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Politics Obama - Actually doing a good job?

Discussion in 'Tilted Philosophy, Politics, and Economics' started by rogue49, Mar 10, 2012.

  1. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    My interpretation of the data is that we have a spending problem.

    When I do the calculations to determine how to allocate capital in my business, I plug in a tax rate. I run the calculations three ways, normally best case, worst case, and expected. Often the tax rate I use determine if the result will be green or red for me. When a business person talks about the importance of the "tax rate" this is the context and why it makes a difference. On the margins investments in people, plant and equipment can hinge on the tax rate among other things. And of course there is the intangible of optimism - currently I am not optimistic and I now only really consider worst case - as a result I have not invested capital in long-term growth.

    True there are many factors, however it is the tax rates that are controlled most easily by government and has the most direct and clear impact of any government policy. Regulations are another big factor, but regulations often lag due to the need to interpret and to measure enforcement.
     
  2. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    I'm not sure that's the only problem. I am sure, however, that this spending problem cannot be solved merely by spending cuts.

    Are you also plugging in such things as sales forecasts? Expense forecasts?

    If there is an opportunity to do business, people will do business despite the tax environment. I sincerely doubt that most companies will look at increased taxes and decide to turtle up instead of pursue opportunities. If my competitor did that, of course, it would make me happy. I seem to recall a time when Americans were considered highly competitive. I hope that's still the case. I refuse to believe businessowners say things like, "Oh, taxes have gone up. I guess we're done with this making money thing. Aw shucks."

    Mind you, I get that small business has much tighter parameters to work with. I've been with a small company for eight years—in publishing, the perilous trade, no less—and I've done freelance work on the side. It's my understanding, though, that Obama has worked on making things easier for small business, that he wants to do more work. I know small businesses are anxious about taxes, are concerned about access to capital, etc., but I think Obama knows this too. He's had to remind Romney a number of times, I think, that his tax plan won't negatively affect the majority of small businesses.

    Whether he can get things done on his second term is yet to be seen. Yet another reason why I hope Congress isn't as dysfunctional as it has been in the past.

    I think the government's effect on business has mostly to do with the indirect effects.
     
    Last edited: Nov 15, 2012
  3. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    I think tax revenues are more correlated to economic growth, given tax rates within a reasonable range as opposed to tax revenues correlated to relative minor changes within a reasonable range. Chew on that for a few minutes before responding. I doubt give or take a few percentage point on top marginal rates will make much of a difference in tax revenues. Again, we discussed the difference between effective rates and nominal rates. Chnages to nominal rates are cosmetic in the context of tax revenue. However, I do think changes to nominal rates will encourage or discourage marginal economic activity.

    Yes. At some point I think I could copy right my spreadsheet and make a few dollars.

    But my point is more about when a capital investment decision goes in the direction of people, plant and equipment compared to alternatives like sitting on cash waiting for better opportunities or moving capital into other investments that may not be productive for the economy, i.e. an investment in gold or gold derivatives. For example business income is taxed as income depending on the state and business structure ( example a C corp. pays corporate taxes and dividends taxed on a individual basis - eventually the point is to get the cash to investors) the effective tax rate on profits may be up to 50% - a long term profit in gold could be taxed at the capital gains tax rate, 15%. If I am pessimistic about economic growth, taxes, interest rates, etc. in simple terms to illustrate the concept a worst case for a business investment should be compared to a best case scenario for gold, but if the capital gains rate goes to being equal to the effective C corp rate maybe that changes. And so it goes.


    President Obama has not done anything for small business that would make investment decisions easier. For example - what is the price of gas going to be in 6 months? $3.50, $4.50, $5.50??? Based on his policy where does he actually want it to be? Do you know? On one hand he want the price higher to encourage conservation and alternatives, global warming, on the other-hand he wants it low for political reasons. And so it goes, and I could list dozens of issues like this. The uncertainty and mixed messages are a killer to business investment. We need some stability, some predictability. why di he kick the can down the road on the Bush Tax cuts - if they had set the rates two years ago we would have the issue behind us.
     
  4. Charlatan

    Charlatan sous les pavés, la plage

    Location:
    Temasek
    Here's what I know... The US needs to increase their incredibly low taxes and they need to curb spending -- at the same time.

    Any discussion that does not include both of these measures is a waste of breath.

    The Bush Administration went to war and incurred Billions (trillions?) in debt with no way to pay for it. Their attitude? Pay it forward. Time to pay.
     
