PDA

View Full Version : So, the economy's in the toilet.



Charlie Kondek
17th July 2003, 14:09
And I think it's mostly the Bush administration's fault. Many arguments on economics are largely a matter of opinion and some are beyond the scope of the layperson. But I think it's pretty glaringly obvious in this case who's to blame.

Bush has inititated an atmopshere of fear and dread in the wake of 9/11 that I think has greatly impacted the market. Combine this with the costs of the "war on terrorism" and our involvement in Afghanistan and Iraq, PLUS this voo-doo economic tax cut of his, and you've got unemployment up, investor confidence down, interest rates in the sh!tter, taxes actually GROWING at the state and regional level, and no end in sight. At this rate, my generation will be plugging holes in Social Security and medicare that cannot possible be filled.

Hey, I thought the GOP was supposed to be good with money?

CNN story about the budget deficit:

http://www.cnn.com/2002/ALLPOLITICS/07/12/budget.deficit/index.html

The White House revised this year's federal budget deficit estimate upward to $165 billion Friday from an earlier $106 billion projection. But numbers released Friday by the White House's Office of Management and Budget project the deficit will begin to shrink next year -- an outlook at odds with congressional budget experts, who project the deficit to grow again in fiscal 2003, which begins October 1.

And that doesn't include the wars in Afghanistan and Iraq, by the way, and the budget projections assume an economic turnaround, which there won't be. But wait, there's more. Here's a telling story about how the Bush admin. routinely stifles economic reports - routine economic reports - that are unfavorable to its fiscal policies.

http://slate.msn.com/id/2085481/

Of course every administration likes to trumpet its good news and hide its bad, but what's remarkable about the Bush team is its willingness to stifle data that had been widely released and to politicize data that used to be nonpartisan.

But don't just take my word for it. Read the papers. Link Central:

http://slate.msn.com/id/2085695/

Jack B
17th July 2003, 14:22
I ascribe to the Camelot Theory of Economics. To wit, the health of the King is the health of the Nation. When Clinton was king, ahem, president, the economy was on a bull run fueled by his optimism and anything-goes attitude. The economy turned sour in September of 2000, because Clinton was a lame duck and it was obvious to everyone that Dub<i></i>ya was going to rule next. He is a pessimist and control freak, so everyone started running scared, the jig was up, all the air was let out of the balloon, and people started holding their money.

I'm not saying the economy wouldn't have tanked under Gore. He is at least as pessimistic as Bush, and the massive financial scams would have paid the piper anyway. However, there would have been much less of an upheaval since Gore would have continued Clinton policies such as progressive taxation and budgetary discipline.

Trickle down doesn't work and has never worked. Unless you call massive federal debts and the Great Depression "working".

elder999
17th July 2003, 14:31
The White House and Republican Congressional leaders were desperate to squeeze the Bush tax cut into the $350 billion limit set by the Senate. There were plenty of ways to do this; all sorts of accounting flummery had already been perpetrated, but the final tweak was that the working poor-who pay little or no income taxes-families with incomes from $10,500 to $26, 625-should not receive the expanded child tax credit. Almost 12 million children were effectively denied stipends up to $400. This saved an estimated $3.5 billion, or 1% of the bill.

The Republicans have never been defenders of the poor, but Bush was supposed to be different, a “compassionate” conservative. Ironically, Ari Fleischer argued that this was a matter of principle- that people who pay taxe4s should get a tax cut. George Bush has argued relentlessly and persuasively in 2000 that the working poor arte hit harder by marginal tax rates than most Americans because Social Security and Medicare take a huge bite of their paychecks.

Bush talked more about the poor than any major presidential candidate in years.

The tax cut is a double hit on poor children. In addition to the child tax-credit fiasco, there is a potentially devastating impact on tax-free municipal bonds, which are used to finance major construction projects. Cities will have to offer higher interest rates to compete with private bonds now that all dividends are taxed at only 15%. That will be expensive, and will drain money from schools, crime and a host of other urban problems.

Bush promised a foreign policy of humility and a domestic policy of compassion. He has given us a foreign policy of arrogance and a domestic policy that is cynical, myopic and cruel. He once said his favorite philosopher was Jesus-the same Jesus who taught that “no one can serve two masters. You cannot serve both God and Mammon ($)” Politicians aren’t saints, but is it unfair to ask whom George Bush serves?

Charlie Kondek
17th July 2003, 14:41
Now that's what I'm talking 'bout! We need this dork and his handlers out of the White House ASAP!

A. M. Jauregui
17th July 2003, 22:16
No matter how rich one is, if they spend they also need a source of income as to offset.

In general:
Fighting wars does generate and increase the velocity of money but making a dollar and losing ten is not sensible. As I implied in my opening line the US needs war reparations... The county’s discretionary income is simply not sufficient. *Excessive pride is damaging.*

Also it is sometimes necessary to do more then step forward. At times one must push the person behind a step back. Economic warfare is not something new in the history of the United States and even though the world is a global economy, strengthening the dollar compared to other currencies would provide a significant advantage.

On the home front:
By freezing governmental hiring in most places across the country, the government is dropping the ball on augmenting services that the private sector lacks. The government as the most massive employer is shooting itself in the foot...

Trickle down economics is not wide spread enough to help the sector that is most lacking. Improving the lot of the economic base leads to upward mobility, which in turn stimulates all sectors.

