Third Party & Independents Archives

June 11, 2008

McCain-Obama: Taxes

McCain-Obama photo UPDATE: June 12 - Tax Policy Center has an excellent overview with numbers of Obama’s and McCain’s tax policy positions to date. Well worth a quick read.

John McCain and Barack Obama are just beginning to outline their policies. Until now, both have been very short on nuts and bolts to questions about their positions.

They are now beginning to work out those nuts and bolts. Here is what I have found about each on taxes, so far. It is important to note that wherever they stood on taxes before is to be taken with a grain of salt. Before, they weren't the presumptive nominees of their parties.

Taxes in General
Obama - June 10, Reuters (1) :

Obama told CNBC that he would raise taxes on Americans making $250,000 a year or more and raise the capital gains tax for those in higher income brackets while exempting small investors. He said the U.S. economy has been "out of balance for too long."

"The general principle of raising taxes on higher income Americans, like myself, and providing relief to those who haven't benefited as much from this new global economy, I think, is a sound one," Obama said.

But Obama, 46, said he would consider deferring some of the tax increases, depending on the economic situation he inherits from President George W. Bush should he win the November election.
McCain in a speech in Washington accused Obama of seeking the single largest tax increase since World War Two, Reuters reports. Reuter's also quotes McCain: "Under Senator Obama's tax plan, Americans of every background would see their taxes rise -- seniors, parents, small business owners and just about everyone who has even a modest investment in the market." Is McCain listening to Obama or Rove? Appears to be Rove.

Reuters reports:

McCain, 71, vowed to maintain Bush's tax cuts, lower corporate tax rates from 35 percent to 25 percent and allow companies to expense new equipment and technology in their first year.

He supported keeping capital gains taxes as they are now, doubling a tax exemption for children, and phasing out the Alternative Minimum Tax, which he said would save some 25 million middle-class families up to $2,000 in a year.

He said he could pay for the plan by cutting what he called wasteful government spending, including ethanol and sugar subsidies and weapons systems.

"We're going to scrub every agency of government and we're going to make them justify their existence. And if they can't, they're going to go out of existence," he said on CNBC.

The question is begged: Who is 'we', in McCain's quote. Surely he is not including the Democratic Congress in this 'we', is he? Does this spell gridlock and government shut downs if McCain is elected? McCain has vowed to use the veto pen to control runaway Congressional spending.

Obama's comments on the McCain tax plan: "I've said that John McCain is running to serve out a third Bush term, but the truth is when it comes to taxes, that's not being fair to George Bush," Obama told reporters in St. Louis, according to Reuters.

Oil Corporations
The Center for American Progress Action Fund, a Democratic organization reports that McCain's proposal to reduce corporate tax rate from 35% to 25% would net the 5 largest American oil companies $3.8 billion in tax savings. This despite the fact that McCain's economic advisor, Douglas Holtz-Eakin, said McCain’s economic plan would eliminate “all special tax breaks” to these oil companies, who are currently enjoying record profits.

Obama on the other hand proposes a windfall profits tax on the oil companies reaping record profits. This measure was tried in the 1980's and produced a spike in federal revenues for a short time, but failed to produce the revenues anticipated in the long run, as the price of oil and gasoline dropped from the 1970s record highs and oil companies cut back on production in an attempt to shore up the price after the embargoes. It is debatable whether such a measure would have the anticipated results in this current environment which is substantially different from the 1980's.

Estate Taxes:
Mark Murray of NBC reports McCain said this morning: ""The estate tax is one of the most unfair tax laws on the books, and the first step to reform is to keep it predictable and keep it low." Murray goes on to cite McCain in 2006 on the Senate floor:

"In his 1906 State of the Union Address, President Theodore Roosevelt proposed the creation of a Federal inheritance tax. Roosevelt explained: 'The man of great wealth owes a peculiar obligation to the State because he derives special advantages from the mere existence of government.' Additionally, in a 1907 speech he said: 'Most great civilized countries have an income tax and an inheritance tax. In my judgment both should be part of our system of federal taxation.' He noted, however, that such taxation should 'be aimed merely at the inheritance or transmission in their entirety of those fortunes swollen beyond all healthy limits.'"

McCain added, "I agree with President Roosevelt, and I remain opposed to full repeal of the estate tax. I have indicated, for several years now, that I am open to considering a reasonable compromise that addresses the concerns of those on both sides of this issue. What constituted a fortune 'swollen beyond all healthy limits' in 1907 is very different from the wealth we see today. I don't think it's unreasonable to raise the amount exempted from estate taxes in order to protect America's family farms and small businesses while maintaining the tax for huge fortunes."

While McCain's campaign staff responded to Murray's reporting stating that McCain's position has not changed, one has to ask what McCain's second step will be after his morning quote: "the first step to reform is to keep it predictable and keep it low."

Obama wrote in his book (2),

"As currently structured, a husband and wife can pass on $4 million without paying any estate tax. In 2009, this figure goes up to $7 million. The tax thus affects only the wealthiest one-third of 1% in 2009. Repealing the estate tax would cost $1 trillion, and it would be hard to find a tax cut that was less responsive to the needs of ordinary Americans or the long-term interests of the country."
Obama wants to see the Bush tax cuts for the wealthy allowed to expire in 2010, including the reduction in the Estate Taxes.

McCain today called the estate tax that familiar GOP refrain, "the death tax" in a report by LA Times reporters Johanna Neuman and Maeve Reston (3). They report McCain said of Obama's intent to allow the estate tax cuts to expire and revert back to 55% for the wealthiest estates:

"After a lifetime building up a business, and paying taxes on every dollar that business earns, that asset should not be subjected to a confiscatory tax."
Sure sounds like McCain's second step in the reform of estate taxes is to eliminate it altogether, which would eliminate $1 trillion dollars from federal revenues, increasing deficits without commensurate spending cuts elsewhere.

Gas Tax Holiday.
This issue has McCain appearing the fool. From John McCain's own web site (5) is found this little gem:

John McCain Will Help Americans Hurting From High Gasoline And Food Costs. Americans need relief right now from high gas prices. John McCain will act immediately to reduce the pain of high gas prices.
Someone forgot to tell John McCain that he can't become president before January 2009, and therefore, lacks the authority or power to "act immediately to reduce the pain of high gas prices."

Obama saw through this one immediately when McCain first announced this gas tax holiday proposal and lambasted it as a political pandering trick which McCain could not enact. Critics of the 'holiday' call this plan robbing Peter to Pay Paul inasmuch as drivers would pocket up $30 extra per month from the 'holiday', but the total revenue loss to road and bridge maintenance insuring drivers safety on our roads would suffer by $9 billion and potentially cost 300,000 highway construction jobs, according to state highway officials, a NY Times article (4) reports. The American Society of Civil Engineers previously estimated that it will cost $94 billion a year over the next five years to maintain the country’s roads and bridges, which is almost $35 billion more than we are projected to allocate in the federal budget.

Tax system reform:
Watch out for this one from McCain's web site. (5). "John McCain Will Propose An Alternative New And Simpler Tax System – And Give America A Real Choice. When this reform is enacted, all who wish to stay under the current system could still do so, but everyone else could choose a vastly less complicated system with two tax rates and a generous standard deduction."

That's it. That is all McCain has to say about it on his web site. This bears close watching as McCain learns what his economic advisors have in mind regarding this new 2 tiered 'flatter' tax alternative. Why the option to stay with the current system?

Obama doesn't have a plan to reform the current tax system. He seeks instead, according to his web site, to make the one we have considerably more efficient and responsible.

In Common
Both Obama and McCain seek to cut wasteful spending, pork barrel spending, and close tax loopholes as well as reduce the tax gap defined as, the difference between what is owed by tax law to the federal government and what is actually collected, currently a gap of $350 billion dollars according to the Obama web site (6).

Not in Common
Again, from Obama's web site, he states he will ensure that federal contracts over $25,000 are competitively bid. Obama will also increase the efficiency of government programs through better use of technology, stronger management that demands accountability and by leveraging the government's high-volume purchasing power to get lower prices. (Sounds like the Medicare Rx drug plan will get revisited for competitive bidding.)

Obama's site also says he will eliminate subsidies to the private student loan industry which has repeatedly used unethical business practices. Obama will also tackle wasteful spending in the Medicare program.

It is interesting to note that McCain's site says he will lower Medicare premiums. This is a puzzlement, since the federal government is already facing trillions in shortfalls of revenue to provide Medicare through the baby boomer retirement years. McCain says he will cut those revenues further by lowering Medicare premiums. Something here does not add up.

More to Come
Both candidates are still hammering out their policy agendas, so this is a work in progress. There will surely be more coming on the differences between the Obama and McCain tax plans as the campaigning goes forward and each attempts crash courses in economics while on the campaign trail.

Source Links
Reuters (1)

On the Issues (2)

The Swamp (3)

NY Times (4)

McCain's Web Site (5)

Obama web site (6)

Posted by David R. Remer at June 11, 2008 12:47 AM
Comments
Comment #255169

David,
Why having missed the days latest propaganda in the news, I cannot help but see on Hardball that Chris Matthews is pushing the Argument of Change or Security.

However, did you see where one of his guest openly admitted that the Parties can say what they want and it is up to the American People to figure out what is right?

Not a good move in My Personal Opinion considering it was a Republican Pundit saying those words. For does this mean that Senator McCain is misrepresenting that he can bring Security to America or Senator Obama is against Change?

Posted by: Henry Schlatman at June 11, 2008 04:15 AM
Comment #255172

Good lookin’ out David. That’s why I still read this blog; it’s nice to see people who give a damn about who’s setting up the detour signs on our destiny trails. I tell ya, out here in the blue-collar battlefield, a political conversation is entered into with a woeful groan, and there boils into a complex stew of confusion, reality, and suspicion.

Obama, McCain… feels somewhat like a choice between standing on the front or the back of a sinking ship. Aside from the obvious item of Barrack’s race, there’s really nothing great about this election. I just see a thin, stretched out status quo establishment, trying to wrap itself around a new generation of day dreamers. We fall for it every time. I’ve said before that this is one area where the government works wonders; playing both sides of the ‘bad mommy, bad daddy’ game - the only other part to play is the poor kid with no choice (except maybe to grow up).

I think perhaps I’ve fallen out of love with politics, such as it is. Just not enough flavor here for this federally libertarian, socially liberal/green, intellectually starved Joe Schmoe Chump. :)

Posted by: willc at June 11, 2008 04:46 AM
Comment #255175

Some short comments (sorry people want me to work today):

Windfall Profits. Didn’t we try that back in the Carter days?

Estate Tax. Again, it’s not the federal estate tax that’s the problem it’s the State Probate systems that get you and me. Ask me how I know!

Tax reform. Won’t happen because it takes power away from Congress to give “targeted” cuts or increases to certain groups.

Reducing wastefull spending. We’ve heard that one before. Cutting spending in Washington goes like this: “we were going to spend 20% more but now we are only going to spend 18% more; that’s a 2% cut!”

Have a good day David.

Posted by: George in SC at June 11, 2008 09:09 AM
Comment #255181

I think the concept of Windfall profits is a bad one.

Rather than windfall profits, how about a competitative incentive tax?

Oil companies correctly whine that they have thin margins. So do airlines. I noted recently that American attempted to raise fares, but failed in the face of competition.

No such problem for lock stepped oil companies.
If they cannot see a reason to squeeze their margins perhaps taxes should be used to produce a competitive source for their product. Most nations have nationalized oil. While I do not advocate that, a small national oil producer may reintroduce our patriotic oil companies to the pain of competition.

Posted by: googlumpugus at June 11, 2008 11:26 AM
Comment #255184

Those that promote the Windfall Profits Tax on the oil companies have no idea who this will penalize. They think that it will keep the big oil companies from gouging the public, but, in truth, it will end up hurting the middle class far greater than “fat cats” or “big oil barons”.

Further, the Windfall Tax is not understood by the general public, but it sure sounds good to them. “Punish those price gougers” sounds great in theory, but who exactly will it hurt?

I refer you to this report by Robert J. Shapiro, Bill Clinton’s Undersecretary of Commerce for Economic Affairs.

To summate:

Throughout the oil and natural gas industry, company execs only hold about 1.5% of the shares. The other 98.5%? Well,

“The data show that ownership of industry shares is broadly middle class, with the majority of industry shares held by institutional investors, often on behalf of millions of Americans through mutual funds, pension funds and individual retirement accounts.”

So who gets hurt the most with Windfall Tax?

According to Shapiro’s report, millions of Americans with savings, investments and retirement accounts. NOT the corporate “fat cats” and multi-millionaires it would SEEM to target.

If you support the big oil Windfall Tax, read the report and see how the average Joe Schmo is getting screwed hardest of all.

Posted by: Jim T at June 11, 2008 11:42 AM
Comment #255186

Bro -

Want a reason to cut taxes? Here’s one - since the end of the Cold War, we have been living through the most peaceful period in human history.

Yep, that’s right. Find a period where the world as a whole had such a low overall degree of violence. But save your time and effort - there ain’t one.

Now the conservatives want us to continue spending more on defense…even though we’re already spending more on defense than the rest of the planet put together.

Eisenhower warned us against allowing the military industry from gaining too much power. That’s one Republican who knew what he was talking about….

Posted by: Glenn Contrarian at June 11, 2008 11:51 AM
Comment #255188

McCain and Obama are promising the moon. And neither will deliver on anything they say. At least not for the Working class. It’ll be business as usual. Big business and special interest will benefit and the Working Joe will get the shaft once again.
The Working Joe needs to wake up and smell the coffee and not vote for either one of these puppets of the duopoly.


Henry said: However, did you see where one of his guest openly admitted that the Parties can say what they want and it is up to the American People to figure out what is right?

Not only can they say what they want, they will. And the American people will have to try to figure out not only what’s right but what the candidates really mean. Because neither candidate will come out and say what they mean. Instead they’ll confuse the facts with issues.

George said:
Your right on everthing ya said. But do ya actually work? :)

Posted by: Ron Brown at June 11, 2008 12:16 PM
Comment #255190

John McCain is all wrong on taxes, Iraq, the economy, has a pathetic voting record on illegal immigration (i.e. voted for the 1st amnesty of 1986, which quadrupled the problem).

Originally, John McCain was for the FairTax.org’s 30% National Sales Tax (with a prebate), but later scrapped that position (probably realizing that even most of the dimmest Americans can see that it would still be terribly regressive (even with a prebate), as all sales taxes are). Besides, polls show that most Americans beleive the fairest tax would be a flat percentage on income with few (if any) tax loopholes, and possibly a poverty-level exemption (i.e. don’t tax any person’s income below the poverty level, since that merely pushes them onto welfare or worse).

