Talk Elections

http://www.washingtonpost.com/business/economy/study-romney-tax-plan-would-result-in-cuts-for-rich-higher-burden-for-others/2012/08/01/gJQAbeCCOX_story.html


If you're not a millionaire and you're voting for this guy, you're an idiot.

George W. Bush cut taxes for everyone, or at least the overwhelming majority of the country.  Were people who voted against him idiots?

Edit: Romney's and Obama's tax proposals are academic anyway.  The question is what would pass the House and Senate, and my guess- guess!- is that the answer is neither.

Did you bother to read before posting?  The study found that if Romney does what he says he wants in taxes, only a small minority at the top would benefit with an overwhelming majority seeing a tax hike.

Yes.  The implied argument in the OP is that people should vote for the candidate who offers them lower taxes than the other, or they are idiots; Obama offers middle-class Americans lower taxes than Romney, according to the study; therefore, middle-class Americans who vote for Romney are idiots.  Surely the same logic should apply to other elections, no?  And surely millionaires voting for Obama over Romney are idiots?

No, the implied argument is that people shouldn't vote for politicians that want to take away their money to give to the rich. If Mitt Romney were proposing that we raise taxes on all Americans to fight the deficit, that would be one thing; but he's literally proposing that we raise taxes on 95% of America so that the rich get to keep more of their money.

The House voted today to raise taxes on the non-rich.  They voted 256-171 to end the Obama tax cuts on the non-rich but keep the Bush tax cuts. They voted 170-255 against extending the existing tax cuts on the non-rich.

This seems like it should be a winning issue for the Democrats to stand firm on, but they will no doubt capitulate as usual.

From what I've read it seems like Romney's arguing that the study doesn't fully account for the increased revenues that will come from private sector growth.

I don't know enough about it to really argue, but I see what he means.

Romney is full of sh**t, as usual.

How so?

A flat tax would be the fair way to go, I say.

Ahhhhh...

the pervasive liberal I am smart, you are dumb argument. Very refreshing.

Tax cuts don't increase revenues. Wrong side of the Laffer Curve.

Well the whole economic basis of this is an ideological talking point that the Bush tax cuts did nothing to support. In really difficult times, the rich save their money, they don't risk investing it in a sluggish economic environment.

That is what is likely to happen if you "broaden the base and lower rates" as they call it, yes.



Yep, the peak is in Sweden territory or something like that.  Like 70%.

a) what rate?
b) what exemptions would apply?
c) what programs would have to die to make up the shortfall in Government revenues?

why even engage?  they're genocidal maniacs

A flat tax is completely unfair.

The rate would have to be ~22% for the flat tax to be revenue neutral. Consider that while considering that our current tax rates do not provide enough revenue to meet our obligations. The flat tax would be a catalyst for economic fallout, and an effective tax increase on virtually everyone; especially if the reform were to scrap most deductions, as the Heritage Foundation has suggested.

The Tax Policy Institute actually did even run the model with generous growth assumptions and still concluded that the only way to remain revenue neutral Romney's plan would have to raise taxes on the middle to pay for the 1%. But of course Romney would never actually propose such a thing, what he is proposing is something that just doesn't add up.

Romney is saying he will keep Bush tax cuts, add new tax cuts, increase defense spending, and maintain revenue. He has also talked about balancing the budget.   When asked for what he would cut in terms of spending and tax exemptions he refuses to say so its impossible to score but basic common sense says that it just wont add up.

The question is, can he go through an entire campaign by saying "I'll give you the details after I'm elected".

Remember it was Romney who was pretty hard on Cain back when he and 999 were riding high. It was Romney pressing him in the debates for details, like how it created a new sales tax on top of current sales taxes. And, ironically, it was Romney's campaign that touted this same Tax Policy Institute when it pointed out the problems in Perry's tax plan.

No, flat incomes would be the 'fair' way to go.

In essence, Romney wants to run for president without being vetted.

[link=https://uselectionatlas.org/FORUM/index.php?topic=156857.0]The Overall Tax Burden is already pretty much flat.[/link]

Well, Romney paid 14% federal income taxes, and in his schedule A reports 4% state income and sales taxes, so the 18% ha paid is a lower percentage than all but the poorest 20% paid according to that table.

Heaven forbid a candidate should want that.

To avoid increasing deficits you don’t have to generate an equivalent amount of revenue. You can also cut an equivalent amount of spending. And that’s what Romney is going to do.




It's a biased study that doesn’t even consider cutting spending.

Really? ???

Has Romney ever actually given any indication as to what he'd supposedly cut? (other than "Obamacare" and repealing Obama's Freedom Tax or whatever).

AFAIK Romney has said he'll increase defense spending (including more battleships for some bizarre reason) and to maintain benefits for seniors, as outlined in this article on Bloomberg (http://www.bloomberg.com/news/2012-08-02/romney-tax-plan-on-table-debt-collapses-table-.html).


How on earth is this study "biased", incidentally? I don't understand. ??? It's basic mathematics.

I think we can conclude that Romney isn't serious about reducing expenditure - for all his many faults, including having the sheer contempt for the public to propose this thing as if it's a reasonable suggestion, he's not an idiot, and he's already admitted that spending cuts in the middle of a massive recession, especially on anywhere near the level that'd be required for this moronic idea to break even, would plunge the country into another recession.

The assumption is wrong. Romney will pay for all of his tax cuts through spending cuts. The deficit reduction will come from increased revenue that will come with revival of the economy.

See sig.

Yes, yes, yes, rhetoric and "our economy is fuelled by freedom!" platitudes aside, where's the evidence for that claim? ??? What you just posted isn't anything approaching an argument, it's just noises and syllables.

Basically Romney is hoping that he can rely on people's general ignorance in how the tax code and budget works. He offers specifics on the goodies (tax cuts and more military spending) and gets vague on the pain (budget cuts and deduction cuts). Then waves the magic "resulting growth" wand over it all.

In a world where people think the budget can be balanced without cutting any programs that they like (because cutting PBS and int'l aid should be enough to wipe out the deficit right?), Romney figures he can get away with it.

It's abundantly clear that Romney has no intentions of paying down the national debt.

Great. Harrison Bergeron morons. Flat incomes is the sh**ttiest idea ever. If I wanted to live like the poorest folks, why am I working my ass off?

Yeah, this isn't news, but some people just don't choose to accept it.

Class warfare is ugly.

Ideally, everybody would pay the same percentage of their income regardless of how much or how little they earn (with the exception of a negative income tax for the poor, of course). No more deductions, loopholes, etc. A flat percentage of your income goes to Uncle Sam to fund what we've elected our representatives to ensure is provided to the public in the form of public goods.

If everybody saw their taxes go up or down by the same percentage of their income, I think we would see a convergence towards the tax rate and amount of government services that the vast majority of people actually want. In the process, we would minimize government abuse/waste while constraining the growth of government spending.

A graduated tax rate can be justified on the basis of diminishing marginal returns, an economic concept that applies to all forms of income and consumption. To take an extreme example, you could have an extremely poor family that earns just enough to eat, clothe, and pay rent at the poorest possible subsidized housing rate. Any more than a 10% tax means that the family can't afford rent, has to miss a meal, or perhaps can't celebrate Christmas. This is a heavy blow, and it means a lot to these people.

On the other hand, take the likes of Bill Gates. Gates has a huge charity because he knows he has more money than he could ever possibly spend. Even if he tried to spend, the biggest house in the world, an army of servants, the biggest yacht, the biggest plane, the most sumptuous food and entertainment, parties every single day, he could not possibly spend even a small fraction of his fortune. So he gives it away. 10% for him is nothing.

