Editor‚??s Note: Human Events ‚??Debunker‚?Ě Mark LaRochelle in recent weeks has taken on the fundamental economic questions of Romney vs. Obama. We‚??ve condensed his research for this article. For all of Mark LaRochelle‚??s Debunker columns, go here.
1. THE BUSH TAX CUTS FLIM FLAM
President Obama and Senate Democrats in April unsuccessfully pursued a proposal for the so-called ‚??Buffett Rule,‚?Ě named for Obama supporter and Berkshire Hathaway founder Warrant Buffett. The rule would establish a minimum tax rate of 30 percent for any taxpayer with income of $1 million or more.
This is necessary because, according to the President, ‚??billionaires‚?Ě are ‚??paying a lower tax rate than their secretaries,‚?Ě a claim this column debunked. This tax hike is needed, the President told the Associated Press luncheon April 3, because of the Bush tax cuts¬†for ‚??the wealthiest Americans.‚?Ě
(Even The AP had to call B.S. on this, reporting: ‚??You wouldn‚??t know from [Obama‚??s] statement that taxes in 2001 and 2003 were cut across the board, not just for the wealthy.‚?Ě)
By allowing the rich to avoid paying their ‚??fair share,‚?Ě claims the President, the Bush tax cuts are to blame for Obama‚??s budget deficit, which will exceed $1 trillion this year for the fourth year in a row, pushing the National Debt over $14 trillion dollars.
REALLY, MR. PRESIDENT?
Obama‚??s ballooning deficit is due not to declining revenues, but to runaway spending. The Bush tax cuts did not cause tax revenues to fall, but to rise. Since the final round of Bush tax cuts was enacted in 2003, federal revenues have actually increased by about 29 percent, from $1.9 trillion to $2.3 trillion.
The problem is that spending has increased more than twice as fast ‚?? a staggering 67 percent, from $2.2 trillion to $3.6 trillion. As a result, the deficit has more than tripled, from $378 billion to $1.3 trillion, while the National Debt has more than doubled, from $6.8 trillion to $14.8 trillion.
(April 17, 2012)
2. CLASS WAR RHETORIC OF ‚??FAIR SHARE‚??
President Obama has opted for demagogic tactics and class-war rhetoric, endlessly pretending that he wants to raise taxes only on ‚??millionaires and billionaires.‚?Ě
His plan, however, would actually raise taxes on every family making at least $250,000 (about 2 percent of households) and every individual making at least $200,000 annually (more than 3 percent of all returns as of 2008). Obama claims that excluding these people¬†‚?? huge numbers of them small businessmen ‚?? from the extension of the Bush tax cuts will force them to ‚??pay their fair share.‚?Ě
REALLY, MR. PRESIDENT?
There is no evidence that tax rate cuts reduce the share of total income taxes paid by high-income people. (See table at HumanEvents.Com, March 12, 2012 Debunker.) When Bush cut the top marginal rate by 3.5 percentage points, the share of the total income tax burden borne by the top one percent (those who earned more than $343,947 annually, as of 2009) actually increased by 6.5 percentage points by 2007. Indeed, every reduction in the top marginal rate has increased the share of income taxes paid by high earners.
According to progressive Berkeley economist Emmanuel Saez, fully 93 percent of the income gains made during the Obama ‚??recovery‚?Ě in 2010 went to the despised top one percent, while the other 99 percent of Americans have seen only a 0.2 percent growth in real income.
This is a far worse performance than the much-maligned Bush, under whom the top one percent garnered only 65 percent of the income gains during the 2002-2007 expansion, while the bottom 99 percent saw real income grow by 6.8 percent.
In other words, Obama‚??s recovery has been 43 percent better for the top one percent than the Bush expansion, while the Bush expansion was 34 times better than Obama‚??s recovery for the bottom 99 percent.
