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host · 08-09-2007, 11:29 AM

Quote:

Originally Posted by aceventura3

On what basis do you support the notion that the US wants "domination", I think we want access to the oil at a far price.

If Venezuela starts selling oil to China and India are you going to suggest those countries have the same motives as the US, why or why not?

How does the US dominate the region? Don't the countries in that region have free opportunity to exploit their resources on the world market and exclude the US - like let's say Cuba?

Taking a shot at the "long-view"? Do you not believe the long-term needs for capital investment are real? If so, what are they in the context of Venezuela?

Do you conclude that the US and US capitalism is primarily responsible for the conditions in Latin America, the good and the bad or just the bad?

Are we selling it? Implying there are willing buyers. Or, are we forcing it on people? Implying the domination you suggested earlier? Now you have me confused.

If Venezuela holds Argentinian debt that is o.k., but if the US hold Argentinian debt thats a problem - seems like a contradiction, please clarify. I see debt as debt, regardless of who holds it.

On a side note perhaps Venezuela would be better off investing the money in the proposed pipe-line, oil rigs, new wells, etc.

Perhaps the country acquiring the debt has some responsibility in regard to the consequences. How about that? Or, is that a non issue, since it doesn't support your view that the US is evil.

Cite one source where someone on the right has used the word "hate" when talking about Chavez or Venezuala - and I will fill-up at Citco for the next month, otherwise I will continue going to any other gas station but Citco.

ace...I posted news from a July 9th Bloomberg report that confirms a demand in Asia for the heavy oil that Venezuela is awash in.

If this is a discussion about whether "flaws" in the leadership of Hugo Chavez justify the condemnation of him by US officials and at least one religious leaders, doesn't it follow that our own system must actually be of superior potential...it's government, social framework, fiscal soundness...for any of us to post some of the negative opinions about Chavez and his government and Venezeula's future prospects....with ours looking...FAILED....headed for a "blow up"? Treasury debt here was $1 trillion in Oct., 1980 $4.2 Trillion in Oct. 1992, $5.6 trillion in Oct., 2000, and $8.8 trillion, now. US trade was balanced in the mid 90's...we run an $850 billion annual deficit, now.... We're going backwards as far as human rights and our bill of rights.... Yet some of us tout the superiority of "our system"? Doesn't it cost a lot more to service just the interest on $8.8 trillion in debt, than it did on $5.6 trillion? Isn't a currency supported by huge oil export potential, sounder than one supported by an expensive to maintain military as the only offset to dramatically rising trade and treasury debt? Who are we to talk?

Our Latin American foreign policy is offensive to me, ace...and I don't live there. The intent of the Bush admin. was the thugs appointed to represent the US in that region.... I try and try, ace....to share what I read that influences me to disagree with almost everything that you post...and it seems to not affect you.... but I keep trying, anyway:

In post #18m you offered "some history", that includes none of this....and Venezuela is a country of only 30 million....would you have omiitted "9/11" in any serious attempt to present a "background" on Bush's "War on Terror"?

II Facts click to show

Quote:

http://www1.umn.edu/humanrts/iachr/C/58-ing.html

II Facts

2. In Section III of its application, the Commission presented the facts that originated this case, and said that:

a. on February 16, 1989, the then President of Venezuela, Carlos Andrés Pérez, announced a series of structural adjustment measures to refinance the external debt through the International Monetary Fund that were implemented on February 27 that year;

b. on February 27, 1989, an undetermined number of persons from the poorer sectors of the population began a series of disturbances in Garenas, State of Miranda, owing to the increase in urban transport rates and the failure of the Executive to grant a preferential rate to students. These disturbances then extended “to other parts of the metropolitan area of Caracas, and Caricuao, La Guaira, Maracay, Valencia, Barquisimeto, Guayana, Mérida, Maracaibo, and zones adjacent to the transportation terminal”;

c. the disturbances consisted mainly in burning urban transportation vehicles and looting and destroying commercial properties; these events caused extensive damage to public and private property;

d. on February 27, 1989, a sector of the Metropolitan Police was on strike, and consequently did not intervene promptly to control the disturbances. According to declarations of the then President of the Republic, published in the newspaper El Nacional of June 10, 1990, “at the beginning, there was no organized body to prevent or deal with what was happening”; in the same declaration he also said that “upon returning from Barquisimeto, when passing through the area of Caracas near the Presidential Palace called El Silencio, [he saw] the shattered shop windows; arriving at Miraflores, he called the Minister of Defense and ordered him to mobilize the troops”;

e. the armed forces were entrusted with controlling the situation, and, to this end, about nine thousand soldiers were brought in from the interior of the country; these were young men of 17 and 18 years of age, recruited in February 1989. From statements made by senior Army officers, former Ministers of State and the former President of the Republic, it is clear that the armed forces were not prepared to assume control of public order and the young men who were sent were a danger to the life and physical integrity of the population, owing to their youth and inexperience. Similarly, it is evident that these young soldiers were equipped with assault weapons (7.62-mm light automatic rifles) to control the civilian population, and AMX-13 armored vehicles. The officers used 9-mm heavy-duty guns.