Now, if taxes need to be raised, would it not be worth it to raise Bill Gates' tax from 10% to 15%, and leave the barely-scraping-by family's tax at 10%? Than to raise both Bill Gates' and the barely-scraping-by families' tax reach to 14%? The latter proposal (the flat tax) would actually generate far less revenue, despite the fact that average tax rates under it are higher than under the progressive tax. The progressive tax can absolutely be justified on sound economic and moral grounds that have nothing to do with class warfare.

Yes, right now. Things will change once Romney gets in.

Obviously the nation needs a fiscal enema much like we needed a monetary enema in the late 70s/early 80s. It is the only path to real recovery. The alternative is a downward decline for four more years.

Yes it is, Mitt Romney should be ashamed of himself. 

Obviously there needs to be an exception for the poor. The flat tax rate would need to only apply to those who are at some level above a reasonable threshold. If the rate is at a level that is deemed too high by a strong majority, people will elect representatives who will lower the rate accordingly. The most important benefit of this scheme will be the elimination of the psychological delusion that government intervention has only benefits and no costs. This delusion is bankrupting many parts of the world, and we need to prevent the contagion from spreading to America. Nothing is more important.

I'm glad you oppose Mitt Romney's tax plan.

No one is saying government intervention "only has benefits" and no costs. Everything has a cost.

I know you have a firm appreciation of costs/benefits, but a strong plurality, if not majority, of our fellow citizens really do see government intervention as having only benefits without costs (This should not come as a surprise when one considers that over half of the population does not pay any federal income taxes whatsoever). IMHO, it is a costly delusion that can only be remedied with a real flat tax. Rolling out a flat tax would induce a recession, but it would pay off not long thereafter (a sort of fiscal version of Volcker's shock therapy, if you will). The alternative is far worse than my short-term pain for long-term gain.

No, that is a malicious lie.

Over half of the population does not even work, so how is it a malicious lie?

First of all, even those who do not work pay tax. Even little children pay tax on their toys, or their parents do. Every single person in this country who has reached voting age has at some point seen, firsthand, the cost of government. Are you seriously disagreeing with the idea that death and taxes are the only certain things in life?

Volcker's shock therapy wasn't nearly as much of a success as it was portrayed. Every recovery from 1982 until 2009 was based on an explosion of debt, and that's exactly what we're paying for today. Post-Volcker, debt replaced inflation; and debt is even more insidious, because while the harmful effects of inflation are seen right away, debt can build up seeming innocuously for years until there is finally a crisis. And contrary to popular belief, since 2009 the economy has actually been cutting debt, as a share of GDP, for the first time since the Great Depression.

Not to mention, Volcker was a shameless, unprofessional partisan hack who tried to help Jimmy Carter win re-election but utterly failed at being a partisan hack.

I assume over half the population makes purchases subject to sales taxes, for instance.

Obviously I was talking about federal income taxes and federal spending. Furthermore, if we give tax dollars to somebody in exchange for their existence and they spend part of those tax dollars on taxes, is that person really paying taxes? If somebody receives bundles of benefits funded by "other" people's taxes and pays occasionally a few dollars/cents on their consumption goods, do they really gain an appreciation of the costs of government spending?

There is a mentality that is emerging that says government basically has benefits with little to no costs (or at least little to no costs to those individuals who want more and more spending). This bankrupt idea is going to bankrupt America if we do not eliminate the mentality one way or another. I firmly believe this, and I firmly believe the only solution is a real flat tax, at least when it comes to the federal level (I support allowing states to tax/spend whichever way they choose, but there should be no bail-outs for the fiscally irresponsible governments).


Of course not.


Volcker's objective was to slay excessive inflation, and his plan worked. A flat tax will slay excessive public debt and return America on a path towards real growth with freedom and individual responsibility leading the way.

In exchange for their existence? One would think people have their mothers to that for that, not the government.

Very, very few people have never done a day of formal work in their lives (well, maybe Ann Romney). Even most people on welfare, or temporary assistance, who currently do zero work (which is a tiny minority of people), have at some point worked and paid federal social security, and unemployment insurance taxes, which are substantial.


Then why has Obama overseen the slowest spending growth in decades?

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Why is this the first recovery from recession in which fewer people are working for the government than before?

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I'd argue the opposite of your case- more people are becoming aware that the growth rate of health care costs is becoming unsustainable, and that it needs to be addressed to ensure the stability of the federal budget. With Republicans in control of the House, which decides on the budget, they can't complain that spending is out of their control. Obama can't do anything fiscal-wise as long as Boehner is Speaker, and that is not likely to change after November.


A plan that lowers revenues would increase public debt, as it did under Reagan and Bush. This is the same failed rhetoric from the Bush administration. Romney is going to need to do better than that to convince people who can remember back more than a few years.

I'm going to do something else now, but I appreciate the discussion.

We've been running deficits in excess of $1 trillion every year under Obama, so of course the rate of growth is lower than previous administrations. We saw a massive spike in the wake of the financial crisis, and nothing has been done about this spike over the past four years. We need to get the deficit back under control soon before it is too late.


We are talking about the federal government, not federal, state and local governments. The reason why the public sector is decreasing is because states and local governments need to balance their budget, and the vast majority of state/local governments are closing their gaps via spending cuts that exceed any increases in taxes.


A flat tax will cover the costs of Medicare/Medicaid if the flat tax is at a necessary level. If people deem they are unwilling to pay those costs, the programs will need to be cut to a degree, or spending elsewhere in the budget will need to be cut. The bottom-line is that nothing is free, and everything eventually needs to be paid for one way or another. The only fair way to figure out exactly what the majority of the public wants is with the adoption of a flat tax rate that is set by representatives who were elected by the people to carry out their bidding. A flat tax will act as a sort of mechanism that ensures public debt gets under control and never goes out of control ever again. On the whole, people will get the level of government spending that they are willing to pay for; there will be no more delusions of free lunches and no more free riding.


The adoption of the flat tax will need massive spending cuts coupled with shifting spending decisions onto the states wherever and whenever possible.

This is a pill that is difficult to swallow, but sometimes that kind of medicine is what cures you. When the alternative is dying, there really is no alternative.

So why do you favor Mitt who calls for massive spending increases?  A buck is a buck even when spent to buy guns instead of butter.

Fixed.

Context is lost on some folks, I guess...

Mitt knows the difference between politics and economics. I believe that Mitt, for better or worse, is our best only hope in achieving fiscal sanity before the end of the decade. If we do not have our house in order by 2020, meaning we need drastic changes over the next four years, I cannot even imagine what type of poor sight we'll be.

The spike in the deficit is mostly due to falling revenues, which was tied to the recession. The increased spending can also be attributed to the effects of the recession. The solution is to stimulate the economy and we've learned from Europe (and the Great Depression) that just cutting spending alone doesn't stimulate the economy. It can actually make the economy worse.

Besides, I know this'll probably go over your head, but the deficit is a deeply misunderstood phenomenon. I'll let Edward Harrison from Credit Writedowns explain this:

I’ll let you in on a secret: before this crisis, when I thought about the budget deficit I was like everyone else in that I paid no attention to how the government budget interacted with the private and trade sector balances. This is a big error. If you do that, you treat the government budget deficit in isolation, when the reality is that the government is an integral part of an open economy with households and businesses that trade domestically and abroad. When the government balance changes, the balances for those businesses and households change too. If you are talking about deficits then, you need to know how changes in the government balance affect the rest of the economy.

Here’s the thing: when we exchange goods and services with each other, from an accounting perspective, it’s a wash; if you buy my goods, I get money and you get goods of equivalent value. If you pay for those goods with an I.O.U., with a debt, your liability, your deficit in the year we made the transaction, is exactly equal to the asset on my balance sheet and my surplus for the year. I mean this is basic accounting, folks. There’s no hocus pocus. Any person’s, any household’s, any business’s, any group’s, any government’s debt is someone else’s asset. Any person’s, any household’s, any business’s, any group’s, any government’s deficit is someone else’s surplus. Again, it’s basic accounting.

