FB Share
Email This Page
add comment
Print

Robert Reich writes: "Demagogues through history have known that big lies, repeated often enough, start being believed - unless they're rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth - and spread it on."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)



The Seven Biggest Economic Lies

By Robert Reich, Robert Reich's blog

12 October 11

 

he president's jobs bill doesn't have a chance in Congress - and the occupiers on Wall Street and elsewhere can't become a national movement for a more equitable society - unless more Americans know the truth about the economy.

Here's a short (2 minute 30 second) effort to rebut the seven biggest whoppers now being told by those who want to take America backwards. The major points:

  1. Tax cuts for the rich trickle down to everyone else. Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans' wages (measured by the real median wage) began flattening under Reagan and has dropped since George W. Bush. Trickle-down economics is a cruel joke.


  2. Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they've been since. Yet the economy grew faster during those years than it has since. (Don't believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.)


  3. Shrinking government generates more jobs. Wrong again. It means fewer government workers - everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. And fewer government contractors, who would employ fewer private-sector workers. According to Moody's economist Mark Zandi (a campaign advisor to John McCain), the $61 billion in spending cuts proposed by the House GOP will cost the economy 700,000 jobs this year and next.


  4. Cutting the budget deficit now is more important than boosting the economy. Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They'll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.


  5. Medicare and Medicaid are the major drivers of budget deficits. Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that's because the nation's health-care costs are rising so fast. One of the best ways of slowing these costs is to use Medicare and Medicaid's bargaining power over drug companies and hospitals to reduce costs, and to move from a fee-for-service system to a fee-for-healthy outcomes system. And since Medicare has far lower administrative costs than private health insurers, we should make Medicare available to everyone.


  6. Social Security is a Ponzi scheme. Don't believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.


  7. It's unfair that lower-income Americans don't pay income tax. Wrong. There's nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else.

Demagogues through history have known that big lies, repeated often enough, start being believed - unless they're rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth - and spread it on.


Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.

 

Comments   

We are concerned about a recent drift towards vitriol in the RSN Reader comments section. There is a fine line between moderation and censorship. No one likes a harsh or confrontational forum atmosphere. At the same time everyone wants to be able to express themselves freely. We'll start by encouraging good judgment. If that doesn't work we'll have to ramp up the moderation.

General guidelines: Avoid personal attacks on other forum members; Avoid remarks that are ethnically derogatory; Do not advocate violence, or any illegal activity.

Remember that making the world better begins with responsible action.

- The RSN Team

 
+154 # portiz 2011-10-12 08:44
Robert Reich for President and Elizabeth Warren for VP (or vice-versa)!!!! !
 
 
+22 # wcandler1 2011-10-12 09:58
Quoting portiz:
Robert Reich for President and Elizabeth Warren for VP (or vice-versa)!!!!!


If only someone would run in the primary! Then we would have someone to vote for!
 
 
+26 # J.Lindsley 2011-10-12 10:33
Quoting portiz:
Robert Reich for President and Elizabeth Warren for VP (or vice-versa)!!!!!

NO BLOODY WAY!!!!!!!!!!!!!!!
we need both of these paragons of truth to be free to do what they do that no one...NO ONE...ELSE SEEMS TO DO...relentlessly.
find someother puppetry for President and Vice President....th e office eats up the Executive Branch like fodder as the military uses volunteer Soldiers for cannon fodder.

KEEP THE SAINTED TRUTHTELLERS FREE FORM THE CORRUPTION OF THE WASHINGTON D.C. BORDELLO AU COURRANT.
 
 
+99 # Barkingcarpet 2011-10-12 09:06
The biggest lie of all, is that we have no power. Actually, we ARE the power.

Really, all we need to do, to end the madness, and insanity, is

Take care of each other- you know, just be kind, and don't over consume or be greedy

And, don't support or entertain the crazy's.

Too big IS a failure.

Put what money or investments you do have, in local banks, credit unions, and businesses. Do not support any corporate behemouths, or political nutjobs, they are NOT our friends.

We are the power.

We are all a part of nature, which sustains us, and we need to start taking care of it. Nature is not just resources with $ signs on it, to be destroyed for cheap non repairable landfill bound products. It is alive, and supports our life.

Build strong, caring and inclusive local communities, and quit funding wars, waste, and profiteering.

It IS up to us folks.

The folks at the top sure seem to be self serving crooks out for megabucks, at the expense of any livable future, and NONE of them speaks for me,

It is past time to disempower the idiots ru(i)nning the show, and wake up to our power.

No more B.S. No violence, no fear.

Take care of each other, and the environments which sustain us all.
 
 
-85 # Martintfre 2011-10-12 09:15
Social security is not a ponzi scheme - true cause in a ponzi scheme the suckers volunteer to get in.

those 2.7 trillion of assets - securities... when they mature exactly where does the money come from ? (hint they are a debt instrument)
 
 
-116 # Martintfre 2011-10-12 09:16
If we eat the worlds rich entirely - there would be enough to power the USA about 14 months - then what?

Taxing productivity and rewarding non productivity may be very popular but is economic suicide.
 
 
+72 # GeeRob 2011-10-12 10:24
What a false argument. Nobody, no one, wants to "eat the world's rich entirely."
The 99% want a seat at the table, not an all-you-can-eat buffet.
 
 
+75 # propsguy 2011-10-12 10:27
the rich we are talking about are NOT productive. they don't MAKE anything. they simply make money through tricks and voodoo.

so you are correct, although in a way you didn't mean- we currently reward, the non-productive, the financial speculating class of good for nothings and THAT is economic suicide
 
 
+30 # Ken Hall 2011-10-12 22:37
Your basic assumption is wrong. The rich are not necessarily productive, and in this day and age they are actually parasites on the productive economy. A financier shuffles some papers, creating nothing of real value, and pays less in taxes than a teacher? Unsound reasoning.
 