Windfall profits (proposed by Barack Obama) is a mistake, and the costs and problems will simply be passed along to consumers as hidden taxes, and encourage more corporations to move out of the U.S. (which they have), taking more jobs with them.

Likewise for corporate taxes, which are merely passed onto consumers as regressive hidden taxes, and encourage corporations to move out of the U.S., taking more jobs with them.

The very few things McCain is right about is lowering (or eliminating) taxes on corporations, because these are hidden taxes that are passed along to consumers, and encourage corporations to move out of the U.S. (taking jobs with them).

At the very least, billions in tax dollars should not be going to corporations in the form of subsidies.
But that is what is going on every year.
Not only oil companies with record profits, but all sorts of corporations are receiving massive amounts of corporate welfare (such as the “farm BILL” H.R.2419 (over Bush’s VETO on 21-MAY-2008) in the (source: thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.2419:) House with 316-to-108 votes (more than the two-thirds required to over-ride Bush’s veto).

John McCain (and many other Republicans, mostly) wants to eliminate the death tax, and while the death-tax (i.e. estate tax) is too high in some cases (50% or more in some cases), and should simply be treated the same as all types of income (e.g. only taxed at the same 17% rate), should it be elimiated?
ANSWER: No.
Is it fair to tax persons’ incomes who earn their income from their labor and sweat (and has little or no chance of ever inheriting any weatlh), but not the person who inherits vast wealth with out working for it?
Some people say it’s not income, but a transfer.
Is that a lame argument?
Isn’t inheritance a form of income too?
Why shouldn’t inheritance be taxed the same 17% ?

Unfortunately, today, in case it has gone unnoticed, the current tax system is regressive.
_________Current REGRESSIVE Federal Tax System:________________
35% |——————————o————————————————————
33% |———————-o—————o—————————————————
30% |——————o—————————o——————————————= (30% total
27% |—————-o————————————-o———————————- federal tax for
24% |—————o————————————————o————————- secretay making $60K)
21% |————-o————————————————————-o————-
18% |————o————————————————————————-o-= (17.7% Warren
15% |———-o——————————————————————————- Buffet’s total
12% |———o——————————————————————————— federal taxes on
09% |——-o———————————————————————————- $46 Million)
06% |——o————————————————————————————
03% |—-o————————————————————————————-
00% |ooo—————————————————————————————
____$0__30K__60K__90K_120K_150K_180K_210K_240K … … $GROSS INCOME …

Today, the forms of income that benefit the wealthy most are taxed at lower rates (as clearly exemplified by the Warren Buffet example above).
Capital gains are taxed at a percentage less than most Americans average percentage of all federal taxes.
Also, capitcal gains, dividends, and interest income are not subject to Social Security and Medicare taxes.
Also, the Social Security cap (e.g. $97,500 for year 2007) is clearly regressive.
Social Security and Medicare alone are 15.3% (split between the employee and employer), which is more than the 15% tax on capital gains.
But making matters worse, labor income is then subject to an income tax also.
Thus, it’s not at all hard to see how an employee making $60K annually is paying 31% in total federal taxes (25% if you don’t include the 6.2% in Social Security taxes supposedly paid by the employer, but actually also gets passed along to the employee and/or consumers as another hidden tax), which is still much higher than the 17.7% Warren Buffet paid on $46 Million in year 2006.

John McCain wants to make the regressive taxes permanent (i.e. the 15% tax rates on capital gains), which is unfair to most Americans, as evidenced by Warren Buffet (2nd wealthiest person in the U.S.), paying a lower percentage of income (e.g. 17.7% on $46 Million in year 2006) than his secretary (who paid 30% in federal taxes on and income of $60K). See the details here.

This regressive tax situation and other abuses did not all come about by mere coincidence.
Most (if not all) incumbent politicians in do-nothing Congress like the tax system just the way they’ve perverted it.
The wealthy are getting weatlhier, as planned (by design).

As a result, the wealth disparity gap in the U.S. has never been larger since the Great Depression:

  • 40% of weatlh in U.S. is owned by a tiny 1% of wealthiest of 305 Million U.S. Population:

  • 045.0% +—————————————-

  • 042.5% +—o————————————

  • 040.0% +-o-o—————————-o-o-
  • (40% owned by 1% of wealthiest)
  • 037.5% +o—-o————————o——-

  • 035.0% +——-o———————o———

  • 032.5% +———o——o—o——-o———

  • 030.0% +———-o—o——o—-o———-

  • 027.5% +————o———o—-o———-

  • 025.0% +————————o—o———-

  • 022.5% +————————o-o————

  • 020.0% +————————-o————-

  • 017.5% +—————————————-

  • 015.0% +—————————————-

  • ————1—1—1—1—1—1—1—1—2—2

  • ————9—9—9—9—9—9—9—9—0—0

  • ————2—3—4—5—6—7—8—9—0—1

  • ————0—0—0—0—0—0—0—0—0—0 YEAR

As a result, nation-wide debt is over $53 Trillion (never worse both in size and as a percentage of the $13.86 Trillion GDP):

And no one has yet been able to answer the question:

  • ? Where will the money come from to pay the interest on the current $53.2 Trillion in total nation-wide debt (3.81 times the $13.86 Trillion GDP), much less the money to pay the principal (LOAN = PRINCIPAL + INTEREST)?
    Especially when that money does not yet exist?

As a result, many deteriorating economic conditions are now worse than ever and/or since the 1930s and 1940s.
Toss in some energy vulnerabilities, $136 per barrel oil, $4 dollar gasoline, the falling U.S. Dollar, and two wars in Iraq and Afghanistan, and it’s not hard to see why.

Unfortunately, neither candidate is serious about real tax-reform, but John McCain’s ideas of taxation are clearly worse, a mere continuation of Bush’s tax system (except worse), and biased toward regressive taxation (i.e. biased toward the wealthy). However, it is quite possible that John McCain doesn’t really understand the regressive nature of the current tax system, because John McCain has already admitted that economics is not his strong suit. Either he doens’t understand it, or doesn’t care that the tax system is regressive.

Regardless of who the next president is, what can the next president accomplish if sabotaged and saddled with the same irrsponsible and corrupt Congress?
Perhaps enough voters will vote more responsibly when enough of them are jobless, homeless, hungry, or worse?
Re-election rates are falling (as predicted), as the majority of Americans pain levels increase.
Perhaps when the pain levels get bad enough, when enough voters are jobless, homeless, and hungry, they will finally do as most voters did in year 1933, and oust 206 (or more) corrupt incumbent politicians from Congress. The sooner the better.

At any rate, the voters have the government that the voters elect (and deserve).

Posted by: d.a.n at June 11, 2008 12:31 PM
Comment #255192

d.a.n said: “Windfall profits (proposed by Barack Obama) is a mistake, and the costs and problems will simply be passed along to consumers as hidden taxes, and encourage more corporations to move out of the U.S. (which they have), taking more jobs with them.”

I am not sure you have this one pegged right, d.a.n.

First, as we saw in the 1980’s the initial tax revenues from oil companies did spike dramatically. So, for a short period of a couple years, the oil companies paying a windfall tax would increase federal revenues.

Second, the oil companies MAY try to pass the tax on to consumers, but, oil being fungible, that would make them less competitive in sales against other nation’s oil on the market which is often subsidized by their governments. The world market dictates the price of oil, not American producers.

Third, American oil companies aren’t going to abandon oil reserves in the U.S. territories in response to windfall profits taxes. That is illogical. That line of reasoning works when one can move one’s manufacturing operation overseas. But, one cannot move America’s untapped oil reserves overseas. American oil companies with leases on American oil reserves in American territory are not going to pack up and move operations or jobs overseas. The oil is here.

Jim T, is correct, that investors would see VERY SMALL reductions in their portfolio profits derived from oil company investments, but against their entire 401K diversified pension plan or employer retirement investments, this amount would be extremely small, and not even noticed by working individual retirement saving investors.

Posted by: David R. Remer at June 11, 2008 01:19 PM
Comment #255193

Back at ‘cha bro…

One thing that both Dems and Reps absolutely HAVE to learn is…

If you spend more money, you HAVE to raise taxes.
If you cut taxes, you HAVE to spend less money.

This is a fundamental truth that both parties have roundly ignored, much to the detriment of our national debt.

Now, some here will say, “It’s the Rep’s fault!” and some will say, “It’s the Dem’s fault!”, but both are dead wrong. It’s the Congress’ fault. When you look at the sheer PORK that’s in the Ag bill, it will make you want to puke!

Reps have lost their way, sinning against Conservative values by spending more and more when we (the people) can’t afford it…and Dems…well, Dems are just being themselves. We expect that from Dems.

The old saying is, “I would say that Congress is spending money like a drunken sailor, but that would be an insult to drunken sailors!”

Posted by: Jim T at June 11, 2008 01:37 PM
Comment #255194

d.a.n, I agree wholeheartedly on the flat tax option. I am puzzled why Obama has no position on tax structural reform. Perhaps he is still working on it. Obama would be a damned fool to allow McCain to own the tax structural reform issue, especially if McCain’s two tier option will actually have appeal to voters.

The flat tax options however pose an enormous presidential campaign risk, as such an enormous proposed change to the way the government obtains its funding would dominate all other campaign issues. Unless the tax reform can win the election for the candidate, it would overshadow the other policies that could win for the candidate. Thus, the flat tax issue I suspect, will not be endorsed by Obama before taking office.

I would be extremely supportive of a flat tax plan that eliminated corporate and small business taxes altogether, established a 3 tier flat tax adjusted for inflation, such that those single or family tax payers making less than 1.5 times poverty level income paid no income tax, the lower middle class paid a 10% rate, the upper middle class paid 18%, and the wealthy paid 28%. (All percentages are starting points to determine if the required revenues would be achieved, and if not, the rates adjusted accordingly).

No exemptions, all flat income taxes on earned income and none on assets. The estate tax remains at a 40% rate ONLY on assets inherited which do not constitute a small family business or farm in which the inheritor actually works as a full time employee deriving income from that business.

It is where this country needs to go to insure American business competitiveness in the world and to retain jobs, and business startups.

Finally, as part of this flat tax plan, I would recommend NO subsidies to any corporations for any reasons save national emergencies. There is no need for corporate subsidies with the abolishment of corporate taxes. If the corporation fails to prepare for future eventualities with its untaxed profits, it should fail and be bought out by a competing firm or group.

Posted by: David R. Remer at June 11, 2008 01:39 PM
Comment #255195

Jim T, in light of what you say about D’s and R’s, it is rather ironic that the D’s are trying to play by PayGo, and the R’s have fought it tooth and nail.

But, I couldn’t agree with your more, the spending is a bi-partisan fiasco of irresponsibility and near complete lack of discipline by Congress, who have in their heads that if they don’t bring federal tax dollars paid by their constituents back to their state or district in some fashion, they won’t be reelected.

We have to convince them they won’t be reelected if they DO bring federal tax dollars back in the form of spending that harms the national economic and fiscal condition of ALL the 50 states.

Posted by: David R. Remer at June 11, 2008 01:46 PM
Comment #255203

We get higher taxes and less freedom with one and more of what we have now, with the other.
What a choice.

Posted by: kctim at June 11, 2008 02:28 PM
Comment #255204

David Remer wrote:

“…in light of what you say about D’s and R’s, it is rather ironic that the D’s are trying to play by PayGo, and the R’s have fought it tooth and nail.”

Please…please tell that to Nancy Pelosi. It would seem to me that her $174 million “earmark” in what amounts to welfare to salmon fishermen in the ag bill doesn’t seem to me to be “PayGo” at all…but “Pay…and to hell with the deficit and to hell with the taxpayers as long as I’m re-elected…Go.”

I am so sick of all the waste and overspending in Washington by both Dems and Reps, that I’m getting very, very close to the V.O.I.D. philosophy. If we don’t send a loud and clear message to Washington that things HAVE to change, nothing…and I do mean nothing…will change.

Do you really want to know how incompetent our Senators are when it comes to money and budgets?

They can’t even run a cafeteria and make a profit! And we intrust these Bozos with the financial future of our country?

I guess I shouldn’t call them “Bozos” as we are the “Bozos” that elected them…BUT we are also the “Bozos” that can “UN” elect them as well.

Posted by: Jim T at June 11, 2008 02:38 PM
Comment #255208

The FCC should become a major tax collector. Instead of giving away billions in corporate welfare, they should collect taxes on those coporations and their advertisers.

Posted by: ohrealy at June 11, 2008 03:10 PM
Comment #255209

ohrealy,

Who is the FCC giving away billions in corporate welfare to?

Please enlighten me.

Posted by: Jim T at June 11, 2008 03:15 PM
Comment #255210

Jim T, Yes, Pelosi is of the reasons I said ‘trying’, instead of following.

You and 100 million other Americans like you, Jim are fed up with destroying the nation’s future in the name of bringing home federal dollars for reelection purposes. This is why we must work to get more and more voters to consider voting for a challenger instead of a pork spending incumbent, to send the incumbents the message, pork is not the path to reelection.

I couldn’t agree with your sentiments, more Jim T. It is why we founded Vote Out Incumbents Democracy (VOID), which will one day, hopefully, take flame like a wild grassfire in August.

Posted by: David R. Remer at June 11, 2008 03:18 PM
Comment #255211

kctim, when your only choice is spoiled apples and bananas, its time to knuckle down and work at making cider and daquiris.

We need to improve the Parties themselves from within and without; by reason within, and force from without. All of us have a role to play in making these improvements, D’s, R’s from within, Independents, and 3rd Party supporters from without.

There is never a better time to begin to solve a problem than right now. The sooner we start, the sooner we finish and enjoy the rewards of successful effort.

Sorry about all the cliche’s, but, they are Oh So applicable and true.

Posted by: David R. Remer at June 11, 2008 03:25 PM
Comment #255214

Jim T, if you live in this country, you might have heard of the digital television spectrum.

Posted by: ohrealy at June 11, 2008 03:39 PM
Comment #255222

David Remer,

V.O.I.D. looks better and better. I know for a fact that you can count on one vote against Thad Cochran (#1 in pork spending in the Senate last year) and one vote against Roger Wicker (appointed to fill Trent Lott’s seat until the special election. It will be Wicker vs Ronnie Musgrove(D) then).

ohrealy,

Yes, I’m well acquainted with the Federal Communications Commission, as I have dealt with them (in triplicate) since June 15, 1968…and I know about the DTV spectrum and the fact that radio will follow in a few years (costing broadcasters billions of dollars investing in new equipment).

What about it?

