Democrats & Liberals Archives

Half A Deficit-Reducing Policy is None at All.

On it’s face, it may seem little different. The reports are, the Republicans plan to make it to where any rises in mandatory spending would be paid for by cuts in spending elsewhere. Sure to reduce deficits, right?

One of the most potent deficit increasing bills of the last decade, though, the Bush Tax Cuts, would have never been stopped by this. The republican’s CUT/GO proposal has no hope of actually reducing deficits.

Washington is not the place to pretend, though plenty of politicians of all stripes come there to do so. What people do has great effects. The Pay/Go policies of the Bush 41 and Clinton years, which required offsets of one kind or another for both increase spending and decreased taxes were successful in keeping the two numbers, Revenues and Spending, in good harmony. They didn't work for pretend, they worked for real.

Some would like to pretend that they can starve the beast, but who are they kidding? The beast will not be starved because the beast itself is necessary. There is not so much of a political penalty for letting programs remain and deficit spending to cover their cost, as their is for cutting the programs and fading the heat from the constituents you've just caused trouble for.

And so, instead of leaving the old beast skin and bones, we've just imported feed from abroad. The tax policies of the last few decades, which were intended to motivate people to cut programs they'd otherwise be happy to keep, never served their purpose. The beast is still fed, but the fodder is financed on the credit card, instead of paid for in cash.

Can we leave aside the strained political fictions here? We want a certain level of government. We want programs. Some people don't want you to admit to yourself that you are somewhat dependent on your government, or that you don't exactly hate the fact. So, they'll tell you you're overtaxed. They won't let you decide for yourself what level of government you think is worth it.

But really, for any fiscally sound system, that is the best decision. Now, some may point out that I've encouraged deficit spending in the past couple years. Am I being disingenuous? No, I think the economy right now needs stimulation more than it needs vain attempts at a balanced budget.

When the economy rights itself, though, we need to consider that the cheapest way to fund the government we aren't willing or able to get rid of, is through direct revenue. Taxes come in, spending goes out, the numbers matched. But with the Republican's CUT/GO policy, one entire half of the equation is left out, allowing Republicans to further cut taxes without penalty. They are leaving the door open to aggravate the deficit in a way that Democrats did not. Remember, their policies required offsets for new spending in the form of taxes or transferred revenues, and of taxes with cut spending.

Or, put another way, the Democrat's policy in Congress was actually more deficit neutral than the one the Republicans will come in.

We can deal with the myth of fiscal prudence, or we can deal with its reality. In only addressing increases in spending, the Republican Congress basically trades reality for myth, a reality that Neither Reagan, nor George H.W.
Bush, nor George W. Bush was able to successfully deny.

Republicans had two opportunities, independent of collaboration with the Democrats, to address the necessary role of taxes in the fiscal equation. The first time, after the 2002 elections, they abolished PAY-GO, and subsequently ran up incredible, severe deficits with both new spending, not offset, and new taxes, again, not offset.

They will now fail a second time. My advice to my Republican friends here: If you really do believe in fiscal conservativism, the real kind, and not the joke that was the Bush policies, if you are not ignoring the obvious results of reducing revenues on the federal Budget, you will tell your leaders in Congress to continue PayGo.

Posted by Stephen Daugherty at December 23, 2010 12:06 PM
Comments
Comment #315707

Stephen

So you think that raising taxes on top wage earners would close the deficit?

Obama & the Dems have greatly expanded spending, building on the spending done by previous Congresses. If we get spending down to levels of 2000, when most of us think the economy was pretty good, the taxes would be enough to meet this need.

Posted by: C&J at December 23, 2010 1:19 PM
Comment #315715

C&J-
I’m curious. Besides the emergency spending, including the Stimulus, what exactly have Obama’s extravagances been?

As for getting spending down to what it was in 2000?

You do understand, don’t you, that government spending is part of the equation of growth, right? Literally. A worker gets paid, they spend that money for groceries and for rent and so on and so forth, just like the rest of us.