*End of rant for now*

Nyuck3X
17th July 2003, 23:55
According to the news tonight, the ressesion was over last November.

I lost my job when Bush relaxed the enviromental pollution laws
and no one was required to buy/replace low polluting burners.
(I helped design and develop them.)

I haven't had a job much less an interview for the past 12 months.

Interesting here in California, everone is talking about ousting
Davis and electing "Arnold". Arnold just pushed a bill to
require afterschool programs for kids paid by future tax dollars
but conservatives don't want to pay more taxes. On a side note,
Davis was saddled with an energy crisis created by Pete Wilson
when he deregulated the energy policy and Bush supporters took
advantage of us by selling us over priced energy. (Enron)

Yes, I think it's in the toilet.

Sapporo Ichiban
17th July 2003, 23:57
Hi Charlie:

Let me start off by saying that (1) I'm so liberal on most issues that I'm practically a pinko communist, (2) I don't think George Jr. is qualified to be President, (3) I feel slightly sick when I hear George 'Texas Air National Guard' Bush throw troops around and talk tough, and (4) I don't believe in a tax cut now or in trickle down economics ever.

But . . . I don't think our current economic situation is Bush's fault. I think our current situation was unavoidable due to the stock market bubble as well as lots of public and personal debt. My 2 cents.

Shitoryu Dude
18th July 2003, 02:05
Well, my views are rather dead opposite yours in many respects as I am a rabid capitalist.

Tax cuts stimulate economies because taxation by its very nature stymies economic growth. Cutting tax rates have the delayed effect of actually raising tax revenue. That has been proven, its not opinion.

As for the current economy - I've seen much worse under Jimmy Carter and it is recovering. All economies run on boom/bust cycles, it is unavoidable.

:beer:

Sapporo Ichiban
18th July 2003, 05:48
How do economists prove that lower taxes eventually increase revenue? Taken to the extreme that's impossible (i.e. if a government doesn't collect taxes at all, then they won't increase revenue in the future).

Even in a normal scenario, I'm not sure how anyone would know conclusively what the perfect balance of taxation would be. For example, governments provide education and roads through taxation. Roads and education undoubtably help the United States remain economically competitive (better educated workforce and better infrastructure) but how does anyone quantify that benefit? And if no one can quantify the benefit/loss of taxation, how does anyone prove that the marketplace, if they kept that money, would perform better?

I also think taxes (actually, a progressive tax) are essential to prevent the natural tendency for wealth to accumulate into a few individuals' hands (kinda like an anti-trust law for people instead of corporations). In my opinion, without progressive taxation, that's when you really dampen competition and bottleneck free-flowing capital (not to mention revolution, subsequent chaos, and lots of other unpleasantness). Another of my 2 cents.

A. M. Jauregui
18th July 2003, 07:08
Tax cuts do stimulate the economy when consumer confidence is high. But when confidence is low, as it currently is, a tax cut would equate more toward savings and hoarding (fund that have zero economic velocity) then spending.

Strengthening of the currency in circulation, an influx of external income, or a restart of the economy by complete sector stimulus (done from the economic base up) is what is needed.

Shitoryu Dude
18th July 2003, 13:40
Proof that tax cuts increase tax revenue:

1) Cut taxes
2) Record amount of tax money collected
3) Repeat

Historically, every time taxes have been cut (and even JFK did this to get the economy going again when taxes were much lower than they are now) the amount of tax revenue has increased as the economy became much more vigorous as people started to haul their money out and play with it.

Liberals believe in the totally discredited wish-fantasy Keynesian Economics where things are modeled after how Keynes wished people would act if they were all closet commies who read his books. Too bad for him NOBODY except other commies have ever thought any of his dingbat ideas made any sense. In that fantasy world increasing taxes has no impact other than to make people work even harder to make up for the money stolen from them by the government so it can further run every aspect of life. To a commie such as that, increased taxes mean a more vibrant economy because government taxation and spending IS the economy.

:beer:

Charlie Kondek
18th July 2003, 13:43
Aha! A discussion!

Richard, I see your point. However, I think the bubble burst well before the changeover in administration, and while the economy did experience a downturn, it was nothing like it is now. And the deficit is definitely the fault of Bush & Co.'s "war" spending, domestic and foreign. Most alarming is I think the effect it will have on my ability to pay for Harvey's Metamucil and Viagra as he continues to age (just fuggin' witcha, Harv). By that I mean this rips holes in already thin long-term financial security systems like social security. I notice some segments of the private sector are having a hard time meeting their pension obligations; in the case of the steel industry, there are no more obligations because there simply are no more pensions!

Harv, you wrote:


Originally posted by Shitoryu Dude Tax cuts stimulate economies because taxation by its very nature stymies economic growth. Cutting tax rates have the delayed effect of actually raising tax revenue. That has been proven, its not opinion.

Be interested to hear more. Can you explain?

Ana, what is "a restart of the economy by complete sector stimulus (done from the economic base up)?"

Ben Bartlett
18th July 2003, 13:56
Originally posted by Shitoryu Dude
Proof that tax cuts increase tax revenue:

1) Cut taxes
2) Record amount of tax money collected
3) Repeat

Historically, every time taxes have been cut (and even JFK did this to get the economy going again when taxes were much lower than they are now) the amount of tax revenue has increased as the economy became much more vigorous as people started to haul their money out and play with it.