Posted by: Jim T at June 11, 2008 04:37 PM
Comment #255223
Davir R. Remer wrote:
  • d.a.n said: “Windfall profits (proposed by Barack Obama) is a mistake, and the costs and problems will simply be passed along to consumers as hidden taxes, and encourage more corporations to move out of the U.S. (which they have), taking more jobs with them.”
I am not sure you have this one pegged right, d.a.n. First, as we saw in the 1980’s the initial tax revenues from oil companies did spike dramatically. So, for a short period of a couple years, the oil companies paying a windfall tax would increase federal revenues.
The reason I’m not wild about corporate taxes and windfall taxes are not only a pragmatic, but due to fundamental philosophical reasons.

The philosophical argument is that it doesn’t seem right for the government to single out any corporation or industry (ruthless monopolies excluded) and essentially punish the corporations by way of taxation. It seems fundamentally wrong to me for the government to say “you’re making too much money, so we’re going to tax you more”. If gouging or price fixing can be proven, then that would warrant fines and penalties, but a tax? Especially if some (or all) of it is passed onto consumers as a hidden tax?

There used to be a windfall tax on oil from APR-1980 to 1988. However, taxes were only collected on revenues when the price of crude oil was above $30, and from APR-1983 to 1986, oil was below $30 per barrel, so no oil windfall profits taxes were collected from APR-1983 to 1986.

You may be right that some oil companies will not move out of the U.S., since some of the oil is in the U.S.
However, much of our oil does not come from the U.S., and much of what the oil companies do is distribution, and portions of that business could move out of the U.S.
Perhaps the corporations and stockholders would shoulder some of the cost of the winfall profits tax and corporate income taxes, but it’s not likely since there is nothing to prevent corporations from passing some (if not all) of those taxes onto consumers as hidden and regressive sales taxes.

Also, these taxes have the same effect as price controls (sort of), and we have already seen what happens with price controls (i.e. from 1974-to-1981). It discourages exploration and production.

The current situation is not mostly price gouging, but a falling U.S. Dollar, inflation, and large and rapid growth in Asian economies and their petroleum consumption, the 2005 hurricanes, and U.S. refinery problems due to ethanol additives (all contributing to higher prices).

So, what are we truly accomplishing by taxing the oil companies?
With growing demand world-wide, it may be a huge mistake to essentially punish oil companies.
If there is price fixing and gouging by the oil companies, then those corporations should be dealt with differently (with massive fines and penalties) by enforcing existing laws.

David R. Remer wrote: I would be extremely supportive of a flat tax plan that eliminated corporate and small business taxes altogether, established a 3 tier flat tax adjusted for inflation, such that those single or family tax payers making less than 1.5 times poverty level income paid no income tax, the lower middle class paid a 10% rate, the upper middle class paid 18%, and the wealthy paid 28%. (All percentages are starting points to determine if the required revenues would be achieved, and if not, the rates adjusted accordingly).
I like the idea of an inflation adjustment.

That was the purpose of the N multiplier (i.e. no taxation of any person’s income equal to N times the poverty-level, where N is never less than 1.0).

With a 3-tier 10%, 18%, and 28% rates you mention, that is essentially a progressive tax system.

Again, one reason I’m not wild about the progressive tax system is the same reason I’m not wild about a regressive tax system, or special taxes (i.e. windfall) on selected tax payers.
It’s a fundamental philosophical problem.
Both raises questions of fairness, and fuel class warfare based on income and weatlh. The best way to end that is to stop taxing incomes at different rates (excluding the poor, since pushing people further into poverty and welfare makes no sense).

However, with respect to personal income taxes, there are some pragmatic reasons for wanting to tweak the tax curve slightly, so as to not drive the lower-income earners onto welfare (or worse), and cause a lot of unnecessary bureacracy and negative ramifications.
Thus, if you consider the 17% Income Tax curve below, it has a progressive shape because no persons’ income below N times (e.g. you used 1.5) the poverty level is taxed (whether they are rich or poor).

________ 17% Income Tax ONLY on Income Above the Poverty Level _________
17% |———————————————————————————————-x
16% |———————————————————————x————————-
15% |————————————-x———————————————————
14% |—————————-x——————————————————————
13% |———————x————————————————————————-
12% |—————-x——————————————————————————
11% |————-x———————————————————————————
10% |————x———————————————————————————-
09% |———-x————————————————————————————
08% |———x————————————————————————————-
07% |———x————————————————————————————-
06% |——-x—————————————————————————————
05% |——x—————————————————————————————-
04% |——x—————————————————————————————-
03% |—-x——————————————————————————————
02% |—x——————————————————————————————-
01% |—x——————————————————————————————-
00% |xx————————————————————————————————-
__$0K $20K $40K $60K $80K 100K 120K 140K 160K 180K 200K …$1Million… GROSS INCOME

Now, the 17% number would require some federal spending cuts.
Currently, the federal government is receiving about 19% of the $13.9 Trillion GDP), which comes to about $2.6 Trillion.
Since 17% clearly falls short of that, the federal government would have to cut spending by about $260 Billion.
If we get out of Iraq (which has cost on averaged about $9 Billion per month; $108 Billion per year), stop $100 Billion of annual pork-barrel and subsidies for the wealthy, and stop growing the National Debt ever larger (and the interest on that debt currently costing about $470 Billion per year), and bring some of our troops home from Europe, South Korea, Japan, and other locations, then it would be possible to cut the spending by $260 Billion (or more) and stop growing the $9.4 Trillion National Debt. In fact, if the National Debt is allowed to grow much larger, nothing we do is going to matter much, because it will snowball out-of-control (if it isn’t too late already).

Also, a flat 17% income tax may capture more tax revenues than before, and with less complaining from all tax payers.
After all, Warren Buffet paid 17.7% on $46 Million in year 2006, and that does not even account for many types of income and a myriad of tax loop holes that currently allow many types of other income to be taxed very little or not at all. If the federal government can’t operate with about 17% of GDP, then it needs to cut speiding somewhere, and there are probably thousands (if not tens or hundreds of thousands) of places to cut spending: www.akdart.com/gov1.html

If that doesn’t raise enough tax revenues, the N factor may have to be decreased, but never less than 1.0 .

Davir R. Remer wrote: No exemptions, all flat income taxes on earned income and none on assets.
Agreed. No more tax loop-holes. That includes the home mortgage income tax deduction, which merely serves as a good excuse for the weatlhy to demand their numerous tax deductions. Start down that slippery slope, and it will deteriorate into the mess we have today.
Davir R. Remer wrote: The estate tax remains at a 40% rate ONLY on assets inherited which do not constitute a small family business or farm in which the inheritor actually works as a full time employee deriving income from that business.
I’d prefer to treat inherited income like other types of income, and tax it at the same 17% rate. Again, there’s a strong philosophical reason for that. Once we start treating different types of income differently, we’re opening Pandora’s box. Once opened, everyone will want a tax deduction, and we’ll have another multi-million page federal tax code that no one understands, and allows the wealthy (mostly) to evade taxation.

However, none of these reforms will come to pass any time soon unless enough voters decide now to spare themselves the inevitable and painful consequences of repeatedly rewarding irresponsible incumbent politicians with perpetual re-election; politicians who perpetuate and protect the numerous abuses that are causing the deterioration of the past 30+ years.
Perhaps enough voters will finally question the habit of repeatedly rewarding irresponsible incumbent politicians with perpetual re-election, when enough of the voters are jobless, homeless, and hungry.

At any rate, the voters have the government that the voters elect (and deserve).

Posted by: d.a.n at June 11, 2008 04:48 PM
Comment #255224

“costing broadcasters billions of dollars investing in new equipment” and making billions in profits, right? They weren’t planning on using the same equipment forever, were they? Personally, I think people should be getting everything they want over the internet, and forget about television sets. This needs to be made into a revenue source instead of a giveaway. It can be added to the price of the boner pills they sell all day long.

You might want to consider making your signature a little more different form Jim M.

Posted by: ohrealy at June 11, 2008 04:51 PM
Comment #255225

d.a.n, you’ve made good arguments. We differ somewhat on the philosophy. I appreciate your point on windfall taxes. But, I look at it from the perspective of giving the government the enforcement tool to fight oligopolies, such as that represented by the 5 major American oil companies.

They are sitting on vast, vast acreages of leases for oil drilling, both off shore and on shore, and they are NOT drilling to increase supply. If their profitability depended upon drilling now, because of a windfall tax on enormous profits, they would exercise those leases and begin drilling to compensate for the windfall taxes by increasing production.

Instead they are holding out increasing production because the promise of even higher profits when oil is $200 a barrel instead of $138 is too good to pass up. They are, as oligopolies will, giving each other the nod and wink to hold back on production to drive the prices up through constricted supply. This is at the heart of the Saudis argument that they are NOT sending tankers away empty, and suspect that the fundamentals of supply and demand are being rigged by oil importing nation’s companies to drive up the price before they drill more and add to the supplies. The Saudis suspect other nations are depleting their oil reserves by withholding production in their importing nation homeland.

The fact that American Oil companies are sitting on vast off shore and on shore leases without drilling is evidence that the Saudi’s suspicions and objections are well founded. Our government has no tool to force them to increase production of domestic oil reserves. The Windfall Tax would provide the incentive to drill on those unused oil leases.

Posted by: David R. Remer at June 11, 2008 05:10 PM
Comment #255227

As for the philosophy of a flat tax over a progressive flat tax, I depart from your reasoning only because the wealthier Americans consume more national and governmental services and place a vastly higher premium on enjoying those services, the higher their wealth status becomes.

Microsoft execs and Bill Gates have far more being protected by our international law enforcement and treaty enforcement government services than do you and I. Hence they should pay a higher premium in taxes for services that you and I do not directly benefit from as they do.

The wealthy advantage themselves vastly more of our civil, international, trademark, and patent legal systems than do you and I. They have far more being protected by our military in dollar amounts than do you or I. The list of benefits enjoyed by the wealthier and number of services received by the federal government, in my view warrants a progressive taxing system.

Obviously, you and I don’t agree on this philosophical point that those who benefit most should pay more, and your perspective is not without merit regarding the appearances of fairness of a single rate. The 3 tier flat tax rate plan I offer is a compromise between the two philosophical views. Often compromise is the best democracies can offer.

Posted by: David R. Remer at June 11, 2008 05:19 PM
Comment #255228

ohrealy,

Yes, making billions in profit and paying billions in income tax. You may or may not have known that the broadcast industry (except for public broadcasting) does not get one penny from the government to keep us in business. What keeps us in business is selling advertising, which, of course, we have to report to the IRS and they take their (ahem) “fair” share.

Knowing that, TV stations have been mandated to move to DTV (for which they have to pay for new equipment) by the FCC…something that should have happened a while ago, in my opinion. This will cost them billions in new gear for DTV. This causes a severe squeeze on the bottom line in many cases. Sure, they won’t be able to use the present gear forever…but at least until it wears out from use.

Let us take our situation, for example.

We have a 5 station (radio) cluster. The FCC has mandated that we have to move to digial in the next few years (something we call HDRadio). Now, to move into the purely digital domain, we’ll have to buy new transmitters, transmission line, antennas, processing gear, consoles and God only knows what else. The estimated cost is $100,000 per station. We have 5. That’s a half a million dollars. That’s another 10 year loan and ten more years of penny-pinching and watching the bottom line like a hawk. Either that or go broke. But, you see, the FCC doesn’t care. Go digital or go dark. Your choice.

So yes, we do pay taxes on the commercial time we sell and, BTW, the FCC gets their pound of flesh from us as well. Not to mention BMI, ASCAP and SESAC…but don’t get me on a rant here about legal extortion.

As far as Jim M, I’ve been here a lot longer…so he should change his moniker. Doesn’t bother me though. I could use Bat Guano, as I’m a big fan of Dr. Strangelove. :-)

Posted by: Jim T at June 11, 2008 05:23 PM
Comment #255230

David Remer,

Speaking of the oil companies sitting on vast reserves of oil, they may not have it long off the Florida coast.

China drills for oil 50 miles off Florida coast.

Posted by: Jim T at June 11, 2008 05:33 PM
Comment #255231
I am puzzled why Obama has no position on tax structural reform.

Because he has no problem with the current tax structure. He just wants to, in his mind, better utilize it the current structure. Ie, no real change.

Interesting that the Dems are blocking more drilling in the congress, why is that?

Posted by: Rhinehold at June 11, 2008 06:07 PM
Comment #255233

Rhinehold,
I’m not sure what drilling is being blocked by the Democrats, but the problem is Peak Oil. American Big Oil is not the only game in town. Most countries have nationalized their oil companies. As a matter of supply and demand, everyone in the world should be drilling oil like crazy. Yet the price continues increasing. What does that tell you?

I don’t think it’s a conspiracy. I really, really dislike Exxon, but I don’t think American Big Oil is fixing the markets. It’s probably not speculators, either.

Demand has outstripped supply, and appears likely to continue outstripping it. As the price increases, more marginal oil fields will come on line, but their exploitation depends upon high prices staying high.

Drilling more and more vulnerable environments, such as the Florida coast, or ANWAR, doesn’t change the fundamental nature of the problem. We need to stop digging the hole, not find ways to deepen the hole more efficiently.

We need to change the energy paradigm.

We’ve known this problem was coming for a long time. The first oil shock of 1973 was the warning shot across the bow, and Jimmy Carter gave speeches about it over two decades ago.

Sadly, we have been cursed with a Fossil Fuel administration. BushCo could not have happened to our country at a worse time. It beggars description, that conservatives would even suggest the answer is ‘let’s just keep doing the same thing, only moreso.’ Unbelievable.

The tax issue is interesting, but right now I take the candidate platforms as something along the lines of wishes and ponies, with the rest of us being the beggars.

Posted by: phx8 at June 11, 2008 06:24 PM
Comment #255234

Jim T, I am afraid that the policy of the FCC is that you should be selling out to the big guys who can afford the equipment, or fold up. They have been on the wrong track since Michael Powell. Did I read in your posts somewhere that you are in MS? You must cover a large rural area.

I worked for a company in FL many years ago, driving 2000 miles a week. In many places, the only thing on was talk radio. Here in suburban Chicago, I have one radio tuned to WBBM (CBS Newsradio) and the other to WFMT (Classical). There might actually be fewer station owners here than where you live.

50 miles from FL would be 30 miles from Cuba, right? China is unfortunately more likely to burn more coal than import more oil. They’re not as dumb as we are, to make themselves dependant on imports.

How about Jim T Ripper? or Jim Turgidson?

Posted by: ohrealy at June 11, 2008 06:39 PM
Comment #255235

Jim T,

I look at modernizing equipment as a cost of doing business.

Didn’t your industry fight the “HD” thing tooth and nail in order to reach a compromise?

