Did the tax cut work or is this something else? Federal Deficit Smaller - Tilted Forum Project Discussion Community

Mondak · 05-03-2004, 08:22 PM

Link to article:
http://www.washingtonpost.com/wp-dyn...-2004May3.html

Quote:

Federal Deficit Likely to Narrow By $100 Billion
Tax Receipts Pare Borrowing
By Jonathan Weisman
Washington Post Staff Writer
Tuesday, May 4, 2004; Page E01

Smaller-than-expected tax refunds and rising individual tax receipts will pare back federal borrowing significantly for the first half of this year and could reduce the $521 billion deficit projected for the fiscal year by as much as $100 billion, Treasury and congressional budget officials said yesterday.

The Treasury Department's borrowing estimates may prove to be more good news for President Bush on the economic front, as opponents attempt to make his fiscal stewardship a campaign issue. The $184 billion the government is now expected to borrow through June is a 27 percent improvement from Treasury's February projection of $252 billion, the department said.

G. William Hoagland, a senior economic aide to Senate Majority Leader Bill Frist (R-Tenn.), said he dashed off a memo to GOP leadership predicting the 2004 deficit could be trimmed to $420 billion, a record in dollar terms but considerably lower than the White House's $521 billion projection.

"This is better than what everybody expected," Hoagland said.

Democratic and Republican budget aides in the House warned yesterday that it was too early to reach conclusions. Spending could still take an unexpected jump because of surging hostilities in Iraq. The improving federal borrowing picture, they said, may just be bringing the administration's $521 billion deficit forecast more into line with the $477 billion deficit predicted by the nonpartisan Congressional Budget Office, Capitol Hill's official budget scorekeeper.

Individual disappointments last month could prove to be to the government's fiscal advantage. Earlier this year, Bush had boasted that this year's average income tax refund would be $300 larger than it would have been without last year's tax cut. But refunds have fallen well short of that mark. Treasury officials also cited lower-than-expected government spending and higher payroll and individual income taxes as reasons that less borrowing may be needed.

All of this indicates that the improving economy is beginning to slow a three-year slide in overall tax receipts.

"The 5.5 percent average [economic growth] pace in the latest three quarters was the largest since 1984," said Mark J. Warshawsky, assistant Treasury secretary for economic policy, in a statement to the department's borrowing advisory committee. "With the assistance of tax cuts, growth has become self-sustaining."

An improving picture could strengthen the political hands of the president and House Republican leaders as they wrangle with the Senate over more tax cuts and a budget blueprint for the fiscal year that begins Oct. 1. For weeks, the negotiations have been stalled, with a majority of the Senate demanding new procedural hurdles for further tax cutting and the House and White House steadfastly refusing.

The latest compromise would mandate that tax cuts over the next three years be offset by equal tax increases or spending cuts, unless 60 Senate votes could be mustered to set the restriction aside. However, under the compromise being floated, some tax cuts -- $92 billion worth in 2005 -- would be exempted from that restriction under Congress's annual budget resolution.

So far, House tax cutters have been undaunted by federal red ink. Last week, lawmakers in both parties voted overwhelmingly to make permanent Bush's tax cuts for married couples, a bill that would cost the Treasury $105 billion over 10 years. For the next three weeks, the House has scheduled successive votes on more tax cuts totaling hundreds of billions of dollars.

© 2004 The Washington Post Company

So I am wondering what this was. It seems the economy must be improving for this to hold true. Is the economy turning around on it's own or can you attribute this to the tax cuts? I know what the administration will say.

When I saw the final tax cut that was passed, I thought it was too small to make a difference. I am a person who truely believes that you can cut taxes and make overall tax receipts go up. In the case of the Bush tax cuts, I just did not think they were enough to force investments that would expand the economy. Personally, I wish the cuts were accompanied by cuts in spending (outside of security and defense which are not realistic at this time). That would have a nice effect on the deficit.

What are your thoughts? What do you think of the tax cuts and their effect on tax receipts? At what point is a deficit too big?

Mojo_PeiPei · 05-03-2004, 08:33 PM

Tough situation, no deficit would be good, but it isn't necessarily a practical reality. We are still recovering from one of the worst recessions in the history of our country, you can't expect their to be no deficit, nor can you expect their to be a quick fix with a shaky economy.

I think the Bush tax cuts and refunds worked and are continuing to work, I think they were just what the doctor ordered given the state of the economy. But you're right when you say the spending needs to be cut, that is perhaps the biggest issue. But like I said first things first, the economy is getting better everyday, we'll get to the deficit spending when we can actually do something with it.

Mondak · 05-03-2004, 08:45 PM

As an aside - I submitted this to Fark a few minutes ago. Here was my headline:

Bush's tax plan reduces deficit by $100 Large. Mortimer pays Randolph One Dollar.

I have never had one picked. I am sure something stupid will get in instead. I made myself laugh though. . .

yournamehere · 05-03-2004, 09:12 PM

"Smaller-than-expected tax refunds and rising individual tax receipts will . . . . reduce the $521 billion deficit projected for the fiscal year by as much as $100 billion.