Liberals believe in the totally discredited wish-fantasy Keynesian Economics where things are modeled after how Keynes wished people would act if they were all closet commies who read his books. Too bad for him NOBODY except other commies have ever thought any of his dingbat ideas made any sense. In that fantasy world increasing taxes has no impact other than to make people work even harder to make up for the money stolen from them by the government so it can further run every aspect of life. To a commie such as that, increased taxes mean a more vibrant economy because government taxation and spending IS the economy.

:beer:

Actually, that's not true. During the Reagan years, when he cut taxes, revenue dropped through the floor (thus giving us a very large national deficit). In response to this, Reagan was forced to raise the very taxes he'd cut. Supply-side economics don't work. The left knows it, George H. W. Bush knows it (he coined the term "voodoo economics" for it), and now you know it. (In defense of many conservatives in government, they know it, too. They're hoping to be able to use the deficit as an excuse to cut services they've never much liked anyway, and are willing to go along with the supply-side lie in order to achieve those ends. Can't say I blame them, it's as good a strategy as any.)

That said, there are some tax cuts that could have helped the economy (for instance, a cut in payroll taxes). But cuts in taxes on dividends, or on the estate tax, or focused on the higher end of the income tax, don't really do a whole hell of a lot, aside from cut revenue when we could really use it (for instance, to fund the ongoing war in Iraq). Not to mention, the states desperately need a bail-out, or they'll be forced to raise their own sales and income taxes, thus more than offsetting any possible benefit Bush's tax cuts might have had. Economic policy is just not this administration's strong suit.

kenshorin
18th July 2003, 14:19
Originally posted by Charlie Kondek
Now that's what I'm talking 'bout! We need this dork and his handlers out of the White House ASAP!

He doesn't have much longer left, almost there... thats how I have been looking at it. Primaries aren't that far off... keeping positive.

Of course, the negative side of it is that one dork and set of handlers will just replace the other. And the players paying them all off isn't going to change.

Politics. Gotta love it.

Jack B
18th July 2003, 14:24
That's what I'm talking about. Cutting payroll taxes would be a targeted tax cut aimed directly at putting people back to work. It would trickle UP, since lower labor costs would increase corporate profitability. THAT would be compassionate conservatism.

Bush would have to work awfully hard to lose the election. The inteliigence "scandal" doesn't have the legs to do it, and the economy IS improving. He can still blame it on Bill.

Charlie Kondek
18th July 2003, 14:35
Harv, I think you posted your explanation as I was posting my last post. Interesting, what you and Ben have said. I'm not sure it's true, as Ben noted. But the thinking is: cut taxes, people spend more, government gets more?

I think what these other guys have said are correct; Bush's tax cuts aren't aimed at the right places. If you're gonna cut 'em, have some balls and cut 'em: the income tax. Some reports in the news have recently said that state and regional taxes will grow in response to Bush's cuts.

Shitoryu Dude
18th July 2003, 15:20
I have posted at E-Budo before the actual revenue figures from the Reagan years. Tax revenue went up dramatically - it was Bush senior who raised taxes, not Reagan. After the debacle that was the Carter administration (taxes through the roof, 12% unemployment and 25% prime rate) it took a lot of work to undo the damage that had been done in the 70's. Nixon hosed things up (in my opinion) with his wage and price controls, but the oil embargos didn't help one damn bit. Other buttheaded ideas that didn't work included Nixon's year-round Daylight Savings Time experiment.

How economics work in an uplanned economy:

Low tax rates means a more profitable company which has more revenue left over for development, marketing, etc. This causes the company to grow which means that it hires more people and pays them going rates for their labor (skilled labor gets paid more because it is harder to find and produces more wealth). When more people get hired it shrinks the job pool and competitive prices for those people go up. They have more disposable income, so they spend more and invest. More money circulates and creates demands for more goods which increases sales and profits. Those profits are taxed, generating revenue for the government.

The higher that tax rate goes the less money the company has to run itself. People get laid off, wages go down, the labor pool expands. Demand for goods drops off because there is less money in circulation. Less money is invested in new business ventures and more is put into savings where it remains stagnant until retirement. Tax revenue for the government decreases and liberals will try to increase revenue by taxing more things and/or raising existing taxes.

The concept of diminishing returns has never occurred to a Democrat.

This model has been proven to be correct numerous times over centuries of human civilization. Taxes are a burden on a society, not a means to run it.

:beer:

Charlie Kondek
18th July 2003, 15:35
I get it. Are you going to comment on my Metamucil and Vagra joke, by the way?

As left as I am, I, too, am for reduction in government size and reform in government spending. While I think, Harv, that what you are describing conforms to an ideal in many ways, I am sympathetic to it. Basically, I think it's a good idea, but that the law has to involve itself in how companies behave to keep them from ripping everybody off and kicking all the profits to the top.

dirithtai
18th July 2003, 15:48
One thing the Bush economy did was decrease funding to states (I'm pretty sure), which, at least in Virginia, resulted in a loss of education funding to schools (both of the elementary and higher education varieties).

What this means to us: tuition goes up and services go down at all major state universities, causing more money from personal earnings to be funneled into the school, which is still forced to buy less than it did last year, and pay fewer people, which doesn't stimulate much spending. Spending actually decreases.