How much does your company pay for the use of the airwaves?

Posted by: Rocky at June 11, 2008 06:54 PM
Comment #255238
Davir R. Remer wrote: The fact that American Oil companies are sitting on vast off shore and on shore leases without drilling is evidence that the Saudi’s suspicions and objections are well founded. Our government has no tool to force them to increase production of domestic oil reserves. The Windfall Tax would provide the incentive to drill on those unused oil leases.
OK. There’s some truth to that. There may be some evidence that oil companies in the U.S. are sitting on leases (but not drilling).

However, if only U.S. oil companies are limiting production, why are oil prices rising world-wide (i.e. for everyone).
Is Britain, China, India, Europe, South America, or any other nations paying significantly lower prices for crude oil than the U.S. ? No.

But, you have raised a good point that has some merit (i.e. about the possibility of oil companies limiting production in the U.S.):

  • The federal government has offered 229 million acres of public and private land in 12 western states for oil and gas drilling, an area greater than the combined size of Colorado, New Mexico and Arizona, according to an EWG analysis of land-use records maintained by the federal government from 1982 to the present. This acreage represents the sum of total land actively leased in 1982 and land newly offered from 1982 through 2004.

  • Despite access to over 200 million acres of public land over the past 15 years (1989-2003), the oil and gas industry has produced very little from it (about 53 days of U.S. oil consumption and 221 days of natural gas consumption), according to EWG’s analysis of well-by-well oil and gas production records from AUG-2004 (via a Freedom of Information Act Request). This rate of production amounts to only (on average) 3.6 days per year of oil, and 14.8 days per year of natural gas.
Thus, here’s a plan.

If the oil companies don’t want to drill on those leases, then perhaps the government should drill on those leases (but please, don’t contract Halliburton to do it)?
That ought to give oil companies some incentives, eh?
Typically, I don’t like the government competing with private industry, but perhaps it is appropriate if oil companies are limiting production to manipulate prices.
Also, perhaps the government should charge more for the lease rights, and shorten the lease-periods, which will discourage leasing without drilling?
Those leases cost a lot, and have time-limits?

Also, if the oil companies are giving each other a “wink and a nod” on prices, doesn’t that amount to illegal price-fixing?
If so, it should be discouraged with appropriate fines and penalties (large enough to make a point).

There is definitely a lot of speculation driving up oil prices (world-wide), but that doesn’t necessarily mean its price fixing, or gouging.
In fact, the federal government has been investigating it for a long time, and has come up with little (if any) proof of price fixing or manipulation.
Still, you raised a good point about production.
However, I think the limited production problem can be dealt with in more direct ways.

The real problem here isn’t only oligopolies, but irresponsible politicians that lack the will to publicize these issues, and utilize common-sense solutions to deal with them.
That is, none of these many badly-needed reforms will come to pass any time soon unless enough voters also decide now to spare themselves the inevitable and painful consequences of repeatedly rewarding irresponsible incumbent politicians with perpetual re-election. Perhaps enough voters will finally question the habit of repeatedly rewarding irresponsible incumbent politicians with perpetual re-election, when enough of the voters are jobless, homeless, and hungry.

At any rate, the voters have the government that the voters elect (and deserve).

Posted by: d.a.n at June 11, 2008 07:22 PM
Comment #255241

Phx8:

I’m not sure what drilling is being blocked by the Democrats, but the problem is Peak Oil.

If you are talking peak “cheap” oil I am with you.

The federal reserve has an excellent article:
http://www.dallasfed.org/research/eclett/2008/el0805.html

Their conclusion is:

What’s the bottom line? Absent supply disruptions, it will be difficult to sustain oil prices above $100 (in 2008 dollars) over the next 10 years.

It will take time to bring additional supply to the market to adjust to this great world GDP growth we are experiencing.

On the positive side, Wow is the world poverty rate declining!!!

Posted by: Craig Holmes at June 11, 2008 07:41 PM
Comment #255242

Listen to the Right or Listen to the Left, they are both going tell the audience what they want to hear. How is the American people suppose to figure out what is right or not.

Now as far as the oil companies, making 40 billion dollar profit a year should be called raping the people of the world. I understand supply and demand, they supply the oil and demand our blood. I would like to see a windfall tax, or maybe less of a profit and gas back down to $2 a gallon.

On taxes, why not a straight tax, no loop holes, no write off’s. Everybody from the low income to the highest pay the same percentage. 10 cents on a dollar is still the same if you only make a dollar or a million dollars.

Now this is the third party forum, what does Nader want to do? Haven’t seen or heard a word from him on anything, is he really in it or just trying to play the spoiler again?

Right now Obama is not my choice and never will be and McCain is sliding down hill fast, time to write in myself.

KT

Posted by: KT at June 11, 2008 07:59 PM
Comment #255243
Craig Holmes wrote: Wow[,] is the world poverty rate declining!!!
Think so?

Where’s your statistics?

Last I heard, slavery is worse than ever.
There are millions of refugees world-wide.
Nations are rioting over food and fuel prices.

And in the U.S., never mind these abuses and the painful consequences … some that have never been worse ever and/or since the 1930s and 1940s.

At any rate, the voters have the government that the voters elect (repeatedly), and deserve.

Posted by: d.a.n at June 11, 2008 08:11 PM
Comment #255244

d.a.n asked: “However, if only U.S. oil companies are limiting production, why are oil prices rising world-wide (i.e. for everyone).
Is Britain, China, India, Europe, South America, or any other nations paying significantly lower prices for crude oil than the U.S.”

That is precisely what the Saudis are asking? Why are these prices where they are. There is no shortage of supply. Everyone is getting the oil they ask for.

And they go on to say that because they are fulfilling demand, no ships are turned away empty, demand is being met by supply and that means the price of oil should be about $100 per barrel or less. A few even say $60 per barrel.

Trying to be diplomatic, they are loathe to come right out and say speculators are driving up the price on fears of anticipated shortages, some being created by American oil companies and other countries NOT drilling to capacity for their own domestic reserves, but they certainly don’t leave much to imagination when we find Venezuela is not producing to capacity and importing, America is not producing to capacity and is importing, and etc. etc.

The game is one of Oligopoly, played the same as Monopoly, except that you have consortiums of monopolists playing in concert with each other toward a common end. They are the private and nationally owned oil companies all seeking to preserve their domestic oil reserves for when the price from unequal demand and supply, which they are trying to create, can fetch a price of $200 per barrel or more, later into the future, vastly increasing tomorrows profits over what could be made selling those reserves today.

Hence, the sitting on leases and oil reserves and not drilling. No one but the governments have the power to halt this hoarding behavior. Obama gets it. The windfall taxes would drop profits in the short term, rile shareholders to increase profits in the only way possible, by increasing production and sales according to economies of scale.

John McCain doesn’t get it. His idea is to simply stop subsidies to the oil companies (except for the drop on corporate taxes from 35% to 25%), which of course does not address this problem in the least little way. The oil companies will give up subsidies if forced to, if they can continue to hoard (invest) in the shortages of tomorrow with untapped reserves to meet those shortages at $200 or $250 per barrel.

Posted by: David R. Remer at June 11, 2008 08:17 PM
Comment #255245


The more you raise taxes the more you PayGo.

OPEC has set production to support a price of 80 dollars per barrel, the rest is speculation.

In the last 10 years, the number of oil drilling permits issued by the federal government has risen significantly. In the last 4 years they have gone up dramatically and so has the price of oil.

Posted by: jlw at June 11, 2008 08:18 PM
Comment #255246

David, I’ll have to research it more. I think there’s some merit to assertions about limited production. Still, I think there are better ways to deal with it than via the tax system.

Posted by: d.a.n at June 11, 2008 08:24 PM
Comment #255256

There are a couple of irrational factors that can be included in the run-up of oil prices, but they don’t explain it.

For example, there is a fear factor priced into it. If an attack upon Iran by Israel or the US was in the works, that would explain some of it.

However, the falling dollar is a better explanation for part of the increase. Ordinarily, speculation exacerbates an existing trend. It does not create one. Speculators provide the liquidity for investors, and are very necessary in order for a market to function. The fact remains that most people in the oil markets are investors, not speculators, and they use futures as conservative hedges.

Other commodity indexes have also increased, pretty much across the board. While the run on oil has been pretty spectacular, the increase in other commodity markets suggests once again that this is not so much speculation, or fear, as it is a reflection of a normally functioning market, one experiencing an imbalance between supply and demand.

Hoarding behavior would confirm a market bubble, but it does not make much sense for some of the large oil producers. Some have small populations and more oil than they’re likely to ever need, so they increase supplies in order to cash in on the high price.

But since this is not happening, it most likely means it cannot happen, because there is not enough supply.

It’s called Peak Oil.

Posted by: phx8 at June 11, 2008 10:20 PM
Comment #255260

d.a.n said: “Still, I think there are better ways to deal with it than via the tax system.”

Good luck. Our laws don’t permit coercing private enterprise outside the tax code unless they violate laws directly. Choosing to contain production violates no laws that I am aware of. They can cite the inordinate expenses of exercising those leases and the risk of finding nothing there to justify either asking for more subsidies or refusing to drill. It is a “business decision” as an insurance company I worked for once told me as they ordered me pay a fraudulent claim to favored customer.

No law against that. Not one that would hold up in court at least. Plausible deniability covers an enormous amount of graft, greed, avarice and unethical behavior.

Posted by: David R. Remer at June 11, 2008 10:44 PM
Comment #255262

phx8 said: “as it is a reflection of a normally functioning market, one experiencing an imbalance between supply and demand.”

Only one big elephant in the room shaking his head at your comment, phx8, no buyers of oil are being sent away empty handed. Supply is meeting demand. Ergo, supply and demand DO NOT explain the year’s 400% rise.

As for other commodities like copper and aluminum and gold, there is a supply and demand inequality, but one is likely to find some of the same plays as Diamond producers at play as well. Artificial scarcity is what holds the diamond market price up. No actual shortage of diamonds sitting idle vaults in Europe and NYC.

When supply equals demand, wild upswings in price must by attributed to other causes. This is the case with oil. No buyers of oil are being turned away with empty ships. Even Bush is hoarding oil in the national petroleum reserve during a time economic pain resulting from the price of oil. Why? Could it have to do with the fact that his family and Cheney derive enormous benefits from these lofty oil prices?

Hard to find a more plausible explanation these days, isn’t it?

Posted by: David R. Remer at June 11, 2008 10:54 PM
Comment #255264

“For more than one hundred years we have stoked ever growing numbers of machines with coal; for fifty years we have pumped gas and oil into our factories, cars, trucks, tractors, ships, planes, and homes without giving a thought to the future. Occasionally the voice of a Cassandra has been raised only to be quickly silenced when a lucky discovery revised estimates of our oil reserves upward, or a new coalfield was found in some remote spot. Fewer such lucky discoveries can be expected in the future, especially in industrialized countries where extensive mapping of resources has been done. Yet the popularizers of scientific news would have us believe that there is no cause for anxiety, that reserves will last thousands of years, and that before they run out science will have produced miracles. Our past history and security have given us the sentimental belief that the things we fear will never really happen - that everything turns out right in the end. But, prudent men will reject these tranquilizers and prefer to face the facts so that they can plan intelligently for the needs of their posterity” part of a A Speech By Admiral Rickover In 1957.. www.energybulletin.net/23151.html

Posted by: Rodney Brown at June 11, 2008 11:12 PM
Comment #255265

David, using logic How or why would the Oil Companies want to wait to drill for $200-$250 a barrel of Oil? 60% -70% of the consumers could not Drive there would be riots and chaos, you think there that dumb ?.

Posted by: Rodney Brown at June 11, 2008 11:30 PM
Comment #255266

Glenn C. Said ” Eisenhower warned us against allowing the military industry from gaining too much power. That’s one Republican who knew what he was talking about….” He sure was! Thanks Glenn.

Posted by: Rodney Brown at June 11, 2008 11:55 PM
Comment #255270

David,
Not to ask a hard question, but isn’t the goal of Taxes and Tax Incentives from Our Government are to persuade the Individuals and Corporations to maintain certain behavior?

For why I do believe that the Wealthy needs to pay for their Addiction to Bling-Bling, instead of increasing the tax burden (which is only applicable after profits)should not both Presidential Candidates be looking to find ways to make Energy Independence worth more than the Republican Pundits response of “Drill Baby Drill?”

Posted by: Henry Schlatman at June 12, 2008 12:48 AM
Comment #255271

Dan;

there are multiple sourses for world poverty declining.

google “world poverty decline”

Here is one:

http://siteresources.worldbank.org/INTWDR2008/Resources/2795087-1192112387976/WDR08_03_Focus_A.pdf

The world economy is going great, which is causing commodities to increase. Prosperity does that!!!

Posted by: Craig Holmes at June 12, 2008 12:49 AM
Comment #255272

David,
Rising oil prices mean “buyers of oil are being sent away empty handed.” Those who cannot afford the price do without. Because oil is integral to transportation, it causes prices of almost everything to increase. As the price increases work their way through the economy, the results in the US and abroad can be food riots and worse.

The rise of commodities across the board suggests that an important underlying factor is the weakness of the dollar. All those deficits and all that debt have very real consequences. Foreign investors used to re-invest surplus dollars in American debt, but now the euro offers an alternative currency of last resort. So part of the rise in oil can be explained this way, but from what I’ve read, it isn’t nearly enough to cover the entire rise.

Fear factor… speculation… Ok. Surely those must play some role. But I think the simpler explanation for much of the rise is the more likely, and the simpler one is an imbalance of supply and demand.

Posted by: phx8 at June 12, 2008 12:53 AM
Comment #255278

phx8,
If supply and demand play a part in the inflation of Goods and Services than why are we losing jobs?

True, the weak dollar means that more Nations and Societies have value added to their money and imports cost more. Yet, not having seen any lose of product or good on the market (exception rice) or long gas lines I have to assume that the level of demand has falling off.

No, I do believe the the Oil Companies said it best right after Katrina when they said to Congress that it is their job to ensure the Supply and not worry about the harm they are doing to the Economy.

Posted by: Henry Schlatman at June 12, 2008 02:49 AM
Comment #255281

What possible benefit can there be for not drilling in ANWAR or off the coast of Florida?

Easy.

We’re gluttons of petroleum, and we need to go on a diet. British Petroleum said we have about 41 years of proven oil reserves in the world before it is depleted. People, that’s not much.

According to the Saudis, we may already have reached ‘peak oil’, the point at which production will not significantly increase.

The Association for the Study of Peak Oil and Gas said peak oil will be reached in 2010.

The U.S. Energy Information Administration indicates peak oil may have been reached in 2006.

