Did the Bush tax cuts work?
 

I know I didn't get any money back since I was in school back then, but has any economists looked into the effect giving tax cuts using borrowed money actually has long term?

While I would say it does help the economy, either people pay off their debts or may choose to buy something they may not have. Did it cause enough stimulus to the economy to generate taxes equal to the stimulus. You have Sales tax going to help the state budgets, income taxes from the workers making the products going to the government, investments in wall street or expanding businesses by the rich (which are taxed when shareholders take profits), and it all sounds great. However, if the tax cuts are greater than the revenue it generated for the government, then we are paying interest on those tax cuts now year after year. I could also ask if this was an artificial action by the government meddling with the free market. Where would we be if the Bush tax cuts failed to pass? The economy for me wasn't that great in 2003-2004, yet my life wouldn't be impacted very much if I had to pay higher taxes now.

I know this will get political, and I was debating putting it over in the Politics area. But, I am trying to look at the numbers and see if we can learn from the past. If someone else would like to make one over there to look into the games they are playing now, feel free. You can ask if there are other taxes that should be lowered or eliminated instead of these tax cuts. And is Obama going to say that the $1 trillion deficit (that may be reduced by paybacks), could have been less if the upper tax cuts expired ($700 billion/10 years I have heard estimated I think).

I'm afraid I don't know of a source that discusses this without involving ideology and politics. My feeling is that the economy was fine after The Bush Tax Cuts went into effect, but it was also fine during the Clinton years of Evil High Taxes. The Bush Tax Cuts didn't prevent the housing bubble or the Great Recession, but they probably didn't cause the GR either. What they do contribute to is the long-run budget deficit. I don't think there's any plan that balances the budget and keeps TBTC intact. If you keep TBTC, you have to have massive cuts to medicare/medicaid, defense, or completely dismantle something like the department of education or department of transportation.

Something else to consider is that these are tax rates on your AGI. When discussing taxes, particularly when discussing taxes from Reagans second term onwards, it's important to remember that the government doesn't just automatically get X money from Y people. A lot of the argument comes from the assumption that everyone in the top 2% is simply losing that tax rate in income while everyone below that is simply getting it all back (and sometimes then some). Even someone making 250,000 a year can easily have a lot of deductions and credits meaning they pay much less than the actual rate in taxes.

And that's just the start of considering whether modern tax rates can "work" or not, it's frankly pointless to compare bush and clinton as we're talking a pretty much negligible difference in comparison to the historical rates of 50% and above from 1932 until basically 1980.

No, they didn't work. Trickle-down economics is not something any serious economist would espouse as being helpful for the vast majority of people.

Tax cuts are only effective (amount of money put back in circulation per dollar government can no longer spend) on low/middle class families.

2% reduced taxes on a 50k/yr family is relatively small, and almost immediately gets spent. However small, the sheer number of families in the Middle class ensure massive amounts of funds reinvested into the economy.

2% reduction on a multimillionaire is a massive sum, with very few people in the category. Unfortunately when someone has 2million in the bank, 100k is almost un-noticable. It doesn't get reinvested like trickle-down economics preaches, it sits in the bank.

So does the tax cuts work? Yes, but there is a BIG separation in effectiveness. That's a big reason I support Obama's pledge to continue the tax cuts to people making below $250k. I'm sorry if you make more than that you have no reason whatsoever to complain in this country.

Do you know the difference in % between the Evil Clinton tax rates and the Bush rates? Might want to Google that.

I think the TBTC might well be designed to make it necessary to dismantle things like Dept of Education and make massive spending cuts in all social programs. If that's true they worked great.

Here is one view from American economist Edmund Phelps:

The false hopes of tax cuts | The Japan Times Online

The bottom line:

1. Tax cuts generally help the rich and can potentially harm the poor.
2. Tax cuts can boost employment, but mostly---if not wholly---on a short-term basis.
3. There is no correlation between unemployment and tax rates on labour.

The top 2% of income earners account for 25% of consumer spending. Consumer spending represents 70% of GDP.

Don't underestimate the power of giving them money to spend to grow the private sector.

I don't think it's plausible that giving the richest 2% an extra few drops in their bucket will amount to much. These people can already afford to spend whatever the want.

if the top 2% was such an economic motor you'd think that we wouldn't be in the mess we're in. they could heroically spend our way out of it.

Clearly, if we suspend TBTCs for the top 2% they will stop creating all of the jobs that they're currently creating. They've been very successful in creating jobs so far ;).

yes. so far the tax-break driven activities of the top 2% has been an awesome success story. who in their right mind would reverse the cuts?

When the likes of the top 2% get a windfall, they don't typically spend it in the same way most people would. While the top 2% account for a good chunk of consumer spending, what are the odds of their spending more on consumer goods as a result of tax cuts?

These 2%ers are not spenders like you and me. They're savers. They're budgeters. Many of them know exactly where every penny goes, and they like to hang onto as much as they can while not sacrificing their lifestyle.

Give a rich man $50,000 in tax cuts and he'll likely invest it in God knows where. Maybe China or India.

Give the average guy $1,000 and he's likely to spend it (and maybe more) on something he's been meaning to get for a while.

Regardless, the impact is short term (if you believe the info in the article I posted above). It's not like the guy is going to keep spending that kind of money.

---------- Post added at 10:58 AM ---------- Previous post was at 10:55 AM ----------

No one. It's folly to think you can eliminate tax cuts or—gasp—raise taxes to deal with a deficit and pay down a runaway debt. No one would recommend that ridiculous course of action.

Just let the rich keep more of their money. That'll fix things. It always has. Just let them be and we'll move toward full employment and if you eliminate enough social programs (who needs those with full employment?), the government can finally pay off their socialist debts.

certainly. because there's no reason to do anything else. no indications of anything but triumph after triumph for neo-liberal thinking.

Census: 1 in 7 Americans live in poverty - Yahoo! News

Now I'm curious to know what the health coverage is like for this 20% of American children who live in poverty.

State Children's Health Insurance Program - Wikipedia, the free encyclopedia

And here is the opposition view on SCHIP
Sinking SCHIP | Michael F. Cannon | Cato Institute: Commentary

Our health care system is a mess currently.

----------------------

As for the 2%... Couldn't they be sitting on the sidelines and not spending their money on purpose as a protest? I mean, I boycott some companies, but you never hear the media say, that millions of Americans aren't shopping someplace because they disagree with the operation and business practices.

And the rich are buying up gold now. I'm not sure what would cause a gold bubble to burst.

Bucatti Veyrons and $100 million mansions don't create jobs. That's where that tax break money is going, not into the economy.

