Posted on 06/22/2002 3:25:50 PM PDT by vannrox
January 17, 2002
Top Ten Fiscal Myths of Sens. Kennedy and Daschle
WASHINGTON—In an economic address yesterday at the National Press Club, Sen. Edward Kennedy (D-Mass.) called for supplanting the next stage of the $1.35 trillion tax cut, passed last year, with more federal spending on existing and new programs. Sen. Kennedy's speech echoed many of the ideas expressed recently by Senate Majority Leader Tom Daschle (D-S. Dak.). Cato Director of Fiscal Policy Chris Edwards identified 10 enduring myths in both senators' speeches.
1) Myth: Tax cuts cause budget deficits, but more spending doesn't. Reality: Spending is set to soar at least $120 billion in fiscal 2002, much more than the Bush tax cut reduced this year's revenues.
2) Myth: Any unmet "needs" in society demand government action. Kennedy identified a national education system for 2-year-olds as an unmet need. Reality: Government big enough to supply everything you need is big enough to take everything you have.
3) Myth: Politicians should be army generals exhorting the nation with "we should" and "we must" commands. Daschle had 16 "we shoulds." Reality: America is a hugely diverse society of 280 million citizens with different needs, which they won't be able to meet if the federal government keeps expanding.
4) Myth: The government's interests are the same as society's. Daschle says the Bush tax cut "put us in an unnecessary fiscal bind" that will "shortchange critical needs." Reality: The size of the federal budget and the size of private pocketbooks are inversely related. The fiscal bind and critical needs of families and businesses during a recession can be aided with lower taxes.
5) Myth: New spending programs make families better off since money grows on trees. Reality: Research shows that every $1 of new spending costs Americans about $1.40 due to higher compliance costs and inefficiencies of the tax system. So new spending, on net, makes American families worse off.
6) Myth: Failing government programs simply need more reform, co-ordination, and consolidation. Reality: Many government programs have been "reformed" repeatedly with the same bad results. The real answer for many programs is termination or privatization.
7) Myth: Tax cuts cause high interest rates. Both Kennedy and Daschle say that the Bush tax cut caused high interest rates. Reality: Both short and long-term interest rates are currently low, not high. These days capital markets are global, so modest U.S. budget deficits have negligible effects on interest rates.
8) Myth: Public/private partnerships combine private sector efficiency with government funding. Reality: Mixing business with politics usually leads to corruption and favoritism as private groups latch onto the government gravy train.
9) Myth: Any problem in the private sector is a "crisis" that will get worse without government help. Reality: private markets and individuals are constantly solving problems and making life better for their communities. Washington's "help" usually makes things worse.
10) Myth: Centralization and universality in education and other industries is the wave of the future. Reality: Diversity and decentralization of power are the way for America to go in the 21st Century.
Democrats always conveniently do a static rather than a dynamic analysis of tax cuts. For instance, they assume that if a trillion dollars in tax cuts are legislated, this would cause government revenues to decrease by that trillion dollars. They don't take into account the increased economic activity that tax cuts create. Increased activity generates increased government revenue.
Here is an example that is so simple, even Kennedy and Daschle could understand it. Suppose a toll bridge was erected across a river. The city that built it wanted to generate as much revenue as possible, so they decided to charge ten dollars per crossing. Most people viewed that as outrageously high and chose to drive a few extra miles to go around the river, rather than pay the toll. At the end of the year, only $1,000 in revenue was generated. Suppose, at that point, someone with a clue about economics proposed lowering the toll to two dollars. Kennedy and Daschle would do their stupid static analysis and complain that now, only $200 would be generated. In reality, with most people now actually using the bridge, some number far greater than $1000 would almost certainly be realized. Static analysis is nothing more than another democrat fraud.
Yeah.
Reality:ted "chappy" kennedy is a fat, drunken, womanizing, lying, socialist murderer.
Any questions?...direct them to the Kopechne Institute for Uncovering a Fargin' Murdering SOB @tedchappykennedysux.guv
FMCDH
No one should listen to shorty and the lush. Neither has had to live in the real world.
Only if you believe 1984 and Brave New World. The swimmer and shorty seem to.
I love it!!! You are right on. Thanks
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.