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The Elections


By lephead - Posted on 15 October 2010

To tell you the truth, the stuff that goes on any more has me scared to be involved in anything political.  I was just reading some of the other blogs, like the one on global warming and it seems like "truth" is being decided by who has the most money and power to force their position on others.  I read in an email today that "a certain candidate from Nevada" states that Social Security is against the 10 commandments.  I am just plain scared because these people and interest groups have no concern other than getting their way and making the rest of us subject to their mental illness.  In spite of what some might think, I understand people can be conservatives.  I used be one.  I used to vote straight Republican, particulary in the 80's even though I didn't think Reagan was God.  It just bothers me that we have serious issues and problems in our country and all, it appears, is that all people care about is getting their way and making everybody subject to their views.  I understand that Jesus said that it was going to be that way at the end of the times, but it still is unpleasant and unsettling.
I agree lep. We've got some major issues before us and yet we still see politics over real solutions. Maybe when the Nov. election is over-no matter who is in control of Congress-they might finally decide to roll up their sleeves and work for "we the people" rather than scoring political points, trying to make Obama "fail" and blocking votes on every piece of legislation, even if they once supported it, just to show power & control. We are not paying them to say no, no, no, but to work together for the good of the people and compromise to get to solutions. I pray that happens sooner than later.
Thank you for your comment Kelly.

I'm going to post it in its own thread, but supposedly this was one of the most productive Congresses since the Civil Rights era.

Stuff did get done, even though few individual Congress-critters want to admit it. 

I really wanted the administration to hold firm on their "no extension of Bush tax cuts for couples making over $250,000" (because that would help us reduce the deficit in the optimal way and seemed like a reasonable bar) but as I expected, they are already showing an openness to compromise, perhaps raising that threshold. The problem is when the GOP hears compromise, they think: "Oh, we get to make the rules and determine the final deal." So pretty soon they'll tell us that someone making $1 million per year really should not be considered wealthy. Sigh.

Tin, the Congress might have passed a lot of bills, but their legislative results are unpopular with a significant chunk of the electorate.

The Healthcare bill is extremely unpopular.  Very few of those who voted for it are campaigning on their yes vote while those who voted against it (including Democrats) are campaigning on their no vote.

The stimulus is perceived as a failure.  Unemployment is sky high and the deficit is exploding to historic levels. Businesses are not hiring or spending money because they believe the administration is going to have to raise taxes.   

What do most of those other "accomplishments" in the article have in common?  They give the federal government more power and control.  Americans are a center to center-right country and most don't believe that Washington bureaucrats are the answer.

 

Yes, the whole "repeat a lie often enough and it becomes the truth" with regards to the stimulus. *shrug*

I really REALLY don't think that taxes is the reason that businesses are slow to increase their hiring.

Of course, we live in the age of instant gratification, so if it doesn't do something for me right now then it must be full of crap.

As for raising taxes, Congress doesn't have to do anything for taxes to increase. That was written into the tax cuts to begin with, in order to hide their true cost. We knew it at the time, it was widely reported.

And yet, if the tax cuts expire, if they return to the same rates we had under Clinton, then Obama and the Democrats will be blamed for it. Even though it wouldn't be their fault.

Man, all this political BS is really making me sick.  Between unelected activist judges and willful distortions of the public record, I wonder if it's even worth voting any more.

 Businesses are not hiring or spending money because they believe the administration is going to have to raise taxes.   

I beg to differ with this statement. 

1. Unemployment for college-degreed workers is 4.4%, so I would argue that businesses ARE starting to hire those with college degrees AND experience (granted, those who just graduated are having a hard time finding jobs). 

2. My interpretation is that the fear of a double dip recession still lingers, although I have lots of reasons to believe that we will not see a double dip.  That lingering fear, however, factors WAY more into hiring decisions than fears of taxes. 

 

(Edit) 3.  OR... perhaps unemployment is just repeating the history of past recessions?   

