The Seven Biggest Economic Lies


by Robert Reich
The President’s Jobs Bill doesn’t have a chance in Congress — and the Occupiers on Wall Street and elsewhere can’t become a national movement for a more equitable society – unless more Americans know the truth about the economy.

Here’s a short (2 minute 30 second) effort to rebut the seven biggest whoppers now being told by those who want to take America backwards. The major points:

Tax cuts for the rich trickle down to everyone else. Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans’ wages (measured by the real median wage) began flattening under Reagan and have dropped since George W. Bush. Trickle-down economics is a cruel joke.

Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they’ve been since. Yet the economy grew faster during those years than it has since. (Don’t believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.)

Shrinking government generates more jobs. Wrong again. It means fewer government workers – everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. And fewer government contractors, who would employ fewer private-sector workers. According to Moody’s economist Mark Zandi (a campaign advisor to John McCain), the $61 billion in spending cuts proposed by the House GOP will cost the economy 700,000 jobs this year and next.

Cutting the budget deficit now is more important than boosting the economy. Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They’ll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.

Medicare and Medicaid are the major drivers of budget deficits. Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that’s because the nation’s health-care costs are rising so fast. One of the best ways of slowing these costs is to use Medicare and Medicaid’s bargaining power over drug companies and hospitals to reduce costs, and to move from a fee-for-service system to a fee-for-healthy outcomes system. And since Medicare has far lower administrative costs than private health insurers, we should make Medicare available to everyone.

Social Security is a Ponzi scheme. Don’t believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.

It’s unfair that lower-income Americans don’t pay income tax. Wrong. There’s nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else.
Demagogues through history have known that big lies, repeated often enough, start being believed — unless they’re rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth – and spread it on.


http://www.commondreams.org/view/2011/10/12-2

Im not the economic genius some claim to be,, but I found it to be an interesting article,,,,

I took some time off today and turned on CSPAN because I wanted to watch this debt super committee hearing.

One of the Democrats asked the guy who was testifying if he thought that the 2009 stimulus helped create jobs and staved off a worse financial situation.

He responded "Oh Yes it did, both".

A Republican asked him the same question and when the guy responded with the same answer, the Republican asked him if he could prove it..

His answer was..... NO..

The moral of the story is you can take data and skew it to fit your agenda.

There are several pieces to the article you posted that are missing.

Reich is a smart guy. He has his opinion and other economists have theirs.

We have accrued a huge amount of debt since Obama took office.

He has done exactly what the Reich types wanted.

Do we measure economic success after almost 3 years by saying that... well, it could have been worse?

If that is the measure.. I would call that trickle down stupidity..

Robert Reich is a cruel Joke on America!
Arch-Keynesian!
A Brainbrother of Paul Krugman!

Realy? it seems we are liveing the results of tax cuts for the rich, the BS of trickle down economics. Lets try a riseing tide raises all boats again, it worked pretty good for everyone.

The disparity of wealth im america is insane. Thanks to trickle down economics we are practicly a bannana republic.

you think taxing the rich is going to bring back jobs?

Taxing Financial Transactions is different to Taxing the Rich but it is the Rich Elite that oppose the the Transaction Tax.

really... such over the top comparison.

Bannana Republics have villages not cities (but a few).
Bannana Republics have predominately dirt roads.
Bannana Republic...?

Problem with a rising tide is the anchor rode. The Rising Tide of larger and larger government is sinking ALL of the boats...

they are anchored to close to the mud... instead of lifting them up Government is taking them to the bottom.

This tax the rich mentality is so short sighted that it is really becoming painful to read.

No one believes this is going to fix the actual problems creating this economic situation.

Does it appease the keynesians and the socialists.. Yep.. Does it do anything to create an environment that will lead to people getting back to work.. NOPE..

People are going to look back on this period and wonder what the F**k were these idiots doing.

http://anewworldsociety.ning.com/notes/Technological_Unemployment

Technological Unemployment

People will be out of work in the coming years because it will just seem more logical for companies to hire robots and machines to do they're jobs for them. So how are you going to make a living when you have these machines doing the work and the ceo or boss of the company is reaping in all the benefits. While the poor man is sitting on the curb begging for food, but what happens when everyone is laid off becasue of Technology, they all suffer of course, or have to find a way to steal food. What do we do? there is just one solution and that solution is abolish money and currency.

