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Credit: Marketwatch

This week, Rex Nutting of the MarketWatch caused a stir with his analysis correctly showing that federal spending has hardly budged under President Obama, rising at the slowest pace since the Dwight Eisenhower was in the White House. Predictably, James Pethokoukis of the conservative American Enterprise Institute cited the jump in Washington's spending as a percentage of the U.S. economy to comically "prove" that "actually, the Obama spending binge really did happen." Comically, that is, because Pethokoukis conveniently ignores the staggering economic contraction resulting from the Bush recession, with GDP only last year having returned to 2008 levels. Even less surprising, the perpetual tax-cutters of the right neglected to mention that thanks to the steep recession and the Treasury-draining Bush tax cuts, total federal tax revenues as a percentage of GDP hit their lowest level since 1950.

On January 7, 2009, Reuters reported that President Bush was bequeathing a $1.2 trillion budget deficit to his successor. That record gap was fueled by Bush's $700 billion TARP program and plummeting tax revenue due to the shrinking American economy. As Reuters noted, President-Elect Obama "said he expects deficits around $1 trillion for years, forcing tough budget choices."

Which is exactly what came to pass. But even with the 2009 stimulus program and the necessarily growing outlays for Medicaid, unemployment insurance, food stamps and other safety net programs, those trillion deficits had less to do with Barack Obama boosting spending than the dramatic loss of tax revenue. As former Reagan administration official Bruce Bartlett explained in October 2009:

According to the Congressional Budget Office's January 2009 estimate for fiscal year 2009, outlays were projected to be $3,543 billion and revenues were projected to be $2,357 billion, leaving a deficit of $1,186 billion. Keep in mind that these estimates were made before Obama took office, based on existing law and policy, and did not take into account any actions that Obama might implement...

Now let's fast forward to the end of fiscal year 2009, which ended on September 30. According to CBO, it ended with spending at $3,515 billion and revenues of $2,106 billion for a deficit of $1,409 billion.

To recap, the deficit came in $223 billion higher than projected [in January], but spending was $28 billion and revenues were $251 billion less than expected. Thus we can conclude that more than 100 percent of the increase in the deficit since January is accounted for by lower revenues. Not one penny is due to higher spending.

Obama's own tax cuts, the ones contained in the February 2009 stimulus bill, "reduced revenues in FY2009 by $98 billion over what would otherwise have been the case."

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Credit: Perrspectives

Conservatives this week were quick to mock the Obama campaign's "The Life of Julia," an online slideshow highlighting how government investments in education, health care, small business and retirement security help enable the children of working families to climb the ladder of social mobility. Republican critics dismissed that common path to the middle class as the "condescension" of "cradle-to-grave, government-supported existence" supposedly championed by Democrats.

It is only fitting, then, that the Romney campaign offers its alternative vision. So here is "The Life of Mitt," a tale of a winner-take-all America in which government exists to ensure a privileged few stay that way.

Age Minus 9 Months: The son of American Motors magnate and Michigan Governor George Romney, Mitt fondly recalls being with his father for Detroit's Golden Jubilee. That celebration marking the 50th anniversary of the American automobile occurred on June 1, 1946, "fully nine months before Romney was born." Years later, Mitt would similarly "remember" seeing his dad march with Martin Luther King, Jr.

Age 8: Young Mitt Romney is living his American Dream; that is, being born to a father who achieved his own. "Only in America could a man like my dad become governor of the state in which he once sold paint from the trunk of his car." In Michigan, Mitt learned to love cars and trees which were the right height. He also begins to soak up valuable life lessons from his dad, like "Mitt, never get involved in politics if you have to win election to pay a mortgage." As for the millions of Americans unable to pay theirs, Mitt later concluded:

"Don't try and stop the foreclosure process. Let it run its course and hit the bottom, allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up."

Despite his filial devotion, Mitt forgets his father's warning that "rugged individualism" is "nothing but a political banner to cover up greed."

Age 12: After attending a public elementary school, young Mitt is sent to the prestigious Cranbrook School in elegant Bloomfield Hills. This experience leads him to declare he's just "a guy from Detroit," one who happens to support school vouchers and tax breaks for home schooling, while slashing funds for public schools.

