Bush tax cuts add to debt

You’d think that the expiring tax cuts for the wealthy would present a dilemma to Republicans, who suddenly rediscovered the evils of budget deficits on Jan. 20, 2009, after George W. Bush had racked up $4 trillion of national debt.

After all, conservatives are now forced to push two mutually exclusive, yet theoretically “core,” tenets: 1) tax cuts as the solution to everything and 2) budget deficits as the greatest evil facing our nation.

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Of course, when push comes to shove, Republicans will choose their beloved tax cuts over deficit reduction every time. So the prospect of seeing individuals making over $200,000, or couples earning over $250,000, having their top marginal rate increase by three points is driving Republicans insane.

“Raising taxes during the worst economy in 25 years is a profoundly bad idea,” said Rep. Mike Pence (Ind.), chairman of the House Republican Conference, arguing that extending the cuts would magically help erase the budget deficit. “There’s no evidence whatsoever that the Bush tax cuts actually diminished revenue,” lied Senate Minority Leader Mitch McConnell (R-Ky.). “They increased revenue, because of the vibrancy of these tax cuts in the economy.”

What the heck does “the vibrancy of these tax cuts in the economy” even mean? The reality is those Bush tax cuts cost the nation $2.5 trillion, with half going to the top 5 percent wealthiest Americans. And unlike Democratic efforts to stimulate the economy, create jobs and provide basic access to healthcare, the GOP’s efforts never did trickle down to anyone outside the country-club set. In fact, the slashes have devastated the middle class.

Despite Bush’s claims that “tax relief will create new jobs, tax relief will generate new wealth and tax relief will open new opportunities,” the economy shed jobs after passage of the bill — from 132 million in June 2001 to 131.4 million in June 2004. By the end of Bush’s presidency, that number was at 137.7 million, for a total job gain of 6.3 million for his term. By comparison, Bill Clinton presided over the creation of 18 million jobs during his two terms, despite raising taxes in 1993. 

Alan Greenspan, former head of the Federal Reserve, was a key cheerleader for Bush’s tax cuts back in 2001. No longer. “I’m very much in favor of tax cuts, but not with borrowed money, and the problem that we have gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money,” he said on “Meet the Press.” “And at the end of the day, that proves disastrous.”

Ronald Reagan’s budget chief, David Stockman, was equally harsh. “If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing,” he wrote in a New York Times op-ed, noting the trillions of dollars those tax cuts are adding to the deficit. “It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.”

Back in early July, during the official GOP response to President Obama’s weekly radio address, Sen. Saxby Chambliss (R-Ga.) said that debt was “one of the most dangerous threats confronting America today.” But it’s plain that GOP histrionics over the deficit are little more than rhetorical red meat for the Tea Party set. 

Letting those tax cuts for the wealthiest expire will save the country $40 billion next year, and $676 billion over 10 years. That should be music to the ears of Republican deficit hawks.

Turns out none of those really exist.

Moulitsas is founder and publisher of Daily Kos 
(www.dailykos.com).