f. on February 28, 1989, the Executive issued Decree No. 49, ordering the suspension of the following guarantees established in the Venezuelan Constitution: individual freedom (Article 60.1, 2, 6 and 10); right to immunity of domicile (Article 62); freedom of movement (Article 64); freedom of expression (Article 66); right of assembly (Article 71) and right to take part in peaceful manifestations (Article 115). According to the Commission, the constitutional guarantees were reestablished on March 22, 1989;

g. during the 23 days that the suspension of guarantees lasted and, in particular, as of March 1, 1989, the Venezuelan armed forces were in control of the territory and the population; moreover, at first they imposed a curfew that obliged people to remain in their homes between 6 p.m. and 6 a.m.

h. during the state of emergency, the State security bodies, together with the Metropolitan Police, the National Guard and the Army, carried out a series of operations to repress acts of violence;

i. according to official figures, the events of February and March 1989 left a balance of 276 dead, numerous injured, several disappeared and heavy material losses. However, this list was invalidated by the subsequent appearance of mass graves;

j. as of February 28, 1989, a secret military plan entitled “Avila” was imposed on the civilian population. This plan was conceived during the 1960s when, according to the former Minister of Defense, Ítalo del Valle Alliegro, there were illegal armed groups in Venezuela. In his words, this plan “was executed, despite the length of time [that had elapsed] without implementing it”; however, “it had to be revised and updated in view of the new circumstances”;

k. two non-governmental organizations that carried out investigations in situ, as well as international experts, agreed that most of the deaths were due to indiscriminate firing by agents of the Venezuelan State, while others resulted from extrajudicial executions. They also agreed that the members of the armed forces opened fire against crowds and against homes, which caused the death of many children and innocent people who were not taking part in criminal acts;

l. the victims included seven children and five women. Of the 44 cases, 18 occurred on March 1, 1989, or later although the events had ceased as of February 28 that year when, according to Venezuelan Government reports, the situation was completely controlled; 11 victims were killed in their homes, five of these during curfew hours, and the other seven cases were typical of extrajudicial executions. Regarding the circumstances of death, 14 of the victims died as a result of head injuries caused by firearms, three of them received bullets in the neck, 14 in the thorax or abdomen, and five were shot in the back. Another four victims disappeared in the area controlled by the Army and the Metropolitan Police and, to date, there has been no information on their whereabouts. Furthermore, 32 of these cases were pending before military tribunals or were heard by military tribunals (although some of them also being processed under civil jurisdiction) and in none of the cases has there been a judgement that identifies those responsible and establishes the corresponding penalties.

m. in the cases that are the subject of this application, there was a common pattern of behavior characterized by the disproportionate use of the armed forces in the poorer residential districts. This behavior included hiding and destroying evidence as well as the use of institutional mechanisms that have ensured the impunity of the acts;

n. in the days following the events, the State, through the Executive, ordered that an undetermined number of corpses should be buried in mass graves in the sector known as “La Peste I and II of the Southern General Cemetery of Caracas in order to ‘comply with specific health-related instructions’”;

o. at the time the application was presented - nine years after the exhumations were carried out - investigations remain at the summary proceedings stage which was secret; “this means that, ten years after the events occurred, the victims’ next of kin have not been able to gain access to the file papers or ascertain whether the tribunal hearing the case has issued an interlocutory order”. When the victims’ next of kin were informed of the burial, they immediately approached the competent national authorities in order to seek and claim the corpses. At first, state officials publicly denied the existence of mass graves, but the victims’ next of kin presented a series of proofs to the Venezuelan domestic jurisdictional bodies that established the existence of mass graves in the Southern General Cemetery.

p. on November 5, 1990, the Tenth Criminal Court of First Instance of the Judicial District of the Metropolitan Area of Caracas conducted a judicial inspection in the Southern Cemetery to determine alleged irregularities in how the corpses buried in mass graves had been registered and, in the corresponding official record, it “certified that the victims of the events of 27/2/89, buried in the North 6 sector (“la Peste”), are not recorded in the registers…”; and

q. on November 28, 1990, the public was informed that the first remains had appeared in plot number 6 North of the Southern Cemetery General in Caracas. 130 corpses were exhumed; of these only 68 corresponded to persons whose date of death was February and March 1989. On May 30, 1991, the Committee of the next of kin of the victims of the events of February and March 1989 (hereinafter “COFAVIC”), filed a claim before the Tenth Criminal Court of First Instance, owing to a fire in the area of the mass graves.....

Friends of terrorism click to show

Quote:

http://www.guardian.co.uk/comment/st...646835,00.html
Friends of terrorism

Bush's decision to bring back Otto Reich exposes the hypocrisy of the war against terror

Duncan Campbell
Friday February 8, 2002
The Guardian

His name may sound like that of a character from a Mel Brooks musical but Otto Reich is real enough. He has just been appointed by President Bush as assistant secretary of state for western hemisphere affairs - and both the manner of his appointment and the role he will now play have profound implications for a part of the world often disregarded since September 11.

