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Five myths about the Bush tax cuts

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  • A gloomy economic and fiscal outlook has given rise to a number of stubborn myths about what extending the Bush tax cuts would -- or wouldn't -- do.
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  • Think Again: Inequality and America’s Antiquated Politics
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William G. Gale, Washington Post | DC

Photo Credit: AMagill

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The tax cuts enacted in 2001 and 2003, known as the Bush tax cuts, are set to expire Dec. 31, and the fight over what to do is increasingly heated. Should the tax cuts expire, as some Democrats have said? Should they be extended, as most Republicans maintain? Or does the answer lie somewhere in between, as the Obama administration, led by Treasury Secretary Timothy Geithner, has argued in recent weeks?

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The cuts lowered tax rates across the board on income, dividends and capital gains; eventually eliminated the estate tax; further lowered burdens on married couples, parents and the working poor; and increased tax credits for education and retirement savings. Obama's proposal would extend most of these reductions, allowing only those for individuals making more than $200,000 and families making more than $250,000 to expire.

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Complicating the debate is a gloomy economic and fiscal outlook, one that is decidedly different from the rosy scenario that prevailed at the beginning of the last decade. That outlook has given rise to a number of stubborn myths about what extending the Bush tax cuts would -- or wouldn't -- do.

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Think Again: Inequality and America’s Antiquated Politics, Eric Alterman, Center for American Progress

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  • Economic inequality in America is growing to proportions we have never seen before, threatening not only our social structure but also our democracy as the U.S. Supreme Court equates the right to spend money on politics with freedom of speech
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  • Americans Vastly Underestimate Wealth Inequality, Support 'More Equal Distribution Of Wealth'
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  • Special Report | Poverty in the U.S.
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Think Again: Inequality and America’s Antiquated Politics

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  • Economic inequality in America is growing to proportions we have never seen before, threatening not only our social structure but also our democracy as the U.S. Supreme Court equates the right to spend money on politics with freedom of speech
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  • Americans Vastly Underestimate Wealth Inequality, Support 'More Equal Distribution Of Wealth'
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  • Special Report | Poverty in the U.S.
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Eric Alterman, Center for American Progress

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It’s ironic—though perhaps that’s too kind a term—to note that at the moment the U.S. poverty rate is reaching a 15-year high the nation is engaged in whether to offer additional tax cuts for those making more than $250,000 per year. (For a single adult in 2009, the poverty line was $10,830 in pretax cash income. For a family of four it was $22,050.)

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This despite the fact that the nonpartisan Congressional Budget Office analyzed the short-term effects of 11 potential options for dealing with the present unemployment crisis and found that retaining the Bush tax cuts for the wealthy offered the least powerful “bang for the buck,” owing to wealthy people’s proclivity to save rather than spend additional income. And yes, it just so happens that the Forbes 400 came out during the same week, and lo and behold, “The super-rich got even wealthier this year.” (CAP's Matt Yglesias offers a few ideas about this phenomenon as well.)

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Americans Vastly Underestimate Wealth Inequality, Support 'More Equal Distribution Of Wealth', William AldenHuffington Post

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  • Americans vastly underestimate the degree of wealth inequality in America, and we believe that the distribution should be far more equitable than it actually is, according to a new study.
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  • Class Warfare from the Top Down
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  • Third world America
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Special Report | Poverty in the U.S., David Culver, ed., Evergreene Digest

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  • Poverty Rate In U.S. Saw Record Increase In 2009: 1 In 7 Americans Are Poor,
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  • US Poverty Data Tells Only Half the Story...
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By the Numbers, Public Workers Defy Anti-Government Stereotypes

Reactionary politics have perverted the concept of "shared sacrifice" into a standoff between the public and private economic realms. But drawing this artificial divide keeps workers from finding common ground in challenging corporate power from the bottom up.

Michelle Chen, Common Dreams

Want to get a disgruntled worker really mad? Just point to his arch enemy: the civil servant. You know, the shiftless paper-pusher, fattened on our tax dollars, the epitome of “waste, fraud and abuse.”

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Alright, this might sound harsh to those of us who still think the government has some useful functions in society today. But bashing on the government and its workers has become a favorite pastime for conservatives like New Jersey Governor Chris Christie, who has argued that public employees enjoy undeservedly lavish compensation packages while their private-sector counterparts grapple with shrinking paychecks. So the logic goes: Why should struggling families' tax dollars finance the bloated wages of bureaucrats?

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Health Care: The Disquieting Truth

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  • Tracking Medicine: A Researcher’s Quest to Understand Health Care 
by John E. Wennberg
Oxford University Press, 319 pp., $29.95
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  • Health Insurance costs going up, and reformers won’t admit it
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Arnold Relman, New York Review of Books

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Submitted by Evergreene Digest Contributing Editor Will Shapira

Joely Richardson and Dylan Walsh in the television series Nip/Tuck Warner Bros. Television/Everett Collection

Most experts agree that the central problem with the US health care system is its high cost. We can’t afford universal coverage unless there is much better control of medical expenditures, which are now reaching over $2.5 trillion per year. What’s more, without effective control of health costs the federal budget deficit and the national debt will continue to increase.

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Nevertheless, our political leaders have decided to expand and improve insurance coverage first, while deferring any serious attention to costs. Moreover, as I will discuss in the second part of this review, the book by John E. Wennberg demonstrates that in many parts of the US, costs are driven up by an excessive supply of medical services.

