On December 6, 2011, President Barack Obama made a speech in Osawatomie, Kansas. In the speech he said some things that could be considered a stretch, and told some out and out whoppers. For you Obama Kool-Aid drinkers, let’s examine some of the things he said.
According to CNS News, in his Osawatomie speech Obama “…argued that, while a limited government that preserves free markets ‘speaks to our rugged individualism’ as Americans, such a system ‘doesn’t work’ and ‘has never worked’ and that Americans must look to a more activist government that taxes more, spends more and regulates more ….” So, with a little fact checking by The Washington Post (no bastion of conservatism), let’s make this the focus of this article.
In his speech, Obama said, “Some billionaires have a tax rate as low as 1 percent — 1 percent. That is the height of unfairness.” But the only evidence that the White House could offer for this quote was part of a conversation on Bloomberg TV, in which Gigi Stone made this assertion during a discussion about the tax strategies that the very wealthy use to avoid paying taxes. Stone quoted from a Bloomberg News article that reported on tax strategies to defer paying capital gains taxes, but the article never made the 1 percent claim. An administration official conceded that the White House had no actual data to back up Obama’s statement. Of the top 400 taxpayers (in 2008, the latest year available), 30 paid an average tax rate of between zero and 10 percent, 59 paid an average tax rate of 30 to 35 percent, while 238 paid a marginal tax rate of 35 percent and above. Only 17 had a marginal rate of zero to 26 percent. The average tax paid by the top 400 taxpayers was nearly $50 million. Stretch or whopper? Your call.
Obama also said, “…Massive deficits that have made it much harder to pay for the investments that built this country and provided the basic security that helped millions of Americans reach and stay in the middle class….” Obama blames the Bush tax cuts for “massive deficits.” While it is true that the Bush tax cuts caused deficits, they were not the only reason. Congressional Budget Office (CBO) data show that the largest cause of deficits was increased spending, which accounted for 36.5 percent of the decline in fiscal position. The Bush tax cuts, and some Obama tax cuts, were responsible for just 24 percent. Does anyone remember that Obama and Democrats called for almost $1 trillion for a stimulus? And did that affect job growth? Stretch or whopper? Your call.
Obama continued, saying, “…it’s not as if we haven’t tried this theory [tax cuts]. Remember in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history.” The 2001 tax cuts were marginal rate cuts, which included all taxpayers, not just “for the wealthy” as he said, and the 2003 tax cuts included a reduction in taxes on dividends and capital gains. Stretch or whopper? Your call.
He went on, ” And what did they [tax cuts] get us? The slowest job growth in half a century.” Obama’s claim of the slowest job growth includes the loss of jobs under his own (as well as Bush’s) administration. Further, while the Bush tax cuts have been criticized for being inefficient and poorly designed, it is a stretch for Obama to blame slow job growth on the tax cuts. Still further, it is a stretch to directly link the 10 year old tax cut to the present slow job growth. And it is just as big a stretch to claim that Bill Clinton’s tax increases resulted in a gain of 23 million jobs. Stretch?
According to the Bureau of Labor Statistics (BLS), job growth has been slower under Obama than under Bush: 40,500 jobs a month versus 68,000 jobs per month.
Obama also said that there is evidence that higher income disparity can affect economic growth, but gave no reference for that statement.
While it is true that Obama inherited an economic mess, and he does not deserve blame for the job losses early in his administration, it is getting very tiring to hear him blame all his problems on the Bush tax cuts, especially three years into his administration.
So if Obama stretched the truth, and told some, ah, stories, how can we believe anything in his speech? I will, of course, be accused of cherry picking. But remember, cherry picking goes both ways. As Ronald Reagan said, “Facts are stubborn things.”
But that’s just my opinion.