Brandon, I wish I could unburden you from your Laffer Curve mentality.  Taxes are not the end-all reasons why people make decisions -- investment, employment, or anything else.   If my capital gains tax goes back up again next year, it isn't going to keep me from continuing to invest.  The same can be said on the bigger scale -- sure, there are probably some companies whose management fears a Dem in the WH and the majority of Congress, but it isn't enough to nudge employment figures by that much. 

 

Do you have a reference for the unemployment rate for college-degreed workers?

That seems awfully low.

That, and while I do have a job, we need to make sure that more jobs are available to those of us who didn't/couldn't get a college degree. 

It's a figure that the chief economist at my firm references weekly on a conference call, and I prefer not to indicate my own firm (anonymity and all).  Not sure where he got it but I'll come back with a citation.

Edit: Here's one source, with a good article to boot.

Another edit:  I completely agree about the (desperate) need to create jobs and get unemployment down across the board.   

Kim, I would never say that taxes are the only reason why businesses don't employ or invest, but is the main reason.

A CATO study has found that:

"taxes are a leading indicator of employment creation and economic growth. Each 1.0 percent rise in the federal tax burden leads to a 1.8 percent reduction in economic growth. Each 1.0 percent rise in the federal tax burden leads to a 1.14 percent decline in national employment." "When taxes as a percentage of GNP rise, the very next year growth in real GNP and employment will decline. The converse is also true: when federal tax burdens fall, economic growth and the unemployment picture will improve the following year." The CATO model has demonstrated "that the aggregate federal tax burden has an adverse economic impact, regardless of how taxes are collected. Taxes have a negative effect because they deprive the private sector of resources to expand growth and often produce negative incentives for desirable activities, such as business investment or increasing work effort."

 

So does that mean that reducing taxes to 0% will lead to 70% economic growth and 44% employment growth?

Oh, wait a minute -- I forgot, we're dealing with percentages. Reduce taxes by 100% and we'll increase growth by 180%! And employment by 114%! 

Sign me up! Can I subscribe to your newsletter? Does it come with free Kool-Aid?

Of course, this is basic Keynesian economics. Not that Republicans would admit it publicly -- those that understand economics that is. 

Okay, so you quote CATO.

I receive dozens of emails every day, directly from Wall Street analysts, who report for me what CEO's/CFO's are saying on their conference calls.  Not one report yet says that companies are not hiring because of a fear of tax increases.

The reasons are they want to see top-line stability in revenues.  They've "slashed and burned" to the bone (layoffs), now they're closely watching their revenue growth.  Profit margins are showing incredible improvement, but they aren't quite ready to start hiring again.  I expect to see significant improvement throughout 2011, as companies see top-line expansion.

You've got your CATO, I've got my daily reports. 

"So does that mean that reducing taxes to 0% will lead to 70% economic growth and 44% employment growth?"

No, because tax rates alone are not the only factor that leads to economic growth.  Without taxes, you wouldn't have the military, the police or the court system.  Without those 3 entities (among others), you could not have a functioning economy.

No one is arguing for ZERO taxes.  Conservatives are arguing for concepts like reducing taxes for small business owners, reducing regulatory red tape to make it easier for businesses to hire additional workers, approving trade agreements to open up more commerce with other countries and most of all cut government spending and stop the talk of anti growth legislation like cap and trade.

Do you really have faith that Obama and the Democrats current economic plan is going to jump start business and the economy?   


Yes.

So far, so good. I hate to see where we would be if we kept sliding down the slippery slope we were with the same answer "tax cuts" to every single economic question.

Edit: If government spending was too high then we'd be seeing a lot more inflation than we are now. Right now, inflation is pretty flat, and it's all the Fed can do with its fiscal policy and the government can do with its economic policies to keep us from sliding into deflation.

It's like we're stuck in the balance. 

I just can't get all giddy about "cut taxes" slogans for saving the economy when they're already at lower rates than recent decades when the economy was doing well.

I'm far from knowledgable on the economy though. 