Over the last year President Bush has attempted to bring back into office people who were discredited during the US interventions in Central America in the 1980s and 1990s. One such appointment was that of Elliott Abrams, who had two convictions in 1991 for misleading Congress about the so-called Iran-contra affair. He was pardoned by President Bush's father in 1992 and now enjoys the title of head of the "office of democracy and human rights". Another was John Negroponte, the former US ambassador to Honduras, who was accused by his predecessor of turning a blind eye to the atrocities committed there against leftists because it was felt necessary to remain on good terms with the Honduran government. Negroponte was quietly confirmed as US ambassador to the UN shortly after September 11. But the third appointment is by far the most controversial and potentially divisive.

....Otto Reich is a rightwing Cuban American whose key policy objective is the overthrow of Fidel Castro's regime and whose support base is the Cuban-American community in Florida. President Bush's brother, Jeb, is depending on this community's votes and backing as he runs for re-election as governor of the state later this year.

Otto Reich came to prominence during the Reagan administration when he was appointed head of the office of public diplomacy within the state department. According to the national security archives, Reich used this role to pursue his own agenda to such an extent that in 1987 the Comptroller-General of the US, a Republican appointee, found that some of the efforts of his office were "prohibited, covert propaganda activities ... beyond the range of acceptable agency public information activities". A letter of September 30 1987 concluded that Reich's office had violated "a restriction on the state department's annual appropriations prohibiting the use of federal funds for publicity or propaganda purposes not authorised by Congress".

He staffed his unit with CIA and Pentagon "psychological warfare" specialists and discredited journalists whose work the Reagan administration did not like. His office wrote bogus editorial pieces under the names of Nicaraguan contras and got them published in the mainstream media. He reported directly to Oliver North.

Reich also served as US ambassador to Venezuela and was alleged to have used his influence to try and get a US visa for a convicted terrorist, Orlando Bosch, jailed in Venezuela in 1976 for the bombing of a Cubana airliner with 73 people on board. Bosch had already been convicted of a terrorist attack in Miami on a Polish merchant vessel bound for Cuba and jailed in the US.

According to US justice department records: "the files of the FBI and other government agencies contain a large quantity of documentary information which reflects that, beginning in the early 1960s, Bosch held leadership positions in various anti-Castro terrorist organisations ... Bosch has personally advocated, encouraged, organised and participated in acts of terrorist violence in this country as well as various other countries."

Amazingly, Bosch was granted a pardon by George Bush senior in 1990 and is now in Florida, apparently untroubled by the current president's commitment to rooting out terrorism in all its forms. Although many countries seek Bosch's extradition he remains free, protected by the same government that warns other countries that they are either for or against terrorism.

The Democrats on the Senate foreign relations committee had already made it clear that they would oppose Reich's appointment, not least because of the Bosch factor. So President Bush made a "recess appointment" at the beginning of January, which meant that he could side-step the Senate confirmation and avoid the damaging questions which Reich would be asked. ......

Venezuela coup linked to Bush team click to show

Quote:

http://observer.guardian.co.uk/inter...688071,00.html
Venezuela coup linked to Bush team

Specialists in the 'dirty wars' of the Eighties encouraged the plotters who tried to topple President Chavez

Observer Worldview

Ed Vulliamy in New York
Sunday April 21, 2002.....

...The Bush administration has tried to distance itself from the coup. It immediately endorsed the new government under businessman Pedro Carmona. But the coup was sent dramatically into reverse after 48 hours. Now officials at the Organisation of American States and other diplomatic sources, talking to The Observer, assert that the US administration was not only aware the coup was about to take place, but had sanctioned it, presuming it to be destined for success.

The visits by Venezuelans plotting a coup, including Carmona himself, began, say sources, 'several months ago', and continued until weeks before the putsch last weekend. The visitors were received at the White House by the man President George Bush tasked to be his key policy-maker for Latin America, Otto Reich.

Reich is a right-wing Cuban-American who, under Reagan, ran the Office for Public Diplomacy. It reported in theory to the State Department, but Reich was shown by congressional investigations to report directly to Reagan's National Security Aide, Colonel Oliver North, in the White House. .......

....Reich also has close ties to Venezuela, having been made ambassador to Caracas in 1986. His appointment was contested both by Democrats in Washington and political leaders in the Latin American country. The objections were overridden as Venezuela sought access to the US oil market.

Reich is said by OAS sources to have had 'a number of meetings with Carmona and other leaders of the coup' over several months. The coup was discussed in some detail, right down to its timing and chances of success, which were deemed to be excellent.

On the day Carmona claimed power, Reich summoned ambassadors from Latin America and the Caribbean to his office. He said the removal of Chavez was not a rupture of democra tic rule, as he had resigned and was 'responsible for his fate'. He said the US would support the Carmona government.

