Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

[unofan]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

It is impossible for the elimination of tax cuts to impact the economy unfavorably.

Not impossible, just highly unlikely.

 

[geezer]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

Completely depends what you're spending that money on. Let's take the reductio ad absurdum -- zero taxes. No free schools, no opportunities of any kind unless you already have money, no social mobility, immense wasted human capital, the downward spiral of any country with a high Gini (and ours has grown since the late seventies until we're right back to the wealth stratification of the 1920's).

There's certainly wasted spending -- pretty much all entitlements above means-testing levels. But the money you spend to invest in valuable things private capital will not cover, like equal opportunity to allow the society to benefit from a true meritocracy rather than the accidents of inherited wealth, is far better spent from a societal point of view.

There's a balance point, as always, that simplistic ideological statements can't reach.

You're saying that tax money is the only driver of "opportunities", "social mobility" and the fulfillment of human capital??? Is there no free market reward for perspiration and inspiration?
I could maybe see it in the top ten... considering scholarships & research grants.
We could ask the tenant farmers of the Middle Ages how it worked out for them to entrust their incomes to the gov't in return for protection, etc. Given a choice, would they lean toward zero taxation and private property?

 

[Kepler]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

You're saying that tax money is the only driver of "opportunities", "social mobility" and the fulfillment of human capital??? Is there no free market reward for perspiration and inspiration?

Not tax money, but the availability of education. This is not 1860 -- there is too much to assimilate before you can "build a better mousetrap." I don't see private charity creating an all-inclusive educational system the way state and federal governments have. The Catholic Church did a fantastic job of that once, but there is no equivalent in today's society, and I have the feeling our morally untainted benefactors at Cato aren't going to foot the bill.

But for that matter, state funding was always a big driver even back in those halcyon days that "boot strappers" harken back to. A lot of the golden age of private capital was created by seed money (or graft) from big government projects, because the government is typically the only institution with any incentive to think long-term, even if they rarely exercise it. The rugged individualism of our past is as much a sepia-toned crock as John Wayne's old west (itself built on federal agriculture and railroad grants).

We could ask the tenant farmers of the Middle Ages how it worked out for them to entrust their incomes to the gov't in return for protection, etc.

Oh man, that is such a bad example for you, since tenancy in the Middle Ages depended on the Manorial System dominated by large local landowners who were able to abuse their tenants precisely because there was no strong government protector of their rights -- the original "trickle down" system. And indeed every hesitant step towards securing peasant rights has been met with the same dire predictions that if you curtail the total freedom of the wealthy the economic health of the country will be doomed.

If the "conservative" argument had won the day, there would never have been an independent merchant class, a bourgeois small capital ownership class, or the unseating of rents in favor of investment as the major driver of wealth. Adjustment to change is a fact of survival -- you can't go back to the robber barons, even if they actually were what the Randians mistakenly masturbate to.

 

[ScoobyDoo]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

Not tax money, but the availability of education is key now. This is not 1860 -- there is too much to assimilate before you can "build a better mousetrap."

But for that matter, state funding was always a big driver even back in those halcyon days that "boot strappers" harken back to. A lot of the golden age of private capital was created by seed mon ey from big government projects, because the government is typically the only institution with any incentive to think long-term, even if they rarely exercise it. The rugged individualism of our past is a crock.

And you pretty much need a college degree, or often times an advanced degree to get ahead. And how much does that cost now? Here in Minnesota our budget government spent his 8 years in office not caring how much tuition went up.

I still haven't heard why the Bush Tax Cuts didn't do what they were supposed to do.

 

[Bakunin]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

Or if you can't see a light because its covered up by snow, maybe you should stop or proceed with caution

If the light is obscured (particularly at night), you may not know an intersection is there until it's too late to stop.

 

[geezer]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

Not tax money, but the availability of education. This is not 1860 -- there is too much to assimilate before you can "build a better mousetrap." I don't see private charity creating an all-inclusive educational system the way state and federal governments have. The Catholic Church did a fantastic job of that once, but there is no equivalent in today's society, and I have the feeling our morally untainted benefactors at Cato aren't going to foot the bill.

But for that matter, state funding was always a big driver even back in those halcyon days that "boot strappers" harken back to. A lot of the golden age of private capital was created by seed money (or graft) from big government projects, because the government is typically the only institution with any incentive to think long-term, even if they rarely exercise it. The rugged individualism of our past is as much a sepia-toned crock as John Wayne's old west (itself built on federal agriculture and railroad grants).

Oh man, that is such a bad example for you, since tenancy in the Middle Ages depended on the Manorial System dominated by large local landowners who were able to abuse their tenants precisely because there was no strong government protector of their rights -- the original "trickle down" system. And indeed every hesitant step towards securing peasant rights has been met with the same dire predictions that if you curtail the total freedom of the wealthy the economic health of the country will be doomed.

