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Wednesday, July 12, 2006

McIlheran Watch: Let's Celebrate Massive Deficits!

(Updated below.)

You know, every time I think about continuing to catch up on stuff I skipped last week, something new crops up. The Milwaukee Journal Sentinel's resident member of the fantasy-based community is back from his summer vacation. I don't know if he got too much sun, or if he's celebrating Bush's visit to Milwaukee this week, but he has certainly left the rose-colored glasses on.

One post Tuesday is all about how great it is that we're adding $300 billion to our national debt this year. He somehow thinks this is good news.

He's not the only one. New nemesis The Game is exultant:
Conservatives believe that if you lower taxes to a certain point, you actually get MORE in tax revenues because people have more money to spend, they buy more stuff, buisness makes more money, they hire more people to make more stuff, and so on...

But since liberals don't believe that...explain how Bush's tax cuts for the rich have collected MORE taxes FROM the rich?
The comments to that post degenerated into an argument over Social Security, but Game kept begging that his liberal commenters to admit that Bush's tax cuts have been a rousing success.

And that's McIlheran's point, too; the title of his post, after all, is "Argument's Over," saying "The tax cuts didn’t destroy America. Can we move on to the next issue, please?" Well, no, America isn't destroyed. But consider that, even after the good economic news of the week--that the deficit would be but $300 billion, not the close to $400 billion projected--we still learned that the deficit would in fact be the fourth-largest deficit in the history of the country. (Deficits 1-3 are, of course, Bush's from 2004, 2003, and 2005, in that order.) In fact, Bush himself predicted during his first campaign that there would be a surplus of more than $500 billion this year, not a deficit.

I do not understand how a loss of more than 800 billion dollars can be considered anything other than an abysmal failure.

What's more, according to the New York Times, "many independent budget analysts note that overall revenues have barely climbed back to the levels reached in 2000." So, sure, yeah, the tax cuts haven't destroyed anything, but they certainly haven't shown anything like that graph on the napkin: The argument actually was, to remind the goal-post moving Patrick McIlheran, that cutting taxes would increase revenue faster. That hasn't happened; I suppose we can say that argument's over now, too.

McIlheran isn't done there, though. He completely undercuts his own arguments (or, rather, those of the Heritage foundation, which he cites). He writes,
That is, CEOs got fat paychecks and their investments did well--because, in part, of the tax cuts that spurred the economy. As Heritage Foundation’s Brian Riedl put it, “Lower tax rates increased the incentives to work, save, and invest, and as a result the economy has grown faster.”

And when it grows, people earn more and pay more in taxes. Of course.
My head hurts from that spin. Let me see if I get this straight: The extra revenue you're celebrating comes "from 'the tippy-top of the income scale,' with Americans who have investments earning handsomely from capital gains"--money grown from money earned by people who have money. Yet you (and Heritage) say that this is evidence of more "people" at "work"? There's no "work" in capital gains. This increase in income is not being enjoyed by the "people" but by the few. It's John Edwards's "Two Americas" personified (and read that link to see how conservtives distort economic figures to pretend tax cuts help cure poverty better than social programs).

Actual economist Brad DeLong has two posts deflating some of the some of the ill-advised celebrating among the likes of McIlheran. First, he notes that even former Bush shills see bad times ahead; next, he takes apart Larry Kudlow, approvingly linked by McIlheran, who is also abusing economic figures to imply that things are moving more hummingly than they are.

Yes, the argument's over. The evidence continues to pour in that Bush's economic policies have neither helped the vast majority of Americans, nor have they done anything close to what they promised to do for us.

Update: Barbara O'Brien reminds me of something I thought I remembered but didn't have tim to check on this morning: The original 2006 deficit estimate was probably inordinately high on purpose. That means when the deficits no one but the Bush spinners expected didn't arrive--as expected--they claimed victory. Reminds me of Lisa Simpson:
Lisa: I could say that this rock keeps tigers away. You don't see any tigers around, do you?
Homer: I would like to buy your magic rock.

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