Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

[Rover]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Deficit projections? Revised downward. Again. From "liberal newsrag" CNBC...

CBO Slashes 2013 Deficit Projection to $642 Billion
Published: Tuesday, 14 May 2013 | 3:55 PM ET




The Congressional Budget Office cites higher tax revenues and better-than-expected bailout repayments by mortgage giants Fannie Mae and Freddie Mac as the key reasons for the improved outlook. The budget office now predicts a 2013 budget deficit of $642 billion, more than $200 billion below its February estimate. This year's shortfall would register at 4.0 percent of the economy, far less than the 10.1 percent experienced in 2009 when the government ran a record $1.4 trillion deficit.
CNBC's John Harwood reports CBO has cut its fiscal 2013 deficit forecast to $642 billion from an earlier estimate of $845 billion.Last year's deficit was $1.1 trillion, capping four consecutive trillion dollar-plus deficits during President Barack Obama's first term.


The deficit picture is expected to continue to improve next year and beyond, with the 2015 deficit now projected at $378 billion, just 2.1 percent of the economy. All told, the budget office predicts deficits over the coming decade of $6.3 trillion, down $522 billion from earlier projections.

The CBO report comes as Washington has again hit budget gridlock after enacting a $600 billion-plus tax increase on upper-bracket earners in January. The report could sap momentum from further deficit-cutting efforts.


One of the reasons for the burst of additional income tax revenues, the budget office says, is that upper-income taxpayers claimed more income late last year in order to avoid paying the higher tax rates enacted in January.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Deficit projections? Revised downward. Again. From "liberal newsrag" CNBC...

CBO Slashes 2013 Deficit Projection to $642 Billion
Published: Tuesday, 14 May 2013 | 3:55 PM ET




The Congressional Budget Office cites higher tax revenues and better-than-expected bailout repayments by mortgage giants Fannie Mae and Freddie Mac as the key reasons for the improved outlook. The budget office now predicts a 2013 budget deficit of $642 billion, more than $200 billion below its February estimate. This year's shortfall would register at 4.0 percent of the economy, far less than the 10.1 percent experienced in 2009 when the government ran a record $1.4 trillion deficit.
CNBC's John Harwood reports CBO has cut its fiscal 2013 deficit forecast to $642 billion from an earlier estimate of $845 billion.Last year's deficit was $1.1 trillion, capping four consecutive trillion dollar-plus deficits during President Barack Obama's first term.


The deficit picture is expected to continue to improve next year and beyond, with the 2015 deficit now projected at $378 billion, just 2.1 percent of the economy. All told, the budget office predicts deficits over the coming decade of $6.3 trillion, down $522 billion from earlier projections.

The CBO report comes as Washington has again hit budget gridlock after enacting a $600 billion-plus tax increase on upper-bracket earners in January. The report could sap momentum from further deficit-cutting efforts.


One of the reasons for the burst of additional income tax revenues, the budget office says, is that upper-income taxpayers claimed more income late last year in order to avoid paying the higher tax rates enacted in January.

Youuuu just fell into the... oh never mind.

However, by posting this as "victory", you are in fact falling into a trap, and it's the same trap many of your colleagues fell into in 2004. The key to this is actually the last paragraph that you posted. The CBO reported that taxpayers claimed more income last year in order to avoid paying higher tax rates. What this means is that it needs to be treated as a one-time additional revenue stream. Sure, the Senate may have resolved that a change in taxes will affect not only the rate of revenue but also the aggregate revenue, but it doesn't seem that the CBO got the message. Do I think you'll see the same thing next year? Yes, I do, however you will not see it the year after, and this is why, and it also includes why so many pundits are predicting such a massive sell-off: It's because of the PPACA article stating that all dividends and interest, regardless of qualification, shall be taxed at an increased rate of 3.8%. Yes, I understand the way the law is written only affects income above 200k/250k, but it is still going to be causing an effect, and if we take the left's assumption that the 1% have such a drastic effect on Wall Street and prices, it will be massive. Just like we saw such a selloff in 4Q 2012 due to concerns of Taxmageddon, so will we see a selloff due to concerns of the additional PPACA tax. Are they going to look to pull that tax? I'm not going to call that, nor am I going to show any support or resistance. All I am doing is stating the facts of what has happened in the past, and showing the connections to describe that it will happen again.

