] spending ok, Bush’s spending bad. I can’t deny that and I won’t back down from that argument. With [Obama’s] budget though you see the results of the country fighting 2 wars. W buried that and never had it reflected in his budget. So people need to take the wars into account when they see [Obama’s] budget.”

Deficits

Deficits

Aside from the glaring inaccuracies there are other problems with this statement. I think we have to address the tax issue. The commenter claims that taxes would have to be raised as a result of Bush’s spending. The purpose of raising taxes I would assume would be to get rid of the deficit. Please reference the chart on the right. These numbers include all war spending. Now if we look at this chart we can see that even including the wars Bush’s deficit was drastically less than the proposed Obama deficit. So, if the purpose of raising taxes is to reduce the deficit then I am thoroughly confused. What is the point of raising taxes if you are going to increase spending by astronomical amounts? Even with tax increases Obama’s deficit will be more than all previous Presidents’ combined.

The commenter also claims that Obama had to reflect the wars in his budget which is causing it to look so bad. Although it is true that Bush funded the wars through emergency supplementals; it is false to say that this is the reason Obama’s budget is horrible. The spending although not in the budget had to surface somewhere. It surfaced in the deficit. Riedl writes, “President Bush presided over a $2.5 trillion increase in the public debt through 2008. Setting aside 2009 (for which Presidents Bush and Obama share responsibility for an additional $2.6 trillion in public debt), President Obama’s budget would add $4.9 trillion in public debt from the beginning of 2010 through 2016.” So, forget about the budget and focus on the end result, the deficit.

Another similar misconception (not voiced by the commenter) is that Obama is creating $2 Trillion in savings with his plan. “During his recent address to a joint session of Congress, President Obama previewed his budget by asserting that the Administration has “already identified $2 trillion in savings over the next decade.”[9] This is simply not true. His budget increases spending by $1 trillion over the next decade, which he attempts to offset by reclassifying as “savings” $1.4 trillion in tax increases and $1.5 trillion in reduced spending in Iraq. However, gov¬ernment savings have always referred to spending cuts that save taxpayer dollars, not tax increases that feed the government. Furthermore, the Iraq “sav¬ings” are measured against an implausible spending baseline that assumes a permanent $180 billion bud¬get for the global war on terrorism, without any troop withdrawals through 2019. This is the equiv¬alent of a family deciding to “save” $10,000 by first assuming an expensive vacation and then not taking it. Without these false savings, only the $1 trillion spending hike remains, and that does not account for the extra $250 billion proposed for another round of financial bailouts in the current fiscal year.”

The poster also wrote “I don’t believe in a recession that giving tax breaks to the rich is the answer.” This is also hopelessly false. Firstly, the cuts benefit everyone. Secondly, “In the 18 months following the 2003 tax rate cuts, economic growth rates doubled, the stock market surged 32 percent, and the economy created 1.8 million jobs, followed by 5.2 million more jobs in the next 27 months.” The fact of the matter is that tax cuts encourage spending, investment and growth. Even extremely liberal and economically ignorant people like Alec Baldwin admit this. In an interview, Baldwin said “I’m telling you right now, if these tax breaks are not reinstated into the budget, film production in this town is going to collapse, and television production is going to collapse, and it’s all going to go to California.” The only thing Baldwin got wrong here is that the business will not move to California where the taxes are already worse and driving the movie industry to places like New Mexico, Montana and Canada. Taxes hurt business more than anything else. Reducing taxes on businesses as well as individuals will bring us out of the recession. To look back at the Bush years as having no economic prosperity is completely shortsighted and biased. Even taking into account the housing bubble burst; the economy is still better off then before.

Unfortunately, arguments based on false information never end well. The fact of the matter is that Obama has drastically increased unaccounted for spending to levels that will be detrimental to the economy. I’ll end with a quote:

Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.-John Adams

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