Democrats & Liberals Archives

A Challenge To The Right

In the last five years, the following have occurred:
1) An economic downturn, occasioned by fraud and stock overvaluation on Wall Street;
2) The worst terrorist attack in our history;
3) The greatest expansion of domestic government spending in modern times, which has included the creation of a major new medicare benefit, the foundation of an entirely new cabinet department, and more pork than you could shake a barrel at;

4 )Raised defense spending, got into two wars, one of which is ongoing, and will be a continuing committment for sometime whether we win it or not.

and

5) We have suffered the most destructive and expensive natural disaster in American history, and on account of that have lost a strategic port crucial to our economic wellbeing.

Let go of your tax cuts. Plain and simple. It won't be the end of civilization. In fact, it might just be the salvation of it.

Some folks might not believe it, but my first blog entry for this website was not about Iraq. It was The Gamble-and-Spend Conservative, which essentially laid out the contradictions and problems of Bush's tax cuts.

It's been a season short of two years since I wrote that article. The point still stands- it doesn't seem like the Republican leadership cares what the context of their tax cuts are, as they defend them to the last. It doesn't matter whether we're riding high on a surplus, or low on a record deficit. It doesn't matter whether we're fighting a war or trying to recover from one of the worst national disasters in our history. For ideological reasons, the ending of the tax cuts is out of the question. For political and strategic reasons, spending cuts of any great size are out of the question.

Our biggest, most expensive items, the ones undoubtedly causing the most fiscal trouble, are precisely the ones that will be most difficult to rid ourselves of: The War, the Medicare Drug Benefit, and recovery from Hurricane Katrina. While the choice to streamline and phase out some of these items exists, there are real world consequences to changes in those policies.

Faced with spending that's really going nowhere, the logical responsee would be to bring back taxes, for the most part, back to what they once were. We might be able to fudge on the lower income end of things, which ironically the structure of Bush's tax cuts makes your average American's share of the tax cuts easier to preserve. The rich will return to their old tax scheme, but they can afford to pay a little more in taxes. As for any argument that they wouldn't be able to pass on benefits to the lower-class, it's obvious from businesses practices nowadays that big business doesn't hire that much from our lower class anyways. They export the jobs to the lower class of other countries.

I know there are going to be people who defend the tax cuts even now. Well, let them answer one question: How much do you want our government to cost? The more we run a deficit to finance our government, the more expensive our debt gets. When you have to issue a treasury bond to cover your nation's debts, you are promising whoever buys it, whether they be foreign or domestic investors, that they will get a percentage of interest in return for paying for our current debt. As we get deeper in debt, we will have to make greater returns on these treasury bonds to get people to buy them, putting us even deeper into the hole when they come due.

And yes, we do have to pay for it. Right now, an amount equal to our defense budget, equal to our budget for Social Security, goes to do one thing: pay off our debts. We would actually be close to a balanced budget at this point in history, if we weren't have to pay off debts from the last three administrations.

The war cry from the right is to starve the beast. Unfortunately for them, America wants the beast, needs it in these dark times of wars, terrorism and disasters. Even then, they have not been sucessful in starving it. The beast feeds elsewhere, for a price to be extract at a future date, and people aren't so opposed to federal government that most of the spending truly outrages them. It's the spending in excess of our means that most people find distasteful.

If the Right wants to do good by America, they should push for the only practical solution to this problem: removal of the tax cuts for the richest Americans. This will not be done arbitrarily, but a sacrifice asked for by our leaders, for the greater good. We are, after all, in a time of need. In return, they get a valuable strategical position from which call for spending cuts- The Break-Even Point.

From there, they can advocate for future spending cuts, and from there get tax cuts that don't require more expensive renumeration of investors later. They can really give Americans their money back, ( if they want that, and not programs) instead of merely defering costs for later. They can go back to being the party of balanced budgets, instead of being the fiscal hypocrites of the American Political Order.

Posted by Stephen Daugherty at September 18, 2005 4:25 PM
Comments
Comment #81289

Go to any of several large South American or Indoesian cities. The rich conservatives will spend their ill-gotten fortunes on private armies and walled palaces if the current trend continues. They will have money and perhaps some power, but they will be prisoners in jails of their own making. Perhaps another reading of Dickens, I’m thinking, A Christmas Carol, in particular, is in order.

Posted by: Rick at September 18, 2005 4:49 PM
Comment #81290

Stephen

Sorry…gotta disagree.

Here’s why:

1.First,the Federal budget is replete with fat…start there.I am a conservative…you know that….but I’d start with NASA and the Mars trip and continue outward.
The Federal budget could be shaved $100 billion without a hiccup.

2.Next,look at the above cost…$200 billion.That is really a false lead….factor out re-captured Federal and state taxes,increased corporate taxes (Hint:Buy Home Depot…a freebie to the left from me) PLUS an increase ultimately in valuation of property in the 3 states and we recapture everything and them some within 5 years.

3.Let us talk about the tax cut for the rich for a minute in real simplistic terms.

Take me for instance:I saved $30,000.00 in taxes last year.That money which I saved I put into a CD.The bank that I put that money into loaned that money to a small business which created one job which yielded more federal and stae tax dollars.
Had I not had that tax benefit,it would now become part of the bloated and wasteful Federal government…paying off pork somewhere.

We(private enterprise) know what to do with our money..we put it to work.The Feds give it all away and everyone loses but the pols.

It’s really very simple.

Posted by: sicilian eagle at September 18, 2005 5:10 PM
Comment #81291

No! I won’t give back my tax cut.