While Mitt Romney would certainly never had to worry about "getting a pink slip," he stills gets a chuckle thinking about those who did when his father moved AMC jobs from Michigan to Wisconsin. It's no wonder he chides his former home town in 2008, declaring, "Let Detroit Go Bankrupt."

Age 16: In 1963, Mitt confronts personal tragedy, as "dear, close family relative" Ann Keenan dies as a result of an illegal abortion. As he later explained during a 1994 Senate debate with Ted Kennedy, it was that searing experience which made him a pro-choice Mormon:

"It is since that time that my mother and my family have been committed to the belief that we can believe as we want, but we will not force our beliefs on others on that matter. And you will not see me wavering on that."

Age 19: In 1966, Stanford student Mitt Romney takes part in his only college protest, one in favor of the Vietnam War. But thanks to the generous 4-D exemption from military service, Mitt like many Mormon young men of his age was able to secure multiple deferments in order to perform his church mission. During that two and half year period when other American men were fighting in the rice fields of Vietnam, Romney faced hardships in the vineyards of France. These apparently included pooping in a bucket during his of roughing it in a palatial church mansion in Paris. As he revealed in a 1994 interview with the Boston Herald, Romney was not exactly racked by guilt as the war raged in Southeast Asia:

"Romney, however, acknowledged he did not have any desire to serve in the military during his college and missionary days, especially after he married and became a father," the newspaper wrote. "'I was not planning on signing up for the military,' he said. It was not my desire to go off and serve in Vietnam, but nor did I take any actions to remove myself from the pool of young men who were eligible for the draft. If drafted, I would have been happy to serve, and if I didn't get drafted I was happy to be with my wife and new child.'"

Thirteen years later, candidate Mitt Romney explained he passed on that tradition to his five boys:

"My sons are all adults and they've made decisions about their careers and they've chosen not to serve in the military and active duty and I respect their decision in that regard. One of the ways my sons are showing support for our nation is helping me get elected because they think I'd be a great president."

Age 24: In 1971, Ann and Mitt Romney head to Cambridge, Massachusetts. There, Mitt starts a "terrific" four year program to get his JD and MBA at Harvard Business School, completing both degrees 37 years before accusing Barack Obama of spending too much time in the Harvard faculty lounge. Even with small children and Mitt in school, Ann avoided the "dignity of work" because "Mitt had enough of an investment from stock that we could sell off a little at a time. The stock came from Mitt's father."

That history might explain why Romney offered this advice in March to college students struggling to pay for his education:

"If you can't afford it, scholarships are available, shop around for loans, make sure you go to a place that's reasonably priced, and if you can, think about serving the country 'cause that's a way to get all that education for free."

Pell grants, schmell grants.

In 2012, Mitt tells college students to borrow money from their parents to start a business, advice his son Tagg took to the tune of $10 million.

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For the second time in four months, Mitt Romney has penned a tough-talking op-ed on the Iranian nuclear program. But this time, the almost certain GOP presidential nominee has introduced a new riff to his constant refrain that "If we re-elect Barack Obama, Iran will have a nuclear weapon. If you elect me as president, Iran will not have a nuclear weapon." Now in his Washington Post piece and again in his speech Tuesday to AIPAC, Romney has portrayed himself as a modern day Ronald Reagan who will force Tehran to give up its nuclear ambitions just as it did the 52 U.S. hostages in 1981. Unfortunately, Mitt forgot the full story of the Gipper's experience with Iran. As it turned out, in the Iran-Contra scandal that almost ended his presidency, Ronald Reagan gave the mullahs in Tehran not a show of American might, but a cake, a Bible - and U.S. arms.

Romney first Reagan impersonation appeared in Monday's Washington Post as a follow up to November's "I Won't Let Iran Get Nukes." In it, he cast Barack Obama as "America's most feckless president since Carter" and cast himself as the Gipper:

Beginning Nov. 4, 1979 , dozens of U.S. diplomats were held hostage by Iranian Islamic revolutionaries for 444 days while America's feckless president, Jimmy Carter, fretted in the White House. Running for the presidency against Carter the next year, Ronald Reagan made it crystal clear that the Iranians would pay a very stiff price for continuing their criminal behavior. On Jan. 20, 1981, in the hour that Reagan was sworn into office, Iran released the hostages. The Iranians well understood that Reagan was serious about turning words into action in a way that Jimmy Carter never was.

