November 01, 2006

The Bad Economy Myth

No matter what fad third party du jour raises its flag calling for the disillusioned protest votes of the masses, when this year’s midterm elections are boiled down to basics, it is still a two-horse race. Admittedly, the two horses are both slightly beaten up and wounded. Yet there are still considerable differences between the rotting equine carcass of the formerly proud Democratic Party of Kennedy, and the limping, but still functioning, trotter of the “Contract with America” Republican Party.

The most breathtaking part of voter disillusionment with Republicans is this disjointed logic proclaimed by many who plan on sitting this election out — or even worse — voting for the Democrats this November. Much of this logic hovers around the liberal media’s establishment and maintenance of the continual myth of a "bad economy." It's a myth so powerful, it manages to propagate itself regardless of what the actual numbers indicate. So pervasive is the "bad economy" myth that record low unemployment averages, real wage gains, historically below-average deficits and a booming private sector (as indicated by Dow Jones record highs), are swept under the liberal lie of growing misery and poverty.

Republicans do deserve some of the blame for the pestilent existence of this myth. GOP shame and blame emanates from a striking failure to take credit for sizable economic gains and create political capital from them. Obviously the liberal press will never aid an incumbent Republican party in achieving said credit, but that alone does not serve as an excuse for failing to bring the message to the grassroots. If there was a real understanding of the true strength of this current economy, these midterm elections could not possibly track as close as they have been.

Numbers are benevolent do-gooders, as numbers cannot lie. The current unemployment rate is 4.6 percent, as per the September 2006 numbers. This puts the unemployment rate for the current decade at 5.1 percent. Remember the glory days of the ’90s under Clinton, where the economy was booming and the good times would never end? The unemployment average for the ’90s was 5.75 percent, more than half a percentage point higher than the current decade's average. In fact, the current decade's average unemployment rate is lower than the averages of the ’70s, ’80s, and ’90s.

"Well," the opposition slyly remarks, "that's fine about the job numbers, but let’s talk deficits." Okay, let's. No true conservative will argue that Bush and the current Republican Congress have been good on spending (from a traditional conservative viewpoint). That said, the liberal lens of the political press pool has distortedly reported the budget deficits. The opposition would have one believe that the current budget deficits are a Bush-related phenomenon. However, this is again another complex distortion in the bad economy myth.

Since 1960, the United States of America has run a budget deficit in 41 of 47 years; that is 87 percent of the time. Furthermore, the average percentage of gross domestic product that the budget deficit makes up has been lower since 2000 than it was during the 1980s and ’90s. Since 2000, the budget deficits have made up an average of 1.07 percent of the GDP. Contrast that number to the greatly proclaimed booms of the 1980s and ’90s, decades where the budget deficit made up 3.93 and 2.16 percent of the GDP, respectively. The proclamation of crisis-level deficits under Bush, as another symptom of a reportedly bad economy, is an added, overt distortion in the continued sustenance of the bad economy myth.

And what about the youth vote? How is it possible that students can sit in their political science classes and hear their college-level classmates complaining about the myth of the bad economy? While the national jobless rate hovers at a very low 4.6 percent, the unemployment rate for college graduates puts that relatively low number to shame.

The unemployment rate among college graduates is at 1.8 percent, the lowest in five years and the foremost indication of the continuing market demand for a college education in the workforce. Mike Walden, an economist at North Carolina State, points out that "half of the new jobs filled this year by people over age 25 were filled by people with a college degree, even though folks with a college degree make up only one third of the workforce."

It is crunch time for these 2006 midterm elections. Republicans can and will pick up votes by running on the issues, not by indulging themselves in Democrat-style October surprises. Mystifyingly absent from the campaigns to date is any mention of the currently booming economy. If the Republicans cannot find a way to shine light on the myth of the bad economy, they may find themselves waking up on November 8 and seeing a Speaker Pelosi nameplate. Let us hope this is not the case, as I, for one, like the current drapes on Capitol Hill.

Posted by Benjamin Hackett at November 1, 2006 03:36 PM
Comments
Comment #192300

the “Contract with America‎ Republican Party !!??!??

When’s the last time you heard a Republican say the words “term limits” or “balanced budget”?

Posted by: William Cohen at November 1, 2006 02:22 PM
Comment #192306

William,

You beat me to it. What a joke! It’s become the Contract ON America.

Posted by: Dave1-20-09 at November 1, 2006 02:29 PM
Comment #192308

I measure the economy by the quality of jobs that are available, by the number of “Fast Cash” outlets (Just think about the financial status of people who need cash RIGHT now and are willing to pay triple digit interest to get it), and by the number of people who are so strapped for money that they have done nothing to prepare for their retirement. What % of Americans will depend on SS for their largest source of income at retirement?
The truth is, that in order for a republican economy to be good they have to borrow like hell (Reagan, bush Sr. Bush jr.) and the hell with the future!!

Posted by: charles Ross at November 1, 2006 02:30 PM
Comment #192311

Figures are useful. What’s interesting is the figures you did not supply. (d.a.n., that’s your cue.) It’s not as simple as you want us to think, of course.

At any rate, the Congressional elections do not hinge on the economy, so why are we talking about this now? You guys have made the War on Terror and the Iraq War the lynchpins of this administration; why suddenly do we find no posts on these issues?

Funny, here in Tennessee, the Republican campaign ads I get in the mail no longer mention the word “Republican.” I wonder why.

Posted by: Trent at November 1, 2006 02:35 PM
Comment #192314

Benjamin Hackett,

“Numbers are benevolent do-gooders, as numbers cannot lie. The current unemployment rate is 4.6 percent.”

Yes but with wages stagnant and cost of living increases ex. Healthcare, Education, Insurance premiums, Taxes and the slashing of funding that helps the poor and middle class, very few people are feeling the warm and fuzzies from a strong market.

“The opposition would have one believe that the current budget deficits are a Bush-related phenomenon. However, this is again another complex distortion in the bad economy myth.”

We believe that the deficits are due in part to the Iraq war(No oil rev.yet), waste, corruption, greed and mismanagement of tax dollars that went to friends, special interests, the wealthiest 25% of Americans, corporate welfare and GOP pork projects that were supposed to guarentee GOP wins in 06. I guess a bridge to knowhere pales in comparison to thousands of U.S. and Iraqi deaths.

What about the money owed to China and India?
What about the trade gap that continues to grow under this current administration?
Why is wealth disparity increased more rapidly?
Why do programs that benefit the poor and elderly get cut to suppliment estate taxes?
Why is the cost of higher education rising while middle class wages remain idle.
Why are energy costs skyrocketing to the point that the poor and middle class have to make wholesale lifestyle changes every winter to make ends meet?
Why are gas prices through the roof until election time?
Save the trickle down economics. Most Americans know what’s trickling down on them and their families. It’s not economics.


Posted by: Andre M. Hernandez at November 1, 2006 02:44 PM
Comment #192316

I loved these sentences:

The most breathtaking part of voter disillusionment with Republicans is this disjointed logic proclaimed by many who plan on sitting this election out — or even worse — voting for the Democrats this November. Much of this logic hovers around the liberal media’s establishment and maintenance of the continual myth of a “bad economy.”

First, the sentiment that it’s better not to vote than to vote Democratic. Nice! So much for encouraging greater voter participation. Second, that voters are disillusioned with the Republicans because not because of the Iraq War but because of the liberal media’s lies about the economy.

What lies? Be specific! Give us some examples from the mainstream media. You made a specific charge, so be specific in your answer. I’m sure if you dig you can find an error or two; show how the liberal media as a whole has lied about verifiable facts.

A factual, non-partisan discussion about the economy would be interesting and useful. But that’s not your goal, is it?

Posted by: Trent at November 1, 2006 02:45 PM
Comment #192322

The middle class in this country has gotten a good old-fashioned screwing over the last six years. If Americans vote to keep these crooks and incompetents in power in ‘06 and ‘08 then I truly give up, I really do.

Posted by: charles Ross at November 1, 2006 02:53 PM
Comment #192325

Benjamin,
Yes, it is a mystery. Why will Republicans not run on the economy? With a Republican president & a Congressional majority, there has been nothing to stop Republicans from enacting their agenda.

Could it be that real non-supervisory wages, which applies to 80% of all workers, are flat after six years?

Could it be that the stock market (DJIA) has increased only @13% in six years?

Could it be because the current recovery has been the weakest for job creation in 40 years? That the Bush administration policies have resulted in @ 3 million non-farm payroll jobs added in six years (with most of those in Health Care & government)? After all, even Jimmy Carter created over 10 million jobs in just four years.

The next unemployment number comes out this Friday. Remember, just keeping up with population growth means the economy should be adding 150,000 - 175,000 jobs per month.

GDP declined to 1.6% this past go around. Without some auto inventory oddities, it would have been .9%

The yield curve is deeply inverted, a reliable indicator of impending recession. Housing prices took their biggest drop since 1970.

Core CPI inflation last month was .6% which is huge. Another reading like that, an annualized number of 7%, and we are well and truly screwed.

The Fed cannot drop rates because of the core CPI- in fact, I think they will be forced to resume increases after the election. We are already falling into recession. Hold onto your hat.

Posted by: phx8 at November 1, 2006 02:57 PM
Comment #192326

This article, from the “mainstream media”, should open a few eyes.

http://news.yahoo.com/s/ap/20061028/ap_on_go_ot/america_the_bankrupt

Posted by: mem beth at November 1, 2006 02:58 PM
Comment #192347

Wondering how much effect families where both parents work has on the unemployment numbers?

Anybody know?

How about the folks still unemployed who have fallen off the rolls?

How about the folks who are underemployed because it’s all they can get?

Posted by: womanmarine at November 1, 2006 03:29 PM
Comment #192355

Where are the Conservative replies? Cat got your tounge boys?

Posted by: Dave1-20-09 at November 1, 2006 04:00 PM
Comment #192357

I’m loathing both parties right now but you Dems have NO solutions.

Raising taxes, raising teriffs, increased regulation of industry…

These are recipes for a lot of things and economic prosperity is not one of them.

The more you regulate and the more you try to “flatten out” the system artificially, the more socialist you get. Show me a socialist economy that is working like ours and I’ll listen to you.

If you say China, you don’t get to blog anymore.

As long as you’re talking about debt, talk about the foreign aid budget and look at the humanitarian work we do that is never repaid.

Posted by: Nate at November 1, 2006 04:02 PM
Comment #192359

Dave1,
Used to be Red Column posters were all over it, full of comments about the greatness of the Republican program & Bush. Now, crickets. Their policies are indefensible- a few lame talking points which fall apart when investigated. It is not a coincidence that the Republicans are going negative. Democrats have no choice to strike back, so the whole thing is a wash- and a wash, or a mud slinging contest, is far better for Republicans than trying to defend failed policies and foreign policy debacles.

Posted by: phx8 at November 1, 2006 04:07 PM
Comment #192362

Nate,
Lame. But at least you are trying. House Democrats have already stated they will re-institute pay-as-you-go, and today Pelosi announced lobbyist gifts, funding of travel, & use of corporate jets will be banned under a Democratic Congress. Democrats will increase the minimum wage from its current level, which is the lowest (after adjusting for inflation) in 50 years. This will stimulate consumption. It is exactly the kind of action which needs to be taken. Tax cut repeals will not affect most Americans. Just as Clinton & the Democratic Congress enacted the tax bill in 1994 which resulted in over 22 million in jobs & a screaming bull market, the current Democrats will probably raise taxes on the top 1% of wage earners. These actions, along with many others, will bring the budget deficits back into line.

Posted by: phx8 at November 1, 2006 04:14 PM
Comment #192364

phx8 -
“After all, even Jimmy Carter created over 10 million jobs in just four years.”

As I remember Jimmy Carter years…we had a dismal job market with moderately high unemployment. Unemployment never went above 7.8 percent under Carter, and it was as low as 5.6, according to the Bureau of Labor Statistics web page. With that many unemployed its easier to get workers to work if there are jobs. It is much harder to find 10M workers when you are working with a lower unemployment rate.

Posted by: Don at November 1, 2006 04:15 PM
Comment #192365

The article Mem-beth posted is very telling, and I would guess, hard for the right to dispute.

Posted by: womanmarine at November 1, 2006 04:15 PM
Comment #192369

There is only one economic issue I care about. The AMT. Please index it. I’m getting closer and closer to having to pay it. If republicans care about the middle class, they will fix the AMT. I don’t care about the tax rate for the rich. Let them pay it. Better yet let them also pay social security on their entire income, not just the first $76,000. This is a tax break for the rich. If I’m going to pay the AMT like the rich, how about I pay social security like the rich. Take only %1 percent of my income and then I’ll by 6% on that(.06%). I bet all responces will be about how horrible it is to tax, but nothing of substance on the AMT or $76,000 income ceiling.

Posted by: SassyA at November 1, 2006 04:19 PM
Comment #192370

Ah, nice essay Benjamin. I would change the title to “Cherry Picking Numbers 101” though. First you cherry-picked the 4.6% rate from last month, and compared it to the average for the 90s, very neatly selecting some numbers for “the decade.” These of course contain the less than stellar results under Bush I as well as W’s recession. Let’s go to the data and see if we see any trend shall we, especially in light of your “numbers are benevolent do-gooders, as numbers cannot lie” position.

From the Bureau of Labor Statistics, annual percentage unemployment rates:

1988 5.5%
1989 5.3 GHWBush - lower than previous year
1990 5.6 higher than previous year
1991 6.8 higher than previous year
1992 7.5 higher than previous year
1993 6.9 Clinton takes office - lower than previous year
1994 6.1 lower than previous year
1995 5.6 lower than previous year
1996 5.4 lower than previous year
1997 4.9 lower than previous year
1998 4.5 lower than previous year
1999 4.2 lower than previous year
2000 4.0 lower than previous year
2001 4.7 Cinton leaves, GWBush takes office -higher than previous year
2002 5.8 higher than previous year
2003 6.0 higher than previous year
2004 5.5 lower than previous year
2005 5.1 lower than previous year
YTD2006 4.7 lower than previous year

Hmmm, do we see anything interesting there regarding how Clinton performed versus the Bush boys?

Nice try though Benjamin. It’s obvious it took you some time to piece together your selected statistics. Too bad a ten minute google search and the facts blew it all out of the water. Also too bad for those benevolent little do-gooders. Facts, damn!

Posted by: Boomer at November 1, 2006 04:20 PM
Comment #192371

phx8 -
“Could it be that the stock market (DJIA) has increased only @13% in six years?”

Not unusual for the DJIA. During Johnson’s Presidency (a Dem from Texas) the DJIA grew by a whopping 6.8% in 6 years.

Posted by: Don at November 1, 2006 04:29 PM
Comment #192375

SassyA,
Yes, the AMT bites. It is supposed to be adjusted upward to fulfill its original purpose.

Don,
Good point, except that the Labor Pool Participation Rate is about where it was 15 years ago, a little under 70%. The population of the US has increased @ 13 million since Bush took office, yet only 3 million non-farm payroll jobs have been added. Something is seriously out of whack.

The problem is that the unemployment rate only measures people laid off within the last six months who are actively looking. Too many unemployed do not meet this criteria. In addition, I suspect a lot of people are under the radar, off the charts, part of a black market. Unfortunately, it is hard to get a read on that.

LBJ dealt with Vietnam & the Cold War, and simultaneously attempted to institute the Great Society program and end poverty. Nice thought, with some great achievements in the effort, especially in reduction of poverty; but in terms of economics, impractical. Vietnam was a disaster in many ways. Also, tax rates were much higher, and it is interesting that the DJIA still increased.

Source for statistic? I am not questioning its validity, I just like that kind of thing.

Posted by: phx8 at November 1, 2006 04:49 PM
Comment #192376

Boomer et al

LAG time. Business decisions take time to be effective. The economy started to decline in 2000 - a year before Bush took office. The Federal fiscal year runs from October to October, so as late as OCTOBER 2001, we still had many Clinton priorities. Bush policies could reasonably have an effect around 2003.

The same goes at the start of the period, BTW. The recovery began in March 1991, more than a year before Clinton took office. Clinton did a decent job as president, but he inherited an economy that was going up and he left an economy that was going down. Bush inherited an economy on the way down and so far has one on the way up.

No liberals should be allowed to drive cars, since they obviously do not understand the concept of momentum. If they are driving their cars at 70 MPH, they evidently figure they can stop immediately and/or go from zero to 70 in zero seconds.

Even if you look at the stats given. 2006 unemployment is as low 2000 and lower than all but three of the years in the past 20. You also understand the unemployment never gets to zero. Anything less than 5% is just around full employment.

The fact is if Kerry had been elected in 2004 and we had exactly these same numbers, Dems would hail them as a great turn around. If Dems are elected this year, they still might find the silver linings.

Presidents get too much credit or blame for the economy anyway. But to say that this economy is anything but one of the best in our lifetimes is just wrong.

Posted by: Jack at November 1, 2006 04:51 PM
Comment #192385

Jack

It’s okay. You can just come right out and say it’s Clinton’s fault. We expect it. And if by some miracle the Dems win and are able to turn it around, you will credit Bush. It’s in your genes. You can’t help it. Your filters only let you see things in that way. Tsk.

Posted by: mental wimp at November 1, 2006 05:18 PM
Comment #192386

Jack,
You never comment on non-farm payroll numbers, even though you know perfectly well that economists use that number, NOT the unemployment rate. Is low unemployment good? Yes! Is it a useful measurement when discussing employment statistics? Not really. But it sure helps avoid addressing non-farm payroll, does it not?

Lag time? Depends on the number of course, but six months is a more realistic number for most measurements.

When housing falls, as it started to do two months ago, the lag time before the onset of recession is up to a year. An inverted yield curve is also a reliable indicator of a flowing market, and it has been inverted for 10 months.

I suspect we are entering a recession right now, in the technical sense of the word. Republican policies have been tremendously beneficial to large corporations, so earnings look great. Republican policies for tax cuts on dividends & capital gains are also very helpful to the wealthy. Too bad, good times for large corporations & the wealthiest 1% do not translate into anything most Americans make sacrifices to support.

Posted by: phx8 at November 1, 2006 05:18 PM
Comment #192388

Phx8
“Democrats will increase the minimum wage from its current level, which is the lowest (after adjusting for inflation) in 50 years. This will stimulate consumption”

I never reply to “economic” posts for obvious reasons. So I would like to ask a question please:
If employers are forced to give pay increases, why won’t they just raise prices to make up for the lose of revenue?
I know I would.

Posted by: kctim at November 1, 2006 05:20 PM
Comment #192392

Benjamin, true enough for the moment. But, watching the some of the debates, the Independents are procuring much higher caliber candidates than ever in the past, and many, many more of them.

I believe the Independent/Third Party candidates are growing in prominence in our political landscape as ever greater numbers of voters leave the Republocrat parties for Independent voter status. Swing vote margins in the polls appear larger this election cycle too! Another warning of what is coming for the Republocrat parties.

Posted by: David R. Remer at November 1, 2006 05:26 PM
Comment #192394

Kctim,
By that reasoning:

If we brought back slavery, employers would be much more profitable.

If employers paid workers only $1 per hour, they would be more profitable.

If we did away with weekends and vacations, employers would be more profitable.

What kind of country do you want to live in?

Posted by: phx8 at November 1, 2006 05:28 PM
Comment #192399

Jack Had a Thread A while Ago That Showed All The Recoverys From Jfk to Bush 2 Were By Republicans Except The One Recovery By JFK. Mr Carter Did Create Ten Million Jobs But Due to all the Baby Boomers Hitting the Job Market it was not near enough Jobs hence the Almost 8% unemployment Rate He Had ,I Remember those days the lines were very long at the unemployment Office! And God Awful Interest Rates at 19% So I Joined the Army. Yes there are more people today than in 1980, but They Are A much Older And Much Younger Group of people that are not in the job Market. I agree Clinton Did A great Job With The Economy.

