Stunningly Orwellian intellectual dishonesty: Boehner's "twice the jobs at half the cost" claim

[ProgressiveEconomist]

for a supposed Republican alternative to the stimulus bill moving through Congress this week.

The Fox News screen crawl under its rebroadcast of the President's press conference last night touted an extraordinary claim by John Boehner. I saw no video clip or story, but I presume Fox was referencing a Boehner op-ed in USA Today late last month. Here are snippets of that Boehner op-ed and the Obama Administration economists' report Boehner cited for the methodology supposedly used in a Republican "study". Do you notice any contradiction?

*** What's your opinion ***

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From http://blogs.usatoday.com/oped/2009/01/gop-has-a-bette.html

"President Obama asked Republicans for our ideas to improve this legislation, and led by Reps. Eric Cantor, R-Va., and Dave Camp, R-Mich., we've offered a better way. According to a methodology developed by the president's nominee to chair the White House Council of Economic Advisors, Dr. Christina Romer, our alternative would create 6.2 million jobs--twice that of the Democrats' plan--at half the cost. ...

Rep. John Boehner, R-Ohio, is the House minority leader. Posted at 12:21 AM/ET, January 30, 2009 in USA TODAY editorial"

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From http://change.gov/page/-/documents/20090109Report.pdf , Appendix 1, page 12:

"Multipliers for Different Types of Spending

... For tax-based investment incentives, we used the rule of thumb that the output effects correspond to one-fourth of the effects of an increase in government spending with the same immediate revenue effects. ..."

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IMO, this is an example of a NUMERICAL Orwellian inversion. Boenher claims the Republican "stimulus plan" (broad details at http://republicanleader.house.gov/News/DocumentSingle.aspx?DocumentID=109659 ) would be FOUR TIMES as cost-effective as the Democratic measure that survived a cloture vote yesterday.

But the document Boehner cites as the methodological source for the Republican estimate says that the kind of tax-based investment incentives Republicans are pushing would be ONE-FOURTH as effective as spending in the same dollar amount.

How can the Republicans expect to get away with this level of audacious mendacity?

[liberal N proud]

1. He has his facts a little backward there.

The rate of return on spending vs. TAX CUTS is $1.50


Toward the bottom of the article:



Why spend rather than cut taxes? Different kinds of fiscal expenditures generate different amounts of return.

Zandi's model projects the most "bang for the buck" from temporary boosts in food stamps, extended unemployment benefits, and increased infrastructure spending. Each would generate more than $1.50 in increased economic activity for each $1 spent, he says.



http://www.philly.com/inquirer/business/20090210_Sizing_up_the_economic_stimulus.html

[ProgressiveEconomist]

2. I get "Page not found" clicking on your URL. I suspect you may

have made a typo that truncated the URL--there's only a one-word description and no ".html" suffix in my browser address window.

[liberal N proud]

3. Try it now

I copied the link wrong

Thanks

[ProgressiveEconomist]

4. Got it--thanks for a good article on a tough subject. Zandi

seems to be saying business tax cuts are ONE-FIFTH as effective as government spending in the same dollar amount. The Romer-Bernstein note (PDF linked in the OP) is based on an average of effects from different economic models, and cites a figure of ONE-FOURTH.

Romer and Bernstein did not cite their sources in the reference I found, but I'd bet that Zandi was one of them, given his prominence in the stimulus debate during the campaign last year.

Do any newspapers give links to technical reports summarized in their articles? The Washington Post did, for a short time, a few years ago, but I've never found another newspaper that cites technical URLs. One online source of good economic and financial information I've found that often clicks through to the gory details is http://abnormalreturns.com , evidently a one-man operation. You might want to visit it soon--the proprietor is not making much money and has threatened to shut down.

[high density]

5. Bush and $1.3 trillion tax cuts = zero new jobs followed by 3.5 million jobs lost

Seems like good, recent evidence that the Republicans have no clue what they're talking about.

[ProgressiveEconomist]

11. Who said, "What disturbs me most is NOT what they don't know, but rather

what they know for sure that just ain't so"?

[ejpoeta]

6. they expect to get away with it because....

they have done so for so long, why change now. people don't look at the particulars. they will either just believe what these people say, or if they look, they won't really look. maybe skim. personally, i don't know why anyone would believe a world out of their mouths at this point, but the fact is that there are a lot of folks who are probably not well educated, taht won't really understand the current economic recovery plan means or the one the republicans are floating. but they will want to act like they know all about it and believe the republicans... because they are probably republicans too.

take aid for the states for food stamps and such. people like my family, i can already hear them. they think that poor people should be dropped in the river to drown or something. they have this idea that all people on welfare are deadbeats who don't want to get a job and don't want to do anything. now, when i was on assistance, of course i was different, but you know.... they seem to fail to realize that food stamps are there for people like THEM when they are struggling. of course, my brother wouldn't go on food stamps if his life depended on it. he'd sooner starve. don't know if he would let his son starve. jake is 12 i think. but anyway....