Secondly, at the elementary and highschool level, the state no longer gives cost of living raises to its teachers, meaning tat in three years time a highschool teacher will be effectively making less money than they are today, which is already shmefully small. Less money to spend means less spending, thus, a loss in tax revenue.

True, the teachers are a small portion of the population, but parents of College age kids, and college kids themselves, are a pretty big chunk of the money in VA.

Also, I have to note, a lot of the problem comes from failed state economic policy. However, since our state gov. is reading from the same playbook as Bush...

Just thought I'd toss a couple cents of my tax rebate into the ring.

Ben Bartlett
18th July 2003, 16:04
Originally posted by Shitoryu Dude
I have posted at E-Budo before the actual revenue figures from the Reagan years. Tax revenue went up dramatically - it was Bush senior who raised taxes, not Reagan. After the debacle that was the Carter administration (taxes through the roof, 12% unemployment and 25% prime rate) it took a lot of work to undo the damage that had been done in the 70's. Nixon hosed things up (in my opinion) with his wage and price controls, but the oil embargos didn't help one damn bit. Other buttheaded ideas that didn't work included Nixon's year-round Daylight Savings Time experiment.

How economics work in an uplanned economy:

Low tax rates means a more profitable company which has more revenue left over for development, marketing, etc. This causes the company to grow which means that it hires more people and pays them going rates for their labor (skilled labor gets paid more because it is harder to find and produces more wealth). When more people get hired it shrinks the job pool and competitive prices for those people go up. They have more disposable income, so they spend more and invest. More money circulates and creates demands for more goods which increases sales and profits. Those profits are taxed, generating revenue for the government.

The higher that tax rate goes the less money the company has to run itself. People get laid off, wages go down, the labor pool expands. Demand for goods drops off because there is less money in circulation. Less money is invested in new business ventures and more is put into savings where it remains stagnant until retirement. Tax revenue for the government decreases and liberals will try to increase revenue by taxing more things and/or raising existing taxes.

The concept of diminishing returns has never occurred to a Democrat.

This model has been proven to be correct numerous times over centuries of human civilization. Taxes are a burden on a society, not a means to run it.

:beer:

Reagan raised payroll taxes in 1983, and made "revenue enhancements" (a euphamism for tax increases) in '82, '84, and '86. Half of the increased revenues which supply-siders claim came from the '81 tax cuts came from the '83 payroll tax increase. And all of that *still* didn't keep us from exploding deficits. Then, after George H. W. Bush and Clinton both *raised* taxes, we ended up with surpluses! Imagine that!

Businesses, btw, do not hire based on current profit, but on expected demand. A cut in the payroll tax *would* help that, which is why I would support it. But the current tax cuts don't help that whatsoever. They mostly just put more money in the pockets of the CEOs of said businesses, which doesn't help anyone.

I should also point out that business growth in encouraged, in part, by government investing, which has dropped due to the current wave of tax cuts (an issue particularly close to my heart, as it caused the last business I was working for to go under).

If the concept of dimishing returns has never occured to a Democrat, then the concept of accepting economic reality has never occured to a Republican. :p

(All of that said, yes, taxes can, of course, go too high, if the cost of the taxes outweighs the socio-economic benefit of the services gained therefrom. But they certainly aren't right now, and, what's worse, the wrong ones are being cut, putting the weight of the taxes disproportionately on the middle and working classes, while doing nothing to combat the ever-growing national debt. And now I'm going to probably be nailed with accusations of liberal "class warfare", but it's still the truth.)

Shitoryu Dude
18th July 2003, 16:06
Viagra - I'm sure I'll be able to afford a cybernetic "Wanger 5000 XL Super-Deluxe" model schlong when I get old enough :rolleyes:

Metamucil - No way in hell am I ever going to eat that crap. Rather eat dirt.

:beer:

Shitoryu Dude
18th July 2003, 16:13
Class is fluid in American society. Many if not most of us here who are "rich" started off most solidly as poor or middle class. We got "rich" by working our ass off. If you want to have a better lifestyle it is all up to you. Nobody should be forced to work for others who want your life without earning it. At that point you have enslaved the few for the benefit of the many.

What happens at that point is that the few either leave, quit working, or find a way to run the whole show and live like kings while the masses become progressively poorer.

Letting everyone fend for themselves lets the whole raise itself to the point that even our "poor" live quite well by the standards of other societies. How many "poor" in other countries have electricity, plumbing, cable TV, free food, free housing, cars, and cell phones?

This thread is becoming a repeat of several others I have contributed to - you can all go reread them instead of posting here.

:beer:

Charlie Kondek
18th July 2003, 16:38
Originally posted by Shitoryu Dude
This thread is becoming a repeat of several others I have contributed to - you can all go reread them instead of posting here.

That's cool. Let's just agree that Bush is an asshole and move on.:D I'm pretty sure you didn't vote for him, Harv. If I had to guess I'd say you either didn't vote or voted Libertarian.

Shitoryu Dude
18th July 2003, 17:32
I found Bush to be the lessor of three evils during the last election. Sadly, there were no truly viable presidential candidates so I had to do a process of elimination. Nader is a buffoon and a joke so he was obviously out. Gore the Bore I feel to be a whining little know-nothing who wants desperately to impress people and be taken seriously. Also, he had the stink of Clinton all over him. That left Bush, who I feel prays too damn much and has a somewhat weak grasp of how things are outside of church. He also sucked as a businessman and spent way too long playing preppy boy with dad's connections. I would much rather have voted for his brother Jeb.