 

[Rover]

Youuuu just fell into the... oh never mind.

However, by posting this as "victory", you are in fact falling into a trap, and it's the same trap many of your colleagues fell into in 2004. The key to this is actually the last paragraph that you posted. The CBO reported that taxpayers claimed more income last year in order to avoid paying higher tax rates. What this means is that it needs to be treated as a one-time additional revenue stream. Sure, the Senate may have resolved that a change in taxes will affect not only the rate of revenue but also the aggregate revenue, but it doesn't seem that the CBO got the message. Do I think you'll see the same thing next year? Yes, I do, however you will not see it the year after, and this is why, and it also includes why so many pundits are predicting such a massive sell-off: It's because of the PPACA article stating that all dividends and interest, regardless of qualification, shall be taxed at an increased rate of 3.8%. Yes, I understand the way the law is written only affects income above 200k/250k, but it is still going to be causing an effect, and if we take the left's assumption that the 1% have such a drastic effect on Wall Street and prices, it will be massive. Just like we saw such a selloff in 4Q 2012 due to concerns of Taxmageddon, so will we see a selloff due to concerns of the additional PPACA tax. Are they going to look to pull that tax? I'm not going to call that, nor am I going to show any support or resistance. All I am doing is stating the facts of what has happened in the past, and showing the connections to describe that it will happen again.

Flag your analysis is so flawed it makes me think you're 12 years old sometimes.

First, the stock market is at record highs. If there's bad news ahead, wouldn't Wall St already have that baked into their valuations? I mean, that's kinda why you pay people big bucks to manage money - their ability to spot trends ahead of time and react to them. . Ask your high school econ teacher in class tomorrow if you'd like.

Next, what I find to be hilarious is that you now know more than the CBO about deficit trends. Could you kindly share with us your qualifications to back up this assertion, because frankly I question whether or not you even have a college degree with some of the simplistic views you bring to financial questions. So out with it. Why are we to believe you over the CBO? Especially in light of your Wall St will tank vs the Wall St is at record highs reality?

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

So France, that policy of taxing the rich REALLY helped your economy, didn't it... http://www.nytimes.com/2013/05/16/business/global/germany-france-economic-data.html?_r=0

 

[unofan]

Flag your analysis is so flawed it makes me think you're 12 years old sometimes.

First, the stock market is at record highs. If there's bad news ahead, wouldn't Wall St already have that baked into their valuations? I mean, that's kinda why you pay people big bucks to manage money - their ability to spot trends ahead of time and react to them. . Ask your high school econ teacher in class tomorrow if you'd like.

Next, what I find to be hilarious is that you now know more than the CBO about deficit trends. Could you kindly share with us your qualifications to back up this assertion, because frankly I question whether or not you even have a college degree with some of the simplistic views you bring to financial questions. So out with it. Why are we to believe you over the CBO? Especially in light of your Wall St will tank vs the Wall St is at record highs reality?

You shouldn't. He clearly illustrates the difference between economists and finance/business persons.

 

[St. Clown]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Flag your analysis is so flawed it makes me think you're 12 years old sometimes.

First, the stock market is at record highs. If there's bad news ahead, wouldn't Wall St already have that baked into their valuations? I mean, that's kinda why you pay people big bucks to manage money - their ability to spot trends ahead of time and react to them. . Ask your high school econ teacher in class tomorrow if you'd like.

Next, what I find to be hilarious is that you now know more than the CBO about deficit trends. Could you kindly share with us your qualifications to back up this assertion, because frankly I question whether or not you even have a college degree with some of the simplistic views you bring to financial questions. So out with it. Why are we to believe you over the CBO? Especially in light of your Wall St will tank vs the Wall St is at record highs reality?

