(06-07-2012 11:42 AM)200yrs2late Wrote:  

(06-07-2012 11:11 AM)Max Power Wrote:  Then forget the liberal economists. How about the results of a study by Greg Mankiw, former chairman of George W. Bush’s Council of Economic Advisers and Mitt Romney's chief economic advisor, that shows the economic growth caused by a tax cut can offset, at best, a portion of the revenues lost by that tax cut? Or an estimate by the then-Bush appointee Douglas Holtz-Eakin-led CBO which found the same thing and even that beyond 5 years the economic effects on top of the loss in revenue could be negative?

Only the extreme right believes tax cuts actually pay for themselves.

http://economix.blogs.nytimes.com/2011/1...hemselves/

Quote:Specifically, Professors. Mankiw and Weinzierl calculated that 32.4 percent of the “static” or direct revenue loss of a capital-gains tax cut and 14.7 percent of the static revenue loss of a labor tax cut could be offset in present-value terms by additional growth, ignoring short-term Keynesian effects (i.e., any immediate stimulus provided to the economy).

Now 32.4 percent is a lot, but it is far less than 100 percent. And a critical assumption for Professors Mankiw and Weinzierl is that government spending falls to keep the budget in balance. In their framework that’s a good thing — as they are effectively assuming away the consequences of any productive effects of government spending (e.g., what if less spending on schools means less education and this hurts “human capital” and therefore productivity down the road?).

Sticking for a moment with just with their view of the world, if instead the tax cuts are financed by additional debt, as was our collective experience during the 2000s, the ultimate effect of those cuts can be to lower economic growth in the long term, depending on whether the larger debt eventually leads to lower government transfers, lower government consumption, higher taxes on capital or higher taxes on labor. (Eric M. Leeper and Shu-Chun Susan Yang discuss this in “Dynamic Scoring: Alternative Financing Schemes,” also in The Journal of Public Economics, in 2008.)

More broadly, in 2005, the Congressional Budget Office, then headed by a Republican appointee, Douglas Holtz-Eakin, estimated that the economic effects of a 10 percent cut in income taxes would offset from 1 to 22 percent of the revenue loss in the first five years; in the following five years, the economic effects might offset up to 32 percent of the revenue loss, but might also add 5 percent to the revenue loss.

Governments aren't like households at all. If a government is bringing in less than it's spending, it can simply raise taxes. It can print its own currency. And it can borrow at 1-2% interest rates, and spend that money in ways that according to some studies can grow GDP by over $2 for every dollar spent. When interest rates are this low that it's not even keeping pace with inflation you'd be a fool not to borrow, whether you're a household or government. But the sticker shock of massive borrowing on voters makes it imprudent for pols to do so.

If push came to shove and there was ever a real doubt in the market that we can meet our obligations (reflected in the T-bill interest rates), we could pass a 25% wealth tax across the board and wipe out the debt in one fell swoop.

Bailing out GM absolutely was the government's business. It the government hadn't stepped in and cut checks (contrary to Romney's advice), a million jobs would have been lost, many of whom would be collecting government aid anyway. And considering the fragile state of the economy that shock on top of the financial shock could have pushed us over the edge into a depression. Yes, contrary to right wing talk radio it was the government's business to bail out GM.

Thankfully most people have a heart and don't want the richest nation in the world to have its people dying in the street.

The effects of tax reduction depends on who is getting the reduction. Lower taxes on a family of 4 making $30k and they'll inject that into the economy. Lower taxes on the billionaire and he'll laugh and throw it into his Scrooge McDuck style swimming pool and maybe throw some more gold toilets onto his Ferraris. But either way studies show it's a poorer way of growing an economy than direct government spending, which according to some prominent economists can in fact pay for themselves under the right conditions.

I'll see your referenced article and raise you one.
We can do this for years.... I'm finished searching the web to try to make a point to you.

Quote:If a government is bringing in less than it's spending, it can simply raise taxes.

Solutions to problems are never simple, especially a problem as complex as govt revenues. Raising taxes should not be the first solution.

Quote:It can print its own currency.

It shouldn't.

Quote:And it can borrow at 1-2% interest rates, and spend that money in ways that according to some studies can grow GDP by over $2 for every dollar spent.

It should only do so sparingly. And I'm pretty confident that after the fact actual returns are far, far less the 2 for 1.