Exactly what here even suggests a tax cut? They don't even bother with the "refund" you have to give back the next April any more.

Speaking for myself (and my wife) - we got the same $170 refund as last year. However, we had $2,000 more in medical costs that were deductible this year - otherwise, we would have owed big time.

Just out of curiosity, has anyone on this board making less than $250K had a tax cut in the last 4 years? I know I haven't - except for the aforementioned $600 "loan" we got in 2001 - and had to pay back in 2002.

smooth · 05-03-2004, 09:55 PM

I didn't get anything. I had to pay out the nose, so did all of my friends and acquantances. Neither me, my wife, nor my mother recieved any DMV return, either (California).

I am also curious whether this new forecast includes the war expenditures. The last ones didn't and they also were "revised" upwards after the media cloud swept through. Let's just see if this new forecast survives the spin cycle before making any hard and fast conclusions.

onetime2 · 05-04-2004, 04:24 AM

Quote:

Originally posted by Mojo_PeiPei
We are still recovering from one of the worst recessions in the history of our country, you can't expect their to be no deficit, nor can you expect their to be a quick fix with a shaky economy.

Ummm, no not even close. The "recession" we were in was among the mildest in the history of our country. There were three quarters of negative growth with two of those negative quarters being less than a 1% decline in the economy.

The economy has been "recovered" for a couple of years now.

As far as the article, of course economic growth leads to more tax revenue. Whether the deficit will be lower than anticipated will depend heavily on what other revisions to the budget occur.

pan6467 · 05-04-2004, 01:24 PM

I have to laugh at how people keep saying "there was no decline in the economy" to suggest that the past 10-20 years have actually been rosy red and filled with great joy.

But truly, let's see, the average family is making under $50,000 per year (most average around $33,000) that means the average salary hasn't gone up that much in 20 years. Overall that is not a bad thing if prices had stayed the same as they did 20 years ago, which they haven't. In some cases to get around "raising prices" some companies just give less than they did. But overall things cost probably at least 20% more (that's just saying an uptick of 1 point of inflation a year... )

The average american family is now at least $8,000 in debt and has very little if any savings.

Health costs and prescription medications are sky rocketing out of control, while Dr.s are now picking and choosing who they will treat as they are close to becoming extinct as communities are losing Doctors left and right because of the high malpractice insurance (hell, here Dr.'s REFUSE to go into nursing homes because of the MP insurance.)

Temp and outsourcing have become the nation's leading industries next to minimum/ barely liveable wage service industry jobs.

Labor laws are heavily in favor of the employer so that an "honest day's work for an honest day's pay" doesn't mean jack. It's all about profits not the workers.

Consumer debt is skyrocketing out of control.

Debt our country OWES other country's is totally beyond control (trade deficit is growing higher than the national deficit)

Debt management, second mortgages (refinancing, equity loans, whatever you choose to call it) and bankruptcies are common practice and in fact almost suggested that you take advantage of these services when once people fought to stay away, (by saving money and working hard for DECENT WAGES,) from these as they were embarassing and showed people you were in trouble. And we all PAY for these in the long run anyway.

We manufacture practically nothing here, a nation is only as rich as the products it produces. So by consuming but not producing we are digging deeper and deeper into a pit that shall have to be filled someday. people blame the government for high taxes BUT in reality what is causing high taxes is the fact we let our industries leave us high and dry or blackmail communities so that their multi-million dollar corporation will get tax abatements, tax deferments and tax shelters to stay. The communities thinking jobs will stay, but realize as the companies outsource and close the manufacturing side down they were duped.

More simply put for those who can't understand....30 years ago taxes were relatively low, industry paid a nice portion and the workers made enough that the tax rate didn't have to be high in order to get what they needed. Thay have gone up not because of any services but because of the loss of industry. You bring back the manufacturing and decent wages the tax problems will end fast.

People truly don't care, we are being acculturated that we deserve everything and that if we can't pay someone else will.

Sparhawk · 05-04-2004, 01:47 PM

So... it's still the worst deficit ever, just not by as much. Big whoop. Sorry children, and grandchildren.

Oh yes, and I was in the same bracket as last year, and received no more money back...

onetime2 · 05-04-2004, 03:32 PM

Quote:

Originally posted by pan6467
I have to laugh at how people keep saying "there was no decline in the economy" to suggest that the past 10-20 years have actually been rosy red and filled with great joy.

And I have to laugh at those who think people are either no better than or worse off than they were 10, 20, or 30 years ago. Utterly ridiculous assertion.

Kadath · 05-04-2004, 04:19 PM

Quote:

Originally posted by onetime2
And I have to laugh at those who think people are either no better than or worse off than they were 10, 20, or 30 years ago. Utterly ridiculous assertion.

"People are better off" doesn't really address much. Do you mean on average? Because, yeah, there's a lot more millionaires today than there were 30 years ago.

pan6467 · 05-04-2004, 05:55 PM

Quote:

Originally posted by onetime2
And I have to laugh at those who think people are either no better than or worse off than they were 10, 20, or 30 years ago. Utterly ridiculous assertion.