The rest of us also depend on things like Social Security and Medicare. While the Republicans screwed up a lot of the financial aspects, not to mention failing to offset their new spending, the drug benefit fills a real need, and now there will be economic consequences for unfulfilling that need.

Not to mention human consequences, which I’ve observed turn into economic consequences, soon enough.

Just because we felt something was good at the time, doesn’t mean that it would work now. 2000’s spending is more appropriate for 2000. What we need to do is set our house in order now.

The first part of doing that is setting our economic house in order, since our fiscal picture is inherently dependent on our economic outlook, regardless of whether you factor in the need for entitlements. We’re running about 900 billion below full potential on our economy, and it’s in part because we’ve not been allowed to use government to the full extent necessary to get things moving. We’re not dealing with a natural low here, the unemployment is likely to continue for as long as we do nothing about it.

The second part is to make sure that one way or another, what we tax balances with what we spend. Of course, it will have to pass political muster, but that’s Democracy for you. We can fantasize about deep and severe cuts, but I predict that if the Republicans succeed in doing that, the backlash will soon follow.

I think the real trouble is, so many Republicans and the special interests they serve think that Adam Smith’s capitalism moves wages and economic needs in only one direction, when in fact a closer reading of his analysis shows that it’s a balancing act. People will get charged more by businesses, and will pass those requests on to those who pay their wages. If that is denied, or if they are unemployed, they’re going to pass their own poverty back towards the folks trying to get money from them.

The Republicans suggest that austerity is the solution of our problem. I would argue that an excess of austerity is precisely our problem. The folks who have tightened their belt, for quite good reasons, unfortunately force others to tighten their belts with them. They also discourage businesses from expanding and investors from investing in new ventures, as there aren’t the customers around to show up and justify the expense.

Your solution is more austerity. The problem is more austerity. How exactly do you expect it to work?

No, what we need is to goose this economy back up to full capacity, and then pay for the necessary costs of doing so.

As for your first question? I would say that if we want to limit the deficit somewhat, they would be the best people to tax to do that. Why? Because it will affect their spending less. The folks on the top have plenty of money that’s not going much of anywhere, so it’s not like we’re keeping them from spending it, the way taxing the poor and middle class might hobble those earners.

Posted by: Stephen Daugherty at December 23, 2010 2:29 PM
Comment #315722

Stephen

Obama has pumped in all sorts of programs. Health care is going to break the bank.

Many of these “emergency” measures will be difficult to get rid of. If spending comes down to 2000 levels after the “emergency” is finished, I will be happy to have been wrong.

The government doesn’t know how to “goose” the economy beyond its legitimate functions such as regulating the financial system (which it sometimes does okay). The recent Omnibus bill, fortunately not passed, had all kinds of corrupt spending plans.

But the second part of your answer is a bit contradictory. If you say that we need to pump more money into the economy, how can you be in favor of raising taxes in the “emergency?”

Anyway, I agree that taxes should equal spending. But spending should not grow, as it has. The Federal government has been around 20% of the economy for a long time. We don’t want it to get bigger, even if we can tax to meet the greater size.

Posted by: C&J at December 23, 2010 3:11 PM
Comment #315723

Obama said in a 2006 floor speech that preceded a Senate vote to extend the debt limit. “America has a debt problem and a failure of leadership.”

The debt ceiling has been raised 4 times since Obama took office. And looking to raise it another 1.9 trillion next year. The national debt is up $4 trillion in 2 years of Obama. I think Obama is correct, we have a leadeship problem. What happend next year when states and cities under liberal leadership start going belly up and Obama and the dems want to bail THEM out TOO?

Posted by: John at December 23, 2010 3:15 PM
Comment #315729

John, etc….you just can’t get out of that same old “spin” mentality, can you? Just never-mind what created the need for the things Obama has done. Use your tunnel vision to focus on a number of your favorite talking points and avoid the truth at all costs.
Maybe that ostrich mentality will keep you snuggly in your own little world.

Posted by: jane doe at December 23, 2010 3:37 PM
Comment #315737

C&J the spending level of Y2K in terms of 2010 dollars or in terms of Y2K dollars?