Posted by: tomd at September 18, 2005 5:27 PM
Comment #81293

You can say all you want about tax cuts. Say they only benefit the rich, what ever. The fact is they worked under Kennedy, they worked under Reagan, and they worked this last round for Bush. During the Reagan years we doubled the federal income. (and congress spent 7-8% more than Reagan’s budget 7 out of eight years otherwise the budget would have balanced.)
Bush stated his election with the economy in a nose-dive. Had the repercussions of 911 and even with gas prices where they are , we have a growth of about 4% (remember 3% would be considered strong.)

95% of the people who want to work have at least one job, some two or more. (which is unheard of in the rest of the world).
Say what you want. Facts are facts.

Posted by: scottie at September 18, 2005 5:29 PM
Comment #81294

“bush started his first term with the economy in a nose-dive”

sorry

Posted by: scottie at September 18, 2005 5:32 PM
Comment #81316

Stephen:

I think right at this exact time would be a bad time to raise taxes. Katrina and high oil prices are already slowing the economy. We have an added $80 Billion in revenue that we were not expecting.

I am not opposed to tax increases. First I want to see what happens after October 15th in Iraq. (some troops coming home?). Second, I want the pork out of the highway bill.

After I would see those numbers, I might be open!!

Craig

Posted by: Craig Holmes at September 18, 2005 9:15 PM
Comment #81317

SE-
If you walk west down Louisiana Street in Downtown Houston on any given day, you will see a tall, rounded, glass-facade building, which stands as the tombstone of the economic exuberance of the 1990’s Those folks at Enron didn’t know how to handle money either, despite the fact that the market treated like darlings that whole decade.

Good God. I have seen so many of the hot number one companies rise, then fall. People thought AOL was big. Now it’s the loss leader for the conglomerate it now owns. MCI WorldCom Was big. a whole load of the Tech Stocks the market bought up were just trash. The market is the end result of people sorting out their errors. It’s not a guarantee of individual competence; you take your chances.

We instituted laws, long ago, that kept finances and accounting pretty honest. Oh, but people couldn’t always make every dime they wanted under those rule. So the Republicans yanked the accountability. Now people don’t trust the stock market, don’t trust the companies. We talk about robust growth now, but it’s nothing like we had.

If we cut NASA and Mars, this country might just as well slit its own wrists and take a warm bath. America has always been built on pushing the frontiers. The jobs those contracts could create, and the technologies to go with them could be of great economic benefit to us.

Fact is, if we don’t, somebody else will, and for the rest of history, we will be the Portugal of space exploration, the country that took the first steps out of our old world, only pass up the first voyage to a new world entirely. And guess who will benefit? Guess who will reap whatever rewards come of all that?

The Federal Budget has fat, much of it put there by Republican hands (Don’t worry. I don’t like it coming out of Democrat hands either.) But until we can get that fat down, we should put taxes back like we had them. So what if the rich don’t get to save more. Money locked up in accounts is money doing nothing.

If you want to cut fat, keep your eye on what both side are doing, and for God’s sake, react! Y’all need to recognize that in this day and age the talk of Democrats wanting sky-high taxes is not accurate, and that your side of things are failing to hold the Republican accountable for their excesses in the process of riding herd on us.

TomD-
Then join the rest of Americans in paying more for your debt. Do you like shelling out more money for your this government you already consider a bloated monstrosity?

Scottie-
Look at the tax brackets and tell me who’s getting the biggest breaks. It’s not just fancy rhetoric. As for where tax cuts work, Alan Greenspan would tell you this: it’s debt that matters more.

Debt coming from the lethal combination of the great society, Vietnam, and Johnson’s refusal to raise taxes to pay for it from non-deficit dollars is what killed us in the seventies. Debt is what yanked us short in the early nineties, too, off of Reagan’s egregious spending.

It’ll yank us short on this one, I promise you. Reagan and Bush both had plenty of opportunity to put their foot down. Unfortunately, the had their spending that they wanted to do, so they just spent away.

It is the combination of information technology, and economy stabilized by debt reduction and a smart, balanced fiscal policy, with spending cuts and proper taxes increases, that made our economy strong. Unfortunately, some have to mess with success. Oh well.

Posted by: Stephen Daugherty at September 18, 2005 9:21 PM
Comment #81321

Anyone who thinks Congress men and women are going to vote to give up pork they won for their state or constituents is living in La La Land. Ain’t gonna happen. And since it won’t, letting the tax cuts expire is the only alternative to trying to make up for the huge deficit spending occuring this year.

Posted by: David R. Remer at September 18, 2005 9:50 PM
Comment #81323

Go ahead increase my taxes and I’ll lay off two guys with kids so that my company will stay afloat? I know of at least ten other guys like me.

Political insiders will kepp protecting themselves for there own gain until one of the two parties self destruct. The current party in the self destruct mode is the democrats.

IRS revenues are larger than they have ever been since the inception of those tax cuts. Because of the reasons I already stated.

As far as terrorists go let’s follow your strategy and run and hide. This way they can come hear and attack L.A., Chicago, Boston, Washington D.C. at the same time and really cripple this country.

Stephen you probably think that the greatest natural disaster was created by global warming?

Now let us look at cost cutting if Republicans try to cut something Democrat leadership screams we are starving children and old people and we are going to kill S.S. and let people die in the streets. Now you complain that we spend to much the real problem is that your party doesn’t have that control anymore and it is quickly slipping into oblivion. You always want to blame the president of the time yet last time I checked it is both the house and senate that write laws and most presidents go along (for the most part) with what comes across there desk because these are the peoples representatives.
Now being that I’m Conservative we have been proclaiming quite loudly about some of the very things you see. So have men like Rush Limbaugh, Sean Hannity,Glen Beck and the like. So maybe this spending absurdity will slow down come next election cycle.

Till then cut my taxes again so I can go on the hunt for men to help my business grow. I say go on the hunt because it is not easy in today’s climate to find good men with which to biuld upon. I will endever to make these men rich beacause in doing so they will make me even wealthier.