Read the entire article, it's good.

http://www.creditwritedowns.com/2012/05/why-cant-people-understand-national-accounting.html

The point is not that "deficits don't matter", but that the government deficit of the past 3 years has actually been a way to allow the private sector (the much bigger part of the US economy) to rebuild its balance sheets by cutting its borrowing, while still supporting final demand somewhat so that private individuals and companies can continue to earn income. The 2008 crisis was brought on by catastrophic private sector balance sheets (primarily in the consumer and financial sectors) and we as Americans collectively haven't given ourselves enough credit for turning it around. As a result of this turnaround, future government deficits will be much lower than they otherwise would be. Private sector leveraging has been shown on an international basis to have major costs to public sector debt once the private sector can no longer support its levels of debt. Private sector deleveraging will have the opposite effect.

That is not to say that further deficit reduction in the long run is not needed. Obama and Boehner, both agree on this. After the election, no matter what happens, I think you'll see some moves towards fiscal consolidation.


In 2010, the latest year for which figures are available, there were 2.133 million federal employees. In 1967, there were 2.251 million.

http://www.opm.gov/feddata/HistoricalTables/ExecutiveBranchSince1940.asp

In other words in the past nearly half century when the population went up 60% and and the economy more than tripled in size, the federal workforce has actually fallen. So no, my point doesn't only apply to state and local governments.


How would the flat tax ensure public debt will get under control when the government can simply borrow? Your plan does nothing to ensure that people 'feel the pain' of government spending because the tax rate can simply be set at an unrealistically low rate while deficits continue to be run. If anything, it would increase the resistance to tax hikes, thus making the deficit worse.


Another absurdity. We will not "die" (as a nation) on account of fiscal issues, no matter what happens. At the end of the day this nation's wealth is in it's people, it's capital, its laws and values, its technology, its natural resources, it's institutions, it's protection by the oceans, it's international image and brand, and the like. You know, real things. Unlike what conservatives think it does not lie in shiny objects or numbers written down on a piece of paper.

Everyone knows you don't go on a strict diet when you weigh 60 pounds. The same goes for economics. You don't make massive spending cuts when you're in recession or recovery. You only do that when you're experiencing strong growth (What Reagan should have done after 1984 and what Clinton did in 1993) and it won't send us into free fall. Ironically, it's Romney who is offering the European Style economic policies, in the form of austerity.

TARP necessitated a massive increase in borrowing. Obama's stimulus added to the pile. Obama's Obamacare can only be projected to add further to it.

Obviously we've seen a fall in overall tax collection, but the deficit is largely the result of largesse. The federal government has become morbidly obese, and needs to be turned into a lean, efficient machine that focuses upon law/order, national defense and BASIC infrastructure (e.g., interstate highways and scientific research, not funding broke public union pension plans that could not possibly be saved without turning the private sector, including private unions, into the Santa Clause of public unions).


Yes, which can be done via tax cuts. There is no reason why a flat tax cannot end up being a net tax cut on the whole for the population if it is coupled with spending cuts on WASTE. The ensuing boost to confidence can increase real investment in real things that consumers want, not what special interests want.

Where you and I largely differ is you buy into the notion that government can stimulate the economy with spending. I realize that most of the federal government is inherently inefficient. Feeding the beast simply makes the economy more inefficient as funds, whether they are taxes or borrowed funds, are moved from the efficient private sector to the inefficient public sector.


Cutting taxes while cutting spending on waste is a net benefit for the economy. The economy becomes more efficient, growth ensues, the pie becomes larger, etc.


How do you think the interest on debt is going to be serviced down the road (we're not all dead in the long-run)? The only way it can be: Increased taxation on the private sector either explicitly or implicitly (i.e., seigniorage).


There is no way to test this hypothesis, so this claim is nonsense.


You're being intellectually dishonest. Yes, we have nearly as many workers in the federal government now as we did in 1967. But do you wish to compare the numbers to 1996, back when Bill Clinton declared the era of Big Government to be over? That number would be 1.934 million. This number went down from 1996-2001. What happened in 2001? 9/11, of course, necessitating an increase in workers in Homeland Security. The number of federal workers was relatively constant from 2002-2007. Since Obama came into office, we've seen about an 8% spike in the federal workforce. This is coming at the expense of the private sector.

Unlike some folks, the people in the private sector know what deficits mean: Tax hikes in the future. They are tampering their spending and investment accordingly in anticipation of this. We need to restore confidence by eliminating these anticipated tax hikes. We can do so with a flat tax coupled with spending decreases. It is possible to cut taxes, decrease spending, and boost confidence in the private sector enough to avert a severe recession (although a mild one would be unavoidable in the short-run). The end result, how things will look four years from now, will be a lot better than four more years of the past four years.


If the lack of confidence in the stimulus shows anything right now it's that people do not want higher taxes later to pay for more government spending now, especially if it is going to be wasted on special interests. Apparently this notion will not sink into the heads of many people in Washington until after the Republicans dominate the election...


No, we will not die, but we will end up like Europe if we continue with four more years of Obama. Eurosclerosis is pretty much the economic version of "dying" (Or becoming a has-been who is a shadow of their former self).

Eurosclerosis is dying? The whole tax-cuts-for-growth economic program in the current American economic environment is the equivalent of a fluffer begging an exhausted porn star, a self-absorbed Romney supporter perhaps, to get it up one last time.

No it didn't. Thanks to the Obama administration's policies, what was originally projected to cost $700 billion only needed $416.1 billion disbursed, and of that, $350 billion has already been paid back, leaving only about $66 billion left outstanding. Less than one-tenth what the Bush administration thought it would cost (http://www.treasury.gov/initiatives/financial-stability/briefing-room/reports/tarp-daily-summary-report/TARP%20Cash%20Summary/Daily%20TARP%20Update%20-%2007.25.2012.pdf).


That's not true; the nonpartisan CBO has said time and time again that Obamacare reduces the deficit. (http://www.tnr.com/blog/plank/105327/cbo-obamacare-deficit-medicaid-expansion-cost-revenue-exchange). Repealing it would inrease the deficit (http://www.rawstory.com/rs/2012/07/24/cbo-repealing-obamacare-would-increase-deficit-by-109-billion/). These are the facts, not bluster.


What percentage of the federal budget is spent on public union pension plans? You do know that public union pension plans are funded by states, right? The federal government has nothing to do with it.

The deficit is due to Bush's policies and the bubble that he oversaw.

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And you want to put the GOP back in power with the same ideas as under Bush?


The Credit Writedowns post went over your head, just as I knew it would. If it hadn't you would have understood that there is no net effect from deficit spending on an accounting basis. If the government borrows from the private sector and spends it, the money goes right back out into the private sector and is earned by the private sector as income. Additionally, the bonds that the government gave in exchange for the funds it borrowed become an asset on the private sector's balance sheet. The deficit is essentially allowing the private sector to earn income while still paying down debt. It stimulates the economy be propping up final demand, thus keeping more people in jobs. It doesn't matter if you think a worker is inefficient, a worker who is working is always more efficient than a person who is not working. It also stimulates demand through the multiplier effect.


Who is against cutting "waste"? Your points are nothing more than hollow platitudes. What, exactly do you consider to be waste? Cutting taxes will reduce revenue and increase the deficit. If cutting taxes were the path to prosperity, the massive tax cuts of the Bush years should have led to prosperity. Instead, they led to 2008. Besides, it's not as if Obama hasn't cut taxes: Americans paid the lowest tax rates in 2009 since 1950 (http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm). So what was it? Either low taxes lead to prosperity, in which case the low taxes that we currently have are the right path, or the economy currently is still struggling, and low taxes weren't he panacea they are made out to be by the GOP, despite trying them again and again. Bill Clinton, by the way, raised taxes in 1993. The Republicans predicted it would lead to a recession. They were wrong. To top it off, Obama's plan would leave taxes for the vast majority of Americans lower than Romney's plan, so even if your statements are accepted on face, they make no sense as an argument for Romney.