I'm willing to wager that there's a lot of mal-investment going on in the stock market these days. With the Fed pumping up the amount of currency in the economy right now, that money has to go somewhere. From this article breaking down the sectors in the Economic Monitor, there's a +2.55% change in the impact of Inventories on real GDP between Q4 2012 and Q1 2013. That's more than the entire annualized GDP gains for Q1 2013. With inventories gaining in value, that traditionally leads to shrinking stock market valuations. We're not seeing that now. That causes me to think that a goodly sum of the QE money is artificially pumping up the stock market right now.

http://www.economonitor.com/dolanecon/2013/04/26/us-gdp-growth-accelerates-from-a-crawl-to-a-walk-in-q1/

http://www.economonitor.com/dolanecon/files/2013/04/P130426-3a.png

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I'm willing to wager that there's a lot of mal-investment going on in the stock market these days. With the Fed pumping up the amount of currency in the economy right now, that money has to go somewhere. From this article breaking down the sectors in the Economic Monitor, there's a +2.55% change in the impact of Inventories on real GDP between Q4 2012 and Q1 2013. That's more than the entire annualized GDP gains for Q1 2013. With inventories gaining in value, that traditionally leads to shrinking stock market valuations. We're not seeing that now. That causes me to think that a goodly sum of the QE money is artificially pumping up the stock market right now.

http://www.economonitor.com/dolanecon/2013/04/26/us-gdp-growth-accelerates-from-a-crawl-to-a-walk-in-q1/

http://www.economonitor.com/dolanecon/files/2013/04/P130426-3a.png

One thing you can add to that is that the stock market has been the best place to make money. One thing that I have found, though, is that many investors, including some of the conglomerates, are now starting to look towards personal loans as an investment, and that's through various outlets such as Prosper, Lending Club, and the like. Granted, you don't get the same tax levels because it is considered interest, but once that's allowed to do Roth IRAs, I wouldn't be shocked to start seeing the investment paradigm shift.

 

[Rover]

I'm willing to wager that there's a lot of mal-investment going on in the stock market these days. With the Fed pumping up the amount of currency in the economy right now, that money has to go somewhere. From this article breaking down the sectors in the Economic Monitor, there's a +2.55% change in the impact of Inventories on real GDP between Q4 2012 and Q1 2013. That's more than the entire annualized GDP gains for Q1 2013. With inventories gaining in value, that traditionally leads to shrinking stock market valuations. We're not seeing that now. That causes me to think that a goodly sum of the QE money is artificially pumping up the stock market right now.

http://www.economonitor.com/dolanecon/2013/04/26/us-gdp-growth-accelerates-from-a-crawl-to-a-walk-in-q1/

http://www.economonitor.com/dolanecon/files/2013/04/P130426-3a.png

Undoubtably QE is pumping up the stock market, but again its one of many factors. Earnings have to be there. Growth has to be there. Then you need to look at alternate markets to invest in compared to the US markets.

From a growth perspective, putting aside the state planned communist run Chinese economy, US growth is outpacing the large developed economices around the world (UK, EU, Japan). Furthermore, when you look at global trends from today and forecasted out a couple of years, who's set up to gain? China, who's main advantage of cheap labor for manufacturing will soon have costs = that of producing in the US by 2015? Japan which is pretty much in a 25 year recession? The UK and EU, doomed by austerity? Or the US, with an improving housing market, booming energy sector, and a cleaned up financial system? That is the source of market confidence and improving tax revenues. Far from a come down in receipts that Flaggy hopes for in a desperate attempt to not see Obama get the credit, I can see a scenario where the deficit may be adjusted downward once again as global growth slowly improves and energy independence comes closer to reality.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Hey hybrid drivers, enjoy your new tax. http://blog.gasbuddy.com/posts/More-states-target-EV-owners-for-tax-revenue/1715-540080-1781.aspx

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

ah, those "shovel-ready" stimulus projects are so 2009!

um, except that there is one in our town that hasn't quite finished yet, and there's another one that hasn't even started! yup, four years later and that portion of the "stimulus" still hasn't started "stimulating" anything other than derision.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

ah, those "shovel-ready" stimulus projects are so 2009!

um, except that there is one in our town that hasn't quite finished yet, and there's another one that hasn't even started! yup, four years later and that portion of the "stimulus" still hasn't started "stimulating" anything other than derision.