Posted by: Rodney Brown at November 1, 2006 05:31 PM
Comment #192405

Phx8
Please don’t use extremes. I feel its a legit question and its not political in any way.

While my economic knowledge is limited, I do know that when overhead goes up, you raise prices to make up the difference.

How would an increased min wage be any different?

Posted by: kctim at November 1, 2006 05:47 PM
Comment #192410

You raise prices if you can. Competition could make you keep them the same. Also, higher wages can attract more skilled and efficient labor. In the long run, it’s not necessarily true that increasing the minimum wage increases prices.

Also, working people tend to spend the money they earn, not invest it in paper. This can stimulate the economy through the small businesses that depend upon these consumers. This may make up for a small decrease in their margin by increasing volume and eventually recapturing the margin through economies of scale. For example, you may pay your clerk in your store a little bit more, but if everyone else is paid more, you may see more people spending more money in your store. Thus the 8 hours the clerk is spending in your store results in higher productivity, off-setting the increased pay.

Posted by: mental wimp at November 1, 2006 06:05 PM
Comment #192416

Honestly, you can pull up a ton of economic data to support either Point of View, I’ll stake my MBA and PhD on that. What I think is true, and this is just casual observations, Anyone making over 80K a year with 1 child is doing OK. Anyone below that is scraping by for the most part.

How many of you literally have a few days each month where you just have to put the breaks on everything and wait for payday?

I make over 100k+, wife, 2 kids and we have it every month. The dollar just doesn’t go as far as it use to anymore.

Plus the current inflation stats are a joke since the discount fuel costs. That’s pretty much what drives our economy’s base costs.

Posted by: special_ed at November 1, 2006 06:26 PM
Comment #192432

Mental

Presidents get too much credit or blame for the economy. Clinton did a good job, but you cannot credit him with the upturn and you have to admit that the economy started going down while he was still president.

Phx8

The non-farm payroll doesn’t capture all the people who might be self employed or people who just are not looking. We used the unemployment rate happily before and you will use it happily if/when Dems take over.

I do not say this is the best economy ever, but it is very good. As I said above, I think presidents get too much credit or blame for the economy, but you certainly should not BLAME Bush for a good result.

Unemployment lags more than six months. It takes weeks or months to make even simple personnel decisions. Besides the downturn started before Bush and when do you start the count. A president does not have the power effectively to change policies the day he is sworn in. Budgets for various Federal agencies go from October to October. It is just silly to blame Bush.

BTW - even if we take your unrealistic six month scenario, six months from January 22, 2001 takes you almost to July. Take a look at this article and notice the date and the period it is describing. Does this sound like good news to you or the start of something going down?

Special_ed

Yeah people have trouble making ends meet. We live on earth, not in heaven.

Many people have too much money, but nobody has enough.

Posted by: Jack at November 1, 2006 06:59 PM
Comment #192434

special_ed-

You are right about inflation stats being a joke. Not accounting for food and oil…what’s really left?

I do not subscribe to the theory of economics that directly links statistics on economic growth and recession solely to who hapenned to occupy the oval office at the time. That report must have been written by the same person who linked Saddam with Al Quiada. I’m afraid reality is slightly more complex.

Posted by: Kevin23 at November 1, 2006 07:02 PM
Comment #192446

Jack,

Re: LAG time. Certainly there is a lag time for economic performance. But if you choose to apply a lag, then do it fairly. I don’t care if you choose six months, one year, four years, whatever.

Benjamin is making his point of an economic “boom” partially on the basis of the unemployment rate. I simply pointed out the numbers don’t support his premise. If you decide he’s right by looking at W’s performance 5 1/2+ years into his Presidency when when he selects his October number, then doesn’t this mean that we can look at Clinton’s performance from 5 1/2+ years and after? Is the “lag” from GHW Bush done then? Go ahead. My point still stands, just look at the
numbers. Or was Clinton’s continued good performance still a lag from the great GHW Bush? Did that go on for eight years? Then Clinton’s lag for the downturn on W’s watch is only two years until W turned it around? His poor performance lag time is two, not eight. Hmmm, doesn’t sound like apples to apples now does it?

I prefer “the buck stops here” logic. But, if I were in the GOP I guess I’d have a problem with that one too.

The problem with the “lag time” logic is unfortunately time is a constant. You’re choosing to make time a variable to fit your premise. See, you can’t have it both ways. You can’t give credit for the steady decline in the unemployment rate during Clinton’s times to GHW Bush, and then blame Clinton for W’s poor record on the subject.

Better worded, you can take all the credit for GHW Bush and give all the blame to Clinton, that’s the universal GOP answer. It’s just not intellectually honest (and I’ll point out the flaws in your argument).

Posted by: Boomer at November 1, 2006 07:33 PM
Comment #192449

This so-called “good” or “very good” economy is an illusion financed with massive debt, borrowing, rampant spending, and money-printing.

We have a large economy ($12.5 trillion GDP).
So, things take years to transpire, which fools most people.
Federal tax revenues are $2.2 trillion annually.
Total current federal debt is $22 trillion ($8.6 trillion National Debt, $12.8 trillion Social Security debt, $450 billion Pension Benefit Guaranty debt, etc.).
That’s like you having an income of $100K per year, and being $1 million in debt.
There will be consequences for so much fiscal and moral irresponsibility.
Some of the consequences will already be unavoidable.

People, do the math.
This economy is being financed with massive debt for political reasons, and it is threatening the future and security of the nation.

For only the $8.6 trillion National Debt, it would take 143 years to pay down. The interest on that debt only is over $1 billion per day !

The total $22 trillion of federal debt is 176% of GDP. That’s a recipe for disaster. If you include all federal debt, it has never been worse. Not even in WWII.

Your irresponsible incumbent politicians are bankrupting the nation and future generations, but voters keep re-electing them.

Well, those voters will learn the smart way (stop re-electing irresponsible incubment politicians), or the painful way (keep re-electing irresponsible incumbent politicians).

Posted by: d.a.n at November 1, 2006 07:36 PM
Comment #192462

Boomer

Try to understand. Presidents are very important, but they do not control the economy. Economic cycles do not match presidential terms.

The economy started UP in March 1991. It started down in March 2000. If you think of your car, you start rolling down the hill in March 1991. But it takes a little while to get going. You start going up a hill in March 2000, but it takes a while to slow.

Who was president in March 1992? Who was president in March 2000?

Clinton did a good job with the economy. I am one of the only people around who can praise both Bush and Clinton because I understand that they came at different conditions.

If you insist on comparing Bush and Clinton, you have to look at their relative places in the economy. In Clinton’s case, the economy turned up roughly in spring 1991. In Bush’s case it was in winter 2003. If you must compare years, 2006 is like 1994. Of course, this comparison is not very good either, but it is better than what you are proposing.

Dems should just get over this bad economy thing. It makes them look silly.

Like Monty Python, “she turned me into a newt … I got better”

Posted by: Jack at November 1, 2006 08:04 PM
Comment #192464

Benjamin,

The Bad Economy Myth?

This is what David M. Walker, head of the GAO, says: “The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it.” link.

Care to comment?

Posted by: jrb at November 1, 2006 08:06 PM
Comment #192465

Jack,

Dems should just get over this bad economy thing. It makes them look silly.

Really? Check out the link I posted above then tell me if you still feel the same way.

Posted by: jrb at November 1, 2006 08:10 PM
Comment #192469
Since 1960, the United States of America has run a budget deficit in 41 of 47 years; that is 87 percent of the time. Furthermore, the average percentage of gross domestic product that the budget deficit makes up has been lower since 2000 than it was during the 1980s and ’90s.

You are in the rose-colored zone.

Nice spin. It’s interesting how they always forget to include the other federal debt. When you consider all federal debt, it has NEVER been worse. A number of things have never been worse than the they were during the Great Depression.

Here’s the stats for only the $8.6 trillion National Debt (now 69% of the the $12.5 trillion GDP).


Now, if you include the other (cleverly omitted) debt, such as the $12.8 trillion Social Security debt, and $450 billion PBGC debt, it’s even worse than many think. Now, add $20 billion of personal nation-wide debt, and that’s about $42 trillion of nation-wide debt.

All this fiscal and moral irresponsibility (massive debt, borrowring, spending, and money-printnig) reads like a strategy for “How a Nation Can Commit Suicide”.

Posted by: d.a.n at November 1, 2006 08:11 PM
Comment #192472

Read it and weep.

Who’s responsible?
http://www.cedarcomm.com/~stevelm1/usdebt.htm

What’s it being spent on?
http://www.deviantart.com/view/9410862/

GAO warns: national debt could reach $46 trillion.
http://news.yahoo.com/s/ap/20061028/ap_on_go_ot/america_the_bankrupt

What’s your family share? (dynamic clock!)
http://www.uwsa.com/uwsa-usdebt.html

Posted by: Max at November 1, 2006 08:16 PM
Comment #192473

Jack,
Most intelligent response I have seen. I remember most vividly in 1999 and 2000 Bush being accused of “talking down the economy” by President Clinton and the democratic party. But economic indicators were already painting a recession in the near future. The attacks on 9/11 only made things worse. I found an article in the Free Republic from March of 2001 that basically supports this.

www.freerepublic.com/forum/a3ab2b77020fe.htm

Posted by: ed at November 1, 2006 08:17 PM
Comment #192476

jrb

We are moving here to a different debate. The predicted economy is a danger. You can say that the economy is good now, but I fear the future will be worse. My comments are about what is and what was. What will be I am less certain about.

I have written on many occasions the we face a crisis of entitlements and that we are spending too much. The problem with this (for the Dems) is THEY have to do something about it too. It is fun to blame Bush, but if you are looking forward we will need to cut Federal spending and address entitlements. Dems are unenthusiastic about these things. The future is scary. That is why Dems prefer to make obviously false statments about the present and the past. Our biggest problem is the ticking demographic time bomb. That bomb was planted in 1962 or maybe even 1935. Now that is a lag time. The Dem plan is to raise taxes to address it. Republicans want to try some innovations such as helping people save for their own retirement. We will end up with a combination of both.

Posted by: Jack at November 1, 2006 08:21 PM
Comment #192478

Jack,

No problem if you wish to change the analysis. And despite your sardonic tone, I do understand that “Presidents are very important, but they do not control the economy.”

But let’s review. It was Benjamin’s premise that the economy is booming, and based in part on the unemployment rate. When I showed if we looked at all of the data, not just his cherry-picked data, his comparison to Clinton didn’t hold up. Note, his comparison, not me insisting as you propose.

As a rebuttal to my facts getting in the way of his good spin, you educated us all that there is a lag. I didn’t disagree with the lag, just that you can’t cherry-pick the lag times either.

Now it’s all about economic cycles. They just happened to run just before and just after Clinton’s presidency. Of course.

But, in the end, I agree with your original premise, the Presidents don’t control the economy. I guess we agree on that point, so that would trump any of Benjamin’s original spins. Checkmate.

Posted by: Boomer at November 1, 2006 08:22 PM
Comment #192479

Jack,

Why do you believe this reflects a crisis of entitlements? There is actually a possibility entitlements can help [I know, it sounds counter-intuitive].

Regardless, the article suggests we have been heading in the wrong direction for a while now. Not, as you are suggesting, that everything is dandy.

Posted by: jrb at November 1, 2006 08:30 PM
Comment #192480

I knew you’d come through, d.a.n.

Posted by: Trent at November 1, 2006 08:36 PM
Comment #192485

d.a.n.n.i.n.a.t.or


:-)

Posted by: Max at November 1, 2006 08:38 PM
Comment #192490

Boomer

I do not think it is valid to make a close comparison Clinton to Bush. If you do make that comparison, Bush does okay (2006=1994 in the cycle). I think that the article is just trying to point to the good economic news and he is bringing up Clinton only to show that today’s economy is very similar to the one Dems hailed a few years back as nearly perfect. They cannot validly criticize this economy if they want to praise any others besides maybe bubble years of 1998-9.

jrb
I do not know how entitlements can help. The working population supports the non-working population. As the ratio of workers to non-workers shinks, each worker has to pay more or each non-worker has to get less.

The economy is always running toward the cliff, but it rarely actually runs off. We will address entitlements when the pain gets great enough. Until that time it will be politically impossible. There will be more pain because of our wait, but that is how politics (both parties) works.

Politics makes bad economic choices, but we are stuck with it. I do not agree with DAN that we need to bring in inexperienced amateurs every two years. Even Dems might be better. It is hard to make tough choices in a democracy until everybody is convinced and that takes a long time.

Re today’s economy, it is good. We cannot make good decisions if we pretend (or really do) believe in false realities. We will have a much harder time addressing the problems of the future if we continue to claim life is so hard for us now. You can imagine the political calculation. “Life is too hard here and now to do something about the future.”

Posted by: Jack at November 1, 2006 08:51 PM
Comment #192498

There was a really good WP article recently on this subject:

White House officials hailed the improving short-term budget picture as a vindication of President Bush’s tax-cutting agenda, though the long-term prospects are considerably bleaker, given the escalating costs of health-care and retirement programs and, in the view of many economists, the red ink produced by tax cuts.
Posted by: American Pundit at November 1, 2006 09:05 PM
Comment #192500

Great post. Unfortunatley, in a time when Joe Blow on the street can’t name his congressional representative or the VP of the US, getting people to vote out incumbents who are deemed as fiscally irresponsible seems impossible. Especially when they represent both parties. Only in America, where you get a free education, where you are free to be whatever you want, would something this stupid be happening. Everyone wants free healthcare, but are unwilling to be responsible for their day to day health. No one is responsible for anything anymore. From the top on down. I’m afraid we are doomed.

Posted by: ed at November 1, 2006 09:08 PM
Comment #192503

phx8 -

“Source for statistic?”

Sorry, was away for while. Just picked a beginning date out of the air (no attempt to find any down or up day) for near beginning of LBJ term and checked same date for 6 years later.

Posted by: Don at November 1, 2006 09:14 PM
Comment #192504

“Why do programs that benefit the poor and elderly get cut to suppliment estate taxes?”

Andre:

Can you back this up, or are you just blowing hot air?

Posted by: Alex Fitzsimmons at November 1, 2006 09:19 PM
Comment #192507

Jack,

When speaking of entitlements I was thinking you meant things like a national healthcare program.

National healthcare could actually decrease costs—through elimination of, among other things, our poorly structured medicare program [annual negotiating costs, adminisrative costs, etc… would disappear or be reduced].

It could increase tax revenue [by decreasing the expenses of corporations—like GM who spends more per vehicle it produces on heathcare for employees, retirees, and family members than it does on the steel that goes into the car—it will not only make them more globally competitive but also increase their bottom line and thus tax liability]. It will free money available to business for R&D. It will also increase productivity as more healthy workers tend to be more productive.

The same benefits would be felt by small business owners. If the medical cost burden is lifted from employers, they will also feel less pinch from an increase in the minimum wage. This allows the working poor to not only make more, but have healthcare too—without the burden on our business community.

Additionally, a national healthcare program would hedge some of the risk involved in entrepreneurship [can you afford to go without healthcare for your family while you quit your job and attempt to start this new venture].

Bottom line, there are a host of economic benefits to an entitlement program like this.

Posted by: jrb at November 1, 2006 09:24 PM
Comment #192515

I experienced socialized medicine in Scandinavia.

If you can get Americans to accept the kinds of care they get in Europe, I am for it. What would happen is that we would just get the high cost U.S. system paid for by the government making costs rise.

I think we could subsidize things like dental care and vaccinations, since not many people would abuse those things.

Posted by: Jack at November 1, 2006 09:33 PM
Comment #192516

Hey Max !,
I really like this Comment Numbering!

More like the MAXINATOR !
Good points, graphs, and links.
In an voting nation, education is paramount.
Good work !
There ARE reasons to be concerned.
But, the rose-colored, blind loyalists don’t want to address your points.
They prefer to spin their rosy spin.

Posted by: d.a.n at November 1, 2006 09:33 PM
Comment #192519

The economy now is good. People are working. It’s not the best of times, but it is quite far from the worst of times. Next year might be downright horrible, or not. Last year wasn’t better or worse (by much). That’s two good years. I’ll take that over two bad years, wouldn’t you?

People whine that they are so much worse off than they were before, but I don’t see it (and I live in Michigan with the highest unemployment in the nation). My service-related company still made more profit this year than last. People here are not in soup lines, or trying to sell their furniture, etc. Get real! This economy is very good and has been for most of the last 6 years.

Posted by: Don at November 1, 2006 09:39 PM
Comment #192520

Jack,
Government in healthcare is a mistake, which is what you are saying? I agree.
The best healthcare system is the way it used to be. Without any middlemen (government and insurance companies). For example.

Posted by: d.a.n at November 1, 2006 09:40 PM
Comment #192523
Don wrote: The economy now is good. People are working. It’s not the best of times …
Don, You are overlooking important factors. This so-called rosy economy is being funded by MASSIVE government borrowing, debt, spending, and money-printing, and there will be long, long lasting consequences for so much fiscal irresponsibility. Posted by: d.a.n at November 1, 2006 09:45 PM
Comment #192524

Jack,

Actually, I disagree. Check out this link and tell me what you think.

Posted by: jrb at November 1, 2006 09:47 PM
Comment #192563

D.A.N. -

Nothing new in what you say. Same thing has been happening for 40 years or longer (maybe not as much, but still the same thing).

I worried about the same things you complain about back in 1976. There was even talk back then that Social Security wouldn’t be there for us when we retired. I knew this 30 years ago. For 30 years the Dems and the Reps did nothing much to solve the problems.

Charts and graphs have done nothing to change the facts. Politicians have done nothing significant to change the facts. The trade imbalance, the deficit, the SS issue, the Medicare issue… not one of those issues has been dealt with effectively in the last 30 years I’ve been watching.

Your solution is to fire the career politicians (except that you are also against anyone with an R behind their name who isn’t a career politician). So your solution is to elect inexperienced Dems and Independents? Good luck! Nothing else has worked.

Posted by: Don at November 1, 2006 11:55 PM
Comment #192575

Nate said,

as long as you’re talking about debt, talk about the foreign aid budget and look at the humanitarian work we do that is never repaid.

How these two are significantly related I have no idea but I’l try. Which is more pathetic, having the Chinese holding our debt over our head or the pittance of GDP we spend in foreign aid?

Posted by: chris2x at November 2, 2006 12:20 AM
Comment #192608

I have an honest question. By honest I’m not trying to score any political points etc, I’m just genuinely puzzled. I keep hearing about the “cost” of the Bush tax cuts. My question is this; how is there a cost if tax revenues increase? Is the current revenue less than what was projected under the old tax rates? I can see how if the economy cools down a lower tax rate could reduce revenues, but everything I’ve seen shows that revenues increased since the tax rates were lowered. Can someone clarify this?

Ok, now that I’ve got that out of the way, time to try for political points again. Since we’re debating the economy, the real measure of how good or bad it is will show based on how long it takes the Democrats to change their tune and say all is well with the economy if they get the House. My bet is they’ll have the decency/sense to wait about a month, maybe then some idiots will believe it.

Posted by: 1LT B at November 2, 2006 06:32 AM
Comment #192610

1LT B,

I’m not an economist, and I’m certain someone with more experience will jump in (and lots of ppl trying to make political points, as well, but that’s life).

As I understand it, some tax cuts might lead to increased tax revenues, though, again as I understand it, once you factor in the normal flow and ebb of the economy, they are usually overstated. The cost is that if these tax cuts increase the deficit, which Bush’s did (no dispute there, I think), then that money has to be paid back with interest that is greater than the extra revenue generated. Those deficits just contributed to the mindboggling national debt. Right now 20 percent of the federal budget goes to service that debt. Anyway, without doing any last-second research, that’s my understanding.

When tax rates are very high, then cutting taxes has a greater return in revenue. Our tax rates are relatively low compared to much of the world’s, so tax cuts get less bang for the buck.