So if we drill in ANWAR or off Florida, sure, it may give us a year or two more of oil…but it will NOT decrease gas prices (if anyone thinks it will, I’ve got a bridge on eBay for you to bid on).

In other words, further development is a BAND-AID, and not a solution. The solutions are:

1 - RAISE the CAFE standards so our cars get more MPG (Conservative opposition to this is one of the main reasons the Asians are kicking our behinds in the automobile marketplace).

2 - Major Defense cuts, as in dozens of ships and hundreds of tanks that we simply don’t need.

3 - Give full-throated support to solar, wind, and NUCLEAR power.

4 - And place a national emphasis on mass transit.

This will all hurt our economy if we do it now. Of course we can wait for three or four more decades when we will no longer have a choice…and see what it does to our economy then.

Posted by: Glenn Contrarian at June 12, 2008 04:25 AM
Comment #255284
Craig Holmes wrote: d.a.n: there are multiple sourses for world poverty declining. google “world poverty decline” Here is one: siteresources.worldbank.org/INTWDR2008/Resources/2795087-1192112387976/WDR08_03_Focus_A.pdf
I looked at the link you provided. There’s several problems with your spin, and attempts to project those statistics on the U.S.:
  • (1) Those figures are only from 1993 to 2002.
  • (2) It applies mostly only to Asia.
  • (3) Current events (i.e. energy vulnerabilities and rising food prices) of the past few years are not reflected in that article.
  • (4) A few cherry picked statistics from 6+ years ago doesn’t prove much.
  • (5) Recently reported, slavery (world-wide) is worse than ever.
  • (6) There are millions of refugees world-wide.
  • (7) There is now rioting and protesting in many nations over rising food and fuel prices.
  • (8) And to make matters worse in numerous areas, the world population of 6.7 Billion is growing by 211,000 per day! See world population: One-Simple-Idea.com/Environment1.htm
Also, poverty rates in the U.S. have increased over the past 7 years, and 2007 and 2008 are likely to be worse:
  • YEAR:__ POVERTY LEVEL:
  • 2008 __ ??.?% estimate 13.0
  • 2007 __ ??.?% estimate 12.6
  • 2006 __ 12.3%
  • 2005 __ 12.3%
  • 2004 __ 12.6%
  • 2003 __ 12.7%
  • 2002 __ 12.1%
  • 2001 __ 11.7%
  • 2000 __ 11.3%
  • 1999 __ 11.8%
  • … … .
  • 1979 __ 11.7%
  • 1978 __ 11.4%
  • 1977 __ 11.6%
  • 1976 __ 11.8%
  • 1975 __ 12.3%
  • 1974 __ 11.2%
  • 1973 __ 11.1%
Poverty rates have not changed significantly in the U.S. in 30 years, but they have been increasing slightly for the last 7 years, and are now higher than the years between 1973 to 1979. A 12.3% poverty rate in the U.S. means 37.5 million people (1 in 8 people) live in poverty in the supposed richest nation on Earth. What’s good about that? Poverty rates for minors in the United States is among the highest in the industrialized world. Again, your clever use of old statistics, and statistics that are mostly attributable to less poverty in Asia is not very convincing to Americans. Especially the 12.3% (or more) that live below the poverty level.

In addition:

  • (a) Home ownership has decreased for the past 4 years.

  • (b) Home ownership has increaased ONLY for the wealthy.

  • (c) for most middle-income and lower-income people, home ownership has decreased (59.6% in year 2003).

  • (d) Since year 2006 (money.cnn.com/2006/03/22/real_estate/homeownership_study/index.htm) home ownership has fallen for middle-income and lower-income people.

  • (e) Home ownership is in a (money.cnn.com/2008/01/29/news/economy/home_ownership_vacancies/index.htm?postversion=2008012913) record plunge, and the 4th quarter of 2007 saw the biggest one-year drop (1.1%) since tracking began in year 1965, as current mortgage problems and rising foreclosures take their toll.

  • (f) in 2007, there were record level 2 million foreclosures.

  • (g) in 2008, it is predicted there will be another 2 million foreclosures.

  • (h) Home ownership also means debt too, and does not necessarily a good thing.

  • (i) Home ownership rates do not mean those homes are paid-off in full. That is, most homes are not paid-off in full.

  • (j) Since the real-estate bubble is bursting, many people now owe more on their homes than their homes are worth (bubbles caused by the dishonest pyramid-scheme monetary system).

Does that mean there’s nothing good anywhere? No.
For example, people are living longer.
Things could be worse.
However, things in the U.S. can be and should be better, but several things are now deteriorating due to 30+ years of growing government corruption and incompetence, and too many voters that repeatedly reward the incumbent politicians for all of it with perpetual re-election; allowing the nation’s pressing problems to grow dangerously in number and severity.

Craig Holmes wrote: The world economy is going great, which is causing commodities to increase. Prosperity does that!!!
Asia is doing better. The U.S. is not.

You must have been listening to the 4 happy-talkers on Larry King tonight (Wed., 11-JUN).

None of that happy-talk applies to the U.S., nor explains away these 10+ abuses causing these 17+ deteriorating economic conditions in the U.S.

Craig, as I recall, you also wrote a few months ago …

Craig Holmes wrote: America as a whole has never been this rich, and it’s getting richer all the time. It’s a great time to be an American.

On what planet? In what dimension?

AHHhhhh … perhaps, if you are the 1 in 10 people that own 70% of all wealth in the U.S.: One-Simple-Idea.com/DisparityTrend.htm#WealthDistribution

OK. The U.S. is still one of the top 26 nations (of hundreds world-wide) in which to live.
The U.S. is not yet a 3rd world country.
However, again, no amount of rosy talk and cherry-picked statistics can explain away our pressing problems, growing in number and severity, while being perpetuatlly ignored by do-nothing Congress.

At any rate, the voters have the government that the voters elect (and deserve).

Posted by: d.a.n at June 12, 2008 05:06 AM
Comment #255285
David R. Remer wrote:
    d.a.n said: “Still, I think there are better ways to deal with it than via the tax system.”
Good luck. Our laws don’t permit coercing private enterprise outside the tax code unless they violate laws directly. Choosing to contain production violates no laws that I am aware of. … No law against that. Not one that would hold up in court at least.
There is another way … possibly a better way.

Rather than using a windfall profits tax (which may be passed on to consumers as another hidden tax) to coerce oil companies to stop using oligopolistic conditions to drive up oil prices (by intentionally avoiding production):

  • the government could drill on those hundreds of millions of acres of oil and gas leases themselves.

After all, that is a similar argument being used for universal healthcare, in which the government attempts to remove the middlemen, greed, and profit (profits which go mostly to (in this order) hospitals, doctors, pharmaceuticals, insurance companies, illegal immigrants, politicians, lawyers).

That is, whenever corporations try to use oligopolistic conditions to manipulate prices, the government could (as a last resort) provide the services (or commodities) that the oligopolies are greedily manipulating.

This would provide some competition and create more incentive for more production on those unused leases, while avoiding the windfall taxes that may be passed onto consumers as hidden (and regressive) taxes.

Posted by: d.a.n at June 12, 2008 05:57 AM
Comment #255296

Competition d.a.n? competition? Why thats not in the best interest of the US corporations and the foreign corporations that distribute oil here. Where is your sense of corporate/national pride? Its our duty to just let the free market take care of it. Your speaking blasphemy here d.a.n, why its socialism of the worse kind to even say such a thing. The profits of these corporations will be affected by this kind of talk. Remember this and repeat it often-the free market uber alles. The free market will take care of us. The free market watches out for us. Its the environmentalist fault. Its the liberals fault. To many regulations, blame the government. Now go drink the kool aid and quit thinking intelligent thoughts about the oil problem, your scaring the market,. Why I wouldnt doubt that the speculators are fixin’ to bid up the cost of a barrel of oil on this bad news.

Posted by: j2t2 at June 12, 2008 09:31 AM
Comment #255300

Funny! : )
Sort of : (

Posted by: d.a.n at June 12, 2008 10:15 AM
Comment #255301

I agree d.a.n, not funny, however I do think your comment about the government providing the pumping and distribution of native oil is a good one. The profits could help to reduce taxes, which everyone favors and as mineral rights should be considered a “commons” for all the people it would be a good use of the oil.

Posted by: j2t2 at June 12, 2008 10:20 AM
Comment #255304

ohrealy,

The FCC has never cared about what it costs individual owners to comply with their mandates. If it costs 25 cents, it costs 25 cents. If it costs 1/2 million bucks, so be it. Comply or go dark. That’s the FCC.

By the way, speaking of fines, the FCC recently fined CBS a buttload of cash for the Janet Jackson wardrobe “malfunction” during the Superbowl. Many people not in the business thought that was excessive. I think they got off lucky. When I first started broadcasting, the fine for “indecent, obscene or superflous” transmission was $1,000 and/or 1 year in the federal pen. Can you imagine being thrown in Atlanta for saying “shit” on the air? Back then, it was a reality.

I guess I used “Jim T” because of 2 reasons.
1.) It’s easy to type.
2.) It’s my real name.

Good suggestions, BTW.

Rocky,

We were lucky. Our stations were allocated between 1947 and 1993. There are no yearly fees associated with the FCC to broadcast. But getting the license to braodcast is a bureaucratic Greek trajedy.

Today, to put on a radio station from scratch, you have several steps to go through.

1.) Do an engineering study to make sure a frequency you wish to “drop in” does not interfere with any other frequency (this was the wholesale whoring of radio frequencies by the FCC back in the 80s and 90s…and was called an “8090”). OR you participate in an “auction” the FCC puts up. Terribly expensive, by the way.

2.) Apply for the frequency to be “dropped in” (Mucho lawyer fees to submit to the FCC).

3.) IF…IF the frequency is “dropped in”, participate in a competition to get the CP (construction permit) with everyone else who “cross files” for that frequency (ultra expensive). Either buy out the other applicants or go to auction.

4.) Get the CP and begin construction of the station…for which you have a certain amount of time to complete or the FCC will recend the CP and auction it off to someone else.

5.) Get it on the air.

At this point, you have spent a minimum of $200,000 and (if the signal is in a big market) a maximum of a couple of million bucks.

Now, once you get the station on the air, this is when you start to spend money like it was water (if it is a large market) because there are a multitude of other signals that have been there forever…and have “war chests” that far exceed yours (unless your Donald Trump). This is also when you REALLY start to work 24/7/365 keeping it on the air, staffing the station air staff and sales staff, keeping your sales staff actually selling, keeping your air staff motovated, keeping your signal fresh and loud (new…EXPENSIVE as HELL equipment), maintaing the (expensive as HELL) equipment, replacing said equipment when lightening strikes (remember, your radio tower is nothing more than a 500 foot lightening rod), losing your ASS when you’re off the air, etc., etc., etc. It NEVER stops, ever.

Actually, the easiest, and probably the most expensive way, is to buy an existing station. Lots less hassle and you’re about 95% sure of getting that station and getting a license to broadcast transferred to you.

There are no yearly fees paid to the FCC, however, every 8 years you have to make an application to the FCC to extend the license to keep broadcasting. You have to prove to the FCC that you’ve been servicing (Public service and Public affairs) your community of license, and, if anyone files with the FCC saying you HAVEN’T served your city of license, you have to fight that before the FCC (buttloads of cash for FCC lawyer). Sux…but that’s the process. In triplicate.

Yearly fees for broadcasting music are paid to BMI, ASCAP and SESAC, which usually amount to 1-2% of your yearly gross. Yes, we are promoting their music not only for FREE…but we’re paying THEM for the right to broadcast it. And we can’t even charge them the air time for promoting their tunes. If we don’t pay royalties to BMI, ASCAP and SESAC, we can’t broadcast their licensed music and if we DO pay the roylaties, we can be sued for playing any music NOT licensed by BMI, ASCAP and SESAC.

Talk about legal extortion.

Yes, we serve a large rural area. If you look it up on the map, we service Memphis to Vicksburg (North to South) and Greenwood to almost Monroe, LA (East to West). We serve about 1/2 million people.

Out of our 5 stations, we have 2 Urban (Rap, Hip-Hop, R&B) stations, 1 Urban Gospel station, 1 Country station and one Hot A/C (Top 40) station. Since our service area is about 65-70% black, our Urban stations are the dominant ones in our cluster.

Hope that helps give you a perspective on our industry. Anything else, just let me know.

Posted by: Jim T at June 12, 2008 11:50 AM
Comment #255308

jlw, there is much more to this than speculation. The problem with the speculation argument is that at the end of each month, ACTUAL oil supplies are sold to actual buyers willing to pay the inflated prices.

Do not forget that there is an enormous flood of money into the commodities markets as the one rising market sector, supporting higher speculative prices than would be the case if the world and US GDP were at 3% or higher. Both are below 2% currently with US GDP growth below the world GDP growth.

But, speculation and hedging is only a part of multi-part puzzle. phx8 doesn’t want to admit the reality and fact being reported that Private or National Commercial buyers of oil are NOT being turned away. Supply is equal to demand. There are no shortages of oil in the marketplace.

And this points to the third leg under oil prices. I am sure you have heard of the Just On Time inventory paradigm adopted by manufacturing and retailers globally. This paradigm has been adopted by oil producing nations. The production of oil just meeting demand, no less, no more since the Spring of last year. Put in another way, oil producers have found the just in time demand supply point that meets demand allocations without any supply exceeding demand, which of course would undermine speculative investments and upward pressure on prices and profits on each barrel of oil.

That is where American oil companies sitting on vast leases of undrilled, on and off shore, acreages comes into play. This is occurring globally. Each nation with oil reserves wants to be the last country with oil to provide to the world oil at $1000 per barrel, a windfall to beat all windfalls.

The Saudis are making threatening noises because they are pumping to near capacity if not at total capacity and fear running out while other nations hold their reserves undrilled for a higher profit in the future. This is why the Saudis are in the news of late and perplexing markets with diplomatic talk alluding to the points I am making by saying the supply and demand intersection extant only supports a $70 to $80 dollar a barrel price.

The difference between $80 supply/demand price and the current $132 price per barrel of oil is a result of factors OTHER than supply and demand. The Saudis are getting anxious that if this continues, they too will have to pull back on production rather than run out of oil before other nation’s have tapped their reserves, which in turn actually would create shortages raising the supply/demand price well above $120 per barrel, and the ire of the world toward the Middle East and Saudi Arabia. The Saudis view themselves as friends of the U.S., but recognize that friendship would be jeopardized if they were forced to conserve their own reserves for the future as some other corporate and national reserve holders are doing.

