Rich People and Corporations The GOPs Trillion-Dollar Failed Stimulus

Richard Eskow

“Class warfare!” Whenever you heard those words, it’s a pretty sure bet whoever’s saying them is the one who’s really conducting class warfare.

And that you’re the target.

The Fast and the Spurious

The Republican responses to President Obama’s moderate plan for jobs creation have been fast and furious – and really, really repetitive. “Class warfare” is getting thrown around a lot, but other rhetorical warhorses are getting even more of a workout.

“This is another failed stimulus that will not stimulate the economy,” said Texas Republican Rep. Francisco Canseco. (Well, a failed stimulus, wouldn’t, would it?)

“The President needs to move beyond the failed stimulus programs of yesteryear,” said Republic Rep. Mike Conway. “”I had hoped the President would have taken this opportunity tonight, before a Joint Session of Congress, to move past his failed stimulus policies,” said Rep. Randy Neugebauer.

That’s the new Republican mantra. In fact, a Google search on the phrase “failed stimulus” yields nearly half a million hits. And yet more than half of the President’s $447 billion proposal comes in the form of tax cuts. We can debate whether these tax cuts are the most efficient use of dollar. There are better, more direct ways of get the economy moving and put Americans back to work,and the rest of the President’s proposal includes some of them.

But tax cuts are more than half of the President’s plan.

Party Lines

Question: When did tax cuts become a form of “stimulus”? Answer: When a Democrat proposed them. And no matter how much the President tries to position himself as above party lines, the Republicans will never let him forget that he is a Democrat. That’s why they keep calling his tax cuts a “stimulus,” which is now a four-letter word in Washington.

But if the President’s tax cuts are a “stimulus” plan, then so are other tax cuts designed to create jobs. The GOP says it opposes the President’s proposal to raise taxes on millionaires. It would rather expand these tax giveaways because, they say, the wealthy are “job creators.” Same goes for the ultra-large corporations who, they say, are “job creators,” too.

When you give money to create jobs, whether directly through spending or indirectly through tax breaks, that’s a “stimulus.”And the Republicans’ rhetoric makes it clear that their tax breaks are, too.

Mr. Boehner’s America

“Job creators.”

If John Boehner’s said it once, he must have said it a million times. If so, that would be about once for every $3,500 spent on lobbying last year in Washington. And the $350 billion spent on lobbying in 2010 was actually down from the year before.

(You don’t think corporation-friendly, rich-people-coddling notions like these grow on trees, do ya?)

The Speaker says that “private sector job creators are at the heart of our economy and they always have been. That’s the America that I was raised in.”

John Boehner was born in 1949, when the top tax bracket was over 82%. It went up the following year, and the top bracket stayed over 90% until he was fifteen years old. That’s the real “America he was raised in,” and it was a time of much greater growth and job creation than we’re seeing today.

Today the top bracket is 35%, and can be as low as 15% for hedge fund billionaires and other members of the ultra-wealthy class. Mr. Boehner’s fighting to keep it that way – and to lower these rates even more. That’s not fighting for “the America he was raised in.” That’s fighting for “the America that funds his races.”

Rich America.

The Job-Creator Scorecard

But let’s take the Republicans at their word: Let’s assume they support these tax cuts because they believe that they help “job creators” do what job creators are supposed to do – create jobs. That means each and every Republican tax cut for rich people and big corporations should be measured by its ability to create jobs and boost wages for the rest of us.

How’s that workin’ out for ya?

After a decade of giveaways to the “job creators,” official unemployment is still over 9% and the real number is much worse. Wide swaths of the population are living in permanent recession or outright depression. Corporations are sitting on $2 trillion in cash which they refuse to spend, because people are too cash-strapped or too fearful to spend and get the economy moving again.

And everybody keeps saying we can’t do more about jobs because of the government’s deficits. Where did they come from?

Deficits: Reagan’s Real Legacy

The Republican tax giveaways began under Ronald Reagan. So did our exploding deficits. That’s no coincidence. How badly did Reagan drive our government spending into a ditch?

For more than forty years before Reagan took office, the tax rates for the highest earners never fell below 70%, It was frequently in the 90%-94% range.Then Reagan slashed those rates.

When Reagan was elected in 1980, the “runaway” government debt he campaigned against was $930 billion. When he left in 1988 that debt was $2.6 trillion. For all their rhetoric, Republicans didn’t care about deficits much back then.

They don’t care about them now, either. Deficit talk is just another mechanism for preserving these tax breaks for the wealthy by making people believe we “can no longer afford” the basic services that were the foundation of our most prosperous century. Sure we can.

If we hadn’t entered a thirty-year binge of tax breaks for the wealthy, we’d be in great financial shape right now. We’d have surpluses as far as the eye can see.

GOP Tax Breaks: The Stimulus That Failed

We can afford our great national programs just fine, thank you very much. What we can’t afford is to keep coddling rich people. Unless, that is, they really are “job creators.” Are they?

Michael Linden at the Center for American Progress looked at the data and found that “growth was actually fastest in years with relatively high top marginal tax rates. Back in the 1950s, when the top marginal tax rate was more than 90 percent, real annual growth averaged more than 4 percent. During the last eight years, when the top marginal rate was just 35 percent, real growth was less than half that.”

In other words, we’ve never created jobs by lowering taxes for rich people. That’s a “failed stimulus” plan if ever there was one. What we have created with these tax cuts is deficits – the rationale that’s being used for all these cuts.

If you want to reduce the deficits, raise taxes on the wealthy. We could use that money to create some jobs, too.

Trillions More Wanted For Failed GOP Stimulus

How much more money do Republicans want to squander on their failed stimulus ideas?

  1. They want to make the Bush tax cuts permanent, which will cost an estimated $4 trillion. Since more than half of those cuts benefited the top 5% of earners in 2010, that means they’re proposing roughly $2 trillion more of the same failed Republican stimulus.
  2. They’re against limiting deductions and exemptions for income above250,000 per year. That’s another $410 billion of the same failed Republican stimulus.
  3. They’re against closing loopholes and special interest deductions. That’s another $300 billion of the same failed Republican stimulus.
  4. Romney wants to cut corporate taxes by a third. That’s another $900 billion (yep, nearly a trillion!) of the same failed Republican stimulus.
  5. Romney also wants to eliminate the estate tax, which only the richest of the richest heirs pay these days. That’s another $175 billion of the same failed Republican stimulus.

Although, to look on the bright side, it does give Paris Hilton some more partying money.

Fixing Their Failures

The simplest and best thing the country could do is adopt and increase the President’s direct job creation proposals, the ones that put people to work doing things that need doing. We can pay for these jobs by ending these failed stimulus programs for the rich and the big corporations.

The President’s tax cuts are an inefficient way to create jobs, and the fact that they target Social Security’s source of funding is a potential disaster. But there’s no bigger “failed stimulus” in history than the Republican Party’s thirty-year-long, multi-trillion-dollar giveaway to the rich and to corporations that hoard their cash and ship jobs overseas. They’ve driven deficits sky-high and failed to create jobs.

So let’s make the President’s partially-good program even better by increasing direct jobs spending and de-emphasizing the cuts. And when they attack those tax hikes for the wealthy and the idea of closing loopholes for corporations, just tell them we don’t want to get stuck with another “failed Republican stimulus.”

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