Posted by: Chris at September 18, 2005 10:00 PM
Comment #81324

Stephen it is never a good time to raise taxes, but especially now with all the spending going on.
There is fat layered on fat in the federal Government

Take Health care. The reason it is going up at double digit rates is because government is driving it up by dumping money into it.

A little story:
My parents never had health Insurance until well after age 65. They raised 13 kids. We only went to the doc when we needed to, Appendicitis, broken bones. We lived. 5 are now over 80.
Ya. I am retired.
Get the government out of health care.

Posted by: George at September 18, 2005 10:12 PM
Comment #81331
So maybe this spending absurdity will slow down come next election cycle.

Bwahaha! I believe this as much as the rest of the fiction in your post.

[Burt, we critique the message, not the messenger - Watchblog column editor]

Posted by: Burt at September 18, 2005 11:19 PM
Comment #81332
Stephen it is never a good time to raise taxes, but especially now with all the spending going on.

What a great example of Republican logic.

“Republicans are spending so much of our money, that we can’t possibly increase taxes now!”

“Republicans have screwed up the war in Iraq so badly, that we can’t possibly get out now!” - unfortunately, that’s one I sadly agree with.

My parents never had health Insurance until well after age 65. They raised 13 kids. We only went to the doc when we needed to, Appendicitis, broken bones.

More wonderful logic. You also lived 80 years without ever once getting blown up by a terrorist. Therefore, we shouldn’t try and defeat terrorism. What a joke.

Posted by: Burt at September 18, 2005 11:25 PM
Comment #81334

There sure is a lot of use of the pronoun “I” in all of these postings. Aren’t “we” supposed to be doing things? But, since everyone else has felt the need to speak about what is best for them, let me say what I believe is best for everyone.

American ethics are real. There are a few principles that I believe our nation has and should hold dear. One of those has always been the belief that you pay your bills. When I get my phone bill, electric bill, mortgage payment or any other notice in the mail…I pay it. However, it seems that our country as a whole has become a nation of dead-beats. No one wants to pay the bills. Instead, everyone wants to point at each other and complain about spending, or they want to toss up some grand ideological economic scheme that will be the holy salvation of us all. There is no great ecomnomic philosopy…there is only one thing that we have all known from the beginning: WORK HARD AND PAY YOUR DEBTS AND STOP WHINING ABOUT IT!

Posted by: Matthew at September 18, 2005 11:41 PM
Comment #81339

Chris-
You’re not getting those tax cuts for free. You are buying them on credit. You may just succeed now to shoot yourself in the foot later. Anyways, if you’re so close to the edge as it is, Katrina may just knock you over anyways.

We have yet to feel the full effects of this disaster. Whether this is a bump in the road or a concrete road block will be determined on just where the stresses fall from the failures associated with the destruction.

You assume I want to end the war now. You obviously haven’t read enough of my essays to know my real opinion. Fact is, when folks talk about what they are willing to sacrifice to cover the costs of bringing back the Gulf Coast, the first thing they talk about is not tax cuts, but the war.

It’s no small margin, unfortunately. I suggest giving up the tax cuts because that’s the only real alternative to allowing Iraq to disintegrate. Your choice. The alternative, at this point, is to borrow, and that borrowing will wreck our economy. It will be a dead weight on everything we do, either forcing inflation, or interest rate hikes.

I’m your best friend here. Others want to end the war, others will spend money we don’t have, and fund our competition overseas. I want jobs here in America, I want America back on its feet, and I don’t want to be paying ten dollars a decade from now for what I paid a dollar today. Nor do I want to have to pay obnoxious rates on a home or a car. Do you want that? Does that make good business sense to you?

This is just one more consequence of the Bush refusal to do what common sense dictated in a time of war back in 2001. The tax cuts should have never been given out in a time of war, and to that point, no president in US history, not Reagan, not Kennedy, not Clinton, or even this president’s own father had ever given tax cuts in a time of war.

The president and anybody else who approved these budgets weakened America by piling on one debt financed plan after another, and by waging a war at the same time, they have given that war a serious strategical weakness.

Worse, they compounded it by removing a small but crucial segment for funding groups like FEMA, all part of the various ass-covering spending cuts. The Reality is staring them in the face. The enemy may win merely because we were too damn cheap to pay for the war by taxes. That should make you sick.

As for Global Warming? Man, I think you and your party’s biggest problems is that you just don’t let yourself see how bad some of you problems are until its too late to do something about it.

Posted by: Stephen Daugherty at September 18, 2005 11:52 PM
Comment #81340

I thought I might drop a few words of advice for any future leaders that may be reading out there. If you ever happen to come into office when the ecomnomy is doing well and you have an opportunity to pay off some of the debt..THEN DO IT! As Bush has learned: you never can tell when an airplane might drop from the sky or bad hurricane season might crop up..in which case you may need the money.

There is no such thing as “tax relief.” If the government stops paying for something then someone else just has to pick up the tab. Our society is not going to give up anything that it has become accustomed to without something more convenient to take its place (take the automobile for instance). The only thing we can do is continue to grudge along with the burden we have placed on ourselves. Now, granted, we do need discipline in government spending. But, that discipline starts with changes in spending, not changes in taxes.

I have a proposal: The Democrats should agree to vote to end the “death tax” and in return the Republicans agree to place a 90% sales tax on all vehicles that get less that 25 miles per gallon (highway). Just a thought.

Posted by: Matthew at September 18, 2005 11:52 PM
Comment #81342

Start by cutting the whey out of the defense spending. The poor need no armies to defend what they don’t own. Since we’re going on a pay as you go, every man earns his way basis, let the ones who have the most to lose contribute to defense from their private resources. Why should I pay to defend Big Oil companies right to do business overseas? Also cut out farm subsidies, tax breaks on homes, and all welfare for the rich AND the poor.