Looks like this election is suiting up to be another collection of losers as well.

:beer:

Ben Bartlett
18th July 2003, 18:05
Originally posted by Shitoryu Dude
Class is fluid in American society. Many if not most of us here who are "rich" started off most solidly as poor or middle class. We got "rich" by working our ass off. If you want to have a better lifestyle it is all up to you. Nobody should be forced to work for others who want your life without earning it. At that point you have enslaved the few for the benefit of the many.

What happens at that point is that the few either leave, quit working, or find a way to run the whole show and live like kings while the masses become progressively poorer.

Letting everyone fend for themselves lets the whole raise itself to the point that even our "poor" live quite well by the standards of other societies. How many "poor" in other countries have electricity, plumbing, cable TV, free food, free housing, cars, and cell phones?

This thread is becoming a repeat of several others I have contributed to - you can all go reread them instead of posting here.

:beer:

Class isn't as fluid in this country as we'd like to believe. Don't get me wrong, it's better than in a lot of places. But it's very difficult to move up, and even more difficult to move down. The idea that everyone should fend for themselves sounds good, but the problem is that everyone doesn't start with the same opportunities. It's much harder to learn in school if you are, say, a poor inner-city child rather than a wealthy suburbian one. For one thing, the schools aren't nearly as good, and for another, your surroundings are generally pretty lousy. Poor people in this country have it good compared to much of Latin America, Asia, Africa, and Eastern Europe, but not so great compared to Canada and much of Western Europe. There are still a lot of people who have a hard time getting food and clothing and so forth for their children, and, even more often a problem, health care. What's worse, the system is set up to discourage people from getting jobs. Often, if you switch to a minimum-wage job, you lose what health care you were getting from the government. So why would you switch? And things are even worse if you're a single parent who can't afford daycare, because you can't work and take care of your kids. There's never going to be a perfect solution, but I do think we should try to provide the basics: food, clothing, shelter (preferably apartments or houses... homeless shelters are lousy places for kids), education, daycare, and child & family services (to help protect children who are born into dysfunctional families). An improved public transportation system, so that people could get to work without needing cars, would be good, too. If that was provided, then I think all children would start off with at least a fair chance to do well in their lives, assuming they worked hard at it. Naturally, there are some people who succeed despite the odds against them, but I think this would lead to a much larger number of successful people in this country. Anything else people wanted: gourmet food, cars, cable TV, and what-have-you, they'd have to work for.

Of course, that will never happen. But that's my ideal world. (Conservatives everywhere are no doubt shuddering at the very thought of such a place. ;) )

Shitoryu Dude
18th July 2003, 18:34
rehash of old arguments - check out the old threads.

:beer:

Jack B
18th July 2003, 18:58
Originally posted by Shitoryu Dude
Looks like this election is suiting up to be another collection of losers as well.Hear, here.

Cady Goldfield
18th July 2003, 19:17
As soon as US emerged from the colonies and got on its feet, the era of statesmen ended and was replaced by the cavalcade of professional politicians with varying degress of competence. I'd love to see a true statesmen come along again.

A. M. Jauregui
18th July 2003, 22:59
Sorry Charlie I am not going to expand on my statements other then say that it was Milton Friedman that stated *massive paraphrase* that a cut in taxes does not equate to spending but a tax increase reduces spending.

And some people on this thread seem to be less then knowledgeable about consumer confidence, the cyclic mature of the economy, how money supply is a significant factor, relative economic strength compared to other nations, and many other variables make it so that there are no silver bullets.

Sapporo Ichiban
19th July 2003, 00:08
Hi there Harvey:

"Proof that tax cuts increase tax revenue:

1) Cut taxes
2) Record amount of tax money collected
3) Repeat"

The problem with this method is that there are so many variables moving at the same time that it's tough to figure out what's really going on. If we assume your statement has held true (and other posters here seem to disagree), how do we know if revenue gains weren't from productivity increases or population growth (or a lot of other variables) that occured without regard to the level of taxation? Labeling taxes as 'bad' or a 'drain on the economy' seems too simple. I'd wager that, like everything else, the key is moderation--not too much and not too little.

Also, a genuine question for those that might know . . . how is there a difference between money circulating after it's been taxed (i.e. the government spending money) and pre-tax money (i.e. money spent by corporations or you & me). The same money is being spent and flowing around (clearly with U.S. annual deficits and overall debt load there's no hoarding of money by the government). So how do taxes--even if they're outrageously high--make a difference? I'm not trying to yank anyone's chain, I just could never mentally figure this one out.

Shitoryu Dude
19th July 2003, 05:31
That's an easy question - when you tax income and redistribute it you are taking ever smaller portions of the pie as it goes around. Taxes do not produce wealth, and if you are not producing wealth you are going down the hole. Also, governments are by their very nature extremely ineffecient. They have no reason to be efficient as they have no competition, so bloat sets in. Governments are typically union, so you can't get rid of anybody. Furthermore, the longer they have their government job the more raises and promotions they MUST receive. At a certain point they MUST be made a supervisor and given people to supervise. Commonly, there is nobody to supervise, so they will hire people just to be supervised, doing nothing. Those people are also union employees and cannot be fired. See the trend?