If we are to be close to a balanced budget shouldn’t the tax rates for Y2K apply as well as the spending level?

Do we add any spending that would help to pay down the debt accumulated between Y2K and 2010? Do we get out of Afghanistan and Iraq completely or do we increase the Y2K level to fund these efforts?


John, we sure do have a leadership problem. Obama was right then, almost prophetic as the bubble was close to bursting and the economy collapsed a year later.

Our leaders in DC as well as many of the movement leaders on Faux and talk radio, in the think tanks, at the political parties and the corporations refuse to do anything that would keep the economy from just fumbling along so slowly. That leaves the government holding the bag unless you want to beg the corporations sitting on trillions to invest in the economy, which causes one to wonder why they are not doing so if their intentions are to turn a profit. The soon to be majority leaders, the very same in control during the build up to the crash have deliberately demonstrated poor leadership yet we have reelected them to do it again. So the point is us followers that have continued to reelect these guys and yet complain about bad leadership, go figure.

Many would have us believe that

Posted by: j2t2 at December 23, 2010 4:28 PM
Comment #315738

John wrote; “What happen(s)d next year when states and cities under liberal leadership start going belly up and Obama and the dems want to bail THEM out TOO.”

Correct John but you won’t get any liberal state leadership to admit that their policies are flawed. They will simply want more revenue from where ever to keep on spending. Fortunately, I expect the new congress, while sympathetic to states facing bankruptcy, will demand an accounting and and reduction in expenditures much like that occurring in Europe right now.

Here’s an interesting article from Townhall.

“The great engine of growth in America is not the Northeast Megalopolis, which was growing faster than average in the mid-20th century, or California, which grew lustily in the succeeding half-century. It is Texas.

Its population grew 21 percent in the last decade, from nearly 21 million to more than 25 million. That was more rapid growth than in any states except for four much smaller ones (Nevada, Arizona, Utah and Idaho).

Texas’ diversified economy, business-friendly regulations and low taxes have attracted not only immigrants but substantial inflow from the other 49 states. As a result, the 2010 reapportionment gives Texas four additional House seats. In contrast, California gets no new House seats, for the first time since it was admitted to the Union in 1850.

There’s a similar lesson in the fact that Florida gains two seats in the reapportionment and New York loses two.

This leads to a second point, which is that growth tends to be stronger where taxes are lower. Seven of the nine states that do not levy an income tax grew faster than the national average. The other two, South Dakota and New Hampshire, had the fastest growth in their regions, the Midwest and New England.

Altogether, 35 percent of the nation’s total population growth occurred in these nine non-taxing states, which accounted for just 19 percent of total population at the beginning of the decade.”

Posted by: Royal Flush at December 23, 2010 4:33 PM
Comment #315747

You are correct Royal.

This chart from The Heritage Foundation shows the difference betwen the Reagan recovery and the Obama recovery. The difference was Reagan used tax cuts for recovery and Obama used government spending; the results are interesting:

http://blog.heritage.org/2010/10/13/reagan-recovery-vs-obama-recovery-in-pictures/

Posted by: Conservativethinker at December 23, 2010 5:40 PM
Comment #315748

“At this stage of the Reagan recovery from the last deep recession in the early 1980s, the economy had created almost 4 million jobs, or 6 million jobs when adjusting for the size of the labor force. In contrast, under Obama the economy has lost nearly a half million jobs since the recovery began; the growth rate remains stuck around 1 percent; and the economy is sufficiently weak that the Federal Reserve is about to embark on yet another round of quantitative easing to fend off deflation.”

Reagan inherited a 10.8% unemploymnt recession from Carter. By the way, did Reagan ever blame Carter for the mess the country was in, or did he just fix the problem?

Posted by: Conservativethinker at December 23, 2010 5:44 PM
Comment #315749

j2t2

We could do with the tax levels of 2000, if we had the spending of 2000. All adjusted for GDP, of course.

