Supply Side? Romney tells us it's a fraud

[scandal 951]

Here's something I haven't heard anyone in the media pick up on in the wake of Romney's 47% tape.

On Monday night, Romney gave a hasty news conference to attempt damage control right after the first segment of the tape was released.

At the news conference, Romney spun thusly:

"As I point out, I recognize that among those that pay no tax, approximately 47 percent of Americans, I'm not likely to be highly successful with the message of lowering taxes. That's not as attractive to those who don't pay income taxes as it is to those who do."

To me, this statement is far more damaging to Romney, the Republican brand, and conservative ideology than the secret tape itself.

What's stunning to me about what he said Monday night is that it entirely contradicts decades of Republican orthodoxy on trickle-down, supply-side economic theory. From Ronald Reagan/David Stockman days in the 80s, the concept was: lower taxes at the highest income distributions, which would stimulate economic activity and investment, and thus create jobs, and thus promote income growth and social mobility at the lower income distributions. I.e. - the rich get richer, which lets everyone get richer. A rising tide floats all boats. You know, trickle down from top to bottom.

There has been a true electoral genius to this economic theory. It convinced voters to give Reagan two terms. It gave GB 41 & 43 the White House. It brought us Gingrich's Contract with America in 1994, and the Tea Party to office in 2010, and propelled Grover Norquist to signing up all the nutters to his tax pledge. Pretty potent idea. The genius lies in the way it's allowed rich people to sell a policy which directly benefits them (tax cuts for the wealthy) to those who don't directly benefit (everyone else). How do you get poor people to vote for tax cuts for the rich? Convince them that they too will benefit from the tax cuts at the top.

The bombshell in what Romney said on Monday night is that he directly contradicts this theory. He said he doesn't expect "the 47%" to see any benefit in his tax cut policies, since they're not paying any income tax anyway. What does this mean? Romney is telling us flat out that supply side theory is bullsh1t. That even he doesn't see any reason why someone not getting a tax cut should support tax cuts for those who do pay high tax rates. That there's nothing in it for them, and that there's really no reason for those not getting the tax cuts to support them. Really what he said is that supply side is a prank played by the rich on the rest of us. Well, I've always known that. But it's nice to hear the GOP candidate for President say that to the nation on live television.

[one...two...tree 2,762]

Game over.

[Dakine10 5,452]

The bombshell in what Romney said on Monday night is that he directly contradicts this theory. He said he doesn't expect "the 47%" to see any benefit in his tax cut policies, since they're not paying any income tax anyway. What does this mean? Romney is telling us flat out that supply side theory is bullsh1t. That even he doesn't see any reason why someone not getting a tax cut should support tax cuts for those who do pay high tax rates. That there's nothing in it for them, and that there's really no reason for those not getting the tax cuts to support them. Really what he said is that supply side is a prank played by the rich on the rest of us. Well, I've always known that. But it's nice to hear the GOP candidate for President say that to the nation on live television.

Romney's only defense is to say that what he really meant is the 47% don't know enough to realize that supply side would work, thus won't be swayed to vote for him. He's damned either way, although he probably just won't comment on it at all. At this point, he's alienating too many people in too many groups. He just seems out of touch with reality at times.

IMO, Romney knows better than anyone that supply side doesn't "trickle down". He's a business man. He has seen supply side economics in action and has done well. Throughout history, supply side has been referred to by it's more well known catch phrase "the rich get richer, and the poor get poorer". The fact that Romney actually said this illustrates that he doesn't think things through, and he doesn't link cause and effect all that well. I'd hate to see this guy with his finger on the button. I really wouldn't want him in the same room as the button.

[Mr. Big Dog 10,747]

[Penny Lane 8,159]

Yet there are still people who are claiming Romney's doing nothing but telling the truth.

In a way, he is, but not the truth he's claiming to tell.

Edited September 20, 2012 by Evylin

[mawilson 2,133]

He said he doesn't expect "the 47%" to see any benefit in his tax cut policies, since they're not paying any income tax anyway. What does this mean?

I don't think his message is that deep. I think he meant that your average Joe on welfare couldn't care less about lower taxes - he personally wouldn't see more money in his paycheck. It is safe to assume that Joe Welfare knows nothing about the trickle-down effect of lower taxes for the rich, and therefore Mitt's message would not resonate with him.