That's just it people aren't better off than they were 10,20,30 years ago. They are just further in DEBT. And when the time comes to pay the DEBT..... then we'll see if we were truly better off now or 20 years ago. Don't play this "peaches and cream" card thinking we are doing much better when the trade deficit is so high that all the gold in Fort Knox and all the money in the coffers still won't cover the debt to other countries. And sooner or later they will come to cash in on it.

I have to also say, I can tell you think a lot about the future and others. That's where the Conservatives lose it. True there is no problem with making as much as you can BUT..... as a society and as a civilized country that promotes "free enterprise and capitalism" so grandly, one must realize that they are responsible to put money into the system and give others the chance they got in order for that system to work. Which means liveable wages and decent jobs. Because if you do not do this what ends up happening is a division of rich and poor and the middles shrinks to nothing. Then you have rebellion, civil war and eventually a change in government. Because when the government and the wealthy own 95% of the wealth it is not in balance and change will come. This is fact, this has been proven throughout history. France 1795, Russia 1917, the 13 colonies 1776, North vs. South USA 1861, the fall of the Roman Empire, the USSR, Cuba, 1960's Vietnam, 1950's Korea, Gandhi's India, 1900's China, 1930's Spain and so on and so on.

Quote:

Originally posted by Kadath
"People are better off" doesn't really address much. Do you mean on average? Because, yeah, there's a lot more millionaires today than there were 30 years ago.

there are more millionaires today than 20 years ago, but there is also a bigger divide between classes, families are debt ridden, and there are more living at the poverty level also. Plus there are fewer mom and pop places. Corporations rule the land.

smooth · 05-04-2004, 06:20 PM

Quote:

Originally posted by pan6467
there are more millionaires today than 20 years ago, but there is also a bigger divide between classes, families are debt ridden, and there are more living at the poverty level also. Plus there are fewer mom and pop places. Corporations rule the land.

I'm pretty sure kadath was agreeing with you.

onetime2 · 05-05-2004, 05:33 AM

Quote:

Originally posted by pan6467

I have to also say, I can tell you think a lot about the future and others. That's where the Conservatives lose it. True there is no problem with making as much as you can BUT..... as a society and as a civilized country that promotes "free enterprise and capitalism" so grandly, one must realize that they are responsible to put money into the system and give others the chance they got in order for that system to work. Which means liveable wages and decent jobs. Because if you do not do this what ends up happening is a division of rich and poor and the middles shrinks to nothing. Then you have rebellion, civil war and eventually a change in government. Because when the government and the wealthy own 95% of the wealth it is not in balance and change will come. This is fact, this has been proven throughout history. France 1795, Russia 1917, the 13 colonies 1776, North vs. South USA 1861, the fall of the Roman Empire, the USSR, Cuba, 1960's Vietnam, 1950's Korea, Gandhi's India, 1900's China, 1930's Spain and so on and so on.

there are more millionaires today than 20 years ago, but there is also a bigger divide between classes, families are debt ridden, and there are more living at the poverty level also. Plus there are fewer mom and pop places. Corporations rule the land.

Sorry but people are far better off today. Health care, transportation systems, number of jobs, home ownership, retirement savings, etc, etc, etc are all up compared with the past.

You and Kadath seem to think there's a problem with "millionaires" and that they don't "give back". This is completely off base. These "millionaires" don't just have their money locked away in their closets. The money they keep in banks, the stock market, bonds, invest in starting their own companies, etc helps the economy to move forward.

While debt levels are relatively high and Americans should pay them down, their net worth far exceeds their debt. Americans are more likely to have 401k plans, own their own home, have second or third cars, and have countless other assets that the "typical" person didn't have 10 or 20 years ago.

Mondak · 05-05-2004, 06:00 AM

pan6467

You covered a lot there and some of that stuff may even deserve its own thread. That being said, there was a lot of "whats" in that and a lot less "how did we get here" or "why is that the case".

Cut the numbers in a lot of different ways, but we are by and large in better shape in a lot of areas.

Health: AIDS infection rates are down, healthcare is more advanced, teenage pregnancy rates are way down.

US Nation: Literacy rates are at an all time high, true poverty is low to non-existant, malnutrition has been wiped out in the US.

Is it ever enough? No. Should we ever be satisfied? No way!

"Bring back manufacturing jobs" is not the easiest task in the world. To close down trade to allow American made products to compete would have huge effects on other industries that do compete today. To have the governement speak for the gap - taxes would have to go up - a lot.

I believe in free markets and the efficiencies they bring. I think that the problems we are having are growing pains that are caused when our government does not allow the market to act on its own. They raise taxes to pay for programs to address things that are not really public goods.

My view of deficits is that they should be used in specific cases where an investment needs to be made that will pay far larger dividends in the future than our current tax base will support. If a spending program cannot promise that - cut it!

