Eight False Things The Public “Knows” Prior To Election Day

There are a number things the public “knows” as we head into the election that are just false. If people elect leaders based on false information, the things those leaders do in office will not be what the public expects or needs.
Here are eight of the biggest myths that are out there:
1) President Obama tripled the deficit.
Reality: Bush’s last budget had a $1.416 trillion deficit. Obama’s first budget reduced that to $1.29 trillion.

2) President Obama raised taxes, which hurt the economy.
Reality: Obama cut taxes. 40% of the “stimulus” was wasted on tax cuts which only create debt, which is why it was so much less effective than it could have been.
3) President Obama bailed out the banks.
Reality: While many people conflate the “stimulus” with the bank bailouts, the bank bailouts were requested by President Bush and his Treasury Secretary, former Goldman Sachs CEO Henry Paulson. (Paulson also wanted the bailouts to be “non-reviewable by any court or any agency.”) The bailouts passed and began before the 2008 election of President Obama.
4) The stimulus didn’t work.
Reality: The stimulus worked, but was not enough. In fact, according to the Congressional Budget Office, the stimulus raised employment by between 1.4 million and 3.3 million jobs.
5) Businesses will hire if they get tax cuts.
Reality: A business hires the right number of employees to meet demand. Having extra cash does not cause a business to hire, but a business that has a demand for what it does will find the money to hire. Businesses want customers, not tax cuts.
6) Health care reform costs $1 trillion.
Reality: The health care reform reduces government deficits by $138 billion.
7) Social Security is a Ponzi scheme, is “going broke,” people live longer, fewer workers per retiree, etc.
Reality: Social Security has run a surplus since it began, has a trust fund in the trillions, is completely sound for at least 25 more years and cannot legally borrow so cannot contribute to the deficit (compare that to the military budget!) Life expectancy is only longer because fewer babies die; people who reach 65 live about the same number of years as they used to.
8) Government spending takes money out of the economy.
Reality: Government is We, the People and the money it spends is on We, the People. Many people do not know that it is government that builds the roads, airports, ports, courts, schools and other things that are the soil in which business thrives. Many people think that all government spending is on “welfare” and “foreign aid” when that is only a small part of the government’s budget.
This stuff really matters.
If the public votes in a new Congress because a majority of voters think this one tripled the deficit, and as a result the new people follow the policies that actually tripled the deficit, the country could go broke.
If the public votes in a new Congress that rejects the idea of helping to create demand in the economy because they think it didn’t work, then the new Congress could do things that cause a depression.
If the public votes in a new Congress because they think the health care reform will increase the deficit when it is actually projected to reduce the deficit, then the new Congress could repeal health care reform and thereby make the deficit worse. And on it goes.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture I am a Fellow with CAF.

3 thoughts on “Eight False Things The Public “Knows” Prior To Election Day

  1. I read this blog to understand the other side. And, I sometimes have this naïve belief that reason and logic will somehow overcome ignorance and propaganda. And, yet, when I read this latest article I just want to throw my hands up in the air and say, “California deserves what it gets, why should I care?”
    I wrote the above an hour ago, I have cooled down and I will try to answer these, frankly, propaganda charges phrased as myths:
    1. Bush tripled the budget. This is technically true because the first year of Obama was working on Bush’s last year. Obama added the $800 billion stimulus package to Bush’s budget. Of course, blaming this on Bush is a gross representation of facts since Obama championed it and the democrats passed it.
    2. Obama did not raise taxes significantly. I haven’t heard many conservatives argue this. What Obama has done has passed rules and regulations and created a significantly hostile business environment. For example, the EPA has used the water rules to shut down the vast majority of coal mining permits. Obama used the BP oil spill to shut the offshore oil business (and don’t think the recent lifting of the moratorium has made a difference because all it does is allow people to apply for permits, it doesn’t give any out). And, of course, the constant uncertainty on the health care costs, the tax costs, etc. all cause industry to sit on their cash. When it doubt, hold on to cash. You might need it.
    3. Obama did not bail out the banks. This is true. The Bush administration did this. It was a horrible policy. All Barak did was extend the bailout to the auto industry, the insurance industry, and Freddie and Fannie.
    4. The stimulus did not work. Obama defined the goals of this program. He said that unemployment would not go beyond 8%. So, I take the man at his word. By his definition, the stimulus failed.
    5. Business does not hire based upon a tax cut. It hires when it thinks it can make a profit. And, so far, business people aren’t sure of that. I am not sure of it so I don’t hire either.
    6. Health reform will cost $1 trillion. Actually, we don’t know the answer to this one. The canard that it will reduce the budget deficit is of course nonsense. That was based upon ten years of revenue (i.e. tax increases) and six years of cost. Any fair appraisal of the healthcare bill would show that its costs are way above that. I could detail why, but I will save that for another reply.
    7. Social security is a Ponzi scheme. Well, yes it is. Those people getting in latter get less than those who got in early. That is the working definition of a Ponzi scheme. Social security is going revenue negative this year. This is about five years before projections. The cash reserve is T-bills. This is just a promise from the treasury because the social security trust fund has been used for decades to prop up the budget. Sooner or later, social security is going to bite us in the ass. My bet is within a decade. However, to be truthful, that is only a projection and is dependent on employment and interest rates. Frankly, no one knows for sure when the day of reckoning is coming.
    8. Government spending takes money out of the economy. Well, yes, do you think it comes from the “tooth fairy”? Sure, the money is recycled in the economy. The real problem is that the private sector invests to have a return on investment. The private economy invests to buy capital goods, improve the way businesses function, etc. The government sector, by and large, transfers the money to others (examples of this are the elderly, the indigent, social benefits, etc.). Do we need to do this? Sure, doing so is a legitimate role of the government. But, do we need to do this to the extent that we do? I would argue not. Because removing that capital from the private sector reduces the efficiency of industry. Ultimately, it impoverishes us all.
    My final point is this: California is in the dreadful mess that is due to a consistent liberal economic and regulatory enviornment. It is no accident that California’s unemployment is now greater then 12%. And, unless California changes, it will continue to lag the rest of the nation. Either change that or move to Texas.

  2. “I read this blog to understand the other side.”
    That would require some intelligence and intellectual honesty that you lack.

  3. you obviously must be a liberal since your attack on me is personal rather then rational.

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