Welcome to Taxbreakistan, where the same guys who profited from the financial crisis have launched a treacherous two-fisted propaganda campaign: attacking the benefits of the increasingly fragile middle class while protecting the gains the wealthiest accumulated from the bubble economy and the bailout.
The propaganda war is couched in terms of paternal sobriety and facing up to financial realities, making tough choices and sharing sacrifices.
According to the propaganda, the only thing preventing the anemic economy from taking off is that the wealthiest Americans who have an ever-increasing share of the nation’s wealth don’t have enough money yet. Aside from the wealthy not having their permanent tax cuts, the main impediment to the economic recovery, according to the propaganda, is continuing to pay unemployment checks to those out of work.
What a load of twaddle.
While the U.S. Chamber of Commerce and right-wing think tanks are leading the propaganda campaign, one of the leading bomb throwers in this war is former Wyoming senator Alan Simpson, who President Obama appointed to co-chair a commission to examine options to reduce the federal deficit. A fierce advocate of budget cutting, Simpson, a Republican, said recently that he couldn’t wait for the `bloodbath’ that will ensue when Republicans take a meat cleaver to the federal budget in exchange for raising the federal debt limit.
You may recall Simpson’s earlier colorful quote, in which he compared Social Security to a “milk cow with 310 million teats.”
A couple of weeks ago, Simpson threw down the gauntlet in a draft report he wrote with his co-chair Erskine Bowles, a former Democratic Party honcho and hedge fund partner. They proposed cuts to Social Security and Medicare and a host of other sweeteners long sought by big business, such as caps on medical malpractice verdicts, that have little to do with deficit reduction but everything to do with a corporate political agenda. The full commission’s report could be released this week.
Meanwhile, Congress jockeys over how to deliver a sloppy wet kiss to the nation’s wealthiest in the guise of continuing their Bush era tax cuts, supposedly as a means to stimulate the economy, even though the tax cuts themselves add $700 billion to the deficit. While President Obama expresses opposition to extending the tax cuts for those making over $250,000 a year, the president hasn’t been much of a force in the propaganda war over our economic future.
For their part, the Republicans have dug in their heels on behalf of the nation’s gajillionaires.
The whole propaganda campaign is based on the fraudulent notion that tax cuts for the rich help the economy. That’s not how they started out, before the second George Bush was elected president. He intended them as a way to “starve the beast” – giving back the government surplus that had built up during the Clinton era boom as a way to shrink government. His advisers argued that if the government kept that money it was likely to spend it.
Only later, as the economy began to soften, did Bush add the economic stimulus argument. But the evidence that the tax cuts did anything to boost the economy has always been slim at best. Deficit hawks like Simpson and Bowles are trying to jack up the public’s fear about the deficit in a slow-motion version of the fear-mongering that preceded the no-questions asked bank bailout of 2008, and subsequent highly secretive Federal Reserve money giveaway to the nation’s big banks. We shouldn’t fall for it.
A coalition of progressive-leaning nonprofits have offered an alternative, which favors stimulating the economy first, then cutting the deficit. You can check it out here.