But the crucial figure around the coup was Abrams, who operates in the White House as senior director of the National Security Council for 'democracy, human rights and international opera tions'. He was a leading theoretician of the school known as 'Hemispherism', which put a priority on combating Marxism in the Americas.

It led to the coup in Chile in 1973, and the sponsorship of regimes and death squads that followed it in Argentina, El Salvador, Honduras, Guatemala and elsewhere. During the Contras' rampage in Nicaragua, he worked directly to North.

Congressional investigations found Abrams had harvested illegal funding for the rebellion. Convicted for withholding information from the inquiry, he was pardoned by George Bush senior.

A third member of the Latin American triangle in US policy-making is John Negroponte, now ambassador to the United Nations. He was Reagan's ambassador to Honduras from 1981 to 1985 when a US-trained death squad, Battalion 3-16, tortured and murdered scores of activists. A diplomatic source said Negroponte had been 'informed that there might be some movement in Venezuela on Chavez' at the beginning of the year.

More than 100 people died in events before and after the coup. In Caracas on Friday a military judge confined five high-ranking officers to indefinite house arrest pending formal charges of rebellion. .......

Quote:

Originally Posted by aceventura3

http://www.tfproject.org/tfp/showpos...9&postcount=41
Economic policies have long tails. The decisions Chavez is making today won't be seen immediately. For example, oil is currently selling at all-time highs, and Venezuela is selling most of its oil to the US. The US has refineries that more or less specializes in processing Venezuelan oil. Thing are as good as they can possibly be today due to past investment and relationships made decades ago.

However, current Venezuelan oil wells are producing less oil each month. Investment is needed for improving production and to explore new sources of oil in the country.

The price of oil may go higher given instability in the ME, however, if the ME stabilizes it is highly likely the price of oil will go down. This will hurt their economy which is almost totally defendant on oil. And the sale of that oil to the US.

Investment is needed if Venezuela wants to establish new markets for its oil, in Asia. Currently they have no efficient means to get their oil to those markets.

http://www.tfproject.org/tfp/showpos...5&postcount=43 In theory, however, I think the best economic systems are those where people have an incentive to invest in the future, or capitalism. In theory I side with what you call the "economic elite", although in capitalist systems the poor can easily become rich, this is not true in most other economic systems.

Exxon adds it all up: $36 billion click to show

Quote:

http://www.iht.com/bin/print_ipub.ph...ness/exxon.php
Exxon adds it all up: $36 billion
The New York Times, The Associated Press, Bloomberg News
MONDAY, JANUARY 30, 2006

HOUSTON Exxon Mobil, the largest U.S. energy company, posted Monday the highest profit in U.S. corporate history, amplifying concerns over the good fortune of oil companies while soaring energy prices pressure consumers.

.....Profit in 2005 reached $36.13 billion on revenue of $371 billion.

The annual profit easily surpassed the previous record of $25.3 billion, which Exxon had also set in 2004, according to Howard Silverblatt, senior index analyst at Standard & Poor's in New York. Only Ford Motor's profit of $22 billion in 1998 resemble Exxon's success in recent memory, Silverblatt said.

The company's quarterly revenue rose to $99.66 billion from $83.37 billion a year ago but was less than the $100.72 billion Exxon posted in the third quarter, the first time a U.S. public company generated more than $100 billion in sales in a single quarter.

Shares in Exxon rose $1.82, or 3 percent, to close at $63.11 in New York after the company's results beat Wall Street expectations.

Even as investors applauded Exxon's new chief executive, Rex Tillerson, who replaced Lee Raymond at the start of this year, its results masked potentially weaker profits if oil and gas prices begin to decline.

Production at Exxon's oilfields around the world declined 1 percent in 2005, excluding stoppage at platforms in the Gulf of Mexico from last year's hurricanes, illustrating an industry-wide dilemma: an inability to tap into the world's richest oil exploration areas in the Middle East and Venezuela because of political limitations.

"Lack of access to new reserves is the most important problem Exxon and the other large oil companies are facing," said Michael Economides, a professor of chemical engineering at the University of Houston. "It should make them paranoid about the future."

Major oil producers like BP and Chevron are exploring more remote areas of the globe and drilling wells to record depths to bolster production as older fields in North America and the North Sea near exhaustion.

Exxon will this year tap new oil fields holding an estimated 1.75 billion barrels, or 34 percent of all the new projects by publicly traded oil companies scheduled for 2006, according to analysts at Deutsche Bank.

However, political uncertainties in oil-rich nations also worked in Exxon's favor recently, as concern over Iran's nuclear ambitions and tension in Nigeria and Venezuela kept oil prices high.

Crude oil prices have doubled in the last two years, driven by strong demand in rising economies of Asia and in the United States. Oil for March delivery rose by 59 cents to close at $68.35 a barrel in New York trading.

The stellar earnings brought fresh criticism of the energy industry in Congress on Monday.....

