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RUSH: Vickie in Brooksville, Kentucky. You’re first today on the EIB Network and the phones. Hi.

CALLER: Hi. This is truly an honor. Thank you very much, Mr. Limbaugh.

RUSH: You bet.

CALLER: I have a question because I live in Literalville. I live there since I had my first child — he’s 37 now — and I have a question about how on earth can money that isn’t going — because the tax rates have been the same for ten years, that is not going — to the government and is gonna continue to not go to the government, ‘add to the debt’? And how can an estate tax that is now zero, that is going to go up to 35%, ‘add to the deficit’? I swear to God, this is driving me crazy.

RUSH: Where are you hearing these two facts?

CALLER: I’m hearing them from the politicians that are yakking their heads off and —

RUSH: Okay, what’s the first one they’re saying?

CALLER: That if we pass the continuation —

RUSH: Of these tax rates?

CALLER: — of the present rates, that it’s going to add to the deficit and the debt. How can that be? They’re not getting money. They’re going to continue to not get money. So how on earth can that ‘add to the debt’?

RUSH: Wait, wait, wait. Again, it’s baseline budgeting. It’s how you set the table. Remember these people, for the whole year, have been expecting tax rates to go up. They have already been spending that money. So now that the tax rates are going to be the same, they’re looking at this as a ‘cut,’ therefore ‘costing’ the government money.

CALLER: This is insane! If I’m working and I think I might get a raise on January 1st, I don’t start spending the money in July.

RUSH: Let me ask you a question.

CALLER: Yes, sir.

RUSH: And I’m not gonna be able to ask it in the remaining ten seconds I have.

CALLER: Ohhhh.

RUSH: So can you hold on during the break?

CALLER: I certainly will.

RUSH: All right.

CALLER: Thank you.

RUSH: ‘Cause I just have a question for you. Don’t go away. We’ll be back, we’ll continue right after this.


RUSH: So you think it’s insane what they are saying, Vickie, about no changes in the tax revenue whatsoever.

CALLER: Correct.

RUSH: So how can that add to the debt, right?

CALLER: Exactly.

RUSH: Okay, let me ask —

CALLER: I don’t understand.

RUSH: Well —

CALLER: This is nuts.

RUSH: Well… (sigh) Do you understand when I tell you that it’s the way they’ve set the table? They were counting on a tax increase.

CALLER: Ahem. Well, I understand your point.

RUSH: And now they’re not getting a tax increase, so in their mind there’s less revenue coming in. That’s going to hurt the deficit.

CALLER: How…? (gagging)

RUSH: Here’s my question.

CALLER: Am I crazy or are they crazy? That’s what I’m trying to figure out.

RUSH: No, they’re crazy, but —

CALLER: Thank you.

RUSH: All right. Now, but let me ask you a question.


RUSH: First off, do you do the grocery shopping in your family.

CALLER: Oh, my God, yes!

RUSH: All right. Have you ever looked at a newspaper or seen an ad for a product on television that you don’t need, but because it’s on sale you go buy a bunch of it anyway?

CALLER: Depending on what it is, yes.

RUSH: Okay. It’s the same thing at work here, and you’ve told yourself that you ‘saved’ a lot of money, even though you never woulda in her spent the money in the first place unless there was a sale.

CALLER: Mmmmmm…

RUSH: That’s what they’re telling themselves.

CALLER: (grumbling)

RUSH: No, no, I’m not putting you down now. I want you to try to get your arms around this.


RUSH: Let me give you a product. You’re sitting there minding your own business and here comes an ad for potatoes, and you see potatoes which are normally — I’m just pick a price here — a buck-fifty a pound are now a dollar a pound. You don’t need any, but you can’t pass up that price so you go buy a couple pounds.

CALLER: That’s true, because it’s going to go back up, and I know that for a fact.

RUSH: Okay.

CALLER: It will go back up.

RUSH: Right. So you’ve just told yourself you saved a lot of money, right?

CALLER: Correct.