 
+11 # noitall 2011-10-14 12:58
Those 'rich' who are targeted for the crimes that have gotten us to where we are economically are not the productive corporations that you apparently see as the rich. Its those who manipulate funds and have turned Wall Street into a casino. They produce nothing and taint the rest of their ilk. Those who export jobs and hide their profits overseas are equally guilty and non-productive to our economy. Think about the depth of this problem before you type things that reveal your lack of critical thinking. There are other sources of news besides FOX noise.
 
 
+66 # BradFromSalem 2011-10-12 09:18
The real shame is that the MSM (including MSNBC)will never get RR on to explain the Truth point by point.

I have yet to hear any fact based and reasonable explanation by the Right as to how cutting government expenses creates jobs. Or how cutting taxes also cuts the deficit. Or how cutting Medicare / Medicaid from the Fed budget will not transfer those costs to individuals. Individuals who may not be able to afford those costs, especially because the costs are frequently deffered and therefore higher. Or why the simple solution that RR proposes for Social Security is off the table.

So, instead because the right wing idiots can explain their misinformation to sound like common sense, the Robert Reichs and the Paul Krugmans are only allowed on the MSM to get in a mini (very mini) debate about some tiny point and are never allowed to expound on a point.

MSM == Short Attention Span Theater
 
 
-58 # Martintfre 2011-10-12 10:20
//I have yet to hear any fact based and reasonable explanation by the Right as to how cutting government expenses creates jobs.// That is because we were raised in government schools that think 10 years of FDR depression was ended by having our youngest and finest killed in wars along with rationing and all the other violations of civil liberties that accompany war.

IF you read history you will see at the end of WW I, over a million troops came home to a wartime economy with no war - initial economic indicators worse then when Hoover and FDR screwed things up.

What happened - Wilson did nothing (stroked out) Harding cut federal spending and the economy rebounded nicely - real wealth for the common man exploded.
 
 
+5 # BradFromSalem 2011-10-12 18:41
I admit to not knowing much about the Post WWI economy. However nearly all Post War economies suffer during the transition.

Something in Martin's explanation is lacking; can somebody fill in with more detail. How did the jobs get created? Did we have some type of GI bill? I know the GI bill after WW2 was designed as much to reverse the Post War downturn.

Thanks!
 
 
+6 # Ken Hall 2011-10-12 22:39
Martin's info is nothing more than revisionist claptrap.
 
 
-18 # Martintfre 2011-10-13 05:31
The Jobs got created because people wanted things like homes - and some one built them
some one was selling cars - cheap and people bought them - some one was selling electricity and things that used electricity and people bought them.

People bought things with money they saved not with debt foisted upon others.
 
 
+14 # BradFromSalem 2011-10-13 07:37
Martin,

So Ken Hall is right, claptrap! (Thanks, Ken).

So you are saying that the reason we are in the economic bind is that the Middle Class has a high debt to income ratio? Lets look at why, and how it could have been prevented.
At the end of WW1, to get a good paying job you needed a High School diploma. This diploma was not something individuals went into debt to obtain. Medical care, while not primitive, did not run one into debt over a single sickness; and if it did there public institutions that helped pay, sometimes, if you were lucky. Otherwise you died or went to debtors prison or both. Just after WW1, the Wall street crooks had just started to dismantle the existing regulations and began creating a bubble economy, that culminated in the Great depression.
Now, if we just consider having strong financial regulations, shared costs of education and medical care; the personal debt problem is solved in the long run. Believe it or not, people still want homes, cars, and electricity, etc. Their jobs have all been downsized or were sent away; at taxpayer expense. Is that an efficient way to spend taxes, give a break to a business that sends it over seas?
 
 
+8 # jon 2011-10-13 17:54
Martin, you are leaving out Eisenhower's rebuilding of our national infrastructure, for one, and the GI Bill, second, and a burgeoning rail system and airline, airport, and shipping/port industries that were all built by the needs of WWII. These ultra-efficient systems - compared to the rest of the world - lead us into a circumstance where we were driving Corvettes and Cadillacs.

Oh, and don't forget, please, all of the hydroelectric projects that provided the necessary power, and the bridges and highways, land conservation that helped with providing FOOD for all of the above, which were bulldogged through - against enormous Republican oppostion (manifestly like your position) - by FDR.

If FDR had failed in his opposition to the Republicans in putting America back to work, we certainly would have lost WWII. But I feel sure YOU would feel more fulfilled if there were shrines to Hitler all over the world, we ALL spoke German, and you got to Seig Heil all over the place.
 
 
+13 # jon 2011-10-13 17:55
A real man NEVER takes advantage of a person in a weaker position than

himself. A REAL man lives to SERVE those who are in a weaker position

than himself.

This, quite simply, is the way that the Cosmos is rigged. To attempt to

circumvent this ultimate Law in the hopes of short term profit, is to

guarantee ultimate failure. Just ask Jesus, or Buddha, or Ghandi, etc,

etc.
 
 
+21 # Ralph Averill 2011-10-13 01:01
"Harding cut federal spending and the economy rebounded nicely - real wealth for the common man exploded."
The Roaring Twenties roared on credit and speculation. A bubble, a house of cards. When the bills came due, the house of cards came down. As a result, legislation was enacted to strictly limit how and what banks could invest in. As a result of that we had the greatest era of prosperity in our history. Reagan removed those bank regulations,(re member junk bonds?) and here we are again.
 
 
+13 # feloneouscat 2011-10-13 04:46
Quoting Martintfre:
That is because we were raised in government schools that think 10 years of FDR depression was ended by having our youngest and finest killed in wars along with rationing and all the other violations of civil liberties that accompany war.


So 8 years of G.W.Bush and 6 years of virtual Republican rule and what happened? Near total economic collapse. Not to mention two wars and violation of civil liberties.