A U.N. report published inMay predicts a global population of 9.3 billion by 2050, and more than 10 billion by the end of this century.
"With only a small variation in fertility, particularly in the more populous countries, the total could be higher: 10.6 billion people could be living on Earth by 2050 and more than 15 billion in 2100," says the Population Division of the U.N. Department of Economic and Social Affairs.

Much of the increase will come in Africa and Asia.
In light of growing concerns about the global economy, the newUNFPA report highlights financial dangers facing people in industrialized and developing nations.
"While labor shortages threaten to stymie the economies of some industrialized countries, unemployed would-be migrants in developing countries are finding more and more national borders closed to them and the expertise they may have to offer. And while progress is being made in reducing extreme poverty, gaps between rich and poor are widening almost everywhere."

I think there is a big difference though, between believing it could have been worse and believing it would have been worse

For instance, if my home is being foreclosed on, I just got laid off, I came down ill and my car broke down

I could do nothing, let it take its 'natural' course and learn from it in the future (hopefully), or I could do something, find some assistance that would allow me to sell the home instead, use the difference to put down on a home somewhere else, and purchase a bus pass

would I still have debts to pay? yes,,, but at least I would still have shelter and a means of transportation and no foreclosure on my record

in which case I could say,, the assistance didnt fix everything, but it put me in a better place than just letting 'nature' take its course would have,,, and I could call it a save

but if the argument is either increase revenue or decrease spending

why does either one make any less sense then the other

taxing rich would increase revenue, just like cutting programs would decrease spending,,,

and in reality, both have about the same chance of actually 'producing jobs'

but if the argument is either increase revenue or decrease spending

why does either one make any less sense then the other

taxing rich would increase revenue, just like cutting programs would decrease spending,,,

and in reality, both have about the same chance of actually 'producing jobs'


The argument is wrong because it MUST be both, increase revenue AND decrease spending.

Taxing the rich is not the answer to increasing revenue. If the top 4% of wealthy Americans were taxed at a 50% rate, it would only cover 7 days per year of Federal spending!

The way to increase revenue is to put America back to work!!!!!

but if the argument is either increase revenue or decrease spending

why does either one make any less sense then the other

taxing rich would increase revenue, just like cutting programs would decrease spending,,,

and in reality, both have about the same chance of actually 'producing jobs'


The argument is wrong because it MUST be both, increase revenue AND decrease spending.

Taxing the rich is not the answer to increasing revenue. If the top 4% of wealthy Americans were taxed at a 50% rate, it would only cover 7 days per year of Federal spending!

The way to increase revenue is to put America back to work!!!!!



its a good soundbyte, but noone seems to have any idea how to do it,,,

I think when you have a gap between what you have to spend and what you need to live (for instance , earning 1800 a month but having 2000 in expenses),, There is not JUST one option

there are three

you can EITHER increase your revenue (like getting a raise to 2500 per month ) OR decrease spending (like cutting back expenses to 1500 per month) OR BOTH

Plato in his arguments against democracy 2,400 years ago reasoned that democracies were doomed to failure because once the people learned they could vote themselves money, they would, spending themselves into ruinous debt and oblivion.

The argument is wrong because it MUST be both, increase revenue AND decrease spending.

Taxing the rich is not the answer to increasing revenue. If the top 4% of wealthy Americans were taxed at a 50% rate, it would only cover 7 days per year of Federal spending!

The way to increase revenue is to put America back to work!!!!!



its a good soundbyte, but noone seems to have any idea how to do it,,,

I think when you have a gap between what you have to spend and what you need to live (for instance , earning 1800 a month but having 2000 in expenses),, There is not JUST one option

there are three

you can EITHER increase your revenue (like getting a raise to 2500 per month ) OR decrease spending (like cutting back expenses to 1500 per month) OR BOTH


Yeah, that sounds good on paper only. I'm thinking the only way to increase your revenue in tough economic times is by taking a second job. and it's pretty hard to cut fixed expense, especially when you have children to feed, cloth, and house.

Irregardless, taxing the rich is not the answer.

likewise, neither is cutting services to the poor, elderly, and children

but where does that leave us,, who does have an answer?

Not an entire answer but worth three minutes of anyone's time.

http://www.youtube.com/watch?v=ZzZIRMXcxRc

Well one EXCELLENT starting point would be to work on ENDING fraud!! If that were done, and it can be, there would be a surplus of money available for those who really do need assistance!!