Of course, the tax rates of 2000 were a little to high. We should not really run a deficit or a surplus and we need to have some debt, just not the monster we have now.

The problem in 2000 was that politicians had noticed the surplus and were figuring out ways they “needed” to spend it.

Re Iraq and Afghanistan - President Obama said we would be out by 2014. We believe him, right?

Posted by: C&J at December 23, 2010 5:44 PM
Comment #315752

Good link Cons. How’s that Christmas dinner coming along?

Posted by: Royal Flush at December 23, 2010 5:47 PM
Comment #315754

RF, about a half hour, waiting on the kids.

Posted by: conservativethinker at December 23, 2010 6:28 PM
Comment #315757
Stephen Daugherty wrote: We can deal with the myth of fiscal prudence, or we can deal with its reality.
Don’t worry.

The majority of Americans will almost certainly have no way to avoid reality much longer?

Lots of people saying things are getting better, but how much and for how long?

All the while, FAUX NEWS is telling us all the time that the wealthy pay most of the taxes.
That is very misleading (possibly by design?), when there is an obvious omission of several other important facts about tax rates and percentages, and who pays the highest percentages in total federal taxes:

  • the wealthiest 1% own over the total percentage of income paid in total federal taxes by the wealthy is less than that of middle-income Americans?
  • 80% of all Americans own only 17% of all wealth in the U.S.?
  • Some capital gains are taxed at 5% to 15% , and are exempt from Social Security and Medicare taxes, but labor income is taxed at a higher percentage, and are also subject to Social
  • Security and Medicare taxes too (over 30% in many cases for many middle-income Americans)?
  • Warren Buffet paid 17.7% in total federal taxes on $46 million in year 2006, while his secretary paid 30% in total federal taxes on $60K in year 2006? I personally know that my own total federal taxes are much higher than the 17.7% paid by one of the wealthiest Americans in the nation. And Warren Buffet actually agrees.
  • Warren Buffett sat down with Tom Brokaw on “NBC Nightly News” last night [30-OCT-2007] to discuss his problems with the US tax structure. He described an informal poll of his office, where the average tax rate was 32.9 percent, compared to his 17.7 percent, citing that as evidence that “the tax system has titled toward the rich in the last 10 years.” He also talked about hedge funds managers and the lower tax rates they enjoy.

After all, all of the fundamentals are not only still bad, but many are worse, including debt of nightmare proportions.

The problem with debt today, in the U.S., is that no one takes it seriously … until it is (possibly) too late.

At any rate, the majority of voters have the government that they elect, and re-elect, … , and re-elect, at least, possibly, until repeatedly rewarding failure, and repeatedly rewarding FOR-SALE, incompetent, arrogant, greedy, and corrupt incumbent politicians in Congress with perpetual re-election rates finally becomes too painful.

Posted by: d.a.n at December 23, 2010 7:02 PM
Comment #315759

Tax revenue as a percentage of GDP is about at the historical norm.

Posted by: Royal Flush at December 23, 2010 7:13 PM
Comment #315760

“Reagan inherited a 10.8% unemploymnt recession from Carter.”

Your simply wrong. Reagan inherited a 7.5% unemployment rate from Carter. At the end of his first two years in office, the unemployment rate hit a historical high of 10.8% which continued through the first half of 1983. His approval rating at this comparable point was significantly lower than Obama’s. Reagan cut taxes but did not cut spending. In fact, he significantly raised government spending. He pumped federal deficit money into the private sector. He was a keynesian in the final analysis.

Posted by: Rich at December 23, 2010 7:39 PM
Comment #315762

This is your Fifth post since you were challenged, Stephen Daugherty.

How do you and your fellow WatchBlog readers consider your performance during the “Next Five Posts” challenge?

Posted by: Weary Willie at December 23, 2010 9:49 PM
Comment #315763

Con from your link to Heritage and the misinformation half truths and outright lies of Conn Carroll,


Philip, Maryland on October 13th, 2010 at 10:34pm said:

“Reagan was starting with a relatively small deficit left by Carter, as well as high interest rates created by Fed Chairman Paul Volker to smash the inflationary spiral that had plagued the economy of the 70′s under Nixon, Ford and Carter.