FDR did a lot of positive things for this country. One can not be said the same is true of G.W.Bush.
 
 
-20 # Martintfre 2011-10-13 05:33
At the end of Bush unemployment was far lower then now - One of Bushes errors was the fascist Bail outs that senator and then president Obama joined in on.

If government spending was a viable solution then the soviet union would not be the FORMER soviet union - contrary to reagan fans it did not fail because it was evil - it failed because the welfare/warfare state is not productive enough to support the welfare/warfare state... a lesson we are learning now.
 
 
+20 # BradFromSalem 2011-10-13 07:41
It was the warfare state that destroyed the Soviet Union. And no, we are NOT learning that lesson.

America is much, much closer to being a fascist state, than it is a socialist state.

Another lie the righties tell us!
 
 
-12 # Martintfre 2011-10-13 11:30
Neither the welfare nor the warfare state is productive enough to support its self.

We are becoming less and less an individualistic respecting state revering the creators that made and profited handsomely from things we all enjoy the fruits of (Thanks Steve Jobes!!!) and are becoming a bitter uncreative mob thinking every one has a right to live at some one elses expense.
 
 
+55 # Joan Manning 2011-10-12 09:20
He's right, of course, but how to communicate this to the public? It's an appeal to the brain, not to the gut. The rich and powerful are telling the public that taxes are too high, meaning their taxes, but pretending ours. They say there is too much government intrusion into our lives, meaning corporations but pretending ours. So naive people rage on behalf of those who would use them.

The Occupiers are wonderful and I cheer them on, but when the winter weather comes and they all go home, what then?
 
 
+5 # Carolyn 2011-10-12 09:34
or the other way around.
 
 
+42 # firefly 2011-10-12 09:47
To the best of my limited knowledge, the moment the legislature made it legal for lawmakers to remove funds from Social Security and use them for day-to-day general spending they made it a Ponzi scheme. SS should be a dedicated fund with any excess working to increase the fund.
 
 
+31 # Tee 2011-10-12 09:47
Of all those from the Clinton administration Mr. Reich appear to be the only one who is serving a public good. While Americans are suffering from the corporate elite those in the Clinton and the Obama administration seem to have lost their voices.
 
 
+21 # BradFromSalem 2011-10-12 10:35
Ironic? that Robert Reich is the only major player from Clinton's economic team ignored by the Obama (really Clinton II) adminstration.
 
 
+3 # Capn Canard 2011-10-12 15:42
LiberalLibertar ian, that is why he is ignored by Obama... and notice that pathetic Clinton isn't saying anything either. I believe it is because Reich is the only one on the side of the lower classes. Clinton is too busy with interns and Obama is trying to hard to be one of the big boys to bother. It appears to me that Reich is being treated like he has a contagious disease and Clinton will not acknowledge him in the least. That is what happens when you challenge the illusion of the Elite.
 
 
-12 # uglysexy 2011-10-12 10:09
I hate to be a doubting thomas but I doubt we'll ever be able to pay the national debt ....and that war that either redraws all market lines or that wipes us out....will be the ultimate conclusion
 
 
+12 # Inland Jim 2011-10-12 13:10
You're probably right about the debt... but why would we want to? How many times have you paid off your car or your house before trading it in on a newer, spiffier model?
 
 
+10 # BradFromSalem 2011-10-12 18:45
The debit is nothing that a little inflation couldn't cure. Especially if the dollar gets devalued a little as well.

We don't need to eliminate debt, just bring it down; and as you know if you ever had bills mount, the best cure for debt is to have more money.
 
 
-5 # Martintfre 2011-10-13 11:33
//The debit is nothing that a little inflation couldn't cure. Especially if the dollar gets devalued a little as well.//

ah... really bad idea.

unless you like prices changing daily, always up, and total uncertainty about things like - will the store have bread today or not.

if you want to bring down debt - a good idea - FIRST stop getting deeper into it.
 
 
+19 # pernsey 2011-10-12 10:33
Bush and the GOP started most of these lies. I agree they are all lies and if Fox news repeats them long enough to their sheeple it becomes the truth for them. They are minus facts and high on sound bites and spin...its such a shame the people have been lied to for so long they defend the rich while they shooting themselves in the foot. It makes no sense to me, but then again I dont have to defend these lies LOL!! Opinion news is not filled with facts, but opinion!!
 
 
+32 # Steemdoff Moore 2011-10-12 10:34
Just one question:
Why is Robert Reich the only voice of common sense and reason in this sea of deception and lies????
WHERE ARE THE DEMS?????
 
 
+2 # Capn Canard 2011-10-12 15:38
Steemdoff Moore, I wish it weren't so but the Dems are not an answer to our problems. They are sucking on the hind teat of power. Our system is more strung out on money than words can express.
 
 
+17 # croc1 2011-10-12 11:05
It is difficult to understand why Americans don't have the ability or desire to reason logically. Over and over they accept lies, exaggerations, and ideology over fact and good sense. Here in Harwinton,CT, with one of the highest populations of people in CT over 65, improving the volunteer ambulance service into an expanded facility, wholly paid for with a State grant, and by the Ambulance service association, at no cost to the taxpayer, was met with stiff Republican, falsehood based resistance. It passed 527 to 308 at referendum, with less than 25% of the electorate voting. Has our education system failed so badly that people have become apathetic zombies and are no longer able to evaluate what they are told and select for what is in their best interest?
 
 
+5 # LonnyEachus 2011-10-13 01:50
Please explain: how do you reconcile "wholly paid for with a State grant", and "at no cost to the taxpayer"?

Those statements are mutually exclusive.
 
 
-30 # Martintfre 2011-10-12 11:08
For any one who thinks Social security is solvent - please explain to me where the money comes from when the "securities" that the Social Security Administration calls assets are to be redeemed

.. exactly where does that money come from?
 