Sparhawk · 05-05-2004, 06:02 AM

I think he's talking about this, onetime2:

Quote:

MM: How do economists measure levels of equality and inequality?
Wolff: The most common measure used, and the most understandable is: what share of total wealth \ is owned by the richest households, typically the top 1 percent. In the United States, in the last survey year, 1998, the richest 1 percent of households owned 38 percent of all wealth.
This is the most easily understood measure.
There is also another measure called the Gini coefficient. It measures the concentration of wealth at different percentile levels, and does an overall computation. It is an index that goes from zero to one, one being the most unequal. Wealth inequality in the United States has a Gini coefficient of .82, which is pretty close to the maximum level of inequality you can have.
MM: What have been the trends of wealth inequality over the last 25 years?
Wolff: We have had a fairly sharp increase in wealth inequality dating back to 1975 or 1976.
Prior to that, there was a protracted period when wealth inequality fell in this country, going back almost to 1929. So you have this fairly continuous downward trend from 1929, which of course was the peak of the stock market before it crashed, until just about the mid-1970s. Since then, things have really turned around, and the level of wealth inequality today is almost double what it was in the mid-1970s.
Income inequality has also risen. Most people date this rise to the early 1970s, but it hasn't gone up nearly as dramatically as wealth inequality.

While we do have more better off folks in this country, we have a many more worse off folks. I'm not really sure if this is even a solvable problem. I read recently that the average CEO 25 years ago had an income 12 times that of the average worker, now it is something like 100 times that of the average worker (I may be off on the percentages, but the net increase is about right).

onetime2 · 05-05-2004, 06:45 AM

Quote:

Originally posted by Sparhawk
I think he's talking about this, onetime2:

While we do have more better off folks in this country, we have a many more worse off folks. I'm not really sure if this is even a solvable problem. I read recently that the average CEO 25 years ago had an income 12 times that of the average worker, now it is something like 100 times that of the average worker (I may be off on the percentages, but the net increase is about right).

This problem is incredibly overrated. Some basic truths that need to be recognized:

1. There are more publicly traded corporations than ever before.

2. The stock markets have attracted more cash than ever before.

3. More people are invested in the stock market than ever before.

4. Executive stock options, loans, stock awards, etc have become a huge part of the compensation package.

5. These are all ridiculously new phenomenon.

Points 3, 4, and 5 are perhaps the most important economic facts of our time (home values and cosumer debt ranking alongside them).

Since there are so many more people in the market to own stocks, those who own big chunks of stock in popular companies become super rich on paper (or their compensation is boosted due to their stock options or grants). It's these super rich who are pushing the indexes you point to up. There will inevitably be a spring back effect from the high demand for stock and the number of super wealthy will decline. Executive compensation is heavily influenced by their stock options and the current high demand for stocks.

The relative newness of the average person's stock ownership lends itself to a problem. Calculating their wealth is difficult because it fluctuates on an almost daily basis and traditional measures like "Savings" don't cut it. So, the average worker's wealth and income is poorly calculated while the executive's income is widely publicized and easily tracked. New measures need to be created, vetted, accepted, and, finally, tracked so conclusions can be drawn. We are in the early stages of this process and grand assumptions about the gap between the wealthy and the average are almost completely without base.

The average person in America today has a higher likelihood of being prepared to take care of themselves financially in retirement than they've had in the past. There's more "wealth" available to all than ever before and just because there's a group of super well off people in the world it doesn't mean that the average person is somehow in bad shape.

Kadath · 05-05-2004, 11:04 AM

Quote:

Originally posted by onetime2

You and Kadath seem to think there's a problem with "millionaires" and that they don't "give back". This is completely off base. These "millionaires" don't just have their money locked away in their closets. The money they keep in banks, the stock market, bonds, invest in starting their own companies, etc helps the economy to move forward.

Yeah, that wasn't even close to what I was trying to say. All I was saying is that more rich people affects the "average" person's standing. They bump up the average. I was just pointing out that you weren't really diving too deeply into who the average person is; you're just saying that people as a whole are better off.

pan6467 · 05-05-2004, 12:19 PM

Quote:

Originally posted by Mondak
pan6467

You covered a lot there and some of that stuff may even deserve its own thread. That being said, there was a lot of "whats" in that and a lot less "how did we get here" or "why is that the case".

Cut the numbers in a lot of different ways, but we are by and large in better shape in a lot of areas.

Health: AIDS infection rates are down, healthcare is more advanced, teenage pregnancy rates are way down.

US Nation: Literacy rates are at an all time high, true poverty is low to non-existant, malnutrition has been wiped out in the US.

Is it ever enough? No. Should we ever be satisfied? No way!

"Bring back manufacturing jobs" is not the easiest task in the world. To close down trade to allow American made products to compete would have huge effects on other industries that do compete today. To have the governement speak for the gap - taxes would have to go up - a lot.

I believe in free markets and the efficiencies they bring. I think that the problems we are having are growing pains that are caused when our government does not allow the market to act on its own. They raise taxes to pay for programs to address things that are not really public goods.