Another consideration: different types of tax cuts stimulate the economy to different degrees. Some, I think, don’t do much at all in those terms.

Perhaps someone with more expertise will post a relatively objective answer with factual support.

Your last point. You’re probably right — that’s the nature of politics.

Posted by: Trent at November 2, 2006 06:51 AM
Comment #192617

I find these discussions amusing, and occasionally I respond to a few posting that I think have merit. The first mistake I think all of us make here is to try to compare one administration with the other. Second, one forgets that the Dems, Reps, Ind are all a part of this adminstration and all play a role. I have noted that the party not in the lead seams to think that they are not part of this Administration. Wrong Answer! I have not looked at the numbers; however, I would be willing to bet, that the Dems/Ind are just as guilty as the Reps for the current state of our economy. Well maybe 15 more house members and 6 more senators have generated more pork than the Dems/Ind. Reguardless, as I have stated previously here, a simple majority in the Senate is insufficent to pass the so called run-a-way spending of this Administration. What roll did our Dems play in this? All legislation in any administration is based upon compromize. So to blame one party or the other is somewhat jaded. As for the economy, I personnaly see it as growing, I read a recent article that the mean wage for hourly workers is approximately $17.70 per hour and just yesterday, there was an article that stated that wages grew at 2.1%. Now I no that there are those of you that will find fault with this and claim all those unemployed that fell off the rolls were not counted and that real income is loseing ground. I would offer the following: Save more spend less as indivuals, thus lower the national debt. Personal responsibility starts with the indivual. Require our elected officials to be more conservitive with our money. After all, we have a say every two and six years respectively to require them to answer to us. So if our economy is so bad, is it the Presidents fault? Or, the fault of the Congress who appropriates and spends the taxpayers money. It is easy to look to the top and lay blame the head man/woman for all of our woes; however, by doing this, we can forget about our own responsiblity. If you think the economy is bad, save more, buy American, support good politicians (if there are any) and vote for those that are responsible to you the voter not to a party.

Posted by: Lacy at November 2, 2006 07:46 AM
Comment #192618

Unemployment stats in the USA are so bogus. Have you ever studied who IS NOT counted as “Unemployed” in the USA:

1) Those who leave their job willingly
2) Those who did not work full time
3) Those who worked free-lance
4) Those who hadn’t worked in the past 2 years ( now that would include students, mothers coming back to work after pregnancy, etc.)
5) Those who job didn’t pay into state unemployment insurance

Net, net. The real number, those who want a job and cannot find it would put unemployment rate in the USA at nearly 12 to 15%! No kidding.

Just as the BLS has “fixed” the CPI to keep reported inflation at an artificial low, the same goes for a true account of the umemployed. And I didn’t even include those who are working 2 or 3 part-time jobs because they can’t find full time work.

I certainly agree about tax rates. But let’s be clear what is hurting most Americans in this coming election: not Federal income taxes, but Real Estate taxes and Sales Taxes. On an average, local RE taxes are rising 10 to 20% a year.

If your wages are stagnant (as they have been under Bush), and your living costs are going up 3 to 5% a year, just imagine the crunch you feel after six years. Now that’s the pain. And God help you if you get sick. THen get ready to declare bankruptcy. Remember, in 2004 75% of personal bankruptcies in the USA were due to medical bills!

Posted by: Acetracy at November 2, 2006 07:55 AM
Comment #192619

d.a.n.

uhmmm, dude the worlds changed since the 50’s okay.

Gross Domestic PRODUCT??

Wake up. Let’s try including SERVICES muchacho - then rerun your stats. Oh, and if you include us exporting ideas and services our trade imbalance would look a lot different to.

You don’t see people driving around in Studebakers anymore - so its time the “end of the world” crowd update their lame stats using out of date irrelevant factoids.

gotta go - my leisure suit needs some ironing.

Posted by: echop8triot at November 2, 2006 08:00 AM
Comment #192625

If the economy was so good, the Republicans would be running on it. They’re not. All they try to do is raise the specter of tax increases and gay marriage. After all, they arrived in power with a budget SURPLUS. It is now gone, replaced with a huge deficit and what, exactly, do we have to show for it? A record Dow? Wheeeeeee! THAT’LL help salvage some of those ARM’s that are about to ratchet up like crazy.

The economy is not an issue they can use, so it receives little actual discussion - other than vague references to how Democrats would make it worse…

It. Is. To. Laugh.

Posted by: Jeff Seltzer at November 2, 2006 08:39 AM
Comment #192628
Everything I’ve seen shows that revenues increased since the tax rates were lowered.

Another point to consider. If you borrow trillions of dollars and give them to companies like Haliburton, they will generate more tax revenue. But all of this is propped up on loans. I am NOT saying this is the only reason for greater tax revenues, but it is a contributing factor.

Posted by: Max at November 2, 2006 08:52 AM
Comment #192634

The “economy” may be good, but personal economics is very bad (wages, taxes, food prices, gas prices [until it got close to the election…funny how that worked out], tuition…

People judge by what they see…most people don’t have a clue as to what the DOW is, nor do they care…they care about feeding and housing and educating their families…and that is becoming harder and harder to do.

Negative savings rate for the U.S. … and massive and record budget deficit (which doesn’t, by the way, include Iraq war costs!) and the record trade deficit. People will lose again when it comes time to bring the deficit down…things will get much, much worse for families before it gets better, unfortunately!

Corporate welfare will come once again before helping the poor, the sick, the handicapped…20% of our children live in poverty. 80% of children without health insurance have working parents.

Life is good at the top 1%, but the rest are going down the tubes….

Posted by: Lynne at November 2, 2006 09:27 AM
Comment #192635

Trent, Max,

Thanks for the informed responses. I had indeed heard that the military spending in Iraq was a contributing factor to growth in tax revenues. Just a point to consider; Dems have consistently said that the Bush tax cuts screw the middle and lower classes to the benefit of the wealthy. However, the reports I’ve read state that most of the growth in tax revenues came from the wealthiest Americans taking advantage of lowered taxes to take capital gains windfalls etc. A question I have is why would Democrats, knowing thta the wealthy have ways upon ways to hide or conceal thier money, try to increase taxes, the old rates which appear to have been a contributing factor to the wealthy hiding their wealth in the first place? Isn’t a smaller cut of large declared amount of income better than noting from a concealed income?

Posted by: 1LT B at November 2, 2006 09:29 AM
Comment #192645

jrb,

I liked the article on Universal Healthcare you posted. This is the first proposal that I have seen that has made me even want to consider it.

I think that it is worthy of a post on its own, so that we could all pick it apart and see how it would stand up to the test of debate.

Thanks for the link.

Posted by: Rob at November 2, 2006 10:07 AM
Comment #192646
However, the reports I’ve read state that most of the growth in tax revenues came from the wealthiest Americans taking advantage of lowered taxes to take capital gains windfalls etc. A question I have is why would Democrats, knowing thta the wealthy have ways upon ways to hide or conceal thier money, try to increase taxes, the old rates which appear to have been a contributing factor to the wealthy hiding their wealth in the first place? Isn’t a smaller cut of large declared amount of income better than noting from a concealed income?

Making stuff up as you go along is not the basis for sound economic policy. Taxes were increased during the previous administration and it lead to a balanced budget. Bush lowered taxes and look where the deficit is now…

Posted by: Jeff Seltzer at November 2, 2006 10:09 AM
Comment #192663

4 top stories from Reuters today:

Retailers post disappointing October sales

Productivity growth stalls

Jobless claims rise 18,000 in latest week

Apparel retailers suffer through dreary October

Yup…the economy is humming.

Posted by: Darth Independent at November 2, 2006 11:14 AM
Comment #192665

Jeff Seltzer,

How does increasing revenue lead to more deficits? The problem we have is not revenue generation, its overspending and both parties are guilty. I wouldn’t even mind the deficit so much, its natural to run a deficit in a time of war, but the continued pork barrel spending in the middle of a war is what offends me. Its also worth noting that the previous adminstration, along with not having a war to deal with, also saved a large amount of money by drastically cutting the size of the military, the same military that Dems now say is overextended.

Posted by: 1LT B at November 2, 2006 11:16 AM
Comment #192682
How does increasing revenue lead to more deficits?

Nice non-sequitir. When the Clinton administration increased tax rates on those with higher levels of income, they also had the precience to REDUCE the size of government.

The problem we have is not revenue generation, its overspending and both parties are guilty.

In what way are the Democratic members of Congress “guilty” of this? It seems that YOUR party is in charge. The Democrats can’t get bills debated on the floor, can’t get bills through committee, can’t table amendments, etc. Your guys are in charge. It would be pleasing (and anger a lot less people) if your party had the grace to accept responsibility. (After all, they are SUPPOSED to be the party of personal responsibility.

I wouldn’t even mind the deficit so much, its natural to run a deficit in a time of war

more excuses…

but the continued pork barrel spending in the middle of a war is what offends me. Its also worth noting that the previous adminstration, along with not having a war to deal with, also saved a large amount of money by drastically cutting the size of the military, the same military that Dems now say is overextended.

Please provide details on how much was “cut” from the military under Clinton and how this contributed to the enormous surplus that Bush inherited. (I’ll give you a hint, it doesn’t cover 10% of it…)

Oh, and you don’t think the military is overextended? And, I thought the oil revenues were going to pay for reconstruction in this stupid war… whatever happened to that?

TAKE RESPONSIBILITY FOR THE GOVERNMENT YOU WANTED. COnservatives are always going on and on about responsibility and accountability… SUCK IT UP.

Posted by: Jeff Seltzer at November 2, 2006 11:53 AM
Comment #192691

Jrb

I just trust my fellow Americans to figure our entrepreneurial ways to get more. I think we maybe should go to a program such as the one offered currently to Federal workers. It allows choice, but has a overarching plan. The difference is Feds pay their premiums. It is subsidized but still not free.

Trent

I understand that the general cuts are not much use, but that the cuts on capital gains etc increased revenue.

Acetracy

It is always hard to know if statistics are measuring what we want. However, I have never heard anybody say that the CPI understates inflation. In fact the opposite seems to be the case.

RE unemployment some people claim to be looking for work or they would take “the right job” but they really are not serious. Not many people, BTW, are working at their ideal job. That is why they call it work and not play.

Max

If you think Halliburton is getting so much money, why don’t you invest in it? It is publicly trade (HAL). You can give the proceeds to charity if that makes you feel better. Talk is cheap and sometimes free. Very few people actually act on their convictions. Maybe that is because they know what their advice is worth.


Jeff

Revenues are at an all time high this year. The reason we have a deficit is increased spending. You can blame the republican congress (with some justification) for that, the make sure you look at the right problem.

BTW - the rich are paying more. IN fact the top half of the income groups pay almost all the Federal taxes. The lowest 20% actually gets back more in credits than they pay.

Posted by: Jack at November 2, 2006 12:07 PM
Comment #192692

1LT B,

To be fair, nearly all Republicans were in favor of cutting the military at that time as well. Anyhow, cuts that were made were cuts of spending on old technology in favor of newer programs. Allegations of Clinton “gutting ” the military were often attempts by congress members to maintain pork that benefited their districts.

Additionally, our military is overextended not because of reductions in spending. Rather, IMO, it is due to our leadership’s persuit of a war of chioce, leading to a lengthy occupation, in which our military is forced to function as police—not soldiers. Our military is not designed to be a police force.

Posted by: jrb at November 2, 2006 12:09 PM
Comment #192699

Jack,

First, did you actually read the link?

as well I want to take issue with your comment above:

BTW - the rich are paying more. IN fact the top half of the income groups pay almost all the Federal taxes. The lowest 20% actually gets back more in credits than they pay.

I am not sure if I fall in that lowest 20% or not, but 24,000/yr in California is not much. After my mortgage interest and property tax deductions are coupled with education credits, I still pay more than I get back. I would like some documentation for your statement if you are willing to provide any.

Also, if I am not mistaken … while you are techincally correct that the rich do pay more as measured in dollars, the percentage of their income paid is often times lower than less well off, middle class workers.

Posted by: jrb at November 2, 2006 12:22 PM
Comment #192709

There is no way this is a GOOD Economy. Many Americans are heading on the edge by barely a thread, the next few months some will fall over, Us included i presume. Sad, this country is in such a cloud, and the President cant see it, but then again our President sees nothing but what he wants to see. Even if Clinton didnt care about us, I always felt he did

Posted by: Diane at November 2, 2006 12:27 PM
Comment #192711

Jack-

Causation is your number one enemy. You are great at making correlations, but I see nothing of real value in your statements linking revenues to capital gains rates. Are you claiming that the economy would not be as good if the rate was higher? Pretty far fetched…maybe a smidgen of actual truth. A gross oversimplification though.

But I do understand your distaste for details, so I don’e expect much of a response.

Posted by: Kevin23 at November 2, 2006 12:31 PM
Comment #192724

I’m certainly not a genius on the economy as I have trouble balancing my checkbook every month.

This discussion is good and people cite all kinds of articles and stats and the like and that is good, but something smells when common sense is just ignored for the sake of statistics. Give me common sense every time.

Reminds me of all these political adds on both sides where both parties look at the same numbers and interpret and use them different. It is very confusing. Some guy will say so and so voted for something that did some horrible thing and the other other says he didn’t. Seems black an white, but what they don’t say is that many times votes on multiple issue bills are made for reasons totally unrelated to the point they are trying to make. Happens all the time.

Anyway, revenues from the Bush tax cuts have increased by about 14% over pre tax revenues and the projected deficit is lower than what was originally planned so it is progress at least.

Let me see, if I get a 15% raise and then my total debt still goes up albeit at a slower rate, is it a revenue problem or is it a spending problem? I have to think about that for awhile. I’ll get back to you.

It seems to me that the common sense approach to tax policy is that it is not the government’s money to start with!!! They should tax no more than is required to run the basic needs of the government and what is out of control is the excessive spending that has accumlated over the years. (Social security, welfare, pork barrel spending, defense, etc, etc.)

It seems this fairness policy that prevades the left’s thinking that basically says we should all make the same amount and if you make more than me than it should be taxed since it obviously is the government’s role to redistribute the wealth of the country as it sees fit.


Posted by: mef at November 2, 2006 12:49 PM
Comment #192742

mef,

the projected deficit is lower than what was originally planned so it is progress at least

This was achieved through manipulation. For example: This month you spend $100. Next month you predict your spending will have to increase to $1,000. When it only increases to %750 you say you are “cutting” spending—as the prediction you made was higher than the $750 you did spend. It is all a game.

Posted by: jrb at November 2, 2006 01:09 PM
Comment #192750

Jack-

“If you think Halliburton is getting so much money, why donï½â‚â„t you invest in it? It is publicly trade (HAL).”

Because the most likely scenario is that the profits are re-invested in the company to facilitate more of the same. Unless they decide to stop growing and give high dividends. Then the stock price goes up and a correction takes place, which is not what officers or directors of the company want.

Once again, your overly simplistic approach is fatally flawed. What does that make your “advice” worth?

Posted by: Kevin23 at November 2, 2006 01:31 PM
Comment #192753

Don, echop8triot,

You offer nothing but your own conclusions.
Don, just because you’ve been saying something since 1976 doesn’t mean it can never happen.

The total federal debt is $22 trillion.
That is 176% of GDP.
If you take real gross production, the percentage is worse, because GDP includes things that are not really productive (like divorce).

You offer conclusions with no data of your own.
So you are OK with $8.6 trillion National Debt?
So you are OK with $12.8 trillion Social Security Debt ?
So you are OK with $450 billion PBGC debt?
And the hundreds of billions of unfunded liabilities for Medicare and Medicaid?
And the hundreds of billions of unfunded liabilities for the ongoing wars in Iraq and Afghahistan?
And the trade deficits?
And the nation-wide personal debt of $20 trillion?

Do you have any idea how long it would take to pay down that debt?

Did you know 20% of every tax dollar is currently going to just pay interest on the $8.6 trillion National Debt alone? That does not ever include the future cost of the $12.8 trillion Social Security debt and the $450 billion PGBC debt.

The government is essentially borrowing $1.63 billion per day!

And you think that’s OK?

Can a country commit suicide?

Keep borrowing, growing debt, spending, and printing money like we are NOW, and I can guarantee you that there WILL be an economic meltdown, and a lot of unhappy people wondering what happened to their Rosy economy.

That much debt would take 200 years to pay down (even if we ever had the discipline and growth needed to do it):

There are many pressing problems that can not be ignored for much longer.
Many are worse now, and have never been worse ever, and some have never been worse since the Great Depression. For instance, the 1% of the U.S. population with 40% (and growing) of all wealth and the remaining 99% of the U.S. population has never been worse since the Great Depression. The total $22 trillion of federal debt (adjusted for inflation) has NEVER been worse than now. Not even in WWII.

I thought Republicans were supposed to be fiscally responsible?
What a laugh?
The National Debt has grown by $3 trillion since 2000.
The massive borrowing, debt, spending, and money-printing is the only thing keeping this illusion of a “good” economy going.

How long do you think that can last?

With some jobs going overseas still, and median incomes falling since 1999, can GDP grow enough to offset the massive debt? And, how is immigrating the impoverished and uneducated by the tens of millions going to improve the debt? And increasing global competition isn’t helping either (along with corporations making us train our own replacements, and then firing us because they can get cheaper labor overseas). We are essentially training our competition. It’s good for those countries, for a while (there’s always cheaper labor somewhere else). And the nationwide personal debt of about $20 trillion is not helping matters. The nation is swimming in debt. This does not bode well for the next recession (or depression). Foreclosures have already been climing fast for two years. People have been cashing out the equity in their homes. This is a bad situation. The middle class is being squeezed. That’s a dumb thing to do to the economy and the future of the nation.

There will be consequences for this $22 trillion of total federal debt and massive fiscal and moral bankruptcy by government, and the voters that keep re-electing them.

Those that think this economy is “good” or “very good” are in denial (just like a good many Republicans that are in denial about the highly probable loss of the majority in the 2006 and 2008 elections), and refuse to admit this illusion of a “great”, “good”, and/or “very good” economy is being funded with massive debt, borrowing, spending, and money-printing.

Please tell us how that debt will be offset?
Currently, it is growing by $1.63 billion per day.
Over $1 billion of it is interest alone on only the $8.6 trillion National Debt.
What about probably shortfalls in Social Security and the fact that Social Security surpluses are STILL being plundered?
Then, there is the ever present inflation.
Well, that’s likely to get worse, because when it starts becoming harder and harder to meet the interest and all unfunded liabilities (such as those in the Medicare, Medicaid, and shortfalls in Social Security), they will only have one choice left: print more money. Then people will better understand the pitfalls of a fiat-funny-money-system.

Posted by: d.a.n at November 2, 2006 01:40 PM
Comment #192755

jrb

Point well taken. But the projected deficit is based on projected spending versus projected revenues. I don’t think (I could be wrong of course) that they deliberately jack up the projected deficit just to be able to say that when it comes in under that number that “we are cutting the deficit” A deficit is a deficit and it means you are spending more than you are taking in.

It is the same trick that they use when they say Clinton had a budget surplus. Because of the way Social Security is accounted for and using the revenues from that source to use in the budget calculations. Virtually putting IOUs in the SS “lock box” which one day will have to be paid back. We have never, never actually balanced the budget. It is a Ponzi scheme of huge proportions and the pols just keep on putting this one over on us. Unless we tackle entitlements (SS in particular) we will never have a balanced budget. Won’t happen until the whole thing collaspes as it is a political hand grenade that neither party will tackle.

However, I am still stuck on the fact that I increase my revenues with a tax cut and so this is some kind of a trick or manipulation, but the fact that the deficits go up with these increased revenues isn’t answered by the fact that spending is out of control….not revenue intake.

