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The
Beatings Will Continue Until Morale Improves
February
24, 2004
By Bridget Gibson
"By income taxes we strive to redress the balance and
at the same time make the builders of great fortunes pay proper
toll to the society which has made their success possible."
— George Lorimer, 1934
In 2001, we were told that the Bush Tax Cuts would create
two million new jobs. In 2002, the administration projected
2.5 million new jobs and in February 2003, we were told that
the Bush Tax Cuts would create 3.6 million jobs.
On February 9, 2004, the Bush administration released the
Economic Report of the President which was interpreted by
economists to state that there would be 2.6 million jobs created
in the calendar year of 2004. The following day, the President's
Council of Economic Advisers (CEA) said that the economists
had misinterpreted the report and that there would actually
be a creation of 3.8 million new jobs. The 3.8 million new
jobs promised number equates to approximately 317,000 new
jobs that need to be created each and every month. Despite
great expectations by the Bush administration, the total jobs
created for the last six months of 2003 was 366,000.
However, the net job loss for 2003 was 53,000, bringing
the total number of jobs lost since January 2001 to 2.2 million.
Since January 1, 2004, the following companies have announced
staff reductions and mass layoffs:
AlcaTel, AllTel, American International Group
(AIG), AOL, AT&T, Baltimore Maryland Schools, Best Buy,
Biddeford Blankets, Blue Cross/Blue Shield, Blue Ridge Paper,
Boeing, Bombardier, Bon-Macy's, Bose, Cebal, Champaign County,
Illionois, Cigna, Cigna Corp., City of Baltimore, Maryland,
City of Benton, Illinois, City of Boston, Massachusetts,
City of Chicago, Illinois, City of Chillicothe, Ohio, City
of Cleveland, Ohio, City of Erie, Pennsylvania, City of
Fort Lauderdale, Florida, City of Houston, Texas, City of
Lancaster, Pennsylvania, City of Providence, Rhode Island,
City of Salem, New Jersey, City of Sioux City, Iowa, Cooper
Bussman, Covenant Medical Center, CXS, Danka Business Systems,
Dickinson Hospital, Bismarck, North Dakota, Drexel Heritage,
DST Systems, Earthlink, Eastman Kodak, Emisphere Technologies,
Fetzer Vineyards, Ford Motors, Gradall, Hennepin County,
Minnesota, Home Depot, Hoover Hanes Rubber Custom Mixing
Copr., Huffy, IBM, Iowa Packing Co., Kanawha Manufacturing,
KB Toys, Kraft, Madison Square Garden/Cablevision, Maytag,
Meijer Foods, Monroe County, New York, National Textiles,
Northampton County, New Jersey, Northwest Airlines, Ohio
Casualty, One Price Clothing, PalmOne, Perdue Farms, Pillowtex,
Rainbow Movers, Reliant Energy, REMEC, RJR/Brown & Williamson
Tobacco, Rouge Steel, Rubbermaid, SBC, Sprint, State of
California, State of Colorado - CSU Veterinary Teaching
School, State of Connecticut, State of Missouri, State of
Oregon, Steelcase, Subaru, Systemax, The Carrier Corp.,
TSYS, Tulalip Casino, Tulsa World News, TYCO, U. S. Airways,
Union Institute, United States Navy - civilian employees,
Walt Disney Studios, Washington Mutual, Weirton Steel Corp.,
Westmoreland County, Pennsylvania, Wilson's Leather, Yale
University Library
Many companies, both large and small, are outsourcing or
off-shoring their jobs, or are closing their American facilities
entirely.
The state and local municipalities are facing massive budget
shortfalls due to the decline in the economy, and are reducing
services, laying off employees or are raising local taxes
and fees.
The current administration is facing a net job loss of more
than two million, the first administration since Herbert Hoover
to fail to create jobs within the American economy.
Between January 2001 and January 2004, the civilian work
force has grown by 3,076,000 people, while the non-farm jobs
have decreased by 2,357,000.
The loss of jobs within our borders shows that the current
administration’s mantra of cutting taxes has failed to support
its snake-oil claims of “job creation.” In fact, the opposite
is true. These tax cuts have encouraged the flight of jobs
from the United States. Treasury Department figures show that
actual corporate income tax revenues fell to $132 billion
in 2003, down 36 percent from $207 billion in 2000.
As a result of these low levels, corporate revenues in 2003
represented only 1.2 percent of the Gross Domestic Product
(GDP) (the basic measure of the size of the economy), the
lowest level since 1983, the year in which corporate receipts
plummeted to levels last seen in the 1930s.
Corporate revenues represented only 7.4 percent of all federal
tax receipts in 2003. With the exception of 1983, this represents
the lowest level on record (these data go back to 1934).
The ripple effect of these lost jobs will be enormous. One
of the many apparent consequences will be the reduction in
the monies that are received by the U.S. Treasury, making
the deficit grow exponentially.
The failure of the accounting will produce a massive shortfall
in the ability of the Federal Government to narrow the budget
deficit, which is approaching $500 Billion for the fiscal
year of 2004.
The U.S. National Debt surpassed $7 Trillion last week, an
amount equal to sixty-three percent (63%) of our 2003 Gross
Domestic Product (GDP).
The Republicans have been saying that ‘deficits don’t matter’
since Ronald Reagan. This explanation for the justification
of the insolvency of our country makes no sense.
They compare the deficit to the GDP, stating that it is only
5%.
Since 1986, the burden of taxes has shifted from the corporations
to the individual taxpayers, thus the amount of revenue that
the U.S. Treasury receives is dependent on the wages of its
citizens. As fewer American jobs are kept and created, the
chasm between the receipts and the expenses becomes greater.
For the debt to be compared to our GDP, one must suspend
all logic. How can any of us borrow money on what our neighbor
owns or earns? Unless our government is willing to nationalize
every corporation and small business within its borders, it
cannot claim the income from those endeavors. The U.S. National
Debt must be repaid in dollars from the U.S. Treasury. The
Treasury’s funding comes from the receipt of taxes, fees and
tariffs. It does not receive the funds that are used to calculate
the GDP.
A more accurate comparison of deficit and GDP would be to
compare the amount of money in your bank account to the amount
in Bill Gate’s bank account. Just because he has money, does
not mean that you can borrow against his assets or on his
credit rating.
When the smoke clears from the fiasco of the accounting procedures
of the past and current administrations, it will become clear
that ‘things that can’t go on forever, don’t.’
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