The interest on the debt can be easily serviced. Interest rates right now are at 60-year lows, some even negative, which means that the private sector is paying the government to hold onto its money. And who do you think would be collecting the interest, if interest rates went back up? The private sector. So it would be funded with taxes on the private sector, and what it is, is payment back to the private sector. Net effect zero.


Maybe not, but there is a huge amount of evidence from many historical incidents across many countries that excessive levels of private debt get transferred onto governments, whereas countries countries that are able to run government surpluses do so at times when the private sector balance sheets are healthy enough to enable it to create final demand by leveraging itself. This then contributes to higher government revenues.


That's not dishonest; those are the facts. The long term trend in absolute size of the federal workforce is relatively stable, and as a percentage of the population it is falling. If you made a chart with all the data points there, you would see the same thing. I deliberately excluded World War II because the war effect was so dominant. An 8% increase over 16 years is still not a lot. The US population has increased at a faster rate. So even by your own standards, the federal workforce as a percentage of the population was lower in wartime, post-9/11 year of 2010, than in 1996, when Bill Clinton declared the era of Big Government to be over.


Forgive me if this sounds arrogant, but attempting to engage you reminds one of an Aesop's Fable:

"The Owl is a very wise bird; and once, long ago, when the first oak sprouted in the forest, she called all the other Birds together and said to them, "You see this tiny tree? If you take my advice, you will destroy it now when it is small: for when it grows big, the mistletoe will appear upon it, from which birdlime will be prepared for your destruction." Again, when the first flax was sown, she said to them, "Go and eat up that seed, for it is the seed of the flax, out of which men will one day make nets to catch you." Once more, when she saw the first archer, she warned the Birds that he was their deadly enemy, who would wing his arrows with their own feathers and shoot them. But they took no notice of what she said: in fact, they thought she was rather mad, and laughed at her. When, however, everything turned out as she had foretold, they changed their minds and conceived a great respect for her wisdom. Hence, whenever she appears, the Birds attend upon her in the hope of hearing something that may be for their good. She, however, gives them advice no longer, but sits moping and pondering on the folly of her kind."

And with that, it being 3:39 AM here, and I being a hardworking, full time professional, I must keep my promise...


You know nothing about the situation in Europe. The root of that problem is countries that don't control their own currencies, it has nothing to do with any of the debates in the US, except that it shows that austerity doesn't work.

You'll have to excuse me for using TARP as a catch-all term for not just the assistance given to the banks, but the takeover of Fannie Mae and Freddie Mac along with the bailout of AIG. All of these events happened in late 2008 and they caused a massive spike in the deficit at the time (I believe the deficit doubled from 2007 over 2008, and much of it was increased borrowing for these events).


The CBO can tell me that the sky is red, but that does not make it so. You cannot add an entitlement for poor people and expect it to lead to lower spending, thereby reducing the deficit. That is like telling a fat person that eating pizza everyday for the rest of their life will decrease their intake of unhealthy fats.


Have you ever stopped and wondered why Obama's federal stimulus funds did not stimulate the economy to the degree Keynesian theory would anticipate? I'll give you a hint: Special interests. Go do some digging, my friend. You may not like what you uncover.


The deficit has been over $1 trillion for each and every single one of Obama's years in office. I was not a fan of Bush, but the deficits on his watch were sustainable; these deficits are not. Obama has no plan to address them other than massive tax hikes. Obama ought to owe up to the fact that his plan is the same plan that Walter Mondale had for America: Massive tax hikes.


That post is not science. It's finance masquerading as economics, and it's dead wrong.


If the government borrows from the private sector and transfers it to various states so they can find clever ways to prop up public unions and pension funds that made promises that cannot be kept, those are real resources that could have been put to use in a productive way creating tangible goods/services that consumers want that were instead wasted on special interests. This is precisely what happened to a large degree, and it's why the stimulus did not stimulate the economy as predicted by Keynesian theory.


Public unions and their servants in the Democratic Party.


Not if it is coupled with spending cuts, and causes a real multiplier effect in the real economy.


If you want to see the difference between increases in government spending versus tax cuts as a way of stimulating the economy and all that entails, compare the 1970s to the 1980s. The differences could not be more stark. We are better off today than we would otherwise be because of the adoption of tax cuts as a better, more efficient way of stimulating the economy. Tax cuts return income to the efficient private sector to spend as they see fit. Economic decisions and power are dispersed to millions of consumers/producers, rather than being made out of a centralized Washington hierarchy that cannot possibly know how to efficiently allocate resources given the immense complexity of the demands of the aforementioned millions of consumers/producers.


Tax cuts have nothing to do with 2008. 2008 would not have been a big problem if commercial banking and investment banking were separate as was the case before Clinton repealed Glass-Steagall. Allowing investment banks to go belly up is not a threat to the money supply; allowing banks that engage in both commercial/investment banking to fail would have led to a massive decline in the money supply for obvious reasons. That's why what's done was done.

If there is another financial crisis, separation of commercial banking and investment banking will inevitably be restored. The public will demand it, both from the left and the right. The banks know this, so I would say they will likely be more prudent in the future and a repeat of 2008 is unlikely. The problem is that in 2008 they knew they could be reckless and still be bailed out, so we should not have been surprised when they did exactly that.

On a related note, a big problem was the government implicitly forcing banks to give out loans to people who could not possibly payback the loans. Government programs and the poor decision to separate commercial banking and investment banking are what ultimately led to 2008, not Bush's tax cuts.


Low taxes coupled with unsustainable deficits causes most everybody to anticipate massive tax hikes down the road. Confidence and spending is lowered. We need low taxes and fiscally responsible spending.


Bill Clinton is an infinitely better president than Barack Obama, but he had the good fortune of being president during the emergence of the Internet and all that entailed. Policy had little to do with the good times of the 1990s. The tax increase of 1993 had absolutely nothing to do with it. Getting spending under control, as he did in 1995-onward, did help.


The plans submitted by both are meaningless. Everybody knows that Obama has a strong desire to raise taxes if he gets re-elected (he will not cut spending just like the Republicans will not budge on no new taxes); if he cannot do it with tax hikes because of a Republican Congress, he'll put in a new Chairman of the Fed who will do it via seigniorage.


You've definitely been drinking the Kool-Aid hardcore the past few months, I see. The interest rates will only go back up once inflation goes back up. If you tax the interest earned before inflation is taken into account, which is precisely the case, you're basically transferring real value from the efficient private sector (which produces the real goods/services that consumers choose freely) to the bloated bureaucracies that produce/consume goods/services that taxpayers are forced to pay for via taxes. To a large degree, we transform market diversity into government conformity. I thought we were discussing economics, not finance/accounting.


You're conveniently ignoring the fact that federal workers earn more than their private sector counterparts who do equivalent work. This was not the case decades ago when the government was seen as the employer of last resort. In other words, the secretary who pays taxes in the private sector is seeing a portion of their income (and therefore some of the fruits of their labor) transferred to a secretary in the public sector who gets paid far more to do equivalent work. Do you think that is fair, or will lead to efficient allocation of resources?

When Bill Clinton declared the era of Big Government over, he actually cut the federal workforce and confidence in the economy increased afterward. There is no reason to believe that similar cuts today would not have the same effect on confidence moving forward.


It's actually an 8% increase over four years.


()

Sorry, but it's our turn now...


The root of that problem is the belief in excessive government intervention.

Why am I still awake. Why O Why.