Details?

 

[Bill]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

So what happened to the TARP Money. Here's what Neil Barofsky (Former TARP IG) says:

http://www.billbonnersdiary.com/articles/bonner-fed-tarp.html

 

[unofan]

So what happened to the TARP Money. Here's what Neil Barofsky (Former TARP IG) says:

http://www.billbonnersdiary.com/articles/bonner-fed-tarp.html

Oh good lord. Where do you find this shiat? I'm supposed to listen to Bill Bonner, a guy who apparently has no actual economics training listed anywhere in his own biography? A guy whose top book review is:

“For better or for worse, my entire education in economics comes via Bill Bonner,” – Jenna O., World News Desk, Collapsenet.com, World Trade Center Environmental Organization

Yeah...some one needs to put the tinfoil back on.

 

[Rover]

Oh good lord. Where do you find this shiat? I'm supposed to listen to Bill Bonner, a guy who apparently has no actual economics training listed anywhere in his own biography? A guy whose top book review is:

“For better or for worse, my entire education in economics comes via Bill Bonner,” – Jenna O., World News Desk, Collapsenet.com, World Trade Center Environmental Organization

Yeah...some one needs to put the tinfoil back on.

Maybe USCHO Poster Bill is this guy. That would explain a lot...

I've never understood the GOP's reaction to TARP. Its a GWB program that worked. You know how often you get to say that? Once, and that once is TARP. Oddly enough they've completely p ! ssed away a chance to say "it took bold action by a no-nonsense conservative to save the financial system..AND its made the Treasury money".

Failed Presidencies usually have one thing they can hang their hat on. Carter for example brokered the first and only peace deal between Israel and one of its neighbors. In hindsight Ford's decision to pardon Nixon was probably the right one, a highlight in an otherwise unremarkable term in office. Not sure what Nixon ever did right, but there must be something.

So, while most people laud Bush's leadership in the immediate aftermath of 9/11, he squandered that and then some by using it to launch the most foolhardy war in US history while ignoring the more worthy conflict in Afghanistan. Thus leaving his predecessor the task of cleaning it up. So, at the end of the day after 8 years of ineptitude, TARP is all Bush is going to have left. Amazing in their secret desire to see his image rehabilitated knuckledraggers don't focus on the one thing he actually did right.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Oh good lord. Where do you find this shiat? I'm supposed to listen to Bill Bonner, a guy who apparently has no actual economics training listed anywhere in his own biography? A guy whose top book review is:

“For better or for worse, my entire education in economics comes via Bill Bonner,” – Jenna O., World News Desk, Collapsenet.com, World Trade Center Environmental Organization

Yeah...some one needs to put the tinfoil back on.

So Mark Zuckerberg has no idea how to run a billion-dollar company because he dropped out of college? Perhaps the late Fortune 500 CEO Steve Jobs? Oh right, in order to be credible, you have to be indoctrinated by brainwashing organizations known as schools. I'm not able to read what he's writing from my current location, but dismissing what a person says solely based upon the amount of time spent sitting in a classroom is just plain ignorance and lowers the credibility of your argument. Given the guy looks to be an entrepreneur, I think he has some worthy background when it comes to businesses and how an economy would affect them. With that out of the way, anything specific in what he says that you don't like?

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Maybe USCHO Poster Bill is this guy. That would explain a lot...

I've never understood the GOP's reaction to TARP. Its a GWB program that worked. You know how often you get to say that? Once, and that once is TARP. Oddly enough they've completely p ! ssed away a chance to say "it took bold action by a no-nonsense conservative to save the financial system..AND its made the Treasury money".

Failed Presidencies usually have one thing they can hang their hat on. Carter for example brokered the first and only peace deal between Israel and one of its neighbors. In hindsight Ford's decision to pardon Nixon was probably the right one, a highlight in an otherwise unremarkable term in office. Not sure what Nixon ever did right, but there must be something.