Hey now this is America and everyone has an equal opportunity. All you have to do is work hard and be smart then you too can own that McMansion and Bucatti. Oh, that and the checks in the mail and I won't cum in your mouth.

I by no means am an expert on economics and you will probably all be dumber for having read this post...no seriously you may just want to skip it all together...

I'm not a fan of personal anecdotes to provide evidence but I'll indulge a little bit here because it might make a point for discussion. I know a fair number of wealthy people around here and one thing I've noticed about each and every one of them is they feel if they can't get the maximum benefit from the money they invest into our economy they simply are just going to find other ways to use it (They's taxin mah profits to high!!! I can't afford to hire people and I'm cutting positions left and right because my profits are razor thin kind of stuff). I have no clue what the economical advantage is to the following but it seems they'd rather just sit on the money and collect interest or send it overseas or something where they can (apparently) get more bang for the buck. I don't know how widespread this mentality is but if every wealthy bastard in the US is yanking money out of the economy to protest or avoid high taxes that doesn't seem very beneficial either.

Now I don't necessarily subscribe to the above and its a very broad overview of some of the discussions I've had lately but there you go. So did the Bush tax cuts work? I have no idea, some seem to think so and others don't as best I can gather about taxes it just depends on what your personal political outlook is when it comes to what works and what doesn't.

In my opinion as long as what I'm paying is fair and not crippling my bank account then I'm happy to pay it.

That used to be a real popular thing. I can remember my dad and my uncle talking when I was a kid and I'd always hear them use the phrase "Hey, I pay my taxes!" With that one statement they were saying two things... I'm honest and I pay my fair share. Today it's almost a badge of honor to many to pay little or no taxes regardless of income. Heck I see ads all the time where people claim they owed "X" amount in taxes but they'd called the offices of "Dewey Cheatem and Howe Attorneys at Law." Now they only had to pay 5-10% of what they owed. I always see that and think "great now the rest of us have to pick up your share."

"Hank Hill, tax payer"

It was a pretty common for people to be proud to pay their way in the US but I think that generation (and philosophy) is slowly dying off. People today would never sacrifice comfort for the war effort, they'd never actively participate in local politics, functions or fund raisers and they certainly don't want to sacrifice their lifestyle and personal income to pay taxes. It would almost seem the prevailing mentality these days is "that's not my responsibility" and as long as that's an acceptable way of thinking people will always demand lower taxes.

I get that people want to get the most bang out of their buck and want to decide for themselves how the money they earn is spent. I get people who are upset that taxes are too high and paying them is more of a financial burden then anything else and it is important to work out a balance that both benefits us as a whole while benefiting our wallets as well. However I'll never understand the mentality behind refusing to pay anything (or as little as possible) at all and demanding the folks on the other side of the track take the responsibility.

"Taxes should be paid by the rich!!!"

"NO!!! We invest our money the poor need to pick up the slack!!!"

How about everyone just pays their fair share and we leave it at that?

I don't have a problem with paying my fair share for taxes. However, my fair share does not include taxes for somebody else who isn't paying any taxes. My fair share also does not include paying taxes so that the government can play Robin Hood and give stuff to people who the government thinks don't have enough stuff.


Exactly. There were articles in the news over the past year about how only 46% of the people paid any income tax. That means there's some 54% that aren't paying their fair share.

Is this 46% of the entire population?

I ask this because over 20% of the population are minors, as many as 15% live in poverty, and another 12% or so are seniors. Now factor in the unemployed. Plus, I'm not sure what the numbers are on invalids or people who are otherwise unfit to work.

Oh I agree, would could save a a fortune on what we do pay if we didn't have inept govt officials running bloated out of control social programs (amongst many other things..military anyone?)...I don't even mind the Robin Hood mentality but for god sakes if we are going to do it can we not find the most ass backwards, inefficient way possible to get it done?

Anyway the problem is everyone wants a tax cut and when you do that you only shift the burden somewhere else, they in turn demand a tax cut and suddenly there is nobody left to pay for anything. Instead of constantly shifting the burden from rich to poor to middle class we need to find a way to get everybody paying a fair percentage, but none of that really matters if the government doesn't care to find a way spend our money in the most efficient ways possible.

Then again to ask for efficiency and a fairly balanced tax system might mean that everybody has more responsibility and wont get everything they want when they ask for it...so yeah...that candidate or any party supporting the idea probably isn't getting elected any time soon.

This webpage calculates the percentage of the total number of tax returns, not percentage of the population. The data is a few years old but in line with the 46% quoted this year.

The Tax Foundation - Number of Americans Paying Zero Federal Income Tax Grows to 43.4 Million

Based on your same source, the profile of those 40+ million non-payers looks like this:

• 91% earn less than $19,000 (less than 4% earn more than $40,000)
• 35% are under 25 years old (likely to be students)
• 15% are 55+ years old (at least some of them will be retirees or seniors who work part-time)
• 35% work full time year round (20% work full time less than 50 weeks)
• 46% are part-time workers (20% of them working less than 13 weeks)

So what you have are people making very little money (a vast majority), half of them being either young or old, and nearly half of them working part-time jobs (a fifth of them working fewer than 3 or so months out of the year).

I'm not all that surprised they aren't paying any income tax. How much should the feds be milking from these people?

And here is the problem. We've just crossed from whether or not a given tax rate can mathematically work, an entirely objective matter, to whether or not a given tax rate is moral and what constitutes "fair" taxing.

The latter is a pretty violently divided issue in america because a huge portion of the country still follows, even if only on a subconscious level, our founders extremist beliefs: That someone's prosperity or misfortune in this world is a direct sign of whether they are chosen by god for salvation or eternal damnation and to interfere in that in any way, whether it be taxing those doing well or offering any kind of assistance to those suffering in some way, is a direct interference with gods plan.

Just look at the language people use when talking about this. They talk about fair, moral, right, just, and some people (my classmates at times) will even call it "evil". Talking about what constitutes a "fair" tax isn't a matter of any kind of economics or science, its a religious belief.

I would extend the religion accusation to economics in general. Two opposing economists sound more like a catholic and protestant arguing over scripture than they do scientists.

You shouldn't be surprised by the numbers. But one thing to think about is those tax rates, schedules and % is most of them are a direct result of the Bush Jr. tax cuts that Conservatives love so much. Another thing to consider is it's basically a not factual to say 30, 40 or even 50% of people don't pay taxes. Because the source and the number provided in it are only looking at income tax. When the CBO released a study of analyzed total effective federal tax rates by income, and comes up with the following "Effective fed tax rates"-

Lowest 20 percent………$15,900 ……………………4.3 percent

Second 20 percent…….. $37,400…………………… 9.9 percent

Middle 20 percent……….$58,500………………….. 14.2 percent

Fourth 20 percent……….,$85,200………………….. 17.4 percent

Top 20 percent…………..$231.300…………………..25.5 percent

Top 1 percent…………..$1,558,500………………….31.2 percent

These numbers include things like gas taxes, fees, etc...

