Friday, July 08, 2011

Rubio's Supply Side Economics

Sen. Marco Rubio advocates supply side economics as the key to reducing the debt. Rubio proposes that more tax cuts will create revenue.

To be clear, new revenues are an essential component of any viable debt reduction deal. We can’t simply cut our way out of this debt; we also need to grow our way out of it. The best way to do this is by increasing the number of taxpayers gainfully employed in our economy and by easing burdensome regulations, not by raising taxes.

We can generate lasting economic growth and trillions in new revenues for the federal government through pro-growth tax reform. Sen. Pat Toomey has a budget proposal that lowers top marginal tax rates to 25 percent in a revenue-neutral way and eliminates loopholes and deductions, resulting in $1.5 trillion of additional real growth over the next decade and millions of new private-sector jobs, according to the Heritage Foundation. His budget recognizes that tax cuts and an overhaul of our 70,000 page tax code will create jobs and generate trillions in new revenue.

I wrote that Bush administration appointees have said that tax cuts do not create surpluses.

Robert Carroll, deputy assistant secretary for tax analysis at the U.S. Treasury Department during Bush’s second term.

“As a matter of principle, we do not think tax cuts pay for themselves.”

Former Treasury Sec. Henry Paulson.

“As a general rule, I do not believe that tax cuts pay for themselves.”

Proof that supply side economic doesn't increase revenue is how the federal debt went down with the last two Democratic presidents. The debt increased under Republican administrations that believed in supply side economics.

Federal debt:

Jimmy Carter Federal Debt
Debt/GDP 35.8% 32.5%

Federal debt:

Ronald Reagan Federal Debt
Debt/GDP 32.5% 53.1%

Federal debt:

George H. W. Bush Federal Debt
Debt/GDP 53.1% 66.1%

Federal debt:

Bill Clinton Federal Debt
Debt/GDP 66.1% 56.4%

Federal debt:

George W. Bush Federal Debt
Debt/GDP 56.4% 84.2%

Rubio should be laughed out of the room whenever he talks about fiscal discipline. Rubio had a house foreclosed on in 2010. Rubio cannot explain how he ran up a $110,000 bill on a Republican Party of Florida credit card. Rubio used the credit card to buy groceries at Winn Dixie, shop at Apple's online store and buy "beverages at Happy Wine. The RPOF is suppose to be used to help get GOP candidates elected.

Rubio double billed the RPOF and the taxpayers for eight flights he took. It is unclear what happened to the excess money. In 2001, Rubio owed $30,000 and $165,000 in student loans. Rubio's wife received $5,700 "gas and meals" expenses from her husband PAC. It is unclear what Jeanette Rubio did for the PAC.

There is nothing fiscally conservative about Rubio. No one who was broke in 2002 should and has no problem spending other people's money should be taken seriously.

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