Tuesday, August 3, 2010

GOP Hypocrisy Regarding Deficits

After months of Republicans talking about the deficit and claiming to be the fiscally responsible party, the GOP is now turning their back on the deficit by ignoring the damage keeping the Bush tax cuts on the books will cause, instead trying to push the notion that keeping tax cuts for the wealthy will cause job growth - something that is known as the trickle-down economics, formerly horse-and-sparrow theory.

"Republicans seem to think there is an inspiring quality in giving more money to the top one percent," wrote economist John Kenneth Galbraith.  "When I hear this, I think of the `Horse and Sparrow' theory of economics that if you feed enough oats to the horse, some will pass through to feed the sparrows."

This is what we are experiencing now - the Republicans want to forget the fact that keeping the tax cuts will increase the deficit because elections are nearing and they want to paint the Democrats as being big spenders and big taxers.  The hypocrisy is that the GOP are now shifting focus, trying to make job creation their number one priority when all along they have been targeting the deficit and opposing job creation legislation.

Sam Stein wrote for The Huffington Post:
While tax cuts are estimated to have a return of 32 cents of economic growth for every dollar spent, programs like food stamps (which are set to be cut under legislation to help states with Medicaid and teacher funding) have much higher rates of return -- $1.71 of economic growth for every dollar spent. Mark Zandi, Sen. John McCain's (R-Ariz.) adviser during the 2008 election, has estimated that each dollar spent on extending unemployment benefits generates $1.61 in economic growth. (Republicans have overwhelmingly opposed extending unemployment benefits, citing deficit concerns.)

As the nonpartisan Tax Policy Center put it: "The Bush tax cuts of 2001 to 2003 provided much less stimulus to the economy than other policies of equal cost would have. The underlying reason is that although the tax cuts were well-timed to provide a short-run economic stimulus, they were poorly designed for this task."
Republicans need to be called out on their hypocrisy and the tax cuts need to expire.

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