Here ya go…
Pretty straightforward. Dems aren’t going to win any economic ingenuity awards, but we’re out of the recession, private sector job growth is still holding on and we’ve got the shopping season coming up, which should drive even more.
But what if the Republicans had their way?
Well, let’s refer back to the Congressional Budget Office’s recent projections, as brought to you by Newsweek. Basically, the Republicans wanted to extend the tax cuts and that’s about it. What effect would that have on the economy?
Extending all of them, according to the CBO, would lower unemployment by 0.3 to 0.8 percent over the next year or so; extending them solely for people making less than $250,000 would produce a somewhat smaller effect, for a difference of roughly 200,000 to 500,000 people.
The problem, as economist William G. Gale of the Brookings Institution has noted, is that “of 11 potential stimulus policies the CBO recently examined, an extension of all of the Bush tax cuts ties for lowest bang for the buck.” In fact, he continues, “letting the high-income tax cuts expire and using the money for aid to the states, extensions of unemployment insurance benefits, [or] tax credits favoring job creation … would have about three times the impact … as continuing the Bush tax cuts.”
In addition, it’s unlikely that extending the cuts for the richest Americans would have much of an effect on small-business hiring, which is a claim that Republicans make with some regularity. Why? Because of the taxpayers that report running small businesses on their taxes, only 2 percent fall into the top two income brackets.* The other 98 percent of small-business owners make less than $250,000 a year and wouldn’t pay higher taxes under Obama’s plan.
Now, let’s look at their supposed deficit reduction measures, which they’ve been talking about constantly. Again, we’ll refer to the CBO and Newsweek’s analysis of it, which I’m repurposing here to make a couple additional points.
Obama spent $814 billion on the stimulus plan and Republicans didn’t offer an alternative, so it’s…
On health care reform, Republicans want to repeal the law and substitute it with, well…nothing. Some think they’d take the Wyden/Bennett approach, but there’s no evidence that would actually happen. So what’s the problem with repealing it? The CBO says that the current health care law will cut $30B from the budget deficit in the next 10 years. What’s the cost of doing things in the same way (repealing it) ? $455B. That’s right…the health care bill is actually saving us $475B over 10 years. Still, you can’t subtract $455B from the Dem’s total, so Dems are still leading the deficit game in 10 years time…
Now, on to the Bush tax cuts. As mentioned above, only 2% of small businesses owners make more than $250,000 in income every year and their hit would be VERY minimal. For a refresher, let’s go back to the chart we posted a few weeks ago…
That’s right, people making up to $500,000 will have to pay roughly $400 more a year if the tax cuts aren’t extending. Folks who make $250,000 would pay even less than that. Most likely around $200 extra.
So, don’t believe the Republicans when they say not extending those benefits would kill jobs killer because $400 of salary can’t create a job.
The Dems’ extension of the tax cuts for everybody else will add roughly $3 trillion to the deficit in the next 10 years. What would the Republicans add? Another $700B.
What’s the total budget deficit over the next ten years for either party?
If you vote for the GOP this fall because you think they’re going to create more jobs and reduce the deficit, you’re a sucker. Plain and simple. They have no new ideas to turn things around and they’re simply referring back to the same play book that got us into this mess in the first place: deregulation and tax cuts.
Also, remember that if the GOP had their way they would reduce the federal government down so much it would cripple an already crumbling infrastructure. We need to innovate and continue to make sure the basic building blocks of our society are the best in the world or else we will not be competitive in the years to come. And, as the evidence shows, the Dems still offer the best plan for that. I’m not saying it’s the best, most innovative plan, but it’s demonstrably better both in terms of jobs and deficit reduction than the GOP’s.
(h/t: Washington Monthly)