Require government bidding to meet high standards and low profits or else let the government run the jobs cutting out the fat hogs like Halliburton and other major players who eat at the public trough. No more fat for people like Ross Perot who became billionaires off the government then complained about the waste.

Lay out a flat 10% income tax on EVERYBODY. Reduce social security/medicare taxes to 3% on 100% of what you earn even if it is in the millions. That’s fair right? Cut out all off-shore accounting, all tax breaks (that’s what a flat tax is right?) Let the elderly, the infirm and the weak starve if they can’t make it on $200 a month. Let the rich whine if they can’t get government contracts, subsidies, and payola. Let them hire private guards to keep the poor from kidnapping them and their families. EVERY MAN FOR HIMSELF. SUPPORTING HIMSELF.

I think I’m becoming a real conservative here. I’m not talking about the kind who wants every one to pull their own weight and then accepts government money and assistance. That would be hypocritical wouldn’t it?

Posted by: Rick at September 18, 2005 11:56 PM
Comment #81343

Burt,

You are all over the map with conflicting and incoherent logic.

What does health care have to do with terrorism?

It’s quite obvious that you have never had to make payroll for the people working for you. Taxes are a killer for the small businessman. Remember, these are the major employers of today.

Your wonderful contribution to your kids will undoubtedly become the futures liability…

Posted by: Discerner at September 18, 2005 11:57 PM
Comment #81353

Rick, there are some terrific ideas there (I’ve always been intrigued by the idea of a flat tax), but your attitude towards corporations involves a fairly fundamental error.

Tax incentives and government contracts awarded to corporations and smaller companies should not continually be thought of as handouts to “the rich.”

Companies are not individuals. They are networks of individuals, and it’s always a tiny minority of them who are rich.

Take the airlines as a classic example. I would agree that several of them are working on business models that are tenuous at best, but the government continually bails them out with one handout after another.

Why? To line the pockets of the rich? Hardly. The airlines, even those suffering losses, provide a vital service to the economy. They keep open the lines of commerce which many industries depend upon who employ perhaps millions of workers—most of whom could not be called “rich” by any stretch of the imagination.

If you live in a community without profitable industries, where a large percentage are unemployed, and your local officials decide to offer incentives to bring in a company—is this being done for the rich? Of course not. It’s more likely being done for the poor.

Posted by: sanger at September 19, 2005 1:00 AM
Comment #81355
You are all over the map with conflicting and incoherent logic.

Thanks for making my point. George’s logic doesn’t make much sense, does it?

It�s quite obvious that you have never had to make payroll for the people working for you.

Well, you’re wrong. [deleted for critiquing the messenger] I’m a small business owner.

Taxes are a killer for the small businessman. Remember, these are the major employers of today.

I know plenty of people who were making plenty of money in the late 90’s. If your business can’t survive your personal taxes returning to those levels, it ain’t the government’s fault. Go drive a bus and let someone else run the joint.

Your wonderful contribution to your kids will undoubtedly become the futures liability�

I’m not sure what you mean by this. My kids will be just fine. But I still wonder how you justify passing on your tax bill to them?

[Burt, we have one rule here: critique the message, not the messenger. Follow it or you’re gone.]

Posted by: Burt at September 19, 2005 1:39 AM
Comment #81356

Sanger,

You obviously haven’t looked at Exxon’s latest balance sheet.

Posted by: Burt at September 19, 2005 1:39 AM
Comment #81373

Discerner-
Discern this: one day, the bill comes due. When that happens, your wonderfully robust economy hits the brakes. What are you counting on to prevent that from having an effect? The answer seems to be that you hope the economy will be so robust that it takes the hit without missing a step. You hope we grow out of trouble, essentially.

Let me tell you a little secret: it’s never been done. Only increased taxes allowed us to manage our debt the last time. All three of Bush’s predecessors raised taxes, because the alternative was either inflation or interest rate hikes.

We don’t have any different of a situation here.

Saying we have to keep the tax cuts to keep this economy going is like saying we have to keep taking amphetamines to keep awake at work tomorrow instead of getting a good night’s sleep.

Sooner or later, such a person will crash, and crash bad. Same thing with tax cuts that cause deficit spending. Sooner or later, the debt comes due, and the cost of further debt skyrockets, and the only alternative will be nation default.

Y’all are addicted to tax cuts. You refuse to see them as a liability in a time of deficit spending, and as a result, our deficits, even reduced from the their highs, are still worse than any other deficits this country has ever run.

It’s positively insane that so business-focused of a political party has forgotten the number one rule of economics: There Is No Such Thing As A Free Lunch.

Yes, we may have to take an economic hit in the process of repealing these tax cuts, but it will be to prevent a worse economic disaster later.

I think sooner or later, Republicans and independents are going have to become more mature about taxes, because they are thinking with the logic of a teenager with a credit card, or a person with a bank account who continues to write checks out of an empty account because they still have checks in their checkbooks.

Posted by: Stephen Daugherty at September 19, 2005 7:21 AM
Comment #81374

Stephen
Glen Hubbard (probably the next Fed chairman) said in today’s Financial Times (Monday) that the net effect of Katerina would be “modest”….pretty much what I said in my Sunday post above…..Hey….maybe I should get a job with the Fed…….

By the way,a small business man like me has zero in common with Enron…small business,not mega corporations is what propels America….always has,always will…taxing me and my business results in me cutting jobs..not adding to them….
If you like the Mars project,we will keep it…but surely you,of all people,could agree that our Federall Budget has probably in excess of $500 billion of pork in in,don’t you?Cutting back on $200 billion is doiable….
Eliminating the Senate allocation for alcoholic beverages for Senator Kennedy and the handi wipes for Senators Kerry and Clinton is a good start.
By the way,even up here in New England..in liberal Boston…Bush’s speech played very ,very well…as a matter of fact,many New England governors,including Mitt Romney (don’t worry,I don’t endorse the guy for president but he would make one hell of a Homeland Securityt chief) have now ordered monthy disater reviews in thei states.
Slowly the Pheonix rises and some good may actually come from the disaster.

