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The 9 Biggest Conservative Lies About Taxes and Public Spending

Here are the things the corporate media won't tell you about the tax-cut rhetoric in Washington.

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7. We're Being Killed by Runaway Government Spending

Public spending has increased with the wars in Afghanistan and Iraq, and, temporarily, with the stimulus package. And it will rise in the future as more baby boomers retire. But beyond that, it's important to understand how “limited” our government really is relative to other wealthy countries.

Sabina Dewan and Michael Ettlinger of the Center for American Progress crunched the data and found that between 2004 and 2007, the U.S. ranked 24th out of 26 OECD countries in overall government spending as a share of our economic output. Only Ireland and South Korea, both relative newcomers to the club, had a more “limited government” than we did during that span. Again, we came in around 7 percentage points of GDP below the OECD average -- and almost 20 percentage points beneath that of big spenders like France

8. Conservatives Favor Low Taxes and Limited Government

The Right loves “Big Government” as long as it's pursuing their preferred agenda. What they don't like are the government's most popular functions – assuring a social safety net, protecting consumers and the environment, subsidizing education, etc. They don't want to debate priorities, so they claim an ideological preference for a smaller government while showering tons of money on the military, law-enforcement, corporate subsidies, etc.

That's why the share of the economy represented by government spending (at the local, state, and federal levels combined) has been remarkably consistent during the last 40 years or so, regardless of which party controlled the White House or Congress.

In the two years that Gerald Ford presented budgets, government spending as a share of GDP averaged 31.4 percent; in ultra-liberal Jimmy Carter’s four years, it dropped to 30.7 percent; Ronald Reagan, the patron saint of fiscal conservatism, came into office, and it rose to 32.2 percent. It nudged slightly higher during the first George Bush’s term in office, then dropped to an almost Nixonian 30.3 percent during the Clinton years, before rising to 31.6 percent during the second Bush administration.

Looking at the other side of the ledger, overall government revenues have also remained relatively stable, but the pattern is reversed. The government’s take, as a share of GDP, dropped during the Ford era, rose again under Carter, and fell again under Reagan. Revenues rose by almost 2 percent under Clinton and fell by a percent and a half under George W. Bush. (The only exception: government revenues rose from 27.3 percent of GDP during the Reagan years to 27.6 percent under George Herbert Walker Bush – that was the “peace dividend.”)

Although the government taxes and spends at fairly similar rates, under Republican leadership the nation shells out a bit more for government services and takes in just a bit less in taxes. With a $15 trillion economy, those little differences add up to pretty big deficits, and this, rather than hot school lunches for poor kids, is responsible for a large chunk of our federal debt.

Given that reality, it's a wonder that conservatives have managed to convince the mainstream media and much of the country that they’re the fiscally responsible ones who are always ready to step in and clean up the nation’s budgetary mess.

9. Taxes on Top Earners Are Actually Taxes on 'Small Businesses'

For years, Republicans have pushed the spin that most of the Bush cuts for the highest earners were going to “small business owners,” the proverbial lifeblood of Small Town U.S.A. Then Republican national committee chair Ed Gillespie launched the meme in a 2003 speech, saying that “80% of the tax relief for upper income filers goes to small businesses.”

 
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