Mitch McConnell Tax Cut Line Ignores Recent History

[Galraedia]

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Source: Huffington Post

Slate's Dave Weigel noticed a paradox at the heart of a statement Senator Mitch McConnell released Friday afternoon.

McConnell was responding to President Obama's Friday-morning press conference, in which the president said that increased government spending was the only way out of the economic crisis, and that the private sector was "doing fine." McConnell's statement:

"It’s baffling that in the face of all evidence to the contrary, this President still believes that spending money we don’t have to inflate the government is the answer to America’s economic problems. The economy would respond much more favorably to providing the tax certainty Americans deserve by extending all the tax rates and assuring employers they do not have to budget for the largest tax increase in American history next year. The Obama Economy is even slower now than when we extended the rates in 2010 -- raising taxes on job creators in this slow economy is simply not the elixir for his failed policies.”

In his own words, McConnell implies that his proposed policy solution -- tax cuts -- have done little to spur the economy in the two years since their extension. His simple solution: More tax cuts.

Read more: http://www.huffingtonpost.com/2012/06/08/mitch-mcconnell-ignores-history-tax-cuts_n_1582095.html?ref=politics

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[NRaleighLiberal]

1. The GOP no longer tell, care about, or even think about the truth.

The 8 Bush years taught them that enough of the public will swallow whatever they say and never question it. There's never anything to pay for the lies.

They just open their mouths and let whatever shit spew out - and those who vote for/support them eat it up and ask for more.

[SoutherDem]

2. If the Republicans would actually look at some facts

before speaking, well I guess that would make them Democrats.

[aint_no_life_nowhere]

3. That's hilarious

But McConnell would never admit to the contradiction. If the economy is slower now, it's not because of Republican tax policy so it must be something else, probably those black man's vibrations that Obama is emitting into the atmosphere.

[Galraedia]

4. The "trickle down" theory:

[JohnnyRingo]

9. +1

I'm borrowing that. Thanx.

[The Wizard]

5. Every time a Repube complains

about taxing "job creators" an orphanage burns to the ground.

[DallasNE]

6. Weigel Caught The Paradox On Taxes But He Missed The One On Spending

The stimulus package passed in February 2009 was a 2 year deal so those were slated to expire at the end of 2010. The tax cuts in that package along with the Bush tax cuts were extended through the end of 2012.

McConnell also said that contrary to all evidence government spending (in the stimulus) made no difference. But let's take a look at the evidence. When the stimulus spending was in full gear the economy was growing faster, along with faster job creation. With the tax cuts still in place but with the spending from the stimulus drying up the economy again slowed as did job creation. The facts supported by the data paint the opposite picture of what McConnell contends. It was the government spending that made most of the difference. The tax cuts simply caused the deficit to explode.

As any economist will tell you, it is aggregate demand that leads to job creation. When the private sector does not generate enough aggregate demand then jobs are not created and may be lost. And that is where government steps in, creating increased aggregate demand. Not only does that spending increase aggregate demand, but there is a multiplier effect that provides a secondary boost to aggregate demand. Tax cuts generally go to things like paying down debt and new investments with very little increase in aggregate demand. In this case the multiplier effect is negative, meaning it partially offsets what little increase was created by the tax cuts. It is also why increasing the tax rate for the top 2% will decrease the deficit while having only a very, very small drag on the economy then by using some of that money for spending it will leave an overall increase in aggregate demand while also actually slowing the budget deficit. This is win-win while what McConnell proposes is lose-lose. Now which would you rather have?

[MrScorpio]

7. Panacea...

That's what their tax cut mantra amounts to.

The problem with that is that panaceas are always mythical and never really work.

[JohnnyRingo]

8. "...the biggest tax increase in history"

It's not an increase. It's rolling back the biggest tax cuts in history that got us to where we are today.

[OKNancy]

10. Locking

Repackaged story originally in Slate. Date on Slate article and this one is Friday. More than 12 hours old.
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