Burnett's take on Bernanke testimony: "Congress get your act together"

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1. Meg
   

   I was watching Erin discuss tax reform today. The whole point of doing tax reform is to bring in more revenue to pay down our deficits, but the Norquist pledge does not allow for there to be any increase in "total revenue" – none at all – if taxes are increased in one area, they have to be cut in another to offset any increase in the total.

   The Tax Policy Center has estimated that the extension of the Bush Tax Cuts as a part of the Ryan Plan with adjusted AMT will cost 5.4 trillion over ten years and the Ryan Plan would add 4.6 trillion more. CNNMoney has said they will cost 3.7 trillion, over ten years. I assume this perhaps does not have the same changes to AMT or some other difference – but the bottom line is this the CBO's baseline assumes these taxes will expire. This is one reason our deficits are so large – the Bush tax cuts and other new tax cuts to fight the recession. Loss of revenue accounts for more of our deficits than increases in the defense budget and the defense budget has "increased" 400 billion per year in 10 years (went from 300 to 710 billion) – so other than some automatic increases to mandatory programs that will disappear with the recession 1/2 of our deficits are now from revenue losses.

   However, the Norquist pledge says that although you can move the tax burden around you can't actually "generate" more "total" revenue when you are done with tax reform and moving things around so we will be stuck with the huge projected deficits from the Bush tax cuts mentioned above if the republican do tax reform – if we now bring in X trillion in total federal revenue – then the reform can't bring in more than X in total when it is completed – so what is the point? This means that that any change in taxes won't actually help reduce our deficits or the projected deficits that we would have if we extended the Bush tax cuts above at all. We are stuck with trillions 3.7-5.4 trillion more in deficits than the current CBO baseline – even (particularly) if the Republicans do tax reform now.

   This is what Erin does not seem to understand, the pledge does not mean you can't create a "new" taxes or move the tax burden around, it means that when you are done, you can't have increased any more revenue in total for our nation as a whole that it can use to pay its bills.

   The whole point of reforming the tax code is to generate additional revenue to pay our bills, to help reduce the deficit – so why do reform if it does not "do" anything to help wit our deficit problem –

   Erin Burnett does not seem to "get" this point at all – that the Norquist pledge means we can't undo the part of our huge deficit hole we have that was caused by the Bush tax cuts and the other tax cuts and the Tax Policy Center projection and CNNMoney's projection for 3.7 -5.4 trillion more in deficits from the loss of revenue will have to happen based on the Norquist pledge because they are not allowed to pass anything that will generate any more revenue than we already bring in with the Bush tax cuts in place.

   So what would be the point of "just" moving taxes around – when we need to bring in more money – the Norquist pledge does not allow is to "bring in more in total revenue" even if it is just by cutting deductions – So when the Republicans were on today saying they were willing to reform where the wealthy might pay more – they were also saying they would not generate "more total revenue" so it does not help our deficit problem – if the raised more in one area, they would have to cut somewhere else or they would violate the pledge – the pledge is based on that bogus idea that if you do not bring in more revenue that it will force spending cuts – but it never has worked in fact it just got them all used to thinking deficits were OK because it would force cuts later – but it didn't – just grew our deficits and debt over decades.

   June 7, 2012 at 7:47 pm | Reply
2. Debbie
   

   Ben Bernanke sounds just as frustrated with Congress as the rest of us. Just watched your interview with the Congressman Van Hollan. We in the middle class are sick of hearing about the deficit how it should be fixed. One thing we do know. We do not want one red penny of an increase imposed on us in any way, of any kind, any where, period! We are tired, worn out, exhausted from working our buns off year after year just to tread water. Forget about the notion of getting ahead. Whenever more money is needed, it has been once again squeezed out of the middle class. This just didn't start in the last few years. It's been going on for decades! We've had it! STOP!

   June 7, 2012 at 7:24 pm | Reply
3. thomasvincentahearn
   

   I find it immensely gratifying that Ben Bernanke, Robert Reich and Paul Krugman all read my blog and kudos to them for finding the time! Standing in my company must be a great comfort to them in these uncertain times. You know, Doll, there was a time when I believed that Congress didn’t know what the correct course of action was but that time has long passed. They have to know what to do but just won’t do it. That pretty much leaves ulterior motives which I’m sure we are all shocked, shocked to hear of. Reading Big Ben, I’d have to say he’s telling Wall Street, “Look, no more QE until you get these knuckleheads in line.” Hope it works…All the Best, TVA. Ps. Love your show and you look marvelous. Keep both up… (Yeah, Billy Crystal did kind of ruin that line forever, didn’t he?)

   June 7, 2012 at 6:30 pm | Reply