The link I pasted included AIG. The Obama Treasury has been regularly earning back the AIG money (http://www.bloomberg.com/news/2012-03-15/aig-said-to-boost-u-s-tarp-recovery-to-80-with-payment.html) that the Bush Treasury spent.

Yes the government lost money on the takeover of Fannie Mae and Freddie Mac, but the losses in the mortgages giants were directly tied to the overinflated value of housing in the mid-2000s, at the height of the Bush Presidency, aided and abetted by deregulation that he accelerated, and a conservative Republican Fed Chairman who looked the other way. In 2004 Bush campaigned for reelection on the housing bubble, bragging about the "homeownership rate" and benefitting from the temporary construction jobs created by the bubble. To use those losses as a reason to reward the same party that caused the calamity selling the same ideas that caused the calamity would be blaming the victim- not as bad as impriosning a rape victim for being raped, as they do in some areas of Pakistan, but the same principle. It would be heinous.


There are cuts to Medicare, as well as increased taxes in Obamacare that more than offset the entitlement for poor people. Hence, it leads to a lower deficit. If you can't understand that you are really stupid. The CBO's projection is actually conservative, as it only covers the years to 2022. Once you go past that, the deficit reduction from Obamacare is even greater. Also, the CBO actually has a history of overestimating entitlement costs (http://insuremekevin.com/2012/05/10/prescription-drug-plan-cost-overestimated-by-cbo-healthcare-reform-also/) so there's a chance that they're actually being too harsh on Obamacare.


A stimulus that was 28 percent tax cuts and cut taxes overall for 95 percent of Americans? Keynesian theory says nothing about where the money is spent; in fact Keynes himself once drew the analogy that the economy would be better off if the government hired people to dig useless holes, because at least it would get money flowing. I've already posted a list of nine studies of whether the stimulus worked (http://www.washingtonpost.com/blogs/ezra-klein/post/did-the-stimulus-work-a-review-of-the-nine-best-studies-on-the-subject/2011/08/16/gIQAThbibJ_blog.html) and most of them say that it did have a large positive impact. If anything, the stimulus was too small. A bigger stimulus would have helped even more.


Go back and read what I wrote about deficits up above.


No, it's simple accounting, the same kind you can find in any freshman-level 101 economics textbook. National accounts are the F = MA of economics. In any case, nowhere have you shown that you even understand what was being presented, let alone begin to formulate a response to it.


LOL. Public unions have taken a massive hit in this country in the past few years. Have you ever heard of Wisconsin? In Wisconsin, it wasn't even the benefits that the unions were attempting to defend, it was merely their right to negotiate, and they still lost. Even Andrew Cuomo has cut the public unions' benefits. The massive losses in state and local government jobs compared to all the previous postwar recoveries show that state and local public workers have been hit hard. And before that, Republicans as well as Democrats fed them richly.


And the GOP opposes even the modest regulation that was passed under Dodd-Frank.


That is bullsh**t-- read the Financial Crisis Inquiry Report. The vast majority of problem loans came during the private sector subprime bubble of 2003-07, when mortgage shots like Ownit, Golden West, and Countrywide were shovelling bad loans to Wall Street with assembly-line efficiency, since they thought they could offload the risk and Wall Street thought it could offload the risk through securitization.

Well low taxes and unsustainable deficits is exactly what you'd get under Romney, who wants to cut taxes for the rich and increase spending.


Without the tax increase of 1993, the budget would have never been balanced. The Internet didn't only grow during Clinton, it also grew during Bush. Bush also had the housing bubble going for him. He also had massive tax cuts, supposedly, going for him. Two rounds of them, in fact. Yet his record was worse than Clinton's.


LOL. He already had a chance to put in a new Chairman of the Fed and he reappointed the Republican, Ben Bernanke. Romney would do the same. There is no difference between the two on who they'd put in as Fed Chairman. And it's hard to argue Obama has had a raging hard-on for raising taxes when he cut taxes in 2009 and again in 2010 during the lame duck session, and wants to extend the vast majority of the Bush tax cuts.


Now you're confusing real interest rates with nominal interest rates. I'm talking about real interest rates. But including inflation as a variable changes nothing, b/c interest rates are judged on a real basis. If you tax the interest that is earned on government debt, and then use that tax money by spending it in the real economy, the money still goes right out back to the private sector. The private sector still earns it as income. Nothing in my point is changed. Ironically, the only way that the government could reduce the balance sheet of the private sector, is if it ran a budget surplus. In that scenario, the government would be taxing the private sector, but not buying from the private sector in the same quantity, thus it would be taking from the private sector on an accounting basis. Economics is based on accounting; you don't have economics without numbers, so there's a distinction without a difference in this case.


This is unsupported. FactCheck.org, which critically analyzed and debunked the claims from both sides, concludes that "In reality, the question of whether or not federal employees are overpaid doesn’t have a simple answer, according to Charles Fay, a professor at Rutgers University and former Federal Salary Council member. Those in entry-level jobs in the government might earn more than entry-level jobs in private practice, he notes, while the opposite is true for those in management and specialized fields requiring years of experience. "The higher you go, the more they’re underpaid," Fay says. "The lower they go, the more they’re overpaid." (http://www.politifact.com/truth-o-meter/statements/2010/feb/10/jon-stewart/stewart-claims-stimulus-bill-one-third-tax-cuts/)


There is no reason to believe that it would. Clinton's cuts to the federal workforce were miniscule, and they're a miniscule part of the economy. And the economy was already recoverying strongly in 1993 and 1994, before the GOP took over the House, and before Clinton's shift of message to a more economically centrist approach. In any case, Obama has been to the right of Clinton when it comes to tax rates.


To still a lower level than Clinton had in 1996, once all federal government workers are included (http://www.opm.gov/feddata/historicaltables/totalgovernmentsince1962.asp). And as a percentage of the total population, an even lower number than that.


First of all, nice dishonesty, posting a chart with the last data point having unemployment at 9.1% when the most recently available data shows it at 8.3%. But I've already addressed that chart in a previous post. See here. (https://uselectionatlas.org/FORUM/index.php?topic=156887.msg3372685#msg3372685)

And yes, over 8% unemployment is not good. In the past 80 years only one President has been reelected with over 8% unemployment (FDR). But the main difference between 1936 and the other economic downturns that doomed incumbent parties in 1980, 1992 and 2008 is that in 1980, the economy was worse than in 1979, in 1992 it was worse than 1991, and in 2008 it was worse than 2007. Wheres in 1936, it was better than in 1935 and had been improving since FDR's first year in office. Similarly the economy this year is better than last year and it has been improving, albeit more slowly, since 2009. Hence Obama still has a chance, since we're heading in the right direction. People don't want to go back to the failed policies that got us here in the first place.

Hey Beet, whoever the Obama campaign has that is handling their policy and economic messaging, they should fire that person and hire you!  Well done.

Too complicated for the average voter.
No offense is intended, of course.

My support for the flat tax is really hypothetical -- the fair policy that we won't have for various reasons but would in a perfect world. (Abolishing the NHS is a UK-politics analogue). The comment was meant to express that depending on how its done, Romney's plan might make taxation fairer, not less fair, and that I would support Romney anyway.

http://www.politico.com/blogs/burns-haberman/2012/08/obama-its-romneyhood-131270.html


Romney's campaign has lost what little connection to reality it still had.

Beet, I cannot be bothered wasting my time responding to each point in your post. You're grasping at straws by defending $1+ trillion deficits. Numerous businesses not being able to adequately borrow because the federal government is borrowing too much is not a good thing. Go ask Bob Rubin and Bill Clinton. Not every business needs to deleverage. The government cannot spend borrowed funds better than America's entrepreneurs, the people who have created so many goods/services that have enhanced our standard of living.  Yes, the government can take from the private sector in the form of taxes, turn around and re-spend it in the private sector, but that does not necessarily lead to an efficient allocation of resources. Take a look at Solyndra (and god knows what else; the Romney Administration will uncover all of the boondoggles soon enough).

