Sunday, April 19, 2009

I love it when people (albeit inadvertently) manage to tell the truth...

... even though nobody seems to be listening.

Two examples: one, David Axelrod's comments regarding the Tea Party tax protests on Face the Nation, where one line has been highlighted and another one--the big lie--completely overlooked.

Here's the complete transcript of the relevant portion of the broadcast:

SMITH: What do you make of this spreading and very public disaffection with not only the government, but especially the Obama administration, the TEA parties this week? You even have the governor of Texas even using the word secession? Should Texas be allowed to secede?

AXELROD: Well, I don’t think that really warrants a serious response. I don’t think most Texans were all that enthused by the governor’s suggestion.

SMITH: But what about the first part of the question?

(CROSSTALK)

AXELROD: I think any time that you have severe economic conditions, there is always an element of disaffection that can mutate into something that’s unhealthy.

SMITH: Is this unhealthy?

AXELROD: Well, we’re -- this is a country where we value our liberties and our ability to express ourselves. And so far these are expressions.

Now, one thing I would say is -- the thing that bewilders me is this president just cut taxes for 95 percent of the American people. So I think the tea bags should be directed elsewhere, because he certainly understands the burden that people face.


The truth here: Axelrod is simply furthering the strategy of equating certain forms of political speech with extremism (and, by implication, violence) that has been adopted as part of the new Democratic playbook (as I have discussed here).

The lie: that nobody should be worried about rising taxes, because President Obama has just cut taxes and he's not going to raise your taxes to pay for all that spending.

How do we know that's a meme/narrative/whatever-other-pretentious-pseudo-intellectual-term-you-like intended to distort the overall fiscal strategy of the Obama administration?

Because Jeffrey Sachs of the Earth Institute at Columbia University--one of the world's brightest economists and an Obama supporter/consultant--admits in the latest issue of Scientific American (the link is to the gated version; sorry, I went out and bought the dead tree edition) admits that what Barack Obama wants to do cannot be done without massive tax increases.

Here are the revelant segments:

Obama's budget plan properly focuses on areas that public economics identifies as priorities: health, education, public infrastructure, and research and development, especially sustainable energy--all areas where the US lags discernably behind many parts of Europe. The president's vision of an expanded federal role is on target and transformative, but the financing will be tricky. This year's deficit will reach an astounding $175 trillion, or 12 percent of GDP. In the plan, the government debt held by the public will balloon from 40.8 percent of GDP in 2008 to 65.8 percent in 2013, a level that will weight heavily on the budget for years.

Obama's budget plan aims to reduce the deficit to 3 percent of GDP by 2013 and then to level it off until 2019. This deficit is relatively large, but even that target will be very difficult to achieve and sustain. With significant increases in entitlements spending and higher interest payments on the rising public debt, the plan is to cut the deficit mainly through higher taxes on the rich, reduced military outlays for Iraq and Afghanistan, new revenues from auctioning carbon emissions permits, and finally a squeeze on nondefense discretionary spending as a share of GDP (which is set to decline from 4.7 percent in 2010 to 3.3 percent in 2019). Such a squeeze on nondefense spending seems unlikely--and indeed undesirable--at a time when government is launching several much needed programs in education, health, energy and infrastructure.

The truth is that the US, like Europe, will probably have to raise new revenues by a few percent of GDP if the government is to carry out its expanded role. Within a few years we will probably see the need for new broad-based taxes: perhaps a national sales or value-added tax such as those common in other high-income countries. If we conitued to assume that we can have the expanded government that we need without the tax revenues to pay for it, the build-up of public debt will threaten the well-being of our children and our children's children. No parent, or citizen, should find such an approach acceptable.


Notice that casual reference: we will probably have to raise new revenues by a few percent of GDP if government is to carry out its expanded role.

Exactly what does this mean?

A few paragraphs earlier, Sachs explains that in the US, over the past three decades, total government revenues (Federal, State, and local) in the US have averaged 33% of GDP, with total government spending averaging 39%--which explains how we got into our deficit fix, spending an average of 6% of GDP we didn't have for nearly thirty years.

Sachs compares this to Europe, wheren total government revenues in the same period averaged 45% of GDP, with total spending at 46% of GDP--much smaller budget deficits.

So for Sachs--and, one suspects, for Barack Obama--that few percent of GDP amounts to an increase from 33% to 45% of GDP going to government.

Sachs knows that soaking the rich will not produce a 12% of GDP increase in tax revenues.

He also knows that nondefense discretionary spending is not going to be cut.

I suspect he knows that our military budgets are not going to be cut in any meaningful way, either.

Sachs can say all this--honestly--because he is an academic and not a politician. He doesn't have to get the votes.

[And please note: President Obama, like all other politicians, has insured that much of the pain necessary to complete his plan will occur after he is safely out of office, even if he serves two terms.]

So back to my original question: how can I call David Axelrod a liar on taxes?

Because I'd rather think he's a liar than to think he's really that damn stupid.

3 comments:

tom said...

I never ceases to amaze me that Obama has the chutzpah to talk about what he will cause the deficit to do 10 years from now, two years after the end of his presumed second term and more than half the population doesn't have the common sense to call bullshit.

Delaware Watch said...

"The truth here: Axelrod is simply furthering the strategy of equating certain forms of political speech with extremism (and, by implication, violence) that has been adopted as part of the new Democratic playbook (as I have discussed here)."

Geez, you are reaching so much here that you are leaping. You say he is equating the extremist speech of the tea party rallies w/ violence. Where does he EXPLICITLY do that? NOWHERE!

That much of the language at these rallies was extreme is hardly in dispute. That HE IS EQUATING IT w/ violence is YOUR leap, attribution. Are you mind reading him, Steve? You have psychic abilities? Nothing he said warrants the vicious, dirty smear you attributed to him. It's disgusting.

"The lie: that nobody should be worried about rising taxes, because President Obama has just cut taxes and he's not going to raise your taxes to pay for all that spending."

Where's the lie? Where has Obama said he will raise the income taxes on anyone bot the top 5-10% (I can't remember which) of wage earners? As a matter of fact, this language is a KNOWN GOP talking point.

"How do we know that's a meme/narrative/whatever-other-pretentious-pseudo-intellectual-term-you-like intended to distort the overall fiscal strategy of the Obama administration?

"Because Jeffrey Sachs of the Earth Institute at Columbia University--one of the world's brightest economists and an Obama supporter/consultant--admits in the latest issue of Scientific American (the link is to the gated version; sorry, I went out and bought the dead tree edition) admits that what Barack Obama wants to do cannot be done without massive tax increases."

This has to be one of the weakest arguments you have ever presented. Obama will have to raise taxes, you say, because of the analysis of one economist. That is such a bad argument it's positively sophomoric. And here is the funny part. Sachs is a Kensyian (sp?); he has argued w/ Krugman that Obama's stimulus package will probably fail because it is not large enough. (And that is probably operating in the analysis you cited. He wants more taxes because he wants a bigger stimulus and thinks Obama will have to go for a bigger stimulus later on.) You certainly seem to cite the economists you dislike when it suits you purposes.

This post is way below your usual standards.

Tyler Nixon said...

This post is up to and beyond your usual incisive piercing of the rhetoric and 'nuance' aka bullshit from the Obama flacks like Axelrove.