Mitten Romney: Stimulus Lies

   Another Christian candidate who has to resort to lies in an effort to look better than he actually is.

Romney's Big Lie on the Economy Gets Bigger

Originally posted to Avenging Angel on Mon Jan 16, 2012

If nothing else, Mitt Romney seems dedicated to proving that repetition of a lie will make it true.  On no point is Romney's tilting against the windmill of truth more comically pathetic than his long-ago debunked claim that President Obama "did not cause this recession, but he made it worse."  After a tidal wave of fact-checkers demolished his mythology last summer, Romney on June 30 pretended, "I didn't say that things are worse" before reinstating the falsehood in his stump speech just days later.  Now, Mitt has a new twist on his "Obama made it worse" fraud, declaring in light of the improving economic outlook that "It's getting better not because of him, it's in spite of him and what he's done."

Sadly for the myth-maker from Massachusetts, the numbers and the overwhelming consensus of economists - including John McCain's 2008 brain trust - demand Mitt Romney give credit where credit is due.

That, of course, is something the serial deceiver Romney is refusing to do, even as he acknowledges the economy is improving.  As Mitt put it in New Hampshire ten days ago:

"I'm sure the president will want to take credit for it, for any improvement. Guess what? He doesn't deserve it."

Two days later during a GOP debate, Romney repackaged his con job this way:

"The president is going to try and take responsibility for things getting better. You know, it's like the rooster taking responsibility for the sunrise. He didn't do it," Romney said. "In fact, what he did was make things harder for America to get going again."

But back on planet Earth where the force of gravity still applies and the sun rises in the east and sets in the west, Romney's slander should receive the ridicule it rightly deserves.

This summer, Time blasted Romney's accusation that "the recession is deeper because of our President," concluding "that Romney's claim has no credible basis" because "there's no credible economic data showing that Obama has inflamed our economic problems."  As Greg Sargent noted on June 27, both the AP and the Washington Post's own fact-checker demolished Romney's talking point on the recession which the NBER declared over in June 2009.  Confronted three days later by NBC producer Sue Kroll about the growing economy, modest job gains and surging stock market, Romney simply denied he ever made the charge:

"I didn't say that things are worse...What I said was that economy hasn't turned around."

Nevertheless, just four days later Romney marked Independence Day by returning to his lie.  As the New York Times reported:

Speaking at the annual July Fourth parade here on Monday, Mr. Romney told a crowd of supporters and passersby, "the recession is deeper because of our president," adding, "it's seen an anemic recovery because of our president."

Mr. Romney made a similar assertion earlier when reporters had pressed him on the point near the parade staging grounds, after initially seeming to limit his commentary to the president's handling of the recovery, which he said, "has been slower and more painful,'' But then he went ahead and said it, that the president "made the recession worse."

As it turns out, it's not just the tidal wave of reporters and fact-checkers that washed away the mud Mitt Romney hurled at President Obama on the economy.  A bevy of economists, including ones who worked for Romney endorser John McCain, long ago concluded that Barack Obama saved the U.S. economy from calamity.

Take, for example, the nonpartisan Congressional Budget Office.  Despite Republican mythmaking that the American Recovery and Reinvestment Act (ARRA) "created zero jobs," in November the CBO reported that the stimulus added up to 2.4 million jobs and boosted GDP by as much as 1.9 points in the previous quarter.  As The Hill explained, the CBO has found that "President Obama's 2009 stimulus package continues to benefit the struggling economy":

The agency said the measure raised gross domestic product by between 0.3 and 1.9 percent in the third quarter of 2011, which ended Sept. 30. The Commerce Department said Tuesday that GDP in that quarter was only 2 percent total...

By CBO's numbers, the $800 billion stimulus added up to 0.9 million jobs in 2009, 3.3 million jobs in 2010 and 2.6 million jobs in 2011.

Mark Zandi, an adviser to John McCain in 2008, was adamant on positive role of the stimulus. Federal intervention, he and Princeton economist Alan Blinder argued in August 2010, literally saved the United States from a second Great Depression. In "How the Great Recession Was Brought to an End," Blinder and Zandi's models confirmed the impact of the Obama recovery program and concluded that "laissez faire was not an option":

The effects of the fiscal stimulus alone appear very substantial, raising 2010 real GDP by about 3.4%, holding the unemployment rate about 1½ percentage points lower, and adding almost 2.7 million jobs to U.S. payrolls. These estimates of the fiscal impact are broadly consistent with those made by the CBO and the Obama administration.

But their modeling also suggests that the totality of federal efforts to rescue the banking system dating back to the fall of 2008 prevented a catastrophic collapse:

We find that its effects on real GDP, jobs, and inflation are huge, and probably averted what could have been called Great Depression 2.0. For example, we estimate that, without the government's response, GDP in 2010 would be about 11.5% lower, payroll employment would be less by some 8½ million jobs, and the nation would now be experiencing deflation.