Economics is not about numbers on ledgers; it's about resource allocation in a world of scarcity. Government intervention alters incentives, creates negative (sometimes positive) spillover effects, and produces deadweight loss. With Obama's reliance on overwhelming levels of spending and excessive regulation, his version of government has created a toxic environment for the private sector. Businesses, who create the vast majority of jobs in America (always have and always will), are overwhelmed by uncertainty and malaise. Good intentions do not make up for poor results and unintended consequences. The problem with the $820 billion deficit is not that it was too small; it's that it was not allocated properly. We would have been better off just dumping $820 billion into the coffers of scientific research. Seriously. I mean, doing so surely would have produced something more remarkable than this failure of a stimulus.

Everybody on here should refer to Taylor's analysis of the stimulus. Here is a mainstream report:

http://online.wsj.com/article/SB10001424052970204138204576600630985154132.html

Nor will I respond to your post point by point.

I will make a few minor points- first of all, what you linked to was not a study, not really even a "mainstream report", as you put it- it was an opinion piece. Although the WSJ is certainly reputable and Taylor is reputable, the piece itself consisted only of a series of stylistic representations of historical events with no quantitative founding whatsoever. The heavily misleading style of the article can be found in the fact that no mention is made that monetary policy was the primary driver of economic shifts 1980-83, or that GDP and jobs growth was very strong throughout 1975-79. These omissions are enough to discredit the article because the authors do know better, but they deliberately misrepresent.

Secondly regarding the borrowing costs of US businesses- what are they? As usual you make assertions that are the direct opposite of the actual truth, which you seem to think you can get away with on account of not actually citing the relevant facts:

()

There are your corporate borrowing rates. Collapsing.

Rather than respond to the rest of your points I will simply note that the central thrust of your argument, that 'Obama is hurting business' argument just won't fly. Why? Let's see- The value of major American public companies has surged since March 2009. The NYSE Composite is 73% higher today than when the stimulus passed. Other major indices have doubled. The Dow is up 103% in just three years. The S&P is up 110%. The Nasdaq, which represents the leading technology edge of corporate America, is up 137%. These are not my judgments or the result of anything you or I, or Obama or Romney, say; they are the judgments of the free market, of millions of people putting their trillions of dollars where their mouths would be if they spoke what they thought.

And they would be right, for the profits of US companies are in fact surging:

()

The economy is not a monolith. It has various parts and components. It baffles me that you- and Romney, are focusing on the one are of 'the economy' where things are going the most smoothly. One can argue that Obama hasn't created enough jobs. One can argue that income growth hasn't been fast enough. One can argue that people are struggling. One can argue the deficit. The one thing one cannot argue with a straight face is the condition of American business.

Thank you anvi. :) Yes, it may be too complicated, but surely there is room for messaging at different levels. Anyway - the points above are not all that complicated.

^^^

:)

I will caveat my position to say that there's a big difference between large business and small businesses. Small businesses are much like the rest of the economy - they're struggling much more than large ones. Of course, they also don't compete with the government to borrow.

Congrats, Beet. You have officially roasted Politico with a thoughtful and thorough explanation of the current macroeconomic environment and why we are in the sour spot we're in. He will only respond with his FAUX News talking points and platitudes. Hopefully your roasting will now encourage him to go back into hiding.

Beet, to pick at one of your points at random, unfortunately rank is a pyramid, so there are far more "overpaid" folks at the low end, than underpaid folks at the high end. And if the higher end folks are underpaid, why don't they quit, and get a job commensurate with the market for their skill set?  Maybe there are reasons they choose to work for less than they are worth, as it were. In which event, they don't need to be paid more, no?

Granted, state and local government employees is where the real abuse is, more than the Feds with the GS system, which does keep things from spinning totally out of control.  Plus federal employees in my experience do tend to be of higher quality in my experience than the state and local government all too often slugs - particularly at the higher end, where some of them are excellent.

And aside from pensions, not that much money really is involved relatively speaking. Which gets back to entitlements. Sigh. :(

No one earns the $50,000+ a day that people like Mitt Romney make for not working. I'll agree that some government workers have some pretty nice pensions, but compared to Mitt Romney, they are nothing. Even that $500,000 a year from that corrupt guy from Vernon, CA.

Inevitability is its own defense. When the corrupt boom of the Double-Zero Decade imploded, much of what Americans thought were desirable assets were no longer worthy of being considered assets. The corrupt boom committed capital to investments that eventually failed.


Only rarely has capital been so cheap as it is now. People are still scared that there might be another economic meltdown that leads to a realization of a Great Depression as nasty as that of the 1930s. People are certainly not building single-family houses when so many are available for less than the cost of new construction due to foreclosures.

As John Maynard Keynes put it in the last Depression, we are in a liquidity trap. 



You describe a situation out of the 1950s in which business was investing heavily in plant and equipment and in marketing efforts. People were spending heavily on big-ticket items (cars, appliances, furniture, televisions) that were costly by the standard of the time. Workers could prosper because what they worked to make in the factory was scarce... and because their toil was necessary. Today labor and manufactured goods are cheap.

By the technological standards of the 1950s we have solved the question of scarcity by reducing the material cost of almost everything tangible. The $20 calculator can calculate far faster than a mainframe computer of 1952 can, and without the need of a high-paid programmer and a bunch of maintenance people, and that is before I even discuss what your computer can do. You can get a 32" screen TV for about $250  that offers a bigger and better picture than the 25" monitor that cost $600 in 1980... and the new one has a remote control and is cable-ready. To be sure, the newer TV has less material in it; you can hang it on your wall almost like a painting. Add to that, you don't need a projector and screen to watch a roll of celluloid film off a reel.

We have resolved the problem of scarcity but we have neglected the value of humanity. People who get treated badly will always be unhappy. Right-wing ideologies that force a race to the bottom will create suffering that no economic growth can mitigate.     


Which is not to say that government can always avoid boondoggles in direct investments and in political sponsorship. If you thought Solyndra was bad (this was a technological failure), then recall Enron Corporation which had the sponsorship of right-wing American politicians (including George Worthless Bush). There have been some spectacular Roads to Nowhere (Interstate 180 in Illinois... built to facilitate the distribution of steel from a mill that since closed) and unnecessary airports. But there have also been some very good investments.

Government and business can both make bad investments -- and, as with the real-estate fraud of the last decade, can waltz together off an economic cliff.   



Numbers on ledgers is, of course, accounting and not economics. But add the ledgers and you get much of the economic data. When scarcity disappears, then we need ask how we allocate the rewards. If the abolition of scarcity leads to the debasement of humanity, then something is very wrong with the technologies that abolish the scarcity or at least the bureaucratic choices of tycoons and executives.   

So how do we adjust to a world in which scarcity is greatly abated? Maybe we can invest in people. Maybe we can get people to go back to school to learn the humanities that offer an alternative to the reptilian lives that so many Americans live (sex&drugs&rock-n-roll... and material indulgence, comfort, and bureaucratic power).

Numbers on ledgers is, of course, accounting and not economics. But add the ledgers and you get much of the economic data.



At least give credit to the 112th Tea Party Congress for stopping that.


Not if we have a Socialist revolution that overthrows a capitalist order that creates indulgence only for a few and suffering for the vast majority. The first step to a Marxist regime is a corrupt, brutal, hierarchical, inequitable order that fails to create mass happiness despite its ability to meet human needs.   


Much of the deficit results from wars for profit in Iraq and Afghanistan... and tax cuts targeted at the super-rich. Neither has created prosperity for any but a few well-connected people. I can think of  better investments. Mass transit. Retraining of displaced workers. Replacement of "Blood Alley" stretches of highway. Basic science -- of course. 