Cutting taxes will most definitely increase production - that is how it works. Population increases are not large enough to explain increased tax revenues in very short periods of time.

Reagan's tax cuts have been acknowledged by all but the most die-hard leftist out there are being a stimulous to the economy. His administration cut taxes on an overall basis a large amount and got the country out of the pit that Carter had put it in. Clinton just coasted on it and did nothing but get his dick sucked while his wife tried to install socialist programs "for our own good". By the time his tenure was over the whole thing was imploding. All of the corporate scandals that were discovered when he was gone all got their starts in his administration as he wasn't going to do anything to rock the boat he was riding in.

Toss in September 11, the paniced collapse of air travel for over a year and two major military campaigns that were needed to stop further terrorist attacks and to provide regional stability and you have one screwed up government bankbook. On the other hand. the market is above 9000, companies are reporting profits, Martha Stewart is going to jail, my 401(k) is growing like a weed, interest rates are rock bottom which means people are refinancing like crazy and buying cars, and I bought gas for $1.45/gallon two days ago. Things aren't that bad at all.

:beer:

Ben Bartlett
19th July 2003, 13:22
That's an interesting take on history, but it totally ignores the recession that occured during the Bush years, which was one of the main reasons Clinton was elected. As for whether or not Reagan's tax cuts stimulated the economy, they may or may not have (I haven't looked into the issue)- my only argument was that they did not cause an increase in government revenue (a fact that everyone but the most die-hard supply-sider agrees upon).

Btw, I'm not implying that the current President caused the current economic problems- those were bound to happen, given the tech bubble and so forth. I'm just arguing that his policies haven't been helping.

Shitoryu Dude
19th July 2003, 15:20
The numbers have been posted MANY MANY MANY times - Reagan's tax cuts brought in more tax revenue. This is not disputed by anyone who was actually alive at the time and over the age of 10.

Something everybody keeps forgetting - economies cycle. You will always have a recession every few years. Next point - the economy was so deep in the shitter after Carter that it took a very long time to recover. 4 straight years of unabated hell in the 70's combined with chronic fuel shortages and Jimmy inventing new taxes screwed this country over big time. Why do you think he lost his reelection so thoroughly? Reagan wasn't one of those "just squeaks in" presidencies, he kicked Carter's ass so completely at the polls that Carter might as well not even bothered to run. Hell, that tub of lard, alcoholic murderer Ted Kennedy even took a shot at the nomination. Reagan was reelected by comfortable margins as well. Bush was good at foreign policy for the most part but sucked domestically. He also killed himself quite thoroughly with his "no new taxes" pledge which he reneged on for no good reason.

Clinton just coasted on what the previous 12 years had created. The USSR was gone, the economic pit of the 70's had been fixed, and we were on a post-war boom cycle like nobody had ever seen before. He figured it was time for him and his butt-ugly "wife" to bring socialism to the USA so it could screw us up as bad as it had Europe. Once his universal medical plan got shot down and he was mired in endless scandals he tossed a few cruise missles around every now and then, lied some more, and hit up a few more interns for nookie. He basically deserves to be in prison.

While I'm on the subject of Clinton - he was without a doubt the most honorless, worthless, lying piece of dog crap to ever disgrace the white house. Anything bad that ever happens to him in his life is still far short of what such a worthless SOB deserves. History will record him as one of the worst presidents of all time - a renowned liar who stood for nothing except himself. A slave to the polls from the start. Without integrity, vision, honor, and incapable of earning respect from anyone who saw the true him.

Recent polls show that some 80% of the populace now think Bill Clinton is incapable of telling the truth.

Rant over.

:beer:

Mitch Saret
19th July 2003, 17:02
Ben, the proof is out there. On another thread I was taken to task on a similar subject and went to the source that was cited by the other guy. During the Reagan/Bush41 years revenues to the government went up tremendously. During the same time period individual income increased in all brackets and more people moved up in class than down. I even posted the information from the census on the thread.

To look at another of your points, increased taxes equalled surpluses...well, that's just too easy. If you look at the way the Clinton administartion financed the debt, they used short term loans and interest rates. This was in contrast to every other administration having used long term financing. The result was lower interest payments on the debt, but the financing ran out after 5 years. With lower interest payments it appeared we had a surplus, not a deficit, but only at that moment. When the refinancing took place, cooler heads prevailed and a more normal structure resulted. In simple terms, the books were manipulated to appear as if there would be no debt in the future by using this short term financing. In reality it appeared as though there was a surplus during the Clinton years that was immediately lsot upon refinancing under the new administration.

Now, in addition to everything Shitoryu Dude has stated, the early recession of the Bush term came awfully quick, before he even had a chance to do anything. Turned out the numbers given to the incoming administration by the previous, were doctored to make things look much better than they were. This was reported by sources that usually lay absolutely no blame at the Clinton's feet.

Ben Bartlett
19th July 2003, 18:30
Allow me to, once again, restate my argument. Actually, to make it simpler, let me first write what I am not saying: I am not saying that tax revenues went down throughout the Reagan administration. I am saying that it was not the Reagan tax cut which caused the increase in revenue, and that, in fact, he was forced to raise taxes 4 times after that tax cut (including one raise to the payroll tax in '83, which basically reversed any beneficial effects of his '81 income tax cut). If you can show me statistics that disprove that, then go ahead and put a link to them. But just showing that revenues increased during the Reagan and Bush I administrations doesn't mean squat (they also continued to increase during the Clinton administration, and Clinton, unlike Reagan, actually slowed the growth of government... even conservatives like David Brooks have said as much. So let's just admit that, whatever his personal flaws, Clinton managed to do a few things right and move on with our lives, shall we?)

