Fox Falsely Claims Government Spending And Higher Tax Revenue Are Harming The EconomySeptember 12, 2013 2:26 PM EDT ››› MICHELLE LEUNG
Fox Business' Stuart Varney falsely claimed that government spending and increased tax revenue were harming economic growth, despite the fact that economists say government spending cuts negatively affect GDP growth and the rise in revenue has reduced the deficit, a goal Varney has previously championed.
On the September 12 edition of Fox & Friends, Varney discussed the recent Congressional Budget Office (CBO) report to Congress estimating that U.S. budget revenue is up $284 billion dollars. Varney ignored that the report revealed this increased tax revenue has been used to reduce the deficit by $400 billion, instead falsely claiming that government spending and high taxes are the cause for "a lousy growth rate," a "shrinking middle class, and appalling rates of unemployment amongst young people and minorities."
In fact, a number of economists have pointed to decreased government spending as the greatest drag on economic growth and a contributor to the sluggish recovery, and research from the CBO reveals that the economy's current low growth rate can be attributed to the large cuts in government spending known as sequestration. The CBO estimated that canceling sequestration would raise GDP by 0.7 percent, could generate 900,000 new jobs by 2014, and would lead to greater output and higher employment in the next few years.
Furthermore, Varney failed to mention that this rise in revenue has led to a two-thirds decline in the deficit, despite the fact that he has previously fixated on reducing the deficit as an economic priority. The deficit is now the lowest it has been since 2008.