I hate to say "We told you so" but we did.   Now there is credible back up to our 2010 claims.

First, here's an acronym glossary for the three expert organization now in agreement that the GOP economic policies are a proven failure.  You can click on each to learn more about each.  Actually, any copy below that is either brown or orange will take to you the source documents:

IMF - International Monetary Fund
CRS - Congressional Research Service
CBPP - Center on Budget and Policy Priorities

I wrote this in July, 2010, the year Democrats didn't show up to vote in droves, heralding in the Tea Party takeover of the House which gerrymandering might keep in tact.

Deficit Hawks Lie, and Lie, and Lie, and Lie

It's not Political Rocket Science.

And when you hear either side mention ANY form of tax cuts to solve our economic woes, know you are being lied to, AGAIN.

Also, this just in, recommended reading Ruh Roh! CBPP Report "Big Dangers Ahead for the Economy, the Budget, and Low-Income People"

Tax cuts cause deficits.  Unfunded war spending causes deficits.  It's plain and simple.  It's not Accounting Rocket Science.  If you take in less than you spend, you have a deficit.  In the governments case, if they take in less taxes then they spend, we have a national deficit.

The Republicans caused the deficit.

Anyone who has read The Shock Doctrine by Naomi Klein knows that the IMF Austerity programs, foisted on countries around the world, created a world of hurt for the majority of their citizens and stellar investment opportunities for the world's multi-national corporations.  

The IMF recipe, in short, has been:  Debt, Privatization of Resources, higher costs for utilities, reduced social safety nets, increased poverty for the citizens, and chaos followed by government repression of the chaos.

Perhaps the IMF ran out of countries to anchor with economically suffocating debt, because they changed their mind recently, proving we have been right all along:  The IMF & GOP foundation principles are wrong.

I highly recommend reading this article that exposes how the Republican Senate squashed the release of the September, 2012 CRS report (see below) that obliterated the GOP position that lower taxes and austerity will solve the American economic woes:

The IMF Admits It Was Wrong About Keynesianism

But wait a minute.  Maybe not!  Maybe the title of the above article takes some liberties.

Right off the bat the authors of this report, Growth Forecast Errors and Fiscal Multipliers, include  this disclaimer:

This Working Paper should not be reported as representing the views of the IMF.
Within the paper the authors make a good case that austerity causes contraction, not expansion of the economy.

However, the article concludes (page 20):

Thus, our results should not be construed as arguing for any specific fiscal policy stance in any specific country. In particular, the results do not imply that fiscal consolidation is undesirable. Virtually all advanced economies face the challenge of fiscal adjustment in response to elevated government debt levels and future pressures on public finances from demographic change.
I am not qualified to discern the science presented in the above report and will leave that to the economists.

However, and more importantly, in September, 2012 (just before the election) the Congressional Research Service concluded its research on the effects of lower tax rates on the economy.

Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945

The CRS reported concluded with this important paragraph:

Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%.

There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth.

Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.

However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.

The share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. The evidence does not suggest necessarily a relationship between tax policy with regard to the top tax rates and the size of the economic pie, but there may be a relationship to how the economic pie is sliced.

You will find some great charts in the CRS paper; however, I wish this CRS report had included this chart that shows how the Income Inequality prior to the Depression was almost identical to the Income Inequality prior to the Great Recession.

This Center on Budget and Policy Priorities, dated September 9, 2009, adds fuel to the fact that only the 1% has gained any benefit from the Lower-Taxes-help-the-economy falacy:

Income Inequality Pre-Depression & Pre-Recession the Same

Just in case the above chart isn't quite stark enough for you, here's another

Income Distribution Inequality, USA 1946 - 2007

The closing statement of this CBPP report concludes:

Whether the highest income households will once more capture a highly disproportionate share of income gains as the economy begins to recover is uncertain, but Saez, along with Harvard economist Lawrence Katz, points to previous recessions and notes that only major policy shifts like the New Deal have prevented income concentration from “bouncing back” after a decline. In the absence of significant policy changes, income concentration levels could well return to their previous highs after the current recession ends and resume their 30-year climb.
Again "only major policy shifts like the New Deal have prevented income concentration from “bouncing back” after a decline."

History has proven time and time again that when the masses are impoverished in order to increase wealth for the few, all hell breaks loose.  Mass unemployment, unjust policies, and reductions in social services are a recipe for chaos as proven by riots in many countries today.

