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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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