RUSH: But you didn’t. You spent money you would have otherwise never spent because you don’t need the potatoes. You only bought ’em ’cause they’re on sale. So you’re actually out the money, and you’re telling yourself you saved a bunch. This is how our government baseline budgeting works. They have a budget that automatically triggers every item going up eight to 10% every year, and if it only goes up five, they claim that their budget’s been cut, even though they had a 5% increase. You have just spent money that you weren’t going to spend, but because there was a sale, you’ve told yourself you saved money. These guys are telling themselves this. They’ve been planning on a tax increase, therefore more money, but there never was a tax increase. It never became law. But now there definitely isn’t gonna be one, they claim the deficit’s gonna be hurt because they’re not gonna get what they never were gonna get.

CALLER: A-ha. So even if for the past ten years it’s been the same and it’s going to continue being the same, in their wee-small minds, they believe that that actually is going to be a debt?

RUSH: They do. For two reasons. A, it’s in their DNA.

CALLER: Ahhhh!

RUSH: They believe that every tax cut costs the government money.

CALLER: I see.

RUSH: They are demonstrably wrong about it.

CALLER: Oh, my God, yes! (laughing)

RUSH: So anything that looks to them like a tax cut — which is tax rate’s staying the same after they thought they were going up — that constitutes to them a cut. Therefore think they’re getting screwed with less money.

CALLER: That also includes the estate tax, which is zero that’s going to go up to 35% —

RUSH: They’re happy about that.

CALLER: — on money that’s already been taxed. They consider that, because it’s not going up to whatever they want, therefore —

RUSH: Right, because it used to be —

CALLER: — it’s going to be added to the deficit.

RUSH: See, it used to be 55%.

CALLER: Huh-uh. Correct.

RUSH: Now it’s going from zero to 35%. They don’t look at that as an increase; they look at that as a cut.

CALLER: Oh, my God! These people are NUTS!

RUSH: Well, this is how —

CALLER: How do they live day-to-day?

RUSH: This is how the federal budget gets put together every year. Have you —

CALLER: No wonder we’re in such a freaking mess!

RUSH: Exactly right. Now, I’m sure you can remember every year a budget is presented by let’s say George W. Bush, and they said, ‘It’s DOA. Look at all the budget cuts in here.’

CALLER: Right. Right.

RUSH: And you looked at it and said, ‘There aren’t any cuts ’cause the budget’s bigger than it was this year. There aren’t any cuts.’

CALLER: Exactly.

RUSH: They think there are because let’s say the Department of Education was scheduled to get a 10% increase and Bush’s new budget says, ‘No, we’re only gonna spend 7% more.’ They think they’ve got a cut of 3%. So they run around saying, ‘He cut our budget!’

CALLER: So they present this to the public —

RUSH: Right.

CALLER: — in a propagandist style —

RUSH: Right, and the media —

CALLER: So they can persuade the public to believe this crap?

RUSH: And the media helps it along because they’ll do it with things like the school lunch program for kids.

CALLER: That’s why when they started this whole entire conversation, even Fox News — which I only watch Fox News — kept saying that this was going to cost $900 billion, and I’m thinking, ‘This isn’t gonna cost anything because nothing’s changing!’ I don’t get it.

RUSH: That’s right. It’s gonna cost —

CALLER: Why do they do this!

RUSH: It’s gonna cost $900 billion for two reasons. They say it politically and also because they’re not gonna get the money. Here’s what I would say about costing money. I think we need to get away from this whole theory, all of this language, that tax cuts cost the government money. Who the hell are they? What right…?

CALLER: Exactly.

RUSH: How come tax increases never cost us?

CALLER: Exactly.

RUSH: It’s our money. If they get less of it, it is just like we are: It’s up to them to deal with it.

CALLER: And I have the biggest beef in the world with the Republicans. They are constantly just going along with this. Why can’t they change this conversation back to reality.

RUSH: Because —

CALLER: (sneezes)

RUSH: Because they’re on defense. They don’t like it being said that they’re starving kids.

CALLER: Oh, my God, this is crazy! You know, we’re gonna lose if they continue to have this conversation on their terms instead of dealing with reality. Reality is a whole lot different than what we’re talking about.

RUSH: That’s right. And that’s why this program is here. And that is why I have been really probably over-dwelling on this today, but it’s crucial. When I hear Obama start talking about, ‘If we don’t do this, we’re gonna have a double-dip recession’? Well, if we don’t do what? We’re not changing anything! There’s no change. There are no tax cuts. It’s this minuscule, 2% cut. I’m not opposed to it, don’t misunderstand, but it’s just one year. It’s a 2% reduction, not an elimination of the payroll tax. So it’s gonna amount to some, but nothing anybody can plan on. It’s just one year. It’s just in there so that the regime can say they cut taxes, but until they start cutting marginal income tax rates there’s nothing in here that’s going to stimulate economic growth.