Posted by: sicilian eagle at September 19, 2005 7:23 AM
Comment #81375

Stephen
One more thing…about AOL,World Com et al.
I took a hit on those stocks six years ago..as I did with CMGI,Lucent,Cisco,JDSU,Qualcom.
Quarter million.
Down the shoot.
Paid for by the profit I made on GE,Merk,Comcast,Microsoft,Bank of America,and twney other companies in my portfolio.
That’s way they call it business.
Those thugs that ripped us off from Enron and World Com are where they belong,but really,not all of corporate America is a rip off artist.

Posted by: sicilian eagle at September 19, 2005 7:30 AM
Comment #81398
American ethics are real. There are a few principles that I believe our nation has and should hold dear. One of those has always been the belief that you pay your bills. When I get my phone bill, electric bill, mortgage payment or any other notice in the mail?I pay it. However, it seems that our country as a whole has become a nation of dead-beats. No one wants to pay the bills. Instead, everyone wants to point at each other and complain about spending, or they want to toss up some grand ideological economic scheme that will be the holy salvation of us all. There is no great ecomnomic philosopy?there is only one thing that we have all known from the beginning: WORK HARD AND PAY YOUR DEBTS AND STOP WHINING ABOUT IT!

Matthew thanks for clarifying my point.
When the Government got in health care everyone came with their bowl and were pissed if the government didn?t fill it up. Same thing will happen now with the gulf states. The government will set up some program to try and rid those areas of poverty and Chicago and Detroit and all the rest will whine until they get some too. All People in the USA live at the top. They have no idea what real poverty is, and they all whine daily.

Stephen

This is just one more consequence of the Bush refusal to do what common sense dictated in a time of war back in 2001. The tax cuts should have never been given out in a time of war, and to that point, no president in US history, not Reagan, not Kennedy, not Clinton, or even this president?s own father had ever given tax cuts in a time of war.

Truth is we were in a recession in 2001 and we would still be in it without the tax cuts.

Matthew

Republicans agree to place a 90% sales tax on all vehicles that get less that 25 miles per gallon (highway). Just a thought
.

Does that include trucks? Pickups? Gravel Trucks? 18 wheelers?

Rick,

Require government bidding to meet high standards and low profits or else let the government run the jobs cutting out the fat hogs like Halliburton and other major players who eat at the public trough.

Kellog, Brown & Root, a subsidiary of Haliburton, are in the gulf region today, cleaning up the off shore area after Katrina. They got the contract by the low bid of Qualified companies well before Katrina.. Same as last year.

The government can not itself go into the off shore area and clean up for many reasons, so they hire contractors.

Posted by: George at September 19, 2005 10:01 AM
Comment #81400

SE-
We should prepare for the effects to be not so modest, regardless. We should act as if the worst could happen, even if we don’t 100% cover our butts on it.

On the Tax cuts, Bush was counseled by Treasury Secretary John O’Neill that he should should attach triggers to the tax cuts, cancelling them should the the Federal Government go into deficit spending. This was from the guy who ran Alcoa, a real businessman who improved his company’s performance. Also, a friend of Alan Greenspan, whose conversations with him (as detailed in Ron Suskind’s The Price of Loyalty are much more illuminating than his cryptic oracular pronouncements in his reports to congress.

The real question here is whether you want to take a bad hit now, or a worse hit later. Keeping these tax cuts will ultimately cost you dearly, as a small business owner. It will either devalue the dollar, forcing you to pay more for the same supplies, goods and services, or it will force you to pay higher interest rates on loans, or at least your customers.

If you say, let’s reduce spending, and by that reduce the hit we have to take on taxes, I’d say fine. But let’s be smart about it. That approach means we cut the B.S. Take Halliburton to the woodshed, don’t cut the Budget of FEMA, or some other truly important project.

Dump the defense contractors who just create a bunch of high tech junk our soldiers will never get the chance to use. Stop overpaying KBR to quartermaster and supply our troops, and start getting our troops doing that once again. Get our armed forces self-sufficient, rather than dependent on civilian contractors who require our protection, and who don’t listen to us about going into places like Fallujah.

Rewrite the law on Medicare, so we aren’t leaking tens of billions of dollars because of the entitlements inability to bargain for better prices.

Rewrite the policy on Iraq so we no longer have to throw good money after bad in beating our heads against the wall making a peaceful, united Iraq.

One final note: I must reiterate the position on essential services like FEMA. If we don’t get our policies and our budgets right on those services, we will take another hit on things, and there will be another writeoff this government has to take that we could have prevented.

Posted by: Stephen Daugherty at September 19, 2005 10:04 AM
Comment #81407
Truth is we were in a recession in 2001 and we would still be in it without the tax cuts.

Truth is the recession would have been shorter and shallower without those mistargeted tax cuts.

Posted by: American Pundit at September 19, 2005 10:39 AM
Comment #81414

Tax cuts may do some good in the short term; however, since it is a regulation designed to guide behavior should we not make them work for all Americans?

Using Sicilian Eagle’s example of $30,000.00 invested in a Bank CD last year and the fact that at least 10 million citizens made the same savings from their tax cuts, we could directly effect everyones wealth and well being by regulating this tax cuts so that they are only available if the person purchase US Treasury Notes at the same interest rate as the Bank CD.