So who's paying 0% in fed taxes? Pretty much no one, but it's a good lie and it gets the base fired up.

So why should anybody get to pay 0% in income tax if they have an income? What difference does it make whether they pay other taxes or not? If you want the benefits of a government then you should be contributing to that government if you have an income.

If people are paying fed taxes in any manner they are "contributing to that government." For years the taxes on the fed level have been shifting from income tax to fees and item specific tax. Gas prices and state tax on that gas vary from state to state so I'm not sure there are numbers or studies that could be quoted but for the most part gas costs everyone (in a given area) the same amount. So if you have a family of four making 20K a year the % of their income spent on gas and it's taxes might be 10% or more. Now if you have the same family of four making 250K a year that % might be less then .05%. Does that sound like both families are paying their "fair share?"

This why wealthy people were pushing the idea of a flat tax not so long ago. I remember Dick Army speaking on a Sunday morning news show where he stated something to the effect of "if everyone just paid 2500 a year we could solve our budget problems." Ok, great... if you make 50K or more that would be fine. But if you make 10K a year you were probably struggling before but now you're no longer able to afford even the basics. Even if you worked it as a % and not a set amount. Most flat tax people used the number of 17% if I remember correctly. Most economists said it would more likely be closer to 25%. Either way it works great if you have expendable income... it completely screws those who do not.

I guess it all comes down to what is your definition of "fair share."

Which again comes down to the very-nearly-religious belief that has cropped up in only the last 30 years or so that people with lots of money are pretty much divinely entitled to keeping more of it their income than people that don't have as much.

One of the things that needs to be accounted for in taxing isn't just the flat rate of the tax itself, but what percentage of that brackets income that flat rate is, and how much income the person is left with in an absolute sense. If bill gates paid Reagan's 81% tax rate he'd still have more money than most people would ever be able to spend, but if my friend's family paid a 40% tax rate they wouldn't be able to afford ramen noodles.

To use your specific gas tax example, the purpose of the gas tax was supposed to finance a highway fund. So yes, if both people spent the same amount for gas and paid the same tax, then both are paying their fair share.

Fair share is that everyone pays the same percentage. I don't have a problem with the concept of a flat tax.

I can respect that opinion even though I disagree. Personally I think a flat tax will simply add more to the growing ranks of people who live in poverty. I don't think that helps the US at all.

ok so here's something interesting.

washingtonpost.com

now if the case that ending the bush-cuts would balance the budget is well-argued (and it is) then the quality of the argument and data are really the only elements open to dispute, yes?
no-one can reach into the future and say whether this would turn out as predicted or not.
however, most economic (free-marketeer) conservatives have no problem whatsoever living entirely within metaphysical constructs when it comes to economic matters so long as they get to define which terms are used. so inside conservative private language, making grand statements about the hydraulic nature of the economy is quite the opposite of a problem. it's a way of life.
all of which is to say that if there's a problem with the above, it's either at the level of argument or data, not with the idea that it makes statements about the future that conservatives don't like because they can't control the terms of debate.

conservatives also like to blah blah blah about "balanced budgets" and "fiscal responsibility" and all that stuff.

so how on earth can the right oppose allowing these cuts to expire?
they haven't stimulated economic activity.
they haven't done shit in the present economic situation--you know, the recession that every week or so is declared to be over despite the continuing rise in unemployment, the continuing stagnation of velocities real and symbolic, commodity and capital.

let them expire.

There's two elements to the debt issue. Tax revenues and government spending.

If the the tax cuts are allowed to expire so we can fix the federal debt problem, then Obama's spending needs to be severely cut as well. That means revoking every single one of his stimulus programs and health care plan for starters. Then fix the problem approximately half the population paying no income tax. If we have a national problem, the federal government needs to get serious about it's overspending and everyone needs to participate in paying off the debt.

I think this is oversimplifying the issue of managing the economy during a bad recession. Have a look at the excerpt below from an op-ed piece regarding support for stimulus spending:
Why America must have a fiscal stimulus - Harvard - Belfer Center for Science and International Affairs

The idea that all stimulus spending (deficit spending) is bad is itself a bad idea. I'm not saying this is your absolute position, but you did suggest repealing all stimulus spending. The issue isn't whether stimulus spending should be repealed; I think it should be whether it's being done for the greatest benefit/impact. The points above should be what people pressure the Obama administration about, not the fact he's using stimulus spending at all.

Health care spending is another issue entirely. By saying the U.S. cannot afford some form of universal health care is admitting defeat in the face of being a part of the developed world. But like I said, that's another issue.

I find that people turn tax cuts/stimulus spending into a kind of dichotomy, which I think is the wrong way to go about it. To throw in the heath care issue will only further confuse the matter.

so let me see if i understand this. the republicans are willing to make "fiscal responsibility" mean destroying what the obama administration has tried to do in order to deal with the economic wreckage that republican-inspired economic policy caused rather than allow the ineffectual bush-cuts to expire.

so what that does is allows the republicans to say "we're against obama" which sells better--somewhere---god knows where---than "we are shilling for insurance corporations" or "we are shilling for the koch brothers" or "we are shilling for wall street ceo's who are boo hoo poor me about the idea of having to play more taxes."

so it's got nothing to do with the principles. if fiscal responsibility meant anything substantive, the republicans would have no choice but to allow the cuts to expire.
idiocy.
simple idiocy.

When all is said and done, taxation boils down to personal philosphy. Fruits of one's labor vs. duty of a civil society. There are always going to be examples to support both sides.

While I believe the federal government is way too big, I am not against the income tax - which is a bit of a divergence from my "party". Generally, I support a fair tax rate - somewhere around 12% to 14%, but it really needs to be the number that allows a reasonably sized government to operate. It seems it would be rather easy to calculate: Federal budget as a percentage of the nation's gross earnings(I think I have that right).

That rate applies to everyone. I don't care how many kids you have, what you gave to charity, how much you paid in mortgage interest, etc. The tax form becomes:

1) What was your gross income last year?
2) Send 12% ( or whatever) in.

I'm certain many of you have reviewed the Fair Tax philosophy and have objections to it. I'd be curious to hear those. The only one that I can think of is that 12% to a person making $19,000 is $2280. That would be money they don't currently pay to the government in income tax - and it would be a tough pill. However, that very vocal objection would hold Washington in check for responsible budgeting.