Posted by: David R. Remer at June 12, 2008 12:19 PM
Comment #255310

d.a.n, OK, I can accept that the Federal Government getting involved may be a better option in the short run. Perhaps, if the legislation constrained the Government oil agency to drilling ONLY for the purpose of maintaining our national petroleum reserve, two birds could be taken out with one stone. Downward pressure on oil price and incentive to private drillers to drill more, and prevent the nationalization of the domestic oil industry, at the same time.

This in turn, would allow the government oil agency to produce oil as needed to influence the price of national oil by releasing oil from the reserve in times of high prices and halt releases during times of oil price threats to our private oil industry. All the while, maintaining the volume of our national petroleum reserve without concern for world market prices.

It has merits beyond imposing windfall taxes on the private sector. Of course the oil industry lobbyists would not stand for such a proposition being worked in the Congress.

Posted by: David R. Remer at June 12, 2008 01:00 PM
Comment #255311

David,
The goalposts keep moving.
You write: “… The supply and demand intersection extant only supports a $70 to $80 dollar a barrel price.”

Ok. I’ve seen the same number. But it was only a few years ago that Greenspan said $60 oil would be really bad for the economy. The supply and demand number keeps being increased. The current run-up is spectacular, but the sustained increase throughout the Bush administration cannot be explained by fear factor or speculation or conspiracy alone.

The rising price recognizes the increasing demand and the prospects implied by Peak Oil. The current price discounts future inability to keep up with demand and scarcity, not just the JIT inventory considerations of today.


Posted by: phx8 at June 12, 2008 01:23 PM
Comment #255320

phx8, you say you have seen the same number. So, why do you discount it? What evidence?

What Greenspan said a few years ago was only relevant to the environment Greenspan was aware of a few years ago. Such a comment made a few years ago is irrelevant to today, OBVIOUSLY!

The Supply and Demand numbers DO NOT keep increasing significantly. They are estimates and range between $60 and $80 per barrel over the last year. Current prices are about double that equalization price based on supplies meeting demand.

You said: “but the sustained increase throughout the Bush administration cannot be explained by fear factor or speculation or conspiracy alone.”

Perhaps, though arguably, but real price increases are NOT supported by any demand going unmet. That fact is clear and undebatable. No Oil Cargo ships pulling up for refill are being denied, phx8.

Posted by: David R. Remer at June 12, 2008 03:27 PM
Comment #255326

David:

It would be so interesting if they would just raise the margin limits on Oil.

Posted by: Craig Holmes at June 12, 2008 04:44 PM
Comment #255327

Craig, I don’t understand what you mean. Margin limits?

Posted by: David R. Remer at June 12, 2008 05:04 PM
Comment #255329

Jim T, thanks for all the information. It explains pretty clearly how the scales are weighted in favor of big guys buying up the littler guys. I guess you don’t have much of a classical music market there, but I’m glad to here you’re not involved in TalkRadio. There are many people here in Chicago from your area, or descendants of people who came from there. Your Gospel and Country stations sound most interesting. We’re having the fuss here about digital TV, on cable and sattelite, but I haven’t heard much about the changes in radio. On the internet, I sometimes use BBC7, when there’s nothing interesting on my youtube subscriptions.

Posted by: ohrealy at June 12, 2008 05:10 PM
Comment #255330

David:

The difference between $80 supply/demand price and the current $132 price per barrel of oil is a result of factors OTHER than supply and demand.

Do you mean supply? Price is a function of supply and demand. I agree with your point that there are no pictures on the news of empty tankers lined up not being filled, and also we do not have lines at gasoline stations, so there is plenty of supply.

However demand is obviously very high.

I also agree with your thoughts that this is complicated meaning one issue will not solve it.

I think we have a ways to go. I read somewhere that the cost of ocean drilling rigs (rental cost) is way more than doubled recently. I think it is something like $500,000/day. That is an indicator that over time supply should increase.

I have recently read from the federal reserve that they believe $100 oil will be hard to maintain over the next 10 years.

Posted by: Craig Holmes at June 12, 2008 05:14 PM
Comment #255332

David,
Speculators are buying on margin.

The following quote is from an article posted on www.oildrum.com


“Growth in worldwide oil supply is not doing well. Non-OPEC production is sagging and is expected to increase by only 310,000 b/d this year and OPEC currently is close to producing flat-out out with new projects slipping. OPEC’s production is now expected to grow by only 500,000 b/d during 2008, half of the amount anticipated earlier this year. The bottom line is that supply is not keeping up with demand.
The most troublesome aspect of the IEA report is that OECD crude stocks fell by 8.1 million barrels in April – a time of the year when they typically increase by 30 million barrels. Preliminary numbers suggest that the drop is continuing in May and June. The world is living off its stockpiles, a situation that will not long endure. If it turns out that supply only grows by about 500,000 b/d while demand increases by 800,000 b/d, it should be obvious that prices are going up until the demand falls.”

So oil tankers are not being turned away empty. But if the world is living off stockpiles, and demand increases supply, then, as the article so nicely sums it up, “prices are going up until the demand falls.”


Posted by: phx8 at June 12, 2008 05:19 PM
Comment #255335

Correction, that should read ‘demand exceeds supply’.

Drilling new fields ignores the problem that old fields are being exhausted faster than new ones can be brought on line. Furthermore, new drilling technology has allowed existing fields to be drained more quickly and more thoroughly.

The free market will resolve the problem for us, but we’re not going to like that resolution at all. The obvious solution is be pro-active. Earlier in the thread, Glenn mentioned some solutions. It will take government leadership to become pro-active. Unfortunatley for all of us, Bush will be in office for another seven months.

Posted by: phx8 at June 12, 2008 05:25 PM
Comment #255344

phx8, I don’t know if you have seen these videos, from CSpan I guess, on Congressman Roscoe Bartlett and Peak Oil:

http://www.youtube.com/watch?v=Gtkq5DdcgYA

The graphs are particularly interesting. There are 2 parts, 9:44 mins and 8:54 mins.

Posted by: ohrealy at June 12, 2008 06:15 PM
Comment #255346

Craig said: “Price is a function of supply and demand.”

Not exclusively, and certainly not when you have cartels and oligopolies in play, and speculators and investors in futures prices. It is future price of oil that MAY be motivating drillers to abstain from drilling for a number of strategic reasons, all having to do with maximizing profits over time against the backdrop of a diminishing finite resource as the source for their profits.

The potential shift of nations to rely more and more on renewable non-polluting energies no doubt threatens the elevated price of oil today. Causing an oligopolic response to elevate and maintain as high a price as possible in the interim.

Posted by: David R. Remer at June 12, 2008 06:28 PM
Comment #255348
David R. Remer wrote: It has merits beyond imposing windfall taxes on the private sector. Of course the oil industry lobbyists would not stand for such a proposition being worked in the Congress.
Well, yes.

That’s the rub, as usual.
The problem is not that we lack good ideas for our problems growing in number and severity.

The problem is that Congress is where good ideas go to die.

That’s that problem, as usual, with just about everything … whether Congress will choose to do the common-sense, no-brainer, ethical, and responsible thing.

And voters are culpable too, since too many voters continue to repeatedly reward the irresponsible incumbent politicians in the two-party duopoly in the do-nothing Congress with perpetual re-election rates.

Perhaps enough voters will question the habit of repeatedly rewarding irresponsible incumbent politicians with perpetual re-election when gasoline is $10 per gallon, and enough voters are jobless, homeless, and hungry?

Perhaps enough voters will question the habit of repeatedly rewarding irresponsible incumbent politicians with perpetual re-election when this list of abuses and deteriorating economic conditions is twice as worse?

Perhaps enough voters will question the habit of repeatedly rewarding irresponsible incumbent politicians with perpetual re-election when the taxes are twice as regressive as they are now … that’s what will happen if Mr. Economics - NOT! (i.e. John McCain) gets his way to cut taxes more for the wealthy, making the tax curve more regressive than ever in American history. What John McCain is calling a tax increase is such a fraud, and such a deception, it’s hard to believe any tax payer would fall for it. John McCain is NOT for maintaining low taxes for the middle class. John McCain is for maintaining low taxes for the wealthy. Either John McCain is too stupid to understand the regressive nature of a simple 2-dimensional tax curve (below), or he knows it and hopes to perpetuate that fraud …

  • ___The evidence of the REGRESSIVE nature of the current Federal Tax System:____
  • 35% |——————————o————————————————————
  • 33% |———————-o—————o—————————————————
  • 30% |——————o—————————o——————————————= (30% total
  • 27% |—————-o————————————-o———————————- federal tax for
  • 24% |—————o————————————————o————————- secretay making $60K)
  • 21% |————-o————————————————————-o————-
  • 18% |————o————————————————————————-o-= (17.7% Warren
  • 15% |———-o——————————————————————————- Buffet’s total
  • 12% |———o——————————————————————————— federal taxes on
  • 09% |——-o———————————————————————————- $46 Million)
  • 06% |——o————————————————————————————
  • 03% |—-o————————————————————————————-
  • 00% |ooo—————————————————————————————
  • ____$0__30K__60K__90K_120K_150K_180K_210K_240K … … $GROSS INCOME …

Either John McCain truly doesn’t understand that graph, or he’s does and thinks it is fair.
If he thinks that is fair, then he is not a fair-minded person.
Regardless of which (either (a)ignorance or (b)purposeful regressive taxation), John McCain is bad for America.
John McCain is wrong on:

  • taxes;

  • Iraq;

  • the economy;

  • illegal immigration (he voted for the first shamnesty of 1986, which quadrupled the problem); however, Obama’s record on illegal immigration is equally as pathetic;

I’m also getting tired of John McCain Television ads telling us how he was a POW in Vietnam, as if that somehow makes him more qualified to be president. It’s sort of lame in the same way John Kerry repeatedly told everyone he had 3 purple hearts. After a while, it sounds like bragging. It starts to ring hollow. It’s sad. His sacrifice should not be diminished, but his tactic is what is possibly diminishing it (especially after the hundredth time you’ve heard it). John McCain says it is foolish to romanticize war, but then he proceeds to use his POW experience, and the history of his family’s experience in the military for political purposes, as if we need to be reminded again and again of it.

Instead of John McCain trying to use his POW experience for political advantage, I’d like to hear why and how U.S. troops in Iraq is making the U.S. safer? McCain says it is because the terrorists will follow us home. If that’s the main reason, then aren’t there better ways to make the U.S. safer than nation-building and policing the Iraqis? OOOppppps … I forgot, we’re not supposed to ask common-sense questions like that. To do so is traitorous, disloyal to America, and cut-and-run cowardice. Fortunately, it appears that the majority of Americans are no longer falling for that bull$#!+ . In fact, it reminds me very much of the lame tactics used by some pro-amnesty groups that say are a xenophobe, or racist, or have some “antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations”, if you want legal immigration and secure borders.

Thus, it is always important, but perhaps now more than ever. Whoever the next president is, don’t forget about the do-nothing, go-along-to-get-along, complicit Congress.

At any rate, the voters have the government that the voters elect (and deserve).

Posted by: d.a.n at June 12, 2008 06:36 PM
Comment #255349

phx8 said: “The bottom line is that supply is not keeping up with demand. “

False! Supply is keeping up with demand currently. What you are referring to is the speculator’s hopes and anticipation that in the FUTURE supply will not keep pace with demand, fueling enormous returns on the futures markets, and hedge markets for those unbelievers and unfaithful.

But the thing to remember is that future’s contracts expire at the end of each month, and at the end of each month, actual oil supply is purchased by actual buyers in demand of x quantities of oil and on the last day of the month, it is the supply and demand equality that SHOULD be dictating the actual purchase price. But, it’s not. Other factors are at play elevating that actual transaction price, and we don’t yet know with evidence, what those factors are.

Why are buyers bidding and paying a price greater than the supply and demand equality price of $60 to $80 per barrel? That is the fundamental inquiry that must take place, and that inquiry is only just now getting underway.

Is there hoarding going on motivated by the fear that next month’s price will be even higher? That is one psychological phenomenon that could account for why buyers are willing to pay more than the supply and demand equalization price. I offer this only as an example of what may be found by the investigations and inquiries.

Posted by: David R. Remer at June 12, 2008 06:42 PM
Comment #255350

ohrealy,
Thanks for the link to the Peak Oil presentation. I watched the whole thing.

It leaves me shaking my head. How in the world will we explain ourselves to posterity?

Posted by: phx8 at June 12, 2008 06:44 PM
Comment #255351

Supply is keeping up, until you see shortages and lines at the gas pumps again (as occurred during the 1970s).

However, the supply is being BARELY met (intentionally).

Also, speculation and other manifestations of unchecked greed are driving up prices.

However, with the demand for oil in Asia growing VERY fast, shortages in the not-too distant future is not far fetched … and that is when the $#!+ will really hit the fan.

Posted by: d.a.n at June 12, 2008 06:48 PM
Comment #255354

d.a.n, quite right. Having worked in psychiatric institutions in the Army and private sector and with federal prisoners in a halfway house setting, my experience does not lend me to trusting people who have been tortured, abused, and kept prisoner whether by bars or inherent limitations.

There are volumes of research done on the psychological trap that being a victim captures some people into. It is a trap of changing roles from victim, to aggressor, to rescuer, often instantaneously from one to the next depending on circumstance and context of interaction. This fascinating study began with research on why some Holocaust victims became aggressors and torturers equal to their Nazi captors. That research continued to the present with implications and therapies now in place to aid addiction and alcholism, and spouse and child abuse.

It is a fascinating area of research and innovation and understanding in the area of human response to torture and imprisonment. For these reasons and policy issue positions, I simply cannot consider supporting John McCain for president. His experience as a POW may account for his propensity to invade Iran and open a three front war in total disregard and denial of the consequences such action portends.

Very dangerous prospect, McCain being elected. Very dangerous to our military, our economy, and our reputation in the world, not to mention stability in the Middle East.

Posted by: David R. Remer at June 12, 2008 06:55 PM
Comment #255356

David R. Remer, Very good point about the psychological traps … very much like abuse breeds more abuse, the abusers were often also abused, etc.

Again, it shows how important a firm understanding of human pyschology is to good governance … something I tried to address here (i.e. admitting to natural human tendencies, and dealing with them appropriately).
It’s not something we like to admit, but must, if we are to learn from it … that is, learn the smart way, instead of the hard way (repeatedly).

At any rate, the voters have the government that the voters elect (and deserve).

BTW, Here’s a good idea I heard today.
After the election, make G.W. Bush (42) the Ambassador to Iraq.

Posted by: d.a.n at June 12, 2008 07:07 PM
Comment #255357

CORRECTION: After the election, make G.W. Bush (42) (43) the Ambassador to Iraq.