Reagan gave the economy a significant Keynesian stimulus by driving the deficit up (creating demand without a balancing increase in taxes), while the fed had a long way to go in dropping interest rates to stimulate borrowing.

Obama had neither advantange — his predecessor in office created massive unsustainable deficits even during periods of relative recovery (though Bush’s tax cuts never created a really vibrant economy even before the real estate bubble burst and toppled the economy into the abyss.)

Very simply, Reagan had been left fiscal tools that allowed him to combat the recession from the demand side and also using interest rate reductions to stimulate added investment; Bush squandered all the tools and left the US in an economically dire position where little can be done to address the downturn.

One other advantage Reagan enjoyed — the Democratic party in the House and Senate saw the recession as an emergency that they needed to work to resolve across partisan lines. The current minority sees it as an opportunity to score political points.”

Facts are such a doggone pain for conservatives aren’t they?

Posted by: j2t2 at December 23, 2010 10:47 PM
Comment #315765

C&J-
The contradiction is in the misinterpretation.

What I am saying could probably be summed up in terms of which problem we deal with, and in what order.

We are currently dealing with an economy that is austere before you even apply the austerity measures. We’re suffering from a major idling of resources already. The point of any austerity, whether tax-related or spending related, would be to reduce the government role in creating growth from the demand side, to literally take the money from people and corporation’s pockets they would otherwise use to create the runaway growth of the economy that would feed inflation.

Or put another way, would you raise interest rates at a time like this?

It’s a nice subtle question to ask, but if you understand it, you understand why the GOP, and you in particular, are in a logical trap of your own making.

If you would not raise interest rates, despite incredible debt levels, then you’re not seriously considering austerity, at least not across the board. You can use the phrase “shared sacrifice”, but not without a certain sense of ironic humor. Same thing with the tax cuts. The Republicans were told that it would add an amount equivalent to the amount of money spent on the stimulus to go through with it permanently. Still they supported it.

Can you give me a reason why the drumbeat seems to be on cutting programs that are shown to be stimulative and helpful to people, while the policies seem to treat tax cuts that weren’t job creators in the first place as if they are sacrosanct?

I think too much of politics on the right centers on acting consistent with the things you say, even if that comes at the cost of bad policy. I truly don’t understand that kind of politics, didn’t even understand it in my younger days.

Policy must work first, and be consistent with some political platform second, if at all.

Posted by: Stephen Daugherty at December 23, 2010 11:36 PM
Comment #315766

Reagan’s early 1980s recession was a double dip recession. That graph from the Heritage Foundation omits the first dip, which makes it quite misleading.

Posted by: Warped Reality at December 23, 2010 11:54 PM
Comment #315768

Reagan dipped twice. They called it Reaganomics. But the economy started to grow again in 1982 and it kept going with only minor setbacks until 2007.

Reagan “inherited” an economy headed down. Obama “inherited” an economy already near the bottom, as he points out. The inertia was on his side, however, as the economic cycle was farther along. In Reagan’s case, we were headed into recession when he came in. Then we were well out (morning in America) by the time he was up for reelection. Let’s see if it works out as well for Obama.

Obama’s experts thought we would be headed back up - strongly - by the end of 2009. That is how they thought the system would work. Evidently, their model wasn’t very good, or maybe they screwed it up with their own actions.

It seems like the initial bailouts in late 2008 and even the stimulus in 2009 were necessary. If the Democrats had left it at that, we would be okay by now. But they pushed in a more liberal direction, ramming health care down the country’s throat and creating uncertainty that prolonged the downturn.

Liberal policies were rejected in the last elections. Democrats have now become more reasonable. With more moderation, forced by the weakening of the liberal power, confidence should return and the economy will get better. Obama increased his chances for reelection by moving to the right/center.