Also, this makes the tax code incredibly easy for everyone and Washington can only fiddle with one number each year. I'm sure I'm missing something, though. :)

I've always looked at it that way too Cimarron and its what I was kind of getting into above about a "fair" tax for everybody. Everyone gives a certain fixed percentage of what they make to the govt and the rest is yours, no shifting the burdens, no tax cuts for one group and not another and no bickering about who has a responsibility to pay what. If you live here you have a responsibility, simple. But not having a huge grasp of economics I'm not sure what the pitfalls of that would be either, other then the rich don't pay a large enough chunk of their income and the poor pay to much. I don't know.

Of course what a fair percentage is is obviously up for debate...then we'll get into a national discussion about what the poor should really owe (anything?)...if the poor gets a pass why does the burden fall on the rich...if it doesn't fall on the rich why should the middle class have the shoulder it...and suddenly its back to politicians pushing tax cuts for their voting base and we start all over again from the beginning with business as usual.

I read today that the average overall tax burden in the U.S. since 1950 is 12%. And this is interesting to me because I took a peek at countries who use a flat-tax system (a bunch of them are in Eastern Europe), and the rates I generally saw were between 24% and 40%, quite a bit higher than 12%. I'm not sure what to make of that at this point.

The immediate objection I have is the shock this would have on the American economy. Going from the current tax system to this 12% for everyone means, generally:

• Poor/underemployed/underpaid workers will lose more of their income;
• Rich/top paid/professional workers will retain more of their income;
• The poor will become more needy in terms of basic necessities, and thus will create pressure on government for social support;
• The increased demand for social support will mean an increased demand for government spending;
• The poor will have less disposable income than ever, which will be bad for the overall economy;
• The wealthy will keep more of their income and will likely invest much of it, but it's not guaranteed the investments will remain in the American economy;
• The scaling of economics means that the tax burden on the poor would be a greater overall economic burden than the tax burden on the rich, despite the flat 12%: $2,280 in taxes paid could be equal to two months' rent, whereas the wealthy would merely keep more of their money than in the past. Consider the concepts of % of income spent on food, shelter, clothing, etc.
• This proposal of a "Fair Tax" would, overall, be a recipe for making the rich richer and the poor poorer.

I'm just brainstorming here. But generally there is a difference in my mind between what's "fair" and what's bearable. And it could be argued that many of those earning less than $20,000 are students, transient workers, or aren't the head of the household, but the fact remains that many in the lower tax brackets would end up with the shock of having less money in their pockets when they didn't have that much to begin with.

I'm not a tax expert or anything, but doesn't the progressive tax system work in way that means everyone pays the same rate for the first $20,000 they make, and the same rate for the next $20,000 (or whatever the bracket is), etc.? Isn't that fair enough in that the guy who makes $250,000 paid the same rate for his first $20,000 as the guy who only made $20,000 the whole year? (Assuming I'm correct about how this works; please someone correct me if I'm wrong.)

I can find articles from economists who oppose the stimulus spending as well. I look at any article on the economy or other social issues coming out of Harvard as having a liberal bias unless definitively proven otherwise.

The government should not be meddling in the economy at all. Let supply and demand drive the market. Obama's meddling in the auto market and the housing market illustrate this. All Obama did was succeed in borrowing against future sales at taxpayer expense. As soon as cash for clunkers ended, sales of new cars dropped. As soon as Obama's homebuyer's tax credit ended, housing sales dropped.

One other thing Obama did accomplish with his cash for clunkers program was to increase the price of used cars, and increase the expenses for lower income people who needed to buy cars, thanks to his idiotic requirement that the clunkers turned in be destroyed.

---------- Post added at 07:37 PM ---------- Previous post was at 07:32 PM ----------

I think the rates are actually somewhat variable based on what deductions a person can claim to lower his adjusted gross income, which is the income used in calculating taxes, and by tax credits which generally are only given to lower income people.

But that aside, there is no justification for taxing someones second $20,000 in income at a higher rate than his first $20,000 in income other than the liberal's insistence on wealth redistribution by taxation. A person works at least as hard to get to a $40,000 income as they do to get to a $20,000 income level.

---------- Post added at 07:50 PM ---------- Previous post was at 07:37 PM ----------

You should note that I wrote that if the Bush tax cuts were allowed to expire because reducing the debt is so important (which it is) then Obama's stimulus and health care plans should be rescinded for the same reason.

Besides, the Democrats also had a hand in the economic crash with their insistence that loan requirements be relaxed so that people of lower income, who really had no business obtaining a mortgage could obtain one. That also played a part in the housing bubble with more buyers available to buy a limited resource (housing) and pushing home prices up. The logical outcome of that fiasco was that of course the lower income people didn't have the income to afford their mortgage and they ended up in foreclosure.

Flat taxes, as much as they appear to be, are not fair taxes.

A progressive tax is much fairer. The one we pay here looks like this. The tax form I fill out is one page long. There are very (very!) few deductions that can be made.


On the first.....$20,000.....0%.........$0
On the next.....$10,000.....3.5%.....$350
On the first.....$30,000..................$350
On the next.....$10,000.....5.5%.....$550
On the first.....$40,000..................$900
On the next.....$40,000.....8.5%.....$3,400
On the first.....$80,000..................$4,300
On the next.....$80,000.....14%......$11,200
On the first.....$160,000................$15,500
On the next.....$160,000.....17%....$27,200
On the first.....$320,000................$42,700
Above............$320,000.....20%

Yes, those who make more pay more. Amazingly, this country runs a surplus and has no debt. It's GDP is also tiny compared to the US and has a high percentage of military spending as part of it's GDP. It's still apples and oranges but there it is...

So in other words you refuse to believe any citations until someone proves to you they are not [s]a witch[/s] liberally biased? That sounds more like a case of insisting that because you disagree with it then it must be wrong.


Or maybe we could stop blowing more on our military than the next two highest spenders combined and dismantle Bush Jr's Terrorist Mood Ring and be able to pay for all of this quite readily.

I invite you to find them. However, I would like to hear your opinion on how the author suggests stimulus spending should be managed. I know you are opposed to stimulus spending; if you don't want to comment on the aspects of it, at least comment on why you'd disagree with stimulus spending of this kind.

If the American government stopped "meddling" with their economy, it would be at the mercy of global markets and it would be taken advantage of. America would be the only advanced economy that isn't a mixed economy, and if you think that's a good idea, you're mistaken, because government "meddling" includes such protective measures as tariffs, quotas, and embargoes. (That's right, even the embargo against Cuba would come to an end.) And this is just one aspect.

This would mean the U.S. would cede much economic and political power to the global market, which consists of powerful economies that are actively managed mixed economies (which, historically are the most stable in the history of the world).

