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Point ignored in President’s speech
President Barack Obama’s campaign speech in Roanoke, Va. on July 13 made some waves.
In case you missed it, this was the famous, or infamous depending on how you view it, “You Didn’t Build That” speech.
What I found surprising, however, was how the Republicans, the media…mainstream, right, or left, take your pick…missed one sentence uttered by our President buried in the speech.
No, no, look — I mean, we’re having a good, healthy, democratic debate. That’s how this works. And on their side, they’ve got a basic theory about how you grow the economy.
And the theory is very simple: They think that the economy grows from the top down. So their basic theory is, if wealthy investors are doing well then everybody does well.
So if we spend trillions of dollars on more tax cuts mostly for the wealthy, that that’s somehow going to create jobs, even if we have to pay for it by gutting education and gutting job-training programs and gutting transportation projects, and maybe even seeing middle-class folks have a higher tax burden.
— Remarks by the President at campaign event, 7/13/12.
Here’s what is wrong with our country.
Grammar aside, the belief that a tax cut is a form of “spending” boggles the mind.
Truly boggles the mind.
Exactly how does government “spend” a cut in taxes? If I get a tax cut, I consider that less income for the government, and more income for me to spend.
I believe the reason Romney and the Republicans didn’t catch this, or the media, is because all of them (the politicians) view tax revenue as “their’s” and reducing that flow of revenues is to them a form of spending.
So, while we all fight on Facebook and message boards about which candidate or which party will fix the economy, perhaps we should look at all of them.
My guess is, at the federal level, elected officials on both sides of the aisle view tax cuts as the equivalent of spending.
And since Romney’s campaign, the media, and everyone else overlooked this quote from President Obama and instead focused on the grammatically debatable use of the word “that”…as in “you didn’t build that”…is another clear sign that Washington’s idea of “spending” is quite different from yours and mine.
See what people are saying:
Join the discussion:
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Vballer says:
You need to do your homework a little more than what you did! The President was not the first to say that, I think maybe it was Valerie Jarret which he leans to a lot for advice!!! And she said it about a year ago. And yes she meant EXACTLY the way it’s being portrayed. The govt built the roads, the workers built the companies, it would not happen without the government! Excuse me!! We’re did the taxes come from to build the first road?? One question….Ever get a job from a poor person??
Russ Lay says:
The article wasn’t about the build it comment, but in that regard, it was Elizabeth Warren who made that point first. She is running for the Senate in MA and gave a keynote speech at the Democratic Convention. I have discussed Obama “borrowing” that talking point from her on Facebook with numerous Voice readers, but again, not the subject here!
obxpatriot says:
I think Romney and the Republicans know exactly what he means…. when ever the Republicans propose a tax cut the Democrat response is “how are we going to pay for that”, as if all money belongs to the government and what we get back is what they deem we should have!
NagsHeader says:
Ron Paul knows the difference & would never say that.
But alas… America gets what is chosen for them & around 50% will have the illusion that they won.:/
JUMPIN says:
th is
country was founded on a 2% hike on tea.before wwii there were no income taxes.this country fought taxes up till then.let the govt find it’s own source of income.we pay tax on everything.gas,food,wares,property,death,capitol gains and on and on.forget the govt.the postal sevice will be bankrupt soon.thats how govt runs a business.fed ex and ups
Stacy says:
When you look at tax cuts the way they do, it is an expenditure. Sure, some of us actually get to keep more of our own money, but more receive transfer payments. If an individual or family receive a refund in an amount greater than what was paid in, that is an expenditure and it does have to be paid for. The Bush tax cuts included.
The fact that that can even be called a tax cut is what boggles the mind.
obxdad says:
Why the interest in semantics?
When you imbalance the budget by spending too much or cutting taxes too much, the result is the same.
A deficit and debt. Why can’t we all just attack the budget deficit with the same vitriol we reserve for our politicians?
Taxes have to go up. Spending has to come down.
Why are we talking about anything else?
KDHgal says:
I’d just like to see some proof that giving the wealthy all these tax cuts and loopholes has created jobs.
Transplant from WI says:
The one place where I did not read or hear about the Presidentual race. The voice is starting to be more opinionated latley. I guess I will be reading it less.
Russ Lay says:
Transplant-part of the reason people began reading the Voice is that other local media refrained from opinions. The Voice is all about opinions…ours, yours, and anyone who cares to jump in as long as certain behaviors are not exceded. Er, exceeded. Thanks Stewie!
Stewie Stewington says:
I’m sure all of us would prefer to pay less taxes. The problem is people like getting all the stuff they get and aren’t really paying for.
Neither party is seriously addressing spending. Why?
Because they are afraid of the wrath that will certainly rain down on them whenever any movement is made to reform the status quo.
Transplant – If the opinion pieces on the Voice bother you then why not just skip them?
Russ – It never fails that when someone criticizes someone else on an internet post (in this case you criticize the President for grammar in a speech) about their grammar or spelling they are bound to then commit such an error themselves.
To wit: in your response to Transplant you misspelled exceeded.
Russ Lay says:
Yep! When I multitask, spelling goes out the dor, er, dore, er door!
Ray Midgett says:
I am not wealthy. However, I am thankful there are people in this country who are wealthier than I. If I were a younger man, it would give me hope. Now, as an older man, I am more concerned with getting people who are less fortunate than I am today, off the welfare rolls and into good jobs, than I am the fact that people wealthier than me might be paying a lower % of income tax. For the fact is, what they do pay is a hell of a lot more than I pay, and I commend them for their success. Now, let’s hope they can help us provide some of those jobs. I can’t. Nuff said.
Jimmy Woodson says:
I agree with NagsHeader…vote Dem or Rep…keeping doing the same thing we’ve always done (two party death grip), we’ll get the same thing we have always gotten. I recommend we all vote our favorite third party.
obxdad says:
Ray,
Yes, the wealthy DO pay a lot in taxes. I’ve paid a lot in taxes myself.
But you know what it really means to pay a lot in taxes? You are making a WHOLE LOT of money.
The wealthy have not become smarter or more industrious, they simply have shifted the incomes up the ladder. Poor people would pay a lot more in taxes if there were a higher minimum wage. The rich get rich by keeping the wages low though, as that’s how you make a profit.
Don’t get me wrong, as I know how much it sucks to pay someone more than they are worth. But there are lots of industries out there that have taken all the productivity gains made by the workforce and transferred the profits to the investors and management, with no increase for those actually doing the work that makes the money.
Workers need more market power to counteract the natural tendency for capital to move profits up the income scale, rather than spreading it around to everyone who helps make it.
A rather blunt instrument is higher marginal tax rates on high income – they have always worked in the past to encourage re-investment rather than profit taking.
Every time someone talks about how much money rich people pay in taxes, they leave out the obscene amount of money they are making in the first place. If the game is rigged, we should not be admiring the grifters.
Civility on OBV Please says:
A more educated and attentive electorate would solve most of these issues.
It is unfortunate that we as a society seem more interested in the human cock-fighting aspects of politics than in the substance and nuances of the issues that plague us. We seem to value short-term gratification for ourselves over longer, more rewarding goals for our posterity.
Hopefully we still have time to prevent history from repeating itself. For our children’s sake, we must correct our own ways before a modern Alaric arrives to correct them for us.
Steve says:
I think Thomas Jefferson had it right in stating… “Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains.”
Look at what Industry is doing today. Corporations are designed for one purpose; to provide a profitable return to investors. It is quite simple. That investor can be you… me… or Warren Buffett.
And in a time when goods were produced here and sold here and the investors were part of the community to which the corporation served, it was a fair deal for everyone.
But now, in the Global Economy, corporations scour the Earth for most cost effective way to produce their product. They have to because the other guy will do it if they don’t. They go to China to produce the product… and to places like India to design the product while executive leadership stays in the U.S. And why wouldn’t they operate that way… they are designed to operate that way. Workers are an expense, just like copy paper or office furniture.
You talk about words and meaning… I was listening to the last debate, and they got off on a tangent concerning the bailout of Detroit.
Governor Romney stated that he would have let them go Bankrupt through the normal channel because it would have released them from certain obligations…. Hmmm… Now… anyone with little business acumen knows that the biggest cost to any large business is wages, retirement, and healthcare.
So… does that mean that GM would have been free to cut the wages and dismantle the unions? Does it mean that GM could have relinquished itself from the commitments it made to its retired workers? Does it mean that it could reduce the health benefits to its workers and retirees? Does it mean close up shop and build elsewhere? What do you think?
I could go on and on… I may not be smartest man in the room, but I consider myself a rational human being. It is very simple. Look at the world statistics on the happiest people on the planet. The United States is not even in the top ten. Why is that… and why are European countries dominating the top ten? The only commonality in all of those countries is the role of government and its commitment to the betterment of the people they serve.
Our form of government exists because people back then believed it was a universal truth and our right to Life, Liberty and the Pursuit of Happiness. They created a form of government to support that purpose. We are the government. It is our only counter to a market system set up to encourage a robber barron approach to business.
Listen hard to the positions of each of the candidates. Hopefully you will find the one statement that will solidify your choice come Tuesday. It did for me.
vanative says:
I found this article very cute. You wanted a reaction and got it. People going off about you and your opinions. Seems like your colume has taken on “tonight show” ground.
What a trip.
Gene Hoglan says:
Spot on, Russ! Tax cuts aren’t the same as spending.
Spending creates use-value from a tangible product or service, whereas tax cuts, especially those currently favored for the wealthiest, have no use-value as they go into the pockets of people who have little need to increase their own personal spending.
junkman says:
Maybe your Republican friends “missed” it is because they might have actually understood the comment. So lets look at the basics of business, assuming for a moment that you want to think of the government in “business” terms. Give it a try. Fundamentally there are two variables – revenue and expense. If we raise revenue and hold expense we’re better off. If revenue is cut and expense holds constant we’re not. So whether you consider cutting revenue “spending” or “reducing” or or whatever, the impact is the same…..revenue down, expense constant – not good. If we want to balance out the equation, the need is to cut expenses to offset the reduction in revenue (in this example, taxes lowered and offset by reductions in education, transportation, etc). The idea of a “balanced budget” is revenue = expense. Not sure what you don’t get or even why we’re having this discussion………lets move on to something more productive
Bob Samuels says:
Thanks Russ – this editorial has generated one of the most civil “discussions” I have read on the Voice.
With that said, government is not a business. There are way too many variables; it’s like comparing apples to oranges.
Semantics 101- Spend it or use it? The bottom line is that we HAVE to deal with the budget deficit. The bi-partisan Bowles-Simpson Report stated that in order to reduce our deficit we need to generate revenue (increased taxes) AND reduce spending.
I believe that if Mr. Romney wants to have a legitimate chance of being our next President, then he needs to come clean on his plan for the tax deductions that he wants to eliminate. Otherwise, it’s all talk.
In addition to the tax increase on the wealthiest citizens President Obama has suggested, the President also needs to spell out the spending and program cuts that he intends to pursue. History has proven that the “trickle down” approach to tax cuts for the wealthy has not worked. The rich get richer and the rest of us remain the same. This is why I am in favor of the the tax increases on the wealthiest citizens earning over 250K. During Clinton’s presidency this approach worked to produce a budget surplus and keep the wealthy rich.
No matter what happens November 6th, our Congressional leaders in Washington need to bury the hatchet and put country before party. A great way to start off the 113th Congressional session would be to legislate a way around the “Citizen’s United” Supreme Court decision. I’m sure that the Founding Fathers would be very disappointed that the Supreme Court has allowed a corporation to have more influence over our government than the citizen.
Browny says:
In 1848 Carl Marx wrote the Communist Manifesto. When looking at the 10 planks, you will see that the #2 plank addresses the need for a progressive INCOME TAX. That monster was unleased on us in 1913. The tax argument should be about replacing the income tax with a consumption tax. The FairTax awaits. Then the power to coin or print money should be returned to Congress. Will that be easy? No but it has to happen to protect freedom and to allow return to sound money. At present the Cartel that comprises the Fed Res owns you and I and the government we are supposed to control since we are the ones that set it in motion. Would it not be nice to know daily how much $ the gov’t takes in? It would make it very difficult for the Gov’t to spend more than it takes in. Tax reform is not what is needed. Replacement of the income tax is the ultimare fix. It would represent the largest transfer of power from the Gov’t to the people ever to happen. Federal officials could then be elected on merrit instead of their ability to voodo the tax code. A true free market economy is not compatible with the taxing of income. Study The FairTax before you dismiss it. It’ll come to ya if it it hasen’t already.
obxdad says:
Some great points – Spending is really more valuable to the economy, as that’s money that is DOING something, priming the pump, becoming someone’s income, which is then spent again, and becomes someone else’s income, and so on.
Tax cuts, especially those for the rich, are great if you ARE rich, but are generally just saved instead of being spent, so no demand increase, no incomes increase, no jobs created.
The Thrift Paradox is the main reason the economy does better when the rich are taxed at high marginal rates. Saving is great for the individual, terrible for the economy.
Nags head bob says:
Obxdad is a genius. Spinding has nothing to do with prosperity. It only occurs when when the rich are put in their place.
Guess you aren’t capable of more on your own.
R SIMS says:
It is impossible for me to understand why any educated person could agree that wealthy people, who enjoy ownership of most of this country’s wealth, should not pay their share. What happened to the Christian principal of giving according to your ability?
When I was in college (many years ago), I was shocked to find that 48% of all jobs did not pay a living wage!! The greed of some people is astounding. People that make minimum wages struggle to get food, fail to get access to education for themselves and their children.
I read a news article recently about the richest woman in the world. http://thinkprogress.org/economy/2012/09/05/797221/worlds-richest-woman-minimum-wage/?mobile=nc Her wealth has been the result of her ownership of mines in Australia. She made the news because she is advocating the abolishment of the minimum wage. She was complaining that her company could not compete with the mines in Africa that pay $2 a day for labor.
Shame on her and the greedy people in Africa, China, and the US who treat their workers like slaves! They use anything in their power to use us to get more money well beyond anything we can imagine. Then they use their money, not for necessities or pleasures, but for POWER to keep education to themselves through high education cost, avoid taxes, indoctrinate the working people that worker rights, minimum wages and unions are bad for the economy, and control elections.
obxdad says:
@ Nags head bob
Actually, I am a genius; I.Q.> 150
And my net worth is well over a million dollars, which I’ve earned entirely myself through real estate sales and designing and building homes.
I also own six houses. How many you got?
I’ve paid in excess of $250,000 in taxes in my best year, 2005. What’s your best contribution to our nation’s tax base?