 
+24 # sebastiano 2011-10-12 13:47
Quoting Martintfre:
For any one who thinks Social security is solvent - please explain to me where the money comes from when the "securities" that the Social Security Administration calls assets are to be redeemed

.. exactly where does that money come from?

iT COMES FROM THE FEDERAL RESERVE WHO HAS BORROWED FROM IT TO FINANCE THE WARS OF AGRESSION CONGRESS DID NOT AUTHORIZE AS PER THE U.S.CONSTITUTIO N
 
 
-8 # Martintfre 2011-10-13 11:38
Nope.
The FED will lend us money (with an interest charge) to cover one "securities" redemption - and kick the can a little further down the road with a slightly larger price later.


That leads to the question why are we borrowing 43 cents of every dollar the federal government spends.(hear the sound of billions of old cans getting kicked down the road?)
 
 
+16 # Ken Hall 2011-10-12 22:42
The money was used to underwrite tax cuts for the rich and a bloated military budget. Time for them to pay back.
 
 
+18 # Lady Jane 2011-10-12 11:31
As Jim Hightower famously remarked: "If the gods had meant us to vote, they'd have given us candidates." The apparent lack of any "leaders" to offer any solutions is a reflection on how bad our situation truly is. Each candidate (I hate to think they really ARE candidates) only wants to yell and make nastier and more meaningless comments than the others. It's all a divsrsion from the horrors of the situation and their vacuous inability to address it. Join me in a big sigh. The American public should demand more intelligence in our supposed "leaders."
 
 
+14 # karenvista 2011-10-12 21:22
Quoting Lady Jane:
The American public should demand more intelligence in our supposed "leaders."


But we don't want intelligence in our leaders. We want a "regular guy." "Someone we'd like to have a beer with."

Why anybody would want to be led by "a regular guy" is beyond me. I guess they think we could go down to our local bus stop and find someone who could become the Leader of the world's only remaining superpower.

It looks like that's what the Republicans did for this election.
 
 
-14 # irma robinson 2011-10-12 11:44
Was "The Truth" be known that "They" did not come here for love, peace and harmony we will begin to seek wisdom knowledge. Believe nothing you hear and only half of what you see. Know what "The Word" says it explains it all; it takes away all dought. Know the TRUTH and the TRUTH shall set you free. My prayer is that we open up the windows of our minds, take the invisible shackles off and let the truth sink in. Renew our minds and put a RIGHT SPIRIT in there>>STOP BELIEVING THE DECEIT AND LIES..PEACE!!
 
 
-2 # irma robinson 2011-10-13 13:26
"They say don't do this and don't do that to the rich, well check this out.>>The Rich are paying a "Shake Down" and the rest of us are getting "busted" That's why they are exemp and It's not because of their charity giving; (here In The USA, anyway) Beware of twisted words and switch and bait and deception" people.
 
 
-43 # Robt Eagle 2011-10-12 12:06
Reich just lied to you all (except Martintfre) and you all bought it hook, line, and stinker! Even if the wealthiest paid more in tax as Obama is presenting, it would merely raise $92 billion, versus the $1.3 trillion he is planning on spending. Libs are now saying Police, Fire, Teachers, EMS, etc would lose their jobs...that is rediculous. Private industry is what generates taxes, not government workers who just use up taxes in salaries. Both side of Congress agree that there is duplication (in some cases 6 times overlap of services between agencies) of Federal services. The waste is enormous, but whaqt the heck, those folks have jobs...at whose expense? Go ahead tax the wealthiest and the corporate jets...it's a pittence compared to what Obama wants to spend and cause more heart ache. Get this anti-American out of the White House and let's get on with proper (not political) enterprise in the private sector to increase jobs. And please see that the bad guys are still running the show: Barney Frank and Christopher Dodd should be in jail for their influence and hard work to keep Fannie Mae stealing huge sums from the taxpayers and then bailing them out once failed. Read Gretchen Morgenson's "Reckless Endangerment" to find out who the theives are who created this economic disaster...it wasn't just Wall Street, it was mainly your elected officials.
 
 
+25 # BradFromSalem 2011-10-12 18:56
Get out of the silo!

OK, good. Wealth is created by circulating money. Taking tax dollars from the rich for the government to create jobs will put nearly every penny of that money in circulation. In the USA. That circulating money will be spent so that demand increases, small and large businesses will hire people to meet the demand. Those persons that now have jobs will pay taxes. The employers will make more money and pay higher taxes.
Oh and if the rich keep all their money, they will not circulate it to persons that will spend it locally. For the most part they will use tax dodges and hide it overseas. They will not buy a single additional pizza. The pizza guy won't be hiring another pizza maker. The rate of circulation is significantly less, thus the actual wealth created is much less.

OK back into your silo.
 
 
+13 # jonathanfreed 2011-10-12 13:41
Robt. Reich is a walking superlative. He's a top-notch educator, but really miss him running things. The Republicans are drinking koolaid, and it's going to poison us all.
 
 
-21 # joetruth 2011-10-12 15:29
Regarding Lie #1 - Sorry to break the news to Robert, but when Reagan cut the top tax bracket from 70% to 28%, the top earners actually paid more in tax revenue to the government since they weren't so concerned about sheltering any longer. So the government had more discretionary spending, not less (not that this is a good thing in my opinion). Whoops Robert!
 
 
+15 # BradFromSalem 2011-10-12 19:03
Sorry, Mr. Truth.

That was an aberration that lasted 1 year. I forget the details exactly, but once the tax from the previously sheltered money was paid after the first year, tax receipts actually dropped.

Discretionary is a subjective term. Undeclared war is discretionary, providing an education from pre-school through college is not.
 