So, while most people laud Bush's leadership in the immediate aftermath of 9/11, he squandered that and then some by using it to launch the most foolhardy war in US history while ignoring the more worthy conflict in Afghanistan. Thus leaving his predecessor the task of cleaning it up. So, at the end of the day after 8 years of ineptitude, TARP is all Bush is going to have left. Amazing in their secret desire to see his image rehabilitated knuckledraggers don't focus on the one thing he actually did right.

TARP was one of the worst ideas ever that gave us the worst debt that this country has EVER seen. You only like it because it was a socialist program that Obummer continued for trillions more and wallowed us even worse into debt. It did not work, and the USA continued to sink. Don't get me started with the forcing of sub-prime loans, either (I believe that was Clinton's decision, although Dubya's equally at fault for allowing it to continue). There's this little thing called fiscal responsibility that people don't seem to understand anymore, apart from maybe Suze Orman. If you can't afford something, don't buy it! TARP basically encouraged, you could possibly even say rewarded, the fiscal bad behavior of the losers that couldn't pay their mortgages because they bought houses they couldn't afford.

Oh, and for the record, I even hated this idea when Dubya was in power. You don't reward bad fiscal behavior. In fact, I think this was one of the last straws that pushed me away from the elephant and towards the porcupine.

 

[Rover]

TARP was one of the worst ideas ever that gave us the worst debt that this country has EVER seen. You only like it because it was a socialist program that Obummer continued for trillions more and wallowed us even worse into debt. It did not work, and the USA continued to sink. Don't get me started with the forcing of sub-prime loans, either (I believe that was Clinton's decision, although Dubya's equally at fault for allowing it to continue). There's this little thing called fiscal responsibility that people don't seem to understand anymore, apart from maybe Suze Orman. If you can't afford something, don't buy it! TARP basically encouraged, you could possibly even say rewarded, the fiscal bad behavior of the losers that couldn't pay their mortgages because they bought houses they couldn't afford.

Oh, and for the record, I even hated this idea when Dubya was in power. You don't reward bad fiscal behavior. In fact, I think this was one of the last straws that pushed me away from the elephant and towards the porcupine.

This why I'm hoping for Rand Paul as the GOP nominee in 2016. Or he can run as 3rd party candidate I suppose. Nothing is better to assure an opposition party's defeat as watching them assume loony libertarian positions and then have them start in disbelief as the electorate sends them packing. When he starts up his campaign and you sign on as a volunteer, I'm writing for all to see out here that I will be happy to contribute to the "cause".

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

This why I'm hoping for Rand Paul as the GOP nominee in 2016. Or he can run as 3rd party candidate I suppose. Nothing is better to assure an opposition party's defeat as watching them assume loony libertarian positions and then have them start in disbelief as the electorate sends them packing. When he starts up his campaign and you sign on as a volunteer, I'm writing for all to see out here that I will be happy to contribute to the "cause".

I'm tempted to quote that last sentence in my signature to see if you are a man of your word. I'm not a complete sociopath and will assume you are a man of your word. If you don't have honour, you have nothing.

 

[Craig P.]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I've never understood the GOP's reaction to TARP. Its a GWB program that worked. You know how often you get to say that? Once, and that once is TARP. Oddly enough they've completely p ! ssed away a chance to say "it took bold action by a no-nonsense conservative to save the financial system..AND its made the Treasury money".

If I had to guess, I'd guess that this is mainly Tea Party driven. The big thing that seemed to define the early Tea Party was being incensed that the government was going to use tax money to rescue all the people who had bought houses they couldn't afford and were walking away from their obligations.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

If I had to guess, I'd guess that this is mainly Tea Party driven. The big thing that seemed to define the early Tea Party was being incensed that the government was going to use tax money to rescue all the people who had bought houses they couldn't afford and were walking away from their obligations.

Many people actually point the creation of the Taxed Enough Already (TEA) party to Rick Santelli's rant of outrage in March of 2009 when Obama signed into law an extension of TARP for around a trillion dollars or so to subsidize those mortgages. Santelli actually called for people on July 4th of 2009 to get together in Chicago for the event.