And this Obama knows.

Remember, now, folks, the last thing he wants is for this to work. Here you are, a Marxist socialist, you’re sitting there in the White House, and at the end of two years you have to say, ‘You know what? I was wrong. The supply-side theory actually does work’? Well, it isn’t gonna work. Keeping the same tax rates, if they haven’t stimulated an economy… See, they’ve already done the stimulation. When Bush cut these taxes in 2001 and 2003, the stimulation, the stimulus, took place within three years. To stimulate again you’d have to have more cuts now. The stimulus has already occurred. So it’s now embedded. It’s part of the daily economic structure. There won’t be any stimulus here. This Obama knows.

So in two years he can say, ‘I tried it. You know, in the interest of bipartisanship to get along with the other guys after they won the election, blah, blah, blah. I’m a good guy. I tried it their way and it just didn’t work,’ and in two years Obama would love to be able to call a press conference where he officially buries the notion of supply-side, ’cause he tried it for two years and it didn’t work, when he didn’t try it. That’s the risk here. I hear our guys running around saying, ‘The Democrat Party is dead.’ Ah, ah, ah, ah! I’ve got guys writing the e-mails saying, ‘Rush, he’s not that smart.’ Now, wait a second.

All you people continually writing about how we’re always one step behind the Democrats and they’re always strategically one step ahead of us, I give you an example of that and you say, ‘He’s not that smart.’ Okay, maybe he isn’t. I don’t know. But somebody’s got this idea because I’m telling you: On Tuesday he says there’s no way there’s gonna be double-dip recession with current policy. The next day he says we run the risk of a double-dip recession if we don’t do this tax rate extension. So something’s going on here. These guys… Somebody’s pulling him along if it’s not him. Frankly, I don’t care who is not. I just know what’s happening. I listen to them say so. It’s not that hard to figure out.


RUSH: Robert ‘Fibbs,’ the White House press secretary, says the White House is estimating the cost of the tax cut dealing somewhere in the range of $700 billion to $800 billion a year and we have a caller coming up from Bozeman. I don’t want to take him yet. (interruption) He didn’t drop? Bozeman is still there? (interruption) Oh, the guy on Line One did drop. We had a guy who said, ‘Most economists keep saying the Bush tax cuts will add 790 to 800 billion dollars to the deficit over time. Why are you telling this woman, Vickie, that it won’t add to the deficit?’ He said, ‘I’m confused.’ I wish he were still there. This is a great question. If you don’t understand that, it’s a great question, and I’m gonna do my best to explain it anyway even without the caller.

Because this is a perfect disinformation campaign. They want you to think that any tax cut — and there isn’t one. He even said here ‘keeping the Bush tax cuts.’ The Bush tax ‘cuts’ happened seven years ago; they’re now existing tax ‘rates.’ They’re tax rates that have been in place for ten years. This notion that they cost the government money, stop and think about it. Folks, remember, to liberals, government’s god, and god should never starve, and god should never be thirsty, and anything that takes money away from god is immoral. And these people are looking at this as $900 billion to $800 billion in less revenue, but it isn’t. They are not losing a dime! There is no less money going to Washington because the tax rates are staying the same.

There’s no way, mathematically, economically, you can say that everybody paying the same tax rates is gonna ‘cost’ the government money. The only way that happens is if unemployment keeps rising and there are fewer people paying taxes and we extend unemployment benefits. That’s what causes deficits: Spending. Am I yelling? I got a note today saying I’m yelling too much and I don’t have to yell. Am I yelling here? (interruption) Well, I’m just passionate. This woman says, ‘You can get passionate without yelling.’ I don’t want drive people off here but some of this, you lose your patience with it. You know, I live in Literalville, Realville, Logicville, wherever. We have current tax rates. They are X, whatever they are.

