John Edward, a resident of Chelmsford who earned his master’s degree at UMass Lowell and who teaches economics at Bentley University and UMass Lowell, contributes the following column.
One reason I started writing columns was to respond to things I read in the newspapers. Informed people will come to different conclusions regarding public policy issues. However, we too frequently encounter misinformation in letters to the editor.
This column is dedicated to correcting misinformation. I surveyed letters published in the Lowell Sun during August 2011. Some people really do say the darndest things.
On August 16th a writer from Chelmsford joined many others in complaining about the federal deficit. He had a solution: “Duplication of jobs in Washington that could be eliminated . . . would probably make up half the deficit.”
The budget deficit in Washington is $1.6 trillion. Half of that would be $800 billion. What if there was so much duplication that we could get rid of half of federal jobs?
According to the United States Census Bureau, total Federal Government Civilian Employment was 2.8 million in 2009. If we fired 1.4 million public servants and assumed that would cut the payroll in half, we could eliminate $90 billion in spending per year. Even if we eliminated all federal jobs, including the 1.6 million serving in the uniformed military, we still do not get anywhere close to cutting the deficit in half.
On the 30th, a letter from Dracut claimed, “… half of all taxpayers don’t earn enough to pay any taxes.” The author is probably referring to a projection by the Tax Policy Center that 46 percent of filers would not owe any federal income tax this year. That number is unusually high right now because of economic stimulus programs that target the people most likely to spend – low-income taxpayers. Many of the people not paying federal income taxes are on social security.
However, some wealthier people, including some very wealthy people, pay little or nothing because of generous credits and deductions. According to the Internal Revenue Service, 1,470 income tax filers who paid no taxes in 2009 had incomes over a million dollars. Over a half million taxpayers with adjusted gross incomes more than $200,000 paid an effective tax rate less than 15 percent.
Moreover, the federal income tax is just one component of our national tax structure. Most everyone that works, including people in poverty, pay very regressive payroll taxes. We pay sales taxes, excises taxes, and various state and local taxes that are also regressive. Think about it. Do you know anyone who pays no taxes?
A letter writer, no town indicated, complained on August 8, “Billions in stimulus programs have left us with nothing to show but more debt.” According to the Congressional Budget Office (CBO), the impact was far from nothing.
Using the midpoint of the CBO estimates, due to the stimulus programs Gross Domestic Product (GDP) grew by 1.6 percent more than it would have without the spending. The unemployment rate was a percentage point lower. Two million more people had jobs.
The CBO report also had an interesting analysis of which forms of stimulus had the greatest impact. Again, using their midpoint estimates, they reported the following multipliers. The higher the multiplier the more we have to show for the stimulus.
• Federal government purchases 1.75
• State and local infrastructure spending 1.75
• Unemployment benefits 1.45
• Tax cuts for low and middle income 1.05
• Tax cuts for high income 0.40
As for the debt, the CBO estimate is that the stimulus spending will add $825 billion over a decade. Citizens for Tax Justice has estimated that making the Bush tax cuts permanent would add $4.5 trillion to the national debt over a decade.
On the 14th, an online letter writer from Chelmsford was upset because “The Department of Education’s discretionary budget is $69.9 billion, none of which is spent on establishing schools, creating or controlling curriculum, paying teachers, writing text-books, or educating children.” My initial reaction was to consider how upset others would be if the federal government did write textbooks.
The Department of Education’s budget represents only 11 percent of national spending on education. The vast majority of money for teacher salaries, building projects, and educating children comes from state and local coffers. However, the Department of Education certainly does offer supplemental funds.
For example, they spend money on a Teacher Incentive Fund that “rewards educators who take on tough jobs and show results in high-need schools.” They also support a Troops-to-Teachers program. Many prospective students would not be able to afford college tuition without Department of Education funded Pell Grants. Many prospective educators would not become teachers, or have a decent facility to teach in, without the money invested by the department.
A Billerica writer wants to “remove all social services for illegal immigrants.” Many have written to oppose the Commonwealth of Massachusetts losing money by offering in-state tuition to illegal immigrants.
A study conducted by the Massachusetts Taxpayers Foundation, and endorsed by the Federal Reserve Bank of Boston, found the state would actually make money with in-state tuition rates for the children of “illegal immigrants.” According to a Harvard Law analysis: “every empirical study of illegals’ economic impact demonstrates [undocumented workers] actually contribute more to public coffers in taxes than they cost in social services.”
In the 1840s and 50s the anti-immigration zealots were called the Know Nothing Party. Today, it seems many are not aware that, as former Federal Reserve Chairman Alan Greenspan testified to Congress: “There is little doubt that unauthorized, that is, illegal, immigration has made a significant contribution to the growth of our economy.”
Finally, the August 6 edition had another letter from Chelmsford that made ridiculous claims, attributed to Steve Forbes, including “we [the United States] had more oil than the entire Mideast [the Middle East].” On the 10th the paper ran a great letter by Corey Sciuto of Lowell that shot down the claims and even took Forbes off the hook. It turns out the source was just a chain email making its way around the internet.
The question is why the Lowell Sun would print the original letter in the first place. Darned if I know.