Media in Trouble: All the news thats UNfit to print!: Back to the Issues... Economy

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Tuesday, October 05, 2004

Back to the Issues... Economy

Ok folks I promised that I would parse the issues and I realize I haven't done so since Iraq.

Sorry but with heads of state comming out about the Iraq mishap... well, there is just so much going on in these last couple of days and there is more comming.

The Economy.

Let it be known that although I am not an economist I know a few things about business. A few basic things for example. Can a company survive if it spends more than it earns?

Let's check it out? Enron was spending more than it earned, granted it was spending it on the top level people of the company and lying about how much it actually earned hmmm sounds like Halliburton.

Anyway it seems common sense that it just doesn't work that way. Over the last 4 years, the government started out and I applaud Bush for this cutting taxes. However, if we delve deeper into the tax cut we see that the top tax brackets got a bigger tax cut than the lower brackets.

Using data from the Congressional Budget Office, the Center on Budget and Policy Priorities (an independent government watchdog organization) put forth a great study about the Bush tax cuts in this time of increased spending (Read this)

Here is what they had to say about who got the money:

Those in the bottom fifth of households, with average incomes of just $16,600, will receive an average tax cut of $230 in 2004.

The fifth of households in the middle of the income spectrum, with average incomes of $57,400, will receive an average tax cut of $980.

By contrast, the top fifth of households, with average incomes of $203,700, will receive tax cuts averaging $4,890.

And the top one percent of households – with average incomes of $1,171,000 – will receive an average tax cut of $40,990.

This is more than 40 times the size of the average tax cut going to the middle fifth of households. Not to mention more than TWICE the ammount of income the lower fifth gets on average when they are WORKING for it.

But hey everybody hates taxes right? right. Even I hate paying taxes. Nobody I ever met liked to pay taxes. However, the Republican party boasts about its claim of being fiscally responsible.

The other thing about spending more money than you earn (through taxes in this case) is that evenutally you have to borrow money from other countries to pay off the debt you have created by spending all the money you don't have.

This causes the dollar to go down, this increases the price of importing goods and lowers the prices of exporting goods to other countries. So everybody looses if we start raising the debt.

Before I loose all the Homeland Security nuts. If the debt is too high, it means we have to borrow money. Who do we borrow money from? China, Japan, Saudi Arabia. Sounding dangerous yet?

China happens to be one of our largest trading partners. Trade is now unfair. You know, things are cheaper over seas so companies make stuff overseas and that makes them cheaper for the company, but it looses jobs here in the US. However trade agreements need to be inforced so that they can be fair. How can you make trade policy with your largest banker? The Chinese have the power over our economy.

That don't sound like we are in control.

OK jobs at home. There is also data in there about how the Bush presidency predicted about 5.5 million new jobs would be created between July 2003 and December 2004.

Not only have they been extremely wrong. They have been CONSISTENTLY WRONG. Again from the CBPP Almost every month (with the exception of March and April of 2004) the job numbers have come in GROSSLY under the estimate of the Bush Administration.

Let us not forget on Bush's watch we are at an overall deficit of jobs in this country. This is slated to be the first presidency to have lost jobs after Hoover (and he had to deal with the great depression).

Another thing Bush touts is that small businesses are helped out by the tax cut. However, only 1% of small businesses benefit from the tax cuts (fact check). Also the estate tax that was cut will only benefit a miniscule of small businesses.

Finally, for those who measure the economy (like I really do) by how the stock market does. So far in the last 4 years here is the scenario:

DOW Jones: down 570 points. Roughly 5%

NASDAQ: down 1400 points. Roughly 42%

S&P 500: down 186 points. Roughly 15%

No matter how they try and paint the picture various groups and the facts themselves have proven Bush wrong on the economy.

A couple of other articles about Greenspan and Bush's economy:

New Yorker article published by John Cassidy 9-6-04

NY Times Paul Krugman June 4, 2004 on Greenspan

Why Trickle Down Economics Doesn't Work

Let's see what the Candidates say about the Economy and their plans:


  • Corporate tax contributions as a percent of the overall federal revenue stream have been declining for fifty years and now stand at 7.4% despite massive record profits. A fundamental reappraisal of our tax laws should start with a principle that taxes should apply first to behavior and conditions we favor least and pinch basic necessities least such as the clearly addictive industries (alcohol and tobacco), pollution, speculation, gambling, extreme luxuries, taxing work or instead of the 5% to 7% sales tax food, furniture, clothing or books.
  • Tiny taxes (a fraction of the conventional retail sales percentage) on stock, bond, and derivative transactions.
  • Revamp the estate tax because unearned income should be taxed higher than earned income.
  • End the subsidized wasteful Military Industrial Complex in order to better fund social programs every American can benefit from including health care, education, and environment.
  • By requiring equitable trade, investing in urgently needed local labor-intensive public works (infrastructure improvements), creating a new renewable energy efficiency policy; by fully funding education and redirecting large bureaucratic and fraudulent health expenditures toward preventive health care we can reverse this trend and create millions of new jobs.


  • Cut taxes on businesses that create taxes here in the USA. Kerry also plans on enforcing fair trade agreements already in place.
  • Cut middle-class taxes 98% of Americans and 99% of small businesses will get a tax cut. (in recent news Bush signed a middle class tax but in front of new mothers holding babies in Idaho, besides it being about the first time I ever saw a President sign legislation outside of the White House... This tax cut is also a sham (fact check).
  • Families in the middle of the income scale — those in the middle 20 percent of the income distribution — will receive an average tax cut of $162 in 2005 from this legislation. By contrast, those in the top fifth will get an average tax cut of $1,317, and those in the $200,000 - $500,000 income range will get an average tax cut of $2,390.More than two-thirds of the tax cut — 70 percent of it — will go to those in the top fifth. Some 47 percent of the tax cut will go to those in the top tenth of the income spectrum. But families in the middle 20 percent of the income scale will get only 9 percent of the bill’s tax cuts, a peculiar result for a bill promoted as a middle-class tax relief package.
  • Enforce the budget in Washington so that wasteful spending is kept under control. Kerry will half the deficit in his first 4 years.
  • Invest in new high-technology jobs, high-paying jobs to help americans attain the elusive "American Dream."


  • Keep taxes low for the rich in hopes of trickle down Reaganomics working for the working class.
  • Do nothing about jobs being imported.
  • Spend more than you make. (it is no wonder he didn't make it in the business world).
  • Screw the deficit, we can borrow from the Chinese.
  • So what if the dollar is weak. Not in this country it ain't (ain't it?)