GM should have gone through bankruptcy just like any other company. It is too big to fail, it would have been restructured. Yes jobs would have been lost, yes it would have been painful, but it would have been the correct way to do it. GM didn't learn any lessons since it was bailed out. Instead it learned there aren't consequences to its actions.

Quote:Lower taxes on the billionaire and he'll laugh and throw it into his Scrooge McDuck style swimming pool and maybe throw some more gold toilets onto his Ferraris.

All of which will return the money to the economy. Somebody sells and builds the pools, golden toilets, and Ferraris. Not to mention last I checked all of the above were taxable.

You're very fond of asking others to prove something so I would like you to prove to me where "govt spending can pay for itself under the right circumstances" please.

Oh good. Another moron who doesn't think GM and/or Chrysler would be liquidated and would just go a "normal" bankruptcy and come out the other end in tact(with workers getting the shaft). Wher do you guys get this crap? Fox News? Rush Limbaugh? Sean Hannity?

(06-07-2012 12:02 PM)RobertN Wrote:  Oh good. Another moron who doesn't think GM and/or Chrysler would be liquidated and would just go a "normal" bankruptcy and come out the other end in tact(with workers getting the shaft). Wher do you guys get this crap? Fox News? Rush Limbaugh? Sean Hannity?

Thanks for adding something meaningful to the discussion.

By the way, Obama supported a bankruptcy option for GM at one point. Instead the govt owns 26 percent of GM, and would take a $16B loss if it sold its shares today.

(06-07-2012 12:41 PM)200yrs2late Wrote:  By the way, Obama supported a bankruptcy option for GM at one point. Instead the govt owns 26 percent of GM, and would take a $16B loss if it sold its shares today.

Not only did he support it he put them into BK.

The bailout wasn't of GM, it was of the union. Because if they'd gone through traditional BK Chapter 11, which they could have, the union would have had to renegotiate benefits and pensions. Instead they didn't have to, GM is still saddled with the crippling costs of both, so the problem will just come back in a few years.

There are 10 GM workers working for every 1 GM retired worker. It's unsustainable.

(06-07-2012 10:15 AM)200yrs2late Wrote:  

(06-07-2012 08:18 AM)firmbizzle Wrote:  So what you are saying is that when America was in free fall and revenues dropped that we should have immediately pulled out of Iraq and Afghanistan, voided the prescription drug benefit and gotten rid of all new federal employees hired under W?

Nope, Impulsive and rash decisions are never a good idea. Quit trying to over simplify things.

So then you agree that the debt and deficit had to go up under Obama if we were going to continue 2 wars, Bush tax cuts, prescription drug benefit and kept all the new federal employees hired under Bush while revenues went down?

(06-07-2012 12:55 PM)firmbizzle Wrote:  

(06-07-2012 10:15 AM)200yrs2late Wrote:  

(06-07-2012 08:18 AM)firmbizzle Wrote:  So what you are saying is that when America was in free fall and revenues dropped that we should have immediately pulled out of Iraq and Afghanistan, voided the prescription drug benefit and gotten rid of all new federal employees hired under W?

Nope, Impulsive and rash decisions are never a good idea. Quit trying to over simplify things.

So then you agree that the debt and deficit had to go up under Obama if we were going to continue 2 wars, Bush tax cuts, prescription drug benefit and kept all the new federal employees hired under Bush while revenues went down?

$5,027,761,476,484.56 in less than 4 years on Obama's watch and all you want to do is blame Bush. Get real.

(06-07-2012 11:42 AM)200yrs2late Wrote:  I'll see your referenced article and raise you one.
We can do this for years.... I'm finished searching the web to try to make a point to you.

That both "sees" and "raises" my Harvard economist, Berkeley economist and Romney, Bush and Obama advisor studies? Let's glance at this guy's qualifications shall we?

Quote:ABOUT THE AUTHOR: Michael T. Griffith holds a Master’s degree in Theology from The Catholic Distance University, a Graduate Certificate in Ancient and Classical History from American Military University, a Bachelor’s degree in Liberal Arts from Excelsior College, and two Associate in Applied Science degrees from the Community College of the Air Force. He also holds an Advanced Certificate of Civil War Studies and a Certificate of Civil War Studies from Carroll College. He is a graduate in Arabic and Hebrew of the Defense Language Institute in Monterey, California, and of the U.S. Air Force Technical Training School in San Angelo, Texas. In addition, he has completed Advanced Hebrew programs at Haifa University in Israel and at the Spiro Institute in London, England. He is the author of five books on Mormonism and one book on the JFK assassination. His books on Mormonism include How Firm A Foundation, A Ready Reply, and One Lord, One Faith.

