Liberal myths vs. reality

Liberal myths vs. reality

According to Barack Obama, "The arguments of liberals are more often grounded in reason and fact." But according to Margaret Thatcher, "The facts of life are conservative." Who’s right?

Randall Hoven
New York Post
December 19, 2010

Myth: The deficit was caused by Bush’s tax cuts.

Fact: For over four decades, 1960 through 2000, federal revenues averaged 18.2% of Gross Domestic Product and the trend was virtually flat. The final Bush tax rates became effective in 2003. In 2006 and 2007, well after the new tax rates were in effect, federal revenues were 18.2% and 18.5% of GDP, above historical levels. The federal government collected over half a trillion dollars more in 2007 than it did in 2000.

Myth: Republicans spent like drunken sailors.

Fact: Federal spending from 1960 through 2000 averaged 20.3% of GDP, with a slightly upward trend. The average over all Bush years, 2001 through 2008, was 19.6% of GDP – below the historical average. The 2001-2008 average deficit was also below the 1960-2000 average.

Myth: Republicans exploded the federal debt.

Fact: Per the US Constitution, "all bills for raising revenue shall originate in the House of Representatives." Democrats controlled the House from 1955 through 1994, leaving the federal debt held by the public at 49.2% of GDP. Republicans then controlled the House from 1995 through 2006 and left it at 36.5% of GDP — below the level left by Democrat Congresses.

At the end of Bush’s presidency the debt was 40.2% of GDP. Now, two years post-Bush and four years of a Democrat Congress, the debt is 64% of GDP, the highest it’s been since Harry Truman was paying off World War II.

Myth: The deficit is due to the Iraq War.

Fact: The Congressional Budget Office calculated that the Iraq War cost $709 billion from 2003 through 2010. Total federal deficits over those eight years added up to $4.944 trillion, with the bulk of that ($2.968 trillion) added in just the last two years, after Bush was out of office.

By contrast, federal spending on education over 2003-2010 was $792 billion, and Obama’s stimulus will cost $814 billion. How often do you hear that our deficit problem was caused by education spending?

Myth: The Reagan and Bush tax cuts only benefited the rich.

Fact: According to the CBO, "The lowest three income quintiles have seen declines in their average tax rates since the early 1980s .¤.¤. The average tax rate on the top quintile has fluctuated more, with periods of increases and decreases, and was somewhat lower in 2007 than in 1979."

In fact, the top quintile (top 20% of taxpayers) paid about 25% of its income in federal taxes in 2007, about the same as it did in 1982. By contrast, the middle and bottom quintiles paid less than 15% and 5%, respectively, both lower than at any time since 1979. The bottom two quintiles had negative average income taxes – they received more in tax credits than they paid in income taxes. Per the CBO, "In 2007, about 35 percent of households did not owe any federal income taxes."

Myth: The deficit is due to military spending.

Fact: If federal military spending had been eliminated in its entirety in 2009, the deficit would still have been $776 billion, a historical high. Defense spending is less than one fifth of the federal budget and less than 5% of GDP. When the economy was doing quite well in the 1960s, defense spending was twice as high in those terms. In fact, President Bush presided over smaller defense budgets (as a fraction of GDP) than all presidents from 1941 through 1993.

Myth: "The last eight years," "the last ten years," "the last decade," "the lost decade."

Fact: From 2000 through 2007 real GDP grew 2.4% annually and real disposable personal income grew 2.8% annually. The economy added 5.5 million net new jobs in those years. The unemployment rate stood at 4.4% in May 2007, just before the newly elected, Democrat-controlled Congress raised the minimum wage.

From August 2003 through December 2007, over eight million net new jobs were created.

Fiscal year 2007 was the last one under a federal budget written by a Republican-controlled Congress, and marked the peak in real GDP, jobs, and the stock market. The bad economy of the "last ten years" was all in the last three years – under federal budgets written by a Democrat-controlled Congress.

Myth: Bush deregulated banks, causing the financial crisis.

Fact: President Bush did not deregulate banks, or much of anything else. He increased staffing and spending on economic regulation more than President Clinton did. The number of pages in the Federal Register averaged more in Bush’s first term than at any prior time in US history. He signed the Sarbanes-Oxley Act of 2002, the most sweeping regulation of business since the New Deal.

The New York Times, no cheerleader for President Bush, said in 2003, "The Bush administration is rightly pushing for the Treasury Department to regulate the two giants [Freddie Mac and Fannie Mae], along with the network of federal home loan banks." It was Barney Frank and other Democrats who helped kill such regulation. Frank said, "These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis."

Not a Myth: The above facts are matters of historical record. The sources of many myths are computer models rather than results from the real world. Remember the economic model that said the unemployment rate would not go above 8% if Obama’s stimulus was passed? The stimulus was passed, yet the unemployment rate went above 10% and has been above 9% for the last 19 months.

The models that say extending today’s tax rates would add to the deficit assume that tax rates have no effect on taxpayer behavior. That is an assumption virtually all economists, and most non-economists, know is false. Yet Congress requires the CBO to base its predictions on that bogus assumption.