Posted by: C&J at December 24, 2010 12:29 AM
Comment #315771

Warped, Obama is 2 years into his presidency and he and the left are still blaming Bush for the economy. Reagan inherited a terrible economy from Carter; inflation, prime rate at 21% and even though unemployment may have been 7.5% when Carter was booted out of the WH, don’t you think it would take Reagan a while to correct the economy? If Obama can blame Bush for his first 2 years in office; don’t you think blaming Reagan for his first 1 ½ years is unfair. Six months into Reagan’s presidency, he was able to pass his first tax cuts though a democratic congress;

“The Reagan Tax Cuts: Lessons for Tax Reform”
“During the summer of 1981 the central focus of policy debate was on the Economic Recovery Tax Act (ERTA) of 1981, the Reagan tax cuts. The core of this proposal was a version of the Kemp-Roth bill providing a 25 percent across-the-board cut in personal marginal tax rates. By reducing marginal tax rates and improving economic incentives, ERTA would increase the flow of resources into production, boosting economic growth. Opponents used static revenue projections to argue that ERTA would be a giveaway to the rich because their tax payments would fall.

The criticism that the tax payments of the rich would fall under ERTA was based on a static conception of human behavior. As a 1982 JEC study pointed out,[1] similar across-the-board tax cuts had been implemented in the 1920s as the Mellon tax cuts, and in the 1960s as the Kennedy tax cuts. In both cases the reduction of high marginal tax rates actually increased tax payments by “the rich,” also increasing their share of total individual income taxes paid. Unfortunately, estimates of ERTA by the Democrat-controlled CBO continued to show falling tax payment by upper income taxpayers, even after actual IRS data had become available showing a surge of income tax payments by affluent taxpayers.

Given the current interest in tax reform and tax relief, a review of the effects of the Reagan tax cuts on taxpayer behavior and tax burden provides useful information. During the 1980s ERTA had reduced personal tax rates by about 25 percent, while the Tax Reform Act of 1986 chopped them yet again.”

http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm

The results were not seen immediately, but the economy did turn around and unemployment dropped from 10.8% which was inherited from Carter’s presidency and dropped to about 7% with 16 months and even further by the time Reagan’s second term was up.

“Retrospective on the 1981 Reagan Tax Cut”
edited by Andrew Chamberlain

“The passage of the Reagan tax cut—the Economic Recovery Tax Act (ERTA)—in August 1981 was a watershed event in the history of federal taxation.

The centerpiece of the bill was an across-the-board 25 percent cut in individual marginal rates. However, the bill also included a number of lesser-known reforms that have had a dramatic and lasting impact on the Internal Revenue Code—indexation of tax rates to end “bracket creep,” improved tax treatment of depreciation and lease payments, reformed tax treatment of overseas income, and more.

As a tribute to the Reagan tax legacy, the Tax Foundation has assembled the following historical retrospective on the Reagan tax plan, featuring a collection of original Tax Foundation analyses conducted in the wake of the ERTA’s passage nearly a quarter-century ago. All documents are in PDF format:

Special Report: The Economic Recovery Tax Act of 1981
Read the original Tax Foundation analysis of the Reagan tax-cut plan, from its steep reduction in marginal rates to its indexation of tax rates to end the hidden tax of “bracket creep.” Originally published September 1, 1981 —a Tax Foundation classic.

The Fairness Issue
Was the 1981 tax cut a “fair” tax cut? A common criticism of the Reagan plan was that it disproportionately benefited the wealthy. In this classic response, Tax Foundation economists show that tax cuts only tilt unfairly toward high-income people if they eliminate a larger percentage of their tax burden. But since ERTA’s tax cut was proportional—giving equal percentage tax cuts to all income brackets—they argue that it was therefore fair.

Evolution of the Federal Tax System: 1954-1983
At the time, the Reagan cut was seen by many economists as radical and unprecedented. To see why, the cuts must be viewed in historical context. This Tax Foundation memo provides a brief history of the federal tax code leading up to the ERTA’s passage, underscoring its historical importance.

