Thursday, May 12, 2011

Questioning Some Economic Assumptions

Let me see if I have this right. I could be wrong, so feel free to correct me.

For thirty years you believed Republicans when they said deficits don't matter. While they were promoting this idea, you were happy with the tax cuts they made, believing that "starving the beast" was a good thing because Republicans told you it was.

Now you've changed your tune and you believe that deficits do matter but hasn't occurred to you that they lied to you for thirty years about deficits. Deficits do matter and they told you they didn't.

In the meantime, they've cut taxes - i.e. revenue - and made up the difference by borrowing so that the government could maintain it's obligations to it's people. Even though they've cut revenue income and replaced it with borrowed funds that must be repaid, you now believe them when they tell you that we have a spending crisis and not a revenue crisis?

Beyond that, when it comes to creating jobs you believe Republicans when they tell you that further tax cuts (additional reductions in revenue forcing more borrowing) will somehow create jobs. Yet the numbers are pretty clear. During the Clinton administration (eight years), more jobs were created than during the Reagan administration (eight years), the Bush I administration (four years) and the Bush II administration (eight years) ... combined! But, in spite of the numbers, you believe them.

When Republicans tell you that "tax credits" are a good thing you believe them because you believe anything that reduces taxes for anyone must be a good thing ... and because that's what Republicans have been telling you for years. They don't bother to mention that even though "tax credits" may reduce taxes for some, they leave a gap in tax revenue that must be made up for either by additional borrowing or higher taxes for others.

For years Republicans have told you that government is inefficient and you believe them ... in spite of the fact that Medicare (a government administered program) delivers excellent health care for 41.61 million people with only a 3% overhead while private insurance companies require more the 15% to provide service that's not as good. Paying 5x for the same or inferior service doesn't seem like the epitome of efficiency. (Ask anyone who's paid for their own insurance for any period of time before qualifying for Medicare which of the two they prefer.) Keep in mind that for the most part Medicare delivers services to people who are 65+; people who tend to need more health care services, while private insurance companies a.) serve a younger demographic who tend to need less health care overall, b.) have eliminated people with preexisting conditions (i.e., people who actually need health care) and retain people who don't need health care and c.) limit coverage with it gets too expensive - making the disparity even more striking.

Every system has waste but when Republicans talk about waste, they only talk about it in terms of government waste, without comparison to anything else ... but you believe them when they say government is wasteful. It is. But compared to what?

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