Speaking by satellite Tuesday to the American Israel Public Affairs Committee Policy (AIPAC) Conference, Mitt again donned his Reagan mask (around the 8:40 mark above):

"I believe the right course is what Ronald Reagan called 'peace through strength.' There is a reason why the Iranians released the hostages on the same day and at the same hour that Reagan was sworn into office. As President, I will offer that kind of clarity, strength, and resolve."

Apparently, Mitt Romney wasn't paying attention to the rest of Reagan's performance. That would be the part when Ronald Reagan swapped arms for hostages with Ayatollah Khomeini.

The Iran-Contra scandal, as you'll recall, almost laid waste to the Reagan presidency. Desperate to free U.S. hostages held by Iranian proxies in Lebanon, President Reagan provided weapons Tehran badly needed in its long war with Saddam Hussein (who, of course, was backed by the United States). In a clumsy and illegal attempt to skirt U.S. law, the proceeds of those sales were then funneled to the contras fighting the Sandinistas in Nicaragua. And as the New York Times recalled, Reagan's fiasco started with an emissary bearing gifts from the Gipper himself:

A retired Central Intelligence Agency official has confirmed to the Senate Intelligence Committee that on the secret mission to Teheran last May, Robert C. McFarlane and his party carried a Bible with a handwritten verse from President Reagan for Iranian leaders.

According to a person who has read the committee's draft report, the retired C.I.A. official, George W. Cave, an Iran expert who was part of the mission, said the group had 10 falsified passports, believed to be Irish, and a key-shaped cake to symbolize the anticipated ''opening'' to Iran.

The rest, as they say, is history. After the revelations regarding his trip to Tehran and the Iran-Contra scheme, a disgraced McFarlane attempted suicide. (That would be the same Bud McFarlane whose endorsement Newt Gingrich touted during a reecent GOP debate.) After his initial denials, President Reagan was forced to address the nation on March 4, 1987 and acknowledge he indeed swapped arms for hostages (video here):

"A few months ago I told the American people I did not trade arms for hostages. My heart and my best intentions still tell me that's true, but the facts and the evidence tell me it is not. As the Tower board reported, what began as a strategic opening to Iran deteriorated, in its implementation, into trading arms for hostages."

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What do healthy, functional adults do when they make a serious mistake? Apologize for it. Apparently, Rick Santorum is not a functional adult.

“There was nothing deliberately done wrong here. This was something that happened as a mistake. Killing Americans in uniform is not a mistake, ” said Santorum. “Say it’s unfortunate…but to apologize for something that was not an intentional act is something that the president of the United States in my opinion should not have done.”

Protests erupted in Afghanistan after the accidental burning and two American troops were killed by an an Afghan soldier.

“I think it shows weakness,” said Santorum on the apology.

Yes, by that nutty standard -- that one shouldn't apologize for "mistakes" -- Ronald Reagan was a surrender monkey, as was George W. Bush -- not to mention Gen. Stanley McChrystal and Gen. David Petraeus.

They're all a bunch of weak, appeasing cowards, unlike the very brave and steadfast Rick Santorum, who never apologizes for anything.

I'll tell you this: the GOP owes America an apology for elevating this clown into a serious presidential contender.

(h/t David)

I enjoy reading The Onion, even more so when those it lampoons don’t get the joke. But while satire is meant to be amusing, it quite often reflects a more serious state of affairs. A recent Onion post on a captive breeding program designed to save the critically endangered moderate Republican had me laughing, before it had me thinking.

Because, actually... they’re right - the Republican Party truly is dying. For all intents and purposes, it’s already dead, the only impression of life being the lurching about of animated zombies eating their own brains, leaving the traditional mainstream moderate Republican conservative embarrassed and frustrated. The traditional mainstream moderate conservatives aren’t even in reality Republicans any longer, as the party itself has deteriorated from the rot of tea party fanaticism, and Koch Brother corruption, and the constant barrage Fox propaganda posing as journalism, and hate-filled blustering talk shows spewing hydrophobic nonsense, and the jaw-droppingly atrocious bunch of incompetent idiots posing as GOP Presidential candidates. All that is left of a once a respectable political party is the name “Republican” for nostalgic conservatives to cling to.