And I don't know about Tin, but I don't trust the GOP for anything. Dems aren't much better but they seem to have more ideas than "cut taxes, cut taxes, cut taxes, cut taxes". Especially since the GOP is even more about screwing the lower and middle classes now with the "fend for yourselves" attitudes. And add on to that all the social issues they focus on to move us back a couple of decades and destroy education. 

"Can't find a job? Unemployment is unconstituntial and your lazy for taking it."

"Your wage is too low to earn a comfortable living? Minium wage is unconstitional. Pick yourself up by your bootstraps."

"No Health insurance? You might be sick but the free market will  help you pick yourself up by your bootstraps." 

"You're disabled and need health insurance? Health insurance companies that are free of government intervention will help you. Really. I swear."

Anyway, taxes are too low for top percantage of wage earners. Then you see the arguments from the right about them paying 70 % of the overall taxes already. Well, they have close to 70% of the country's overall wealth  too (or higher from what I remember). Of course spending is out of control and no one will argue that. 

Do you favor the Bush tax cuts, Brandon? 

My mother is taking care of my disabled father while trying to earn money for both of them at a pre-school job and she has no health insurance a year after getting successful surgery to remove cancer. Pardon my language, but I don't trust the GOP to do s*** about helping my parents and other families in that situation.  I don't trust the dems either but at least they passed some form of healthcare legislation that got watered down to nothing because of Republicans. 

She should just work harder.

Or maybe she's just not smart enough to make more money.

Or, at least, that's what some people's ideas would imply.

Some might say she's too lazy and is looking for handouts from the goverment.

 

Doesn't she know that the GDP will go up if she just stops demanding so much?

Really, if she asks for less she'll get more. Trust me. /Joe Isuzu 

 Or maybe she's just not smart enough to make more money.

Or, at least, that's what some people's ideas would imply.

Tin: If this is because of the data and link I posted, I am SO SORRY if I implied in any way that this is my belief.  I am about as far from being an "elitist" as a person can get. 

I'm sorry, I thought that the dripping sarcasm was obvious.

I'll try harder next time ;-) 

Edit: I haven't even looked at the link yet! Sorry for the confusion. So no, my snark had nothing to do with what you posted. It was a caricature/slippery slope of some people's economic (mis)beliefs.

"Do you favor the Bush tax cuts, Brandon?"
 
Definitely, the evidence shows that the Bush tax cuts worked exactly as predicted.  
 
Ending the Bush tax cuts would not be good for the economy.  Historically, higher taxes encourages the government to spend more money not cut the deficit. No one can seriously believe that someone who believes in an activist federal government like President Obama is going to use additional tax revenue to cut the deficit.
 
Tax increases normally hurt the economy especially higher marginal tax rates on work, saving and investment.  These kind of tax increases reduce the incentive for people and businesses to engage in productivity.  
 
High unemployment, lower incomes and less profit means less money for the government to tax at any rate.
  

I have a question...one that is not intended to be snide or sarcastic, but one that I always wonder about when people say something like "the evidence shows that the Bush tax cuts worked exactly as predicted".

If the tax cuts were so beneficial, why is it that our economy ended up in the tank while they were in effect?

As I said to Tin below, there are other factors besides tax rates that impact the economy:

"The Bush economy does not look nearly as good as the Clinton for reasons like the fall of the technology bubble, 9/11, out of control spending, unfunded wars, massive trade deficits, the mortgage crisis etc." 

I saw you change courses from what you posted previously Brandon...."I would never say that taxes are the only reason why businesses don't employ or invest, but is the main reason"

So, my question remains the same.   OR, if it isn't really a big factor, then let's let them expire for the upper echelon, and bring more money into the Federal treasury.

The U.S. economy is a complicated entity, so there are all kind of factors besides taxes that can cause sluggish growth.

But there is plenty of historical evidence that shows the quickest way to grow the economy is to cut taxes.  If you cut marginal tax rates and taxes on investment, you create productivity.  

The best way to bring more money into the Federal treasury is to make the economy larger. 