My view of deficits is that they should be used in specific cases where an investment needs to be made that will pay far larger dividends in the future than our current tax base will support. If a spending program cannot promise that - cut it!

First, while it is important to find out why the divide between classes is so great, and how. We need to work on the solution first. If we work to figure out how and why first, we'll get the customary finger pointing from both sides and nothing will be solved except the GOP will continue to cut social programs, while the Dems. will throw money and neither is the answer. The answer lies in the middle.

While healthcare is better, it is forcing people into heavy debt, bankruptcy and companies to cut other benefits and jobs because of the outrageous pricing. Even malpractice insurance is killing the Dr.s and affecting their jobs. Yes, people can say our healthcare is among the best, and it is but the price is way too high. And when we look at infant mortality rates we rank lower than some 3rd world countries and last in the industrialized countries. Also, affecting the quality of healthcare is the fact that our foods are safer (better less carcinogenic and poisonous insecticides, fertilizers, better standards and education on cooking) , we promote health and fitness (we know about cholesterol and smoking effects and have cut them down). But the life expectancy has not truly increased in 40 years.

Child malnutrition is low because of school lunches and education, but adult malnutrition exists. More from lifestyle than any other reason, but they do exist.

Literacy maybe up but computer literacy is not improving, and that is the literacy we need to focus on now.

I don't disagree with much of what you said Mondak. And the great thing about this country was the exchanging of ideas and finding ways to improve. The problem today is neither side wants to do that and if someone does then he is attacked by both sides.

Quote:

Originally posted by onetime2
Sorry but people are far better off today. Health care, transportation systems, number of jobs, home ownership, retirement savings, etc, etc, etc are all up compared with the past.

You and Kadath seem to think there's a problem with "millionaires" and that they don't "give back". This is completely off base. These "millionaires" don't just have their money locked away in their closets. The money they keep in banks, the stock market, bonds, invest in starting their own companies, etc helps the economy to move forward.

While debt levels are relatively high and Americans should pay them down, their net worth far exceeds their debt. Americans are more likely to have 401k plans, own their own home, have second or third cars, and have countless other assets that the "typical" person didn't have 10 or 20 years ago.

As for Onetime, People don't "own their own home" more now than in the past. In fact look at the numbers and you'll find people in fact owe more on their homes than before. Not because the homes are more expensive (which they are) but because they have Equity loans and second mortgages.

You need to understand and this is what is killing this country faster than any split in parties (which is just an diversion to keep from focussing on the bigger problem). That problem is that debt runs the nation. Therefore credit has to be expanded more than ever before. If we force people to live within their means as they did in the past, we would definately lose our standard of living and face severe financial problems.

So yeah, people own the 2-3 cars, and this and that for a better lifestyle, but they are also deeper in debt, have no savings and while they may have more saved for retirement, they'll also be paying more debt off than the previous generation. And when they die the creditors will take all they can, and the kids become responsible for the outstanding debts and then the snowball effect really starts.

What we need to do is swallow the pill now to protect the future generations and cut all debt, live within our means and figure out a way to build a capitalist / free market system that doesn't feed on debt. The only way for that to happen is to distribute fairly the wealth.

Yes, the man who takes the risk deserves more than the one who just works and doesn't. BUT, both should be able to live debt free and enjoy a decent standard of living.

onetime2 · 05-06-2004, 05:29 AM

Quote:

Originally posted by pan6467
As for Onetime, People don't "own their own home" more now than in the past. In fact look at the numbers and you'll find people in fact owe more on their homes than before. Not because the homes are more expensive (which they are) but because they have Equity loans and second mortgages.

You need to understand and this is what is killing this country faster than any split in parties (which is just an diversion to keep from focussing on the bigger problem). That problem is that debt runs the nation. Therefore credit has to be expanded more than ever before. If we force people to live within their means as they did in the past, we would definately lose our standard of living and face severe financial problems.

So yeah, people own the 2-3 cars, and this and that for a better lifestyle, but they are also deeper in debt, have no savings and while they may have more saved for retirement, they'll also be paying more debt off than the previous generation. And when they die the creditors will take all they can, and the kids become responsible for the outstanding debts and then the snowball effect really starts.

What we need to do is swallow the pill now to protect the future generations and cut all debt, live within our means and figure out a way to build a capitalist / free market system that doesn't feed on debt. The only way for that to happen is to distribute fairly the wealth.

Yes, the man who takes the risk deserves more than the one who just works and doesn't. BUT, both should be able to live debt free and enjoy a decent standard of living.

In 1965 homeownership rates were at 63% they are now near 69%. While people may owe more on their homes now than before it is because they cost more. Only about half of homeowners have ever refinanced their homes. The homeowner debt to disposable income ratio has increased by only a couple of percentage points over the past 2+ decades (11.62 in Q1 1980 to 13.91 in Q3 2003) while home values have gone up by multiples of that. While consumer debt is increasing it is far from the epidemic you are convinced of.