Which is so not good for our country. If disaffected Republicans ever managed to purge themselves of the zombies and the tea partiers and the Limbaughs and Fox and regrouped as something else, much like New Labour rebranded itself in the UK (although New Labour turned out to be just Tory Lite rather than any sort of improved Labour party), Democrats might finally have genuine opponents again - which would be both a bit scary and a bit hopeful. A nation runs best when there's an honorable opposition to keep the ruling party honest, regardless of what party is in power. An honorable opposition represents a very large proportion of the nation’s citizenship, and gives that citizenship a strong voice. An honorable opposition works harder at designing and proposing alternative ideas in the hope that the good they can do will garner them enough votes next go-round at the polls. I’d like to see an honorable opposition again.

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Credit: Jared Bernstein

Behind almost all of the disturbing issues raised by Mitt Romney's jaw-dropping tax returns stands one largely unchallenged conservative article of faith. Much lower tax rates for capital gains than income earned through labor, conservatives claim, spur investment, catalyze economic growth and fuel job creation. But if that Republican theology isn't true, then the United States has for decades done nothing more than deliver a massive windfall to the wealthiest Americans needing it least. Unfortunately, that's precisely what the data show. As it turns out, lower capital gains taxes increase income inequality - and not investment - in America.

As Paul Krugman recounted two weeks ago, the historically low capital gains rate enjoyed by Mitt Romney hasn't always been 15 percent. In the not-too-distant past, it reached 39.9 percent and with the Reagan tax reform of 1986 was briefly the same as the top tax rate on income. But successive presidents of both parties lowered the capital gains rate on investment income because they believed, the Washington Post explained, "it spurs more investment in the U.S. economy, benefiting all Americans."

But as Jared Bernstein demonstrated with the chart above, there's no evidence to support that claim. Bernstein found that the business cycle, not acts of Congress, drive investment in the U.S.

Hard to see anything in the picture supporting the view that either the level or changes in cap gains taxes play a determinant role in investment decisions.

Remember, the ostensible reason for the favoritism in tax treatment here is to incentivize more investment and faster productivity growth. But that's not in the data and the reason it's not in the data is because investors aren't nearly as elastic to cap gains rates as their lobbyists say they are (more precisely, they'll carefully time their realizations to maximize their gains around rate changes, but that's not real economic activity-that's tax planning).

Reviewing other analyses, Brad Plummer of the Washington Post concurred with that assessment that low capital gains taxes don't necessarily jump-start investment in the economy:

The top tax rate on investment income has bounced up and down over the past 80 years—from as high as 39.9 percent in 1977 to just 15 percent today—yet investment just appears to grow with the cycle, seemingly unaffected...

Meanwhile, Troy Kravitz and Len Burman of the Urban Institute have shown that, over the past 50 years, there's no correlation between the top capital gains tax rate and U.S. economic growth—even if you allow for a lag of up to five years.

Billionaire Warren Buffett, the inspiration for the "Buffett Rule" advocated by President Obama and his Democratic allies, couldn't agree more. As he told The New York Times last year:

"I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77—shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off."

But if lower capital gains tax rates have had little impact on investment, they have had an outsized impact on income inequality in the United States.

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The best examples come from a famous floor statement Gingrich made on March 21, 1986. This was right in the middle of the fight over funding for the Nicaraguan contras; the money had been cut off by Congress in 1985, though Reagan got $100 million for this cause in 1986. Here is Gingrich: “Measured against the scale and momentum of the Soviet empire’s challenge, the Reagan administration has failed, is failing, and without a dramatic change in strategy will continue to fail. . . . President Reagan is clearly failing.” Why? This was due partly to “his administration’s weak policies, which are inadequate and will ultimately fail”; partly to CIA, State, and Defense, which “have no strategies to defeat the empire.” But of course “the burden of this failure frankly must be placed first on President Reagan.” Our efforts against the Communists in the Third World were “pathetically incompetent,” so those anti-Communist members of Congress who questioned the $100 million Reagan sought for the Nicaraguan “contra” rebels “are fundamentally right.”

And the best part:

Such was Gingrich’s faith in President Reagan that in 1985, he called Reagan’s meeting with Soviet leader Mikhail Gorbachev “the most dangerous summit for the West since Adolf Hitler met with Neville Chamberlain in 1938 in Munich.”

Classic.

This is especially rich since Newt has been invoking St. Ronald of California more than any other GOP candidate.