As Brian Reidl explained in the Atlantic article I posted when asked:  

Why not raise tax rates on the top five, one, 0.1 percent of the country back to their 1990s levels?

"It would have a negative effect on the economy. We tax tobacco because we want less of it. If you're going to tax working, saving, and investing, you'll get less of it, and the economy will grow slower. The top five and one percent: a lot of them are small businesses."

I actually don't think that the top 5, 1, or 0.1 percent work that hard.

*shrug*

But while what you stated might have been true when marginal tax rates were 70 or 90 percent, I think that it's a lot less true now.

We've reached a point of diminishing returns both with regards to lowering tax rates and with lowering interest rates --which usually has a MUCH larger and quicker effect on the economy than does tax rates/credits/etc.

Of course, interest rates have been lowered to almost zero as well.

Our economy rests 70% on consumption. Because of the crash in equity related to the real estate bust, worthless derivatives, and over speculation, people are now unsure of where they stand fiscally. So they spend less. Less spending equals less demand. Less demand equals over capacity which equals layoffs and more people being unsure of where they are fiscally.

Variables like that have hundreds of times more effect on businesses and consumer confidence than do tax rates.

There's no one surefire cure, but I think that lowering tax rates will have little or no effect on short-term demand. 

I am unsure as to why the discussion about tax rates on individuals has bearing on the hiring decisions of companies.  Those are two different things.

As someone who is involved with hiring decisions every day, I can say that Kim's point about stable revenues was much more on the mark.

Proponents of the tax cuts will argue that small business owners fall into that category.  But only 3% of small businesses...most small businesses incorporate, and don't file their business income as personal income. 

So the Republicans are left with an empty argument...One I wish the Democrats would make a big part of the message.

CTX- I am unsure as to why the discussion about tax rates on individuals has bearing on the hiring decisions of companies.  Those are two different things.

 I often wonder about that myself....All wealthy people do not employ people either. And why  so many actors/musicians and other Arts related people  lean left?

Why can't they make the tax law to raise it on the wealthy, but if you are a small business owner, then you get tax breaks when you employ people?? Am I missing something?? I do not claim to know about economics, but some things just seem like they complicate it too much, when there seems to be simple solutions. 

"When the power of love overcomes the love of power
the world will know peace." Jimi Hendrix

I know the economy is complicated, far beyond the understanding of most of us. (That's why I trust Kim more than anyone here on that subject ;-)  BUT....but saying this  But there is plenty of historical evidence that shows the quickest way to grow the economy is to cut taxes.  If you cut marginal tax rates and taxes on investment, you create productivity.  we're back to square one.  It economy took a nosedive while the cuts were in place.  Why would anyone believe keeping them in place would help.

The Bush tax cuts did exactly what tax cuts are supposed to do, grow the economy.  Again, from The Atlantic link I posted:

Effect before after bush 03 tax cuts.png

 

 

 

 

 

 

 

 

The nosedive in the economy was caused by factors that are in no way linked to tax cuts.

If I give you a $1000 to help with your finances, but at the same time you run up a credit card, get sick, have a car wreck and lose your job that doesn't mean that the $1000 I gave you was a bad thing or wouldn't come in handy the next time you needed financial help. 

 

You believe Obama's stimulus will eventually get us back to 4% unemployment, give us real GDP growth and eventually reduce the deficit?

If so, what leads you to believe that his policies will lead to greater prosperity? 

I don't know if we'll EVER get back to 4% unemployment. Hopefully, but doubtful as that rate is pretty rare over the course of history. Especially without a high rate of inflation.

We're experiencing "real GDP growth" right now, according to the economists. Or haven't you heard that we're out of the Great Recession?

I also think that it will reduce the deficit by increasing government revenues and by cutting certain unnecessary spending, especially military spending which is the biggest discretionary piece of the budget.

I think that these things, a return to a saner fiscal policy, will lead this nation to greater prosperity.  

"I think that these things, a return to a saner fiscal policy, will lead this nation to greater prosperity."