World Faces Oil 'Supply Crunch' after 2010, IEA Says click to show

Quote:

http://www.bloomberg.com/apps/news?p...fag&refer=home
<b>World Faces Oil `Supply Crunch' After 2010, IEA Says (Update2)</b>

By Stephen Voss

July 9 (Bloomberg) -- The world faces an oil ``supply crunch'' after 2010 because demand will outpace the growth in production from non-OPEC countries, according to the International Energy Agency.

Output growth outside of the Organization of Petroleum Exporting Countries, led by Russia and Brazil, will be countered by a decline in Europe, the Paris-based agency said in a report today. That shrinks the cushion of excess capacity that OPEC members such as Saudi Arabia provide, the agency said.

``Despite four years of high oil prices, this report sees increasing market tightness beyond 2010, with OPEC spare capacity declining to minimal levels by 2012,'' the IEA said in its Medium-Term Oil Market Report, which is published every six months. ``Low OPEC spare capacity and slow non-OPEC production growth are of significant concern.''

Global oil demand is forecast to expand by 1.9 million barrels a day, or 2.2 percent a year on average, reaching 95.8 million barrels a day by 2012, the IEA said. The fastest growth will occur in Asia and the Middle East, it said. Brent crude oil futures prices have averaged $64.11 a barrel so far this year, down from an average $66.11 last year and $55.25 in 2005.

``Oil and gas price pressures look set to remain in the coming years,'' the IEA said. The agency, an adviser on energy issues to 26 industrialized countries, does not publish a specific price forecast.

Coal, Nuclear

Investment in coal and nuclear power may ease pressure on the oil market after about 2015, the group said. World oil- refining capacity will rise by 10.6 million barrels a day through 2012, which could help reduce prices for gasoline and other refined products, it said.

Brazil, Russia, Canada, Kazakhstan and Azerbaijan will show the biggest gains in production among non-OPEC nations over the next five years, the agency said. Those five countries will each expand output during the period by at least 500,000 barrels a day, with Brazil gaining about 1 million barrels a day, the IEA predicted.

The laggards among non-OPEC countries will be the U.K., where output will fall some 600,000 barrels a day over the period, followed by Norway and Mexico. In the U.S., oil production will rise in the Gulf of Mexico, helped by BP Plc's delayed Thunder Horse and Atlantis projects, the IEA said. The gains in the Gulf will be more than offset by reductions elsewhere in the U.S.

Higher oil prices have helped lift shares of the world's largest producers. Exxon Mobil Corp. rose 91 cents, or 1.1 percent, to a record $87.37 at 2 p.m. in New York Stock Exchange composite trading. Chevron Corp. gained $1.31 to $88.99.

Heavy Oil, Biofuels

Overall, the IEA reduced its projection for non-OPEC supply in 2011 by 1 million barrels a day since its last medium-term report in February because of revisions to data and the reduced reliability of major oil projects being completed on time.

Non-OPEC oil supply, including biofuels, is expected to tally 52.6 million barrels a day in 2012, up from 50 million barrels a day in 2007.

Since that February report, more than 3.2 million barrels a day of new projects in 2007 through 2011 ``have seen their timing slip, emphasizing the scale of the problem,'' the IEA said.

The biggest increases in non-OPEC production will come from nations that produce heavy oil, and from biofuels, rather than so-called conventional crude oil fields, the report showed.

``Our forecast suggests that the non-OPEC, conventional crude component of global production appears, for now, to have reached an effective plateau, rather than a peak,'' the report said. ``Put another way, all of the growth in non-OPEC supply over 2007-2012 comes from gas liquids, extra heavy oil, biofuels'' and by 2012 some coal-to-liquids production in China, it said.

Spare Capacity Cut

Among OPEC nations, the IEA assumes there'll be no expansion of production capacity in Iran, Iraq and Venezuela over the next five years and no resumption of some 500,000 barrels a day of long-shuttered production in Nigeria's delta swamps.

By 2012, the quantity of OPEC crude oil theoretically needed to balance world supply and demand will rise to 36.2 million barrels a day, up from 31.3 million barrels a day for this year. The IEA doesn't directly forecast OPEC production because it can't predict OPEC policy and quota levels.

The constraints in some OPEC nations along with project delays in other countries and a strengthening of world oil demand meant the IEA cut its forecast for OPEC's spare production capacity in 2009 by some 2 million barrels a day since its February report.

`Low Levels'

OPEC spare production capacity, which had risen from low levels in 2004 to almost 3 million barrels a day as of mid-2007, will increase through to 2009 and then decline to between 1.55 million barrels a day and 2.18 million barrels a day by 2012, the report showed.

OPEC's spare, or unused production capacity influences oil prices because that's the cushion of extra supply that can be brought onstream quickly when major disruptions occur elsewhere in the world. Saudi Arabia controls the most spare capacity.

``Despite an increase in biofuels production and a bunching of supply projects over the next few years, OPEC spare capacity is expected to remain relatively constrained before 2009 when slowing upstream capacity growth and accelerating non-OECD demand once more pull it down to uncomfortably low levels,'' it said. .....