 
+4 # Ken Hall 2011-10-12 22:48
Where do you get your incorrect factoids? Amazing ignorance!
 
 
+11 # Capn Canard 2011-10-12 15:34
All the things Reich mentioned should be common knowledge but we have gotten very piss poor reporting from the washington insiders and sunday morning programs fro 40 years. Those idiots(the idiots are NBC, ABC, CBS, CNN, FOX, NYT, WSJ, even PBS are all mouth pieces for WEALTH) know only to repeat the standard storyline... so they faithfully repeat what they are told. Robert Reich doesn't get as much press as he should. Methinks his message makes him unpopular among the elites of Wall Street, Madison Avenue, K-Street and the corridors of power.

AMERICA IS FINISHED.
 
 
-23 # joetruth 2011-10-12 15:37
Regarding Lie #2 - True also that most small business owners are not in the top 2% tax bracket. Unfortunately, Obama wants to raise taxes on everyone making more than $200K/year. Most small business owners DO fall into this category. The proposed 5.6 % tax on people making over a million a year, these are also small business owners. So the truth is proposed tax increases will affect small business owners. Whoops Robert!
 
 
+20 # BradFromSalem 2011-10-12 19:09
Mr. Truth,
Can you get anything right? That is 200K in taxable income from a small business; another word for that is profit. Salaries to employees are deducted, so that mathematically the impact on hiring is minimal. Essentially the worst case is that it will offset the positive impact of (overall) some of the tax breaks Obama has proposed and implemented.

Try Again! This is fun!!
 
 
-12 # Martintfre 2011-10-13 13:15
//Can you get anything right? That is 200K in taxable income from a small business; another word for that is profit//

so $2,000,000 of retirement fund money (some mine) pre-tax yielded 200K -- Of which some ninny pencil pushing tax bureaucrat saw a profit and taxed away 200,000 so retirement fund sees nothing before inflation.... strangely the fund managers are soon begging for a bail out.. who could of seen that coming?
 
 
+17 # fredboy 2011-10-12 16:20
Lie Number 8: Republicans understand business and the economy.

These bastards are anti-business, just like they are anti-America.
 
 
-14 # LonnyEachus 2011-10-13 01:41
Well, Bob, I have to give you credit. You got it about half right, but your math skills seem to be a bit less than top-notch.

According to multiple studies, for every Government dollar spent to create a job, AT BEST 40% of the money being spent by the government directly on that job actually goes to the worker. Whereas in the private sector, that amount is 100%.

So for every job the government "creates", the private sector can afford to create 2.5 jobs.

And where does that money come from? Why, since it's tax money, it comes from those other workers, of course. So you have taxed 2.5 jobs' worth of money to create 1 job.

That's not positive math, Bob. Do the math. It's elementary-scho ol level. And I did not make up the figures; the studies have been reported year after year.

Yes, according to the best economic theory (not Keynesian, by the way, which has been repeatedly and robustly discredited), shrinking the government DOES expand the private sector. And you are in no position to say it doesn't, because IT HAS NEVER BEEN DONE. You have no history to support your position, so you have exactly zero evidence to back that claim. But there is lots of history that gives evidence to the idea that more government means less prosperity. Just about constant evidence under 200+ years of growing government, in fact.
 
 
+11 # BradFromSalem 2011-10-13 07:51
Lonny,

Very simplistic and again silo thinking. The only fact you have that is close to the truth is that 100% of a person's salary in a job created by the private sector goes to the worker.

So if the government pays someone $100/day for a job, their paycheck only shows $40? Where did the other $60 go? Could it be that it was used to pay for the lights and heat and bokks, etc at the school where that teacher works? And how does the private sector get all that stuff for free?

Give me a break.

Oh and the Private Sector will only create jobs when the private sector can create a larger profit than they currently get. No teachers getting hired, no pizzas being sold to the teacher staying up all night correcting papers.
 
 
-10 # LonnyEachus 2011-10-13 08:40
No, you made an erroneous assumption. I did not say that 40% of what the government PAYS somebody ends up in their paycheck. I said 40% of what the government SPENDS on that job. Those are two completely different numbers. Most of the government expenditure does not end up in the paycheck; that is the whole point.
 
 
-8 # Martintfre 2011-10-13 13:11
//So if the government pays someone $100/day for a job,//

and in the private sector some one could of done the same job for $40 then there is $60 piddled away that could have paid 1.5 other people to do something that was useful and wanted.
 
 
-17 # LonnyEachus 2011-10-13 01:42
Second point: "Cutting the deficit is more important than improving the economy."

That one is the biggest piece of BS yet, because you can't separate the two. Certainly, I would have to agree that it isn't "more important", because at the present time they are almost one and the same thing. You won't improve the economy without reducing the deficit, and any increase in the deficit is going to hurt the economy. Thinking otherwise is trying to have things both ways; that's just not living in the real world.

History has already proved you wrong about Medicare and Medicaid. It's been done, dude, and it didn't work. Pick up a book and read about it. Or learn from someplace. Where did you get this idea? It certainly was not from reading about the history of those very things.
 
 
-6 # Martintfre 2011-10-13 13:17
I wonder .. does spending 43 cents of every dollar make sense?

Maybe we can borrow our way out of that nasty debt.

(that savings and productivity stuff sounds like hard work - let some one else do that)
 
 
-12 # LonnyEachus 2011-10-13 01:43
"Social Security is solvent for the next 26 years" ??? Are you completely out of your mind? It doesn't work that way. Social Security has not been "solvent" for decades. Congress had taken ALL the deposits into Social Security and replaced them with Federal promissory notes. Social Security contains NO money. The only way it can be considered "solvent", is via a calculation that in 26 years the money coming in will no longer equal the money going out. But make no mistake: the money coming in and the money going out are on a daily basis. There is not a single cent of "savings" or "investment" in Social Security, and there hasn't been for a long time.