Redistribution of wealth would cause far more problems than we have now or we can potentially have in the future going down our current path.

irateplatypus · 05-06-2004, 07:39 AM

i think it's getting harder and harder for kerry to run against bush on the economy... if you don't credit the tax cuts for the strong resurgence in the past year then at least you can agree that it hasn't brought on the disaster some predicted it would.

one of these days though... the politicians are going to have to face the music. we can't live on credit forever... and unless we face that fact and take a hit in our cost-of-living for a while, we are certain to have a dramatic crash. neither one of the party's want to tackle the issue because they know they'll get shredded if they let the economy dip on their watch.

keep feeding the monster... don't think about what it'll eat next after you run out of food to give it.

smooth · 05-06-2004, 08:20 AM

Quote:

Originally posted by irateplatypus
i think it's getting harder and harder for kerry to run against bush on the economy... if you don't credit the tax cuts for the strong resurgence in the past year then at least you can agree that it hasn't brought on the disaster some predicted it would.

one of these days though... the politicians are going to have to face the music. we can't live on credit forever... and unless we face that fact and take a hit in our cost-of-living for a while, we are certain to have a dramatic crash. neither one of the party's want to tackle the issue because they know they'll get shredded if they let the economy dip on their watch.

keep feeding the monster... don't think about what it'll eat next after you run out of food to give it.

The dire predictions I heard were coming from economists who were talking about our long-term economic infrastructure.

We also haven't seen what the ramifications of consumer debt are going to be--the Fed has rates pushed to the floor. If something bad does happen, we don't have any recourse any more. More important to me, however, is that our nation is pumping all its resources into this recovery. What happens when it stops doing that?

I don't know, I'm not stating that things will stop growing, but it doesn't make much sense to me to declare success when we haven't stopped propping the economy up.

Just read this from the Times

Quote:

Greenspan Warns Against Soaring Deficits

America's soaring federal budget deficits represent a major obstacle to long-term U.S. economic stability even though they have yet to put pressure on interest rates, Federal Reserve Chairman Alan Greenspan warned today.

Greenspan cautioned against being lulled into a false sense of security about the deficit, Americans' low savings rates or the nation's trade deficit just because these problems have not yet triggered rising interest rates or a steep fall in the value of the dollar.

Posing the question of whether something has fundamentally changed that would allow the country to "disregard all the time-tested criteria of imbalance and economic danger," Greenspan said, "Regrettably, the answer is no. The free lunch has still to be invented."

Greenspan told a banking conference that the federal budget deficit was a bigger worry to him than the soaring trade deficit or the high level of household debt because those two problems can be corrected by market forces.

"Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances," he said in remarks to a banking conference.

Greenspan noted that the federal deficit, estimated by the administration to hit a record $521 billion this year, will amount to 4.25 percent of the total economy after being in surplus just a few years ago.

He said one of the biggest concerns was that the deficits now were occurring right before the first wave of baby boomers retires.

"We have legislated commitments to our senior citizens that, given the inevitable retirement of our huge baby-boom generation, will create significant fiscal challenges in the years ahead," Greenspan said in a speech delivered by satellite to the conference sponsored by the Federal Reserve Bank of Chicago.

Greenspan cautioned that the country should not be lulled into a false sense of security about the federal deficit just because at the moment interest rates on long-term Treasury securities remain low.

Greenspan did not offer a solution to the budget deficit in his speech today although in the past he has called on Congress to move quickly to address the looming funding difficulties in Social Security by trimming the benefits of future retirees.

Two proposals he has suggested include raising the retirement age for receiving full Social Security benefits and reducing annual cost of living adjustments that Social Security recipients receive.

Federal Reserve policy-makers met on Tuesday and left a key interest rate at a 46-year low but signaled that they planned to start raising rates at a moderate pace in coming months. Greenspan did not address interest rates in his prepared remarks or in answering audience questions.

He did predict in response to one question that China's rapid economic growth would certainly slow to a more sustainable pace, in part because the Chinese government, worried about inflation pressures, was "working assiduously" to slow growth.

He said slower growth in China would likely help to relieve pressure on global commodity prices, which have been surging in recent weeks, reflecting in part strong demand for commodities such as steel in China.

The Bush administration has been stepping up pressure on China to stop linking its currency to the dollar and to lower trade barriers as a way to deal with America's record trade deficit with China. It announced today that Deputy Treasury Secretary John Taylor would visit Beijing next Monday and Tuesday for high-level talks on China's efforts to prepare for a free-floating currency.

Taylor will also stop in Japan to meet with Japanese finance officials to discuss efforts to bolster the Japanese banking system and in South Korea for the annual meeting of the Asian Development Bank.

-- http://www.latimes.com/business/la-0...home-headlines

pan6467 · 05-06-2004, 08:58 AM

First Onetime and I agree in another thread, now Irate and I.......... Lord have mercy Elizabeth I'm coming to join ya darlin'

onetime2 · 05-06-2004, 09:27 AM

Quote:

Originally posted by pan6467
First Onetime and I agree in another thread, now Irate and I.......... Lord have mercy Elizabeth I'm coming to join ya darlin'

LOL, it's the BIG ONE!

phyzix525 · 05-06-2004, 12:32 PM

Quote:

Originally posted by yournamehere
Speaking for myself (and my wife) - we got the same $170 refund as last year. However, we had $2,000 more in medical costs that were deductible this year - otherwise, we would have owed big time.