Sure the War is a big part of this and maybe one could argue for some kind of a war “surtax” that would help. But just raising taxes on the “rich” and this will help is not factual true. It will have a counter effect of slowing the economy down, just as higher interest rates will do. It will decrease revenues in the long wrong. Tax cuts always stimulate the economy.

We need to talk less about “fairness” and more about how to best get the revenues we need and then curtail spending.

Posted by: mef at November 2, 2006 01:40 PM
Comment #192771
mef wrote: Seems black an white, but what they don’t say is that many times votes on multiple issue bills are made for reasons totally unrelated to the point they are trying to make.
That’s why we need a One-Purpose-Per-BILL amendment. But, that would make graft, pork-barrel, and corporate welfare harder to do. No wonder they resist it.

If you want answers, do the math.
It’s not that complicated.

The total U.S. federal debt is $22 trillion.
That consists of $8.6 trillion National Debt which has interest on it.
Then there’s the $12.8 trillion of Social Security debt, which will have to be paid back relatively soon as 77 million baby boomers start drawing from it.
There there’s the $450 billion of Pension Benefit Guaranty debt, which has to be paid out as it comes payable.
There are also hundreds of billions of unfunded liabilities in Medicare, Medicaid, hurricane Katrina relief, and the wars in Iraq and Afghanistan.

Now, the federal government’s annual revenues is about $2.2 trillion.
The nations (just and FYI) is about $12.5 trillion (and has been increasing by about a trillion per year, but that may not last much longer with increasing global competition, massive debt, etc.).

Therefore, $2.2T annual revenues / $22T total debt = 10
Therefore, total debt is 10 times the federal revenues.
That’s like you making $100K per year, but owing $1 million .
How long would it take a person making $100K to pay off $1 million?
A long time, of course.
But, what makes it worse is that there are pre-existing liabilities, such as Social Security, Medicare, Medicaid, the wars in Iraq and Afghanistan, the National Defense, etc., etc., etc.

So where’s the money going to come from?
Can GDP grow enough?
Not likely?
They could stop over spending and over borrowing, but that’s not likely either.
So, GDP can’t grow enough without increasing the population substantially, and/or printing a lot more money.

Is that what you want?
Because, that’s what politicians want.
That’s part of their plan.
But, how will importing the impoverished and uneducated going to help that?
Well, it’s cheap labor.
Now you understand why most politicians don’t want to stop the inflow of cheap labor.

Now, if you don’t like this, then I would make one little suggestion. Stop re-electing the very same irrespnonsible, bought-and-paid-for, look-the-other-way incumbent politicians that ignore you, and enjoy a 90% re-election rate, and are irresponsibly threatening the future and security of the nation, and running up huge debt on future generations for many decades to come. Just because you have never seen an economic melt-down does not mean it can’t happen. Look at the big picture, and do your own calculations, and you’ll see that there IS valid cause for concern. Anyone that isn’t concerned with the massive debt, borrowing, spending, and excessive money-printing is delusional.

Posted by: d.a.n at November 2, 2006 02:07 PM
Comment #192778

d.a.n,
You are a man of many stats!! I like the old saying that figures lie and liars figure. Now, I’m not saying you are lying as you have the fancy charts and everything to back you up.

And I do agree, this is a political situation independent of affliation and sending others there, while it sounds appealing, just won’t work either. The beltway corrupts and I’m talking both sides of the aisles and it will corrupt whomever you send that you think will solve the problem.

The 1% of income earners in our country have a AGI (Adjusted Gross Income) of 19% of the total. (2004 stats) They pay 36% of the income tax from individual tax payers. The top 5% are 33.45% of total AGI and 57% of total tax paid. The top 10% are 44.35% of AGI and they pay and astonishing 68% of total taxes paid. Top 10% pay two thirds of total taxes!! Top 25% have 66% of AGI and almost 85% of taxes. Top 50% have 86.58% of AGI and 97% of total taxes. The bottom 50% of AGI pay only 3.3% of total taxes.

Do you see? The bottom 50% of our taxpayers pay 3% of the total tax revenues and we want to tax the rich even more? Bad, bad idea and talk about fairness…..there is none in the above numbers. The “rich’ pay far more than their fare share and there are those who want them to pay even more.

I guess fairness is in the eye of the beholder, but when I see that amost 65 million tax returns only pay 3.3 percent of our total tax revenue why the other 65 million pay 97% of the taxes, fairness is not the word that comes to mind.

We need to think more about the amount of revenue we need (that can be argued) and less about the sources from whence that revenue comes.

Posted by: mef at November 2, 2006 02:19 PM
Comment #192781

after rereading, I need to make a correction or two.

The top 1% of income earners in our country have a AGI (Adjusted Gross Income) of 19% of the total. (2004 stats) They pay 36% of the income tax from individual tax payers. The top 5% are 33.45% of total AGI and 57% of total tax paid. The top 10% are 44.35% of AGI and they pay an astonishing 68% of total taxes paid. Top 10% pay two thirds of total taxes!! The top 25% have 66% of AGI and almost 85% of taxes. Top 50% have 86.58% of AGI and 97% of total taxes. The bottom 50% have 13.4 % of AGI pay only 3.3% of total taxes.

Posted by: mef at November 2, 2006 02:25 PM
Comment #192798

Jrb

See the figure just above. The rich pay more dollars and a greater percentage of their income. It is how it should be AND how it is.

Kevin

Both of us have distaste for details. I have answered your questions with greater specificity than they implied.

Re capital gains, there are many theories on how and if this works. They are controversial because ALL we have is correlation. So I indeed have no more than experience; neither do you or anyone else.

As you know, we don’t do details. I rely on someexperts.">http://search.heritage.org/search?restrict=Heritage&q=capital+gains+tax&btnG=Go&ie=&site=heritageorg&output=xml_no_dtd&client=heritageorg&lr=&filter=0&proxystylesheet=heritageorg&getfields=%252A”>experts.

Re HAL and stock investing.

I make money on the stock market. You don’t. Suffice with details? I do not own HAL, however. I do not think it is a good investment.

Most things in life are simpler than people want to believe, but not easier.

Posted by: Jack at November 2, 2006 02:43 PM
Comment #192799

Sorry expertsThis is the link.

Posted by: Jack at November 2, 2006 02:45 PM
Comment #192804

D.A.N.-
“Don, just because you’ve been saying something since 1976 doesn’t mean it can never happen.”

That’s not what I was saying. Go back and read my post again. I think everyone else got it…these problems have been with us for a long time and no congressman has done anything about it. THIS IS NOT A NEW PHENOMENON. The train has been coming down the same tracks that our collective car is stranded on for decades. No congressman has gotten out to push the car off the tracks…do you have it now, or do I need to mix more metaphores.

Stop with all the cut-n-paste stuff, it gives me a headache. I proved long ago that you don’t understand most of the statistics yourself. Goodness, it took 3 or 4 days of back-n-forth arguments to get you to correct just one of your erroneous “statistics”. And most of it is out of context anyway. That being said, your conclusions might be right…our country is deep in debt, with too big of a trade imbalance, with Medicare and Social Security programs that are incredibly underfunded. That’s the train that has been coming for a long time.

“Many are worse now, and have never been worse ever, and some have never been worse since the Great Depression. For instance, the 1% of the U.S. population with 40% (and growing) of all wealth and the remaining 99% of the U.S. population has never been worse since the Great Depression. The total $22 trillion of federal debt (adjusted for inflation) has NEVER been worse than now. Not even in WWII.”

People are not worse off because someone else has more! That’s stupid! Thank goodness some people have money otherwise there would be no jobs for the yacht builders. There would be no money for the venders at baseball games, etc., etc. This idea that rich people are evil because they have MORE is doltish. We need rich people! The richer they are the better. Even if their wealth has outpaced the earning level of the common man, that is NOT evil.

I have to go to work and bring home some of that filthy lucre now.

Posted by: Don at November 2, 2006 02:52 PM
Comment #192807

Jack-

Those percentages don’t speak to what I was suggesting. While the total dollar ammount and percentages of total tax paid by all might be higher for the rich, and this makes sense since they make so much more, my point was that as a percentage of their income they often pay less than the middle class as a percentage of their income.

Sorry if I wasn’t clear on my assertion.

Posted by: jrb at November 2, 2006 02:57 PM
Comment #192825

Jack-

“Both of us have distaste for details. I have answered your questions with greater specificity than they implied.”

I happen to love the details, Jack. Don’t speak for me. You have enough trouble comprehending my posts as it is (as evidenced by your “responses”). And how have you respnded with ANY specificity? You go by experience? Funny how you never mention what that entails. Maybe that is too specific? But you are more than happy to comment on what you assume my experience to be in the market. Hmmm.

re: HAL

Investing in a company is to invest in its management, right? What was your original point then? You told someone to invest if they wanted a share of the profits. That just doesn’t make sense.

re: capital gains

You are the one who brought it up. I would never have assumed to know of any causal link…I’d be purely speculating. So, my question remains. Do you know something I dont? Or just speculating? Please clear that up.

Posted by: Kevin23 at November 2, 2006 03:44 PM
Comment #192842

Kevin

I guess you are way smarter than I am. I just don’t see pertinent details that I have left unaddressed. If the premise is wrong, the details of the argument are immaterial, no matter how elegant.

RE your stock investment skills - Your statements led me to make conclusions about your experience in the market. Maybe I missed your point, but it seemed to me you were saying:

“Because the most likely scenario is that the profits are re-invested in the company to facilitate more of the same. Unless they decide to stop growing and give high dividends. Then the stock price goes up and a correction takes place, which is not what officers or directors of the company want.”

When I have made money in stocks, it has always been because the firm grew through reinvesting, in which case the price of the stock rose (i.e. Microsoft or CISCO) and/or they issued dividends in which case the stock price sort of stabilized. The real fun ones can do both (RIO or NUCOR) but not forever. Under the old capital gains laws, investors essentially paid extra tax on dividends, so many firms tried to grow the value of their stocks through reinvestments or repurchases. Under the new law, they were more likely to issue dividends. The before tax amount the investor made was similar, although the old law led to some inefficiencies.

I did not know there was any way for stocks to make money besides though some combination of appreciation & dividends. But according to you, HAL has some other method. Either you are a financial genius and have discovered a whole new income stream, or you have little successful experience in stocks. Since geniuses are rare, I drew the conclusion that seemed most likely based on my experience.

The more recent statement confirms this: “Investing in a company is to invest in its management, right? What was your original point then? You told someone to invest if they wanted a share of the profits. That just doesn’t make sense.”

Yes, when you invest you assume management is competent, but there REASON you invest is to share in the profits. Management and the firm itself is a means to that end.

If you invest w/o the expectation of sharing in the profits, you probably do not invest wisely.

Posted by: Jack at November 2, 2006 04:38 PM
Comment #192849

Jack-

“When I have made money in stocks, it has always been because the firm grew through reinvesting, in which case the price of the stock rose (i.e. Microsoft or CISCO) and/or they issued dividends in which case the stock price sort of stabilized.”

Yes, but those stocks are not almost entirely tied to a finite resource. So again, you speak a general truth, but fail to account for the elephant in the room.

“Under the old capital gains laws, investors essentially paid extra tax on dividends, so many firms tried to grow the value of their stocks through reinvestments or repurchases. Under the new law, they were more likely to issue dividends. The before tax amount the investor made was similar, although the old law led to some inefficiencies.”

OK…thank you, because now you are getting me interested again. I will definately agree that is the theory. But has that really turned out to be the case? My experience from buying stocks with other people’s money for several years tells me that companies are still aggressively re-investing back into equity holdings due to the returns from developing countries and real estate. Of course the driving force is basically exploitation of cheap foreign labor in overseas equities, but here at home we also started letting pensions and other huge institutional investors invest in REITs and get add’l tax breaks. This greatly aided the real estate boom which, here in CA, has really impacted people’s money for non-fixed expenses. That has NOT helped the economy. And of course commodities and oil futures were deregulated. So people pay more for gas and food at unpredictable times because of the market manipulation that innevitable goes on, especially when regulators are told to look the other way.

So you starting to feel me a little bit? Come on, lets focus on things like this instead of challenging my investment success. You and I both know that stock speculation is an insiders game (actually knowing the management practices), and outsiders are taking shots in the dark. That is why you just diversify and keep re-balancing based on your original asset allocation. Simple. Granted. No need to try and assasinate my character before you even try to scrape the surface of the topic really at hand here. But when we are talking about an industry, we can’t ignore its very nature if it is relevent.

Now back to HAL-

Using the very logic you pointed out, isn’t it safe to say that the reason why you and I don’t like it as a stock is that there are lots of profits and very little dividends? So management isn’t looking out for its investors, right? My very point. They are probably too busy trying to filter money through offshore accounts to foreign subsidiaries to avoid being there showing up on earnings statements making investors demand dividends.

You aren’t seeming to understand even where we agree. But I do. So don’t be afraid to keep the genuine comments coming. But please stop pretending to know personal things about me.

Posted by: Kevin23 at November 2, 2006 05:11 PM
Comment #192850

Jack,

I did not know there was any way for stocks to make money besides though some combination of appreciation & dividends.

There are other ways for someone to make money in the stock market [I assume by “way for stocks” you mean “method for someone to make money on a stock” since stocks, being inanimate, cannot actually make money … only people can]. One can short a stock.

Sorry, I Just felt you weren’t completely technically correct.

Posted by: jrb at November 2, 2006 05:12 PM
Comment #192852

jrb-

Shorting a stock is just selling it before you own it. It is still stock speculation. Maybe the technicality would work for option trading. Puts and calls.

Posted by: Kevin23 at November 2, 2006 05:16 PM
Comment #192868

Kevin23,

The statement was made that the only way to make money was through “appreciation & dividends.”

Since shorting a stock is not JUST selling before you own it—rather, it is banking on the value of a stock decreasing to make a profit—there is neither appreciation nor dividends involved. Additionally, in options trading one does not invest in the stock itself. Instead, one purchases the right to buy or sell the underlying stock at a given price irrepsective of whether or not they own any shares of that particular security.

[I’m sure you understand most, if not all, of this but I felt I should be clear]

Posted by: jrb at November 2, 2006 06:00 PM
Comment #192875

jrb-

I see where you were going. OK, so I’ll give you shorting the stock. What about buying a put, or selling a call? Aren’t we banking solely on depreciation in the same way? And the object at issue is still the underlying stock value.

Posted by: Kevin23 at November 2, 2006 06:10 PM
Comment #192881

Kevin23

Well, yes.

Obviously you know what you are talking about.

Posted by: jrb at November 2, 2006 06:24 PM
Comment #192888
d.a.n wrote: Don, just because you’ve been saying something since 1976 doesn’t mean it can never happen.
Don wrote: That’s not what I was saying.

Really? This is what you wrote:

Don wrote:
D.A.N. -
Nothing new in what you say. Same thing has been happening for 40 years or longer (maybe not as much, but still the same thing). I worried about the same things you complain about back in 1976.

Don wrote: Go back and read my post again. I think everyone else got itâ€these problems have been with us for a long time and no congressman has done anything about it. THIS IS NOT A NEW PHENOMENON.
Don, Things take a long time, and the growing debt of the last three decades will have have painful consequences, eventually. That time may not be that far away, since the National Debt was has been quickly escalated by $3 trillion since year 2000. The debt can get out of control, and it may already be out of control. 20% of all federal tax revenues are already spent on interest alone, and that’s ONLY on the $8.6 trillion of National Debt. To make matters worse, Congress passed a Drug Prescription plan that will cost hundreds of billions more per year.
Don wrote: The train has been coming down the same tracks that our collective car is stranded on for decades. No congressman has gotten out to push the car off the tracks
So, you’re saying the train will never arrive, these things will never be a problem, or there really is no problem, or what?
Don wrote: … do you have it now, or do I need to mix more metaphores.
Do whatever you like.
Don wrote: Stop with all the cut-n-paste stuff, it gives me a headache.
Then just scroll past it. Try it. It’s easy..
Don wrote: I proved long ago that you don’t understand most of the statistics yourself.
No. You only proved it in your own mind. You are referring to the fact that of all federal campaign donations (in 2002) come from a mere 0.15% of all 200 million eligible voters (total U.S. population is 300 million). That is corroborated by this document at OpenSecrets.org . Are you still disputing it? Which part? The 83% , or 0.15%, or the 200 million eligible voters, or the U.S. population of 300 million?
Don wrote: That being said, your conclusions might be right … our country is deep in debt, with too big of a trade imbalance, with Medicare and Social Security programs that are incredibly underfunded. That’s the train that has been coming for a long time.
So you agree? Or, are you saying it will never arrive?
d.a.n wrote: 1% of the U.S. population with 40% (and growing) of all wealth and the remaining 99% of the U.S. population has never been worse since the Great Depression. The total $22 trillion of federal debt (adjusted for inflation) has NEVER been worse than now. Not even in WWII.
Don responded: People are not worse off because someone else has more! That’s stupid!
Non-sequitur. Don, your own statement is the very thing you call other’s comments. Where did anyone say someone having more or less is worse or right or wrong. You are overlooking the squeezing of the middleclass via unfair taxation (the wealthy are not paying their fair percentage of income tax due to a tax system that is full of loopholes; for example, capital gains are taxed at 10% and 15% while the average tax rate is 21%), corporate welfare and pork-barrel, illegal immigration (costing U.S. taxpayers $70 billion per year), etc. I am not envious of the wealthy. There are those that are, and try to disguise their envy and jealousy as demands for equality. That is not me. I only expect fairness, and to me, that means everyone should pay the same flat 17% tax rate percentage (eliminate all deductions). As it is now, the ridiculously perverted tax code allows many wealthy to avoid paying even 17%.
Do wrote: Thank goodness some people have money otherwise there would be no jobs for the yacht builders. There would be no money for the venders at baseball games, etc., etc. This idea that rich people are evil because they have MORE is doltish.
More nonsense, and is not even part of the real issue. The issue is unfair taxation, and corpocrisy, corporatism, and corporate welfare, and their unfair influence on politicians that is wrong. Government should NOT be FOR SALE. You are trying to twist the argument into something about class warfare, and that is just a lame distraction to cloud the issues and obscure the facts.
Do wrote: We need rich people! The richer they are the better. Even if their wealth has outpaced the earning level of the common man, that is NOT evil.
I have said being wealthy is evil, but I will say it is wrong for the weatlhty to abuse their wealth to control government, which is the real point which you are trying to avoid with non-sequiturs and irrelevant and unrelated issues.
mef wrote: d.a.n, You are a man of many stats! I like the old saying that figures lie and liars figure.

Then, mef proceeds to provide a myriad of his own stats (only minutes after saying “I’m certainly not a genius on the economy as I have trouble balancing my checkbook every month.”) …

mef wrote:The 1% of income earners in our country have a AGI (Adjusted Gross Income) of 19% of the total. (2004 stats) They pay 36% of the income tax from individual tax payers. The top 5% are 33.45% of total AGI and 57% of total tax paid. The top 10% are 44.35% of AGI and they pay and astonishing 68% of total taxes paid. Top 10% pay two thirds of total taxes!! Top 25% have 66% of AGI and almost 85% of taxes. Top 50% have 86.58% of AGI and 97% of total taxes. The bottom 50% of AGI pay only 3.3% of total taxes.

I agree that the wealthy pay more taxes, but the real question is do the wealthy pay a fair percentage of their income to income taxes? For example, capital gains taxes are only 10% or 15%, but the average income tax rate is 21%. Many wealthy (not all) are not paying their fair percentage, and it is because of a severely perverted tax system that allows the weatlhy to take advantage of a myraid of tax loop holes that most of the middle-income-class and poor can not. I’m not talking about class warfare or even equality. Just fairness. I’ve seen those income stats before, but they don’t answer the most important question. The don’t prove that the wealthy are paying a fair share (i.e. percentage) of their gross income (before deductions). Many probably pay less than the average 21%. Again, the perverted tax code allows this. Congress won’t reform it. They like it just the way they have perverted it.

mef wrote: The “rich” pay far more than their fare share and there are those who want them to pay even more.
You have NOT proven that. After you calculate percentages based on gross income (before deductions), you will see that most wealthy are getting away without paying their fair percentage of income tax. Prove it wrong if you can. That is why we need a simplified tax system. Just get rid of all the tax deductions and make it a flat 17% income tax rate. This would also require a reduction in federal spending by about 6%.