(March 12, 2012)
3. THE ‚??BLAME BUSH FOR DEBT‚?? FEINT
According to President Barack Obama‚??s 2013 budget estimate, the National Debt this year is a staggering $16 trillion dollars. The President blames his predecessor George W. Bush, saying ‚??we cut taxes without paying for them over the last decade; we ended up instituting new programs like a prescription drug program for seniors that was not paid for; we fought two wars, we didn‚??t pay for them,‚?Ě etc.
REALLY, MR. PRESIDENT?
In Fiscal Year 2009, in response to the financial crisis, Bush increased spending by more than half a trillion dollars, while revenues simultaneously fell more than $400 billion, producing the first trillion-dollar deficit in history.
But Obama has continued this spending spree, running trillion dollar deficits every year since, and planning to do so again this year. Yes, Bush increased the debt by an average of $750 billion per year, but Obama has increased the debt by an average of $1.4 trillion annually ‚?? about 85 percent faster than Bush ‚?? and plans to continue doing so.
(April 10, 2012)
4. OIL PRODUCTION CANARD
In his weekly radio address Feb. 25, the President said that ‚??under my administration, America is producing more oil today than at any time in the last eight years.¬†In 2010, our dependence on foreign oil was under 50 percent for the first time in more than a decade.‚?Ě
This came two days after he told a crowd in Miami, ‚??we have a record number of oil rigs operating right now ‚?? more working oil and gas rigs than the rest of the world combined.‚?Ě
REALLY, MR. PRESIDENT?
While it‚??s true that U.S. oil and natural gas production are up, this is not thanks to, but in spite of Obama. All the increased production has come from state and private lands, where the President has little power. On federal lands controlled by Obama, production has actually fallen.
According to an Institute for Energy Research analysis of data from the Interior Department‚??s Office of Natural Resources Revenue, production of oil increased 14 percent and natural gas 12 percent on private and state lands in Fiscal Year 2011, while on federal lands, production of oil declined 11 percent and natural gas 6 percent.
(March 8, 2012)
5. JOBS APLENTY IN OBAMA RECOVERY
The U.S. economy has generated more jobs during the Obama recovery than it did during the Bush recovery or even the Reagan recovery, according to Obama‚??s Deputy Campaign Manager Stephanie Cutter. On a recent episode of MSNBC‚??s ‚??Morning Joe,‚?Ě Cutter told co-host Willie Geist: ‚??‚?¶ over the past, you know, 27 months we‚??ve created 4.5 million private sector jobs. That‚??s more jobs than in the Bush recovery, in the Reagan recovery, there‚??s obviously more we need to do ‚?¶‚?Ě
According to the Business Cycle Dating Committee of the National Bureau of Economic Research, the Obama recovery didn‚??t begin 27 months ago, but 37 months ago, in June 2009. Cutter skipped the first ten months of the recovery‚??during which the private sector lost 800,000 jobs, a decline of about 0.8 percent. Understandably, the Obama campaign wants to drop this period‚??encompassing that embarrassment the administration dubbed ‚??recovery summer‚?Ě‚??down the memory hole.
Cutter‚??s 27 months begin in the employment trough of April 2010, the tenth month of the recovery. Starting from that point, according to the U.S. Department of Labor‚??s Bureau of Labor Statistics, private sector employment in the U.S. increased by about 4.2 million (not 4.5 million)‚??from about 107 million to more than 111 million. That‚??s an increase of 3.9 percent over these 27 months.
How does this compare with the Bush and Reagan recoveries? To find out, we must compare analogous periods, starting with each recession‚??s employment trough and ending 27 months later.
During the Bush recovery, private-sector employment bottomed out in December 2003 with 108.7 million jobs. Over the following 27 months, it increased by more than 5 million jobs, to about 113.8 million in March 2006‚??an increase of approximately 4.7 percent.
During the Reagan recovery, private-sector employment bottomed out at about 73 million jobs in March 1983. Over the ensuing 27 months, it rose to about 81 million in June 1985. That‚??s an increase of nearly 7.9 million jobs‚??more than 10 percent!
(Sept. 9, 2012)
Sign up to the Human Events newsletter