Kirk Cherry-Picks And Twists Some Stimulus Stats
Like everyone in his caucus,
Rep. Mark Kirk voted against the economic recovery package when it came
up for a vote a few weeks ago. While he has continued to insist that some form of stimulus is “necessary,” he has also persisted in raising flags about the package’s cost. ...
Like everyone in his caucus,
Rep. Mark Kirk voted against the economic recovery package when it came
up for a vote a few weeks ago. While he has continued to insist that some form of stimulus is “necessary,” he has also persisted in raising flags about the package’s cost. Talking to the Tribune's Rick Pearson on WGN Radio yesterday, he resorted to using misleading and selective statistics to make his case.
Here’s Kirk’s first problematic statement:
KIRK: The Congressional Budget Office, which is the real experts here … they have projected that of the stimulus, only about $30 billion can actually be spent in 2009, of the $800 billion we would borrow.
Kirk is pulling this figure from the CBO’s report titled “Cost Estimate for H.R. 1 As Amended and Passed by the House.” While it’s true that only $29 billion of the $276 billion appropriated for infrastructure and other capital improvements will be spent by September 30 (the end of the 2009 fiscal year), it’s important to note that $115 billion will subsequently be spent on such projects during the 2010 fiscal year -- when America will still be stuck in a recession.
Furthermore, by cherry-picking one figure, Kirk ignores all of the other spending that’s included in the bill. This includes $62.5 billion in FY 2009 tax cuts to American families and businesses. Many of these provisions were added to the measure to placate conservatives, despite the fact the tax breaks aren’t nearly as stimulative as public spending. (Indeed, 36 Senate Republicans voted in favor of a stimulus amendment consisting of nothing but tax cuts that would have cost $3.1 trillion over ten years!)
The bill also provides timely, targeted, and temporary resources to key social service programs. In FY 2009 alone, the House version allocates $78.1 billion to programs like food stamps and to budget-strapped states. This is spending that (as we’ve repeated ad nauseum) puts money in the pockets of people who will spend it quickly, fueling economic growth and ultimately creating more jobs.
Here’s Kirk’s other misleading use of statistics:
KIRK: We calculate that right now the federal debt requires each American to spend about $56,000 more in taxes over their life. Once the stimulus is passed, your tax bill will go up to $76,000. That means that the combined debt spending is ripping the equivalent of a college education from each family in America to service the debt we are incurring.
I’m not sure if Kirk is aware, but America has a graduated tax system. As a result, I’m not subjected to the same tax rate as, say, Bill Gates. That Kirk uses the average tax burden as opposed to the median tax burden is intentionally misleading.
That being said, the economic recovery package will increase the nation’s debt, no question about it. But the benefits of a massive injection of federal funds into the economy far outweigh the costs. To give one example: Paul Krugman estimates that the Senate “compromise” fashioned over the weekend -- which cut $86 billion from the House bill -- will "ensure that we have at least 600,000 fewer Americans employed over the next two years."
With the economy in peril, Kirk's purportedly prudent budget hawkery is a bit sickening, particulary from a guy who supported the Iraq war, the Bush tax cuts, and the TARP plan.
Comments
For those of you who didn't make it to Kirk's economic-48 fish fish from the harbor will get you town hall in Waukegan, you should know he touted economic decline as a way to clean the environment. He actually said that the good news about recession (depression) was that pollution was on the downswing right along with the economy. He also touted less outsourcing as a benefit because the economies of most of the rest of the world are tanking too. However, he was wrong on that one. We've since learned that lots of financial institutions used their TARP funds to outsource financial jobs. It became such a problem that Bernie Sanders introduced an amendment to the current stimulus package to prevent recipients of stimulus money from using it to outsource. Kirk's idea of stimulus? Tort reform. Yup. He actually said that too.
I attended a meeting of advocates for skin disease research in D.C. last Thursday where Rep. Kirk made most of the points expressed above in the audio clip. However, he also mentioned that it might be difficult to raise more money through issuance of bonds, He stated that a recent auction by Great Britain had failed. I went to check on that, and found that there had been a recent failure in Germany, but not in G.B. His point, of course, was that there is a limit to the amount of bonded indebtedness that can be incurred by a nation.
When he asked for questions from the floor, I mentioned that one way to shore up investor confidence is that the government issuing the bonds is able to assert its taxing authority, since bond interest payments must primarily come from tax revenue.
It was amusing to watch him squirm in response to the suggestion that taxes might be a GOOD thing. I believe that the creation of a new 50% bracket at about $1,000,000 could be a big part of a realistic part of a recovery plan.
It is time to look at reorganizing NAFTA but not the way Obama wants to. I suggest a non competitive free trade tarif imposed on imports that come from businesses that operate below the norm of their industries operating costs.
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