In last week’s Newsweek (yep, I’m behind in my reading), there was a very interesting article called 10 Partisan Myths. It’s an excerpt from Peter G. Peterson’s new book, Running On Empty : How The Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It. I’d love just to copy the whole article, but that’d be immoral and illegal, so I’ll just highlight the five myths he claims each party holds dear. The Democratic myths are about entitlements, and the Republican myths are about taxes.
FIVE DEMOCRATIC MYTHS ABOUT ENTITLEMENTS
- Because federal benefits go to the poor, reform will amount to a shedding of our social safety net.
- Even if they don’t go to the poor, federal benefits foster equality by going mostly to lower-income households.
- Federal benefits go to the elderly, who everyone knows are much less well off than younger Americans.
- Social Security and Medicare are earned rights by contract; beneficiaries are only getting back what they paid in.
- The future growth in the cost of senior benefits, whatever they may be, can easily be borne by younger generations.
Basically, he says that entitlements don’t directly help the poor as much as Democrats think, and that senior entitlements are an unearned burden that will grow larger than the country can handle.
FIVE REPUBLICAN TAX MYTHS ABOUT TAX CUTS
- Because the American people are overtaxed, they want and deserve our tax cuts.
- OK, forget the long-term tax burden. Our tax cuts are still a sensible near-term means of stimulating a weak economy back to health.
- Even when they don’t deliver near-term stimulus, tax cuts make the tax code more efficient.Over the years, many tax reformers have defended their proposals – creating fewer tax brackets, establishing a national value-added or “flat” income tax, or phasing out the taxation of estates or dividends – by citing efficiency advantages.
- The critics just don’t get it. What our tax cuts are really about is improving “supply side” incentives to work, save and invest.
- Let’s be honest. This is all about politics. In the long run, our tax cuts will force Congress to cut back spending and, with that, cut back government.
Basically, he says that we aren’t overtaxed, supply-side doesn’t really work as implemented, and that “Starving the Beast” isn’t going to work, either.
He gives a paragraph or two refuting each of these in the excerpt, and I’d assume that he goes into more rigorous detail in the book (which I haven’t read).
Of course, I agree with him on the Republican myths (after all, I am a liberal), but I found the Democratic myths interesting. I already didn’t believe in the myths he cites about senior entitlements, but I found his analysis of the benefits of entitlements for the poor more challenging.
Is he right? Are these commonly held beliefs? Are these beliefs wrong?