A. M. Jauregui
19th July 2003, 19:52
...

Shitoryu Dude
19th July 2003, 20:07
Clinton's primary personal flaw was not killing himself at a young age.

Sorry, you cannot get me to give Clinton credit for anything worthwhile. He is immoral, dishonest, lacking of any integrity, and basically an intellectual prostitute. Hillary is even worse. The two of them together remind me of a pile of dog crap that gets stepped in and has to be scraped off of your shoe. Anything they ever "accomplished" that was actually of any good to the US or the world at large was either purely by accident or forced upon them. And these are the nicest things I can say about either one of them.

As I said before, these little economic arguments have been discussed on this forum to death, complete with stats and links. Go look them up.

:beer:

Charlie Kondek
21st July 2003, 15:07
Harv, Harv, Harv.

First of all, I appreciate your efforts - as far as looking these old arguments up, can you point us to some search terms or advise us on which threads covered this?

Next, how about a little consistency? I thought you were a libertarian - your hatred of the Clintons is in keeping with that, but how can you turn around and embrace Ronnie & his unholy offspring, Bush I and II? Enjoy your guns while you have them because your friends at Homeland Security will be rounding them up soon. How will it feel to be in a gulag on Guantanamo Bay next to a pinko Marxist? :D

Lastly, here's another good article at Slate:

http://slate.msn.com/id/2085834/

As they did in the '90s, the wealthy will receive a disproportionate share of the reward when the economy and the markets pick up again. But because of these tweaks to the tax code, the government will harvest much less of the windfall than it did during the Clinton years... The Bush administration has been woefully off-base when it comes to projecting federal revenues and expenditures. Even if economic growth meets its expectations, the recovery in federal revenues won't. They have changed the rules too much.

Charlie Kondek
21st July 2003, 15:16
By the way...


Originally posted by Shitoryu Dude
Toss in September 11, the paniced collapse of air travel for over a year and two major military campaigns that were needed to stop further terrorist attacks and to provide regional stability and you have one screwed up government bankbook. On the other hand. the market is above 9000, companies are reporting profits, Martha Stewart is going to jail, my 401(k) is growing like a weed, interest rates are rock bottom which means people are refinancing like crazy and buying cars, and I bought gas for $1.45/gallon two days ago. Things aren't that bad at all.

:beer:

Just a couple of observations:

1) Airlines were imploding long before Sep. 11. I love how a supposedly free capitalist society has to bail out major corporations now and then. Shouldn't this be left to shake itself out?

2) The two military campaigns were not needed to stop further terrorist attacks and "provide regional stability." I know you just tossed this one out there, but I disagree strongly in your assessment.

3) We can agree on the Martha Stewart thing.

4) If your employers got hit by an Enron-like spate of behavior, how safe would your 401(k) be? (Knowing you, you're probably pretty savvy with it.)

5) I'm not sure people are refinancing like crazy, despite the good interest rates (say goodbye to them).

6) Wasn't gas $1.09 a gallon and less two summers ago?

Ben Bartlett
21st July 2003, 15:19
It's also interesting to see a libertarian who promotes supply-side economics, since most libertarians usually want to see taxes cut in order to reduce the size of government. But, then again, I'm a liberal who favors a strong military and free trade, and disapproves of farm subsidies and the like, so I feel that a little inconsistency is a good thing. :cool:

elder999
22nd July 2003, 00:51
When Bush was first elected, it sounded as though we had entered an era of fiscal responsibility. The disconnect between Bush’s rhetoric and his policies has proven otherwise, however. He’s lied to the public. The moral, economic and intellectual dishonesty he has employed to accomplish his goals is striking, beginning with convincing a large slice of the public-including you who have posted here-that his tax cuts will be of some benefit to you.

Fools!

We have a sluggish economy-practically a recession, no matter what the official words for it are-and a budget that’s gone out of control. What he’s done is initiate a process that locks in long term tax-cuts that will help push our budget further and further into the red, and to what benefit.

We‘ve basically got a $10 trillion economy and a $2 trillion budget each year, so $500 billion over ten years is not that much,, with respect to government spending, but if you look at ancillary stuff like Social Security, we’re actually talking about something that will be subtracting an additional one percent of GDP from government revenue. The budget deficit is bigger than all nonmilitary discretionary spending combined, so even if you eliminated the court system-eliminated everything but Social Security, Medicaire and government pensions-you’d still have a deficit.

The reason to worry about the deficit(s) is not now, but what happens down the line when all the baby-boomers(me, Harvey, et. Al.) start hitting up Social Security and Medicaire. If the government debt is large enough before we all retire, and we’ve got an overall tax revenue at a level insufficient to cover the cost of Social Security and Medicaire, then we’re setting ourselves up for a fiscal crisis, and that’s just what he’s done.


If financial markets continue to loan the U.S. government money (you made no mention of that, Harvey) then we could keep going until about 2020 before it becomes serious, but they’ll pull the plug and start treating us like Brazil around 2010, if they behave like they have in the past.

