Today’s output from Blogistan Polytechnic Institute’s state-of-the-art HEMMED (High-Energy Meta Mojo Elucidation Detector) machine is me piling on.
The news today is filled with stories about the ten years of the Bush tax cuts. I am not sure if it is waxing nostalgic for the “good old days” when there was bipartisan agreement that the wealthy were overburdened with the lowest tax rates in history or if it is like people who mark when the Hindenburg crashed or the Titanic sank.
One of the lasting shames of the Democratic majority in the Senate in 2001 is their vote in support of essentially flushing away the surpluses from deficit reductions accrued during the Clinton Administration. Of course there was no guarantee that the surplus would have stayed intact especially since the groundwork had been laid for the 2008 financial meltdown caused by repealing key parts of the Glass-Steagell Act of 1933.
The triumvirate of Robert Rubin-Alan Greenspan-Lawrence Summers, Time Magazine‘s 1999 Men of the Year, had already opened the doors to credit default swaps, derivatives of derivatives and other bogus financial instruments that were sold as if they were something of value except to the sellers reaping huge profits. Additionally, as Federal Reserve Chairman, Greenspan had been successfully ignoring the housing bubble which was still expanding in 2001. How one can ignore that a 2-bedroom ranch in California could sell for $750,000 is beyond me but, hey, I am not a ‘brilliant economist’.
Regardless of whether or not the banksters would have still succeeded in crashing the economy, I personally would have liked to have that $2.6 trillion dollars listed as reserves on my balance sheet instead of in some rich person’s Swiss Bank Account.
Lest we forget the rationale for these cuts here is a reminder:
The tax cuts were sold as necessary economic stimulus that would boost job creation and a moribund economy. “Tax relief will create new jobs, tax relief will generate new wealth, and tax relief will open new opportunities,” Bush said on April 16, 2001 as he was pushing for the passage of the first tax cut. Two years later he said, “These tax reductions will bring real and immediate benefits to middle-income Americans…By speeding up the income tax cuts, we will speed up economic recovery and the pace of job creation.” Bush called the 2001 tax cut, “a victory for fairness and a vote for economic growth.” Then-Speaker of the House Dennis Hastert (R-IL) said that the cuts were necessary to “spur the economy on.”
It did not create jobs, most of the benefits of the tax cuts went to the top 2% not the middle class, and ballooned the deficit and the debt. Other than that it worked exactly as Bush and Hastert predicted.
And yes, another Democratic Senate renewed the Bush Tax Cuts in December 2010 in order to get important lame duck legislation passed including extending unemployment benefits in the worst job market in several generations. At least they did not claim it would create jobs so I give them a mulligan on that.
As the Democrats go into this next round of talks with Republicans about the budget, the deficit and taxes, the Bush Tax Cuts and what they did and did not do should be big part of the conversation.
They say that one of the signs of insanity is doing the same thing over and over again and expecting a different result. It is time to break the cycle of wrong-headedness.
Anniversary duly noted. Now let’s learn from it.
Happy Tuesday to everyone and fist bumps!
The BPI Campus Progressive agenda:
1. People matter more than profits.
2. The earth is our home, not our trash can.
3. We need good government for both #1 and #2.
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