Tax Cuts for the Rich Won't Do What the Right Says They Will Do

Moody's Analytics, Inc. data were quoted in a recent Bloomberg article - read it here.

The article is very clear that an analysis of information all the way back to 1989, shows that tax cuts in 2001 and 2003 under Bush resulted in an increase in savings by the wealthy, not by more spending, not by more investment in new business or more jobs. One of the economists involved in the analysis, Chris Cornell, made the statement, “Spending by the top 5 percent of households seems much more closely tied to business- cycle issues than it does to tax-cut issues.”


The information on which conclusions were based was the Federal Reserve Quarterly Flow of Funds report which assesses the net worth of households, and the Fed's triennial Survey of Consumer Finances, which tracks balance sheets, pensions, and incomes.

Boehner in the house, McConnell in the senate claim that to let the Bush tax cuts end would be 'bad policy'.  Politicians from the House and Senate minority leaders on down through the state and local levels make similar claims in defiing how they would enact tax policy at their respective levels. 
 
They LIE, they are dishonest in their claims.  They have no data to support their ideology. That this is a false claim from the right is not news.  CBO Director Douglas Elmendorf testified before Congress last February 23rd, “Policies that temporarily increased the after-tax income of people who are relatively well off would probably have little effect on their spending because they generally would be able finance their consumption out of their income or assets without such a change.”  In other words, they would still have a roof over their heads, they could still buy food instead of going hungry, they would still be able to afford medical care, they would still have assets versus foreclosures and bankruptcy and unemployment.
 
At the same time last week McConnell claimed that wealthy Americans suffered the most in the catastrophic financial crash under the Bush administration in which many Americans lost their jobs, their homes, their health coverage.  Really? The wealthy SUFFERED the MOST?  They lost the roof over their heads?  They experienced illness  - in some cases, death - because of loss of income, loss of jobs, loss of homes?  How many of those wealthy went hungry, exactly, based on any kind of reliable, verifiable data?  What standard of measurement is McConnell using for this suffering, exactly?  I'd like to know.
 
I think all voters would like to know.
 
Except for the right, who blindly, foolishly accept ideology over reality.  Time for a wake up call about who is suffering, and time for a reality check on what creates jobs - and what does not.  Time for an honesty check on who is making these statements that are patently false, especially the tea party darlings who will say anything to gin up the support of their deluded base.
 
It is time, and past time.  Let us do all we can to make sure those checks take place before the election on November 2, 2010.  We can't afford the Republican ideology; the whole country cannot afford the conservative, Tea Party-endorsed false economics.