Not true.  There is no tax increase on anyone other than the "rich" in his plan.  Where did that study come from anyway?  Romney's plan calls for making the Bush-era rates permanent and moving toward a flat tax.

If you bothered to read the OP you would see that the plan comes from the independent Tax Policy Center, "a joint project of the Brookings Institution and the Urban Institute."

Romney's plan calls for a repeal of the Estate Tax (God knows why) which disproportionately benefits wealthy people and investment cuts that also disproportionately affect people like him. So stop claiming ignorance and faux outrage and start reading the links that are posted rather than merely spewing your Fox talking points across threads you know and understand nothing about.

This is a political forum, not an economics forum, so I posted a mainstream report ("opinion piece," if you insist) which ties in nicely with Taylor's paper on the stimulus (which shows the failure of stimulus spending from both Republicans and Democrats):

http://www.stanford.edu/~johntayl/JEL_Taylor_Final%20Pages.pdf


Volcker's shock therapy slayed the inflation beast, preventing runaway inflation from destroying this nation, but Reagan's fiscal policy had a lot to do with the subsequent recovery as argued in the piece.


It was a mirage as evidenced by the ensuing stagflation.


Yes, we're in a liquidity trap. Borrowing rates are down for all, but that does not mean that  borrowing by large firms is taking place at a level that enables an adequate level of private investment. My point was that government spending is crowding out private investment. Case in point, we're almost three years into the recovery yet private investment is nowhere near the level it was before the recession:

()


Many large businesses are hoarding cash and not hiring because of uncertainty about future costs (both explicit and implicit) and the ability to borrow in the future.

Furthermore, small firms represent 99.7 percent of all employer firms and employ half of all private sector employees (http://web.sba.gov/faqs/faqIndexAll.cfm?areaid=24). Many of these firms are having immense difficulty borrowing right now. While it is true that they do not explicitly compete with the government for loanable funds, they implicitly do so when you consider the opportunity cost facing commercial banks whenever they are faced with providing loans to a small firm (not to mention the high degree of risk aversion among banks right now as a result of this toxic environment; the president has failed to inspire confidence in the nation the way he did on the campaign trail in 2008).

Lastly, a recent poll by Gallup of small business owners found that two of the biggest problems they face today are regulatory burdens and lack of credit availability:

http://www.gallup.com/poll/150287/Gov-Regulations-Top-Small-Business-Owners-Problem-List.aspx


It baffles me that you continue to act as if this debate is taking place in 2009. This is 2012. Clearly the Keynesian promises did not pan out as predicted by theory. The underlying reason is because government is inherently inefficient outside of its realm of specialty as espoused by Adam Smith (i.e., law/order, defense, and BASIC infrastructure). It is time to change course towards a more market-based approach. We cannot afford to have an entire lost generation. The Obama Economy is sowing the seeds of an entire lost generation that cannot find employment, and older generations fear for the future of their offspring. We must return towards real growth and prosperity, not continue on the path towards Eurosclerosis. We must return to American greatness, not embrace European-style decline.

Because, in many cases, they are not underpaid or they would do as you suggest. People who suggest they are not overpaid generally ignore their implicit pay (i.e., their pensions). Mind you, there are some people who are underpaid and stay out of a sense of duty. This is especially true in matters of national defense and law/order, areas of the economy that clearly require government intervention.


I agree with this.

Why do people hate tax cuts for the rich :(

Because they want to free ride off public services/transfers provided by taxes funded by rich people. They think rich people owe them something rather than thinking that all of us should have to contribute the same percentage of our income towards public endeavors.

Ah, common sense at last.

Because we are already running a budget deficit over a trillion dollars.

But if you cut spending and taxes, then the budget will be balanced, providing you cut more in spending.

(Common sense)^2

We are running a $1.4 trillion dollar deficit. That means we collect $1.4 trillion less in taxes than we spend. You want to cut taxes (revenue). So, where do you get the >$1.4 trillion to balance your budget? Hint: You wont get there without hacking Social Security, Defense, and Medicare/aid - which no politician is willing to do (heard anything about the Ryan budget lately?)

Because rich people don't need tax cuts, you troll.

Stegosaurus, don't bother trying to reason with him. He's a bigger troll than Politico and plays dumb to deny common sense.

Wait until January 20, 2013. We can get there while ensuring obligations towards Social Security and Medicare are met. Tax reform is essential in achieving this result, of course.

Quite amusing being called a troll by somebody with Mondale in their username. You do realize Mondale is second only to McGovern in the quest for title of "biggest loser of them all," right? Heck, I'd put McGovern above Mondale if only because McGovern is a war hero.

Yes, because Mitt Romney being in the White House will make new revenues magically appear...

How? I sincerely hope that we aren't banking on "the economy will grow and simply crap savings" theory.

Actually it would be Goldwater or Landon, but nice try...

http://en.wikipedia.org/wiki/List_of_landslide_victories#Presidential (http://en.wikipedia.org/wiki/List_of_landslide_victories#Presidential)

Also, just because people voted for Reagan (who began the process of bankrupting this country and selling it piece-by-piece to the corporate class) doesn't mean his ideas had any merit. Or that he had any ideas for that matter...

Tax reform will create job growth, causing new revenues to appear over time. Of course, the biggest part of the solution will be transferring spending off the federal books and onto the states. Allowing the states to decide what is worth paying for and what is not will pay huge dividends for economic freedom.

Al Landon last mattered, what, when Hitler was alive? He ceded the title to McGovern back when he died, whenever the heck that was.

Goldwater's 52 EVs are a bit more impressive than Mondale's performance. The only reason Mondale even won Minnesota is because Reagan allowed him to. Had Reagan been mean-spirited, he would have spent more time and money in Minnesota.

Yeah except Goldwater won ~38% of the popular vote, Mondale ~41%.

Anyway, Walter Mondale is not the point of this thread, nor is my username. The point of this thread is how disastrous Mitt Romney would be for middle class families and how he would gut their tax cuts and deductions so that he and his friends can continue to prey off the system. You can address the OP or you can leave. Every moment you spend attacking me reinforces your forum stereotype as a troll and hack who resorts to personal attacks because he has no ideas to stand on.

Go tell Al Gore that the popular vote matters.


As opposed to four more years of struggle for middle class families under Obama? The last four years have not been hunky dory for America's middle class families, folks.


Romney's tax reform plan would be a net cut for all but the wealthiest. The elimination of deductions will disproportionately affect wealthier Americans.


You are the one who accused me of being a troll. I did not provoke you. I simply responded in kind without resorting to name calling (And I have merely pointed out that Mondale, NOT YOU, was a loser...I actually tend to like your posts, if you must know). In case you did not notice, I have put a lot of time and effort into contributing to the conversations in this thread.

Come on Mondy, I'm not a troll, I'm just very, very right-wing.

Don't worry, pal. Some folks on here erroneously believe this is Diet Democratic Underground hence the accusations of "trolling" whenever somebody offers a right-wing point of view.

That's quite silly you think Romney would do any tax reform...

It will be the signature achievement of the Romney Administration, and a positive spillover effect will be the creation of millions of jobs in the process (obviously some accountants fear this change, but they're the only ones who will lose something with everybody else gaining immensely):

http://www.bakerinstitute.org/publications/Diamond-RomneyTaxReformPlan-080312.pdf

I'd like to point out that this threads title is highly misleading. He doesn't intend to raise taxes on everyone other than the rich, just slash entitlements.

This is false. He wants to gut the safety net because he doesn't care about average people (or couldn't be bothered to care), he wants to eliminate the deductions that help working people (like the mortgage deduction), and he wants to end the estate tax (which disproportionately benefits the wealthy). How is the thread title misleading again?

Because eliminating deductions and credits isn't the same thing as "raising taxes", even if a higher burden for some is the cumulative effect.