The IRAs are Coming… And Some Other Breaks, Too
The Reagan tax plan is sometimes described as a short-run policy that was designed to bump the U.S. economy out of recession. But fully one-fourth of the cuts were geared toward long-run economic growth, through provisions aimed at boosting savings and capital accumulation.

Debate Over Business Taxes
Most analyses of the Reagan plan focus on individual taxes. But the ERTA also made sweeping reforms to business taxes—including the implementation of the Accelerated Cost Recovery System (ACRS), which revolutionized the tax treatment of depreciation in an attempt to boost capital accumulation and economic growth.”

http://www.taxfoundation.org/news/show/163.html

The point of the Heritage Foundation chart is that in similar circumstances and time period, Obama has gone from 9.5% unemployment up to a 9.6%. Obama has only created government jobs, where Reagan created jobs in the private sector. Obama is only trying to put a band aid over the problem and Reagan, on the other hand, set up an economy that continued to grow for the next 20 plus years.

Posted by: Conservativethinker at December 24, 2010 1:18 AM
Comment #315779

Con,

Much is made of the 1981 Reagan tax cuts. Much less is made of the 1982 Reagan tax increases which were the largest in history. When it was all said and done, Reagan cut taxes by about 1.48 trillion but raised taxes about 1.5 trillion during his full tenure. All the while increasing government expenditures resulting in a tripling of the national debt during his tenure.

http://mises.org/freemarket_detail.aspx?control=488

Posted by: Rich at December 24, 2010 8:33 AM
Comment #315781
Obama has gone from 9.5% unemployment up to a 9.6%.

Wrong! That 9.5% rate is from December 2007, a year before Obama became president.

Posted by: Warped Reality at December 24, 2010 9:02 AM
Comment #315783

Actually, unemployment was 7.6% when Obama took office, and a little lower than that when Bush left. Remember, he promised to keep it under 8%. It never got as high as 8% anytime during the Bush, Clinton or Bush I presidencies. In fact, it had not been above 8% since 1984. The rate didn’t reach 9% until the summer of the Obama term.

Posted by: C&J at December 24, 2010 10:35 AM
Comment #315788

Perhaps some of you should go back and actualy read the links I posted. The Heritage Foundation chart showed a comparison between the results of the actions of Obama and Reagan regarding very similar recessions. The time period was backdated from the end of the recession. The results of their actions was a improvement in unemployment with Reagan’s actions and a continued loss of employment under Obama’s actions. Let me post it again, and at the bottom you will notice the source of this chart is “The US Department of Labor: Bureau of Labor statistics”:

http://blog.heritage.org/2010/10/13/reagan-recovery-vs-obama-recovery-in-pictures/

I might also add this link, because I don’t think any of you have a real desire to say anything but liberal talking points:

http://www.heritage.org/Research/Reports/2010/10/Obama-Jobs-Deficit-Further-Evidence-of-Failure

Now, you can spin it all you want, but our country is in a real mess and Obama’s Keynesian style recovery cannot possibly work. If there is a recovery, it will be because the new conservative Republicans hold someone’s feet to the fire.

Posted by: Conservativethinker at December 24, 2010 12:13 PM
Comment #315791

As stated earlier, the unemployment and fed spending is only the tip of the iceberg. It is believed by MANY economists that some state and city pension funds are going broke. Will it be up to the federal government to bail out these pension funds at the taxpayer’s expense? I don’t think so, and there will be a cry from conservatives to politicians to not bail them out with our money. The message sent in November and the message sent last week to the congress on the spending bill, will be resounded next year by the TP conservatives. These states and cities got themselves into this predicament by electing tax and spend liberal democrats and RINO’s. There is an old saying. “The shit will hit the fan” on this one. And since the House is now controlled by conservative republicans, you do the math.

Posted by: Conservativethinker at December 24, 2010 12:41 PM
Comment #315794

I’m already aware that Obama was too optimistic about our economy when he first took office; we were in far worse shape than anyone could think. Also, the economic picture worsen quite a bit between the fall of 2008 when Obama made those promises and January 2009 when he was sworn in. I see the x-axis on the Heritage graph is labeled “months since end of recession” which doesn’t make sense given the context. I assume they meant “months since beginning of recession”. In any case, the first 13 of “Obama’s recovery” on the Heritage graph occurred when George Bush was president. The fact that this is not mentioned is highly misleading. Also, the “Obama Recovery” line ends in June 2009 less than half a year after Obama became President and before any of his policies had much of a chance to have any impact.