I'm not sure that's what you mean to say. There is no such thing as a purely free market. If you think America can compete with a purely free market, I don't know where you'd get that idea. For example, the average American worker is currently overpriced in the global market by a long shot. Have you ever seen the wholesale collapse of an agricultural industry? What are you thinking, exactly? (By the way, I think the U.S. agricultural industry would probably be saved in this scenario by opening up the borders, especially to Mexicans. Without any labour restrictions in the economy, you'd get some cheaper workers that way, and a lot of them.)

I can't comment much on these programs because I don't know much about them. However, on the surface they've always seemed to me to be short-term measures to prevent deep damage to the industries. Did Cash for Clunkers, despite its effect on the used market, get domestic manufacturers to loosen up their inventories, which would in turn lead them to fire up their plants to make more? And although the homebuyer's tax credit was short-term, did people not use it to buy homes? Does this not in turn lead to further sales in the form of home-based consumer goods and services?

Well, another way to look at it is that the first $20,000 is taxed lower.

That isn't really true all the time.

I would like to see the facts behind that. And why only certain cities have been hit much worse than others. And it's namely cities were the average price of a new home was well outside the range of even a middle class family, let alone a poor one.

Now, you can say that the Democrats good intentions for having easier credit available for lower income families and Republican reduced regulations helped home flippers and greedy real estate investors bid up the market in cities like Miami, Las Vegas, Phoenix... It was an artificial demand from people who had no intention of ever living in the home that caused the problem.

I don't see the gain in pointing fingers at either party for the mess that is (was) the US financial system. You fucked yourselves by deregulating the system. Both parties had various stabs at doing this as part of a "let the market decide" kind of thinking that has been prevalent in US thought for some time. It isn't the parties but rather the overall mind set in which both parties operated that brought this about.

America needs less finger pointing and more rolling up of sleeves.

Really. To many of us in the rest of the world the US is looking increasingly like it is devolving into a group of school kids fighting over lunch money. Get your shit together. It's embarrassing.

Here's a couple articles about economists who disagree with the stimulus programs

Economists: Stimulus Not Working, Obama Must Rein in Spending - Peter Roff (usnews.com)

Peter Morici: Struggling Americans know more than arrogant advisers | Contributors | projo.com | The Providence Journal

As to why I'm opposed to Obama's stimulus programs, he borrowed hundreds of billions of dollars to artificially inflate the economy. Just the two examples I've referenced, cash for clunkers and the new home buyer's credit borrowed against future sales to create a temporary bump in the economy, with subsequent slump in sales after the programs ended. So the taxpayers paid for a nice discount to people who took advantage of the programs for no benefit.

My point was government subsidies. That means that the company is having part of the price of his products paid for by the taxpayer. The company should succeed or fail on its own merits.

If GM and Chrysler couldn't manage their business to remain profitable, then they deserve to go out of business. If the UAW was collectively such a group of greedy people who were unwilling to recognize they had priced themselves out of the labor market, then they collectively deserve to lose their jobs.

If people selling their homes has so inflated the market that they priced themselves out of the market, then they, not the taxpayers should eat that loss.

If people were dumb enough to sign a mortgage with terms they couldn't afford, they should suffer the consequences of that mistake, not the taxpayers. Next time maybe they will read before signing.

We know. And most of us are ashamed.

---------- Post added at 08:22 PM ---------- Previous post was at 08:18 PM ----------

So fucking myopic. It's like a ten-year-old's grasp of the economy.

It strikes me as the equivalent of treating a disease by telling the cells that they should just man-up. If they aren't strong enough to survive, then fuck 'em. Nevermind that it's your fucking body.

Nicely put, filtherton.

Yeah but there is something to be said for cutting off a gangrenous finger the save the hand too....or something. The whole issue of government bail outs and what not strikes me as a per issue thing no one solution is inherently right and any responsible government should explore any and all available options to bring about the best result for the issue at hand.

There is something to be said for not abolishing risk/responsibility altogether and letting the old and broken die off to be replaced by something better, but it isn't nor should it be the only solution we turn to for every crisis.

Okay, let's assume, then, that Obama's handling of the stimulus spending was, for the most part, bad. (However, the only true way to know this is to wait until all of the money has run through the system---and, as an aside, the Canadian government's handling of stimulus spending was more moderate and therefore more manageable and likely more effective...time will tell.) This brings us to: what do we do now? People are calling for the government to reign in spending. That's probably a good idea. I'm not sure what this deal is with stimulus spending made "permanent," but stimulus spending is supposed to be temporary. Maybe start by making sure it's temporary.

Of course, the government could also look at ways to trim the budget. I know that people are concerned about "pork," so money could be saved there, but it's my understanding that it isn't all that much, comparatively.

The other ways to trim the budget will need to be weighed seriously. With an aging population, cutting things like medicare or pensions would be disastrous. I think that much of any savings should come from the defense budget, which remains to be monstrous and at levels comparable to WWII. Save. money. there. Start by ending operations in Iraq and Afghanistan. Play it touch-and-go from there, there's a lot to be done.

Beyond that, cutting too much of any other spending would most likely hurt those in lower income levels. This is a terrible thing to do during a recession, and would serve to stall the recovery.

That said, I don't think there is much else to save. Most of the savings would come from ending the stimulus and cutting from the defense budget. A big picture reminder: government spending remains low as a percentage of GDP (below 25%). In real terms, the U.S. spending at the moment isn't "out of control" or "breakneck." That there was a spike in spending during the biggest economic contraction since the Great Depression isn't a surprise, and shouldn't be to anyone, no matter how much you want to criticize it.

So spending can be reigned in, but whether deficits can be eliminated depends on the topic of this thread: the expiry of the Bush tax cuts. They should expire. The tax revenues are needed to help cover the budget and eliminate the deficit. Furthermore, increasing taxes should be considered because....um....there's a pretty big debt to pay down. If you disagree with raising taxes for this purpose, then I can only assume you're not too interested in paying down the debt, at least not in the current environment----not for at least 10 years or so.

If you're going to be a free-marketer, you shouldn't cherry-pick your government "meddling." It makes you look like you're open to it. If you want to rid of subsidies, then you should be ridding of tariffs, quotas, and embargoes as well. If you don't, you're economic philosophy is that of a conflicted nationalistic nature: You're not okay with the government preventing domestic prices spiking and industries collapsing (no subsidies), but you're totally okay with the government increasing the prices of foreign goods by adding to their value (tariffs) and limiting how many can be sold (quotas). Embargoes are often political, but a free market is a free market. American companies should be allowed to do business with Cuba. To have a government say no you can't do business because of political reasons hints as socialism, as it is a government-directed economic measure (just like subsidies, tariffs, and quotas).