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In March, after more than a year of bitterly partisan congressional debate, a narrow majority of exclusively Democratic lawmakers passed the most extensive health care reform since Medicare and Medicaid were enacted forty-five years ago. As described by Jonathan Oberlander and Theodore Marmor in these pages, the main thrust of this extensive legislation is to provide federal aid for mandatory expansion of coverage by Medicaid and by private insurance plans, and to expand benefits under Medicare. It has also been promoted by its sponsors as a measure to control costs, but it is not. Oberlander and Marmor make very clear that there is little reason to expect it will do much in the near future to control the relentless rise in health expenditures—a task that must wait for future reforms.

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Health Insurance costs going up, and reformers won’t admit it, E. Thomas McClanahan, Kansas City Star | KS

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  • Threat from Sebelius defies economic reality
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  • Steep rate hikes on way for individual health insurance
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America's Decoupling from Reality

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  • Trapped in the mud, millions of Americans are complaining about their loss of economic status, their sense of powerlessness, their nation’s decline. But instead of examining how the country stumbled into this morass, many still choose not to face reality.
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  • Building a Nation of Know-Nothings
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  • The United States of Fear
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Robert Parry, Consortium News

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Submitted by Evergreene Digest Contributing Editor Joanne Theilen

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As Election Day 2010 approaches – as the United States wallows in the swamps of war, recession and environmental degradation – the consequences of the nation’s three-decade-old decoupling from reality are becoming painfully obvious.

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Yet, despite the danger, the nation can’t seem to move in a positive direction, as if the suctioning effect of endless spin, half-truths and lies holds the populace in place, a force that grows ever more powerful like quicksand sucking the country deeper into the muck – to waist deep, then neck deep.

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Building a Nation of Know-Nothings, Timothy Egan, New York Times | NY
It’s not just that 46 percent of Republicans believe the lie that Obama is a Muslim, or that 27 percent in the party doubt that the president of the United States is a citizen. But fully half of them believe falsely that the big bailout of banks and insurance companies under TARP was enacted by Obama, and not by President Bush.

The United States of Fear, Bill Quigley, Common Dreams
You tell me what happened to the land of the free and the home of the brave since September 11, 2001.

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How Right-Wing Billionaires and Business Propaganda Got Us into the Economic Mess of the Century

Joshua Holland's new book shows how the corporate Right obscured how they've rigged the "free market" so they always come out on top.

Joshua Holland, AlterNet

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AlterNet Editor's note: AlterNet is proud to present this excerpt from senior writer Joshua Holland's new book, The Fifteen Biggest Lies about the Economy (And Everything Else the Right Doesn't Want You to Know about Taxes, Jobs, and Corporate America). Holland's research-rich but entertainingly written book slices and dices the latest talking points, explaining the issues with depth and nuance. The book tells an important story about the American economy that you won't read in the Washington Post or the Wall Street Journal. It's one that is vitally important to understand as we grapple with some new economic realities. It's a story about how the corporate Right has obscured the ways in which they've rigged the “free market” so they always come out on top. Ultimately, it goes a long way toward explaining how so few Americans noticed as a new Gilded Age emerged under a haze of lies, half-truths and distortions.

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*****

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The Great Recession that began in 2008 wiped out $13 trillion in Americans' household wealth —in home values and stocks and bonds—stoking the kind of anger we’ve seen from pissed off progressives and from the Tea Partiers who dominated the news in the summer of 2009.

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But although a lot of people threw around some angry rhetoric—and even invoked the specter of armed revolution—the reality is that when the economy nosedived, we basically took it. We didn’t riot; we took the bailouts, tolerated our stagnant wages, and accepted that Washington wasn’t about to give struggling families any real relief.

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The Myth Of A 'Christian Nation'

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That the US is not a Christian nation is historical fact--not an opinion--worth remembering.

A. James Rudin, Religion News Service/Huffington Post

The late Sen. Daniel Patrick Moynihan is credited with saying that "everyone is entitled to their own opinions, but they are not entitled to their own facts."

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Some leaders of the religious right would have us believe that America was founded as a "Christian nation." The facts, however, say otherwise.

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While the Founding Fathers, with their diverse Christian backgrounds, had every opportunity to make the fledgling United States into a "Christian nation," the factual record reveals they consciously refused to do so.

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The Right's Shameful Muslim-Bashing, The Progress Report

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  • "If the prospect of losing our Constitution to religious government frightens you, don't worry about the tiny Muslim-American minority. Worry about the anti-mosque majority Gingrich is working to mobilize." --Slate Magazine's Will Saletan
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  • Zero Tolerance
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The 100 Vote Senate

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The Senate does not operate by majority rule; It does not really even operate by supermajority rule. Increasingly, the Senate can only act unanimously.

Progress Report, Think Progress

It's common wisdom that nothing gets done in the U.S. Senate without a 60 vote supermajority, but this common wisdom is entirely too optimistic. Although only a small minority of senators object to any one of President Obama's judicial nominees, confirmations have slowed to such a glacial pace that Republican control over federal trial courts increased since Obama took office.

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Likewise, a massive 372 bills that passed House during the Obama presidency have yet to receive a vote in the Senate. Only a handful of these bills were even remotely controversial in the House, and 44 of them passed the House unanimously. Such obstruction works, even against uncontroversial bills and nominations, because the Senate's system of filibusters, delay tactics and secret holds empowers just one senator to bring the institution to a standstill. The Senate does not operate by majority rule; It does not really even operate by supermajority rule. Increasingly, the Senate can only act unanimously.

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