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Lying About Reagan's Tax Cuts

by Pontiff Maximus Friday, Jun. 11, 2004 at 2:25 AM

What can I say? I swore off the Dayton Daily News a long time ago, tired

of their ceaseless attempts to deceive. They pressed one of my

hot-buttons, though, so here I am once again tilting at windmills in the

vain attempt to educate their editorial staff.

I can certainly understand why the editors at the Dayton Daily News

would want to down-play tax cuts. After all, the party of JFK washed

their hands of tax cuts after President Reagan rode to victory with them

in 1980 and 1984. Since then tax cuts have been the kryptonite of the

Democrat Party. At every turn they downplay them, demonize them, equate

them to racist lynchings and totalitarian death camps...which is all the

more reason we have to expose these illogical tactics when they occur.

On this occasion it is Martin Gottlieb who is leading the charge against

tax cuts. His primary target is the Bush tax cuts; those already granted

and scheduled as well as those newly proposed. His parting shot, though,

is aimed squarely at the Reagan legacy.

Let's examine his argument, so as to more fully appreciate the irony of

his final claim. Gottlieb starts out alleging that President Bush is

telling half-truths, at best, about his tax and economic plans. In his

State of the Union speech President Bush stated:

Jobs are created when the economy grows, the economy grows when

Americans have more money to spend and invest; and the best and fairest

way to make sure Americans have that money is not to tax it away in the

first place.

Gottlieb's objection to this is that the first part is self-evident, the

middle part (the alleged half-truth) is backwards (people have money

because the grows, not the other way around) and the last part, about

tax cuts, completely wrong. Let's look at what Gottlieb says:

The part about the economy growing when people have more money is

someplace in the realm of truth. But it seems to suggest that the

economy grows because people have more money. In fact, people having

more money is more likely the effect of the economy growing than cause.

If they have more money not because the economy is growing but

because taxes have been cut, the money has simply been transferred from

someplace else. In that case, there are negative consequences to be

considered (below) if one wants to confront anything like the truth.

And as for Bush's concluding notion that the best way to make sure

people have money is not to take it away: If it's taken away, it's still

being spent, possibly on things that, themselves, spur the economy....

Well! That's quite an indictment of President Bush's statement, isn't

it? Actually, it's not. Speaking of half-truths, Mr. Gottlieb has simply

tossed out a few of his own to try and support his claims that President

Bush has told them. While that in and of itself is logically invalid,

let's pick apart his claims just for fun.

Gottlieb has a problem with stating whether people have more money is

the cause or the effect of a growing economy. That's fine, but that

doesn't make one claim a half truth and the other the whole truth.

Gottlieb's position is just as (in)valid as President Bush's. So either

Gottlieb is also telling a half truth...or he's simply of a differing

opinion. History shows that a growing economy and increasing incomes are

linked in a feedback loop. Trying to determine which comes first is like

arguing for the chicken or the egg. We can conclude, then, that

Gottlieb's claim that President Bush told a half-truth on this issue is

not supported by the facts.

Next, Gottlieb's claim when you cut taxes it amounts to a transfer "from

someplace else" is simply false. Cutting taxes means the government

doesn't take it from the taxpayer in the first place. There is no

"transfer" at all. This is simply the tired liberal attack on tax cuts:

that it's the government's money, not yours. However, the government

takes money from our paychecks, not the other way around. The claim that

government taxing your money and spending is of equal economic stimulus

isn't supported by the facts, either. To tax a dollar requires that the

government spend money. It costs money to collect taxes, to administer

the money and to spend it on items via government programs. All of this

money takes away from that dollar taxed, so it's something less than a

dollar that eventually gets spent. In addition, there are many

government programs that do not produce goods or services. Money spent

on those other programs has little, if any economic stimulus effect.

But enough of Gottlieb's hand waving about the Bush tax cuts (which goes

on to whine about deficits), what set me off was the last part of his

editorial. He told a whopper of lie:

The new debt caused by a tax cut might be a reasonable trade-off if

the tax cuts actually worked to stimulate the economy in the short term.

But the first thing that followed Ronald Reagan's tax cuts in 1981 was

the worst recession in 50 years. (Things did eventually get better.) And

the first thing that followed George W. Bush's tax cut in 2001 was nothing.

That's a part of the truth they want you to forget.

Well! Is that so? Of course it isn't. The recession started in June of

1981. Reagan's tax cuts were passed by Congress in late summer and early

fall. Taxpayers didn't receive any money until the summer of 1982, with

their 1982 tax returns. Guess when the recession ended? Yep, the fall of

1982, right after people started receiving their tax cut benefits. In

addition, the recession of 2001 ended right when the rebates for the

2001 tax cut were being received by the taxpayers, in the fall of 2001.

I guess for people like Mr. Gottlieb, a "half truth" is worthy of an

editorial, but an outright lie...well that's something to be proud of.

Four years ago in another response to the Dayton Daily News I said: "A

lie is not an editorial. An editorial is an opinion piece, and while the

DDN has all the right in the world to be wrong (one that they do

exercise frequently) they do not have the right to lie." Apparently that

statement is as necessary now as it was then. I am once again tilting at windmills in the vain attempt to

educate their editorial staff.

So either Gottlieb is also telling a half truth...or he's simply of a

differing opinion.

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