Bush was elected to take responsibility for the country’s future. What he has done is not idealistic; it is cynical and short-sighted. It’s worth reading the conservative Heritage Foundation reports: it’s all about rolling-back middle class entitlements, doing away with Social Security and Medicaire, and the asinine notion that growth will solve all the problems . If you look at the back pages of this administration’s budget, there are long-term forecasts that are straight out of a Disney cartoon, and even they show the U.S. going into bankruptcy around 2020.

I won’t need Social Security. I’d like to say I won’t need Medicaire, but I’v seen too many of the aging upper-middle class and wealthy come to depend upon it.

What will you need that won’t be here in a mere 15 years?

Shitoryu Dude
22nd July 2003, 03:31
Hey, I personally think the way the government does business and accounting deserves prison sentences.

I do believe in conservative fiscal policies, open markets, extremely low taxes, and common sense regulation to reign in the evil bastards like Martha Stewart, Enron, and Microsoft. If it had been done like that to begin with we wouldn't be in quite such a mess.

:beer:

primeape
22nd July 2003, 07:05
Aaron, don't worry. It is not just debt which in the US case is, as you stated, of rather manageable size at least so far. What is worse is that the US is constantly unable to pay for what it buys abroad, and subsequently goes into foreign debt every month that shows a trade deficit.......
The biggest foreign creditors of the US are the japanese pension funds who in may held something 430 billion $ worth of US government bonds out of the total 1300 bn held by foreigners. Now, the japanese post-war baby boomer generations start retiring around year 2012, as the boom years were around 1948-55 and not straight after the war. At that time the pension funds will need some of their money back. If the debtor, U.S., does not have sufficient surplus funds at the ready something else needs to be done. How about giving the japanese pension funds some real estate with hotels, golf courses, friendly population and nice weather instead? How about Hawaii? - Just a thought. How else can the US keep buying Japanese goods without exporting enough to pay the bills.........

Primeape
Helsinki
Professional economist, with a bizarre sense of humour and slightly distorted wiew of the world

Vapour
23rd July 2003, 16:35
As a graduate of economic, I'm qualified to say this.

I won't name name but some of you are BULLSHITING so shut up and anyone who utter the words "trickle down" should be :shot:.

Cady Goldfield
23rd July 2003, 17:15
You know what's missing in America? Good old-fashioned entrepreneurial ingenuity! Whatever happened to it? It's what made this nation great.

Maybe we need to re-train ourselves to think outside the box (so to speak...) again, like these guys did:

http://www.boston.com/news/daily/23/odds_corpses.htm

Starkjudo
23rd July 2003, 17:19
Originally posted by Vapour
As a graduate of economic, I'm qualified to say this.

I won't name name but some of you are BULLSHITING so shut up and anyone who utter the words "trickle down" should be :shot:.

Economics degree just means you get to tell me i'm ready to be seated now, instead of asking me if I want fries with that. You guys keep changing the answers every few years.

Trickle down, Trickle down, trickle down.......

Rob Thornton

Chuck Munyon
23rd July 2003, 18:00
Cady,
It's a great idea! Faster than you can say Abra-Cadaver, I'm announcing the launch of Munyon's discount carpool-buddy service! Are you tired of bumper-to-bumper while people whiz by you in the carpool lane? Wish you had a second passenger, but don't want to put up with another person? Want to learn a little about human anatomy in the meantime? Well, faster than you can say "Put your lungs away and bag those intestines, it's time for Biochemistry class," you can be whizzing along in the carpool lane with a compainion who will never complain about your music, won't mind if you smoke, and can be disassembled for easy storage! Order now, supplies are limited.

Rob,
The answers in medicine keep changing every few years as well. Does that mean we stop requiring MD's on the theory that a degree lends no additional qualifications? My father's degree happens to be in economics, but he's a little bit too busy traveling to conferences explaining his proposed new model for multivariate regression analysis in futures markets to seat you right now.

Harvey,
I think I'll be arguing with you in a couple of days, but at the moment I've got nothing to back up my assertions with, so just consider this as an En Garde. It amuses me that the fact that you are so much fun to argue with continually leads me to better educate myself just so I can stay in the fight. Thanks. :D

Cady Goldfield
23rd July 2003, 18:24
Chuck,
Do you still have your med school cadaver from last semester? :idea:

Vapour
23rd July 2003, 19:07
Originally posted by Starkjudo


Economics degree just means you get to tell me i'm ready to be seated now, instead of asking me if I want fries with that. You guys keep changing the answers every few years.

Trickle down, Trickle down, trickle down.......

Rob Thornton

Economic theory itself has been quite consistent. How it has been spined by politician and think-tank/pundit/journalist economists which has been saying trickle down, tricke up, trickle in..... Ask me anything about fiscal or monetary policy. I will explain to you without republican/democrat spin.

Chuck Munyon
23rd July 2003, 19:08
No, Yorrick has been retired. But the new crop will be arriving soon in anticipation of next year's class.

Sapporo Ichiban
23rd July 2003, 21:42
Vapour:

I'm relatively new to the whole field of business/economics. Economics wasn't my major and though I've been taking business courses lately, I don't kid myself on being an expert. So, I gotta ask . . . are you talking about me? If not, whew. If so, could you read my posts and give me some pointers where my learning/thinking fails? Anyone else with an economics degree please also feel free to jump in as well. Inquiring minds want to know. Thanks.