Libs Target Supply-Side Economics

RUSH: Welcome back. It’s Open Line Friday. I am El Rushbo. And let’s go to the audio sound bites. I want to start with number four.

Remember, yesterday I made a point that there’s no economic stimulus tied to the extension of these tax rates. I pointed out that Obama can say after two years, ‘Hey, we did supply-side, and it didn’t work. We tried Reaganomics. We tried to give the rich a tax break, and we had the tax rates reduction, and we had all this and it didn’t work. Tax cuts don’t work.’ And he can forever bury the whole notion of supply-side working in two years. And I said this is part of the strategery here. We have an audio montage of Democrats making this point.

HARKIN: What we bought into is we are going to accept the Bush era economic formula, the trickle-down formula.

BROWN: Tax cuts for the rich trickle down. It doesn’t work.

ROBINSON: The classic supply-side idea.

VITNER: He’s embracing supply-side economics.

REICH: You supply siders, in your soul of souls, you really believe that if you give tax cuts to the top, the benefits trickle down and everybody’s better off.

DEFAZIO: If you believe in supply side, trickle-down economics, hey this is your thing

RUSH: See? See? Do I know these people or do I know these people? This is not supply-side because nothing’s being cut. Not one income tax rate is being reduced. There is not one income tax rate reduction in this bill. There is no supply-side here, folks, but that’s what they’re calling it. And they know it won’t work. I’m here to tell you now that there is no economic stimulus in keeping these tax rates the same. The only thing there is is less harm committed. If tax rates went up you’d destroy even more business, more business planning, you would take more capital out of the hands of people, there would be less economic activity in the private sector. Unemployment would go up and economic activity would decline. That’s the benefit of holding the tax rates the same. But there is no economic stimulus by keeping them the same. But you can see here what’s being set up. And the Drive-Bys are not gonna correct these people on this. Nobody will. And I don’t hear a Republican standing up and saying, ‘No, no, no, these guys are lying to you.’ I don’t hear Republicans standing up and correcting all this. As usual, ladies and gentlemen, it is left to I, El Rushbo, which I have been doing all week.

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RUSH: Sarasota, Florida, Rob, you’re next. Hello, sir.

CALLER: Hello, Rush.

RUSH: Hi.

CALLER: Rush, it is an absolute honor to speak with you. This has been driving me crazy all week. I have two quick points. The libs say extending the current tax rates, the Bush tax rates would add to the deficit and debt. Well, the payroll tax is essentially Social Security and Medicare taxes, and they’re already broke. So a 2% reduction of payroll taxes in the Social Security would just make the problem worse and add to the shortfall. Point number two. The libs also say paying unemployment benefits is the best thing we can do to stimulate the economy. We’ve heard Nancy Pelosi and all the libs talking about how much of a stimulus it is to pay unemployment benefits, better than windmill farms and better than the Chevy Volt. So if that’s true, why not use unspent stimulus money to pay for the unemployment? And they need to be nailed on this, and that’s what I had to say.

RUSH: Well, we have asked that question prior to today. We’ve actually given the answer to it, too. The reason they don’t want unemployment benefits paid outta stimulus is because that stimulus is a slush fund for their reelection in 2012. That stimulus was all about election campaigns in 2010 and 2012. It’s about nothing else and they want more spending. I mean they’re not on the page that says we gotta reduce spending or even pay for the spending that we engage in. They just want more. I mean that’s half of the reason why they’re proposing this unemployment extension. They just want to spend more money. That’s how they’re buying votes. That’s how they expand the base of their party, in their thinking, pure and simple. They don’t care about the country. They don’t care about any of these things. They don’t care about the unemployed. If they cared about the unemployed they’d be doing everything differently than they are doing. They are perpetuating unemployment. They are extending unemployment, not just unemployment benefits. They are robbing people of their dignity. They are doing deleterious things for everybody that lives in this country in the name of compassion and in the name of expanding their business and their importance and their power, pure and simple.

Joe in Jefferson City, Missouri. Hi.

CALLER: Thank you, Rush, for giving voice to the common person. And I got a small point of order. If we adopt the verbiage of the left, it’s gonna be hard to win an argument. My point is we don’t really tax the rich. We tax productivity in this country. The rich people, people think about guys like Warren Buffett, he collects a salary of a hundred thousand, but most of his money comes from dividends, which is taxed at a single digit, 10% rate.

RUSH: That’s right.

CALLER: And then we have our good friends the Kennedys, and their money is tied up into tax-free —

RUSH: Well, they’re clipping coupons on municipal bonds. They got a lot of tax-free things there, plus they’ve got trust after trust after trust that was set up by old Joe after he made a mint selling short in the stock market.

CALLER: Okay. Getting back to my point is what we do is we tax productivity, and the more productive you are, the more the government takes. Our system is actually evil and is immoral, because the harder you work, the more the government takes. But if you want to stay at home and watch TV the government will pay you to be nonproductive.

RUSH: That’s mostly true.

CALLER: Well, it’s exactly true.

RUSH: It’s mostly true.

CALLER: The other thing I want to help people understand is why lowering taxes increases economic activity. Now it’s been proven that when a dollar is in a community, it generally changes hands seven times before it leaves that community. So if the dollars is in a community it’s gonna travel around seven times, and each time that dollar changes hands the government gets a cut of that money. But if you raise taxes, that’s like turning on a giant vacuum sweeper sucking all the spare money out of the community so that inhibits the economic activity and the overall revenues go down to the government.

RUSH: Yeah, I never thought of it quite like the giant vacuum cleaner, but you got a point there.

CALLER: Well, Rush, see, you’re at the top, I’m at the bottom, I’m just giving you a different perspective.

RUSH: Well, I appreciate that. I really do. I’ll go back to the drawing board on this and make sure that I understand it.