Just by this example would add 300 Billion dollars to the Federal Reserve. By limiting this revenue to loan/pay for infrastructure projects in America all Americans win. Cutting taxes or raising taxes will not deal with the problems facing America and Humanity’s Nations in the 21st Century. However, directly investing in the strentgh of the America Dollar/Economy future through a massive Bond/Note drive in America can eliminate the debt of this nation quicker and more effectively than any tax cut or raise without one citizen losing a dime.

In fact, history will show that this method of raising funds for our country works better than the B.S. or T.S. which has driven the political agenda of the Republicans and Democrats respectfully for the last 50 years

Posted by: Henry Schlatman at September 19, 2005 11:00 AM
Comment #81437

Watchblog editor,

Honest question. Discerner calling my kids a liability on the future is OK, but saying that Discerner was wrong about his assumptions of me is prohbited?

Posted by: Burt at September 19, 2005 1:22 PM
Comment #81439

American Pundit -“Truth is the recession would have been shorter and shallower without those mistargeted tax cuts.”

and just where do you get that “Truth”

you can say that until the cows come home. History and economic modles show that is not true. If it wrere the liberal pundits would use that as their Premier Talking point. You make me laugh till it hurts while rolling on the floor. John Kerry would have shown that “truth” and won an election by a landslide. Ronald Reagan would have never won a second term. You better stick with “tax cuts for the rich are unfair”

Posted by: scottie at September 19, 2005 1:31 PM
Comment #81448

Stephen and Henry
Thank you Henry…a very very insightful post and something that we all should consider doing….I have done that for years as well as invest in government bonds…paid my kids college tuitions (three of them ) that way.
I think we proved the point,Stephen.

Stephen,Pundit and David:
Like it or not,I’d say our extremely “dumb” president kinda nailed the Democratts to the flooor on the Roberts nomination,don’t you think?

If all the Dems now vote Roberts,then the Repubs will scream that it was an idealogicial vote…on the other hand,if Dems break and vote Roberts and he does prove “conservative”…well that is a mid-term election issue,no?

Looks like Rove outsmarted you folks again(he really must be getting tired of this….kinda like punching a deflated beachball,no?

By the way,not one word from anyone of you…Pundit in Singapore or David building his addition to his house in Texas about the successful election in Afganastan….your silence is defeaning.

PLUS,today the dollar zoomed…thanks to Schroeder getting the boot…..now,if only the Sox can win 9 more games…..

Posted by: sicilian eagle at September 19, 2005 2:38 PM
Comment #81461

scottie,

you can say that until the cows come home. History and economic modles show that is not true.

What history and economic models are you referring to? I can find quite a few ‘models’ that claim the opposite of what you’re claiming, and quite a few that support your claim—but for varying reasons. I haven’t mastered the principles of economics but I’m no foreigner to them either; what does seem clear is that our real-world economy is so complex and affected by so many unpredictable and unknown factors that claims such as yours can never be stated as absolute proof of anything. You claim American Pundit’s statement of ‘truth’ is suspect, yet I see no evidence that proves that AP’s version of the truth is any less valid than yours.

Since there are so many versions of the truth out there I am genuinely curious here as to which sources you give credence to…

Posted by: Charles Wager at September 19, 2005 3:54 PM
Comment #81467

sicilian eagle,

The first paragraph of your last post is fine, but I don’t see the point of the rest—it just seems like a collection of off-topic Dem bashing and Bush worship.

Looks like Rove outsmarted you folks again(he really must be getting tired of this…kinda like punching a deflated beachball,no?

Unfortunately the people that Rove is truly outsmarting are not the Democrats but rather a large percentage of the Republican base that is falling for this administration’s bait-and-switch policy and voting against their best interests. Getting back to taxes, let’s wait a few years and see how the Republican ‘base’ changes when 9 out of 10 people in the middle class get hit with the Alternative Minimun Tax—a virtual guarantee now that Bush chose to ignore the ongoing problem with AMT to make his two rounds of tax cuts look better to the average American and to make them less costly to the Federal government in the long term. This one example is probably this administration’s biggest bait-and-switch of all (well, except perhaps for the Iraq war), and one that people won’t even catch on to until Bush is out of office. The vast majority of average Americans will have most (if not all) of their shiny new tax cuts literally taken back out of the other pocket by the AMT, while simultaneously an increasingly greater percentage of the absolute weathiest Americans will become totally excempt from the AMT.

By the way,not one word from anyone of you…Pundit in Singapore or David building his addition to his house in Texas about the successful election in Afganastan… your silence is defeaning.

I didn’t realize the Afganistan election had anything to do with the topic. If you explain its relevance perhaps the cloud of silence can be broken.
PLUS,today the dollar zoomed…thanks to Schroeder getting the boot…

I’d love to see an economic model ‘proving’ this one as well. Did Schroeder get the boot? Why is he so ecstatic then, and why is his opposition so depressed?

Posted by: Charles Wager at September 19, 2005 4:26 PM
Comment #81470

SE-
Reread the original entry.

You trumpet the small victories, and neglect the losses that matter. Rove has outsmarted the Republican Party, fooled it into believe that it could eternally postpone the consequences of bad leadership by blaming others and pumping sunshine up America’s collective backside.

Look at the big events. Look at the places where Bush’s leadership really mattered. Hell, look at Afghanistan. The Taliban and al-Qaeda still linger, perhaps waiting for the moment when we’re too weak to preserve the peace. Osama Bin Laden still roams free, in the backyard of our main ally in the region, no less.

Will it take another Hurricane Striking the Gulf Coast for you to believe the severity of our situation, on account of Bush’s incompetence? How many times must you accept the word of a man whose promises are worth so little?

Posted by: Stephen Daugherty at September 19, 2005 4:41 PM
Comment #81473

scottie-
Economic Models are just that: models. They attempt to explain and work out what is really not a mechanistic process.

They sport this Laffer Curve (an unfortunately named graph if there ever was one), and tell us there’s this deterministic relationship between tax cuts and raising revenue.