And yes, contrary to what you say, that means it meets every one of the TECHNICAL AND LEGAL definitions of a "Ponzi scheme". It was supposed to be an investment program, but the investment was all usurped for other purposes, and now immediate deposits are being used to pay out immediate liabilities, and there is no actual investment. That, my fuzzy thinker, is exactly the definition of a Ponzi scheme, in every moral, legal, and ethical sense of the phrase. If you can actually refute any of that by all means do so, but I daresay you can't cite any real legal authority that says what I have explained in this paragraph is wrong.
 
 
+8 # phaedrus 2011-10-13 11:19
"Federal promissory notes." Are those T-Bills? If not, how do they differ? Unless I'm mistaken, T-Bills are not just "investments," but the bluest of blue chips.

Lonny, I can agree if your point is that these will never be redeemable all at once. I can also agree that many years of raids have brought it to this condition.

The "Ponzi scheme" label's validity depends on a questionable assumption. I'm not sure that SS was strictly and necessarily "supposed to be an investment program." Perhaps it was "supposed to be" an insurance program. It functions that way now and seems to be doing what needs to be done and that private enterprise wasn't doing in 1936 and before.
 
 
-7 # Martintfre 2011-10-13 13:31
//"Federal promissory notes." Are those T-Bills? If not, how do they differ? Unless I'm mistaken, T-Bills are not just "investments," but the bluest of blue chips. //

What is the quality of those notes Phaedrus?

When these "blue" chips notes are to be redeemed - where does that money come from?
(what is money that the government owes to the people... and where will that come from?
 
 
+4 # phaedrus 2011-10-14 13:58
Don't just take my word for it. If I've read the news correctly, T-bills trade internationally , and their yield is extremely low. This means that big-time investors have such faith in their quality that they're willing to accept extremely low rates of return.

As we know all to well, big-time investors have been big-time wrong before, but it's the best information I have.
 
 
-8 # LonnyEachus 2011-10-13 13:38
No, my point is that government promissory notes, regardless of what variety, are not equivalent to actually having MONEY invested. In case you have forgotten, our government is broke, and the only way it can cover any of its notes is to either borrow money at interest, or print more inflationary dollars. So any way you look at it, the Social Security "fund" is effectively empty. It has no intrinsic worth.

An it doesn't matter whether SS is supposed to be "an insurance program", because insurance is still an INVESTMENT. Insurance companies are required to have the capital to make good on their obligations. That's the whole point here. There IS nothing in Social Security except Federal promises, which it is proving, more and more every day, that it can't keep.

And yes, the money from Social Security was supposed to have been invested at interest. Instead it was spent by Congress. Look it up.

And as for Ponzi scheme: what defines a Ponzi scheme? (1) It is ostensibly a form of investment with a payout. [check] (2) The funds that were to be invested are instead used for other purposes by the "owner" of the program. [check] (3) So because there is no investment, incoming funds are used to pay off prior "investors". [check]

Yep. It's a Ponzi scheme, all right. If you did exactly the same things Congress did, you would go to prison.
 
 
+3 # phaedrus 2011-10-14 14:20
Lonny, rather than quibbling over the concept of insurance as investment, let's just stipulate that SS was supposed to have been an investment program from the get-go. Since you don't seem to regard interest-bearin g T-bills as legitimate investment vehicles, what on earth would be more suitable? Wall Street? What sort of investment would provide sufficient liquidity and security? I really can't imagine.

Oh, and if our government is "broke" in any significant way, the global investment community hasn't heard the news. Not that they've been infallible, but ever since we left the gold standard our economy has been based on "the full faith and credit, etc., etc."

Have we needlessly borrowed and spent ourselves into a deep hole? Absolutely and there are no guarantees of when or even if we can climb out.

I have been a conservative since the era that distinguished between "conservative" and "reactionary." Should that distinction return, we might get the badly needed light to see our way out of this. All we seem to have now is heat.
 
 
-3 # LonnyEachus 2011-10-15 11:29
Quoting phaedrus:
What sort of investment would provide sufficient liquidity and security? I really can't imagine. ...

Oh, and if our government is "broke" in any significant way, the global investment community hasn't heard the news. Not that they've been infallible, but ever since we left the gold standard our economy has been based on "the full faith and credit, etc., etc."


I think you're missing the point here. In order for an investment to be valid, that is to say, in order to pay off an investment properly, there must be assets from which to pay. That is the whole point of an investment: you invest some capital, which is expected to appreciate in value because the investment is expected to gain assets in the form of greater quantity, or higher value for the existing quantity. Those assets can then be liquidated to pay off the investors. The point being that there must be assets that can be liquidated, in order to give the investors a return.

But our government lacks assets that can be liquidated. It has spent itself into a position such that the income is less than the outgo. Its remaining assets are not liquid because they are tied up in the day-to-day operation of the government.
 
 
-4 # LonnyEachus 2011-10-15 11:30
So it has only two ways to make good on the promises it has made for Social Security: get the Fed to create more money (on which our government pays interest, by the way... a bizarre and dysfunctional arrangement), or borrow the money elsewhere, like say China. And since there are no assets with which to pay off external debts, either, the government would still be forced to go back to the Fed for the money (at interest) to pay off the interest. No matter how you look at it, it's a bad scene all around, and leads to inflation. All because the ASSETS that were supposed to be in Social Security were usurped for other purposes.

As for Social Security's original purpose and justification, it is perfectly clear from the historical record that it was intended to be a Trust Fund. A trust fund (you can find it in Wikipedia) is a fund in which ASSETS ARE HELD in trust for other parties until the fund (or in some cases, the party) matures. But no assets were in fact held, that is the point. They were used for other purposes by Congress... Congress broke the trust. In more ways that one.
 