The reality is that government spending is the problem. It is absurdly above historical levels right now and is unsustainable. It is driven by payments for individuals (64% of 2010 federal outlays) and entitlements, especially health care spending. ObamaCare did not bend the health-care cost curve down, either; it bent it up.

We have to go with Margaret Thatcher on this one.

I love it when pure facts get in the way of good liberal talking points.

And Democrats, who are using these liberal myths every day as they blatantly lie to their constituents and the media (a media who actively perpetuates these lies), wonder why the American people swept their ilk from office in November.

Perhaps they might finally get the hint after November 2012, but I'm not holding my breath.

dblboggie wrote:And Democrats, who are using these liberal myths every day as they blatantly lie to their constituents and the media (a media who actively perpetuates these lies), wonder why the American people swept their ilk from office in November.

Perhaps they might finally get the hint after November 2012, but I'm not holding my breath.

It's going to get worse for the left. Seriously. Now that they're in the minority come January, they'll be screeching even louder. Of course, the alternative media will be there to pick apart the bullshit at every turn.

Liberalism as we know it has breathed it's last breath. As long as I'm alive and have a computer, I'll be exposing this stuff endlessly and without reserve.

Do I want conservatism to dominate? No. I want constitutionalism to dominate. If gov't and the politicians were in accordance with the US Constitution, nobody would really care much which president got elected, because it wouldn't impact one's life so greatly.

Anything else is a lie.

If you want Thatcher you are quite welcome to her. Just come on over!

Just for the record, threads like this is what really turns some people who are left of center off this forum.
Quite honestly, I won't even read articles like this because in the past they've been nothing but selective in their information.

BubbleBliss wrote:
Just for the record, threads like this is what really turns some people who are left of center off this forum.
Quite honestly, I won't even read articles like this because in the past they've been nothing but selective in their information.

Selective? Can you dispute the facts presented?

Also, you're more than welcome to post anything left-of-center in the same line of thinking. Despite the problems we've had in recent days, this is still a political forum. The problems was more member related than anything. One can post as they please. You're more than welcome to. The point is for you (or anyone else) to counter what I've stated. That's debate.

What you don't understand is that nobody else WANTS to post these kind of articles or even debate them. The problems may have been member related, but what brought the problems up was the constant bashing of Democrats. Nobody is going to start posting in a forum that only contains liberal bashing articles.

And as for the selective, I wasn't talking about this thread, just in general as most of these articles are in fact selective.

But you have been guilty of saying some of these things:

The deficit was caused by Bush’s tax cuts.
Republicans spent like drunken sailors.
Republicans exploded the federal debt.
The deficit is due to the Iraq War.
The Reagan and Bush tax cuts only benefited the rich.
The deficit is due to military spending.
"The last eight years," "the last ten years," "the last decade," "the lost decade."
Bush deregulated banks, causing the financial crisis.

My aim was to prove those points to be wrong.


So, we shouldn't have GOP or Dem "bashing" posts? What's the point of having this place then? Does everyone take a centrist or neutral approach?

I have literally never said any of those things.

It's not about a neutral approach, it's about trying to attract new people to come in here and post. If a Dem pops in and sees all the Democrat bashing posts, he's not very likely to sign up because he doesn't want to enter an extremely hostile forum. If a Conservative pops in, he'll see all these articles that he agrees with but he still won't start posting because he has nothing to add to the articles.
And once again, political discussions can come from neutral news articles as well.

BubbleBliss wrote:I have literally never said any of those things.

I said some of them. Pointedly, you've said these two over the course of time.

The Reagan and Bush tax cuts only benefited the rich.
The deficit is due to military spending.

And not word for word, but you've clearly alluded to them.

BubbleBliss wrote:It's not about a neutral approach, it's about trying to attract new people to come in here and post. If a Dem pops in and sees all the Democrat bashing posts, he's not very likely to sign up because he doesn't want to enter an extremely hostile forum. If a Conservative pops in, he'll see all these articles that he agrees with but he still won't start posting because he has nothing to add to the articles.
And once again, political discussions can come from neutral news articles as well.

I know plenty of liberals on other sites that would jump in just to argue their point and ideology. Many people that frequent these types of forums are generally happy where they are. Some like the fast pace of hundreds of posts a day. Some don't. I actually like the light pace in here for the time being. If this place ever exploded, I'd sincerely have to step back from debating and help Matt moderate. But I doubt that'll happen any time soon.

What I've said about the tax cuts is that the trickle down effect doesn't work. There's plenty of data that backs that up, and I've posted it all.
I never said that the deficit is due to military spending even though it obviously contributes to it since every kind of expense contributes to the deficit.

BubbleBliss wrote:
What I've said about the tax cuts is that the trickle down effect doesn't work. There's plenty of data that backs that up, and I've posted it all.
I never said that the deficit is due to military spending even though it obviously contributes to it since every kind of expense contributes to the deficit.

Tax cuts do work. It works for the economy. The revenues increase always. The problem there is always spending issues by congress.

You said that we have too large of a military force.

It ain't cheap having one. But our defense spending is small compared to entitlement spending.

