When facts mean nothing

by: Eric B.

Sun Aug 19, 2012 at 12:06:38 PM EDT

Nolan Finley pens for this morning's public presses a column in which he argues that taxation isn't important before going on to saying that tax cuts are important.

When George W. Bush lowered the capital gains tax to its current 15 percent rate from 20 percent, revenue from the tax soared over the next three years and helped the nation avoid the severe economic downturns that easily could have followed the 9/11 terrorist attack, the Iraq War or Hurricane Katrina.

As counterintuitive as it seems, each time the capital gains tax is lowered, it produces more tax revenue. And when it's raised, it fails to generate the additional revenue that is predicted. The 15 percent rate seems to be the sweet spot for producing revenue without slowing growth.

This is patently untrue. When the capital gains tax is cut, it generates more revenue in the short-term because investors cash in. Over the long run, however, that spree dries up and capital gains tax cuts wind up costing more revenue. That's why virtually every economist, using real world data, has called the Bush tax cuts economically worthless.  They helped create the current debt load, without doing much in the long-term to stimulate growth. Growth, you see, is based primarily on consumer spending. Without consumer spending -- that's demand to you and me -- you don't have anyone looking for extra capital to invest in growth.

And, no, it's not spending that's out of control. It's rising costs associated with entitlement programs, primarily government health care (there would be no "Social Security crisis" if Congress didn't raid the trust fund surpluses every year rather than balance budgets in a responsible, sane way). Those costs are based on the fact that the American population is getting older, which means more people leaving private health insurance programs and transitioning into government health. And, that could be alleviated by creating a larger, national pool of people paying into health care. Hence, the individual mandate, which was originally a Republican idea (and the centerpiece of Romneycare, which is just like Obamacare, except adopted in one state and not the immediate cause of anguish and renting of garments on the Right).

One last piece of utter hogwash.

Obama knows this. That's why he didn't let the Bush tax cuts expire in 2010 when he had a Democratic Congress. He knew the negative impact on the economy would doom his re-election chances.

This is precisely the sort of thing you say when you aren't terribly concerned with factual accuracy, and believe that everyone's understanding of history is about six months.  Obama extended the Bush tax cuts in 2010, knowing full well that the tax cuts are -- in the words of virtually every economist walking the Earth -- mostly economically worthless because he believed it would prevent a giant, stupid, credit rating killing fight over the debt ceiling. He also wanted to cut a lame duck deal on "Don't ask, don't tell." He got both a repeal of "Don't ask, don't tell" and a giant, stupid, credit rating killing fight over the debt ceiling because in the words of ex-Reagan Treasury official Bruce Bartlett, today's Republican Party is insane.

This is today's America boiled down, a rightwing that argues without regard to facts, Democratic politicians who refuse to fight it, and a media that is too damned lazy to bother with research or demanding factual accuracy in its own reporting.