Posted by: d.a.n at June 12, 2008 07:12 PM
Comment #255359

More education is needed.
We can get it the smart way or the hard way.
Either way, it’s on the way.

Posted by: d.a.n at June 12, 2008 07:16 PM
Comment #255361

Jim T,
The claim about China drilling in the Gulf of Mexico is a myth:

http://www.mcclatchydc.com/251/story/40776.html

When Cheney talks, there is an excellent chance he is wrong, or simpy flat out lying. I’ve never seen a major political figure get so much so wrong.

Posted by: phx8 at June 12, 2008 07:33 PM
Comment #255363

phx8, “How in the world will we explain ourselves to posterity?”

I’m actually optimistic on this, except for the Oil Wars. I see more strange small cars around here all the time. I don’t even know what some of them are. Recently, I moved closer to the public transportation network here, although it’s more expensive. In the wealthiest suburbs, people actually drive smaller, more efficent cars than in the McMansion suburbs, where Hummers, Navigators, and Yukons are much more common. What these people are thinking is beyond my comprehension.

Posted by: ohrealy at June 12, 2008 07:56 PM
Comment #255382

Dan:

However, with the demand for oil in Asia growing VERY fast, shortages in the not-too distant future is not far fetched … and that is when the $#!+ will really hit the fan

Prostperity is a terrible thing!!! What with world poverty declining and all.

Posted by: Craig Holmes at June 12, 2008 11:14 PM
Comment #255387

d.a.n said: “After the election, make G.W. Bush (42) the Ambassador to Iraq.”

Hell with that. After being chauffeured for 8 years, he needs a driver’s refresher course. I won’t mind if my tax dollars are used to give him the practice of driving a HumVee on point in the Northern Provinces of Iraq, preferably alone. We wouldn’t want his refresher course in driving harming anymore soldiers than his chauffeured decisions already have.

Posted by: David R. Remer at June 13, 2008 12:41 AM
Comment #255388

ohrealy,

I really like listening to the Gospel station. Urban Gospel today sounds a whole lot like ’60s Soul and R&B. Even though it’s on AM, I can listen to it a good amount of time without getting ear strain.

The station that I can’t stand to listen to for very long is our Hot A/C (Top 40) station. That format has gone to hell in a handbasket.

You’re right about people from Chicago here. There was a huge migration northward in the ’60s for better jobs and now those people have come back here to retire and have brought their children (grandchildren) back with them. Makes for an interesting mix.

Yes, the slant is for huge conglomerates to dominate the radio spectrum, but, believe it or not, they have very little interest in small market stations…which is why we remain independant and won’t likely be bought any time soon. So, if you want to buy a station in B.F. Idaho, go for it!

Posted by: Jim T at June 13, 2008 01:09 AM
Comment #255451
Craig Holmes wrote: d.a.n:
    d.a.n wrote: However, with the demand for oil in Asia growing VERY fast, shortages in the not-too distant future is not far fetched … and that is when the $#!+ will really hit the fan.
Prostperity is a terrible thing!!!
Who ever said prosperity is a terrible thing?

Where do you get these strange non-sequiturs?
Is that the best tactic (and lame indeed) you have; to extrapolate to some extreme and illogical (and false) conclusion that makes no sense at all?

Or is simply that anti-anything-not-rosy programming as usual?

Craig Holmes wrote: What with world poverty declining and all.
Mostly only in Asia (e.g. China and India).

But not in the U.S. In fact, it has increased slightly in the U.S., and is likely to be worse when the 2007 and 2008 data is available:

  • YEAR:__ POVERTY LEVEL in the U.S.:

  • 2008 __ ??.?% estimate 13.0

  • 2007 __ ??.?% estimate 12.6

  • 2006 __ 12.3%

  • 2005 __ 12.3%

  • 2004 __ 12.6%

  • 2003 __ 12.7%

  • 2002 __ 12.1%

  • 2001 __ 11.7%

  • 2000 __ 11.3%

  • 1999 __ 11.8%

  • … … .

  • 1979 __ 11.7%

  • 1978 __ 11.4%

  • 1977 __ 11.6%

  • 1976 __ 11.8%

  • 1975 __ 12.3%

  • 1974 __ 11.2%

  • 1973 __ 11.1%

Poverty is increasing in some places around the world, and decreasing in others.
Do you have any other cherry-picked statistics?

Perhaps you could tackle these of 10+ abuses causing these 17+ deteriorating economic conditions in the U.S.

OOHHHhhhhhh … that’s right. Craig Holmes wrote …

Craig Holmes wrote: America as a whole has never been this rich, and it’s getting richer all the time. It’s a great time to be an American.
HHHMMmmmmm … keep chanting that over and over … perhaps someone else will eventually believe it.

Rather than trying to tell us how rich we are all getting, why don’t you try to prove it?
Good luck.
In case you haven’t noticed, the middle-class is getting squeezed for ever angle, and many Americans are falling behind, the U.S. dollar has been falling fast against all major international currencies since 1999, median household incomes have fallen for 8 years, there’s $53 Trillion of nation-wide debt, we are running the biggest federal deficits in history, no one can say where the money will come from (especially when it doesn’t yet exist), Congress and spending is out of control, our borders are sieves, we have a war in Iraq and Afghanistan, unemployment is rising, healthcare costs are astronomical, we have no leadership, and too many voters repeatedly reward do-nothing Congress for all of it with perpetual re-election.

Yep … other than that, everything is rosy!
At least we are not yet a 3rd world country?
Don’t worry, be happy!

Craig Holmes, Do you have any substantive reasons we shouldn’t be concerned, or do you merely have any more flippant and unsubstantiated conclusions that things are actually rosy?
Why does it pain you so much when people want to discuss problems and solutions?
You might some credibility if you could somehow prove to most of us that these problems are not as serious as many think they are.
Be careful about sticking you head in the rose-colored sand … it might actually be a bucket of setting concrete … something that could have avoided with a little more diligence and forsight.

Solutions …

P.S. It’s was just reported that Tim Russert died. I’m sorry to hear that. He’ll be missed.

Posted by: d.a.n at June 13, 2008 03:47 PM
Comment #255459

Barack Obama wants to impose a taxation regime which will through the US back three decades and make the US less competitive.

All this talk about ‘fair’ misses the point - what would be fair would simply be to adopt the same approach that countries in Europe east of Germany adopted after years of communism ( the presumably ‘fair’ system of treating all the same) and then a decade of adopting social program oriented high income tax regimes of socialist democracy of western Europe. What the countries of Czech Republic, Slovakia, and even Russia as well as Austria ( a non former communist country) have learned is that high income and social taxes repress economic growth and freedom. Each of these countries has adopted flat income taxes with caps on social security taxes - meaning all pay the same rate on income and the same on social security. Since they did this, their economic growth has accelerated from over 4 - 10 percent and unemployment has dropped -growing jobs at a rate faster than the US. Wealth and middle class prosperity has been created over the last several years at a rate that exceeds any place in the world.

Barrack’s simple and populist ( shall we say socialist) approach seems to be let’s tax the rich - sounds appealing but it won’t fill government coffers with anything - the wealthy will simply move their money elsewhere and America will de-incentivize individuals and small businesses from building wealth and jobs for Americans.

Living in Europe, I can not believe America is so enamored with such an ignorant and throwback approach. It seems that America is bound to compound its current economic issues with yet another election mistake -

Increasing Taxes will get you now where -

Empowering the same organization which dragged you into Iraq and can’t seem to show the discipline to balance its own budget ( remember Congress led by Democrats holds the purse and budget strings - and has been funding the war and pork barrel projects which provide an unbalanced budget) is not the solution.

Posted by: P Freeman at June 13, 2008 04:08 PM
Comment #255461

P Freeman said: “Barrack’s simple and populist ( shall we say socialist) approach seems to be let’s tax the rich”

As opposed to Republicans socialist approach of taxing future wage earners double by doubling the national debt in 8 years, right? The corporate giveaways by Republicans which account for many corporation’s setting new historical records for profits is also a form of socialism, Freeman. Just a different set of pockets from which the revenues are drawn from.

Don’t get me wrong. I agree with you that our companies and corporations would be more competitive in the world marketplace if they were not taxed at all. But, how that is accomplished is of absolutely of the gravest importance for our future. A flat tax income tax exempting business from income taxes makes sense to me, provided the rates are adequate to fund the general welfare of the nation and her future, and provided it does not drive income earners out of the middle class into poverty. I prefer a progressive 3 tier flat tax with escalating flat rates for lower middle class, upper middle class, and very wealthy. My other stipulation is that the estate tax remain providing exemption for passing on small inheritor owned and worked business or farm.

But, make no mistake, The Republicans have raised taxes on future wage earners vastly higher than any Democrat president has on then current taxpayers in 30 years. The national debt is but an IOU to paid be paid by future tax payers, including interest. And Republicans love socialized spending, they just have a different set of recipients for that spending than Democrats do.

Posted by: David R. Remer at June 13, 2008 04:34 PM
Comment #255462
P Freeman wrote: Each of these countries has adopted flat income taxes with [no] caps on social security taxes - meaning all pay the same rate on income and the same on social security.
Did you mean with no caps on Social Security taxes?

I’m not sure what Barack plans to do, but I agree that a neutral (flat) 17% income tax (neither progressive or regressive) on taxable income, and that would include all types of income not derived from taxes themselves such as entitlements (including inheritance income over a certain amount, lottery winnings, labor income, capital gains, interest, dividends, gifts over a certain amount, etc.) above the N times the poverty level (where N is never less than 1.0).

If that’s not enough, then the government needs to cut spending. We also need a balanced budget amendment, since Congress seems unable to stay within a budget.

Posted by: d.a.n at June 13, 2008 04:40 PM
Comment #255465

Dan:

Poverty is increasing in some places around the world, and decreasing in others. Do you have any other cherry-picked statistics?

I don’t need to cherry pick statistics. There are fewer of the poorest humans in world at globalization expands. Just google “poverty world decline” and see for yourself the multiple sourses.

It makes all the common sense if you think about it. Jobs “going overseas” means people “overseas” are getting jobs. Getting jobs means less lower world poverty rates.

I haven’t been “chanting” America is getting richer. That is a quote from some time ago. Actually right now, American’s are getting poorer. I might add at the same time, that just as in the great depression, wealth disparity is probably getting better right now as the rich are seeing their real estate portfolios decrease.

“rosey” is your term. What I have consistently said is that we are moving above and below the mean and that we will be fine. Right now our growth is a bit below the mean. Again we will be fine. What we are experiencing is normal.

Why does it pain you so much when people want to discuss problems and solutions?

Because it is not in balance. The negative is grabbed at without the positive. We live in the most dynamic economy in the world. We have every reason to be optimistic about the future of our country. There will always be problems and solutions. It bothers me when debates are waged in a hopeless joyless environment.

Do you have any substantive reasons we shouldn’t be concerned, or do you merely have any more flippant and unsubstantiated conclusions that things are actually rosy?

Again rosy is your mischaractorization of my position. My position has always been that American economy will continue to grow at or near the mean going forward. that is pretty rosy actually as America has performed well when compared against all major “mature” econonies in world.

America will continue to move along. Doomsday will not come.

Posted by: Craig Holmes at June 13, 2008 05:06 PM
Comment #255466

After WWII and into the 1960’s, the tax rate was as high as 90%, and decreased to 70%. The corporate tax rate was something like 35%. Yet the US was highly prosperous and competitive. Progressive taxation worked very well.

As for being competitive- I have no desire to see how low Americans can limbo in the name of corporate profit. I don’t want to see Americans living like the poor of Mexico City, or Mombai, or rural China.

Outsourcing used to primarily affect manufacturing. However, computer networks and other technologies has made outsourcing possible in ways we never imagined.

So just the opposite. I’d like to see federal economic & trade policies which CREATE wealth, rather than CAPTURE wealth, by favorably targeting progressive taxation towards the middle and the poor. Obama is on the right track, or at any rate, in the right stadium.

As already noted, borrowing money from the future for tax cuts for the wealthy oday redistributes wealth from the poor & the middle, to the rich, for the purpose of weath CAPTURE.

d.a.n.,
A balanced budget amendment makes no sense, since a mandatory balanced budget removes the possibility of using spending and revenue for fiscal policy.

Posted by: phx8 at June 13, 2008 05:14 PM
Comment #255467

David R. Remer, You mention a 3 tier tax system (e.g. essentially progressive with 10%, 18% and 28% levels). Do you mean there are are discrete thresholds depending on income? For example:

  • 35% |——————————————————————————————-

  • 33% |——————————————————————————————-

  • 30% |——————————————————————————————-

  • 27% |————————————ooooooooooooooooooooooooooooooooooo

  • 24% |————————————o——————————————————

  • 21% |————————————o——————————————————

  • 18% |—————-oooooooooooo———————————————————

  • 15% |—————-o————————————————————————-

  • 12% |—————-o————————————————————————-

  • 09% |—oooooooo—————————————————————————-

  • 06% |—o—————————————————————————————

  • 03% |—o—————————————————————————————

  • 00% |ooo—————————————————————————————

  • ____$0__30K__60K__90K_120K_150K_180K_210K_240K … … $GROSS INCOME …

Without a smooth curve, people would be gaming the system to limit income to the next lowest threshold (e.g. 10%, 18%, 28%).

Or did you mean something like the following which has a maximum 28% tax rate (and no tax on income below the poverty level)? :

  • 35% |——————————————————————————————-

  • 33% |——————————————————————————————-

  • 30% |——————————————————————————————-

  • 27% |————————————————————————ooooooooooooo

  • 24% |—————————————————-o————————————-

  • 21% |————————————o——————————————————

  • 18% |—————————o—————————————————————

  • 15% |———————o———————————————————————

  • 12% |————-o—————————————————————————-

  • 09% |———o———————————————————————————

  • 06% |—-o————————————————————————————-

  • 03% |—o—————————————————————————————

  • 00% |ooo—————————————————————————————

  • ____$0__30K__60K__90K_120K_150K_180K_210K_240K … … $GROSS INCOME …

If it could be proven that the 17% rate (only on income above the poverty level) was sufficient to raise enough revenues, would that work?
I saw your argument above that the wealthy use more social services and should therefore pay more, but even at 17%, the tax on $200K above the poverty level is twice that of the tax on $100K above the poverty level. Do you think perhaps that anything but a neutral tax rate (e.g. flat income tax percentage) fuels the class warfare, and perpetuates the questions of fairness?