Quote:

Originally Posted by aceventura3

http://www.tfproject.org/tfp/showpos...4&postcount=45
Yes. Reagan laid the foundation for economic prosperity in the 90's. Clinton did not do anything material to upset the foundation laid by Reagan. Bush's tax cuts will allow our economy to grow at a moderate pace over the next 5 to 10 years. However, some of the fundamental problems facing our economic futures are being ignored in Washington. Social Security and Medicare will ruin the economy given the limited projected growth in our labor force in the decades to come (especially without a guest worker program and what many call amnesty).

We certainly have our problems and issues, as does Venezuela.

Supply-side Spin click to show

Quote:

http://www.factcheck.org/taxes/supply-side_spin.html

Supply-side Spin
June 11, 2007
Sen. John McCain has said President Bush's tax cuts have increased federal revenues. But revenues would have been even higher without them.
Summary

Republican presidential candidate Sen. John McCain has said that the major tax cuts passed in 2001 and 2003 have "increased revenues." He also said that tax cuts in general increase revenues. That’s highly misleading.

In fact, the last half-dozen years have shown us that we can't have both lower taxes and fatter government coffers. The Congressional Budget Office, the Treasury Department, the Joint Committee on Taxation, the White House’s Council of Economic Advisers and a former Bush administration economist all say that tax cuts lead to revenues that are lower than they otherwise would have been – even if they spur some economic growth. And federal revenues actually declined at the beginning of this decade before rebounding. The growth in the past three years that McCain refers to brings revenues back in line with the 40-year historical average as a percentage of gross domestic product.

It’s unclear how much of the growth can be attributed to the tax cuts. Capital gains tax receipts did increase greatly from 2003 to 2006, but the CBO estimates that they will level off and decrease in the next few years. The growth overwhelmingly resulted from a sharp rise in corporate tax receipts, the cause of which is a topic of debate.....

....Federal agencies have published similar statements regarding the effect of tax cuts on federal receipts. From the Congressional Budget Office’s 2007 Budget Outlook: “The expiration of tax provisions as scheduled has a substantial impact on CBO’s projections, especially beyond 2010 when a number of revenue-reducing tax provisions enacted in the past several years are slated to expire,” the report says. “Almost all of the expiring provisions reduce revenues.”

The Joint Committee on Taxation estimated that the 2001 tax legislation (the Economic Growth and Tax Relief Reconciliation Act) would cause government revenues to be 107.7 billion less than they would have been in the absence of the legislation in 2004, 107.4 billion less in 2005 and 135.2 billion less in 2006. The committee's estimates for the effect of the Jobs and Growth Tax Relief Reconciliation Act of 2003 were that it would reduce otherwise projected revenues by 148.7 billion in 2004, 82.2 billion in 2005 and 20.7 billion in 2006. The JCT makes its comparisons against the Congressional Budget Office's receipts baselines.

The projections were not off the mark. A look at the committee's estimates of total federal revenue including the effects of the 2003 tax legislation versus the actual federal receipts shows that the JCT's projections were higher than actual revenues in 2003 and 2004 and slightly lower than actual receipts in 2005......

Lower Deficit Sparks Debate Over Tax Cuts' Role click to show

Bush Ad Claims His Tax Cuts Exceed Reagan's click to show

Quote:

http://www.factcheck.org/bush_ad_cla...ts_exceed.html

Bush Ad Claims His Tax Cuts Exceed Reagan's
June 8, 2004
It says his cuts are "the largest tax relief in history." Some experts disagree.
Summary
A Bush ad set to run on cable networks starting June 7 makes a questionable claim when it lists "the largest tax relief in history" amid Bush's accomplishments. Bush's cuts are indeed historically big. But whether they are bigger than Ronald Reagan's depends on any number of assumptions. Reagan's looks larger by several measures.
Analysis
The campaign has taken a positive turn: with this ad, Bush paints himself as a bigger optimist than Kerry. The President says, "I believe in the people of America." He's responding to a June 1 Kerry ad in which Kerry says, "We're a country of optimists; we're the can-do people." The Bush ad is named "Pessimist" and the Kerry ad is called "Optimists."

The Bush ad is accurate when it states that the economy has been growing for 10 straight months, that 1.4 million jobs have been added since August (making up more than half the jobs lost after Bush took office), and that home ownership is at a record high. All that is true.

And it's also on target when it cites -- as evidence of Kerry's alleged "pessimism" -- that Kerry keeps "talking about the Great Depression." After Friday's report that the economy had gained 947,000 jobs in the past three months, the Kerry campaign issued a news release saying, "America is still in the worst job recovery since the Great Depression." Now that is looking on the dark side.

Whose is Biggest?

The one place where Bush's ad may go too far is when it claims his tax cuts are the largest -- exceeding even Ronald Reagan's historic 1981 tax cut and the cut proposed in 1963 by John F. Kennedy. Tax experts have been debating that question for some time.

Bush's cuts are clearly the largest if one looks at raw dollars alone, ignoring inflation and the size of the economy. But once those important factors are considered, Reagan's tax cut looks larger to some.

