I can think of few better examples than the Bloomberg Politics Poll from earlier this month that asked 1,001 Americans their thoughts and “knowledge” on certain subjects. Inside that poll, 73% of the respondents said the U.S. budget deficit had gotten bigger in the last 6 years, and only 33% of respondents approved of President Obama’s handling of the U.S.’s budget deficit.
Well, the amount of the U.S. budget deficit is not something that is a matter of opinion, as there are real numbers out there that can tell us if the deficit is bigger or smaller under Obama. Let’s take the number from Fiscal Year 2009, which started in October 2008 (yes, that’s still Dubya’s Administration, but it’s 6 years, so let’s humor people) to see what Obama inherited, and compare it with the recently-completed 2014 Fiscal Year, and also see what the projections hold for FY 2015.
U.S. Budget Deficit, FY 2009-2015
FY 2009 $1,415.72 billion
FY 2014 $483.35 billion
FY 2015 (projected) $469 billion
So not only are those 73% in the Bloomberg survey wrong, they are WAY wrong- the deficit has shrunk by nearly 2/3 in the time that Barack Obama has been in office. That’s pretty good progress. So apparently a whole lot of people are relying on false information when it comes to evaluating this president’s performance in relation to fiscal policy. Gee, you think Faux News, AM radio and Sunday talk shows presenting constant and unchallenged crocodile tears about “exploding debt and deficit” might have something to do with this?
The trickle-down beLIEvers that helped to bring on that huge 2009 deficit are going to be in control of Congress for the next two years. In one of the most underreported stories about the fallout from the November midterms when it comes to framing the debate that is sure to follow with upcoming budget bills and the 2016 elections, Congressional GOPs are planning to remove the director of the . And it’s not because Elmendorf has been dishonest or misleading in his analysis, but it’s because the GOP want to hire someone to say “this time, when it comes to tax cuts, it’s different.” Former U.S. Labor Secretary Robert Reich called out this flim-flam, known as “dynamic scoring”, in an article over the weekend in the Huffington Post.
It's based on the belief that cutting taxes unleashes economic growth and thereby produces additional government revenue. Supposedly the added revenue more than makes up for what's lost when Congress hands out the tax cuts.Related to this, here's an excellent post from Paul Krugman on the joke known as the Laffer Curve, which had its 40th anniversary "celebrated" by Heritage Foundation hack Stephen Moore in some newspaper columns this week. Krugman's post shows what bullshit the "lower tax rates raise revenue" argument has been over that time, including this graph which shows that both the Reagan tax cuts of the early 1980s and the Bush tax cuts of 2001 and 2003 ended up reducing revenues.
Dynamic scoring would make it easier to enact tax cuts for the wealthy and corporations, because the tax cuts wouldn't look as if they increased the budget deficit.
Incoming House Ways and Means Chairman Paul Ryan (R-Wis.) calls it "reality-based scoring," but it's actually magical scoring -- which is why Elmendorf, as well as all previous CBO directors have rejected it.
Few economic theories have been as thoroughly tested in the real world as supply-side economics, and so notoriously failed.
Ronald Reagan cut the top income tax rate from 70 percent to 28 percent and ended up nearly doubling the national debt. His first budget director, David Stockman, later confessed he dealt with embarrassing questions about future deficits with "magic asterisks" in the budgets submitted to Congress. The Congressional Budget Office didn't buy them.
Real revenue growth 36 percent in the 8 years before Reagan, 26 percent under Reagan, 28 percent in the  years following.You can also see the nose-dive in revenues from the Bush tax cuts of 2001 and 2003, and combined with Bush's Great Recession, it took us over a decade to get back over the rates of 2000 (and not coincidentally, it's in a time when some of those tax cuts for the rich are getting rolled back).
But Purty Mouth Paul Ryan would tell you this reality of the last 3 decades of trickle-down failing to raise revenue should be ignored, and the only reason the numbers didn’t work out is because the CBO has simply not accounted for it right. It's not time to change the policy, oh no. We just need a new person in charge at the CBO that could claim the numbers would work out, then the rich and corporate will act completely different than they have over the last two generations, and this time, THIS TIME, they’ll stop hoarding and diverting their money and actually hire people and pay them a bigger wage, and revenues will grow! Gosh golly, Pau-LIE is sure it will!
How can these Republicans be so dishonest and willfully ignorant of history when it comes to fiscal policy, to the point that they literally want to change models of math? Well, there are two reasons. The first is that GOPs are the overwhelming beneficiaries from having a bunch of Chuck Todds in the political media who claim that it’s not their job to give numbers and facts, so they can get away with continuing to tell such a lie in public. And the second harkens back to this quote that a “George W. Bush aide” (aka Karl Rove) made to NY Times Magazine's Ron Suskind over a decade ago.
“The aide said that guys like me were ''in what we call the reality-based community,'' which he defined as people who ''believe that solutions emerge from your judicious study of discernible reality.'' I nodded and murmured something about enlightenment principles and empiricism. He cut me off. ''That's not the way the world really works anymore,'' he continued. ''We're an empire now, and when we act, we create our own reality. And while you're studying that reality -- judiciously, as you will -- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors . . . and you, all of you, will be left to just study what we do.''Oh, we've studied it alright, and it's why Republicans really hate dealing with us in the reality-based community. Because our community that recognizes the deficit has gone down by more than $900 billion during the Obama Recovery, and we're the ones that know that tax cuts for the rich have not and will not raise revenues, no matter how dynamic you make the scoring.