That said, we know what is needed.  The economists that aren't drinking the GOP cool aid know what is needed.  History has proven what has worked.  

Will the Obama Administration apply the real medicine needed to put Americans back to work and return the shared prosperity enjoyed in the decades prior to the laissez-faire takeover of US policies in the 1980s?

What did FDR do?  You can read all about that at Wikipedia New Deal

Well, that was interesting.  I had to edit Wikipedia! which had said that "the first Democratic president after FDR, Dwight D Eisenhower".  I changed that to REPUBLICAN.


America's infrastructure is crumbling, we need to

move to green energy,
bring back jobs,
improve and expand education
honor and improve our social safety nets
undo the chains of special interest
regulate pollution
regulate banks

In short, we need to do the polar opposite of what the Tea Party GOP is pushing for.

FDR, Eisenhower, Nixon, Kennedy, and Johnson agreed on policies that produced the greatest results for most Americans for decades.  The 1950s - 1980 were truly the Golden Years for most white Americans.  We improved opportunities for African Americans.  It wasn't perfect, but shared prosperity was a whole lot better than today.

What will it take to convince the Obama Administration that the majority of Americans believe we can share some sacrifice in order to get this country back into a semblence of balanced economic opportunity?

They are coming for our Social Security and other social safety nets.  It's been a neo-liberal dream for years and they are using the deficit as an excuse to get this heartless desire manifest.  

I call it Manifest Poverty.

IF you have a minute, check out these 10 CHARTS that further demonstrate the disgusting income inequality in the United States in 2013.  SHAMEFUL:

10 Charts Show HOW Trickle-Down Fails and WHY You feel pinched

Can public outcry, now supported by credible sources, force the administration's hand?

Didn't the President tell us WE have to make this happen, WE are the change?

Or perhaps the share holdings by Congress members has locked their alliegence away from us.

Here's is opensecrets.org list of Congressional investments.

And we wonder why policies don't shift! and why companies are gaining monopolies

1    General Electric    94    46    48
2    Procter & Gamble    74    33    41
3    Cisco Systems    72    33    39
4    Microsoft Corp    70    28    42
5    Pfizer Inc    61    27    34
5    Bank of America    61    23    38
7    AT&T Inc    57    20    37
8    Intel Corp    54    24    30
8    Johnson & Johnson    54    18    35
8    Verizon Communications    54    22    32
11    Exxon Mobil    53    14    39
12    Apple Inc    51    21    30
13    Coca-Cola Co    49    22    27
13    JPMorgan Chase & Co    49    19    30
15    PepsiCo Inc    47    22    25
16    IBM Corp    46    16    29
16    Wells Fargo    46    19    26
18    Berkshire Hathaway    43    18    25
19    Walt Disney Co    41    19    22
20    Home Depot    40    16    24
21    Hewlett-Packard    39    15    24
22    McDonald's Corp    38    17    21
23    Merck & Co    37    14    23
23    Citigroup Inc    37    15    22
25    Abbott Laboratories    35    11    24
26    Wal-Mart Stores    31    12    19
27    3M Co    30    16    14
27    Oracle Corp    30    13    17
29    Apache Corp    29    10    19
30    Qualcomm Inc    28    12    16
31    Google Inc    27    10    17
32    Goldman Sachs    26    9    17
32    Ford Motor Co    26    8    18
32    Conocophillips    26    7    19
32    Time Warner    26    14    12
36    United Technologies    25    9    16
36    Bristol-Myers Squibb    25    7    18
36    Chevron Corp    25    8    17
39    BP    24    2    22
39    Amgen Inc    24    9    15
39    Duke Energy    24    10    14
39    Emerson    24    8    16
39    Kraft Foods    24    10    14
39    Teva Pharmaceutical Industries    24    12    12
45    Schlumberger Ltd    23    7    16
45    Comcast Corp    23    12    11
45    EMC Corp    23    13    10
45    Altria Group    23    6    17
49    CVS/Caremark Corp    22    7    15
50    Devon Energy    21    6    15

You can go tothis link to see who the wealthiest Congress members are, how much yours are worth, and what they are invested in.

TAKE NOTE of the interactive search feature in the upper right hand corner.  Search and learn about your Congress members.

Originally posted to War on Error on Tue Jan 08, 2013 at 10:40 AM PST.

Also republished by Community Spotlight.


With the burgeoning evidence, can the Obama Administration return to the fiscal policies that worked from 1950-1980?

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