Just out of curiosity, has anyone on this board making less than $250K had a tax cut in the last 4 years? I know I haven't - except for the aforementioned $600 "loan" we got in 2001 - and had to pay back in 2002.

I made less then 250K, well considerably less, on 1099 income, which did not have taxes withheld, and I got over 2k back this year. I actually paid no taxes and got money back. Which was better then last year for me, but alot of that has to do with the accountant I had do my taxes.

soccerchamp76 · 05-06-2004, 01:06 PM

I am not an active Politics Forum poster and not totally familiar with politics, but how is this reducing the deficit? It just says his projected deficit will not be as large. BIG FREAKIN DEAL, the truth is he is still INCREASING the deficit by 500 billion.

onetime2 · 05-10-2004, 05:55 AM

Quote:

Originally posted by yournamehere

Just out of curiosity, has anyone on this board making less than $250K had a tax cut in the last 4 years? I know I haven't - except for the aforementioned $600 "loan" we got in 2001 - and had to pay back in 2002.

I received a larger refund this year than I received in the past and I make less than $250k a year.

05-03-2004, 08:33 PM	#2 (permalink)
Mojo_PeiPei Kiss of Death Location: Perpetual wind and sorrow	Tough situation, no deficit would be good, but it isn't necessarily a practical reality. We are still recovering from one of the worst recessions in the history of our country, you can't expect their to be no deficit, nor can you expect their to be a quick fix with a shaky economy. I think the Bush tax cuts and refunds worked and are continuing to work, I think they were just what the doctor ordered given the state of the economy. But you're right when you say the spending needs to be cut, that is perhaps the biggest issue. But like I said first things first, the economy is getting better everyday, we'll get to the deficit spending when we can actually do something with it. __________________ To win a war you must serve no master but your ambition.

05-03-2004, 08:45 PM	#3 (permalink)
Mondak Industrialist Location: Southern California	As an aside - I submitted this to Fark a few minutes ago. Here was my headline: *Bush's tax plan reduces deficit by $100 Large. Mortimer pays Randolph One Dollar.* I have never had one picked. I am sure something stupid will get in instead. I made myself laugh though. . . __________________ All truth passes through three stages: First it is ridiculed Second, it is violently opposed and Third, it is accepted as self-evident. ARTHUR SCHOPENHAUER (1788-1860)

05-03-2004, 09:12 PM	#4 (permalink)
yournamehere Invisible Location: tentative, at best	<i>"Smaller-than-expected tax refunds and rising individual tax receipts will . . . . reduce the $521 billion deficit projected for the fiscal year by as much as $100 billion.</i> Exactly what here even suggests a tax <i>cut</i>? They don't even bother with the "refund" you have to give back the next April any more. Speaking for myself (and my wife) - we got the same $170 refund as last year. However, we had $2,000 <i>more</i> in medical costs that were deductible this year - otherwise, we would have owed big time. Just out of curiosity, has anyone on this board making less than $250K had a tax cut in the last 4 years? I know I haven't - except for the aforementioned $600 "loan" we got in 2001 - and had to pay back in 2002. __________________ If you want to avoid 95% of internet spelling errors: "If your ridiculous pants are too loose, you're definitely going to lose them. Tell your two loser friends over there that they're going to lose theirs, too." It won't hurt your fashion sense, either.

05-03-2004, 09:55 PM	#5 (permalink)
smooth Junkie Location: Right here	I didn't get anything. I had to pay out the nose, so did all of my friends and acquantances. Neither me, my wife, nor my mother recieved any DMV return, either (California). I am also curious whether this new forecast includes the war expenditures. The last ones didn't and they also were "revised" upwards after the media cloud swept through. Let's just see if this new forecast survives the spin cycle before making any hard and fast conclusions. __________________ "The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