    • Like Like x 2
  5. roachboy

    roachboy Very Tilted

    or the united states needs to reconsider its allocation priorities. that the federal government spends about 40% of overall outlays on the military is incomprehensible, particularly if you look at those outlays in comparative terms. god only knows how much is pissed away on the bush-period surveillance state because much of the spending is off the books. neo-liberal economic policy is directly related to the ridiculous growth of the american prison system--this is the way conservatives address the social instability generated by their lunatic policies. all three of these sectors are conservative patronage systems, so when the right blathers about spending they routinely keep them off the table. and when the dominant media talks about these matters, it tends---still---to recapitulate that. but the fact of the matter is that there's no reason to take anyone seriously who complains about expenditures on the part of the federal government who is not willing to factor military spending and the surveillance state in.

    a good first step would be for the united states to stand down on this idiotic "war on terror."

    a more basic step forward would be the abandonment of the idiocy of neo-liberal ideology. it has failed. it offers no way out of the consequences of its failure. it continues to hamstring discussions about how the united states might rethink itself. it is the primary cause of the paralysis of conventional political institutions---well that and the infantile strategy used by the republican party since 2010. but everyone knows about that infantile strategy.
     
  6. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    Ace, I think you place too much emphasis on the tax code when it comes to economic growth. There are simply far too many other factors that play into it to put so much value in whether taxes should be cut or raised. It's not that the changes will be that drastic. It's not "tax tyranny," especially considering the low tax environment that most Americans benefit from already (especially with the Bush tax cuts).

    Macroeconomics will tell you there is a lot more going on in the machinery of the economy. The American obsession with taxes is unhealthy, and it's a waste of time and energy.

    Businesses may make decisions based on the impact of taxes, but in the wider picture, what will affect the business will be the large proportion of factors that aren't directly tied to taxes.

    I'm not sure what you're getting at with this issue. Do you want Obama to nationalize gasoline distribution (or socialize it, whatever you call it)? You've brought this up before. Do you want more regulations dictating how companies set gasoline prices? I'm not sure what you are implying Obama should do. Are you suggesting Venezuela has it right? Should the U.S. go in that direction with the coming domestic oil boom?

    * * * * *​

    Charlatan & roachboy

    I think it's a rather difficult issue. Sure, we can say to curb spending, but austerity is damaging, as we've seen in Europe. We can also say tax revenue needs to rise, but placing too much burden on the middle class would be a mistake.

    roachboy makes a good point about the reckless spending rising out of the Bush administration. A good starting point would be there: reign in the spending that occurs off the books. Next look at spending that doesn't have any synergy in the economy or any ROI. I think that's the problem with military spending. Yes, it creates jobs, but much of the product and services are essentially used overseas for obvious reasons, and much of it is wasted. If, say, half of that money was used in subsidizing the tech industries (computing, energy, or what have you), that would have a direct impact on the domestic economy, while still maintaining opportunities for export (those that don't involve blowing people up).

    America needs to shift: away from the military-industrial complex and towards a digital-industrial something or other, or lead the way in renewable energy, or lead the way in transportation development, or lead the way in something other than that old 20th century model which is obviously failing.
     
    Last edited: Nov 15, 2012
  7. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Location:
    Baltimore/DC
    Rather than pay it forward...we need to move it forward.

    The military-industrial complex has it's uses...but if it exist, it's not for itself...but for the need of the military.
    So the fight has changed...so the need has also. From the WWII 2 war prep, to specialized flexible dynamic emphasis.
    So, big metal and volume is not needed any more...more like quick and efficient.

    America has many advantages...and we're not doing too bad.
    But we're like a well-off teen who doesn't know how to control their spending with a credit card.

    Math is easy ...and so should be budgeting... add the pluses, subtract the minuses, simple.
    But we refuse to increase revenue and rationalize why we can't wisely pull back spending. (I hate the word, "cut" it shows no forethought)

    Do the reverse of what many do, instead of spending...just to keep your budget levels up.
    Decrease spending...increase efficiencies...so budget levels can go down.

    Problem is this...the bureaucracy has a conflict of interest.
    They want to keep their levels up, so they can flex...and funding means power...so they're fighting for territory too.
    It takes a directive...with CONSTANT push to make sure the dept leaders are saving where they can.

    So, you need reporting, reporting, reporting...where the money is wasted...and where it can be used better.
    I know they are attempting this currently...

    And fortunately...with the current adminstration continuing...then these efforts and priorities will continue.
    I'm hoping that it turns into a different mind-set over time.
     