Let's hope it does, but I see no evidence that Obama has any idea what he is doing when it comes to improving the nation's sluggish economy. 

Then you need to open your eyes, my friend.

And so do a lot of other people.

But then again, we've become a nation of hedonistic, instant-gratifcationalists so why should I expect anything different.

When I open my eyes, I see over 9% unemployment and a deficit of 1.3 trillion dollars.  Last year's deficit was 1.4 trillion. As a share of the economy, those are the two largest deficits since World War II. 

I don't expect instant gratification.  It took Reagan a good 2.5 years for his policies to start working.  But unlike Obama, there was historical evidence that Reagan's policies would eventually show results. 

 

Right, and we have historical evidence that returning to the Clinton-era levels of taxation will eventually show results as well.

 

As we discussed earlier, tax rates alone are not the only factor.

Clinton's economic boom was based on many things like the huge rise in new technology.  He was smart enough to keep a "hands off" policy on the internet.  He also believed in free trade and deregulation.

But in 1997, Clinton signed a tax cut bill that slashed the capital gains tax rate by 28% and doubled the estate tax exemption.  In 1995, $8 billion of venture capital was invested.  After Clinton lowered capital gains rates, $28 billion was invested. 



Okay, and... ???

You're not making your argument very well. If we cut taxes from the Clinton era and things got worse, then returning taxes to the Clinton-era rates might make things better.

Not to mention that Clinton inherited an economic situation about as bad as we have now.

 

Bottom line...as long as companies continue to oursource jobs, and are given tax breaks for doing so, unemployment rates will continue to be high.

Things did not get worse because we cut taxes from the Clinton era.  The Bush tax cuts worked just as they should have.  

Again there are other factors.  The Bush economy does not look nearly as good as the Clinton for reasons like the fall of the technology bubble, 9/11, out of control spending, unfunded wars, massive trade deficits, the mortgage crisis etc.

"Not to mention that Clinton inherited an economic situation about as bad as we have now."

Not true, the recession of the early 90s officially ended in March of 1991.

Yes, I agree that the Bush tax cuts worked a bit, although not quite as well as they should have.

We were in a pretty nasty recession in 2000-2001. I remember it.

In fact, if it wasn't for government spending then I probably wouldn't have kept my job at the time. A job that got outsourced 8 years later anyway.

See, the Oregon employment department payed me unemployment 1 day a week so the company could only employ me 4 days a week due to the slowdown.

The original Bush tax cuts helped in that recession and in the aftermath of 9/11, though not nearly as much as we were sold they would. That, and the fact that their cost was represented as it was because they would expire this year.

I remember that, too, and the discussion of it at the time.

It's funny that you mention unfunded wars. How are we supposed to fund them? Or pay for them after the fact? By raising taxes, duh. You don't cut taxes during wartime. Even Democrats know that. Republicans used to. Back when they were "fiscal conservatives".

So, we had a technology bubble because people spent too much money speculating on technology, we had a mortgage bubble because people spent too much money speculating on real estate, we have a trade deficit because people want to buy a lot of cheap and worthless goods, and somehow the economy is bad because of government???

Heck, by that logic then raising taxes should have barely any effect on the economy as a whole. People are going to do stupid things regardless, which is a piece of the pie of freedom anyhow.

I like pie.

Sources: http://www.miseryindex.us/customindexbyyear.asp

The recession may have ended in '91, but the misery index was still relatively high, but continued to drop under Clinton.

The unemployment rate, however, also continued dropping through Clinton's term, not rising again until the first year of G.W. Bush's term.

Interesting, that. 

Edit: The Captcha is tEABG. Seriously??? 

Brandon if you want to extend the Bush taxes, you must right now and right here admit that you really don't care about the deficit, because it will cost $3 billion. Say it: I don't care about my grandchildren. That's not some liberal estimate-that's a fact from real economists.

