It's the revenue, stupid! No really, look it up!

So here I sit, at the computer listening to the Sunday morning talk shows. The Republican chorus of “we have a spending problem” is echoing across the airwaves from station to station to station. The verbiage is nearly exact from spokesperson after spokesperson.

“We have a spending problem! We have a spending problem!”

Talk about mass denial of ALL the facts.

Then I glanced back at my computer screen. I was examining a table provided by the Office of Management and Budget entitled “Historical Source of Revenue as Share of GDP.” Yes, I was reading about revenues, not spending. I know that spending has increased. How else do you conduct two wars, implement a Medicare drug bill, increase tax expenditures (tax havens/corporate welfare), and increase defense outlays without increasing spending? It goes without saying. Then… then the recession hit. Spending was out of control even before the recession. But what was happening to revenues? I never hear about revenues. (NOTE: The only way to lend context is to compare revenue as a percent of GDP. Revenue increase without the context of growth is a meaningless number.)

Well, according to OMB, revenues were 20.6 percent of GDP in 2000 and we were paying off Reagan/“Bush 41” debt. In 2001, after the first round of “Bush 43” tax cuts were implemented, revenues dropped to 19.5 percent of GDP and in 2002 revenues were 17.6  percent of GDP. We started running deficits. Revenues were decreasing rapidly, despite modest GDP growth. Then, in 2003, the second round of “Bush 43” tax cuts was implemented. Revenues in 2003 were 16.2 percent of GDP and in 2004 were 16.1 percent of GDP. In four years, revenues had been reduced by 20 percent, from 20.6 percent of GDP to 16.1 percent of GDP.

These facts are indisputable. The source is indisputable (OMB). By 2004, revenues had been reduced to their lowest level since 1951 (pre-Medicare). That’s what tax cuts do if accelerated GDP growth doesn’t make up for revenue loss due to rate reductions. Tax cuts reduce revenues. Again, tax cuts reduce revenues. They have historically. It’s GDP growth that increases revenues. It has historically. Tax cuts to the wealthy do not always increase GDP growth. As a matter of fact, they seldom if ever do. That, too, is proven historically. There is no credible evidence that tax cuts to the wealthy have ever increased GDP growth more than normal. It is a lie to claim so. Always has been. Hence, the title of my book, “YOU ESSAY: Supply-Side Lies and the Middle Class Demise.”

Let’s proceed and further examine the figures from 2005-2009. The case for GDP growth increasing revenues is seen in these figures. Early on, the housing boom (or bubble) was in full swing and unemployment was low because of this boom (or bubble). Home construction was near 14 percent of our GDP. That means more working people contributing to revenues. In 2005 revenues grew to 17.3 percent of GDP, reaching 18.5 percent of GDP by 2007, still 10 percent below the 2000 figure, but increasing.

Then the recession hit (late 2007 – negative GDP growth). Construction dropped below 10 percent of GDP with massive unemployment from the building sector. Over 5 million jobs were lost in 2008 alone. By 2009, revenues had been reduced to 15.1 percent of GDP. And they remained that way through 2010 and are now still under 16 percent of GDP. Revenues are over 20 percent below their pre-Bush levels. About half of our deficit is due to revenue reduction. Had revenues remained at 20 percent of GDP, our deficit would be less than $300 billion today. Revenues matter. GDP growth matters because it fuels employment. It’s not just spending.

But Republicans say we only have a spending problem, or so we are exhaustedly told, over and over and over. Remember. It’s only spending.

Again, no one denies that spending has increased. Just to provide the same services for more people (population increase) requires such, much less paying out more unemployment insurance and low-income assistance after the Bush Recession hit. Numerous studies have detailed where these spending increases have come from, some of which came from “safety net” provisions to aid the unemployed during hard times. But that is not so much the source of our increased spending as it is the result of decreased employment and wage regression.

The overwhelming consensus of numerous non-partisan studies is that most, MOST spending increases that contributed to our current deficit came from unpaid wars, increased tax expenditures (tax havens/tax breaks), the Medicare drug bill, and lastly… bailouts and stimulus. Unemployment assistance, bailouts and stimulus were not the biggest increases in spending. Each war individually cost more than the stimulus. The Medicare drug bill cost more than the stimulus. Defense increases from 2001-2009 cost more than the stimulus. No Republican ever proposed paying for any of those spending increases while they were in charge. Yes, we increased spending, especially during the Bush administration. President Bush never vetoed a spending bill put in front of him, despite having veto-proof houses had he vetoed any of them. He could have insisted on paying for things. He did not, at any time. It was cha-ching on the credit card for eight years.

Here is where the mass denial comes in. Republicans barely ever acknowledge that they voted for unpaid tax cuts, unpaid wars, unpaid Medicare expansion, and unpaid defense increases, and they never, NEVER, acknowledge revenue reduction due to their policies. Never. They seldom even talk about Bush. He didn’t attend the 2012 convention, nor was his name uttered but for a couple of times. Republicans deny that the Bush Congress spent like drunken sailors and deny that revenues are a problem. I’m listening to it now. Some deny Bush, but not his policies. They project the problem on Bush, but continue to promote the same warmed over policies that caused our mess. Ahhhh, blame is so easy. It requires no thought or reflection and washes away responsibility. It’s classic, textbook denial.

It’s like watching spoiled children whine, never caring about anyone or anything else. Only worrying about what they can get, no matter what it does to anyone else. When I was kid, I’d get a whack on the butt and told to behave. Nowadays a “timeout” is used for reflection on bad behavior. But the Republican “parents” (billionaires) think their children (representatives) should have everything they ask for and that’s all there is to it. GIVE ME WHAT I WANT... or I’ll ruin the country.

What a bunch of spoiled-rotten folk posing as “job creators.” They don’t care about jobs. If they did we’d have a lot more “Made in America” products, and purchasers (the work force) would earn enough to afford their products. No, job creation is not their goal. They are driven by greed and greed only.

The stock market is booming. Corporate profits are at their highest levels ever. U.S. income disparity is at the bottom worldwide and getting worse. What more do they want! We’d be a much better country if they lived in those foreign mailboxes, with their trillions ($5 trillion to $10 trillion) used to avoid taxation and the rest of us could rebuild a broken economy they so distorted to their unfair advantage.

Jerry Straka is a resident of Whitefish.