Even Douglas Holtz-Eakin, former head of the CBO and chief economic adviser to John McCain during the 2008 election, acknowledged the impact of the stimulus. Certainly no fan of either Barack Obama or the design of the ARRA, Holtz-Eakin told Ezra Klein that:

"The argument that the stimulus had zero impact and we shouldn't have done it is intellectually dishonest or wrong. If you throw a trillion dollars at the economy it has an impact, and we needed to do something."

Of course, Mitt Romney is nothing if not intellectual dishonest.  But his lie that President Obama "made the economy worse" has become, as Greg Sargent noted, "has now become absolutely central to his campaign message, yet it's finding its way into story after story and segment after segment with no rebuttal whatsoever."  And until that deception is finally buried by the scorn and disdain it deserves, Mitt Romney's "Post-Truth Campaign" will continue until November.

* Crossposted at Perrspectves *

Also republished by Community Spotlight.

Technorati Tags: Mitt Romney,Barack Obama,Stimulus,The Economy,ARRA,CBO,GDP,The Recession,2012 Elections,An American Gothic,Current Events

Where We Are Headed if Republicans Get Their Way with the Tax Code

Originally posted to Tim DeLaney on Mon Jan 16, 2012

The current Republican candidates have all called for the elimination of both capital gains taxes and estate taxes. Presumably, taxes on dividends would also be eliminated, but even if not, there are ways of diverting profits from dividend payments to capital gains--stock buy-backs, for instance.

Below the fold, we will examine the likely consequences of adopting this Republican vision of taxation. Briefly put, it ain't pretty.

Let's imagine you are a CEO or other high-placed executive for a major corporation. Your annual salary--including bonuses--is about $5 million. You are getting more wealthy each year because you don't spend the whole $4 million in after tax dollars. (You have a very good accountant!)

The Republicans gain control of the White House, and of both houses. (Hurray! Let the good times roll!) True to their word, they cut the capital gains tax to zero and eliminate the estate tax. You and your accountants, with an eye toward the 0% tax on capital gains, decide that your salary ought to be structured such that it is classified as capital gains rather than ordinary income.

Somehow, under the magic of creative accounting, and perhaps with an assist from the lawmakers you helped elect with your Super Pac, most of your income is transformed into capital gains. With an effective tax rate near 0%, your net worth skyrockets.

So, what do you do with the money? Even today, the top 1% in wealth own more than half the financial assets in the country. Under the new tax regime, this inexorably increases until--perhaps a few decades from now--they own nearly all the stocks, bonds, and other financial assets. What now?

A natural outlet for all that capital is property. So you start buying up houses on the open market to use as rental properties. The 99% can no longer afford home ownership because you have squeezed the last available dollar out of them. Eventually, most workers are reduced to living from paycheck to paycheck. What do you do when you con no longer get blood from a stone?

You resort to cannibalism, of course. If you are one of the top 0.01%, you start squeezing out the other 0.99%. eventually, and it might take a few generations, all the country's wealth will be concentrated in a few thousand families. (Remember, we abolished estate taxes.) Under the Republican paradigm, the trend is inevitable: the rich will inevitably get richer, and the rest will get poorer.

It may already be too late to reverse the trend. Excess wealth can readily be converted to votes, especially in view of the Citizens United decision. Votes are converted into control of the government, and this in turn is converted to control of the country's wealth. In this circular paradigm, wealth begets wealth. When wealth and politics combine, the non-wealthy are the losers.

For the United States--and all its citizens--to prosper, we need to attain political equilibrium. The politics of the Democratic Party naturally tend towards equilibrium; the politics of the Republicans naturally tend towards runaway wealth concentration.

I don't by any stretch mean to suggest that everything proposed by Democrats is naturally and necessarily optimum policy. We can, and have, made mistakes. But when Democrats make mistakes, those mistakes tend to be self-correcting. When Republicans make mistakes, the results are generally catastrophic.

What does this have to do with the current campaign? First priority, in my opinion, is to overturn the Citizens United decision by means of a constitutional amendment. Demand from every congressional candidate--Democrat or Republican--a firm commitment to the proposed amendment. The alternative is to allow corporations to buy the government. In reality, this amounts to allowing the Boards of directors and the CEO's to buy the government. It is merely a convenient fiction to believe that the shareholders are in control.

There are other reforms needed. In future diaries, perhaps I will try to advocate for some of them.

Also republished by J Town, Dream Menders, and Community Spotlight.

Technorati Tags: Republicans,Taxes,Tax Code,Citizens United,Class Warfare,Current Events,An American Gothic,Politics,The 1%