Wednesday, December 09, 2009

Barack tells the truth on the deficit: largely because of GOP tax cuts, health bill will shrink it, job-creating investments required

There is a false choice between investments in jobs and reducing the deficit. The more we get people working -- through government spending and investments, like the Recovery Act -- the less we spend on unemployment insurance and the more tax revenues coming in from people who are working. The real reason why the deficit is so large is because Republicans cut taxes on rich people (lowering the tax rate on income above $250,000 from 39.6% to 36%), and because income inequality is so stark, rich people make *so much* money, and the federal government didn't get that extra 3.6% of all that income from CEOs and top-level bankers and hedge fund managers and entertainment stars. That tax cut is what has largely caused the deficit we're facing now. So to have Republicans who caused the deficit complain about it now as a reason to avoid job-creation investments is "a sight to see."

Here are clips of his speech yesterday on creating jobs.

And the transcript of this clip:

The fear among economists across the political spectrum that was — was that we were rapidly plummeting towards a second Great Depression. So, in the weeks and months that followed, we undertook a series of difficult steps to prevent that outcome. And we were forced to take those steps largely without the help of an opposition party, which, unfortunately, after having presided over the decision-making that had led to the crisis, decided to hand it over to others to solve.
… Now, there are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. This is a false choice. Ensuring that economic growth and job creation are strong and sustained is critical to ensuring that we are increasing revenues and decreasing spending on things like unemployment insurance so that our deficits will start coming down.
… So let me just be clear here. Despite what some have claimed, the cost of the Recovery Act is only a very small part of our current budget imbalance. In reality, the deficit had been building dramatically over the previous eight years. We have a structural gap between the money going out and the money coming in. Folks passed tax cuts and expansive entitlement programs without paying for any of it — even as health care costs kept rising, year after year. As a result, the deficit had reached $1.3 trillion when we walked into the White House. And I’d note: These budget-busting tax cuts and spending programs were approved by many of the same people who are now waxing political about fiscal responsibility, while opposing our efforts to reduce deficits by getting health care costs under control. It’s a sight to see.

Finally, if you'd like to see the entire speech, it is here:

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