[Mr. Big Dog 10,747]

I don't think his message is that deep. I think he meant that your average Joe on welfare couldn't care less about lower taxes - he personally wouldn't see more money in his paycheck. It is safe to assume that Joe Welfare knows nothing about the trickle-down effect of lower taxes for the rich, and therefore Mitt's message would not resonate with him.

Joe Welfare has a paycheck? Lower taxes for the rich trickle down? When does that happen? We've done this "trickle down" thing for a very long time now and either there really is no trickling down going on at all or the trickle is so slow that it still hasn't arrived decades later. Or the trickle is so thin that it evaporates on the way down.

[JohnR! 5,495]

What's stunning to me about what he said Monday night is that it entirely contradicts decades of Republican orthodoxy on trickle-down, supply-side economic theory. From Ronald Reagan/David Stockman days in the 80s, the concept was: lower taxes at the highest income distributions, which would stimulate economic activity and investment, and thus create jobs, and thus promote income growth and social mobility at the lower income distributions. I.e. - the rich get richer, which lets everyone get richer. A rising tide floats all boats. You know, trickle down from top to bottom.

That is the biggest fallacy ever. If a rising tide floats all boats, wouldn't we be better off with a tax cuts for the middle-class then? If the middle-class has more money, they will spend it across the board and everywhere, thus creating jobs and making money flow, which is what really stimulates the economy. If a rising tide lifts all boats, it follows that the more money left to the middle-class, the higher the tide which will lift all boats. Trickle up works. It is the middle class that sustains the economy and makes it move. The more the middle class spends, the more jobs are created and the money trickles up to all those business owners who see an increase in demand for their goods.

Edited September 20, 2012 by Gegel

[Teddy B 17,251]

He said he doesn't expect "the 47%" to see any benefit in his tax cut policies, since they're not paying any income tax anyway. What does this mean?

I'm no fan of Romney's, but I believe it means exactly what it says. The 47% who pay no taxes will see no benefit in tax cut policies. It has nothing to do with "trickle down" economics. If their not paying taxes to begin with then what would tax cuts do for them anyway. You're digging to deep for something that's not there.

[JohnR! 5,495]

I'm no fan of Romney's, but I believe it means exactly what it says. The 47% who pay no taxes will see no benefit in tax cut policies. It has nothing to do with "trickle down" economics. If their not paying taxes to begin with then what would tax cuts do for them anyway. You're digging to deep for something that's not there.

Alas, it seems Romney is disavowing trickle down economics.... Shouldn't all boats be lifted by the tide?

[Mr. Big Dog 10,747]

I'm no fan of Romney's, but I believe it means exactly what it says. The 47% who pay no taxes will see no benefit in tax cut policies. It has nothing to do with "trickle down" economics. If their not paying taxes to begin with then what would tax cuts do for them anyway. You're digging to deep for something that's not there.

That's contradicting the rationale of the very idea of trickle down economics which Romney is promoting.

[Teddy B 17,251]

Alas, it seems Romney is disavowing trickle down economics.... Shouldn't all boats be lifted by the tide?

If you lower the price of something I'm not paying anything for to begin with, what difference does that make to me? Nothing. Most people aren't looking any further than that when it comes voting time.

[JohnR! 5,495]

If you lower the price of something I'm not paying anything for to begin with, what difference does that make to me? Nothing. Most people aren't looking any further than that when it comes voting time.

Lowering taxes for the middle-class and lowering prices are different things.

Lowering taxes puts more money into the economy which generates demands and jobs....

[Teddy B 17,251]

Lowering taxes for the middle-class and lowering prices are different things.

Lowering taxes puts more money into the economy which generates demands and jobs....

Most people don't understand that. All they know is that they're not paying any taxes now, so what will lowering taxes do for me? That's how most people think, and that's the point Romney was trying to make.

Edited September 20, 2012 by Teddy B

[Mr. Big Dog 10,747]

Most people don't understand that. All they know is that they're not paying any taxes now, so what will lowering taxes do for me? That's how most people think, and that's the point Romney was trying to make.

What people do understand, however, is that a proposal to cut tax rates to the effect of $5 trillion dollars over the next decade which is to be offset by eliminating deductions and tax credits that leave them with no tax liability today means that they will end up paying income taxes - i.e. that their taxes will go up in order for taxes on the upper end of the income scale to come down.