Scrooged by the Democrats: Will the Rich Ever Pay Their Fair Share?and
During the Democratic primary campaign, Barack Obama, along with all of his Democratic contenders, promised a swift repeal of these tax cuts. A rollback of tax cuts benefitting only corporations and the wealthiest individuals was supposed to provide the financing for Obama’s policy proposals, from education and health care to infrastructure and green energy. But by September, the Democratic nominee was already backpedaling on his pledge, and within three weeks of his election, Obama’s economic advisors confirmed that, after all, the new president might just let the Bush tax cuts expire on schedule in 2011, rather than eliminating them two years earlier. The decision is based on the premise that it is unwise—in economic as well as political terms—to raise taxes during a recession, since lower taxes stimulate the economy.
But an analysis by the Center for Budget and Policy Priorities, released earlier this year, debunks the myth that tax cuts for the rich more than “pay for themselves” by fueling economic growth.There is no evidence that the tax cuts caused any increase in economic growth, let alone growth sufficient to offset their cost. In fact, the 2001-2007 economic expansion was among the weakest since World War II with regard to overall economic growth. Moreover, revenue growth was very poor during 2001-2007. Real per-capita revenues fell deeply in 2001, 2002, and 2003 and have since risen to barely 2 percent above their 2001 level. Over the course of other postwar economic expansions, they grew by an average of 12 percent.
Capital gains taxes, CBPP found, have the effect of lowering revenue in the long run. And tax cuts financed by deficit spending—as they were under Bush, and undoubtedly will continue to be under Obama—are especially harmful. [emphasis added]
President-elect Obama Suggests Defaulting on the National DebtWill Barack Obama become an enemy of the people of the United States of America by protecting the rich and powerful at the expense of the majority of citizens just like a despotic leader? Just like George Warmonger Bush?
While Medicare is projected to face shortfalls because of the incredible inefficiency of the U.S. health care system, the Congressional Budget Office projects that Social Security will be fully funded until 2049 from its own stream of tax revenues and the U.S. bonds it holds. If Mr. Obama plans to cut Social Security in the near future, then this effectively amounts to a default on the bonds held by the trust fund which were purchased with workers' Social Security taxes.