According to a paper published last July by a tax expert in Bush's own Treasury Department, Reagan's Economic Recovery Tax Act of 1981 (ERTA) clearly exceeded any one of Bush's cuts. "By every measure used here, ERTA was by far the biggest tax change (and the biggest tax cut) over the past 35 years," wrote Jerry Tempalski of the Office of Tax Analysis.

But what about all three of Bush's cuts, the cuts for individuals enacted in 2001 and 2003, and the business tax cut enacted in 2002? In raw dollars, Bush wins. Tempalski's tables show that Reagan's 1981 cut was estimated to average $111 billion per year during its first four years on the books, while Bush's three cuts average a combined total of $160.4 billion annually during the comparable four-year period.

But Bush loses when inflation is taken into account. A dollar today is worth much less than a dollar in 1981. And Reagan's cut is 12% larger than Bush's combined cuts in "real" dollars (dollars adjusted for inflation) according to Tempalski's tables, again comparing four-year averages for both tax cuts.

But wait -- Reagan's cuts never fully took effect. They were scaled back in 1982 by a tax increase that averaged $37.5 billion over its first four years. Subtract the '82 Reagan increase from the '81 Reagan cut, and the combined Bush cuts once again look bigger, even adjusted for inflation.

Hold on, though. The economy has doubled in size since 1981. According to Tempalski's tables, Reagan's cut would have amounted to 4.15% of the economy by the fourth year, and the Bush cuts total less than 1%. Reagan's cut is four times bigger than Bush's measured this way, as a percentage of Gross Domestic Product (GDP). Even subtracting the effect of the '82 Reagan tax hike, we calculate from Tempalski's tables that Reagan's net cut is roughly three times bigger than all of Bush's put together.

We could go on. The cuts look different depending on whether one looks at only the first-year effects, or the fourth-year effects, or the average of the first two years or the first four years. And that's just using the figures provided by one neutral expert......

Bush click to show

Quote:

http://www.pbs.org/newshour/bb/econo...udget_2-3.html
President Bush submitted his $2.23 trillion budget plan to Congress today, saying it will get the economy going again while taking care of social needs and protecting the U.S. from attack. Experts analyze the proposed budget plan.

SPENDING BLUEPRINT

February 3, 2003

MARGARET WARNER: To analyze this new budget proposal, we turn to experts from two Washington research groups. Robert Greenstein is executive director of the Center on Budget and Policy Priorities, and William Beach is senior fellow in economics at the Heritage Foundation. Welcome to you both.

.....MARGARET WARNER: Let me just ask you to comment on where Mr. Greenstein's comment that this is the sort of 80s redux?

WILLIAM BEACH: When tax rates were cut in the 1980s revenues went up. Spending went out the roof.

ROBERT GREENSTEIN: That's not true, that's not true.

WILLIAM BEACH: This is a very large problem which congresses have had. When Pres. Clinton signed legislation to cut the capital gains tax cuts, people in town, Bob included, thought it wouldn't raise any money. It raised an enormous amount of money.

ROBERT GREENSTEIN: That's not true either.

WILLIAM BEACH: We have a record of these kinds of reactions occurring, both in the 1960s, 1920s, 1980s, 1990s. So we don't have to take that risk any more, we know that certain things work well from a tax standpoint.

MARGARET WARNER: Are you saying, Mr. Greenstein, that tax cuts do not help stimulate economic growth, do not help create jobs, investment so forth?

ROBERT GREENSTEIN: It depends on the kind of tax cuts. But you have two effects from tax cuts. Certain kinds of well-designed tax cuts can help the economy and help jobs and growth, in and of themselves, if they're paid for. But if those tax cuts increase deficits and debt, tin creased deficits and debt reduce saving and harm the economy.

So you have to balance the two effects. The estimates of the president's plan, the tax cut enacted in 2001 from neutral observers, like the Congressional Budget Office, was no significant net effect on economic growth, which means you don't offset these big deficits that are coming.

Now, the model for me, interestingly enough, we talked about the 80s, let's look at Ronald Reagan. Ronald Reagan put through a big tax cut in '81 like George W. Bush did in '01. A year later, for other reasons, the economy in both cases, both presidents faced much darker fiscal situations. Ronald Reagan, Bob Dole, Howard Baker and David Stockman responded in '82 and thereafter by undoing some of the '81 tax cut. This president is digging the hole deeper.

MARGARET WARNER: Brief response.

WILLIAM BEACH: Well, no, the record of the 80s is the basis of the economic growth of the 90s. And we all know what that is. What President Bush is laying right now is the basis of economic growth in the next ten years. If we don't have it, Margaret, we won't be able to fix the many problems that Bob has rightly identified, Social Security, Medicare and all the issues that deal with children. We need this tax cut, we need this budget. ....