A Masters in Theology from THE Catholic Distance University? A certificate from American Military University? And he found time in his busy day to crack the JFK assassination? OH WHAT A SCHOLAR!

Quote:

Quote:If a government is bringing in less than it's spending, it can simply raise taxes.

Solutions to problems are never simple, especially a problem as complex as govt revenues. Raising taxes should not be the first solution.

Well, it can be simple, but it isn't because all GOPers in Congress these days take the idiotic Norquist pledge to never raise taxes.

I agree it shouldn't always be the first solution we look to. Raising taxes in a recession hurts growth, and in such situations we should wait until we're back at our full productive capacity before doing so.

Quote:

Quote:It can print its own currency.

It shouldn't.

Why not? It gives a nation control over its own financial and economic situation. It can fight deflation and encourage spending/demand.

Say there's a group of 50 couples with young kids and they decide to form a babysitting co-op using babysitting coupons, and everyone gets 10 coupons that they can give to someone else for an hour of babysitting. Everything works fine so long as nobody starts hoarding for whatever reason. What if a bunch of them decide that they want to take a vacation without the kids, and they figure they need 40 coupons to do that, so they stop spending the coupons (hiring babysitters) and start saving them (by doing babysitting)? It might be fine if one person does it, but say you have a dozen or so couples who are only interested in acquiring coupons and not spending them, and the coupons that are in circulation become so valuable (because it's becoming so hard to acquire coupons) that more people are reluctant to spend themselves, afraid they'll never have the opportunity to get them back. That's what happens when our economy takes a downturn and people start saving. The more people save, the less income there is and more saving begets more saving. Sometimes the money supply just isn't large enough and the response is to simply to print more coupons, err dollars, so people can reach whatever dollar target they're after and unload. There are always people saving up for the short term for whatever reason and the corresponding drop in income can be made up to an extent by printing. Of course, you sometimes run into a liquidity trap when even the people who get the printed money decide they don't want to enter the market and in those cases the government has to step in directly.

Quote:

Quote:And it can borrow at 1-2% interest rates, and spend that money in ways that according to some studies can grow GDP by over $2 for every dollar spent.

It should only do so sparingly. And I'm pretty confident that after the fact actual returns are far, far less the 2 for 1.

Most studies do show it's less than 2 for 1. But still, if the conditions are right (poor aggregate demand, insanely low interest rates) we shouldn't hesitate. The problem is it's easy to demagogue the deficit issue to the voters, even while it's working, as the Teabaggers did in 2010.

Quote:GM should have gone through bankruptcy just like any other company. It is too big to fail, it would have been restructured. Yes jobs would have been lost, yes it would have been painful, but it would have been the correct way to do it. GM didn't learn any lessons since it was bailed out. Instead it learned there aren't consequences to its actions.

There was NO private financing to carry it through the restructuring process and it was set to run out of cash in weeks. The CEO of GM said this and it's been widely reported. The debt owed to the union health plan couldn't have just been wiped off the books. I posted a well sourced topic on this a couple months ago laying out the law and facts. A million jobs would have been lost; it would have given the economy its second major shock in as many years, risking a depression; every time you buy a car the profits would flow back overseas... there are so many devastating consequences to losing our American auto industry, and most fair people conclude Obama (and Bush, to be fair) did the right thing by cutting the check. As for GM now, it just posted a record annual profit. It's been a success and if we'd followed Romney's advice to "not cut them a check" we'd be up sh!t's creek instead of complaining about the pace of the growth.

Quote:

Quote:Lower taxes on the billionaire and he'll laugh and throw it into his Scrooge McDuck style swimming pool and maybe throw some more gold toilets onto his Ferraris.

All of which will return the money to the economy. Somebody sells and builds the pools, golden toilets, and Ferraris. Not to mention last I checked all of the above were taxable.