They’ve been there for ten years. And now all of a sudden, this year, those same tax rates are going to cost the government $800 billion? They didn’t say that last year; they didn’t say it the year before. They’re only saying it now. Again, it’s how you set the table. The context is, ‘We were going to let them expire, and the top rate was gonna go up from 36 to 39.6%. The 10% was gonna go to 15% and so on.’ So under that scenario, if we let them expire and the tax rates go up, the liberals are counting on that, they’re hoping for that, and they are thinking that those increased rates are going to result in more money. Now all of a sudden Obama comes along and says, ‘Guess what? We’re gonna keep those rates the same. We’re not gonna sunset them. We’re not gonna let ’em sunset, and doing this will cost us $800 billion.’

The only way it costs ’em $800 billion is if they’ve already spent it based on what they thought it was gonna go up, ’cause it’s not gonna result in any less money coming in. Again, the only way that these tax rates… Listen to me on this, ’cause I can lose patience being patient. Look at me now. The only way keeping these tax rates the same can ‘cost money,’ quote, unquote — I don’t even like that. The only way these tax rates staying the same will result in less money going to Washington is if fewer people have jobs, thus fewer people are paying taxes. Add to that those people who lose jobs will get unemployment benefits, and we will be spending more money than we were because we have to spend unemployment benefits, and we’re gonna be getting less money because they don’t have jobs and are not paying taxes.

Ergo it would, quote, unquote, ‘cost the government,’ but only if people lose their jobs. If unemployment comes back, keep the tax rates the same, and revenue will go up. More people are paying taxes. I know one Democrat’s out there saying that we have to borrow money from China to pay for the rich to have a tax cut. We don’t. We have to borrow from China for every bit of spending Obama’s doing. We’re not spending anything on these tax rates! How hard is it for you on the left to get this through your heads? Keeping the tax rates the same, we’re not spending any money to do that.

If the tax rates went down, we wouldn’t be spending any money. Do you know what would happen if the tax rates went down? There would be more jobs. Businesses would start hiring people. There would be the money to do it. Lowering tax rates would actually increase revenue to Washington, if that’s what you’re concerned about. This guy on Line One who didn’t hang around said, ‘How can you tell this woman it isn’t going to cost when all these economists are saying it will!’ Well, yeah, we got a Democrat saying we’re gonna have to borrow money from China to do this. Do you really believe that? Yeah, Obama’s gonna get on the phone to Hu Jintao.

‘Hey, Hu? Yeah, you! Hu! I need $900 billion because we’re gonna keep our tax rates the same here.’

Hu Jintao would say, ‘What?’

‘You heard me. I need $900 billion because we’re gonna keep our tax rates the same.’

Hu Jintao would say, ‘Who you been talking to, because that’s nonsensical!’

‘I don’t care who I’ve been talking to, Hu. I’m talking to you now, and I need $900 billion because we’re not changing our tax rates.’

Somebody please tell me you’re getting this. This is 1 + 1 = 2. This is a kindergarten-type lesson, yet the way I’m explaining it is easy. What I do here is take the complex and make it understandable. This also shows the Democrats don’t give a damn about revenue. They care about power. They don’t care about revenue. They cared about revenue there’s one way to do it: Lower these marginal tax rates and create more taxpayers by creating more jobs. Tax revenue will go up because you have more taxpayers. If the gasoline price stays the same and you drive no differently next month, is it gonna cost you any money? No, no! The per-pump price where you buy gas is going to stay the same next month. Your salary stays the same next month. You are going to drive the same amount next month as you drive this month.

Are you going to lose money with the gasoline pump price staying the same? No. Well, then doesn’t it follow that if the tax rates stay as they have been for ten years and we have the same number of people working — probably fewer — how in the world is it gonna cost the government anything? The government has already adjusted to the revenue produced by these income tax rates. They adjusted to it six, seven years ago. I am more befuddled by how… The guy admitted he was confused, but I am more befuddled by the question than I am by the answer. I, ladies and gentlemen, have been known to lose patience being patient. Some of you people are a challenge in this regard. Twenty-three years I have been explaining this in one way or forum or another.

Baseline budgeting. This. Tax rates going up, less revenue to Washington; tax rates going down, more revenue to Washington. That leads to more taxpayers. This guy says, ‘Most economists say keeping the Bush tax cuts will add $790 billion to the deficit.’ They’re lying. They are politically oriented. I have a story in the stack here that makes total sense. You know, just like at university the conservative professor is a rarity you know what else is? Republican conservative scientists are a rarity, because most of the grants go to liberal scientists. So they become liberals. They write stuff that’s liberal. They promote stuff that’s liberal. That’s how they live. They get grants. You won’t find very many conservative scientists.