05-04-2004, 01:24 PM	#7 (permalink)
pan6467 Lennonite Priest Location: Mansfield, Ohio USA	I have to laugh at how people keep saying "there was no decline in the economy" to suggest that the past 10-20 years have actually been rosy red and filled with great joy. But truly, let's see, the average family is making under $50,000 per year (most average around $33,000) that means the average salary hasn't gone up that much in 20 years. Overall that is not a bad thing if prices had stayed the same as they did 20 years ago, which they haven't. In some cases to get around "raising prices" some companies just give less than they did. But overall things cost probably at least 20% more (that's just saying an uptick of 1 point of inflation a year... ) The average american family is now at least $8,000 in debt and has very little if any savings. Health costs and prescription medications are sky rocketing out of control, while Dr.s are now picking and choosing who they will treat as they are close to becoming extinct as communities are losing Doctors left and right because of the high malpractice insurance (hell, here Dr.'s REFUSE to go into nursing homes because of the MP insurance.) Temp and outsourcing have become the nation's leading industries next to minimum/ barely liveable wage service industry jobs. Labor laws are heavily in favor of the employer so that an "honest day's work for an honest day's pay" doesn't mean jack. It's all about profits not the workers. Consumer debt is skyrocketing out of control. Debt our country OWES other country's is totally beyond control (trade deficit is growing higher than the national deficit) Debt management, second mortgages (refinancing, equity loans, whatever you choose to call it) and bankruptcies are common practice and in fact almost suggested that you take advantage of these services when once people fought to stay away, (by saving money and working hard for DECENT WAGES,) from these as they were embarassing and showed people you were in trouble. And we all PAY for these in the long run anyway. We manufacture practically nothing here, a nation is only as rich as the products it produces. So by consuming but not producing we are digging deeper and deeper into a pit that shall have to be filled someday. people blame the government for high taxes BUT in reality what is causing high taxes is the fact we let our industries leave us high and dry or blackmail communities so that their multi-million dollar corporation will get tax abatements, tax deferments and tax shelters to stay. The communities thinking jobs will stay, but realize as the companies outsource and close the manufacturing side down they were duped. More simply put for those who can't understand....30 years ago taxes were relatively low, industry paid a nice portion and the workers made enough that the tax rate didn't have to be high in order to get what they needed. Thay have gone up not because of any services but because of the loss of industry. You bring back the manufacturing and decent wages the tax problems will end fast. People truly don't care, we are being acculturated that we deserve everything and that if we can't pay someone else will. __________________ I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

05-04-2004, 01:47 PM	#8 (permalink)
Sparhawk Dubya Location: VA	So... it's still the worst deficit ever, just not by as much. Big whoop. Sorry children, and grandchildren. Oh yes, and I was in the same bracket as last year, and received no more money back... __________________ "In Iraq, no doubt about it, it's tough. It's hard work. It's incredibly hard. It's - and it's hard work. I understand how hard it is. I get the casualty reports every day. I see on the TV screens how hard it is. But it's necessary work. We're making progress. It is hard work."

05-05-2004, 06:00 AM	#14 (permalink)
Mondak Industrialist Location: Southern California	pan6467 You covered a lot there and some of that stuff may even deserve its own thread. That being said, there was a lot of "whats" in that and a lot less "how did we get here" or "why is that the case". Cut the numbers in a lot of different ways, but we are by and large in better shape in a lot of areas. Health: AIDS infection rates are down, healthcare is more advanced, teenage pregnancy rates are way down. US Nation: Literacy rates are at an all time high, true poverty is low to non-existant, malnutrition has been wiped out in the US. Is it ever enough? No. Should we ever be satisfied? No way! "Bring back manufacturing jobs" is not the easiest task in the world. To close down trade to allow American made products to compete would have huge effects on other industries that do compete today. To have the governement speak for the gap - taxes would have to go up - a lot. I believe in free markets and the efficiencies they bring. I think that the problems we are having are growing pains that are caused when our government does not allow the market to act on its own. They raise taxes to pay for programs to address things that are not really public goods. My view of deficits is that they should be used in specific cases where an investment needs to be made that will pay far larger dividends in the future than our current tax base will support. If a spending program cannot promise that - cut it! __________________ All truth passes through three stages: First it is ridiculed Second, it is violently opposed and Third, it is accepted as self-evident. ARTHUR SCHOPENHAUER (1788-1860)

05-06-2004, 07:39 AM	#20 (permalink)
irateplatypus can't help but laugh Location: dar al-harb	i think it's getting harder and harder for kerry to run against bush on the economy... if you don't credit the tax cuts for the strong resurgence in the past year then at least you can agree that it hasn't brought on the disaster some predicted it would. one of these days though... the politicians are going to have to face the music. we can't live on credit forever... and unless we face that fact and take a hit in our cost-of-living for a while, we are certain to have a dramatic crash. neither one of the party's want to tackle the issue because they know they'll get shredded if they let the economy dip on their watch. keep feeding the monster... don't think about what it'll eat next after you run out of food to give it. __________________ If you will not fight when your victory will be sure and not too costly, you may come to the moment when you will have to fight with all the odds against you and only a precarious chance for survival. There may even be a worse case. You may have to fight when there is no hope of victory, because it is better to perish than to live as slaves. ~ Winston Churchill

05-06-2004, 08:58 AM	#22 (permalink)
pan6467 Lennonite Priest Location: Mansfield, Ohio USA	First Onetime and I agree in another thread, now Irate and I.......... Lord have mercy Elizabeth I'm coming to join ya darlin' __________________ I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

05-06-2004, 01:06 PM	#25 (permalink)
soccerchamp76 Go Cardinals Location: St. Louis/Cincinnati	I am not an active Politics Forum poster and not totally familiar with politics, but how is this reducing the deficit? It just says his projected deficit will not be as large. BIG FREAKIN DEAL, the truth is he is still INCREASING the deficit by 500 billion. __________________ Brian Griffin: Ah, if my memory serves me, this is the physics department. Chris Griffin: That would explain all the gravity.