I need to do some fact-checking but according to Maddow (who usually does her homework) Bank of America and Citi paid zero taxes last year. Zero. One huge problem is that rich people and big companies can afford to hire the best lawyers and accountants to get them loopholes and work the system. But Mr. and Mr. Smith just trying to make ends meet can't afford that luxury. Really fair system we have. Go back to the Clinton tax rates for the rich or we are doomed. Since Dem's are wimpy on this too, I'll bet the best we can get is a one year extension for the rich, but if the GOP gets more voices in Congress, you know they'll just make them permanent-VERY bad for this country! How about we give the tax cut to companies who can prove they hire x number of U.S. workers? Then we might get something out of it.

Surprise, you got a tax cut

Chris Hayes, Washington editor for The Nation magazine, talks with Rachel Maddow about how an Obama tax cut was distributed to Americans without earning the president any political points, all while Republicans complained about the corporate tax rate for corporation that pay zero taxes.


http://www.msnbc.msn.com/id/26315908/vp/39789312#39789312

Kelly, the main cause of the deficit is not the Bush tax cuts but out of control spending.

Brian Riedl articulates it better than me:

http://www.theatlantic.com/business/archive/2010/07/the-long-term-budget-problem-is-100-percent-spending/60542/

About the Obama tax cut, note where he says:

"Tax rebates never work because they don't change behavior. On the other hand, if you cut marginal tax rates, you create productivity, which causes growth."

Brandon-I am not the only one saying that extending Bush tax cuts will add to the deficit-many reputable sources seem to back this up. Yes, Bush's deficit also had to do with 2 unpaid for wars and huge spending in defense-I'll give you that. But the tax cuts-unpaid for-are a huge reason we are in debt. How can you deny that? And giving rich people an extended break will only add to our deficit, to the tune of about $3 trillion! Even if it spurs some hiring as you insist, the deficit problem does not go away.

This is the secret that Republicans don’t want to talk about – their economic policies created a huge deficit and now they want to shake off responsibility for that deficit. The figure to the right has become very popular lately, it comes from a report by the Center for Budget and Policy Priorities. Republicans have been complaining about Democrats increasing spending, but the reality of who increased spending is very clear in this graph. The Affordable Care Act, while costly, is actually projected to cut the deficit by $127 billion.

While Republicans speak out of one side of their mouths about their concern for the deficit and for our collective grandchildren, they speak out of the other side about their desire to extend the Bush tax cuts. The Bush tax cuts that will increase the deficit another $3.4 trillion. That’s trillion with a ‘T’ – a very large one. The Center for Budget and Policy Priorities explains:

Bush-era tax cuts — Through 2011, the estimated impacts come from adding up past estimates of various changes in tax laws — chiefly the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), the 2008 stimulus package, and a series of annual AMT patches — enacted since 2001. Those estimates were based on the economic and technical assumptions used when CBO and the Joint Committee on Taxation (JCT) originally “scored” the legislation, but the numbers would not change materially using up-to-date assumptions. Most of the Bush tax cuts are scheduled to expire after December 2010 (partway through fiscal 2011). We added the cost of extending them, along with continuing AMT relief, from estimates prepared by CBO and JCT.[23] (We did not assume extension of the temporary tax provisions enacted in ARRA.) Together, the tax cuts account for $1.7 trillion in extra deficits in 2001 through 2008, and $3.4 trillion over the 2009-2019 period. Finally, we added the extra debt-service costs caused by the Bush-era tax cuts, amounting to more than $200 billion through 2008 and another $1.7 trillion over the 2009-2019 period — over $330 billion in 2019 alone.

When Republicans like Marco Rubio say that they don’t know how they would pay for tax cuts, it’s because they haven’t even considered paying for tax cuts. They don’t believe they have to pay for tax cuts. The Republicans believe that they will win majorities in November and that they will be able to extend the Bush tax cuts to their richest friends and that they will never ever have to pay for them.

Republicans care so much about the deficit that they are going to ask people to go to the polls in November and vote for $3.4 trillion more in deficits, a repeal of health care reform, no help for the unemployed, and a repeal of Wall Street reform so the banks can have free rein.