So, statistics are important, but you have to look at them carefully. Just throwing around a bunch of numbers doesn’t prove anything. You have to carefully look at the data, how it is sorted, and you have to be careful about ratio (because they usually hide something; i.e. make something look worse or better).

At any rate, the middle-income-class is getting squeezed, and there are several unfair factors behind it that are a result of irresponsible, FOR SALE government, and influence on the government by some that abuse vast wealth and power. It has nothing to do with wealth itself, and not all wealthy people abuse their wealth. But those that do are the problem. And, a good example if this is the fact that 83% of all federal campaign donations (of $200 or more) come from only a tiny 0.15% of all 200 million eligible voters. That’s not fair to the remaining 99.85% of the 200 million voters. Hence, government is FOR SALE, as evidenced by Jack Abramoff, Tom Delay, Bob Ney, James Trafficant, Dan Rostenkowski, Duke Cunningham, William Jefferson, Alan Mollohan, etc., etc., etc.

Posted by: d.a.n at November 2, 2006 06:41 PM
Comment #192897

Future effects of Bush’s tax cuts…none for the middle class…excellent for the very rich

“A new study released today by Citizens for Tax Justice and the Children’s Defense Fund reveals for the first time who stands to benefit from the 2001-enacted Bush tax cuts in each year from 2001 through 2010. Among the key findings:

Over the ten-year period, the richest Americans—the best-off one percent—are slated to receive tax cuts totaling almost half a trillion dollars. The $477 billion in tax breaks the Bush administration has targeted to this elite group will average $342,000 each over the decade.

By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52 percent of the total tax cuts will go to the richest one percent—whose average 2010 income will be $1.5 million. Their tax-cut windfall in that year alone will average $85,000 each. Put another way, of the estimated $234 billion in tax cuts scheduled for the year 2010, $121 billion will go just 1.4 million taxpayers.
Although the rich have already received a hefty down payment on their Bush tax cuts—averaging just under $12,000 each this year—80 percent of their windfall is scheduled to come from tax changes that won’t take effect until after this year, mostly from items that phase in after 2005.

In contrast, the vast majority of taxpayers have already received most of their tax cuts from the 2001 legislation.

For the four out of five families and individuals making less than $73,000 this year, three-quarters of the tax cuts—averaging about $350 this year—are already in place.
Tax cuts for the 19 percent of taxpayers making between $73,000 and $356,000 this year will grow a little over the next four years as the cuts in the upper tax rates continue to kick in, but then will dwindle thereafter. By 2010, the tax cuts for this group will be no bigger as a share of income than they are now.
As a result, freezing the Bush tax cuts at their 2002 levels would have little or no effect on 99 percent of the taxpayers, whose tax cuts are already mostly or completely “frozen.‎ Only the best-off one percent of the taxpayers will receive significant additional tax cuts if the rest of the Bush tax program continues to be implemented.”

Posted by: Lynne at November 2, 2006 06:57 PM
Comment #192932

Lynne,

Excellent!

There’s no mystery here.
This Republican Congress owes much of its power to their big money doners (i.e. puppeteers).
No one can dispute the fact that many of the wealthiest are NOT paying their fair share of taxes.
They will throw all kinds of percentages at you, and statistics too, but not the ones that matter.
If the don’t like your percentages, they are suspect and smoke and mirrors.
But, if they are THEIR statistics, you are supposed to swallow it hook, line, and sinker.

They will say the wealthy pay a lot of taxes, BUT avoid the total percentage of their gross income (always).

There is no mystery why incumbent politicians carry the water for their big money donors (i.e. the wealthiest with 40% of all wealth).
There is no mystery why incumbent politicians like the current ridiculous tax system (just the way they have thoroughly perverted it).
Among all this, they have never been able to eliminate the marriage tax penalty, or pass many badly needed reforms, but politicians can vote themselves some cu$hy perk$ and a rai$e in a heart-beat.

Posted by: d.a.n at November 2, 2006 08:10 PM
Comment #192933

Ive seen a few comment on here about personal fiscal responsibility, and I wholeheartedly agree. I don’t think many of us need to worry about that. I’ll make the assumptive guess that most bloggers are educated and well employed. It is the rest of the folks out there that have bigger issues. But don’t look to me and folks in my braket to prop you up - just not fair. Totally unamerican. If I could change a few words on the Kerry gaffe, it would go something like this:

“If you work hard, stay is school, you won’t get stuck in a SHACK”.

heheh

Posted by: b0mbay at November 2, 2006 08:10 PM
Comment #192954

Kevin & jrb

As you know, I am a simple man. I have only noticed that lots of people who came from working or poor backgrounds (as I did) can with work, study and a little luck do very well in the U.S. Maybe my standards are too low, but I am comfortable with what I got. There are plenty of choices. If I am/was being exploited, I do not care. In fact I hope it never stops.

Re stocks, you were referring (I thought) to owning a stock, such as HAL. There are other ways to make money in the market. I am familiar with them (I also have an MBA) but I do not use them because (as a simple man) I do not understand how to make more money that way. I will tell you what re stocks, any fool can make money on stocks. That is why I like them. If you just threw darts at the WSJ and bought the 30 stocks you hit each month and held onto them, you would have made about 10% every year for the last ten years. Those who don’t want to do that can buy an index fund. It really is not very hard and it is available to everybody.

Posted by: Jack at November 2, 2006 09:29 PM
Comment #192962

Jack-

My grandfather was also a very simple man. He said: you have to put away money in the good times so the bad time aint so bad.

Good advice. The US government would also be wise to head it.

Posted by: Kevin23 at November 2, 2006 09:57 PM
Comment #192965

Kevin

That would be wise if we would cut spending and address entitlements. I bet your grandfather didn’t try to get money from his neigbors and family to support his spending.

Posted by: Jack at November 2, 2006 10:13 PM
Comment #192967

No, neither he, nor I, would be in favor of welfare, both corperate and social. But when a vital industry acts like a child with no direction, a good parent government will force it to put its money into a college fund for its future…ie. researching alternative energy.

Posted by: Kevin23 at November 2, 2006 10:19 PM
Comment #192971

Jack, how about a windfall profits tax on all business related to fossil feuls and force the money to be used for idea-based research? You can even offset that with tax incentives for private investment in the these new technologies and you wouldn’t effect companys’ after tax profits and you would have double the effort going on, both private and governmental. Just the trading of ideas and personnel between the two would add an immeasurably important third element.

Isn’t an idea like that better than what we have now, or just putting total faith in the private sector?

Posted by: Kevin23 at November 2, 2006 10:26 PM
Comment #192976

Kevin

I prefer not to subsidize any business and I would cut those subsidies if I could.

I wrote re why I do not trust government in energy research. I do not oppose small operations, but the problem with the energy problem is that it is not a problem. It is a choice. We use oil because it is cheap and easy. It has external costs. That is what I would tax.

Government protects existing stakeholders. You can see this now with ethanol, which I support in general. But government pushed corn as the feedstock because of the political power of the corn producers. It might not be the best option, but government power can get us committed.

The private sector is not better at making choices than the government, but private firms do not have the power to keep on throwing good money after bad. So the private sector is better at changing its mind and trying a variety of options. It is messy but it works.

Taxes on windfall profits would be okay, but then you might have to put subsidies on windfall loses. That is how that whole corporate welfare thing gets going

Posted by: Jack at November 2, 2006 10:47 PM
Comment #192980

Jack:

You know all this talk of doomsday etc etc. I’m not buying it.

Also all of this Republican and Democrats doing better than one and other.

My belief is that our system produces a certain rate of growth. (ie, our constitution).

What is great about our system is that it is flexible. I was just reading that America takes in more immigrants than the rest of the world combined. What impact does that have on the “age wave”. And, applications are at all time highs!!

Watch as each election builds on the previous one. I don’t think the Democrats are poised for a “take over” of government. Mostly because they are not campaigning on any ideas. If Democrats speak their mind nationally they loose.

It is interesting to watch the growth rate of the economy trend higher for a while, and then lower. It will also be interesting to watch the age wave become a ripple, as we hire millions of foreigners to do things for us in the future, and of course pay into entitlements.

Craig

Posted by: Craig Holmes at November 2, 2006 10:59 PM
Comment #192989
I wrote re why I do not trust government in energy research. I do not oppose small operations, but the problem with the energy problem is that it is not a problem. It is a choice. We use oil because it is cheap and easy. It has external costs. That is what I would tax.

This is so frustrating to me.

When we talk about energy, we ARE talking about a host of little problems. For example, the sector using the largest amount of energy is industrial. The chemical industry accounts for 30 percent of energy used in the industrial sector. Thus, making chemical industrial processes more efficient can save enormous amounts of energy. The Industrial Technologies Program, working with the chemicals industry, is well on way to cutting energy intensity by 30 percent (as well as cutting pollution and water use). How is it doing this? By funding lots of relatively small R&D and demonstration projects. It’s hard to get the public excited about the Catalytic Membrane project or the Millisecond Oxidation of Alkanes project, but it’s exactly highly specific projects like that which will save energy. Spread ITP efforts along the range of U.S. industries, look at completed R&D, see what’s being worked on now. This is the non-exciting stuff where the action is. Why doesn’t industry do all this on its own? Well, actually, it does do some on its on, but many projects are inherently risky — ITP not only helps in funding (notice I said helps; the industries take quite a bit of risk themselves), but it brings industry leaders to develop roadmaps, vision statements, etc.

The results are highly significant, and have reduced energy intensity in industry a great deal. And yeah I’m too lazy to find that information right now, but it’s out there, publically available.

The ITP budget request for 2007 is $46 million, down from $57 million in 2006. This despite the enormous success of the program. What do we spend every day in Iraq? A billion?

You say government cannot be trusted, but I say is that unwise government cannot be trusted. The successes in government-directed research are all around us; we wouldn’t be communicating the way we are without them.

Here’s an example of unwise government. Hydrogen fuel cars, which may or may not be feasible considering the enormous infrastructure required and the difficulty in getting inexpensive hydrogen from sources other than petroleum, got $1.7 billion over five years — at the same time while unsexy and highly specific and inexpensive projects got slashed. It’s not a problem with government, it’s a problem with unintelligent use of government resources. It’s what happens when politicians, wanting to announce something sexy in a State of the Union speech, look for cool-sounding crap. The experts rolled their eyes, you know. This is why we must elect thoughtful leaders who at least have the good sense to listen to people with expertise.

Posted by: Trent at November 3, 2006 12:26 AM
Comment #192990

Well, I screwed up block quoting that first paragraph.

Posted by: Trent at November 3, 2006 12:28 AM
Comment #193003

Could someone please explain pork barrel spending to me? I take it to mean spending that is not for the common good. But, what is common good for say, people in one state, may not be common good for another. So, it’s all a matter of perspective, right?

And if it matters to anyone, I’ve become a registered “f ‘em both”. Neither party has a done a thing to change my life. I feel as secure today as I did September 10, 2001. I still make ends meet the same way I always did, by spending less than I earn so I could save for the things I WANT and pay as I go for the things I NEED.

If we want a good economy, it all starts at the individual level. Spend what you earn, save for the things you want but can’t yet afford. Is it really all that hard?

And for the inane comment about gas prices dropping right before the election. Have you looked lately? In the last two weeks gas in my area has gone up about 30 cents a gallon. True, it dropped 50 cents to start off with, but here we are 5 days out, and it’s almost right back where it started. Damn that Bush! I thought he wanted me to vote for Republicans!

Posted by: sean at November 3, 2006 02:44 AM
Comment #193014

My Name Is Roger

This is for…………………………………

Benjamine Hackett

Jack

Mike Tate

Seminole 6

Eric Simonson

Stephen Daugherty

Paul Siegel

Sicilian Eagle

I like reading all of your comments, even though I may not agree with everything you have to say.

I just came across a book that each of you may be interested in.

You may not like what the author has to say, but, if for no other reason…. it still might be something you should read, just in case someone aske you about it.

The book is by —> [ ANN COULTER ]

The book is [ GODLESS — The Church Of Liberalism ]

Again …. I like reading all of your comments.

Roger A Conservative Christian Rupublican

Posted by: ROGER at November 3, 2006 06:21 AM
Comment #193031


Roger: I think you should spend more time reading Jesus and much less time reading Coulter. Ann has no room for Jesus in her heart. It is overflowing with hate.

Posted by: jlw at November 3, 2006 09:19 AM
Comment #193034

As we all know, the democratic party does not deliver balanced budgets when it controls congress. So the democrats aren’t much of an alternative.

Not only can we look forward to a continuation of the democratic party’s unbalanced budgets…they have promised vast new spending projects. Projects they can only fund with higher taxes. And they have promised to deliver higher taxes by not continuing the Bush tax cuts. All they have to do is take NO ACTION and the tax cuts expire.

So for the person who wants a balanced budget…I’m not sure there is an alternative. Both parties should be held accountable, no matter who wins…to producing a balanced budget.

What I find amusing is that with these very same economic numbers, the democratic party and the liberal press would be declaring that the democrats have delivered a WONDERFUL economy. And the press would be beating the drums and alerting the public to what a great job the dems have done. After all, dems don’t balance budgets…and they have many many times taken credit for a “great” economy that had no associated balanced budget.

The economy is HUGE. Democrats have run larger deficits in the past when compared to the GDP which is much larger now. In every Good or great economy there is bad news and potential disaster lurking. It’s just a simple fact of life. One the present democrats refuse to acknowledge. But if they were to take power tomorrow, they would simply flip sides on the economy “arguement” and start preaching to us how their low unemployement numbers are great and why the economy suddenly transformed from bad to good the day they took office.

Lets hold each party accountable. What do we want?

1. Balanced Budgets.
2. A Real Fix for Medicare
3. A Real Fix for Social Security.
4. Meaningful and innovative national health care plan.
5. A secure, fenced-in border.
6. Stop Ear Marks in Congress…which will stop much of the corruption.
7. Strong National Security against terrorists. Some of us feel that means fighting a WAR against them over there, so they aren’t blowing us up over here.

This isn’t everything but it’s a pretty good list. Both parties should be promising to get us there. Both parties should be telling us their plan. Both parties have failed us thus far in taking on the entire list.

Which party MIGHT accomplish one or more of the above?

Well, the Repubicans when they controled congress passed the Newt Gingrich bill to balance the budget. So we have a clear signal that one party recently balanced the budget while the other party when it controls congress may never have balanced the budget Certainly the democrats haven’t delivered a democratic congress since after WWII that has given us a balanced budget.

Also, clearly the Republicans have been able to wage a war on terror.

The Republicans problem is that they wandered away from the Newt Gingrich revolution and became more like the democrats in all of their corruption and disconnect from the American public. Take for example, Harry Reid and his million dollar dirty property deal that was nothing more than a flimsy influence peddling scheme.

Don’t be discouraged Republicans. Vote for Republicans as if your LIFE depended on it…it might.

Posted by: Stephen at November 3, 2006 09:30 AM
Comment #193055

Stephen,

I’m thinking last name King? Some great fiction there.

I especially liked the “clearly the Republicans have been able to wage a war on terror” with the implication it has been successful. Perhaps you’ve missed some of the news. Iraq is a total mess, and we attacked them even though they had no WMDs nor responsibility whatsoever for 9/11 as they had no ties to Al Qaeda and bin Laden (still running free). 16 intelligence agencies have indicated that Bush’s war has INCREASED the terrorist threat. And while bin Laden runs free, depsite Bush’s promise to “make the world safe from terrorism,” Al Qaeda has been sucessful in killing people in more than two dozen public attacks since 9/11/01. Taliban? Still operating quite successfully thank you. Seems we’re stretched a little too thin.

The “Harry Reid Deal?” All of this has been fully disclosed by him, and by all reports it was clearly a reporting oversight that he addressed and fixed. As you well know, if there really was any unethical or criminal activity here, the GOP would be all over it like white on rice. Heck, Kerry flubs a joke line and the White House couldn’t have enough quotes bashing him. To compare Reid to Delay, Abramoff, Cunningham, Noe, Taft, Ney, Scanlon, Libby, Foley and let’s not forget your hero Newt’s book deal and his 84 ethics charges, whew, is pretty far fetched, even by GOP spinning standards.

And both parties want a “fenced-in border?” Please. This is a campaign joke.

Finally, I can’t let pass the tired old GOP talking point of “fight them over there instead of here.” And who is the “them” of which you speak? When we bombed Iraq and their civilians, we did not damage terrorists. In fact, as you certainly know, our own intelligence agencies have told us by starting and continuing a war in Iraq, we have increased our threat. Iraq, was not responsible for 9/11, yet we attacked them. Saddam, while not a good ruler, was in the end, an ally for us against Al Qaeda, as he feared them as well. So, in the greatest terrorist attack ever on 9/11, we lost 2,899 people. To date in Iraq 2,826 (add 3-4 per day) of our troops have been killed. Help me with the logic that getting killed in Iraq is better than here. I might follow the logic if the intelligence told us at least we were stopping, not increasing threats here. But that’s not the case, so I’d put the “over there” logic right up there with the “no attacks in five years” mantra.

But clear the mantle for that Pulitzer Stephen, that’s some good stuff there.


Posted by: Boomer at November 3, 2006 10:30 AM
Comment #193058

Boomer

Funny you should mention Reid. Has he changed his mind? Will he give his Abromof bribe money back now? I hear Reid’s four boys are all working for firms in Washington trying to manipulate congress. So if you want Reid to slip in an earmark for your agenda…just hire one of his boys! And Reids “business partner” there in Vegas. The lawyer with mob ties using Reid’s name to get a zoning board to change it’s vote then sliping Reid a million dollar “profit”. You call that LEGAL? Shades of Hillary Clinton. Even CNN admitted that the democratic party had become corrupt and that was part of the reason that the country ran them out of office.

So your cry that Abramoff’s buddy Reid is an innocent man doesn’t really wash. Good old Reid with his own “culture of corruption” going on there isn’t talking much about the Republicans these days ehh? Got a million bucks? Reid will be your business partner too!

No, there’s plenty of corruption on the Democratic side of the isle, just open up their freezers and count all that cold cash they have been stocking up on.

My basic points remain. America wants a balanced budget, a fix for social security, a fix for Medicare, a secure boarder, a basic national health care plan that doesn’t bankrupt us, a war on terror (not a politically correct police action), and stop the ear mark corruption in Washington.

Tell me oomer , when has a DEMOCRATIC CONGRESS EVER PASSED A BALANCED A BUDGET? PLEASE, IT’S NOT A TRICK QUESTION, TELL ME A DEMOCRATIC CONTROLLED CONGRESS EVER PASSED A BALLANCED BUDBGET? I’ll bet you can’t. Democratic congresses DO NOT PASS BALANCED BUDGETS. But Republicans have!

Posted by: Stephen at November 3, 2006 10:43 AM
Comment #193065

Stephen, just to keep this simple, you’ve had Republican Congresses for a while. Why no balanced budgets under Bush? The War didn’t create the deficit. Tax cuts did. Without Clinton, the Republicans would have cut taxes, as they did under Bush. No balanced budget. Actually, if Clinton could have served more than two terms, we’d no doubt be seeing more balanced budgets.

Anyway, you toss away line is a nice one, but not very meaningful. Do a comparison of presidents and congresses and see have the various combinations have done. Better yet, just go find the relevant post in the Blue Column.