So...why get rid of subsidies but not the others? Would you prefer the government only direct economic activity where you think it's a good fit? You know that's called a mixed economy, right? Capitalism and socialism?

It might still happen. I think Japan and China (and maybe India) are going to take over the U.S. auto market over the next 20 or 30 years. The government may be just delaying the inevitable, but at least the blow will be softer than if they just let the thing collapse to foreign competitors. It's more gradual this way.

I think the industry needs tighter regulation. Reagan ruined much of America's economic stability with his radical policies. I sincerely hope Obama and those who come after him instill some sense and responsibility in the financial sector.

Except that for this particular analogy, you have to keep the finger after you cut it off. Perhaps we're stretching it too far.

I agree with you that there is no one size fits all solution. However, the idea that we should let entire sectors of our economy fail based on a vague notion of economic Darwinism doesn't, to me, seem like the stuff of good economic planning.

Right now, the domestic auto industry seems to be making a bit of a comeback. If the "let 'em die" folks had there way, we'd instead have a sucking chest wound where the domestic auto industry used to be. Odd that these are some of the same folks who are complaining about Obama's performance with respect to unemployment. I would expect that in their world, periods of high unemployment would be a sign that the economy is working like it should- you know, crushing the unworthy, creative destruction, etc.

Sure, I mean I'm not an expert on this stuff by any means (I'm sure everyone can tell). I agree I think the auto industry was simply to big and I'm not sure that somebody could have just come along, set up shop and filled in the hole (I'm sure the same can be said for the banks as well). But isn't that the biggest problem of all? Allowing industries or companies to grow so large that their failure essentially holds the nations economy hostage? I would think a healthy market would have enough competition that someone else's failure should turn into another's gain...but I suppose that's why theories don't always apply to real life.

The biggest concern I have in all of this is weather or not popping up these failed sectors is just temporary solution and a larger crisis is looming down the road due to industries that are so diseased they simply can't be fixed. Is it possible that taking a hit now and allowing the industry to rebuild with a much sturdier foundation going to be better for all of us in the long run? Perhaps now that we've gotten them a little more stable and they won't all collapse at once it might not be the worst thing to let a little economic Darwinism to take place. I don't know, just throwing it out there.

Best of both theories! Awesome! :)

Yeah, let's keep wasting tax payer's money bailing out the same sectors over and over again because that works so well and nobody has to learn any lessons.

Companies that build products nobody wants like GM and Chrysler did deserve to go out of business. Companies that replace them will act as customers to those companies that formerly supplied GM and Chrysler

---------- Post added at 05:47 AM ---------- Previous post was at 05:26 AM ----------

What we do now is stop Obama's idiocy of proposing more spending programs like the $150 billion or more he proposed in the last few weeks. Last year's spending hasn't fixed much of anything, so let's not do it again. Taxpayers are going to have to pay this money back, with interest, so taxes are going to go up because of this.

[As I've said before, aggressively cut government spending in all agencies including the military. Fund the military to the point where it's an effective defense force for the US and not the military for the rest of the world.

Entitlement programs need to be cut too. Social Security is a bit of a problem since so many people have effectively invested their retirement savings in it, being forced to do so. However there's stupidity in that program too. I just found out about a "spouse's benefit" where if a husband or wife doesn't earn enough credits to earn Social Security on their own, they get to file an additional claim for half the amount their spouse gets. Something for nothing.Another liberal giveaway program. I happen to benefit from this program since my wife hasn't worked that many years and it's now impossible for her to get enough credits, but I still think this is stupid.

I think paying off the national debt is important. I personally think debt is stupid as a regular course of business. But if we are going to raise taxes to pay of the debt, then Obama also has to give up his programs that are increasing the debt.

The way things are going, it looks quite likely that in 2011, he will be doing exactly that, and be looking for a job in 2012.

if paying down the national debt is of some importance to you, dogzilla, presumably because it has some meaning, then you obviously oppose extending the bush tax cuts, correct?


shadow--neo-liberalism is what free-marketeer ideology is called most everywhere except the united states. it works better as a historical image that points back to classical political economy and bourgeois liberalism, a re-tread tire made of late 18th-early 19th century material, passed through hayek (without the intelligence) and von mises (about whom the less said the better) through the epic frauds of recent times (uncle milty anyone?). and in other places it operates independently of the repellent social politics particular to the american right.

i also like using the term because it links american reactionary economic ideas to a considerable body of critique of those reactionary ideas---much of which originates outside the united states. and for a while, this ideology was so dominant in the states that it didn't even have a name. so it is that we were served real well by the corporate "free press." but i digress.

If the express purpose of allowing the tax cuts to expire is to take the additional tax revenue and pay down the federal debt, then yes, as long as Obama's stimulus programs and health care are canceled or rescinded and not one penny of the new tax revenue funds any of Obama's giveaways or social programs.

If the purpose of allowing the tax cuts to expire is so that Obama has more money to spend, then no I do not support allowing them to expire/

Clear?

except that the projections are that rescinding the tax cuts would have that effect anyway, even with the initiatives that you oppose in place. so it seems to me that even on your own terms, tax cuts like these are simply bad policy.

unless of course you really don't care about this beyond using it as a talking point and what you're really after is your imaginary obama. you know, the "socialist" one.

The Bush tax cuts worked. When I got a $600 check related to the initial tax cut, I used it and some of my money and reinvested in my small business. I was able to buy a higher speed copier/printer/scanner. As a result an employee I had at the time was able to learn and devote more time to higher level customer service work. My customers got better service, my business grew, my employee learned new skills, and I paid him more money.

The above is anecdotal and can be dismissed very easily, but anyone who has actually run a business knows how, "trickle-down" works. But everyone else can simply look at the logic in the numbers:

If a business owner has a legitimate after tax profit margin of 10%, that means 90% went to benefit someone else - or if the business grosses $1 million, $900,000 benefits others. If the business owner doubles in gross to $2 million, $1.8 goes to the benefit of others.

Often in order for a person to double their gross they have to reinvest in the business. So, if out of the $100,000 net to the business owner consumes the money - there is no reinvestment. If a tax cut allow for reinvestment, and business growth for every $1 of that growth $.90 "trickles down", up, around, or some where other than to the business owner.

If the business owner consumes the tax cut, not reinvesting the money still benefits others. If the business owner saves the tax cut, it goes into a bank and the bank lends the money to others, still benefiting others.

No matter how you logically look at "trickle down" works. It takes more than people repeatedly saying it does not. Every time I encounter a post like the above, I can eventually present a supply side argument where there is no meaningful response.

