PolitiFact has a tracked President Obama 's campaign promises and his actions.Republicans are telling Americans a Big Lie, and Obama and the Democrats are letting them. The Big Lie is our economic problems are due to a government that's too large, and therefore the solution is to shrink it.
The truth is our economic problems stem from the biggest concentration of income and wealth at the top since 1928, combined with stagnant incomes for most of the rest of us. The result: Americans no longer have the purchasing power to keep the economy going at full capacity. Since the debt bubble burst, most Americans have had to reduce their spending; they need to repay their debts, can't borrow as before, and must save for retirement.
The short-term solution is for government to counteract this shortfall by spending more, not less. The long-term solution is to spread the benefits of economic growth more widely (for example, through a more progressive income tax, a larger EITC, an exemption on the first $20K of income from payroll taxes and application of payroll taxes to incomes over $250K, stronger unions, and more and better investments in education and infrastructure.)
But instead of telling the truth, Obama has legitimized the Big Lie by freezing non-defense discretionary spending, freezing federal pay, touting his deficit commission co-chairs' recommended $3 of spending cuts for every dollar of tax increase, and agreeing to extending the Bush tax cuts for the wealthy.
Will Obama stand up to the Big Lie? Will he use his State of the Union address to rebut it and tell the truth? Maybe, but so far there's no evidence.
In his weekly address yesterday, the President restated his "commitment" for 2011 "to do everything I can to make sure our economy is growing, creating jobs, and strengthening our middle class." He added that it's important "to look ahead - not just to this year, but to the next 10 years, and the next 20 years" to find ways to stimulate the economy through innovation. And that it is critical that the US discover ways to "out-compete other countries around the world."
Become more innovative? Out-compete? Who or what is he talking about? Big American corporations are innovating like mad all over the world, with research and development centers in China and India. And their profits are soaring. They're sitting on almost $1 trillion of cash. But they won't create jobs in America because there's not enough demand here to justify them.
In the Republican address in response, US Senator-elect Kelly Ayotte (R-NH) restated the Big Lie. "The American people sent us to Congress with clear instructions: make government smaller, not bigger," she said. Deficit reduction "isn't a Republican problem or a Democrat problem - it's an American problem that will require tough decision-making from both parties." And the way to shrink the deficit is to cut government. The extension of the 2001 and 2003 tax cuts over the next two years, she said, was an "important first step" to jump-start the economy.
Starting Wednesday, when the 112th Congress convenes with a Republican majority in the House, we'll be hearing far more of the Big Lie.
George Orwell once explained that when a public is stressed and confused, a Big Lie told repeatedly can become the accepted truth. Adolph Hitler wrote in Mein Kampf that "the size of the lie is a definite factor in causing it to be believed" and that members of the public are "more easily prey to a big lie than a small one, for they themselves often tell little lies but would be ashamed to tell big ones."
Only the President has the bully pulpit. But will he use it to tell the Big Truth?
Phase out exemptions and deductions for higher earners
The Promise: Promise Broken Restore the phaseouts of personal exemptions and itemized deductions for those making more than $250,000 (couples) or $200,000 (single), with threshholds indexed for inflation.
Update December 21st, 2010: Current tax rules continued for high earnersFreeze the 2009 estate tax law
The Promise: Compromise Freeze the 2009 estate tax law, which exempts the first $3.5 million and has a top rate of 45 percent.
Update December 20th, 2010: Obama agrees to lower estate taxesRepeal the Bush tax cuts for higher incomes
The Promise: Promise Broken Repeal the Bush tax cuts for those making more than $250,000 (couples) or $200,000 (single)
Update December 20th, 2010: President Obama signs off on continuing tax cuts for high earners
Extend the Bush tax cuts for lower incomes
The Promise: Promise Kept Extend the Bush tax cuts for those making less than $250,000 (couples) or $200,000 (single)
Update December 20th, 2010: Obama gets extension for the middle-class tax rates
Extend child tax credits and marriage-penalty fixes
The Promise: Promise Kept Will extend aspects of the Bush tax cuts such as child credit expansions and changes to marriage bonuses and penalties.
Update December 21st, 2010: Tax compromise includes extensions of child tax credits and marriage-penalty fixesExpand the child and dependent care credit
The Promise: Promise Broken Expand and make refundable the child and dependent care credit.
Update December 21st, 2010: No expansion for the child care tax creditIncrease the capital gains and dividends taxes for higher-income taxpayers
The Promise: Promise Broken Increase capital gains and dividends taxes from 15 to 20 percent for those making more than $250,000 (couples) or $200,000 (single)
Update December 21st, 2010: No increase in capital gains taxes for high earners
Eliminate capital gains taxes for small businesses and start-ups
The Promise: Compromise "Barack Obama understands that small businesses are the engines of our economy, and he will eliminate all capital gains taxes on investments in small and start-up firms."
Update December 10th, 2010: A short-term fix
Create a tax credit of $500 for workers
The Promise: In the Works Enact a Making Work Pay tax credit that would equal 6.2 percent of up to $8,100 of earnings (yielding a maximum credit of approximately $500). Indexed for inflation.
Update December 7th, 2010: Tax compromise may cut taxes for workers.
Change federal rules so small businesses owned by people with disabilities can get preferential treatment for federal contracts.
The Promise: Promise Broken "Barack Obama and Joe Biden would direct the Small Business Administration to amend regulations under the Small Business Act that provide preferences in federal contracting to small businesses owned by members of socially and economically disadvantaged groups to include individuals with disabilities."
Update November 19th, 2010: No sign of progress toward small business boost for Americans with disabilities
President Barack Obama last month signed into law a two-year extension of Bush-era tax cuts for millions of Americans, including the wealthiest, in a compromise with Republicans.
Republicans, who this week take control of the House of Representatives, want to extend all Bush-era tax cuts "permanently" for the middle class and wealthier Americans. They are also demanding spending cuts to curb the $1.3 trillion deficit.
Sixty-one percent of Americans polled would rather see taxes for the wealthy increased as a first step to tackling the deficit, the poll showed.