 
-4 # LonnyEachus 2011-10-15 11:39
As for the "global investment community" not hearing the news, I think it is you who has not heard the news. The U.S. Government's credit rating has been reduced by the international rating agencies from AAA to AA. And many investment firms have altered their investment policies to give preference to EITHER AAA ratings, OR the US government (prior to this it was AAA ratings only).

It has been all over the news. I guess you missed it.
 
 
0 # phaedrus 2011-10-24 11:11
I think that whatever S&P decides to rate a financial instrument, the reality is observable in the effect on transactions. T-bills did not start paying appreciably higher yields, ergo, the investment community has not been impressed by S&P's "downgrade."

As you observe, investment firms' policy adjustments support this view. Preference is given to AAA ratings "OR the US government." Doesn't this clearly express assumed equivalence between AAA and "downgraded" T-Bills?

Furthermore, S&P attributed its negative evaluation to the intransigent behavior of our Congress, not to inherent weakness of Treasury notes. I know, that didn't reach the headlines, but it was clearly in the text of their statement, although not on the front page.

P.S. I like exchanging observations with you. Your comments (aside from some gratuitous condescension) are thought-provoki ng.
 
 
-12 # LonnyEachus 2011-10-13 01:48
Quote: "Demagogues through history have known that big lies, repeated often enough, start being believed - unless they're rebutted."

Yep. You're spreading them. I just did some rebutting. Refute what I claim if you can. If you try, be warned: if you just try the same kind of rhetoric I will just laugh. You made the claims; support them. Tell us how much money is "in" Social Security, now. How much investment, how much savings. Cite references. (Really, you probably shouldn't bother, because that information doesn't exist. There isn't any significant amount of either one.)

Explain, if you will, how Medicare and Medicaid's "bargaining powers" are going to gain so much for us now, when they have had that same power, such as it is, for decades, and it hasn't done that for us yet. Huh?

As Albert Einstein once said: continuing to do the same thing repeatedly, and expecting a different outcome, is one definition of insanity. But have at it, man. I don't care if you're crazy. What concerns me is that you're so OBVIOUSLY wrong about that, but you're preaching it from the pulpit anyway. That's a different kind of insanity. That's just my personal opinion, you understand; I'm not making any accusations.

This has been interesting. I can honestly say that you made some good points. Too bad the others were bad enough to far outweigh them.
 
 
+8 # phaedrus 2011-10-13 11:26
Whoa, Lonny! Medicare has always had all the "bargaining powers" it needs, yet that has not benefitted us? As I understand it, Medicare is forbidden by law from using its potential "bargaining power" in order to control the prices it pays for prescription drugs.

Was I misinformed?
 
 
-8 # Martintfre 2011-10-13 13:35
medicare's bargaining power is this is how much we will pay for XXX (what ever XXX is) take it or leave the medicare system.

and many doctors are leaving the system, many of the new young brilliant minds are not going into medicine so they do not have to work 80+ hour weeks to get mediocre pay and sued to debt.
 
 
-6 # LonnyEachus 2011-10-13 13:40
No, you are making the same point I was: contrary to Robert's claim, Medicare and Medicaid won't use their "bargaining power" to help citizens. If they could, they already would have. But they didn't -- for whatever reasons -- and we have no reason to believe that will change.
 
 
0 # phaedrus 2011-10-14 13:52
Now I'm getting a better understanding of the positions you and Marinfre you and Martinfre hold. You aren't so much against the principles of Medicare and SS as you are indignant at what Congress has done with them both, right? Same here.

Martintfre's comment is essentially correct. That "bargaining power" is nearly worthless. Medicare won't ever have much "bargaining power" without Congressional initiative (that prescription drug thing, for instance).

I agree with you, Lonny, that "if they could (use their bargaining power), they already would have." So, it's not that they "won't" use that power, but that they can't. ("could--can't; would--won't" Worthwhile distinctions, in my view.)The "whatever reasons" are many, but some of them would no longer pertain if there were political will to change the status quo.
 
 
-3 # LonnyEachus 2011-10-15 06:37
Quoting phaedrus:

I agree with you, Lonny, that "if they could (use their bargaining power), they already would have." So, it's not that they "won't" use that power, but that they can't. ("could--can't; would--won't" Worthwhile distinctions, in my view.)The "whatever reasons" are many, but some of them would no longer pertain if there were political will to change the status quo.


Right... that was basically the point I was making: that Robert's claim that they would use their "bargaining power" to further benefit the populace won't happen. The reason for that, whether it is because they can't or they won't, is less important to my argument: if they were going to do that, they already would have.

My personal opinions about Medicare, Medicaid, and Social Security are really not important in regard to making that point.
 
 
+5 # Ken Hall 2011-10-13 11:39
Lonny: You've learned the conservative catechism well, and can spout it quite fluently. I wonder why you bother to post such bumkum on this thread, where people are too savvy and well informed to be taken in by it.
 
 
-3 # LonnyEachus 2011-10-13 13:45
I am NOT a "conservative", and I resent your use of the label. Just because I call BS on some obvious BS, I must be a "conservative"? Wow. That's a pretty big leap.

Facts are facts, and I do not blindly follow party rhetoric; yours or anyone else's. I make up my own mind about issues, based on what EVIDENCE is available to me.

If that happens to correspond to the views of some conservatives, then so be it. But you have no reason to lay that label on me. It is incorrect. I despise both "sides" approximately equally, for the incessant BS that they both spout.
 
 
+4 # Ken Hall 2011-10-13 18:50
And yet your talking points ignore real facts and follow the line laid out by Rush, etc. You are indistinguishab le from a conservative in your talking points, and your arguments easily refuted. I agree, facts are facts, you aren't entitled to make up your own, or define words as you will. Those paying attention will hold you accountable for your ideas. The ones you've shared so far don't hold water, there is so much inaccuracy, I don't know where to start.
 
