Tuesday, September 28, 2004

I've been listening to the political rhetoric flying back and forth, and I'm struck by the ease that Republicans - especially Bush - twist the truth. They take statements out of context, omit entire phrases to make statements say what they want them to say, and even flat out lie. A good example of this is Bush's claim during several "town meetings" that Kerry plans to raise taxes. When he says this, he fails to make any distinctintions. The statement is simply offered as a broad fact, implying that Kerry will raise taxes on the poor, the middle class, the wealthy, corporations, etc., etc. But that's not what Kerry actually said. Kerry has repeatedly said that he doesn't plan to "raise" taxes, but to roll back Bush's tax cuts on the wealthiest people in the country.

The news came out last month that wealthy Americans - those earning more than $200,000 a year - benefited the most from Bush's tax cuts. While everyone received a tax cut, the wealthiest people in the country got a bigger tax cut, which left them with a larger increase in after tax income than anyone else. Bush's rationale for this was simple - he stated in one of his scripted town hall meetings that wealthy people pay more taxes and , therefore, deserved more tax relief. He has also stated that his lopsides tax cuts had stimulated the economy. This is good old fashioned trickle-down economics.

The idea behind trickle-down economics is that if you give money – in the form of tax cuts and rebates - to businesses and wealthy people, you will put more money in the pockets of the poor. According to the theory, rich people and businesses will use that extra money to purchase lots of goods and services. The companies that produce those goods and services will, in turn, raise workers’ salaries and/or hire more workers. These workers can then use the money they receive to purchase yet more goods and services, thereby stimulating the entire economy. This all sounds good in theory, but it doesn’t really work that way in practice. After all, money, like cream or hot air, tends to move up, not down.

If you give more money to people who already have a lot of money, they aren’t going to run right out and spend it on stuff. They don’t need to, because they have enough money. They can already afford all of their needs and most – if not all – of their wants. Instead, wealthy folks tend to invest extra money, which makes them even more money. So the net result of giving money to rich people is that the rich just get richer. Likewise, if you give more money to businesses, they won’t necessarily raise workers’ salaries and/or hire more workers. Rather than passing revenue down to employees in the form of wages and benefits, companies are much more likely to pass that money up in the form of dividends to stockholders, higher salary packages for upper management and owners, and capital investments for the business. So very little of the money given to the wealthy and to businesses really trickles down to the poor and middle classes; instead, it just sort of circulates around in the upper levels.

If the Bush really wanted to stimulate the entire economy, he should give the largest tax cuts and rebates to the people who make the least amount of money and let it trickle up. The poor, after all, don’t have enough money to afford all of the things they need, let alone the things they want; and while the middle classes can usually afford all of their needs, many of their wants still remain out of reach. If you give money to these people, who don’t have a lot of money to begin with, they will spend that money on goods and services. The companies that produce those goods and services – companies owned by wealthy people – will then pass that money upwards, as illustrated above. In this way, the rich still get richer, but the poor get richer too.

What really amazes me about all of this, however, is not that the President favors giving more money to the wealthy and corporations. After all, Bush came out of corporate America, and he is himself wealthy. He'd naturally want to benefit his own socio-economic group more, seriously deluding himself that by doing so he is helping everyone. No, what really amazes me is the number of middle class and poor Americans who buy into Bush's version of trickle-down economics (call it Reaganomics Lite). The people who are being hurt by Bush's policies the most are lining up behind him and saying they want more of the same. And I'm flabbergasted!

The only conclusion I can come to is that all of these people want to believe Bush's lies. I have to assume that these people have bought into the "Lottery Lie." The Lottery Lie - for those who don't know - is the idea that lotteries are good for poor people because lotteries give the poor the chance to become rich. Keep dropping your dollar and eventually your number will come up, hopefully before you die. Meanwhile, the ones who are really getting rich are the folks who operate the lottery. But the lottery players don't see that; they simply see the chnace of getting rich. This is what Bush is offering the nation. The idea that if we keep things the way they are - in other words, if we don't screw with the lottery - some of us will score big. It's one of the biggest lies in America; unfortunately, it's one that a majority of Americans have chosen to believe.

No comments: