Mike Pence Blames Taxation Rather than Wall Street for Greece's Financial Collapse
You can always count on Greta Van Susteren to allow Republicans like Mike Pence to give an interview full of lies and Republican talking points like he did here and not challenge any of them. Where to begin? How about Greece's financial collapse which Pence blames on the country adopting a Value Added Tax or VAT. I wonder why Mike Pence didn't bother to mention Wall Street and Goldman Sach's part in their demise?
Here's an article from The New York Times explaining what happened there. Wall St. Helped to Mask Debt Fueling Europe’s Crisis:
Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts. As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.
Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting. Read on...
No, the guy who was meeting with Wall Street hedge fund managers last month was instead blaming their problems on the taxes being too high. Despite the fact that Paul Volker has ruled out his idea of a VAT being on the table "now or for the indefinite future", the Republicans have decided this is a good campaign issue for them.
A value-added tax would damage the economy and hamper job creation, House Republicans said Tuesday.
Several House leaders along with more than 80 other lawmakers introduced a nonbinding "sense of the House" resolution today opposing a VAT on top of the current tax code. The Senate recently approved a similar resolution.
"A European-style VAT will only further the catastrophic cycle of tax and spend government in Washington," House Ways and Means Committee member Wally Herger (R-Calif.) said in a release today.
Herger, Minority Leader John Boehner (R-Ohio), Republican Whip Eric Cantor (R-Va.) and Republican Conference Chairman Mike Pence (R-Ind.) are responding to several recent comments by the Obama administration that the VAT is still on the table as a potential revenue raiser.
Former Sen. Alan Simpson (R-Wyo.) and former Clinton chief of staff Erskine Bowles, who are heading up President Barack Obama's financial commission, said late last month that nothing is off the table when it comes to dealing with the nation's deficits and debts.
Simpson said a value-added tax couldn't be done without first dealing with income taxes.
I doubt we'll hear Pence or his ilk raising any similar objections if that debt commission decides to "fix" Social Security. And then there's the matter of Mike Pence carping about this being another "bailout" they're against. Ezra Klein wrote this about the Republicans latest talking point.
On Friday, David Weigel noted that "Greece" had begun popping up in Republican speeches where "France" used to be: It's "the nation whose name Republicans invoke to make the case against Democratic policies."
But Greece is serving another purpose, too: This is a bailout Republicans can finally be against. TARP, after all, was proposed by the Bush administration and attracted a substantial number of Republican votes in Congress. Not so with Greece. Which is why you see House Republican Conference Vice Chairman Cathy McMorris Rodgers acidly saying, "The U.S. isn’t asking Europe to help bail out indebted U.S. states such as California," and joining with Rep. Mike Pence to send a letter to Geithner and Biden opposing a European bailout.
You might wonder why this is becoming an issue, given that the Obama administration isn't bailing Greece out. Well, in something of a bank-shot argument, Republicans are saying that it is. The International Monetary Fund is extending loan guarantees to help Greece. Like other countries that are part of the IMF, the U.S. pays dues to the organizations. Those dues will help fund the aid package. So there's your bailout.
It's a clever, albeit ultimately disastrous, stance. At this point, it's genuinely hard to imagine anything that would be as devastating for the global economy -- which includes us, sadly -- than if Europe drops off a cliff. It would freeze our financial sector, destroy demand for our exports, destabilize other countries we trade with, and generally throw us all back into a recession.
When Pence starts talking about reigning in Wall Street and regulating them again, he can carp about "bailouts". Until then it's either bail them out or let the world's economy go down. I would prefer to regulate them. Pence apparently would prefer to let them do anything they want and then take the rest of us down in flames.
Transcript via Fox.
GRETA VAN SUSTEREN: Republican Congressman Pence is worried the U.S. could end up like Greece if we decide to try a certain kind of tax. Congressman Pence went "On the Record."
VAN SUSTEREN: Congressman, nice to see you, sir.
REP. MIKE PENCE: Good to see you, Greta.
VAN SUSTEREN: I understand the GOP leadership here on the House side is writing a letter to the debt commission, the president's debt commission. Why are you doing this? What do you want?
PENCE: Well, we really want to put down a marker that the answer during the worst economy in 25 years is not to raise taxes on working families, small businesses and family farms, and it's especially not the right answer to pass a European-style value-added tax, as has been rumored by people in and around the administration. And House Republican leaders are -- along with the majority of our colleagues, are going to urge the debt commission to take the VAT off the table.
VAN SUSTEREN: Well, has the president ever specifically said it is on the table or off the table?
PENCE: Well, he hasn't specifically said either one. We've heard very influential economic voices in and around the administration talking about the fact that everything is on the table for the so-called...
VAN SUSTEREN: And even Paul Volcker said something.
PENCE: ... debt commission. Well, Paul Volcker specifically referred to a value-added tax. And we just really believe with the disappointing numbers last Friday -- despite some additional job growth in the economy, we saw unemployment
rise from 9.7 percent to 9.9 percent -- that this is a time when the administration, and specifically this debt commission, ought to make it clear to the American people and clear to the wider world that the VAT has no place in America's budgetary future.
VAN SUSTEREN: Well, it's abundantly clear, I mean, it's no secret that we have a huge economic problem (INAUDIBLE) we need cash. The government needs cash. Now, the value-added tax I understand was at least part of the -- what's -- what's going on in Greece. Greece attempted a -- has had a value-added tax in an effort to solve their economic problems, and it's been at least catastrophic. Are they pulling back on it in Europe?
PENCE: Well, we'll see. I mean, the approach that this administration and the European Union is taking is the same flawed approach we took to our Wall Street crisis a year-and-a-half ago. It's more borrowing, more spending, more bail-outs.
But when you look at the role of a VAT, during the years that Greece saw an extraordinary explosion in their domestic spending and their debt to the size of their economy, they had a 19 percent value-added tax in place. Most of the countries in Europe that are facing a fiscal budgetary crisis today have a value-added tax at the center.
And it's easy to understand why it becomes a problem. The value-added tax is in a very real sense a hidden tax. It taxes along the way the transaction of goods even in the midst of the manufacturing process. And so for many companies -- or countries, rather, they can start with a fairly low value-added tax and then raise it without much public scrutiny. And then it tends to just simply feed the beast of more government and more spending.
We really believe a value-added tax in Europe was a major contributing factor to the fiscal crisis in Greece and Spain, in other countries, and we simply need to take it off the table here in the United States.
VAN SUSTEREN: Well, I suppose that, you know, some would be more inclined to look at with it favor if any of the economies that had the value-added tax were thriving, although, of course, even -- we don't have the value-added tax and we're having problems. But let me go to Greece specifically. The European Union is bailing out Greece. Do we have -- or -- and the IMF -- do we have to pick up any of that freight, American taxpayers?
PENCE: We really do. The American people deserve to know that the deal that was cut to bail out Greece includes between $6 billion and $8 billion in American taxpayer loan guarantees. And the massive new bail- out, the $1 trillion bail-out that's being discussed for across the eurozone, would include more than $50 billion in U.S. taxpayer money in loan guarantees.
Look, we're not looking to the European Union to bail out New Jersey or California. The European Union should not be looking to the taxpayers of the United States of America to provide the loan guarantees to bail out Greece or Portugal or Spain or any other country.