 
+1 # LonnyEachus 2011-10-15 06:33
The fact that I say some of the things that other people do does not make me part of their political camp. I also say many things that they do not. My personal opinion is that Rush Limbaugh is a nutcase, regardless of whether he might agree with me on some things. No doubt Timothy McVeigh and even the Weather Underground agree with me on some things, too... that doesn't mean I am anything like them, politically or otherwise. They are nutcases, too, but essentially political opposites.

But this is the part that bugs me: if my statements are so easily refuted, and contrary to obvious facts, why haven't you actually refuted any of them, or presented any of those facts? Why have you instead, so far, done nothing but indulge in name-calling? You have added exactly nothing substantive to the conversation.

If you actually expect to be afforded any credibility, you have to make an argument that is backed by evidence. Or some kind of argument, anyway. Throwing labels around isn't worth much.
 
 
+10 # sk8sonh2o 2011-10-13 04:17
Poor people pay 'tax' with the blood of their children, who fight for our freedom and security.
 
 
+6 # sk8sonh2o 2011-10-13 04:39
Rich folks will just work 2% longer to cover their higher taxes. Do you really think they're going to stop earning as much as possible?
 
 
+3 # PiscesCurveUS 2011-10-13 09:51
The title should be "The 7 Most Prevalent Lies"; not 'biggest lies'.

But the Biggest Myth/Falsehood ('emperor's new clothes' type deal) today- as its been for centuries- is that "governments have to BORROW money" from the private pro's.

This is also a primary theme running through 3 centuries of American history (and that's history with a small h, [usually] not the oligarchs' officialdom boilerplate).
 
 
+4 # Steemdoff Moore 2011-10-13 14:00
As I meant to say ... Obama put the very architects of the Wall Street debacle in the White House cabinet and got unbelievable concessions for Wall Street ... not just a bailout but a watered down legislation that has NO teeth in it whatsoever (see Dodd-Frank)
 
 
+1 # KathyW33 2011-10-14 03:46
One side issue that no one seems to notice is the Self-Employment Tax. For individuals who are struggling to build up their business, it can be a real killer as it's applicable to everything you earn over $400 up to around $106,000. How interesting that once a person is making a good income they no longer have it! Think about it—a person who makes $10,000 a year may not have to pay income tax, but will still have to pay $1,330 in SE Tax! That's outrageous!
 
 
-8 # Robt Eagle 2011-10-14 04:18
Martinfre and LonnyEachus, sorry that the majority of folks on this site are incapable of thinking for themselves. They only see injustice for those who want to be coddled and taken care of by big government. They refuse to think, or for that matter, see that opportunity, taking risks, and hard work leads to success. They only want to have things handed to them and with that goes loss of ability to succeed individually and then by extension the entire country. Having government bail out any institution or individual destroys self esteem and need for cautious actions. If banks know they are going to be bailed out they take rediculous risk that is not prudent. If groups of people are favored (as in affirmative action, medicaid, and the like) then their incentive to strive for greater success is diminished, or taken away. Democrats have consisitently given freebies to the poor and minorities, and no progress has been made in those communities. Why? Because it is easier to continue to take easy money than be responsible and strive for success, generation after generation. Personal responsibility and the reality of failure is absolutely needed to get out of this financial mess the likes of Barney Frank and Chris Dodd got us into by fostering Fannie Mae to GIVE AWAY to those who could not afford houses or mortgages they could afford.
 
 
+5 # LonnyEachus 2011-10-15 06:45
Quoting Robt Eagle:
... If banks know they are going to be bailed out they take rediculous risk that is not prudent. If groups of people are favored (as in affirmative action, medicaid, and the like) then their incentive to strive for greater success is diminished, or taken away...


This is funny... or it would not be if not so tragic: the fact that the banks and financiers CAUSED the bubble by engaging in unwarranted (and dishonest) risk, is followed up by government rewarding them when those risks ended up in disaster. That's kind of like giving a child a new trust fund for burning down the house.

In regard to the "housing bubble" in particular, this is what I wonder: why did they give the money to the lenders directly (in effect bailing them out), when they could have given THE SAME MONEY to the borrowers instead, who could then pay off the lenders with that money? It all ends up in the same place, but everybody would be that much happier. The fact that they didn't is the strongest evidence that this was nothing more than "Crony Capitalism", and the hell with the little guy.
 
 
-1 # Innocent Victim 2011-10-14 06:36
Mr Reich, why don't you disassociate yourself from the Democratic Party and call for the formation of a progressive party?
 
 
+2 # seniorcitizen 2011-10-15 08:25
If the banks who used the bailout money to gamble with, will start to practice "real banking" again, it would resolve most of the problems that we face.The OCS people want to give that message to the banks and to Congress. There needs to be regulations on the banks. The bailout enabled gamblers that the big banks have become to continue "rolling the dice.".Money was given to the banks with no real guarantee that these banks would use that money for the good of the economy. It was like giving a gambling addict money to gamble with. Now it is time to payback the American people, whose tax money paid for this "fix. If the banks are not forced into some kind of repentance by the outcry of the world,and start using their hordes of cash to loan to business and start building our nation again, then we need to force Congress to put regulations or taxes on these banks so that the money will be used to build business and put people back into their homes that were stolen and open resources in our country for jobs. It will be best for America if we use our tax dollars that are gained through employment and growth to support the system that has worked for so long. Our payroll taxes and Soc. Sec. withholding will keep on working if we can get jobs and growth back. The greedy, corrupt and gambling addicted traders have to go to "rehab' and get straight again.
 

THE NEW STREAMLINED RSN LOGIN PROCESS: Register once, then login and you are ready to comment. All you need is a Username and a Password of your choosing and you are free to comment whenever you like! Welcome to the Reader Supported News community.

RSNRSN