Posted by: Trent at November 3, 2006 11:14 AM
Comment #193092

Trent

Why do you assume the chemical industry is not interested in cutting its costs? I am sure they are working on these better systems and they are being penalized every minute by higher costs if they are not. A higher price raises the penalty and potential reward.

You know what the USG CAN do? It can lead the way in its own things. For example, why don’t all those postal vehicles run on some alternative fuel? How about solar etc for government buildings? The Feds control about 1/5 of our economy directly. If they think something will work for US maybe they can start it working for them. They have the deeper pockets and economies of scale. If the Feds can make alternative fuel work in their part of the economy, which is bigger than the economies of most whole countries in the world, others can adopt it. If it won’t work there, maybe it is not appropriate.

The problem for the G is do as I say, not as I do.

Posted by: Jack at November 3, 2006 01:21 PM
Comment #193093
Craig Holmes wrote: You know all this talk of doomsday etc etc. I’m not buying it.
Craig Holmes, It’s not doomsday. It’s simply that the debt is growing too fast, and is too large. You’d agree with that, right? Then, do don’t you think it should be addressed. To say it’s OK, not too big, not growing too large, and within historical norms is asking for trouble, when you observe the lack of discipline in Congress with respect to spending, borrowing, debt, and money-printing. Also, when saying the National Debt is within “historical nomrs”, that fails to recognize the other total federal debt and much of the $2.2 trillion in annual revenues are already dedicated to Social Security, Medicare, Medicaid, the wars in Iraq and Afghanistan, etc. Something has got to give. Cut the Defense budget? Cut NASA? Cut welfare? Cut Social Security? Increase taxes? The math doesn’t work out, unless there is MASSIVE growth of GDP. And, massive immigration won’t help in a nation with so many social programs. Already, an estimated 32% to 46% of illegal aliens receive some sort of welfare. Massive immigration (legal or not) is not a good solution. In fact, whatever problems exist, a massive population can exacerbate them. The debt is growing faster than GDP, but nobody in government or the Federal Reserve seem concerned. Why is that? Is it because the plan is to simply print more money? Americans need to be asking these questions, because they will be the ones to suffer the consequences if the economy is messed up by the fiscal irresponsibility of an irresponsible, undisciplined Congress.

And, you mention the young age wave?
There is a huge baby boomer wave is coming too, and that’s why it is irresponsible to keep plundering the Social Security surpluses.

While there are some here that say, “Yeah, the debt needs to be reduced, and spending needs to be reduced”, you also say things that sound like it’s OK if the current trend continues, as if it will have no adverse long term impact.

$8.6 trillion National Debt should be a concern.
$12.8 trillion Social Security debt and surpluses still being spent should be a concern.
$450 billion debt for the PBGC should be a concern.

But, ALL politicians are strangely silent about it.
Why is that?
Because they think we can grow enough to offset it?
That’s debatable.
Because they think we can immigrate enough to offset it?

Craig Holmes wrote: I was just reading that America takes in more immigrants than the rest of the world combined. What impact does that have on the “age wave”. And, applications are at all time highs!!
How is importing the impoverished and less educated by the millions going to help? How is growing the population going to help? And, why apply to immigrate legally when it’s easier to do illegally?

The total federal debt is about $22 trillion, and yet, some say “it’s in historical norms, and the sky is not falling”.
That’s not entirely true.
Not when you consider ALL federal debt.
It’s clever how the the $8.6 National Debt has been cleverly isolated in the federal-debt-relative-to-GDP charts and discussions.
Well, if rampant debt, borrowing, spending, and money-printing continues like the last 6 years, it will be a big problem.

And, Republicans and Democrats are BOTH to blame.
Neither can agree to simply being fiscally responsible (but we keep re-electing them, so why should it change?).

And, how responsible is it to keep growing the government ever larger, as large as GDP can allow?

Well, I’m tired of it.
I voted early yesterday, and not a single incumbent got my vote, because in my opinion, most (if not all) are irresponsible, bought-and-paid-for, and look the other way.

The fact is, most voters don’t feel the nation is on the right track, and I hope they will consider the common-sense of NOT re-electing the very same irresponsible, bought-and-paid-for, look-the-other-way incubment politicians, securing their cu$hy, coveted 90% re-election rates.

Posted by: d.a.n at November 3, 2006 01:23 PM
Comment #193112

d.a.n,
Your passion is admirable and you bring up good points that need to be addressed.
What bothers me about your position on the tax code is your use and belief in fairness as if that is some Constitutional bestowed right. here is Preamble to the Constitution

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

I don’t see the word “fair” in there and I think it is a much overused concept. Our capitalistic system depends on the creation of wealth by investment, innovation and yes that evil word the left doesn’t like to use…..profits. Those profits as a rule (I know there are exceptions) are used to reinvest in the business, creating jobs and further opportunities. Yeh, some people make a lot of money in that process and that is a good thing….not a bad thing. This idea that one must soak the rich so that we have a “fairer” system is poppycock and shows a misunderstanding of capitalism. Yeh, like anything else there is a bad side to capitalism. Greed, misconduct, illegal manipulations of the system etc. I’m sure the left can come up with a lot of them as I can also, being on the right. Doesn’t change the validity of the system, just its weaknesses. However, its strenghts far outweigh its problems and the evidence is that through this system of investment, risk taking, innovation we have not only the economy that is the envy of the world, but I would argue the most vibrant economy that the world has ever seen.
Name one system that has provided what we have to its people…ever.
Now, the warts are there. The poor are poor, but our middle class is the envy of the world to the point where the poorest of our poor are very much better off then the poorest of the rest of the world. That is a fact.
You idea on fairness as far as a flat tax has benefits that I like. It would be the “fairest” system but if not careful could actual hurt our poorest as they now pay little in taxes. Our lowest 50% of AGI filers pay about 3.5% of total taxes.
I think the actual most beneficial type system is a consumption tax of some sort that hits everyone the same. What ever you buy, you pay a tax. Have no idea how it would work and it probably is not practical, but to me that is the “fairest” way to collect taxes.
The best and most painless way to increase revenues (after all that is the goal….not to be “fair” and get as much from the “rich”as we can) is to are you ready…..cut the marginal tax rate, lower the capital gains tax and increase the compliance of tax payers by enforcement and penalties. (there is a huge black market in income that doesn’t get taxed due to cheating) A consumption tax would minimize that problem at least.
Main thing is to not talk about fairness as much as how to get the revenues we need and not one more penny as it is not the governments money that they graciously let me keep part of. It is my money, that I have earned and I voluntarily pay for what my government provides me. It is mindset change.
We will never “balance the budget” which is joke of an expression due to the government’s way of accounting. However, one must attack entitlements, medicare, medicde and social socurity in a big time way. That will never happen as it is political suicide as Bush as found out. It is simply not able to be talked about rationally with anyone. Your idea is a good one about not reelecting any of these pols that won’t change.
My only solace is that as bad as it is, it would be a whole lot worse with Dems in charge if that is even conceivable that it could be worse.

Posted by: mef at November 3, 2006 02:25 PM
Comment #193115

Trent,

Lets keep this real simple. You continue to dance around the fact that democratic congresses DO NOT SUBMIT PASS BALANCED BUDGETS! Only a Republican congress will give you that. I find it amazing that not one single liberal can support the claim of the democrats that they will balance the budget by pointing to one single time that a democratic congress passed a balanced budget! Is it because it has never happened?

Posted by: Stephen at November 3, 2006 02:28 PM
Comment #193127

Stephen, did you even read my post?

Posted by: Trent at November 3, 2006 03:03 PM
Comment #193128
Jack wrote: The problem for the G is do as I say, not as I do.
Jack, You’re right. And, it applies to many different realms. Especially in terms of selective enforcement of the law. Politicians, if ever convicted, often get pardons.

The government squanders so much money and opportunities. You’d think we could get much better for the $2.2 trillion per year they take in from taxes annually. Instead, they waste it on bridges to no-where, and $28 billion per year in pork-barrel, graft, and corporate welfare.
Or, use it to grow the government ever larger.
The federal government has increased in size by many hundreds of thousands of employees in the last few years.

And there is the vast structure of the Executive Branch, a gang of over two million unaccountable persons that are neither seen nor heard as they irresponsibly throttle our freedoms and prosperity; subtly growing and securing more and more power; never doing the things you suggest above.

And, then there’s the relatively smaller 535 in Congress and their hundreds of thousands employees, mostly a fumbling and stumbling group that is too busy piling on pork-barrel and subsidies to special interests, gathering $millions while trying to get re-elected, voting themselves raises and cu$hy perk$, and mostly busy fueling the petty partisan warfare.

Just think of what could be done with all the money in politics? There’s something fundamentally wrong with our voting system. 83% of all federal campaign donations (of $200 or more) come from only a tiny 0.15% of the 200 million eligible voters (totally several billions).

Of course, some are going to say things are not so bad, but think how much better things can and should be. And I still believe that IF spending, borrowing, debt and money-printing keeps on the current path for even a few more years, we are highly likely to see some severe consequences that will affect millions of Americans for many years. Especially those that are dependent on government for Social Security, Medicare, Medicaid, and welfare. And, the 99% of the U.S. population (currently with 60% of all wealth) will grow in population while that number continues to fall as it has since 1980.

Some are going to say, FINE !
Some don’t like all those social programs anyway.
But, remember, 77 million baby boomers have paid all their life into Social Security, and they won’t be happy if that system is messed up. That’s what they are doing now by spending the surpluses (and replacing it with worthless government bonds).

Jack,
It’s no wonder the government can’t do the things you suggest. They are best suited for providing a National Defense, but not much else. And, politicians are doing a good job of that either, considering our nearly wide-open ports and borders. Especially in this era of terrorism.

Perhaps it’s best if all these social programs fail? So, we can finally be rid of them? That may be what end up with whether we like it or not, once again proving, we should not ask government to take care of us from cradle-to-grave. Any such systems, with so much money-flow, are simply too irresistable. Politicians always find a way to mismanage and/or plunder them.

Posted by: d.a.n at November 3, 2006 03:05 PM
Comment #193130

Jack, please, do a bit of research. Even without looking at the facts, as I’ve urged several times, one can understand reasons why an industry wouldn’t on its own undertake some research. Now you are objecting to even minimal government spending on R&D, despite the fact that the VERY WORLD WE LIVE IN HAS BEEN TRANSFORMED BY GOVERNMENT RESEARCH. Those satellites up there so crucial to much we do didn’t get started by their own. This internet thing we waste so much time on wasn’t the creation of a private company. You know what’s going on with the world’s climate; projections are continued increases in manmade carbon emissions, not a decrease. Consumption of oil is going to increase, not decrease, despite hybrids and all the other goodies coming on line. And now you argue against even spending less than 5 percent of what we spend on Iraq each day to fund valuable research for an entire year — research that has been proven to be beneficial.

Take the ideological blinders off and do the tiny bit of research it takes to know that government R&D, in general, pays off enormously.

Anyway, that’s my last word on this topic for awhile. You can lead a horse etc.

Posted by: Trent at November 3, 2006 03:15 PM
Comment #193153

Trent-

I think Jack is just viewing the oil industry as if it were the widget industry. And government funded research has indeed provided us with many of our most prized technologies. We should never abandon that if we are serious about solving serious yet foreseeable problems like fossil feul dependence. It is actually the best “security” plan. Imagine the radical muslim states without oil revenues…that is when the US can again play its dominant hand on the international table. Why on earth would anyone be against this?

Stephen-

The past is the past and does not necessarily have any bearing whatsoever on the future…you are speculating. You couldn’t get away with it in any courtroom or on any official report, so why do you think it is a good foundation for a political ideology? You should try and learn about today’s candidates and their policies towards today’s issues. Stop trying to point out historical patterns before they unfold…that is much better left to historians who have the benefit of hindsight.

And I seem to remember the only presidential candidate in recent history to publicly state he would pay down the national debt was Al Gore. Remember? Bush hammered him by saying it was the people’s money and they deserved to get it back. It sounds nice enough, but it ignored the fact that the interest on the debt takes money away from other uses, and only makes things worst in the long run as there is not as much capital to work with as there would have been.

Now I understand the argument that the money would be invested back into the economy, but who did it help when DVD players and TVs flew off the shelves? Regular Americans saw very little benefit. They’d have seen much greater benefits had government eliminated the debt burden and freed up trillions of dollars that could go immediately to fund physical security measures and research into alternative energy. Instead, republicans became worst than big spending democrats, they became big debtors. Who does that help? Maybe terrorists if you use the current republican logic. Why isn’t that on Rush? Hmmm.

Posted by: Kevin23 at November 3, 2006 04:48 PM
Comment #193168

Trent

I support government funded research but in small grants and I have no confidence it will “solve” the energy problem because it is NOT a problem. What if government research tomorrow found a way to produce ethanol from cellulous at the same price it now costs for a barrel of oil? Great. Are we all happy? Now we have to figure out where to grow all that feedstock, how to apply fertilizers etc. Don’t get me wrong. This would be a very good development, but not the end of our problem IF oil remained cheap.

The energy crisis we have today is merely a matter of the choices we make and the incentives we have to make them. There is no sweeping technological fix and if we set the government loose trying to find one, it will just set back progress.

Trent & Kevin

It costs only a couple of dollars to pull oil out of the ground in some parts of the Arab world. Alternatives will never be able to compete with that. That is why we use the oil. We have a couple of options. We can tax oil in order to make sure the price includes the obvious environmental and geopolitical external costs (which I advocate) or we can wait until the oil in these places is largely used up and the price rises to meet that of alternatives. This might take a long time.

We are talking past each other a little. I advocate alternatives, but I am realistic in what can be achieved. It is hard to think of a feedstock that will be cheaper to find or harvest than oil is for some of the Middle Eastern producers. So even if you can create ethanol at zero cost, even if the raw materials cost NOTHING, you still have the costs of growing, harvesting and transporting feedstock. That will cost you more than the oil that these guys can produce.

If you do not raise the price of oil, you cannot solve the energy problem. There is no free lunch, no matter how much government you are willing to tolerate.

Posted by: Jack at November 3, 2006 05:32 PM
Comment #193177

Jack-

I’m in shock at the stuborn resistence to good ideas.

“I have no confidence it will “solve‎ the energy problem because it is NOT a problem.”

How is energy dependence NOT a problem?? Doesn’t it finance our biggest enemies in the world? Doesn’t it contribute to global warming? What are you smoking to think it is not a problem. It may be the single biggest global and universal economic issue of the next 100 years.

“There is no sweeping technological fix and if we set the government loose trying to find one, it will just set back progress.”

That’s arrogance and negilgence. The victims are our future generations. You assume way too much. You ignore way too much. You relegate us to a collapsing and flawed system without even examining alternatives? That is irresponsible to say the least given the risks.

“Alternatives will never be able to compete with that.”

How would you even begin to assume you know that?

“We have a couple of options. We can tax oil in order to make sure the price includes the obvious environmental and geopolitical external costs (which I advocate) or we can wait until the oil in these places is largely used up and the price rises to meet that of alternatives.”

There ARE plenty of other options. I don’t dislike your limiting taxation to external costs, but most are truly immeasurable. Your assumptions that limit us to these 2 options are speculative, so I would say you should reserve being so dead-set until after you are given some tangable reasons. This is just too important of an issue. Now because of security reasons, and in the future for economic reasons.

We clear on the basic yet?

Posted by: Kevin23 at November 3, 2006 05:55 PM
Comment #193184

Kevin

The U.S already spends a fortune on reseach. Even the government. 34 million here, a few nukes there there, 100 million for fuel cellsand pretty soon it adds up to real money.

You say there are so many options. Maybe you could name a few that actually look like they might work in a few years.

I can think of some. Solar and wind will play a bigger role. We will make more ethanol. We certainly could increase our nuclear energy. The French get 78% of their electricity from nukes; we get about 20%. But all this together will not curtail oil as a fuel unless it is made more expensive.

You need to bring in alternative for less than the price equivelent oil. In the middle East you are talking a couple dollars barrel. You cannot chop your own wood for less than that if you include the cost of labor, shoes and axes.

It is economically feasible to use Alberta oil sands at $40 a barrel. You no longer have the Middle East problem, but you have a big environmental one. How much wood would you have to chop at $40 a barrel?

You guys have succumed to hope over experience. You put your faith in an massive goverment program, which failed last time around (under Carter) and shows no sign of having improved.

It is all a matter of how much you want to pay. If you are willing to make a capital investment in solar or hybrid, you can do that now. It is just that oil is cheaper.

Posted by: Jack at November 3, 2006 06:38 PM
Comment #193188

Jack-

So much advancement has been made in recent years. Foreign investment is starting to pour in from other western countries who want to be on the forefront of fossil feul independence. My wife’s company is one of them. They recently hosted the Danish PM, who was in CA specifically to discuss funding research. Why? Because the government was wise enough to fund the original research.

Don’t put me on a slippery slope though. I did not say that there was reason to do this in every circumstance. But in the case of dependence on foreign oil, I’d say we have a clear and obvious mandate. I understand oil is cheaper right now. We’ll use it for years to come. But that oil money is often falling into the hands of those who would seek to do us harm. It will continue to get worst. We should do something about that, don’t you agree?

It is for experts in the industry to decide what the best direction to go is. Fed. grant distribution is done by experts. The funding is specific. I do not pretend to know the technology side of it, other than the recent explosion in new ideas.

Posted by: Kevin23 at November 3, 2006 06:50 PM
Comment #193193


What happens to the economy when American productivity redlines.

If some think that making America independent of foreign oil is not a high priority, just wait until Iran has the BOMB.

Posted by: jlw at November 3, 2006 07:14 PM
Comment #193212

Kevin

YES. Oil money is falling into the hands of people we do not like. YES. Tax their oil. Do not task U.S. firms beyond the 40% we already tax them just because they handle this commodity.

Why do you have so much confidence in the same government that produced all those things you have been criticizing? You didn’t notice the scandals, mismanagement etc. The same thing happened in previous administrations too. Government can do lots of things well. It is essential for some things. But it is not very good at deciding winners & losers in the economy.

The tax on oil applies to everybody who uses oil They have automatic incentives to improve. You, BTW, are giving nothing to oil firms. In fact, you are cutting into their profits and those of the oil producing despots.

The Feds already make lots of grants. If they make more, they just shovel the cash out the door and not always the best destinations.

Posted by: jack at November 3, 2006 09:20 PM
Comment #193219

Jack-

So why don’t we start focussing the appropriate amount of attention to enforcing our laws and on and on auditing grant funded research programs? The old fashioned way of simplifying the rules and actually enforcing them still works, I believe. We need to do that again.

And I guess we fundementaly agree about the good results that have and can continue to come from government grants certain areas. If something proves to be wasteful, then cut it loose. Write that into the mission statement if you want to. Make hard guidelines and consequences. I’d agree.

There ARE many government grant programs that I’d consider wasteful, but this is one area where the benefits outweigh the harm no matter how you draw it up…unless of course you can show me some evidence that the government research in that area has been overly wasteful. I have yet to find such evidence.

Posted by: Kevin23 at November 3, 2006 09:45 PM
Comment #193220

Sorry…the second paragraph should begin: “And I guess we fundementaly DIS-agree…”

Posted by: Kevin23 at November 3, 2006 09:47 PM
Comment #193222

And furthermore, Jack, I’ve actually heard about many more scandels and reports of mis-management coming out of the oil business than I have about government corruption in that arena. If the simple choice becomes whether I’d trust Exxon management or or a regulatory beaurocracy to manage my money most efficiently and transparently, I’d honestly have to admit that I’d have to give it some good hard thought.

Posted by: Kevin23 at November 3, 2006 09:52 PM
Comment #193237

Kevin

We disagree about fundamentals. I do not trust business any more than I trust government. I also do not distrust either more. They both have their roles. In a case such as energy, which is fundamentally about choices, business is a better bet. If we were making a national push toward a single agreed upon goal, I might think government could do a better job.