I don't think throwing money in a pool is "returning it to the economy." The gold toilet and Ferrari purchases are nice but the billionaire will save enough of his money to remain a billionaire (he didn't get this far without a little miser in him), which does little if any good for the economy. The rich save 50% of their income; the middle class save 10-20% and the poor spend all of their paycheck. That's why the best stimulus is food stamps and other benefits to poor people.

Quote:You're very fond of asking others to prove something so I would like you to prove to me where "govt spending can pay for itself under the right circumstances" please.

Former Harvard University President and economics prof (and Clinton's Treasury Secretary and Obama's Chief Economic Advisor) Larry Summers and Berkeley economics prof Brad DeLong recently co-authored such a paper.

http://www.huffingtonpost.com/2012/03/23...75233.html

Quote:Larry Summers says the stimulus can take care of itself.

Summers, who served as President Obama's top economic adviser until last year, has co-authored a paper with Berkeley economics professor Brad DeLong arguing that stimulus spending finances itself during a recession.

Summers and DeLong argue that fiscal stimulus spending can self-finance because of increases in both consumer spending and investment, which, in turn, raises future incomes and tax payments, offsetting more government spending. But they made sure to emphasize that their analysis refers only to when economic growth is shrinking and not once the economy has recovered.

(06-07-2012 01:45 PM)200yrs2late Wrote:  

(06-07-2012 12:55 PM)firmbizzle Wrote:  

(06-07-2012 10:15 AM)200yrs2late Wrote:  

(06-07-2012 08:18 AM)firmbizzle Wrote:  So what you are saying is that when America was in free fall and revenues dropped that we should have immediately pulled out of Iraq and Afghanistan, voided the prescription drug benefit and gotten rid of all new federal employees hired under W?

Nope, Impulsive and rash decisions are never a good idea. Quit trying to over simplify things.

So then you agree that the debt and deficit had to go up under Obama if we were going to continue 2 wars, Bush tax cuts, prescription drug benefit and kept all the new federal employees hired under Bush while revenues went down?

$5,027,761,476,484.56 in less than 4 years on Obama's watch and all you want to do is blame Bush. Get real.

What does that $5 trillion mean? I'm not sure that you know what you are about Willis.

(06-06-2012 07:47 PM)smn1256 Wrote:  The thing that kills me about Obama's speech is that he's doing a 180 on everything. And it's also proof in my mind that he will say anything, do anything, lie about anything in order to get power.

You just perfectly described Romney or any politician for that matter.

Year: 2007 2008 2009(W's last budget) 2010(Obama's 1st budget) 2011
Revenue: 2.5T. 2.7T 2.1T 2.1T 2.3T
Expenditures: 2.7T. 2.9T. 3.5T 3.7T 3.3T
Deficit: -.2T. -.2T -1.4T -1.4T -1.0T

Now what do you want to cut? Defense? Social security?

(06-07-2012 05:46 PM)Longstrangetrip Wrote:  

(06-06-2012 07:47 PM)smn1256 Wrote:  The thing that kills me about Obama's speech is that he's doing a 180 on everything. And it's also proof in my mind that he will say anything, do anything, lie about anything in order to get power.

You just perfectly described Romney or any politician for that matter.

It sure is Romney. If Obama came out for socks, Romney would say that socks are killing the economy and he is against socks. It's kind of depressing listening to him talk about how bad things are.

Depressing? Hey, the truth hurts.

COTUS' grand plan is to ruin the US capitalism economy and he's doing a helluva job killing it.

Here's a few examples:
Ramming the tax increasing and regulatory nightmare of ObamaCare down America's throat and cutting all sorts of side deals and exemptions to get it done.
The pathetic saga of NLRB and Boeing in the SC non union plant.
The travesty of the Keystone pipeline.
Immelt heading up US Government Export Increase goal then taking his GE division to China.
The poor leadership in acknowledging the BP oil spill, combined with the impact of COTUS severely limiting off shore drilling in America....yet sending US tax dollars to support Brazil's off shore drilling.
Having US credit rating downgraded for the first time in our history.
Running up an extra $5,000,000,000,000 in new debt in 3.5 years.
Ignoring CEO meetings where they advised COTUS to:
1) Reduce corporate tax rate since it is the HIGHEST in the G-20
2) Work on weaning Americ aoff foreign oil
3) Reduce/eliminate the stifling bureacracy of federal regulations that impede profitability and growth

COTUS is an AA President that is in wa-a-a-a-a-a-a-a-y over his head. It ends in November, then we only have to endure his pardon list before he leaves the Oval Office.