Rich guys like Buffet warn us it not to extend the tax cuts and even say "no thanks, not worth it!" How can you be so against deficit issues when you talk about health care reform but shake it off when it comes to lining the pockets of rich people?

Kim is in the field. Do you think she is making this stuff up? Your main source is Cato? Can we say biased and very right-wing? Weren't they the ones who said privatizing Social Security was a good thing when Bush tried to push that through? Imagine where we'd all be if we followed their leadership! You still don't think they have an agenda?

Now if you REALLY think tax cuts for the rich must be extended and you can't tell me how Republicans are going to pay for it, you must be honest. Say it proudly: "I don't care about the deficit." Don't be shy.

Here's a good article from Newsweek which mentions that keeping the tax rate for the wealthy does little to spur the economy, but if we used that money for infrastructure or even a tax cut for the middle class, we'd get more bang for our buck.

But is this really the choice we currently face—between dour, flinty responsibility or profligate favors for the fortunate? Not necessarily. Nonpartisan economic analyses show that while any tax increase will lower overall demand and thus reduce economic growth, the Bush tax cuts for the wealthy create far less economic growth than other potential tax cuts or spending increases of equal size. So if we were to let the Bush tax cuts on top earners expire and use the money for something else—whether it’s infrastructure spending or more effectively targeted tax cuts—we could be much better off.

“The concern about raising taxes now is completely valid,” says Chuck Marr, director of federal tax policy at the Center for Budget and Policy Priorities, “but you have to think about which taxes, and net taxes. It’s not that you can’t raise some taxes: maybe you should raise some to cut others.”

If we were to raise the total tax rate on society as a whole, we’d run the risk that the government would suck money out of the economy. But that doesn’t mean you can’t raise a specific tax on a specific group. Tax cuts for the rich put relatively little back in the economy compared to tax cuts for middle-class or poor people, even though, as advocates of tax cuts for the rich are usually quick to point out, the top 2 percent of earners account for a disproportionately large proportion of total consumer spending. “High income people don’t live paycheck to paycheck,” explains Marr. “Their spending is less sensitive to taxes. It’s inefficient to rely on tax policy to increase or decrease their spending. Yes, they are high spending, but if their spending is not responding to taxes, so what?”

 

I think the deficit is a huge problem.  But the best way to control the deficit is through economic growth not tax increases.

Do you really think Congress (either party) is going to actually take revenue gained through a tax increase and put it toward deficit reduction?  Historically, they have just increased spending. 

The government has a spending problem, not a revenue problem. 

Brandon, while I may disagree with you on sources (ie CATO) and while I may disagree that the unemployment rate is driven by tax decisions, I DO AGREE ENTIRELY with this statement.

Our debt @ current time is approx. 100% of GDP -- that's disturbing enough as it is.  However, if we do nothing to stem the tide, funding the current programs is projected to be 300% of GDP in the coming years.

That scares the sh*t out of me.

Now, the question in my mind: "Is a change in party control in Congress going to fix that?"  Unfortunately, I've lost faith in the GOP to control their spendinng; however, we're supposed to just trust them that they're really, really sorry for the past and they won't do it again.  They promise.  Additionally, I'm very concerned about some of the candidates the GOP has to offer.  A former CEO who ran Hewlett Packard into the ground is the best they have to offer against Boxer?  Really??? That doesn't build much trust in my mind.

 

Speaking of privatizing Social Security, President Bush has come out of the shadows (much to the frustration of GOP leaders who prefer him to keep quiet-especially right before the election!) recently to talk up his new book. Apparently, he sees NOT privatizing social security as a major regret. Wow-that sure plays right into the Democratic narrative as they target all these "extreme" candidates, doesn't it? Thanks for helping the Democrats in a tough election, President Bush! They need all the help they can get.

Heh -- that was one of the things I actually agreed with him about.

Unfortunately, I'm in the minority on that. 

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