Monday, September 5, 2011
Men Lie, Women Lie, Numbers Don't
This Thursday President Obama will be addressing the nation on the specifics of his plan to further stimulate job growth and aid our struggling economy.
Although we have made tremendous progress, we need to make sure that we continue growing the economy and do not revert back to failed policies. With unemployment still high and slow job growth, we need to ensure that more burden is not placed on the working class.
For those that continue to claim that we need to continue decreasing taxes for the wealthiest two percent in order to stimulate growth, I argue the opposite.
Under President Clinton, the marginal tax rate was at 39%, yet we still created more than 23 million net new jobs with about 90% in the private sector in less than eight years! However, under President Bush (with a lower marginal tax rate of 35%), our economy had a net growth of only 3 million new jobs and ZERO in the private sector (not to mention we went from a $200 billion surplus to an incredible $1 trillion deficit).
Put simply, the wealthiest two percent have had these tax cuts for nearly a decade now and the level of job growth is still weak.
Although there are many other factors that have also contributed to our weakened economy, when the choice comes down to providing tax breaks to the richest or the middle-class, I would rather give more money to those that are likelier to spend it than save it: the middle-class.
Last year, Obama lowered the payroll tax for millions of middle-class Americans. These tax cuts are set to expire at the end of the year, effectively raising taxes on the working class. However, many in the Republican leadership are already promising to let them expire.
In December, the same group threatened to raise taxes on all families unless President Obama agreed to extend the Bush tax cuts for the wealthy. Then last month Republicans in Congress (and each of their presidential candidates) continually threatened to force a default on our obligations, resulting in the first US Credit downgrade in our history.
Further, Republicans have repeatedly denounced the positive effects of Obama’s stimulus package passed within the first month of his administration. But as Jay-Z points out, “men lie, women lie, numbers don’t.” Here are some numbers:
When Obama took office, we were losing over 700,000 jobs a month. Without an immediate government stimulus, the Labor Department estimates we would have lost more than 11 million jobs.
Then came healthcare reform, with 32 million new patients added to the insurance pool and a saving of over $230 billion, according to the Congressional Budget Office.
Furthermore, we passed Wall Street reform (holding executives accountable, ending "too big to fail" bailouts, and enacting the strongest consumer protections in history) and ended the Iraq War (saving billions of dollars).
All these measures have helped. The Congressional Budget Office, for example, just released a report finding that Obama’s Recovery Act created around 2.5 million jobs, and shaved a full percentage point off of the unemployment rate.
Yes we still have many problems, but Obama’s efforts have kept a bad situation from getting worse.
Democrats and Republicans both want to cut spending. But we should not focus on providing more tax breaks for the rich at the expense of cutting spending on education, infrastructure, or extensions to the payroll tax.
Posted by Ashwani Jain