(06-08-2012 12:14 PM)boss man Wrote:  Depressing? Hey, the truth hurts.

COTUS' grand plan is to ruin the US capitalism economy and he's doing a helluva job killing it.

Here's a few examples:
Ramming the tax increasing and regulatory nightmare of ObamaCare down America's throat and cutting all sorts of side deals and exemptions to get it done.
The pathetic saga of NLRB and Boeing in the SC non union plant.
The travesty of the Keystone pipeline.
Immelt heading up US Government Export Increase goal then taking his GE division to China.
The poor leadership in acknowledging the BP oil spill, combined with the impact of COTUS severely limiting off shore drilling in America....yet sending US tax dollars to support Brazil's off shore drilling.
Having US credit rating downgraded for the first time in our history.
Running up an extra $5,000,000,000,000 in new debt in 3.5 years.
Ignoring CEO meetings where they advised COTUS to:
1) Reduce corporate tax rate since it is the HIGHEST in the G-20
2) Work on weaning Americ aoff foreign oil
3) Reduce/eliminate the stifling bureacracy of federal regulations that impede profitability and growth

COTUS is an AA President that is in wa-a-a-a-a-a-a-a-y over his head. It ends in November, then we only have to endure his pardon list before he leaves the Oval Office.

The sky is not falling. It's actually getting better than it was. Did you see Bush's last budget? He's the one that increased it by $600 billion, while at the same time taking $600 billion less in revenue. You wanna talk about an AA presidency.....43.

I love how wingnuts complain about the growing deficit and at the same time say we need to cut corporate tax rates. There are dozens of Fortune 500 corporations that pay nothing!

BTW a Moody's study in 2008 showed lowering corporate taxes has a 0.3 multiplier effect (the same as making the Bush tax cuts permanent), meanwhile food stamp spending, infrastructure spending and unemployment benefit extentsion have 1.7, 1.6 and 1.6 effects respectively. But we can't do those last ones because the poor won't learn their lessons.

http://www.imf.org/external/pubs/ft/spn/...pn0911.pdf

(06-08-2012 01:50 PM)Max Power Wrote:  I love how wingnuts complain about the growing deficit and at the same time say we need to cut corporate tax rates. There are dozens of Fortune 500 corporations that pay nothing!

BTW a Moody's study in 2008 showed lowering corporate taxes has a 0.3 multiplier effect (the same as making the Bush tax cuts permanent), meanwhile food stamp spending, infrastructure spending and unemployment benefit extentsion have 1.7, 1.6 and 1.6 effects respectively. But we can't do those last ones because the poor won't learn their lessons.

http://www.imf.org/external/pubs/ft/spn/...pn0911.pdf

You do realize that corporations merely pass their taxes on to those who purchase their products unless of course they have the means to move overseas to a more tax friendly enviroment.

(06-08-2012 01:50 PM)Max Power Wrote:  I love how wingnuts complain about the growing deficit and at the same time say we need to cut corporate tax rates. There are dozens of Fortune 500 corporations that pay nothing!

BTW a Moody's study in 2008 showed lowering corporate taxes has a 0.3 multiplier effect (the same as making the Bush tax cuts permanent), meanwhile food stamp spending, infrastructure spending and unemployment benefit extentsion have 1.7, 1.6 and 1.6 effects respectively. But we can't do those last ones because the poor won't learn their lessons.
http://www.imf.org/external/pubs/ft/spn/...pn0911.pdf

My taxes increase so that those that pay none can receive more handouts to stimulate the economy. Thanks but no thanks. You cannot repeated ask more of those that contribute to the system while giving more to those that do not. Can you really not see where this line of thinking leads to? It continually raises the bar, pushing more and more people to become dependent on the system and leaving fewer and fewer that are capable of paying into it.

Nevermind that you study looks only at a single point in time, one year from the time the money was spent. I'll take slow, steady, and continual improvement over a flash in the pan temporary return anyday.

Corporate income taxes only account for 9% of the federal revenue in the 2010 budget. The loss of federal revenue from reducing the corporate income tax would be more than offset by the expansion of existing businesses and new businesses, new hires, and increased investment. People complain about corporations sitting on their money, give them a reason to feel good about spending it, something this administration and most liberal economist haven't even considered.