In any case, I think it’s a poor idea to use the official BLS recession begin/end dates for such a graph. Those dates reflect when GDP growth was negative, but have little relation to the unemployment rate.

For more information look here.

Posted by: Warped Reality at December 24, 2010 1:13 PM
Comment #315796


Obama promised to keep unemployment under 8%. I don’t blame him for breaking that promise but I wish he would recognize the problem and fight for the workers and jobs rather than compromising with those that sold our country out for foreign profits.

Bush promised that his tax cuts would create millions of jobs. I most certainly blame Bush for his great lie.

Clinton promised the American workers protection against the effects of globalization. I definitely blame Clinton for his big lie. He did nothing to protect workers.

The government, the FTC, the Fed, they all swore that self-regulation of the markets was a great thing. They are all greed guilty as hell.

Lying in the pursuit of profit is no vice. The only exception, when one profiteer lies to another or other profiteers, they will put you in prison for that.

CT, typical conservative, bailed out the banks, lost an election, won an election and now, by God, the shit is going to hit the fan if anyone dares trying to help pensioners or workers.

C&J, Don’t you think that the problems created by Bush and the Republicans is quite a bit harder to deal with than the problems handed to Bush by Clinton and the Republicans?

You liked to remind us that Bush inherited a recession from Clinton. But the biggest problem Bush faced was the Balanced Budget Agreement and he got rid of it real quick. So, I guess it wasn’t much of a problem at all.


Posted by: jlw at December 24, 2010 2:44 PM
Comment #315830

Conservative Thinker-
First, I would ask you not to copy things wholesale. Quote. You have a right to fair use, but they have a right to maintain control over the republication of the greater part of their work.

Second, look at the unemployment figures. Does it go down afterwards? No, it goes up to 10.8, staying above 10.0 for a total of eleven months. It doesn’t come down to the level it was at before for about three years after the passage of the policy, and by that time, Reagan has already raised taxes. The experiment was a failure.

The experiment of starving the beast is also a failure. Fact is, few are suicidal enough to destroy their own government, and those who are cause such havok they undermine their party. Besides, you can be twice as popular if you both give people the benefits of government, and tell them they don’t have to pay the cost out of pocket.

That’s what the Republicans have done. Folks have said that they got too liberal, I think the answer is more that they know cutting programs enough is going to cause the kind of pain that turns people against conservatives, and they also know that generous pork providers gain loyal followings. That’s why they don’t balance the budgets. They can always be the drinking buddy sort of person who enables irresponsible behavior, rather than the wet blanket who gets the flak for reining in people’s instant gratification.

That, I think, has been the Republican’s source of popularity, but also our society’s source of decadence.

I think this nation best manages its finances when the consequences are clear. By running intentional deficits, the GOP set the stage for the distortion of the market, if you will for government spending and government taxation. Really, if you want to moderate the demand for government services, you make people pay for them upfront.

That would work in normal times.

However, these are not normal times, where government programs are often a luxury. We had a truly nasty economic disaster inflicted on us not so long ago, and that’s put us into a situation where the demand is not that flexible. The need for more jobs is not a local or unnecessary thing at this point. It’s a widespread, nationwide need.

I don’t think Tax cuts for the wealthy are going to stimulate jobs, not after ten years of record tax cuts creating record low job creation. I think it doesn’t encourage hiring, it encourages people at the top to simply play financial games, not do productive things. People at the top are making the same amount of money with less struggle. So why innovate? Why employ more people to do more productive things? Coupled with the deregulatory efforts the Republicans have gone through, they’ve taken much of the disincentive to screw around out of business.

Posted by: Stephen Daugherty at December 25, 2010 10:44 PM
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