I really cannot understand your logic about the mechanism. You reject the direct tax on oil, which will impact both foreign despots & big oil firms in favor of taxing firms (most of which are American) and then you think it will lower the prices.

I take your word that you are satisfied with your financial and managment success. The wonderful thing about the U.S. free market is that we have choices. I would not want to invest my money with you or work for you. You are welcome to think the same about me and we may both be right. We certainly would produce different results.

The argument here is becoming circular. It is a difference on emphasis on theory and practice, hope and experience. I am through casting pearls on this thread.

Posted by: Jack at November 3, 2006 11:23 PM
Comment #193245

Several Thoughts On A Few Of The Issues Raised

Tax Cuts
Why is it that people think tax cuts cause revenue to go down? Revenue went up when Truman cut taxes. Revenue went up when Kennedy cut taxes. Revenue went up Reagan cut taxes. Revenue went up when Bush cut taxes. How many examples of ‘cause and effect’ are required before people can grasp a concept?

From the 07/09/06 NY Times “An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.”

Gas Prices
Just because people remember gasoline being 33 cents a gallon, doesn’t mean it was the equivalent of 33 cents a gallon in today’s dollars, as it is often refered / perceived. In constant dollars, gasoline sold for $1.98 per gallon in 1956, $1.79 in 1966, $2.02 in 1976, $1.67 in 1986, $1.54 in 1996 and it is currently $2.31 per gallon in our area today. Yes, gas costs more today than in years past, but not as dramatically more as people believe. (Gas prices are from a report from Oregon State University)

Median Income
A recent article in Forbes showed how eventhough people complain about how bad they have it in today’s economy, the median household income is actually 32% higher now than it was in 1967. Here’s a thought, maybe too many people are living beyond their means, fulling their wants, not their needs. If you don’t have the income for a 3,000 sq. ft. house, or for a $50,000 car- don’t buy it. Bottom line, don’t live beyond your means and then complain about how bad things are. This doesn’t mean there are people who aren’t having a rough go of it, but generally speaking, personal responsibility usually comes into place for someone’s success or failure.

Posted by: AmericanPatriot at November 4, 2006 12:27 AM
Comment #193246

Jack-

“You reject the direct tax on oil, which will impact both foreign despots & big oil firms in favor of taxing firms (most of which are American) and then you think it will lower the prices.”

You’re hopeless. I’m tired of trying to explain the same things 10 different ways and still having you misrepresent my views. You’ve yet to successfully repeat any of my positions, and you ducked every honest question by answering a different one. Maybe those were your intentions all along.

And to think that federal grants are best used for situations involving one agreed upon direction shows a lack of understanding of the whole grant administration system even though it was explained repeatedly. Researchers come up with the ideas independently, THEN ask for the grant. The whole point of doing it that way is to promote innovation as opposed to a unified direction.

And, for the last time, you should stop assuming things. You really suck at it. And I’m seriously talking about a 0% success ratio. Really terrible!

Posted by: Kevin23 at November 4, 2006 12:33 AM
Comment #193270

AmericanPatriot,

You want people to accept responsibility for their actions? What? You want people to look in the mirror for their salvation and not to the government? No! Are you saying it is up to each of us to ensure their own success or failure? Unreal. Next you’ll say that when people are interviewed they say they are doing fine but they are really worried about their neighbors financial situation. When the neighbor is interviewed he says the same thing. Huh? I’ll bet you even think the unemployment rate is at 4.4%. Where do you get these ideas? Tax cuts that allow people to keep the money THEY earn? Ridiculous. They should be voluntarily be giving that money to the government if it is not taken by force. I’m sure all the “tax the rich” posters here already send all the “extra” money they have directly to the treasury to help their fellow man.

p.s. I have some nice swamp land, I mean beach front property to sell. Let me know.

Posted by: Realist2 at November 4, 2006 09:02 AM
Comment #193284

“AmericanPatriot”

the median household income is actually 32% higher now than it was in 1967.

I wouldn’t want to go back to 1967…$300 a month paid rent, heat, electricity, food, and gas/transportation and there were 3 of us living on that income…

Rent alone for the same flat would now be around $800 a month…not to mention the cost of food ($15 a week used to feed the 3 of us in 1967), utilities, gas (not even close to $1 in 1967)…

Posted by: Lynne at November 4, 2006 12:26 PM
Comment #193290
mef wrote: d.a.n, Your passion is admirable and you bring up good points that need to be addressed. What bothers me about your position on the tax code is your use and belief in fairness as if that is some Constitutional bestowed right. here is Preamble to the Constitution …

mef,
And, there’s nothing that says it should NOT be fair.
It should be.
And, when it is as fair as can be, there will (naturally) be more compliance.

mef wrote: I don’t see the word “fair” in there and I think it is a much overused concept. Our capitalistic system depends on the creation of wealth by investment, innovation …”
Fairness is a given and logical to assume. Fairness does not mean equality. Fairness does not justify those that try to disguise their envy and jealousy as claims for equality. That is not what fairness is all about. Fairness is not about universal health care. Fairness is not about being taken care of from cradle to grave. Some think it does, and they are, ironically, often the very ones that are unfair in demanding someone else provide for them. We know things are not always fair, but the absence of fairness does not warrant or justify unfairness.
mef wrote: … and yes that evil word the left doesn’t like to useâ€..profits. Those profits as a rule (I know there are exceptions) are used to reinvest in the business, creating jobs and further opportunities. Yeh, some people make a lot of money in that process and that is a good thingâ€.not a bad thing.
Nothing wrong with profits. I never said there was, and never said it was “evil”.

All I’ve ever said is that those that abuse vast wealth and power to control government, create monopolies, or violate anti-trust laws, exploit labor (e.g. child labor) is not only unfair, but wrong, and illegal in most instances. But, the laws are selectively enforced, which is wrong too. For example, government refuses to enforce immigration laws (which is costing tax payers over $70 billion per year in net losses), and the Supreme Court upholds the abuse of eminent domain laws (e.g. 6 cases per day in the U.S.), not to mention countless examples of selective law enforcement. Politicians are especially above the law. Even if ever convicted of a crime, they often get a Presidential pardon (like the 546 criminals pardoned by Clinton; 140 on his last day in office).

mef wrote: This idea that one must soak the rich so that we have a “fairer” system is poppycock and shows a misunderstanding of capitalism.
I agree, and never said the rich should be soaked. My Flat 17% Income Tax Rate is fair to everyone, and raises the needed tax revenues, has NO deductions of any kind, and a no one pays tax on income below the poverty level.
mef wrote: Name one system that has provided what we have to its people … ever. Now, the warts are there. The poor are poor, but our middle class is the envy of the world to the point where the poorest of our poor are very much better off then the poorest of the rest of the world. That is a fact.

True, but the middle-income-class has been shrinking since 1980 , as evidenced by this graph. If any part of that is a result of unfair taxation, violations of anti-trust laws or monopolies, irresponsible fiscal policies of the government, corporate welfare, fraud, graft, or a government that is essentially FOR-SALE, then those are valid issues, and require attention. That’s all. All these other issues about “soaking the rich” and calling profit “evil” are clever distractions to cloud the issues, obscure the facts, and make an argument to justify mediocrity.

mef wrote: You idea on fairness as far as a flat tax has benefits that I like. It would be the “fairest” system but if not careful could actual hurt our poorest as they now pay little in taxes. Our lowest 50% of AGI filers pay about 3.5% of total taxes.
That’s why it does not impose ANY tax on anyone below the poverty level. Also, the adjusted gross income is part of the problem. It is wide-open to abuse, tax loopholes, and allows too much tax evasion. Some people like a graduated income tax rate, where the income tax rate increases as income increases. That to me, is unfair. An upper 35% tax rate is out-rageous. And it used to be as high as 90%, which is even more ridiculous. And the death tax rates in some states are 50% or more, which is also ridiculous. A flat 17% tax rate on all income is graduated enough, since 17% tax on $100K is twice as much as 17% on $50K which is twice as much as 17% on $25K, etc., etc., etc.
mef wrote: I think the actual most beneficial type system is a consumption tax of some sort that hits everyone the same. What ever you buy, you pay a tax. Have no idea how it would work and it probably is not practical, but to me that is the “fairest” way to collect taxes.

That, to me, would hammer the poor the hardest.

  • the FairTax.org recommends a 23% sales tax rate (23% inclusive, but actually, it is a 30% sales tax on the price of the item purchased). That is, if you buy a $100 item, your tax is $30, which is 30% of $100. So, it is a bit dishonest to call that a 23% sales tax, when most people understand sales tax to be a “percentage of the item purchased”. Fairtax.org calls it a 23% tax by calculating $30 on the sum of $130 from the cost of the item purchased and the tax on it ($30 / $130 = 23%). Either way, 23% or 30%, it is very high sales tax. Too high.

  • Such a high rate (23% inclusive, 30% exclusive) will almost guarantee blackmarkets and tax evasion.

  • There is less transparency of sales taxes collected, versus income tax (especially if you consider the number of sales to the number of people with income). Less transparency will breed more corruption.

  • There is insufficient proof to show that all will be taxed equally (based on income). Since most people insist that the objective is to tax income equally, (except the poorest below the poverty level), how does the fairtax plan prove that income will be taxed equally ? That is a very interesting point. If the main question about any tax system that is continually asked is “Will everyone (excluding the poor) pay their fair (or equal) percentage of tax related to income?”, then what does that tell you? It seems many people still want the end result of any tax system to be that everyone pays their fair (or equal) percentage of income (excluding those below the poverty level, which would pay zero tax). Therefore, if we are continually tasked with proving that any tax system, in the end, must fairly tax income the same percentage (excluding the poor who pay zero tax), then why not simply retain the income tax (but greatly simplified)?

In my opinion, the FairTax.org plan will let the wealthiest evade more taxes than ever before. If the goal is to tax income equally (as most people want), then why complicate it by trying to place the tax on sales (on the other end of the spectrum)? Also, we might end up with both a federal sales tax, and federal income taxes. All that is required is a simplification of the existing system. Make it a flat 17% rate income tax, eliminate all the tax loop holes, and don’t tax anyone until their income exceeds the established poverty level.

OBJECTIVE: design a tax plan where all pay the same percentage of income ( except the poor, which pay nothing ), and satisfy the following:
(01) has a sufficient probability of actually taxing income equally;
(02) retains Social Security and accounting for it (currently 12.4% on first $90K gross income);
(03) retains Medicare and accounting for it (currently 1.9% on gross income;
(04) defines the tax collection methods;
(05) has a sufficient probability of compliance;
(06) does not increase tax evasion;
(07) does not increase black markets;
(08) does not driveup the cost of all products and exports;
(09) does not tax the poor and truly needy;
(10) resolves question of whether corporations should be taxed?
(11) adequately integrates and/or replaces old systems with new systems;
(12) does not double tax: for example, with the fairtax plan, the vastly wealthy get double taxed, since they already paid income tax on much of their money? That will go over like a lead balloon.

The obvious question, is this: Since the objective is to tax income fairly and that for many seems to be a flat rate income tax (with a poverty level exemption for the poorest below the poverty level), how does the fairtax plan prove that income will be taxed equally ?

Also, here’s a very interesting point. One question about any tax system that is continually asked is:


Will everyone (excluding the poor) pay their fair (or equal) percentage of tax related to income ?

Interesting isn’t it? What does that tell you? It seems many people still want the end result of any tax system to be that everyone pays their fair (or equal) percentage of income (excluding those below the poverty level, which would pay zero tax).

So, if we’re continually tasked with proving that any tax system, in the end, must fairly tax income the same percentage (excluding the poor who pay zero tax), then why not simply retain the income tax, except make it a flat tax rate of 17%, eliminate all loop-holes, deductions, subsidies, which will also mean little or no changes for accounting for Income tax, Social Security tax, and Medicare tax.

One thing is for certain. it is not easy for everyone to live at the expense of everyone else. And, when people try to do that, these systems become perverted, abused, and unfair (like our current tax code).

But, like many badly needed, common-sense, no-brainer reforms, it is all futile until a fundamental change is made first to give irresponsible, corrupt, bought-and-paid-for politicians an incentive to be responsible, transparent, and accountable too! Stop re-electing irresponsible incumbent polticians. Stop pulling the party lever (i.e. voting straight ticket).

mef wrote: The best and most painless way to increase revenues (after all that is the goal … not to be “fair” and get as much from the “rich” as we can)
I disagree that fairness is not a primary goal. Fairness should be important in any tax system. Taxes should NOT be merely based on government thinks it needs. It already gets $2.2 trillion a year, and that’s too much already.
mef wrote: is to are you ready … cut the marginal tax rate, lower the capital gains tax and increase the compliance of tax payers by enforcement and penalties.
The capital gains tax rate should be the same 17% flat rate. All income above the poverty level should be taxed the same rate. The problem now is that capital gains are taxed at 10% and 15% and that is below the nationwide average of 21%. Thus, money made on money is being taxes less than hard-earned income.
mef wrote: (there is a huge black market in income that doesn’t get taxed due to cheating)
There would be less of that if the tax system was more fair.
mef wrote: A consumption tax would minimize that problem at least.
No, it would create a bigger black market, and it would probably hammer the poor the most.

Also, the income tax system is already in place.
All it needs is simplification.
Eliminate all deductions and loop-holes, and make it a flat rate 17% income tax, and NO tax on income below the poverty level. Rather than sending rebates to people, just don’t tax them on income below the poverty level. That’s much simpler.

mef wrote: Main thing is to not talk about fairness as much as how to get the revenues we need
Those two things have almost equal importance. (1) Fairness and (2) the needed revenues.

Number (2) is not the problem. Government already gets plenty. Too much.

mef wrote: and not one more penny as it is not the governments money that they graciously let me keep part of. It is my money, that I have earned and I voluntarily pay for what my government provides me.
I agree. It’s our money. While it is folly to expect government to do anything without funding, that is not the problem. The problem is that the government takes too much. And it is fiscally irresponsible.
mef wrote: We will never “balance the budget” which is joke of an expression due to the government’s way of accounting. However, one must attack entitlements, medicare, medicde and social socurity in a big time way.
I agree. Something has to give, or the problem will solve itself the hard, painful way … and that may ALREADY be unavoidable.

Some here quickly label me a liberal, but I’m actually quite centrist, and not all about complaining (see the common-sense solutions on my web-site … including the first important step, which is to merely stop re-electing irresponsible incumbent politicians).

mef wrote: That will never happen as it is political suicide as Bush as found out.
That’s because Bush tried to change Social Security, rather than fix it. All Bush really needs to do is STOP spending the surpluses, and perhaps pay back some of the $12.8 trillion borrowed from it, and stop increasing the COLA for awhile).
mef wrote: It is simply not able to be talked about rationally with anyone. Your idea is a good one about not re-electing any of these pols that won’t change. My only solace is that as bad as it is, it would be a whole lot worse with Dems in charge if that is even conceivable that it could be worse.
Yes, if the are incumbent Dems, or Dems have a huge majority, since we see what happens when one party has too much power. The Dems had power for 70 years, and lost it for good reasons. The Republicans are going to lose some seats now, and for good reasons. My hope is that voters will wake up, take off their party blinders, and stop re-electing irresponsible incumbent politicians in BOTH parties.

BAD_VOTERS = BAD_POLITICIANS = BAD_GOVERNMENT
STOP Repeat Offenders.
Don’t Re-Elect Them!

  • Posted by: d.a.n at November 4, 2006 01:58 PM
    Comment #193311

    Lynne,
    Gas was more than a $1 per gallon in 1967- in constant dollars. In fact, in constant dollars, gas was $1.68 per gallon. Your $300 flat that you said would $800 today, would be a bargain because $300 in ‘67 would be equal to $1,800 per month in today’s dollars. $15 worth of groceries in 1967 is the same as buying $90 worth today. In 1967 though, you didn’t have to worry about spending your money on microwaves, vcr’s, dvd’s, cable or satellite tv, cell phones, internet or any of the other things people spend money on today. How much of the average household’s income is spent on things that didn’t even exist in ‘67? When it comes to comparing what things cost in the past, you have to compare in constant dollars to maintain perspective.

    Posted by: AmericanPatriot at November 4, 2006 05:19 PM
    Comment #193329

    Dan:

    You asked a question up there somewhere about immigration and how it could possible impact the massive debt expectations.

    The massive debt calculations are present value calculations assuming (key word) I will repeat for emphasis, ASSUMING present trends continue.

    The basic truth is that if present trends continue America will be awash in debt as we try to take care of the aging babyboomers. Basically not enough workers paying in to support the system.

    If you take a look at unemployment rates during the 70’s and 80’s, you can see that they were very much higher than today. Why? Well obviously because more workers were entering the work force than the economy could handle. It looks to me like the unemployment rate was about 3% higher then then now.

    It seems likely that when babyboomers retire the reverse will happen. Unemployment (assuming nothing changes) will be 2 to 3 percent lower than now. Just as there was a labor surplus when babyboomers were young, there could be a labor shortage as baby boomers retire.

    Lets say my son who is 25 now runs for congress in 15 years or so when all of this is coming down. He has to vote. (Being a good republican). He can either raise his taxes to take care of my generation, or adjust immigration to bring in other workers to fill the gap or some combination of the two.

    I think there are many many many answers to the demographic issues of the future, and the projected debt burden. Immigration is only one of many tools that can be used.

    I believe our system if flexible, and will adapt through the years. I think the economic growth rates are not republican or democrat but constitutional. I believe that over our lifetime economic growth will trend near historical averages, and doomsday will not come.

    Craig

    Posted by: Craig Holmes at November 4, 2006 07:22 PM
    Comment #193330

    Dan:

    One more thing about politics and the economy. There is evidence that politics does effect the economy.

    90% of capital gains in the stock market come when congress is out of session.

    The stock market does best with split government.

    Craig

    Posted by: Craig Holmes at November 4, 2006 07:25 PM
    Comment #193347
    Craig Holmes wrote: Dan: You asked a question up there somewhere about immigration and how it could possibly impact the massive debt expectations… . The basic truth is that if present trends continue America will be awash in debt as we try to take care of the aging babyboomers. Basically not enough workers paying in to support the system.
    Yep, that’s where it is headed. Just based on track-record.
    Craig Holmes wrote: It seems likely that when babyboomers retire the reverse will happen. Unemployment (assuming nothing changes) will be 2 to 3 percent lower than now. Just as there was a labor surplus when babyboomers were young, there could be a labor shortage as baby boomers retire.
    Maybe. Maybe not. We may not have the growth capacity we used to have, now that we have much more global competition. Also, importing the impoverished and less educated will only make things worse. Not better, as evidenced by the current $70 billion in net losses due to illegal immigration.
    Craig Holmes wrote: [We] can either raise his [our] taxes to take care of my generation, or adjust immigration to bring in other workers to fill the gap or some combination of the two.
    Forgive me for saying so, but I think it is diabolical to use immigration and people this way. Why not exercise some fiscal responsibility instead of using people this way?
    Craig Holmes wrote: I think there are many many many answers to the demographic issues of the future, and the projected debt burden. Immigration is only one of many tools that can be used.
    Immigration is a tool, eh? Sorry, but to me, there is something selfish and fundamentally wrong with that plan. It sounds elitist at the least. It sounds manipulative. It sounds like people are just a commodity to be used. I find the whole idea repulsive, repugnant, and elitist.
    Craig Holmes wrote: I believe our system if flexible, and will adapt through the years. I think the economic growth rates are not republican or democrat but constitutional. I believe that over our lifetime economic growth will trend near historical averages, and doomsday will not come.
    You’re assuming politicians will become disciplined somewhere along the way. We’ll see. Their current track-record is not encouraging. History shows us that economic melt-downs can occur. There are many factors now that warrant concern.
    Craig Holmes wrote: Dan: One more thing about politics and the economy. There is evidence that politics does effect the economy. 90% of capital gains in the stock market come when congress is out of session. The stock market does best with split government.

