Let’s separate facts from the spin
October 19, 2012
In response to the Other Voices article, “Democrats need to emphasize historical facts” on Sept. 22, the writer is entitled to his opinion, but his historical facts are not factual and/or they represent his personal spin.
Quote: “Obama is often blamed for the debt’s existence.”
Fact: Since Obama took office the U. S. debt has increased by $5 trillion.
Fact: Obama’s recent budget sent to the Senate was defeated 98 to 0 and his party is the majority in the 100 member Senate.
The major problem with our increasing federal debt is spending, not revenue.
Quote: “Reagan tried ‘trickle down’ economics. On seeing it didn’t work, He raised taxes.”
Fact: Reagan cut the top federal income tax rates from 70 percent to 35 percent. At the 70 percent top rate, tax revenues were 500 billion dollars. The new tax rates with the top rate at 35 percent increased revenues going into the U.S. Treasury to $1 trillion.
Quote: “There was a budget surplus at the end of Clinton’s presidency.”
Fact: There was a surplus. But, the article did not mention that Clinton reduced our Navy by 100 ships, he cut our Army and Marine Corp. personnel by 800,000 and he cut the CIA budget by 25 percent. All these cuts are to things that affect our national security.
Fact: Clinton also raised the percentage of social security payments subject to federal income taxes from 50 percent to 85 percent.
There were no costly wars in Iraq or Afghanistan during the Clinton presidency. He treated violent attacks against the United States as crimes, not as acts of terrorism.
Quote: “Bush renewed Reagan’s experiment by handing out tax cuts depriving the country of $1.3 trillion in revenues over 10 years.”
Fact: The Bush cuts we passed by Congress in 2001. They in fact were the federal tax rates for 12 years.
Fact: As a result of the 2001 tax cuts, 10.8 million people at lower income levels do not pay any federal income taxes.
Fact: The new tax rates implemented in 2001 increased the federal tax revenues by 42 percent starting in 2003 and through 2007.
Fact: Obama had the majority in the House of Representatives and in the Senate at the end of 2010. He could have changed the federal tax rates at that time back to what they were in 2000. He did not change the tax rates. Why?
Fact: The major problem with our increasing federal debt is spending, not revenue.
Quote: “Congress accommodated financial industry interests by exempting all transactions involving derivatives from regulation. Clever managers inflated a debt bubble that made them very rich. They won at the expense of untold numbers of people who lost homes, jobs and life savings.”
Fact: During the 1990s the federal government wanted to get more people that could not afford to buy a house, into home ownership. A noble desire! But requiring banks to loan money to people without sufficient income to repay these loans was the primary cause of the financial disaster discover just before the 2008 elections.
Fact: Banks and insurance companies are financial institutions that are heavily regulated to prevent institutional failures. This public interest has never been discarded.
Fact: Banks were required by the federal government to make home loans to people that did not have the resources to pay back these homeowner loans. Many of these bad loans were bundled with other loans and sold to both domestic and foreign investors and banks.
Fact: When these toxic loans became known many large banks and insurance companies that loaned and/or insured them lost hundreds of billions of dollars that resulted in the financial collapse at the end of 2008.
Fact: Two agencies Fannie-May and Freddie-Mac used by the federal government to insure these bad loans also lost billions of dollars.
Fact: Tens of thousands of home loans were in default. Banks had to foreclose on home loans or were forced to make short sales on other loans, resulting in the destruction of the housing market and home values.
William Klein lives in Penn Valley.