Tuesday, June 07, 2011

Pawlenty's Insane Economic Policies

The Citizens for Tax Justice found that Tim Pawlenty's budget plan is fiscally irresponsible.

# Taxpayers with incomes in excess of $1 million would enjoy an average cut in personal
income taxes of $288,822, a 41.4 percent cut.

# Taxpayers with incomes in excess of $10 million would enjoy an average cut in personal
income taxes of $2.4 million, a 46.3 percent cut.

# The cost of the personal income tax cuts just for taxpayers with incomes in excess of $1 million would be $141.8 billion.

Pawlenty says he plans to eliminate capital gains tax, interest income tax, dividends tax, and the estate tax. I know this since Pawlenty said this in his speech unveiling his insane proposal.

In addition --- we should eliminate altogether the capital gains tax --- interest income tax --- dividends tax --- and the death tax.Government has no moral or economic basis to claim a second share of the same income. When you deposit a dollar in your bank account. Every penny should be forevermore yours and your children's. Not the federal government's.

To prove how either unserious or out of touch with reality Pawlenty is; he proposes a constitutional amendment for a balance budget.

The best way, and possibly the only way — to ensure fiscal discipline is to put the Congress in a spending straightjacket. That’s why I support a constitutional amendment. That not only requires a balanced federal budget, but also caps federal spending as a percentage of our economy. Around the historical average of 18% of GDP. Only a constitutional amendment has the power to bind future Congresses to keep their promises. Force decision-makers to finally make decisions. And give statutory reforms a chance to succeed. But passing a constitutional amendment will take awhile. And the crisis that we face is here now. And requires immediate action.

Pawlenty would need 67 Senate votes and two-third of the states to ratify the amendment for it to become law. If Pawlenty is successful the amendment would become law about 25 years after he leaves office.

How is Pawlenty going to keep the federal budget at 18 percent of GDP? Will Pawlenty and Congress throw themselves out of office if they pass a budget that is over 18 percent of GDP? I seriously doubt it. Congress could have dealt with the debt ceiling last year and put it off until it became a crisis. Pawlenty's constitutional amendment has no teeth.

Pawlenty is either pandering to the tea party or he is unfit to handle the nation's economy.

Update: This paragraph from Pawlenty's speech bugs the shit out of me. Pawlenty gives Congressional Republicans credit for President Bill Clinton's economic policies.

Between 1983 and 1987, the Reagan recovery grew at 4.9%. Between 1996 and 1999, under President Bill Clinton and a Republican Congress the economy grew at more than 4.7%. In each case millions of new jobs were created, incomes rose and unemployment fell to historic lows. The same can happen again.

Every Republican voted against Clinton's Deficit Reduction Act of 1993. Republicans were not interested in responsible economic policy. Republicans also fought every Clinton proposal aimed at cutting the deficit and job creation.

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