If the "conservative" argument had won the day, there would never have been an independent merchant class, a bourgeois small capital ownership class, or the unseating of rents in favor of investment as the major driver of wealth. Adjustment to change is a fact of survival -- you can't go back to the robber barons, even if they actually were what the Randians mistakenly masturbate to.

Good points on education - but how much of the debate on ceding control to government does it involve? 5%? Or how much of our tax money? 2%? There are plenty of places we could cut before closing schools.
The large local landowners of the Middle Ages were the strong central government of their day (much smaller units, to be sure). There's no moral difference between their legal theft and ours, whether they wear a crown or not.
In truth, I favor raising taxes here and now; just playing devil's advocate to take issue with the point that government issuance is the only source of opportunity.

 

[MinnFan]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

The part in bold is actually incorrect. CBO and OMB projections take everything you can think of into account, including how the economy reacts to policy changes. Projections aren't "faulty" any more than weather predictions are -- they imply dispersion around a central tendency, like any prediction.

The CBO is prohibited by regulation from taking any kind of dynamic estimate of the affect of legislation. Knowing this, it becomes quite easy to game the system.

 

[MinnFan]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

I still haven't heard why the Bush Tax Cuts didn't do what they were supposed to do.

And you haven't shown how things would have been better if the cuts didn't take place.

Considering we had one of the shortest recessions on record after the tax cuts were put in place I'd say that is some evidence they worked. There is also this:

"The CBO calculated that the post-March 2003 tax cuts would lower 2006 revenues by $75 billion, yet 2006 revenues came in $47 billion above the pre-tax cut baseline released in March 2003."

 

[Kepler]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

The large local landowners of the Middle Ages were the strong central government of their day (much smaller units, to be sure). There's no moral difference between their legal theft and ours, whether they wear a crown or not.

I don't think we can even sensibly analogize between the feudal system and our system, but if we were going to I'd say the better analogy would be the "company town," where unelected strongmen essentially own the population. If there was an analogy to a "federal" government at all it was the Church, though as a trans-national entity that was more like the bureaucratic class of elites who really run things today. The crowns of that period (say, 1000-1500, though different spans in different places and lots of rough edges) had virtually no power other than a double-edged liege power of granting land for military service -- the sting in the tail being every time the king exercised the power he made the nobility that much stronger and able to resist him.

I subscribe to the theory that freedom is a form of inefficiency that grows in the space between conflicting entities: Church and State, crown and nobility, land and capital, aristocracy and merchant class, government and business. If one side overwhelms the other the result is tyranny -- there are different flavors of tyranny depending on who holds the whip hand, but it's every bit as bad when it is Wall Street as when it is a Politburo, a religious order, the army, or some inbred dynastic family.

Gridlock of a given society's most powerful interests is a necessary condition for the freedom of its people. Set those wolves against each other and keep propping up the losers to keep the fight going. Above all, never let them form a syndicate.

 

[geezer]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

The Gridlock of a given society's most powerful interests is a necessary condition for the freedom of its people. Set those wolves against each other and keep propping up the losers to keep the fight going.

Now I'm with ya.

 

[Kepler]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

Now I'm with ya.

I'd bet many "conservatives" and "liberals" merely differ in their perception of who is currently the underdog in the battle between the government wolf and the corporate wolf.

 

[unofan]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

And you haven't shown how things would have been better if the cuts didn't take place.

Considering we had one of the shortest recessions on record after the tax cuts were put in place I'd say that is some evidence they worked. There is also this:

"The CBO calculated that the post-March 2003 tax cuts would lower 2006 revenues by $75 billion, yet 2006 revenues came in $47 billion above the pre-tax cut baseline released in March 2003."

Correlation does not equal causation. Revenue may have increased by 2006, but that doesn't mean the tax cuts caused that outcome. More likely, had the tax cuts not been implemented, gov't revenue would have been greater still.

There's an infinite number of factors at play here, which allow economists to say pretty much whatever they want to say at any point in time (there's lies, **** lies, and statistics). But even Arthur Laffer, who you like to trot out in your arguments, knew that up to a certain point where the tax's disincentives really kick in, increased tax rates = increased gov't revenue (this is the first segment of the famed Laffer Curve). Most economists put that disincentive point well above where our current tax rates are set.

 

[MinnFan]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

Correlation does not equal causation. Revenue may have increased by 2006, but that doesn't mean the tax cuts caused that outcome. More likely, had the tax cuts not been implemented, gov't revenue would have been greater still.

There's an infinite number of factors at play here, which allow economists to say pretty much whatever they want to say at any point in time (there's lies, **** lies, and statistics). But even Arthur Laffer, who you like to trot out in your arguments, knew that up to a certain point where the tax's disincentives really kick in, increased tax rates = increased gov't revenue (this is the first segment of the famed Laffer Curve). Most economists put that disincentive point well above where our current tax rates are set.

Who are these "most economists"?

The Laffer curve has always been a secondary consideration for me. I want more economic freedom for people. I really don't care if gov't revenue goes up or down. I will also add that we don't have a revenue problem. Revenue to the gov't has increased above the rate of inflation over time. We have a spending problem. The only way out of this mess is to cut spending.

