Friday, September 17, 2010

TEA BAG ECONOMICS

I am not an economist, nor do I pretend to be one. In point of fact, I don't consider myself to be particularly good at math or economics. Given that, I expect I shall be roundly attacked after writing this by people who consider themselves to be much better at economics than myself yet who will be exceptionally and unequivacally wrong in just about their entire analysis.

How can I say that, given that I have made it clear I am not an economist? Because I intend to discuss Tea Bag Economics - the economic theory which plainly states that you can continue to cut taxes without cutting the spending of any of your - meaning Tea Party - sacred programs. Let's start with the basics.

The Tea Party claims to be against deficit spending and the deficit in general. They demand that government cut spending. Yet when asked what exactly they will cut, they mention programs which have marginal impact on spending. For instance, foreign assistance. A great deal is made about how much of our tax dollars are being spent overseas for foreign assistance, yet if you look at the figures, foreign assistance doesn't even register. It barely makes any of the graphs. Or let's talk about the Department of Health and Human Services - one Department Tea Baggers like to kick around. The Budget for this Department is $78.7 Billion. That's a decrease of 1.7%. Now, no one is saying that $78.7 Billion is not a great deal of money. But here's the thing - the Defense Department Budget is nearly 10 times that amount. In fact, the Defense Department Budget is 68% of all discretionary Federal spending - it is the major beneficiary of income tax dollars. Not Social Security, not Medicare or Medicaid. Those programs are paid for by separate taxes, not income taxes (although the argument will be that all taxes are income taxes - and in a way that is correct, but misleading).

So, when you break it all down, you have the majority of income taxes - as we generally regard them - going to Defense spending. Now, the obvious question is, will Tea Baggers support cutting the Defense budget? To hear them talk, the answer is no. So just how serious are they about deficit reduction?

Not very, as it happens, as they will also not support paying for any of this spending. How else can you explain their constant admonishments against income taxes? Assuming that they wish to have the smallest government possible and we do away with every single department and program within the Federal Government except the bare minimum, even in that Tea Bagger paradise, the present rate of income taxes would not reduce the deficit nor in fact provide the revenue necessary to continue present trends in defense spending, interest on the national debt and simply running a bare-bones government. The math does not work.

And with the Tea Baggers calling for even less in tax rates and demanding that revenue be even lower, there is no intellectually honest way to reduce the deficit, to pay off our debt. Doing away with every program in the Federal Government except debt repayment and Defense will still not bring us out of deficit as the money coming in is less than the money going out. And Tea Baggers aren't honest enough to admit that lowering taxes will in no way improve that equation.

So when Jim DeMint or Rand Paul or Christine O'Donnell or Sarah Palin tell you that maintaining tax cuts for the rich will not affect the deficit and they have a plan to reduce the deficit without raising taxes, they are simply lying. They care more about their ideological dislike of taxes than they do about the health of the nation.

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