WILL THE TAX CUTS ULTIMATELY PAY FOR THEMSELVES? click to show

Quote:

http://www.cbpp.org/3-3-03tax.htm
March 3, 2003

WILL THE TAX CUTS ULTIMATELY PAY FOR THEMSELVES?
by Richard Kogan

.... * Yet another indication that the Administration does not really believe that the tax cuts will pay for themselves is found in the revenue projections in the President’s budget. The budget projects that under the President’s policies, total federal revenues will grow at a slower annual rate between 2001 and 2008 than in any comparable period over the last five decades. OMB also projects that federal income tax revenues will grow at only one-sixteenth the annual rate they grew between 1990 and 2001.

* The long-term budget forecast in the President’s budget is even more chilling. In President Bush’s first budget, OMB projected the federal budget would remain in surplus at least through 2035. A year ago, OMB projected that surpluses would return in 2005 and remain through about 2025. But this year, OMB projects no return to surplus at any time. OMB now projects that under the Administration’s policies, the budget will be in deficit every year for the next 50 years.

In short, both the analyses that the President’s Council of Economic Advisers has conducted and the budget projections that the President’s own budget office has issued are inconsistent with Administration rhetoric about the hefty revenue growth that its tax policies would generate.......

<center><img src="http://www.cbpp.org/3-3-03tax-f1.jpg"><p>.... The Lessons of the 1980s and 1990s

Nor does history support the rhetoric that the tax cuts will pay for themselves. When the large tax cuts enacted in 1981 were being debated, many of the adherents of those tax cuts contended the tax cuts would more than pay for themselves. Conversely, when marginal tax rates on high-income individuals were raised in 1990 and especially in 1993, the claim was made that these tax increases would damage the economy and that income tax receipts consequently would grow more slowly in the 1990s than in the 1980s. In fact, income tax revenues hardly grew at all in the 1980s (after adjustment for inflation and increases in the size of the working-age population) and grew 13 times faster in the 1990s than in the 1980s....</center>

..... Do Tax Cuts Pay for Themselves? The Historical Record

Large tax cuts were enacted in 1981, with the centerpiece of the 1981 tax cut being a large reduction in marginal tax rates. If such tax cuts really pay for themselves, income tax receipts should have grown as rapidly in the 1980s as they did in the 1990s.

Indeed, in the 1980s, supply-siders argued that the economy would grow more rapidly because of the 1981 tax cut. They contended that a lower tax rate applied to a larger economy would produce at least the same amount of revenue. Then, when marginal income tax rates at the top of the income spectrum were raised in 1990 and especially when these rates were raised further in 1993, a number of supply-side advocates insisted this would harm economic growth. Presumably, higher tax rates applied to a smaller economy would mean that income tax receipts would not grow as much in the 1990s as in the 1980s.

Yet this is not what occurred. Income tax receipts grew noticeably more slowly than usual in the 1980s, after the large cuts in individual and corporate income tax rates in 1981. And income tax collections grew much more rapidly in the 1990s than in the 1980s. The graph and table on the next page illustrate this fact.

A comparison between the 1980s and the 1990s is quite instructive. (Data for the 1950s, 1960s, and 1970s are affected by several increases in payroll or excise taxes, numerous reductions in income tax rates, and uneven rates of “bracket creep” because the individual income tax was not indexed for inflation during those periods.) If economic growth — or voluntary tax compliance, another benefit that supply-side advocates claimed would occur after the large reduction in income tax rates in 1981 — would offset lower tax rates, income tax receipts should have grown in the 1980s at rates roughly approximating the historical norms. They did not. After adjusting for inflation and the increased size of the working-age population, income tax receipts grew hardly at all in the 1980s. In the 1990s, by contrast, income tax receipts grew at a pace similar to that in the 1950s and 1960s and much faster than in the 1970s or 1980s.

The table also shows current CBO and OMB projections of tax receipts in the years ahead. The OMB projections, which reflect not only the ongoing revenue losses caused by the 2001 tax cut but also the new tax cuts proposed by the President in his 2004 budget, are of particular interest. They show strikingly low rates of growth for federal revenues. Under the President’s budget, income taxes would grow at rates even lower than the very low rates of the 1980s, while total revenues would grow more slowly than in any comparable period of the last five decades. These OMB figures show that the Administration’s own official projections contradict much of its recent rhetoric about strong revenue growth under its tax policies.

<center><img src="http://www.cbpp.org/3-3-03tax-f2.jpg"></center>

.... Conclusion

The notion that tax cuts can pay, or have paid, for themselves is refuted by the President’s Council of Economic Advisers both in its analysis of the 2001 tax cut and in the Economic Report of the President. This notion also is contradicted by the abnormally low rate of revenue growth projected in the President’s budget. And it is rebutted by the long-term budget projections in OMB’s Analytical Perspectives, which show permanent deficits. Finally, history shows that the large reductions in income tax rates in 1981 were followed by abnormally slow growth in income tax receipts, while the increases in income-tax rates enacted in 1990 and 1993 were followed by sizeable growth in income-tax receipts. Leading economists are warning that the tax cuts the Administration is proposing will lose substantial revenue and damage the nation’s long-term fiscal position. The idea that tax cuts can pay for themselves sounds too good to be true because it is too good to be true.