‘Mr. Limbaugh, science is not politicized!’

Right, Mr. Castrati. You know, you get stupider every time you open your mouth here. Science isn’t politicized. So, there’s no way. There is no way keeping these tax rates the same costs the government anything, certainly not $800 billion. The only way tax rates stay the same means less revenue is if unemployment keeps going up. Fewer taxpayers paying taxes makes government gets less money. Then we gotta spend more money paying ’em not to work when they go on unemployment. That’s the vicious cycle we’re in. Unemployment is costing us revenue two-ways: Fewer taxpayers and we gotta pay the unemployed. We gotta call Hu Jintao. The real call is, ‘Hey, Hu! I need $900 billion to pay unemployment benefits next year.’


RUSH: Just imagine this. Obama gets on the phone in the Oval Office, he calls China, (imitating Obama) ‘Hey, Hu, uh, Barack Obama here.’

‘Yeah, how are you?’

‘Just fine. Hu, look, I need to borrow some more money.’

‘What for?’

‘Well, we need to pay some people that are not working.’


‘Yeah, we call it unemployment compensation.’

‘You really pay people not to work?’

‘Yeah, for three years.’

‘You Americans pay people not to work for three years and you’re calling me for a loan to pay people not to work?’

‘That’s right, Hu. That’s who they told me to call, you.’

The ChiComs are saying, ‘Man, this is gonna happen sooner than we thought. They’re willingly paying people not to work. It really has happened! We thought we were dead with Reagan there, but, look, two years they’re paying people, three years, not to work, man, oh, man, oh, man. Pretty soon they’re gonna be like Europe and they’re not gonna have an army, either.’ Hu Jintao, I mean if he gets that phone call he’s gonna hang up, may start believing in Christmas. That would be the result.

Now, all of you people still scratching your heads here over my attempt to explain to you how the tax rate staying totally the same doesn’t cost any money, what about all the new massive spending in this bill? Do you know they’re calling this tax rate extension bill a stimulus? There is a whole bunch of new spending in this, and the media mostly ignored that. But what it shows is that regardless of tax rates, the Democrats spend, and the Democrats in Congress are completely rejecting what the voters said in November. What they’re doing, the Democrats in the House are (raspberry) to the voters. That’s exactly what’s happening here.

As to the estate tax, try this a different way. If you own a farm, let’s say if you’re one of the 84,000 black people who own the 17,000 farms? Did you hear that? You’re one of the 84,000 black people who now, as of yesterday, own 17,000 farms. You’re not 84,000 black people who own 84,000 farms. If you own a farm that has been handed down through three generations, and the land alone is assessed at $5 million, but you don’t have anything close to that kind of money to pay a new estate tax, then you have to sell the family farm. And there are many farms and small businesses that get taken down under this. It’s not just about millionaires. It’s not just about billionaires. If the patriarch is lazy or doesn’t want to face his own death and doesn’t do proper estate planning, the heirs can end up having to sell most of what they get to pay what was a 55% death tax. The children of Joe Robbie had to sell the Miami Dolphins and the stadium to pay federal income tax, the death tax.

Now, the people who are writing all of this legislation and making these arguments don’t run small businesses. They don’t run farms. They come out of law school or some highfalutin Ivy League business school or art school or journalism school, they spend their entire lives in politics or law, and they treat everything in a simplistic and very stark way. Now, we have $200 billion or so in new spending in this tax extension bill. Who’s paying for that? There’s no new spending in keeping tax rates the same, but there is new social spending here. Who’s paying for it? And the spending goes on no matter what, right? Oh, yeah, can you imagine how foolish Irksome Bowles and Alan Simpson feel about now? Well, these guys for six months, they have the assignment of a lifetime: Come up with the magic that’s going to fix our deficit problem. They finish, they take a vote, they can’t even get their own commissioners to go along with them, and now everything they said may as well not have mattered, they may as well not have done it. Look how many cocktail hours they missed. That’s a lot of drinking they have to make up.

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