How do you explain the fact that the average real earnings remained virtually flat over the same period (the main exception is a highly educated minority)? How do you explain the growing economic disparity under Bush? People relying on home equity to do their spending? The growing poverty rate? The ultimate economic downturn? Is this due to factors outstripping the benefit of the wealth trickling down?

I don't doubt that things like you explained happen, and people benefit. But the net effect is that most people aren't really seeing it.

Ace as I said before your theory relies on an inherently fallacious basis: It needs perfect people.

YOU may have decided to pay your employees more and provide better service... because you're just that nice a guy. But in the real world, as virtually every other business proves, most of the time what's going to happen is that the guys on top will take the extra money and just pocket it.

I think better measure would be based on standard of living, or the net value of the goods and services people obtain or can afford. Earnings are important, but for example and I have used this in the past, if a family making $50,000 has a child that obtains a publicly funded scholarship to a university worth $100,000, what are there real earnings compared to the family making $250,000 or more that can not qualify because of income? Then complicating the matter, factor in the relative changes over the time frame in question. when we see things like education costs, medical cost increasing at a rate higher than the inflation rate and some receive public benefits in these areas and others don't, that is not factored into real earnings rates.

For business owners paying for employee benefits or even workers compensation premiums, those costs increase but are not received directly by employees. Looking at real wage changes has value, but there are some issues with the measure.

If my income is flat, but I can get more and better stuff with my income - that is a good thing.

The trend started before Bush, but in a word - education. We are becoming a nation of two classes, those with a good education and access to information and those who are not educated and who do not have access to information.

Short sighted, greed - easy money corrupted a lot of people. The problem could have been avoided. the Fed's easy money policy contributed to the excess.

Government sets the poverty rate. Even peole in "poverty" in this nation live well relative to what some consider real poverty in other parts of the world. Everyone has access to food, water, shelter (children, elderly, disabled), education, clothing, medical care. I think technically, I was in "poverty" in 2009 and 2010 based on my income given business conditions - I lost money. But, I don't think I am in poverty.

A normal business cycle made worse by the housing crisis and then the panic created by the Obama administration.


No. There are people who have what it takes to create real wealth, and there are many more who do not. There is sort of a symbiotic relationship between the two. People who can change the world through innovation, often get filthy rich, but they support real living standard improvements for the rest of us. If we just look at human history we see so many examples, I don't understand how people say "trickle down" is not real. Perhaps there is one of those semantic issues blocking an understand - I clearly see what I see and can not understand why others can not.

---------- Post added at 01:37 PM ---------- Previous post was at 01:23 PM ----------

O.k., think of a pack of wolves. You have the strong and most healthy, you have the pups, then you have those that are not as strong and healthy. when times are bad, every wolf suffers in the pack. In better times the strong eat first to gain/maintain strength and an ability to hunt so every member of the pack can benefit. Trickle down. Without the strong the weak will suffer or die. Without the strong the opportunity for new life diminishes.

Many would not say I am a "nice" guy, but my mother and now my wife loves me. I had a dog once...:oogle:, oh never mind.

That aside, when I train my employee, he gets marketable skills and experience, that have value to my competitors and others. If I don't treat my employees well, and pay them fairlyl - they can leave. I can not operate based on trying to be "nice", perhaps when I get Oprah kind of money, I will become "nice", but until then... I find it so ironic that guys like Buffet and Gates are now trying to be all charitable and stuff - this after being heartless business people. Then they want others to pay more taxes, but they ain't giving their money to the government!:rolleyes:

Ace, I think you're playing a shell game.

For starters, when looking at the Bush years and whether his tax cuts saw wealth trickle down, you want to consider the small set of people who had university-aged children who actually earned a scholarship and actually attend a university. And you want to consider medical benefits. What does that have to do with tax cuts?

While it's good to have the increases in these things covered, let's not forget that the CPI increased over the same period at a reasonable rate compared to a desired 2% inflationary rate. Regardless, if your wages are flat and the CPI is creeping upwards, you should realize that the two are connected. During the Bush tax cuts, the average American did not likely see a substantial increase in living standards.

Under Bush, only a small minority of well-educated saw real income increases. Under the same period, the poverty rate jumped about 2 percentage points.

Explain to me again how is the wealth trickling down? I don't get it, nor see it.

Okay, draw less than $20,000 from your business or any other assets year over year. Now on top of that if your spouse or any children don't earn anything at all, and this continues indefinitely, would you then consider yourself in poverty? Would you be comfortable taking care of your wife and child with an income below $20,000 year to year? Would you feel stable? Secure? Well, under Bush, an increasing number of people were in that position. Where is the wealth that was supposed to trickle down?

I think it's either a semantic issue, the little shell game you're playing, or possibly your metaphysical approach to economics. I don't doubt that a select set of the filthy rich had a hand in increasing the quality of life for many, but they are not gods; they had a lot of human help. It's the help that is the concern. Those who are getting filthy rich through companies like McDonald's and Walmart are still responsible for the transient McJobs that don't pay livable wages. But where would the wealth be if it weren't for them and for the Asian workers who make the Happy Meal toys and many of the wonderful products that Walmart stocks on their shelves? Thanks to these business models, it's assumed that these workers aren't working for any level of comfort or even permanently. I'm not even sure it's assumed they're working to support a family, when many of them are. And this is just two examples.

Is the wealth trickling down to them? Have their lives improved under the Bush tax cuts? Why are the poverty rates increasing?

When you're talking about trickle-down economics, you're actually talking about technology, and it's often the case that government has to invest in it in order for the poor to gain access to it. It's not like the rich got rich by giving things away. And again, wealth doesn't come from nowhere. The rich don't create wealth, they corral it.

If a person can take a $1 million gross income per year business and turn it into a $2 million gross income business in terms of real net business activity, do we (society) want him to do that? Yes, or no? Why or why not.

I say yes, because that additional gross income does more to benefit others than it does for the business owners bottom line.

If there are people who can generate real economic growth do we want to create disincentives for them to do that (not talking about an allocation of the real costs to society because of the business activity - which is a fair allocation in my view)? Yes or no? Why or why not?

I say no, because real economic growth is beneficial to common standard of living of everyone. if you have a goose that lays golden eggs, you take care of that goose.

Are excessive tax rates a disincentive? Yes or no? Why or why not?

I say yes. At some point a rich person or anyone will redirect activity to non-productive areas if the disincentives to productive activity is too high.

The notion that human are like bees, in that bees are programed to do what they do, they will make honey - and they will make it regardless of how much the beekeeper takes. People shut down, they would have to be forced to produce a surplus of anything for others without fair compensation. There is clearly a hypothetical marginal tax rate where that happens. Tax cuts above that point will lead to greater economic activity - tax cuts below that point will not make much difference in economic activity.