What most economists have found, instead, is that tax cuts have marginal impact, but the debts themselves caused inflation and interest rate hikes that weren’t.

But of course, you boys have it all figured out over there. It’s an easy, unprovable claim Post Hoc, Propter Hoc- After this, therefore because of this.

Bad debts overwhelm happy returns. Get it? It’s what devalued the dollar to the point it is today, and what sent us into recessions in the 70’s and the 90’s. Bush seems intent on repeating the mistakes of LBJ, and worse, compound them by not admitting when he’s wrong.

Posted by: Stephen Daugherty at September 19, 2005 4:56 PM
Comment #81479

Stephen-

Those who argue for lower levels of debt usually claim that higher debt crowds out new investment, leading to lower economic growth, more unemployment, higher inflation and higher interest rates, and is unfair to future generations, etc. At some level of debt, the arguments against it are undoubtedly true. But again, looking at the data for the last 40 years, there is no evidence that federal government debt levels up to at least 50% of GDP have been a problem. Surprisingly, real economic growth averaged almost 1% higher (3.47%) in the years where debt was more than 33% of GDP than in the years when it was less than 33% (2.59%.) Unemployment averaged 6.43% in the low-debt years, and only 5.65% in the high-debt years, and inflation averaged 7.6% in the low-debt years, and 2.9% in the high-debt years.

Richard W. Rahn

Bush has let conservative and libertarian thinkers down with his record spending; end of story. But just as this 2004 pre-election article states raising taxes. ala Robert Rubin, is not the solution.

Posted by: George in SC at September 19, 2005 5:14 PM
Comment #81502

“Using Sicilian Eagles example of $30,000.00 invested in a Bank CD last year and the fact that at least 10 million citizens made the same savings from their tax cuts, we could directly effect everyones wealth and well being by regulating this tax cuts so that they are only available if the person purchase US Treasury Notes at the same interest rate as the Bank CD.

Just by this example would add 300 Billion dollars to the Federal Reserve.”…….This sounds an awful lot like what President Bush has been asking for and would help an awful lot. I think the best idea is the Fairtax plan.
The poor don’t pay, the middle class only pay tax on what they purchase new and the rich pay tax on everything they buy new. Since the rich buy more new and expensive toys, they will still be paying the lion’s share while the more thrifty among us will still buy our cars used and our houses used. While the rich pays $1150 tax on a $5000 plasma screen tv, I will pay $92 tax on my $400 tv that I enjoy as much as the rich man enjoys his. The rich man will buy a new car every couple of years and pay the 23% tax that goes with it. I will buy a car or truck that the rich man sells and has already paid the tax on. I like this plan more every time I think about it.

Posted by: tomd at September 19, 2005 7:57 PM
Comment #81503

George,

I’m not sure if Rahn is more qualified as an economist or just a political hack, considering he seems to spend more time talking about how global warming is good for us and how liberally biased the media is than talking about economics. However, what I think of him doesn’t matter so I’ll just stick to addressing what he says…

It took me awhile to figure out whether you were using Rahn’s article to support or dispute Stephen’s post…because the article seemed to support Stephen’s claim that our national debt is hurting us. This is because you quoted the folowing statement from Rahn:

But again, looking at the data for the last 40 years, there is no evidence that federal government debt levels up to at least 50% of GDP have been a problem.

This confused me because my recollection was that our percentage of debt to GDP is already over 60% and growing. In fact The White House, in OMB’s 2006 Budget, predicted a 47 year high in 2006

Once I actually followed your link and read the whole article I realized that Rahn was using different debt estimates to claim our debt-GDP ratio was only 35%:

How damaging is the deficit and at what level does it become dangerous? Within limits, economists are not concerned about the deficit in a particular year. Their concern, correctly, is with the amount of government debt held by the public in relation to GDP. As long as individuals or businesses have a yearly rise in income, they can take on more debt without getting into trouble, provided the cost of the additional debt service does not rise faster than the rise in income. The same is true for government. Forty years ago, in 1962, federal government debt as a percentage of GDP was 43.6%. It fell to a low of 23.8% in 1974, rose to a high of 49.5% in 1993, and then dropped back to 33.1% in 2001. Currently, it is about 35% of GDP, and the CBO projects it to fall back to 30.7% in 2013.

Okay, so Rahn chooses to use the Congressional Budget Office as his source. That’s good for his argument, but others don’t argree with the CBO’s analysis:

Writing in the Nebraska Law Review last year, George Washington University law professor Cheryl Block compared bookkeeping by the federal government to bookkeeping by businesses involved in corporate scandals. She found little difference. Congress, she wrote, “has been guilty of using accounting devices remarkably similar to those used by Enron, WorldCom and others to ‘cook the books’ and to mislead the public with regard to government finances.”

So we’re back to the original problem. It’s easy to create an economic model (or cook the books) to support a position, but having a model doesn’t constitute as proof by a long shot. I do agree with Rahn that a certain level of debt is acceptable, and maintaining that debt can actually be cheaper than trying to collect more revenue from tax hikes. I also agree with Rahn that at a certain level of debt (somewhere above 50% debt-to-GDP) the situation reverses and it does become critical to reduce the debt even if that means raising taxes.

Where I and others disagree with Rahn is whether we’ve already reached that inversion point. Rahn (using the CBO figures to support his point) claims that we haven’t. A more complete analysis of the data suggests that we have.

Posted by: Charles Wager at September 19, 2005 8:04 PM
Comment #81524

Sicilian Eagle,
Thanks, could you imagine what would happen to the Oil Companies if an American could/can produce a car that uses no fuel? Do you know that the technology exises right now to allow every American Family to eliminate their monthly Electric and Fuel Bills? Now, how you educate The Market to this fact so that they can educate the general public is the Catch 22 that President Bush doesn’t have the foggist idea how to deal with. Because while it is possible and the benifits are enormous, it will take time to build. However, at a savings of $300-500.00/mth it is worth doing.