[ProgressiveEconomist]

10. Thanks so much for this post. Tax cuts for the poor seem to be anathema

to Republicans, and thanks to your post an idea just crystallized in my mind after years of thinking about the evil political genius of Ronald Reagan, Alan Greenspan, and David Stockman. The idea is this: much of the Republican political hold on poor working people since Reagan may have come from the very payroll taxes Reagan shifted onto them (see below the line in this post), while cutting marginal income tax rates for the wealthiest by two thirds. After Reagan and company shifted the tax burden from the rich to the poor, the poor would become susceptible to Republican anti-tax, anti-government rhetoric. But, unlike the rich, the poor never would get relief from their hefty tax increases. This was part of what Stockman called his "SHIFT AND SHAFT" strategy.

Look carefully at the Republican tax cut plan John Mcain ran on, and that Boehner has adopted. They would change the current 15 percent rate to 10 percent, and cut the current 10 percent rate to 5 percent. Those currently in the 15 percent and 10 percent brackets would get something back, but only those currently above the 15 percent bracket would get the full amount. The poorest filers of income tax returns--those who currently get the maximum Earned Income Tax Credit--would get NOTHING.

Compare the Obama refundable $1000 tax credit for working families in the bill going through Congress. A flat $1000 credit is the highest percentage of income for the poorest, who cannot afford to save much and would spend most of what they'd get immediately. Obama's plan is targeted on the people most likely to stimulate the economy with spending, while the Republican plan would give the most to those who'd likely spend the least. IMO the Republican economic wrong-headednessmay stem mainly from their fear that tax relief for the poor would make them less susceptible to Republican anti-government propaganda.

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More on the steal-in-plain-sight Reagan tax burden shift from rich to poor: IIRC from an old book called "The Education of David Stockman", Alan Greenspan, who was a Reagan campaign economic adviser in 1980, was concerned that the poor did not pay their fair share of taxes! This kind of extremist right-wing fantasyland evidently is where Ayn Rand Objectivist philosphy can lead.

Stockman, who was Reagan's budget director, realized that drastic income-tax cuts for the wealthy would create a huge deficit "hole" in the long-term budget. Under the ruse of concern for the soundness of Social Security when baby-boomers would start retiring 25 years into the future, Stockman and Reagan put Greenspan in charge of a Social Security Commission. This Commission recommended huge increases in payroll taxes that those above the "income cap" would be spared. However, Greenspan saw to it that, unlike pension deductions for workers in individual States, Social Security payroll tax revenues would not go into pension funds whose sole purpose was payouts to old people. Instead, they would serve to hide budget deficits from absurdly large tax cuts for the rich, and they would be spent just like income tax revenues, for wars, defense waste, and future "tax cuts" for the rich.

Stockman realized that the poor would not like having their tax burden increased. But, and this is the genius part, he may have figured out that such resentment among the poor would make them more susceptible to the GOP's anti-tax message. Unlike the rich, however, the poor would get no tax relief from Republicans. Add in spurious "social issues" than would make many of the poor lean even more toward the Republicans and the rest is history. Reagan won 49 States in the re-election of 1984. And now Social Security is "going broke". Few are even asking what happened to the TRILLIONS FICA took from them ostensibly just to prevent the current "crisis".

[underpants]

7. Maybe he should check with his tobacco friends

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=385&topic_id=270247&mesg_id=270247

[WinkyDink]

8. "Jobs"? Or just "work", as Steele has it? Heh.

[Vinca]

9. This must have been cooked up after the 3 martini lunch. nt

[Dappleganger]

12. Oh you mean that little mantra about businesses needing more tax breaks?

That will create more jobs?

Guess what--they'll take the money and leave the US just like they've been doing for YEARS.

[ProgressiveEconomist]

13. Rs are even advocating ANOTHER "one time tax-free repatriation"

of sometimes ill-gotten corporate gains overseas. On CSPAN this week during the filibuster, I heard one Republican Senator advocate this--IIRC it was Grassley.

[11 Bravo]

14. Did he conclude by bursting into tears?

[IGotAName]

15. I figured he just meant they'd hire twice as many people at 20 hrs/week and

cut their wages in half. ;)

[vinylsolution]

16. Boner and his posse of limpdicks....

.... had 8 years to implement some kind of worthwhile job-creation policy.

But they chose not to. Greed first, country last, as always.