 

[ScoobyDoo]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

And you haven't shown how things would have been better if the cuts didn't take place.

Considering we had one of the shortest recessions on record after the tax cuts were put in place I'd say that is some evidence they worked. There is also this:

"The CBO calculated that the post-March 2003 tax cuts would lower 2006 revenues by $75 billion, yet 2006 revenues came in $47 billion above the pre-tax cut baseline released in March 2003."

What?

Double What?

Again. The Bush Tax Cuts were supposed to do TWO THINGS.

1. Decrease the deficit.
2. Increase (drive) economic activity.

It is a FACT not speculation that the housing market ATM card drove the economy during the Bush years. You can prove that by pointing to the worst economic downturn in US history since the Great Depression when the bill came due. The tax cuts during all of this stayed in place and WE NOW HAVE THE SLOWEST recovery ever.

The tax cuts have FAILED to deliver anything they promised.

 

[ScoobyDoo]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

I want more economic freedom for people. I really don't care if gov't revenue goes up or down. I will also add that we don't have a revenue problem. Revenue to the gov't has increased above the rate of inflation over time. We have a spending problem. The only way out of this mess is to cut spending.

That's fine. But the government has lied to us and told us that we were paying for the benefits that we have been receiving. And voting patterns indicate that the people do not want those entitlement programs to change. Hell even the Tea Partiers don't want the gubbermint messing with their Medicare.

I think the proposal that was published yesterday increases the retirement age to 69 in 2050 or so and people are already crying about it.

 

[sagard]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

As with any cut, this is really easy to say until we see what services will be affected. The trouble with those evil non-defense contractors is they tend to be working on things people like, like health, schools, infrastructure, public safety, etc.

That's not to say it isn't a good idea, but it's easily exploitable as a talking point when not backed up by consequences.

Interesting too that it specifically exempts defense contractors. If we're cutting, let's cut. If the wars mean we can't cut defense, end the wars.

Defense spending was the vast majority of the proposed cuts. I'm fine with that. Especially the war spend.

What alarmed me was the 250K non-defense government contracts at averaging $750K per contract. What jobs are these? Let me know where to apply if possible, I'm highly confident I can handle what ever it is.

 

[Kepler]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

Defense spending was the vast majority of the proposed cuts. I'm fine with that. Especially the war spend.

What alarmed me was the 250K non-defense government contracts at averaging $750K per contract. What jobs are these? Let me know where to apply if possible, I'm highly confident I can handle what ever it is.

I'm not sure what that stat means. Is it 250,000 contractors working on contracts that average $750,000, because that sounds completely normal -- for instance, I and my peers at my job are 40 people working on a $100 million contract. That doesn't mean that (a) I make $100,000 million or that (b) we average $2.5 million. The vast majority of the contract value is government procurements, either from other government agencies (in essence just moving money around between piles with no additional costs to anybody) or from private suppliers (which go directly to private business revenues and all the jobs and economic benefits that implies). My peers and I make salaries that are almost exactly at the mean for the private sector for our job duties -- if we were high and a competitor had bid lower salaries, they would have won on cost.

I don't think people realize that government contracts and salaries for contractors are driven by market forces. The exception is no bid contracts, which is why they are so pernicious.

 

[geezer]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

I think the proposal that was published yesterday increases the retirement age to 69 in 2050 or so and people are already crying about it.

Truly?
If we can't agree on the no-brainer of fixing SS, it really is hopeless.

 

[WeWantMore]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

It's by 2075, but yeah, apparently Social Security is doing just fine.

 

[St. Clown]

Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?

It is impossible for the elimination of tax cuts to impact the economy unfavorably. Those who would get them would only hoard the money, piling it in the room with the other money they roll around in every night. None of them are working professionals, small business owners, families with children etc. They are only tweed wearing trust funders who, when they long for autumn, have the servants spread $100 bills on the lawn and pretend they are leaves. Only to rake them up and count them lest any of them blow into someone else's yard.

Since they would not take 100% of the money and spend it, the money should be given to the government because the government will spend 100% of it....heck, they'll spend 110% of it...that would be more now, wouldn't it??

Just because they're not using the money for increased consumption doesn't mean they're not helping the economy. (In economic terms, savings and investment are the same thing, so I'm just going to call it all investment, making the assumption that they're setting that money to work for them with investment returns and not simply "piling it the room.") Investments are what grow an economy in the long term. Politicians tend to not like it when people are investing their money rather than using it for consumption purposes because it takes longer for investment to have a seen and known impact on the economy. It takes time for investment capital to go from the starting point of the investor to the end point of new technology, construction of buildings, and other high-dollar items. But investment is really the foundation of economic growth. You can't expand economic capacity without economic investment. Consumption alone will not develop a new life saving drug. Consumption will not build a new railroad bridge; it simply doesn't provide the financing. You need both consumption and investment to work in concert.