Well your side always claims that letting tax cuts expire means you are raising taxes so clearly anything that raises revenues is "raising taxes" :P

Now we are sinking into an entropic semantical cat fight here.

That is a ridiculous distinction. If he got his way, people at the very top would pay less, some a lot less, while people in the middle pay more. 'nuf said.

Maybe. I am not conceding that yet, in part because Mittens denies it. We will get to the truth in due course. Stay tuned.

That is at least partially true, seeing as how letting a tax cut expire will directly raise tax rates (which the elimination of a credit only affects those that make use of said credit). Either way, I am not fond of the ideological purity that my party strives for on the tax issue. I try to remind other Republicans that tax cuts are spending which, when not paid for, drives up the deficit. Cutting taxes ought to be used responsibly, and not simply every time Republicans have the political capital to do so.

Unfortunately, my "side" of the GOP consists of myself and a very long list of dead and discarded politicians. I am irrelevant, especially in Texas.

I don't see how. Let's say I make $30,000 a year, rent my residence, and make no use of any credits or exemptions aside from the standard personal exemption for my tax bracket. What does Romney's plan do to raise my taxes, exactly?

Most wealthy Americans know how to avoid the Estate Tax through estate planning, so it is primarily the middle class that gets hit with it.  And besides, it hurts businesses and the economy.  It's not about what's "fair" based on somebody's definition, it's about doing what's good for America.  And putting undue burdens on our economy because somebody thinks that we need to promote somebody else's definition of "fairness" is not good for America. 

$30k/year renter doesn't put you "in the middle."

It certainly puts me in the "everybody else" category, as compared to the rich.

And don't forget Mondale.  He only got DC and Minnesota, and even then, Minnesota was close.

How many middle class folks have a net worth of two million or more (the exemption number if the estate tax law is not amended, starting next year, assuming you use the standard trust device to effectively double the exemption if married, which come to think of it, might mean it bites on gay middle class folks a bit)?  This particular Pub has a certain fondness for the estate tax.

The Taylor article you linked is actually in the link that I pasted first-- it's the one study out of nine that didn't find a substantial effect from the stimulus. The other eight studies all found more effect.


The chart seems to show steady recovery- growth since 2009 has been as fast or faster than any other time on your chart. Also keep in mind that domestic 'investment' includes residential & commercial real estate construction. Since there was a massive glut of real estate after the bubble, not as much 'investment' was needed or desired.

Once you narrow it slightly to private nonresidential fixed investment (still including commercial real estate), we are almost completely recovered:

()

But our real disagreement is a fundamental difference- I think the low interest rates show it's clear private investment isn't being crowded out. The market is practically begging the government to take it's money. In other words, the verdict of the markets themselves are that the government is best suited to invest more than it currently is.

Government and private sectors aren't competitive-- they're complementary. The competitive narrative assumes that there is no slack in the economy and that any resources are either being utilized under the direction of government or private business. But the problem in our economy today is precisely that there is slack. The existence of unemployment, for instance, represents slack. The fact that industrial utilization is below its long term average tells us the same.

In any case, but especially under these conditions, government and the private sector are complementary-- private activity boosts government revenues, and government activity boosts private revenues. Neither could exist without the other, and both help each other. They're two sides of the same coin.

The fundamental variable here is final demand-- the higher final demand, the more the private sector will invest, for they will see that there will be a return on their investment. The government can play a role in supporting final demand.

I never looked at the link. Who said it had a positive effect? Future Nobel Laureates (like John Taylor)? I thought not...


It does not matter. We are not back to pre-recession levels, which means private investment has not recovered. When it comes to any economic variable, every single one of them, we are not at the levels predicted by Keynesian theory in 2009.


This simply reinforces the weakness in investment. Investment spending has clearly shifted from residential real estate into other forms, but it has not picked up the slack in an overall sense hence the overall investment levels being lower than before the recession. A key reason is the crowding out effect. The government is issuing more bonds than ever before, and confidence is dismal so people are seeking safety in hoarding cash and government bonds rather than making real investments in the productive sectors of the economy.


This chart simply reinforces the above.


Absolutely not. Domestic government bonds are "risk-free" in the sense that if the domestic government defaults, we have a hell of a lot more to worry about than getting returns. People are seeking shelter and they see it in the form of government bonds. It does not mean they think the government is best suited to invest rather than the private sector.

We have a toxic environment where confidence among businesses and consumers is in the doldrums. The president's policies and rhetoric have not inspired confidence the way that the president did on the campaign trail in 2008.


Most of the stimulus went towards transfers (the grants to states mostly became in-state transfers), not hiring people, as documented in Taylor's paper. Furthermore, the government is crowding out private investment (maybe not to an ENORMOUS degree, but definitely a significant degree), preventing greater hiring in the private sector.


Fixed.


The government can play a role just as it can play too much of a role, doing more harm than good in the process. Ever play on a basketball team with a "ball hog" who wasn't as good as he thought he was, let alone as good as the other four men on the team? The government should not be "that guy."

Erskine Bowles: Romney’s tax plan wouldn’t cut the deficit

http://www.washingtonpost.com/opinions/why-romneys-tax-plan-wont-cut-the-deficit/2012/08/09/37fb2d20-e19c-11e1-a25e-15067bb31849_story.html

"The most important lesson Al and I learned on the commission is that to fix the debt, everything must be on the table. Americans everywhere have told us that as long as the sacrifice is shared, they are ready to do their part. The surest way to doom deficit reduction is to play favorites by taking things off the table.

So although I give Romney credit for pledging to reform the tax code to reduce loopholes, his current proposal will not take us to the promised land. Our commission’s tax plan broadens the base, simplifies the code, reduces tax expenditures and generates $1 trillion for deficit reduction while making the tax code more progressive. The Romney plan, by sticking to revenue-neutrality and leaving in place tax breaks, would raise taxes on the middle class and do nothing to shrink the deficit.

Obama hasn’t gone as far in cutting spending, particularly in health care, as is necessary to stabilize the debt at a reasonable level and keep it on a downward path as a percentage of the gross domestic product. But in contrast to Romney, the president — like the “Gang of Six” and other like-minded members of both parties — has embraced the central principle of Simpson-Bowles: that America will turn the corner on its debt only if Republicans and Democrats come together to support a balanced deficit-reduction plan. For the numbers to work, both parties need to put aside partisanship."

Ouch.

Come on, Beet. You can do better than quoting that goofball.

A: Erskine Bowles is not a 'goofball' simply because he says things you disagree with.

B: He has.

()

Looks like something an 80 year old lady would wear.

Umm...objective criticism tends to be more effective than your personal fashion tastes when building your arguments. 'Just sayin.

I, myself, like them. I have a pair like that except they're not clear (they're more like Al Franken's).

Glasses like that are actually very "in" right now.

That style is not the problem. The problem is that they're clear, like the kind of glasses you'd find an eighty year old woman wearing. And this goofball has been wearing the same style/color for decades.

This thread seems to be rapidly running out of steam.

I simply felt like popping into this thread just to say Beet kicked some serious ass here and the fact that Politico is literally now just making retarded comments about someone's glasses, I think we can, officially, write him off as a not-serious person.

Yeah, sadly my plan is also my wet dream. :(

By failing to explain why the Keynesian promises of 2009 did not pan out as predicted? By failing to explain why we should think the next four years will be any different from the past four if Obama gets back in?


At least I have offered an explanation as to why this so-called "recovery" is pathetic compared to past recoveries. Nobody else on this forum has done so recently.

I think we can have a bit of entertainment from time to time, of course. Has anybody on here ever looked at Bowles and not laughed at his grannie glasses?

I'm still holding out for an exponentially decaying tax rate function, which no one ever bothers to propose.

The reason the recovery isn't doing as well as we'd like is because the Republicans are keeping it that way for political gain.