  8. Charlatan

    Charlatan sous les pavés, la plage

    Location:
    Temasek
    To be clear, I am *not* suggesting austerity measures. Not in the slightest.

    That said, any plan that does not include both increased taxes as well as a responsible reduction in spending, is not going to get the US on to stable footing. I agree that the most likely place to start is in America's approach to the military industrial complex.
     
    • Like Like x 2
  9. Tully Mars

    Tully Mars Very Tilted

    Location:
    Yucatan, Mexico

    Well if you're cut spending you likely going to end up with less services and less benefits isn't that austerity?
     
    Last edited: Nov 17, 2012
  10. redux

    redux Very Tilted

    Location:
    Foggy Bottom
    While necessary, cutting government spending hurts the recovery and is partly responsible for the tepid (but steady) economic growth of 2+% . Ideological driven cuts are reckless and irresponsible.

    Private sector GDP has been in the 3-5% range over the last two years, but as a result of government budget cuts, particularly state/local, and a public sector negative GDP of -1+, the result is a flat economy. Short term government spending is a necessary component, not only on programs that create jobs (investing in infrastructure, clean energy, etc) but for those social programs (unemployment insurance, food stamps, etc) that keep money flowing through the local economy.

    What is ignorant and offensive is the right wing fallacious argument that social programs (mostly benefiting the middle class and working poor on a short term basis) creates a culture of dependency.
    --- merged: Nov 17, 2012 3:25 PM ---
    As ignorant as suggesting Obama wants higher gas price.
    What's next? That he wants more mass murders to encourage gun control?
     
    Last edited by a moderator: Nov 24, 2012
    • Like Like x 1
  11. Tully Mars

    Tully Mars Very Tilted

    Location:
    Yucatan, Mexico
    And yet you have the same folk howling like a stuck pig anytime you mention defense funding. You can't tell me that many defense contractors are not just a group of government dependent losers who either are selling us shit we don't need or charging us 100X the normal price for shit we do need. Talk about waste... but talk about it and try to address it reasonably and the right will label you and un-American or as someone who hates the troops.

    It's all bullshit.
     
    Last edited: Nov 17, 2012
  12. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Location:
    Baltimore/DC
    I still think that Obama is half-way hoping that the GOP bluffs themselves out an agreement,
    and the first portion of sequestering triggers.

    This way, he can at HIS discretion, eliminate immediately any project, location or contract he decides is unnecessary or obsolete.

    This is what truly scares the pork-laden Congress and contractors...that their cash-cow will be struck without so much as a "by your leave".
    With the excuse of, oops sorry cuts by law.

    I was giving a "golf-clap" when Obama convinced them to setup that "compromise" law after the Super Committee failed.
    Talk about allowing your opponents to hang themselves.

    Hmm...we have to actually cooperate or we have no choice after the fact.
    Hmm...sleep with the enemy or have to sleep outside in the cold.

    No matter what you think of Obama...you've got to give him credit as a long-game player.
     
  13. samcol

    samcol Getting Tilted

    Location:
    indiana
  14. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Location:
    Baltimore/DC
  15. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    Terrorists are citizens too?
     
  16. Charlatan

    Charlatan sous les pavés, la plage

    Location:
    Temasek
    And he's right. That said, it underscores that Pakistan is likely supportive of the drone strikes behind the scenes but has to make the (modicum of) noise they are making in public for the benefit of their citizens who are equally mixed on the strikes.
     
  17. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    Ignorant?



    As I pointed out there are two sides to this question - reducing the reliance on fossil fuels can be achieved through relative price adjustments - one being increasing the price of gas.
     
  18. redux

    redux Very Tilted

    Location:
    Foggy Bottom
    And as I pointed out, Chu, in his testimony, was talking about improving efficiency and decreasing dependency on oil.

    So yes, to misrepresent his words is ignorant.
    --- merged: Nov 30, 2012 at 9:13 AM ---
    I previously posted details on Obama's overall energy policy, which of course, you chose to ignore.

    A policy that includes not only more drilling and production of crude oil, but improved efficiency through new CAFE standards and energy efficiency in buildings, investments in natural gas, clean energy R&D, etc.

    And the fact that our dependency on foreign oil is lower than any time in the last 15 years.

    As opposed to the same old policy of "drill baby, drill"
     
    Last edited by a moderator: Dec 7, 2012
  19. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
  20. Joniemack

    Joniemack Beta brainwaves in session

    Location:
    Reading, UK
    Last edited: Nov 30, 2012