    I agree with that.
    What is it telling you?
    The market does NOT trust Congress.
    When government grows as monstrous and bloated as our has, it’s completely understandable.

    Posted by: d.a.n at November 4, 2006 09:06 PM
    Comment #193357

    Dan:

    Immigration is a tool, eh? Sorry, but to me, there is something selfish and fundamentally wrong with that plan. It sounds elitist at the least. It sounds manipulative. It sounds like people are just a commodity to be used. I find the whole idea repulsive, repugnant, and elitist.

    This is the american way. It’s called capitalism. No one forces anyone to come here. They come here voluntarily. We turn away millions. This is probably why your ancestors came here.

    This is the land of opportunity.

    Why are people standing in line to come here if it is so bad?

    Craig

    Posted by: Craig Holmes at November 4, 2006 10:04 PM
    Comment #193376

    The Unemployment Rate fell to 4.4% for October!

    If the Bush policies can lower it by another 0.3% by January of 2009 he will become the second Republican President in 60 years who ended his time in office with the Unemployment Rate lower than when he took office.

    Posted by: Arm Hayseed at November 5, 2006 01:06 AM
    Comment #193407
    Craig Holmes wrote: This is the land of opportunity. Why are people standing in line to come here if it is so bad?
    Clever, but that is not the issue, and just one of the many lame excuses offered up to defend illegal immigration. In fact, to say “It’s the American way. It’s called capitalism” is one of the lamest. It side-steps many other important issues, rationalizing it as “capitalism” and “they come here voluntarily”. It still ignores these important facts:
    • (1) Many are exploited by our own standards and laws, aside from the fact that illegal immigration is illegal. Cheap labor is good for greedy employers (and perhaps illegal aliens too), but it is deceptively shifting burdens onto U.S. citizens. How about that Craig Holmes? You think that’s OK? Why not try to get the law changed, rather than advocating that it’s OK to violate existing laws? You are rationalizing, condoning, and making excuses to continue to ignore the existing laws to permit illegal immigration.
    • (2) Half of illegal aliens don’t pay income taxes, which is an unfair advantage that displaces American workers and drives down wages.
    • (3) The net cost of illegal aliens to American citizens is over $70 billion per year and that does not even include the untold cost of crime, disease, and 2.3 million displaced American workers, closed ERs and hospitals.
    • (4) 29% of all incarcerated in U.S. prisons are illegal aliens (and those are not for crimes mere one-time illegal trespass of our borders)
    • (5) 32% to 46% of all illegal aliens receive welfare and Medicaid.
    • (6) Illegal aliens are voting in our elections, using and abusing our social services, and increasing crime rates. You fail to understand that massive, uncontrolled immigration (legal or not) is a recipe for disaster. If nations are not allowed to secure their own sovereign borders, people from places where things are not as good will always descend by the millions to places where it is better, use and abuse it, until it is ruined too. That is what is happening in several places in the U.S. If you don’t believe it, just visit Los Angeles where 95% of all out-standing warrants for homicide are for illegal aliens.

    So, you think the negatives out-weigh the positives?
    Well, it depends.
    If you are a greedy employer of illegal aliens, or one that is benefiting more from illegal immigration, YES.
    But, NO, if you are one of those being burdened and harmed by illegal immigration and the governments’ refusal to enforce the existing laws.

    Voters bear some responsibility for this too.
    If Voters don’t like it, then Voters need to stop re-electing the very same irresponsible incumbent politicians that keep ignoring the law and the voters.

    Posted by: d.a.n at November 5, 2006 09:56 AM
    Comment #193408
    Arm Hayseed wrote: The Unemployment Rate fell to 4.4% for October!

    True, but median wages have been falling since 1999, and this illusion of a “good” economy is being funded with massive debt borrowing, debt, spending, and money-printing.

    Aren’t you a little suspicious why politicians prefer to avoid the debt issue?

    Aren’t you a little suspicious when politicians and there hacks say “it is within historical norms”, but fail to point out that the DEBT-to-GDP ratio of 69% has never been worse since WWII ? And, that’s only if you exclude the other federal debt, which is actually $22 trillion ($12.8 trillion Social Security debt and $450 billion of Pension Benefit Guaranty debt, and hundreds of billions of unfunded liabilities for Medicare, Medicaid, the wars in Iraq and Afghanistan, hurricanes, etc.).

    What would this economy be like if it were not for the $3 trillion of increased National Debt in the last 5 years?

    It’s clever, and people will believe what they want to believe, but anyone that thinks $22 trillion of total federal debt, massive debt, borrowing, spending, growing government ever larger to nightmare proportions, and massive money-printing is fiscally responsible, and don’t believe there will be consequences for it, are in denial. And, the next administration in 2008 (most likely Democrats) will then make it well known. Unfortunately, Democrats are currently just giving Republicans more of that type (fiscal irresponsibility) of rope to hang themselves with, and the majority of U.S. voters will be the ones that suffer the consequences the most.

    Posted by: d.a.n at November 5, 2006 10:14 AM
    Comment #193434

    Dan:

    I am for legal immigration. And yes this is the land of opportunity. That is why immigrants are coming here. That is why we bring more people here than all other countries combined. And it’s a good thing!!!

    I am glad my family came here. Aren’t you??

    Craig

    Posted by: Craig Holmes at November 5, 2006 12:43 PM
    Comment #193435

    Dan:

    I really don’t understand your point. I am opposed to all illegal immigration. Always have been, always will be.

    So your point is?

    Craig

    PS. But I am totally for LEGAL immigration. Always have been always will be.

    Posted by: Craig Holmes at November 5, 2006 12:46 PM
    Comment #193437

    Craig,

    You are for LEGAL immigration?
    Good.
    But, how much?
    As much as possible?
    All that want to come here?
    LEGAL immigration is OK, if within limits.
    Massive immigration (legal or not) is bad, and leads to societal disorder, chaos, increased crime, and burdens on existing citizens.

    But that’s only part of the issue.
    You stated above, and in other places that immigration can be used to solve our fiscal problems. For example, you wrote …

    Craig Holmes wrote:
    I think there are many many many answers to the demographic issues of the future, and the projected debt burden. Immigration is only one of many tools that can be used.

    So, you believe it is OK to use immigration as a tool?
    You’re talking about peoples’ lives, you know?
    You think it’s a thing to be manipulated?
    For profits?
    For solving political issues?
    For solveing economic issues?
    And how does importing too many impoverished and less educated help the nation?
    Well, the answer is simple, depending on who you are.
    If you are one of the greedy employers of cheap labor, then it’s great, eh?
    But, it’s not good for the larger number of U.S. citizens that are getting the BILL for it (currently over $70 billion per year, which does not even include the cost of crime, disease, 2.3 million or more displaced American workers, etc.).

    And, even if you immigrate large numbers LEGALLY, it will NOT improve the over-all fiscal situation. Not when they are largely imporverished and less educated.
    It is only a clever way for government and those that can profit from it to deceptively shift the burdens to the U.S. citizens.

    Historically, immigrants have been largely recipients of government aid. So, to suddenly start immigrating tens of millions won’t help anything. But, that sounds like what you want, No?

    Also, I noticed that you say you are FOR legal immigration, but you did NOT say you are AGAINST illegal immigration. Sometimes, what people don’t say is as important as what they do say.

    Posted by: d.a.n at November 5, 2006 01:23 PM
    Comment #193460

    Dan:

    So, you believe it is OK to use immigration as a tool?

    Of course I do. People want to come here. Let them. Of course we have the right to decide which ones and how many. We are our own country.

    I am an American. America has always used immigration as a tool for many many things. It’s a great tool.

    I think you are confusing Slavery. I am totally opposed to slavery. That is immoral and wrong. Allowing people to immigrate here is wonderful.

    Craig

    Posted by: Craig Holmes at November 5, 2006 04:10 PM
    Comment #193473
    Craig wrote: Dan: So, you believe it is OK to use immigration as a tool? Of course I do. People want to come here. Let them. Of course we have the right to decide which ones and how many. We are our own country.
    Clever. No matter what the issue, you’ll twist it around and avoid the real issue. Controlled immigration is OK, but not when it is excessive and exceeds the ability for a smooth transition.
    I am an American. America has always used immigration as a tool for many many things. It’s a great tool.
    Really? It’s a tool? There will be a day when people stop saying that. With 6.6 billion people on the planet now, there will be a day when what you are saying is considered crazy.

    We can be enriched by immigration, but it’s really not when it is illegal or excessive (legal or not).

    Craig wrote: I think you are confusing Slavery. I am totally opposed to slavery. That is immoral and wrong.
    Funny. But, there is an issue of exploitation. Not just immigrants, but existing U.S. citizens that are having costs shifted onto them.
    Craig wrote: Allowing people to immigrate here is wonderful.
    Sure it is, if it is legal and not excessive. I can see that you are not really interested in discussing what is an acceptable level of immigration (e.g. 100,000 per year, 500,000 per year, 1 million per year, etc.), the fence, amnesty, etc. I get the feeling you’d like wide open borders and don’t care what the impact is as our hospitals, schools, prisons, law enforcement, welfare, voting, and healthcare system continue to be overrun. Without a fence, and without enforcment of the existing immigration laws, those systems will continue to decline, and possibly fail. All in the pursuit of cheap labor for and a tool to manipulate the economy.
  • Posted by: d.a.n at November 5, 2006 05:36 PM
    Comment #193610

    d.a.n.
    I appreciate your comments on the tax code. Very interesting points and many I think have merit.
    I think the 17% is a bit steep but knowing your propensity for facts, I assume you picked a number that is revenue neutral to what we have now.
    The weakness in your argument is the elimination of what you call “loopholes” Those loopholes incentisize many things in our economy. The deduction on home interest for interest allows many to buy a home. What would happen to home ownership and young folks from buying a first home.
    Charitable contributions. Don’t you wonder what will happen to charities and churches and the like that have revenue stream coming form donations. Would those dry up do to now tax deducts? I worry about that.
    Almost every “loophole” was put in the tax code for a reason. Yeh, some are bad and very, very targeted for a certain part of our tax payer base. But the broader based ones that apply to everyone need to be retained in some manner or I beleive the law of unintentioned consquences will prevail here and it will hurt our overall economy big time. It certainly should be simplfied but let’s not throw out the baby with the bathwater.
    I agree revenues are plenty. The problem is on the spending side. We must get entitlement spending under control and fund it properly.
    Social Security has to be addressed. No COLA adjustments, benefits curtailments in some areas etc. Privitization is a great idea. I frankly don’t understand why our younger population is not jumping all over that. If I had an option of taking my money (and the half contriubted by my employer over the years) I would do it in a heartbeat and I would sign anything they wanted that says I will take nothing from the government every!!! I will invest that money and have more in my retirement than I every would under the present plan. It is a plan that needs to be explored and talked about. It is a great idea and while I don’t know the ins and outs, I like the concept. It would have to be carefully done as you wouldn’t want to hurt those that are near retirement. (say 55 and older)
    Somethign has to radically change or we are going in the tank and will be crushed by the debt we are incurring for future generations.

    mef

    Posted by: mef at November 6, 2006 01:19 PM
    Comment #193636
    mef wrote: d.a.n. I appreciate your comments on the tax code. Very interesting points and many I think have merit.
    mef wrote: I think the 17% is a bit steep but knowing your propensity for facts, I assume you picked a number that is revenue neutral to what we have now.
    Yes, it sounds high, and it could be much less if it were not for the current $22 trillion of federal debt (consisting of $12.8 trillion of Social Security debt, $8.6 trillion National Debt, $450 billion of Pension Benefit Guaranty debt, and several hundreds of billions of other unfunded liabilities for Medicare, the Prescription Drug plan, the wars in Iraq and Afghanistan, hurricanes, etc.). If it were not for that massive debt, and probable short-falls in Social Security and Medicare, it could have been much lower. And, perhaps later, it can be. Even that 17% flat income tax rate will also require a 6% cut across-the-board in all federal spending. The 17% is derived from the current $2.2 trillion annual revenues, our current $12.5 trillion GDP (as of 2006), and our total $22 trillion in total federal debt.
    mef wrote: The weakness in your argument is the elimination of what you call “loopholes”. Those loopholes incentisize many things in our economy. The deduction on home interest for interest allows many to buy a home. What would happen to home ownership and young folks from buying a first home.
    If one deduction is allowed, many will follow. Also, home ownership should not be affected. Especially if taxation is fairer and smaller. Smaller and fairer taxes will help revenues, consumers, and the economy. Currently, too many loop-holes help the wealthy evade paying taxes. Sure, they may pay a certain percentage on their adjusted gross, but the loop-holes let them reduce the gross income drastically. At any rate, I think home ownership would not suffer, because the simplified and fairer tax system would make up for the home mortgage tax deduction. Besides, that deduction is a bit over stated. Many misuse that argument. It’s sort of like spending $10 dollars to save $1 dollar. If you are going to be in debt, regardless, it’s a valid argument, but it is often an argument that is used to justify more debt.
    mef wrote: Charitable contributions. Don’t you wonder what will happen to charities and churches and the like that have revenue stream coming form donations. Would those dry up do to now tax deducts? I worry about that.
    No, I don’t think charitable contributions would be adversely affected, because that is another instance where the tax payer is spending $10 to save $1. Also, that deduction is vastly abused too, because many charitable contributions are not verifiable.
    mef wrote: Almost every “loophole” was put in the tax code for a reason. Yeh, some are bad and very, very targeted for a certain part of our tax payer base.
    Most are bad. Even the supposed good ones are not really that good. And this raises the question? Should the tax code be the tool for manipulating the economy? Voters? Spending? Borrowing? Charities? Home ownership? I don’t think so, and believe it merely over-complicates everything, and makes it easier to abuse. Politicians like it complicated … just the way they have perverted it.
    mef wrote: But the broader based ones that apply to everyone need to be retained in some manner or I beleive the law of unintentioned consquences will prevail here and it will hurt our overall economy big time.
    I believe we are already experiencing the unintentioned negative consequences of an overly complicated tax system, and doubt simplifications will harm anyone.
    mef wrote: It certainly should be simplfied but let’s not throw out the baby with the bathwater.
    Unintentioned consequences are more likely from over-complication, than simplification.
    mef wrote: I agree revenues are plenty. The problem is on the spending side. We must get entitlement spending under control and fund it properly. Social Security has to be addressed.
    Absolutely. One thing that would help is to stop spending (stealing) the Social Security surpluses, now.
    mef wrote: No COLA adjustments, benefits curtailments in some areas etc.
    That may be necessary if it continues to be plundered and mismanaged.
    mef wrote: Privitization is a great idea.
    Hmmmmm … that’s very risky. It also creates a lot of problems in the transistion. If the federal government proves it can’t be trusted any longer, then I’d agree. But, it’s too soon for that. But, if government keeps mismanaging Social Security, privatization will be the end result whether anyone likes it or not.
    mef wrote: I frankly don’t understand why our younger population is not jumping all over that. If I had an option of taking my money (and the half contriubted by my employer over the years) I would do it in a heartbeat and I would sign anything they wanted that says I will take nothing from the government every!!!
    Most young voters are clueless, and care about nothing having to do with politics, despite the impact it will have on them later. Young voters should be very concerned about the massive debt being heaped onto them, while they are being taxed and paying into a Social Security and Medicare system that may go bankrupt. But they aren’t. Hence, they become pawns to be used. Many don’t even vote.
    mef wrote: It would have to be carefully done as you wouldn’t want to hurt those that are near retirement (say 55 and older).
    Yes, that’s the rub. When you have a system that is “pay as you go”, how do you let funds be diverted elsewhere?
    mef wrote: Somethign has to radically change or we are going in the tank and will be crushed by the debt we are incurring for future generations.
    Yes. I think the best thing to do is to take steps to preserve the system. Stop government from plundering the surpluses, and it may be OK. If not … if government can’t be trusted, then it will fail no matter what.

    P.S. Thank you for a thoughtful, non-partisan, well thought-out, logical response that also contains proposed solutions.

    Posted by: d.a.n at November 6, 2006 02:58 PM
    Comment #193662

    Mef-

    “Almost every “loophole‎ was put in the tax code for a reason. Yeh, some are bad and very, very targeted for a certain part of our tax payer base.”

    Good points raised. But I think you are confusing the statutory exceptions, deductions and credits for “loopholes”. Loopholes are not “put in” but rather just a hole in the original legislative language that was never closed up, neither by strict constructionalist judges nor by the paid-for legislatures. Credits, deductions and exceptions are good things because they do only what they say, and nothing more. But it does leave more language for interpretation, and complexity in the writing breeds complexity in the reading and interpreting. I agree we should simplify them to make them easier to enforce and harder to abuse.

    All things equal though, I think we could achieve a lot through simplifying the whole system to a flat tax on consumption and maybe some additional targetted profits taxes on activities that involve the public welfare or resources in the public trust. If you did completely eliminate income taxes, you’d need more than 17%, but there’d be much more ability to pay less if you wanted to by simply buying and living cheaply in the first place. Seems logical to me. For the present time, it’s all about enforcement of the current code in a way that upholds the basic design of the system.

    Reforming that system would take the kind of monumental bi-partisan effort that i dont foresee happening anytime soon. Too bad.

    Posted by: Kevin23 at November 6, 2006 04:46 PM
    Comment #193698

    Kevin23,

    A 17% flat rate income tax would be enough with a 6% reduction in spending.

    OBJECTIVE: design a tax plan where all pay the same percentage of income ( except the poor, which pay nothing ), and satisfy the following:
    (01) has a sufficient probability of actually taxing income equally;
    (02) retains Social Security and accounting for it (currently 12.4% on first $90K gross income);
    (03) retains Medicare and accounting for it (currently 1.9% on gross income;
    (04) defines the tax collection methods;
    (05) has a sufficient probability of compliance;
    (06) does not increase tax evasion;
    (07) does not increase black markets;
    (08) does not driveup the cost of all products and exports;
    (09) does not tax the poor and truly needy;
    (10) resolves question of whether corporations should be taxed?
    (11) adequately integrates and/or replaces old systems with new systems;
    (12) does not double tax: for example, with the fairtax plan, the vastly wealthy get double taxed, since they already paid income tax on much of their money? That will go over like a lead balloon.

    The obvious question, is this: Since the objective is to tax income fairly and that for many seems to be a flat rate income tax (with a poverty level exemption for the poorest below the poverty level), how does the fairtax plan prove that income will be taxed equally ?

    Also, here’s a very interesting point. One question about any tax system that is continually asked is:


    Will everyone (excluding the poor) pay their fair (or equal) percentage of tax related to income ?

    Interesting isn’t it? What does that tell you? It seems many people still want the end result of any tax system to be that everyone pays their fair (or equal) percentage of income (excluding those below the poverty level, which would pay zero tax).

    So, if we’re continually tasked with proving that any tax system, in the end, must fairly tax income the same percentage (excluding the poor who pay zero tax), then why not simply retain the income tax, except make it a flat tax rate of 17%, eliminate all loop-holes, deductions, subsidies, which will also mean little or no changes for accounting for Income tax, Social Security tax, and Medicare tax.

    One thing is for certain. it is not easy for everyone to live at the expense of everyone else. And, when people try to do that, these systems become perverted, abused, and unfair (like our current tax code).

    But, like many badly needed, common-sense, no-brainer reforms, it is all futile until a fundamental change is made first to give irresponsible, corrupt, bought-and-paid-for politicians an incentive to be responsible, transparent, and accountable too! Stop re-electing irresponsible incumbent polticians. Stop pulling the party lever (i.e. voting straight ticket).

    Posted by: d.a.n at November 6, 2006 07:52 PM
    Comment #203807

    How WTO could accepts rules limiting medicine exports to poor countries? WBR LeoP

    Posted by: Leo at January 18, 2007 05:05 AM
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