House Republicans, citing economic conservatism, failed to vote in support of the economic stimulus plan advocated by President Obama and House Democrats. Many of these Republicans proclaimed Rush Limbaugh as “keeper of the faith” of economic conservatism. Rush Limbaugh is both wrong and lying. Rush claims that corporate tax breaks are the only way to open up employment and recover the economy. Rush claims that American companies are taxed at the highest level in the industrialized world. He also claims that the economy will recover itself if left alone.
In all of these claims, Rush Limbaugh is, as usual, completely ignorant of history and absolutely wrong about the workings of economics. It is certain that Rush failed Econ101 just as he failed every other of his college courses. He is a shock jock, not an economist. Why Republican Congressmen usually in possession of at least one college degree would ever listen to Rush Limbaugh’s uneducated verbal confusion escapes me. Two of the greatest periods of American economic expansion in the past century resulted after American corporate marginal tax rates were raised to eighty and ninety-four percent. Higher corporate tax rates equal economic expansion- lower rates equal retraction and recession. Rush Limbaugh claims that American companies are taxed at the highest rate (35%) in the industrialized world; this is an outright lie. The lie exists in comparing the taxation of other countries’ business after realization of subsidies and incentives with American corporate taxes before subsidies and incentives. Fact is, 68% of American businesses with five thousand or more employees effectively pay no taxes, recouping their tax burden in subsidies and incentives at the local, state, and national level. Of those who pay no taxes, many actually wind up in the black, receiving more value in incentives than they pay in taxes. But Rush and the neo-cons believe that only by reducing taxes on those businesses that already pay next to, if not in fact, nothing, will America’s economy be able to recover. And, yet, many of these businesses, for whose legislative benefit Rush so loudly expounds in the name of “free” markets, are the ones who drove our economy into its current state. The economy has never recovered on its own; there has always been an external governmental stimulus involved in economic recovery. Those stimuli may have been in the form of a lowered federal lending rate, or a tax cut, or currency market buy-back, but economic recovery has always been presaged by government interference.
Rush Limbaugh has now famously said that he hopes President Obama fails. Why? Because Rush wants to prove that the Progressive/Liberal/Democratic economic model does not work. He claims that it has been proven time and time again that Liberalism fails. But, of course in Rushworld even the recent Republican policy-fueled economic meltdown is the fault of those Liberals. Bill Clinton is faulted for passing legislation which provided for market de-regulation during his Presidency. Rush, of course, ignores that those deregulating measures that the Republicans so love and that drove the economy into this wall of reality, were pushed by Republicans during Republican control of Congress after 1994. Accepting those dangerous measures was the only way for Bill Clinton to accomplish anything against a Congress filled with Conservative ideologues. And Rush of course, as is the current Republican fashion, prefers to label everything Bush’s fault. The reality is that the Republican conservative movement was energized to new heights of fiscal, as well as legal, constitutional, ethical, and moral recklessness with their total control of government achieved in 2001. According to Rush and those surviving neo-con legislators, it is all the fault of the President, or the President who preceded him; history will tell us it is the fault of conservative economic policy, philosophy, and values. Rush wants Obama to fail because he wants liberalism to fail, but he is still, after all these years, blind to the fact that Conservatism has already fallen.
Rush Limbaugh and the neo-con Congressional coterie want Americans to believe that only they have the true answers. They claim that the liberal Democrats want to push bigger government and deficits upon America. When it is pointed out that we have received both of these through the efforts of the late Bush administration and formerly Republican-controlled Congress, they claim that as an unfortunate necessity of the wars “forced” upon us by 9/11, and not truly representative of Conservative economic policy. If “Conservatives” were in control, then whose policy was on display? Not only did the Conservatives give us bigger government, they gave us less effective government. Regulatory bodies designed to protect American business and consumers, the environment, our resources, and the rule of law were usurped by Conservatives to further a private wealth-building spree of avarice at the expense of the people and the government. Yes, Rush and the neo-cons do have the only true answers; the answers for the question of how to rob a country and its people blind while destroying not just domestic but also world economies.
As they tanked our economy and drove us into chaos, Wall Street firms and executives, in the perfect representation of Republican robber-baron economic policy, doled out billions of dollars to themselves in unearned bonuses. This is the pinnacle of Republican neo-con economic theory, also known as supply-side or trickle-down; those in charge of the private money supply keep everything for themselves at the cost of those below. We have all been woefully reminded of the deficiency of conservative economic values during the first round of financial bailouts. Those begging and receiving money from the fed first spent their new-pressed money on lavish parties for themselves to celebrate their genius at having bankrupted their companies and then convincing the government to give them more money to waste. Rush Limbaugh and his Neo-con friends hope that Liberalism fails simply because, having taken active part in the failure of Conservatism, they don’t want to see anyone else succeed, and in true Conservative fashion, they don’t care who gets hurt, so long as it isn’t them.
In the US, major corporations are generally defined as those with five thousand or more employees, and wealthy is typically applied to those individuals earning $250,000 or more per year.
During the recent federal elections, it was revealed that the Palin family had earned over $300,000 in 1997, but that they paid only a 10% rate on a declared $116,000. The average middle class couple would find themselves facing charges and prison if they cut two-thirds off their declared income and then paid as if they were in the lowest tax bracket. This is one of the many wonders of supply-side economics.
Corporate marginal tax rates for the world show that while the claim of America having the highest rate in the industrialized world, it isn’t so by very much. The corporate tax rates for most of the industrialized world run between 25 and 34%, so the claim doesn’t reveal that much disparity. Also the claim ignores Saudi Arabia, part of the industrialized world, even if not considered developed, which has a corporate tax rate of 45%.
Supply-side economics, a major tenet of the conservative/Republican economic philosophy and the policy most advocated by Rush Limbaugh and the Neo-cons, is practiced by government giving out-sized tax concessions and subsidies to large corporations in the hope that these same corporations will use the money to expand the economic base by putting more people to work. This has not been the case for more than 30 years. In every case, one sees that while major US corporations have increased workers’ productivity, they have also trended towards reductions in the American workforce. Initially, this trend was generally expressed in layoffs and restructurings based upon the advance of production technology, but now it is seen in the increasing use of foreign-based operations and production, taking advantage not only of higher per capita productivity but also of lower foreign wage and legal requirements. These major US corporations still received tax benefits based on the number of people employed even though those people were neither employed nor taxed in the US.
These same major US corporations and the financial elite who control them enjoy an incredible economic advantage due to the largesse of conservative economic philosophy. Unlike any other industrialized country, 98% of the money in the US pays only 60% of the taxes, while 40% of the burden is laid upon 2%of the money. Also unlike other industrialized countries, that 98% of the money is held by only 5% of the population. So, in the US 95% of the population controls only 2% of the wealth but suffers 40% of the taxation. This means that for wealthy individuals and corporations, they effectively pay taxes on $32.66 what the average middle class earner pays on one dollar, which generally works out to be about 40 cents. It would be hard to find a reasonable person who could find much equality or freedom expressed in these figures.
These policies and philosophies have proven their failure in the bankrupting of an American and world economy driven by only the value of greed. These conservative economic policies promote not merit, as claimed, but raw self-interest, which is rarely enlightened enough to temper the propensity to hoarding. A financial stimulus is needed to repair the damage done by the failed economic philosophy of Conservatism. The stimulus should focus not so much on saving the greed mongers who wrecked the system as the basic wage earner who didn’t deserve the ruin wreaked by those in charge. It is time for the American economic system to be overhauled so as to more closely align itself with a new value- responsibility.
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