I said that the trickle down effect doesn't work. And the Regaen Tax Cuts didn't do anything for the middle class.

Yeah, but the too large military has nothing to do with the deficit.

BubbleBliss wrote:
I said that the trickle down effect doesn't work. And the Regaen Tax Cuts didn't do anything for the middle class.

Yeah, but the too large military has nothing to do with the deficit.

Everyone gets a tax cut that pays taxes. 47% of America does not pay any federal tax. That's the bottom 50% of tax payers, btw. Heck, people who don't pay taxes get tax credits. That's money from the Federal Treasury that they never paid into and still received money from.

That doesn't adress the fact that the trickle down effect doesn't work.

BubbleBliss wrote:
That doesn't adress the fact that the trickle down effect doesn't work.

Explain how it does not. We've been over this time and again. I've posted govt stats that say the economy had a huge boom due to trickle down. The stats don't lie.

BubbleBliss wrote:
That doesn't adress the fact that the trickle down effect doesn't work.

"Trickle down" as you call it, does indeed work. According to one report released by the Cato Institute in 1996, real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years. Also Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency - that resulted in real financial benefits to all Americans.

The fact is that by reducing top marginal tax rates from a confiscatory 70% to a reasonable 28%, Reagan returned an enormous amount of money to the private-sector that had been sucked out of the economy by an irresponsible federal government. That money was immediately put to work in the private sector as evidenced by the drop in unemployment and the rise in real median family income.

Had Reagan actually been able to enact the complete plan that he had laid out to the American people, we would have seen even more growth for everyone. Sadly, the legislature writes the bills and much of what Reagan wanted to do with the tax code was not realized.

But make no mistake, the trickle down effect of reducing top marginal tax rates does work; the stats on this don't lie.

Yes, those tax cuts increased median family income, but you have to look at how median family income is calculated. The tax cuts did nothing for middle class families, all that money stayed at the top. Of course a LOT of money went to the top, that's why median family income increased. If you look at how much middle class incomes have increased over the past decades, you'll see that those tax cuts didn't do anything for the middle class.

If none of that money went to the top, there would have been no economic boom. None.

BubbleBliss wrote:
Yes, those tax cuts increased median family income, but you have to look at how median family income is calculated. The tax cuts did nothing for middle class families, all that money stayed at the top. Of course a LOT of money went to the top, that's why median family income increased. If you look at how much middle class incomes have increased over the past decades, you'll see that those tax cuts didn't do anything for the middle class.

This ignores the drop in unemployment. That drop was a direct result of upper income people now having the money needed to expand their small businesses or start new ones. Those businesses are responsible for a significant majority of the jobs created in America. Those previously unemployed people, got jobs that hadn't existed when the federal government was seizing 70% of the wealth of upper income Americans. That's the trickle down effect of cutting top marginal tax rates.

That trickle down also manifests itself in increased spending on all manner of goods and services by upper income persons - purchases which also help create jobs for those producing and selling those goods and services.

In truth, under Reagan, middle class income increased 11 percent after adjusting for inflation, while nearly 20 million new jobs were created. This isn't an opinion, this is according to the US Census Bureau - see graph below:

Long after the cuts were put in place...... by 1991, the top 1% of taxpayers in income paid 25% of all income taxes. The top 5% paid 43%. The bottom 50% paid only 5%.

To suggest that this distribution is unfair because it is too easy on upper-income groups is crazy.

Not trying to flood, just posting facts here.



Median Family income
1979-89
Constant 1990 dollars
Year Income
1979 $35,474
1980 $33,346
1981 $32,190
1982 $31,738
1983 $32,378
1984 $33,251
1985 $33,689
1986 $35,129
1987 $35,632
1988 $35,565
1989 $36,062

The CBO: Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years.

dblboggie wrote:

BubbleBliss wrote:
Yes, those tax cuts increased median family income, but you have to look at how median family income is calculated. The tax cuts did nothing for middle class families, all that money stayed at the top. Of course a LOT of money went to the top, that's why median family income increased. If you look at how much middle class incomes have increased over the past decades, you'll see that those tax cuts didn't do anything for the middle class.

This ignores the drop in unemployment. That drop was a direct result of upper income people now having the money needed to expand their small businesses or start new ones. Those businesses are responsible for a significant majority of the jobs created in America. Those previously unemployed people, got jobs that hadn't existed when the federal government was seizing 70% of the wealth of upper income Americans. That's the trickle down effect of cutting top marginal tax rates.

That trickle down also manifests itself in increased spending on all manner of goods and services by upper income persons - purchases which also help create jobs for those producing and selling those goods and services.

In truth, under Reagan, middle class income increased 11 percent after adjusting for inflation, while nearly 20 million new jobs were created. This isn't an opinion, this is according to the US Census Bureau - see graph below:

Sure, unemployment decreased but that's not what I've been saying.
What I'm saying is that whenever somebody wants to advocate tax cuts for the rich, they always quote the fact that medial household income increased and that the economy boomed. Yet the fact that most of that growth went to the top 10% of the country is always ignored. Median family income will increase even if ONLY the top 1% of the country earnes a tremendous amount of extra money.