I can remember a summer construction job I had while in college. There was a two week period where we worked 12 hour days, for 12 out of the 14 days. There was a point where we got double time or 2x our normal hourly rate - After taxes, union dues (yes I was in a union once), and expenses - the effort was not worth it, and we swore never to do it again. In fact the older guys, called us idiots for working so hard - we got the message. I bet even you guys have a point, where you would just shut it down - so why don't you think rich people do too?

ace, I think the issue for many amongst the rich is that it's better to make $10 million at the top marginal tax rate than it is to make only $100,000, albeit at a lower tax rate.

I mean, you get guys like Warren Buffett who think the rich should be taxed more. He's pretty rich, ain't he?

Anyway, I think we're talking mainly about progressive taxation here, not overall operating expenses and other costs of doing business, or even capital gains taxes or estate taxes. The top income tax rate is 35%. This means what you make above $375,000 is taxed the same rate, regardless whether it's another $375,000 or $3.75 million.

Also, capital gains are capital gains; it's not like investors are going to stop investing because they can't keep their 3 to 5% tax cut every time they take a profit.

If true why do people like Buffet and Gates pay themselves trivial amounts compared to their real wealth. These men through most of there tenure among the wealthiest people in the world could have paid themselves $10 million or more in salary but did not. They hold their wealth in unrealized capital gains and don't pay dividends (MSFT just started). Capital gains are taxed at a lower rate, salary and dividends are taxed at a much higher rate. To a "poor" person what you wrote is true - but if a "poor" got to certain income levels, there behaviors would fall into a pattern followed by most other people in that same wealth category.

He wants you taxed more. He avoids paying taxes.

The real marginal tax rate can be much higher than 35%. People in high marginal brackets tend to hire expensive consultants to help get into a lower real marginal tax rate.

Even looking into this legal tax avoidance business, don't you agree that it is unproductive in terms of real economic activity. Wouldn't society be better off if these minds and resources worked on activities other than saving "rich" people tax dollars? At lower rates these resource would be employed doing other things, potentially much more productive things.

You suspend logic. Every decision made has a pivot point, where a yes becomes no or a no becomes yes. 1%, 3%, 5% can make a measurable difference in some cases.

It should always be assumed that those in the know will maximize their tax efficiency. This is not a good defense for tax cuts.

He maximized his tax efficiency. He's not an idiot, and I won't criticize him for it. I'd likely attempt the same thing were I in his shoes. However, there are ways to tax income in such a way where the rich end up paying more regardless, if that were the goal. You can only be so tax efficient.

I doubt lower taxes for the rich will destroy the "legal tax avoidance business." I sincerely doubt it. But I do agree that these minds and resources could be better spent. But, alas, the rich want to maximize their net worth. Again, I won't criticize them for doing that.

Oh, I assure you I did no such thing. I didn't say anything about how expired tax cuts on capital gains taxes would affect investing activity; I merely stated that the difference in taxation wouldn't stop many people from investing—period. Investors need to take many things into account even beyond taxes: another one is fees. Investors will always work with what stands in their way to make a profit. Reverting to a capital gains tax rate 3 to 5% higher than it was over the past several years won't stop people from buying and selling. They'll just need to work harder and make sounder decisions to maintain their desired ROI.

So, again, reverting to the previous tax rates won't stop them from investing.

There's a government agency you can send as much money as you like to help pay down the federal debt. Something like Office of the Public Debt which I think is these guys Bureau of the Public Debt: Homepage.

So why haven't Warren and all the other wealthy liberals and socialists who think people's incomes should be redistributed sent all their surplus income there as a public example of putting their money where their mouth is? Could they be just another bunch of liberal hypocrites?

He's talking about the rich as a class of people, not him as an individual. He just happens to be a part of that class. He wouldn't suggest higher taxes if he weren't prepared to deal with the extra burden.

He doesn't need tax rates raised in order for him to send the government his surplus money. He can do that today.

Until he and the other elite liberals and socialists do likewise, they have no more credibility than liberal loudmouths like Michael Moore, i.e. no credibility.

Okay, you don't get it.

$47 billion: Warren Buffett's net worth
$54 trillion: The net worth of the wealthiest 25% of American households
$1.06 trillion: The anticipated income tax receipts for 2010
$3.55 trillion: the 2010 federal budget
$1.17 trillion: anticipated 2010 deficit
$14 trillion: estimated public debt
0.3%: the percentage of Buffett's fortune compared to the public debt
386%: the percentage of the fortune of the wealthiest 25% compared to the public debt


A little quick math will tell you that the wealthiest 25% of Americans as a group hold more than 1,000 times the wealth as Warren Buffett, and that even if Buffett donated his entire fortune to the federal government, it would barely put a dent the deficit let alone touch the debt. It would also hobble his ability to continue to generate wealth.

When Buffett talks about taxing the rich more, he's talking about an entire class worth trillions and over the long term. To assume he should "put his money where his mouth is" by donating his fortune as an individual is missing the point. He suggests that America would be better off if more tax revenue were generated from the wealthiest of Americans.

Sadly the US has become a nation "let someone else pay for it or do it." Everything from "we need more prisons!" "Build it in my neighborhood? Fuck that!" "Go to war? In two countries? Hell yes! Lets go get those bastards!" "Raise my taxes to pay for it or send my kid(s) to Iraq?" "Fuck that." I want mine, I got mine and fuck you seems to be the philosophy of a lot of people. The thought that a rising tide lifts all boats is long forgotten.

Maybe what we need to do is just cut out all the noise and let those who support things like national health care, the stimulus etc... pay for it and receive the benefits. And all those folks who supported the wars and the trillion or so dollars it's cost or want to build 700 miles of border walls and spend billions finding and deporting millions of illegals can pay those bills. Want nationalized health care? Ok, here's the bill for your share. Want to continue to fight the war in Afghanistan and pay to build schools there? Ok, here's the bill for your share. Everyone would just pay for those things they support and the budget would be balanced. I'm sure those numbers add up the same way as having Buffet pay off the national debt. But let's just have everyone put their money where their mouth is, if nothing else maybe there would be less shouting.

I think there are a lot of great points here, and overall, I think the tax cuts were probably effective in limiting and postponing the economic meltdown. Whether or not you agree with tax cuts or the implications, there was no stopping the meltdown. The 20 people in the world that really understood the mortgage backed securities didn't invest in them and are probably wealthier than ever. But if we hadn't had that increased spending power throughout that mess, more businesses would have went out of business and more people would have been unemployed!

Minor in Economics.....

good question