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Here's the thrice-divorced Newt, talking to the Christian Broadcasting Network on why he's become the fundie favorite.

GINGRICH: I think the two key appeals are passion -- I think they instinctively can tell that I care so deeply of this country and the future of their children and grandchildren -- and second, I think the sense that I understand that there's a war against religion, and that I'm prepared...to actually fight back for the first in their lifetime and take on the judiciary when it's overreaching and when it's trying to drive God out of life.

Let's be clear about something up front. When Newt talks about a "War Against Religion" he means "A War Against Conservative Christians." Because I'm quite sure he's not talking about Muslims or Wiccans or Unitarians or Reformed Jews -- or any other faith that the fundies hate.

Anyway, I know Evangelicals love to see themselves as some sort of oppressed minority, but Republicans -- who constantly beg for their votes -- have held the White House for 19 of the past 31 years. Just where are all these secular atheist Jesus-hating judges coming from?

Not to mention that the ultimate judiciary, the Supreme Court, is dominated by Republican-appointed Roman Catholics.

But what's this "for the first time in their lifetime" stuff? Did Ronald Reagan and the Bushes not "fight back" against all those secular atheist Jesus-hating judges that Jimmy Carter and Bill Clinton surely appointed?

Shorter Newt: I'm more Jesus-y than George W. Bush.

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Guess JPod missed it when George W. Bush invited Julie Ainger-Clark to his 2007 SOTU. Who's that, you ask? She created the "Baby Einstein" series of DVDs, for which, after lawsuits, Disney was forced to offer refunds.

Just another example of Obama doing something completely innocuous and wingnuts -- like drooling, rabid Pavlovian dogs -- leaping to criticize him for it.

Bonus points here for working in a Reagan reference.

Three cheers for Ryan Lizza. On "Morning Joe" on Monday morning, he refuted the conventional Beltway wisdom that "both sides" are to blame for the political gridlock in Washington.

MEACHAM: What does the White House, I should say attribute the polarization to at this point and if the identified the problems can they do something to solve them?

LIZZA: I think two things that aren't that complicated, polarization, two parties moving to the left and right, but it’s not just polarization and I think where a lot of reporters have trouble describing this phenomenon accurately. Frankly, you have one party that has gone much farther to the extreme than the other. The Republican party has been pushed much farther to the right than the Democratic Party. So we don't have polarization, we have asymmetric polarization.

SCARBOROUGH: I just want to state for the record -- let the record reflect, I disagree. Go ahead. This is your time.

LIZZA: I think there’s some pretty, if you look closely at some of the political science behind that – I think you’d have a hard time making the case that the Democrats in Congress have gone as far to the left as the Republicans have gone to the right.

Scarborough lamely tried to refute Lizza’s point by suggesting that what unnamed Democrats said about George W. Bush was just as bad as what Glenn Beck is saying today about Obama. That’s nonsense, of course – there were no elected Democrats comparing George W. Bush to Hitler on the floor of the House or calling him a racist on national television.

But political rhetoric isn’t what Lizza was talking about.

As Nate Silver demonstrated with hard data, the Democratic Party is still a party primarily of moderates, and the GOP is totally dominated by conservatives. And even that doesn’t take into account how far right the scale has been titled over the past 30 years.

Back in the '50s, an era conservatives romanticize, Dwight Eisenhower presided over a 91% marginal rate on the wealthy and launched the biggest public works project in US history -- which was paid for by tax increases.

During the '80s, another favorite decade of the right-wing, Ronald Reagan raised taxes 12 times -- including one of the largest tax increases in U.S. history -- and signed a bill that provided a path to citizenship for immigrants. Both of which would be unthinkable in today’s GOP.

Today, we live in an era in which a 35% tax on the highest earners constitutes tyranny, a $787B emergency measure to stave off a second Great Depression – over a third of which was tax cuts – is characterized as a historically unprecedented spending binge -- and the GOP's answer to immigration is to forcibly deport 12M people. Not to mention the fact that Senate Republicans have used the filibuster more than any other minority in history -- and that now it's commonplace for Republican presidential candidates to argue that the most popular programs of the New Deal and the Great Society should be eliminated.

Lizza should be applauded for getting this right. This “both sides have become equally extreme” stuff is just lazy and uninformed -- and should be throughly refuted every time it comes up.