Rhetoric is a good thing–except when you have the facts wrong. And, boy, the relentless, daily idiocy spewed out of the mouths of our elected officials about the economic crisis is astonishing. Consider, this morning, Speaker of the House John Boehner.
Two days ago, Boehner gave a speech to the Economic Club of New York where he demanded cuts of "trillions" of dollars in return for a Republican vote to increase the debt limit. In that speech, he asserted:
We’re calling for an end to the government spending binge that is crowding out private investment and threatening the availability of capital needed for job creation.
Well, actually, that’s wrong, as Bloomberg News reporters write:
“Look at interest rates. Look at capital spending,” said Nariman Behravesh, chief economist of IHS Inc., a research firm based in Englewood, Colorado. “It’s very hard to come to a conclusion that there’s any kind of crowding out.”
The cost of borrowing is low by historical standards. Yields on 10-year Treasury notes were 3.21 percent and yields on 2-year Treasury notes were 0.59 percent at 5 p.m. in New York yesterday, according to Bloomberg Data. Average spreads on investment-grade corporate bonds have narrowed from 1.64 a year ago to 1.39 on May 9, according to Barclays Capital.
The TED spread, the difference between what banks and the U.S. government pay to borrow for three months, fell 2.2 basis points since May 9, the biggest drop since April 5. A narrowing spread means banks are more willing to lend. The 23.87-point spread is just below the two-year average.
Business investment in equipment and software was up 15.3 percent last year and 11.6 percent at an annual rate in the first quarter of this year, according to the U.S. Commerce Department. [emphasis added]
As usual for Republican talking points, Boehner claimed that higher taxes hurt economic growth and caused a recession in the 1990s. Uhhhh…sorry, facts are pesky:
The speaker didn’t mention a 1993 tax increase that raised the top individual marginal rate to 39.6 percent, where it stood until 2001. In 1998, the government recorded its first budget surplus in almost 30 years.
The U.S. economy grew at an annual rate of 4.1 percent in 1994, the year after Congress passed the second tax increase of the decade. The growth rate dropped to 2.5 percent in 1995, and thereafter rose to 3.7 percent in 1996. The economy grew more than 4 percent a year from 1997 through 2000. [emphasis added]
In fact, we now know, per the Citizen For Tax Justice, that it was the Bush tax cuts(along with two immoral wars and the financial crisis in 2008) that caused the deficits and long-term debt.
The Boehner claim that the financial crisis was “triggered" by Fannie Mae and Freddie Mac? Opppssss:
That differs from the conclusions earlier this year of the Democratic majority on the congressionally appointed Financial Crisis Inquiry Commission. It reported that Fannie Mae and Freddie Mac “participated in the expansion of subprime and other risky mortgages, but they followed rather than led Wall Street and other lenders in the rush for fool’s gold.”
Let’s get real. As CTJ points out, Boehner and Paul Ryan are not out to reduce the deficit or the debt:
The plan is motivated not by a desire to balance the budget but rather by the ideological goal of reducing the size of government to something that would be unrecognizable to Americans today.[emphasis]
As some know, I have argued for a long time that the whole BI-PARTISAN obsession with the deficit and the debt is crazy. There is no debt or deficit crisis. Today, I chose to focus on the whoppers put out by Boehner. But, we need to challenge similar whoppers, coming from both sides of the aisle, about the phony debt and deficit "crisis".