Posted by: Henry Schlatman at September 19, 2005 10:45 PM
Comment #81548

Stephen:
This morning Reuters reported a 50% turnout to Afganistan’s election…not bad considering there were over 5,000(!) candidates according to the report.

How is that a failure?…People there voted freely for the first time in decades…decades…coming out aginst the threat of warlards and the Taliban….we (The US) barely get 50% in a hotly contested election!

Reports indicate another hurricane (Rita) bearing down on NOLA….that dolt mayor should be placed on a levee and offered to the gods as sacrifice…had this been during Roman or Greek times that is exactly where he would be at this minute.Instead,you blame Bush for the second hurricane(before it strikes) after FEMA screams to the mayor to recind his call to return to NOLA.

Hubbard is right…NOLA needs to rebuilt its infrastructure FIRST befoe any public relations type return.If Rita strikes,this time first-responders still there get screwed .

I brought up Rove since most posts on the left blame him for everything anyway.Last week a column here tatooed the guy for orchestrating the Roberts nomination…did you forget?

I detect a changing of the wind here in Iraq too…the next two or three weeks will be bloody..no doubt…but in the end the constitution will be ratified..and the result will be that this year 2005 TWO countries freely elected their leaders and passed constitutions.

By the way,the Kurds are Socialists…leftists….you know the type…they are the true “rebels” here…I find it ironic that Bush et all see this but you don’t…Here,a conservative president aids the left…the Kurds in its fight against oppression and in the USA,the left here screams….what say you?

Posted by: sicilian eagle at September 20, 2005 8:42 AM
Comment #81559
I detect a changing of the wind here in Iraq too?the next two or three weeks will be bloody..no doubt?but in the end the constitution will be ratified..and the result will be that this year 2005 TWO countries freely elected their leaders and passed constitutions.

C’mon, SE. If ratifying the constitution doesn’t stop the low-grade civil war playing out in Iraq — just like the elections didn’t stop it — then so what? I predict Sunni turnout will be fairly high, and they will oppose the constitution. Then what?

You talk about the Iraqi political process like a bunch of notches in the belt, but if the process doesn’t produce a stable country, then it’s useless.

By the way,not one word from anyone of you?Pundit in Singapore or David building his addition to his house in Texas about the successful election in Afganastan

Ah… Now you’re talking. I wrote it up on my blog:

Afghans also went to the polls last weekend. Even though the media tried to generate excitement by raising the specter of massive terrorist attacks against voters, the process went pretty smoothly. Now, the new government needs to deliver on services, “‘I’m hoping for security first, then roads, then education,’ said Muhammad Tahir, 45, a Kandahar shopkeeper.” Expanding the number of NATO Provincial Reconstruction Teams sure would help with all those hopes.

But that’s pretty off-topic. How come nobody wrote it up in the red column? Too busy bad-mouthing a soldier’s mother, I guess.

Posted by: American Pundit at September 20, 2005 10:37 AM
Comment #81560
Bush has let conservative and libertarian thinkers down with his record spending; end of story. But just as this 2004 pre-election article states raising taxes. ala Robert Rubin, is not the solution.

And yet, Rubin’s solution worked. That must really piss you guys off. :)

Posted by: American Pundit at September 20, 2005 10:38 AM
Comment #81587

Pundit
Glad you wrote of the Afganistan election and I actually detect a tiny bit of optisism there…hardly detectable to the naked eye..but there nonetheless.

That’s called making progress,and I say Bravo!

On Iraq:
IF (and that’s a big IF) a constitution is approved the low-grade insurrency will peter out over time as the Iqaii security forces develop and intelligence improves..my feeling anyway

One more thing:
Shia fundamentalism is Iran will never ever take hold in Iqaq for two reasons:
1.The Iranians are exactly that…Persians….non-Arabs.Push come to shove,eventually an Arab identity will emerge in Iraq.

2.Most important reason:The brand of current Iranian religious thought…that Khomeihi(sic) is a direct spokesman of the Phrophet and on that basis clerics should be engaged politicially flies in the face of Iraqui Shia’ism by Stantianni(sic) which abhors politicial intervetion by clerics.He has spent a career in opposition to the Iranian view.
A cleric -based theocracy like Iran’s will never happen.

Posted by: Sicilian Eagle at September 20, 2005 11:46 AM
Comment #81728

SE, you need to keep up. It was Iranians who fomented the violence in Basra over the last couple days, al Qaeda is using Iraq as a training base AND more and more Iraqis are joining Zarqawi’s group, and many Shiites — especially in the southeast — are of Persian descent (the Sunnis are Arab). That’s why the Shiites declined to declare themselves an Arab state in their constitution.

Also, no matter what Sistani personally believes, the Iraqi constitution gives clerics a veto on all laws passed, subject to their adherence to Shariah law. And I’ll bet Sistani ends up leading the Supreme Federal Court. Sistani may not call himself a direct spokesman of the Prophet, but Iraq will nevertheless be a constitutional theocracy.

BTW, I am VERY enthusiastic about Afghanistan. That’s a clear victory, and I’m stoked that German, French, Lithuanian, British, Canadian, Australian, and other NATO forces are all ramping up their PRTs to extend control of the central government. I wish America was putting more of our own PRTs on the ground, rather than phasing them out.

Posted by: American Pundit at September 21, 2005 8:08 AM
Comment #81794

Pundit
I keep up..the best I can..BUT the really really big news today is that you actually agreed with me about something…Afganistan.

Does this mean …that maybe….just maybe…you sctuslly Liked the job the president did there?………be still my heart….

Posted by: sicilian eagle at September 21, 2005 3:48 PM
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