  • ________ 17% Income Tax ONLY on Income Above the Poverty Level _________

  • 17% |———————————————————————————————-x

  • 16% |———————————————————————x————————-

  • 15% |————————————-x———————————————————

  • 14% |—————————-x——————————————————————

  • 13% |———————x————————————————————————-

  • 12% |—————-x——————————————————————————

  • 11% |————-x———————————————————————————

  • 10% |————x———————————————————————————-

  • 09% |———-x————————————————————————————

  • 08% |———x————————————————————————————-

  • 07% |———x————————————————————————————-

  • 06% |——-x—————————————————————————————

  • 05% |——x—————————————————————————————-

  • 04% |——x—————————————————————————————-

  • 03% |—-x——————————————————————————————

  • 02% |—x——————————————————————————————-

  • 01% |—x——————————————————————————————-

  • 00% |xx————————————————————————————————-

  • __$0K $20K $40K $60K $80K 100K 120K 140K 160K 180K 200K …$1Million… GROSS INCOME

Also, the tax curve above, only for income above the poverty level, would be a flat 17%, such as this:

  • ________ 17% Income Tax ONLY on Income Above the Poverty Level _________

  • 17% |xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

  • 15% |———————————————————————————-

  • 10% |———————————————————————————-

  • 05% |———————————————————————————-

  • 00% |———————————————————————————-

  • __$0K $20K $40K $60K $80K 100K 120K 140K 160K 180K 200K …$1Million… GROSS INCOME

P. Freeman, the current tax system is messed up. It’s regressive (see below). You apparently don’t want it to stay that way when you mentioned a flat income tax rate (which I also think is best and most fair):

  • 35% |——————————o————————————————————

  • 33% |———————-o—————o—————————————————

  • 30% |——————o—————————o——————————————= (30% total

  • 27% |—————-o————————————-o———————————- federal tax for

  • 24% |—————o————————————————o————————- secretay making $60K)

  • 21% |————-o————————————————————-o————-

  • 18% |————o————————————————————————-o-= (17.7% Warren

  • 15% |———-o——————————————————————————- Buffet’s total

  • 12% |———o——————————————————————————— federal taxes on

  • 09% |——-o———————————————————————————- $46 Million)

  • 06% |——o————————————————————————————

  • 03% |—-o————————————————————————————-

  • 00% |ooo—————————————————————————————

  • ____$0__30K__60K__90K_120K_150K_180K_210K_240K … … $GROSS INCOME …

It’s not perfectly clear, but I think Obama means to remove that regressive portion of the curve so that it looks like this:
:

  • ??% |——————————————————ooooooooooooooooooooooooo

  • ??% |—————————————o—————————————————

  • ??% |—————————o—————————————————————

  • ??% |———————o———————————————————————

  • ??% |——————-o———————————————————————-

  • 21% |—————-o————————————————————————-

  • 18% |—————o—————————————————————————

  • 15% |————o——————————————————————————

  • 12% |———-o——————————————————————————-

  • 09% |——-o———————————————————————————-

  • 06% |——o————————————————————————————

  • 03% |—-o————————————————————————————-

  • 00% |ooo—————————————————————————————

  • ____$0__30K__60K__90K_120K_150K_180K_210K_240K … … $GROSS INCOME …

What ever tax system gets proposed, voters should ask to see what the tax curve looks like (on gross income).
If the tax rate curve (relative to gross income) ever starts heading back downward (as in the current tax system curve) as income rises, that’s regressive.
That’s bad.

Posted by: d.a.n at June 13, 2008 05:17 PM
Comment #255469

David:

We obviously are at a crossroads. What you have been so good at is consistently showing that our current path leads to ruin. Of course my point with you has always been that economic curves change and turn. We here are not the only ones who see the graphs.

If you take your arguments about the future of the counry and look at other countries and economies that are older than we are (Japan and old Europe), we can see what not to do. Europe is in decline. The future of countries like Italy, Germany and maybe even Britain if they are not careful are bleak indead. Their social network is so large and their spending so high as a percentage of GDP, that it is likely they will fade from the scene as a percentage of world GDP.

The Democrats with Barak Obama seem hell bent to make our system more European which I think long term would be a huge blunder.

On the other hand, there are bright spots. We could look to countries like Ireland, Iceland, and South Korea etc to see economies that have a much brighter future, learn why and impliment those economies.

My hunch is that this knowledge would slit convervative/liberal down the middle. For instance obviously these countries are open to trade, immigration etc, but at the same time have a social net we should look at.

Keeping spending down is so important. You are right to criticize recent republicanism for what they have done.


Posted by: Craig Holmes at June 13, 2008 05:51 PM
Comment #255471
Craig Holmes wrote: d.a.n:
    d.a.n wrote: Poverty is increasing in some places around the world, and decreasing in others. Do you have any other cherry-picked statistics?
I don’t need to cherry pick statistics. There are fewer of the poorest humans in world at globalization expands. Just google “poverty world decline” and see for yourself the multiple sourses.
Again, not in the U.S.
Craig Holmes wrote: It makes all the common sense if you think about it. Jobs “going overseas” means people “overseas” are getting jobs. Getting jobs means less lower world poverty rates.
And you think that’s good and rosy for the U.S.?
Craig Holmes wrote: I haven’t been “chanting” America is getting richer. That is a quote from some time ago.
Yes you have. You wrote that more than once within the last 6 months.

It was as ridiculous then as it is now.

Craig Holmes wrote: Actually right now, American’s are getting poorer.
Most Americans (i.e. lower and middle income groups) have been getting poorer for many years. Not only “now”.
Craig Holmes wrote: I might add at the same time, that just as in the great depression, wealth disparity is probably getting better right now as the rich are seeing their real estate portfolios decrease.
There’s no evidence of that, because the wealthy are actually buying up real-estate cheap at the foreclosure auctions, causing the weatlh disparity gap to grow larger.

In fact, it was reported on one news station that the weatlh disparity trend had increased from 49% to 50% for the wealthiest 1% of the population.

Craig Holmes wrote: “rosey” is your term.
If the shoe fits.
Craig Holmes wrote: What I have consistently said is that we are moving above and below the mean and that we will be fine.
Think so, eh? On what planet?

Here on Earth, these 17+ deteriorating economic conditions tell a different story and make they don’t look none too rosy.

Craig Holmes wrote: Right now our growth is a bit below the mean. Again we will be fine. What we are experiencing is normal.
Sure … if you are the 1 in 10 people that own 70% of all wealth in the U.S.

How cavaliear of you to tell people everything is normal?
Keep chanting that … over and over … eventually you many actually convince someone else of it.

Craig Holmes wrote:
    d.a.n wrote: Why does it pain you so much when people want to discuss problems and solutions?
Because it is not in balance.
“Balance” ?

Nonsense. Feel free anytime to disprove any of those 17+ things, and the 10+ abuses that are a largly the cause.

Craig Holmes wrote: The negative is grabbed at without the positive.
Not true. Want to see some good stuff? Many good things have happened in the last 230+ years:
  • (01) The U.S. Constitution
  • (02) Slavery was finally abolished (though it came much later than it should have).
  • (03) Progress to reduce discrimination based on race, religion, color, ethnicity, gender, etc.
  • (04) Entrepreneurial spirit, despite the severely bloated government, incessant bureaucratic nonsense, and corruption.
  • (05) Productivity, ingenuity, and diversity.
  • (06) Internet (didn’t Al Gore invent that? Not just the MSM that constantly leaves out the facts, spins the facts, or out right lies)
  • (07) Technology, and the U.S. has lead in many ways.
  • (08) Generosity of Americans.
  • (09) The U.S. is still one of the top 26 (of hundreds of nations world-wide) countries to live-in (though it has been slipping lower).
  • (10) Freedom of speech, and most Americans that are not afraid to speak up about valid issues, and propose solutions, despite some people that try to unfairly label them as traitors, America haters, and America trashers.
Despite all that, there is no reason to not work to make things better, identify problems, root causes, and also Why do some people find that so frustrating and upseting? What’s the harm, as long as people are also proposing solutions, rather than merely complaining?
Craig Holmes wrote: We live in the most dynamic economy in the world. We have every reason to be optimistic about the future of our country. There will always be problems and solutions. It bothers me when debates are waged in a hopeless joyless environment.
Who said it was hopeless.

Did I not suggest solutions above?
Even worst case, pain and misery will finally be the self-correction mechanism.
However, sooner would be better than later.
What’s your beef with that?
Why are some people so anti-anything-not-rosy?
Especially when potential solutions (not only complaining) are also being provided?
What are you afraid of?

Craig Holmes wrote: Again rosy is your mischaractorization of my position.
And an accurate one at that.
Craig Holmes wrote: My position has always been that American economy will continue to grow at or near the mean going forward. That is pretty rosy actually as America has performed well when compared against all major “mature” econonies in world.
HHMMMmmmmmm … you don’t want to be characterized as anti-anything-not-rosy , and then you try to portray our current situation as “pretty rosy”.

Of course the nation has problems, always has, and always will, but there are cycles.
It’s 2.00 steps forward and 1.99 steps backward.
We’ve been going backwards too long now (about 30+ years).

Craig Holmes wrote: America will continue to move along. Doomsday will not come.
How lame. As if someone actually said doomsday was here.

Rather than argue the facts, your comment resorts to another lame extrapolation of doomsday.
We have economic problems.
The lower and middle income levels are getting squeezed.
I’m sure they will be very pleased with your trivialization of their getting poorer now (which you finally acknowedged as fact above).

phx8 wrote: d.a.n., A balanced budget amendment makes no sense, since a mandatory balanced budget removes the possibility of using spending and revenue for fiscal policy.
HHHHMMMmm … many states have balanced budget amendments and they get along just fine.

  • Also, in the 7 years from 1963 to 1969, 34 different states proposed 154 amendments

  • In the 7 years from 1965 to 1971, 35 different states proposed 102 amendments.

  • 104 Balanced Budget/General Amendments have been proposed by 37 Different States

  • 109 Apportionment/General Amendments by 35 different States
  • 37 (or more) States have requested a BALANCED BUDGET amendment.
    The requisite number (more than 34) of the states has proposed a BALANCED BUDGET amendment, yet Congress has ignored it (violating Article V).

    Thus, if it makes no sense, then there are 37+ states (the majority) and a lot of Americans that disagree with your comment: “a balanced budget amendment makes no sense”.

    Posted by: d.a.n at June 13, 2008 06:00 PM
    Comment #255472

    Craig said: “What you have been so good at is consistently showing that our current path leads to ruin.”

    IF, always please note the explicit or implicit “IF” we don’t alter the course we are on. I am not a doom and gloom person, and if you read my writings objectively, you will note that I am hopeful that we will ALTER our course toward deepening our problems beyond the point of no return, for a very, very long and insufferable time.

    Posted by: David R. Remer at June 13, 2008 06:12 PM
    Comment #255473

    Phx8:

    As already noted, borrowing money from the future for tax cuts for the wealthy oday redistributes wealth from the poor & the middle, to the rich, for the purpose of weath CAPTURE.

    The problem I see with your approach is that the tax cuts for the rich actually were not that huge relative to the programs being looked at by the left. If you restore the funds from the bush tax cuts from the wealthy, It’s not that big of an impact on revenue. (again relative to liberal spending agenda).

    Secondly, tax revenue is currently well withing historical norms. From a historical perspective there is currently plenty of revenue.

    When you boil it all down, the left’s agenda is to increase the size of the federal government as a percentage of gdp, which is accomplished will slow down economic growth as it has done in Europe.

    We will start to decline as a country. For instance at the begining of WWII America was roughly the same size economically as Germany, France and England. Today we are roughly the same size as all of the EU. That should show you how our two approaches to economics work over a sixty year period.


    Posted by: Craig Holmes at June 13, 2008 06:18 PM
    Comment #255474

    Craig said: “The future of countries like Italy, Germany and maybe even Britain if they are not careful are bleak indead. Their social network is so large and their spending so high as a percentage of GDP, that it is likely they will fade from the scene as a percentage of world GDP.”

    That’s one way of looking at it, measuring all things human by percent of GDP. But, what you don’t consider is that the Germans and Italians etc. have struck a bargain for less GDP growth and greater percent of taxation in exchange for a social security that is not so easily measured in pure currency exchange terms.

    You may be right. They may take their social spending over the tipping point. But, you must also NOT forget that what they gain in social security taxation and spending, stands in large part in place of a massive military-industrial complex taxation and spending. Which of course, allows them much more latitude in social spending as a percent of GDP than we. This is one of their perks resulting from our 60,000 troops permanently stationed in their country for defense at our expense. Pretty good deal if you can find a sucker to do that for you. And Germany and Europe play that American teet for every last drop.

    Don’t you think it might be time for a change, a reevaluation and restructuring of that economic drain on our future. Obama does. If alliance and diplomacy backed by an enormous club swung from our Homeland can free up a $100 billion per year for American taxpayers, it is worth revisiting our world hegemonic deployment strategy of 60 years ago, don’t you think?

    Posted by: David R. Remer at June 13, 2008 06:22 PM
    Comment #255475

    David:

    I appreciate and respect that “IF” and will use it in the future. Thank you for referring to my position as “half full”. Even though not my words it is close.

    I am hopeful that the changes are already in the works. Just recently (this week) I read a respected economist who projected lower economic growth for a season because of consumer deleveraging, some of it brought on by tougher lending standards.

    I recently read Futurecast by robert Shapiro (Clinton Tres Sec I believe). His economic forcasts to 2020 are reasonable. He is in line with Greenspan and others.

    Many seem to believe we will make the changes necessary simply because there is a gun to our heads and we have no choice, so therefore we will.

    I tend to see things in trends that move back and forth. Seems like you and I remember the last fuel crisis. I see more room to go upward. My simple evidence is crowded freeways going 75 to 80 mph. When we drive 60 again, spend our weekends making our homes for fuel efficient and see no christmas lights for as far as we can see next winter, I will think we are near the top.

    Remember 1974-1975?

    Posted by: Craig Holmes at June 13, 2008 06:27 PM
    Comment #255477

    David:

    Wow have you hit on an important thread. I have to admit that I haven’t ran down all the rabbit trails of thought but would love to explore them with you.

    $100 billion in homeland security.

    I am going to argue that for all our mistakes since WWII our defense spending has added to World GDP and is currently raising world citizens from poverty because we have no near peer militarily. Because we are soo dominant militarily and from a historical perspective use our military within the world framework, (mistakes and all), for the world and the world’s poor our defense spending has been a bargin.

    The positive effects of our military spending to the world has been globalization which could not have happened without our blue water navy. Even with the war in Iraq global gdp recently ran over 5% a year for several years in a row.

    Here is the irony I would like to wrestle with you on. Between 2001 and present global poverty rates have declined. I would not presume to say that the Iraq war has helped poverty decline. I would say that with world GDP growth so strong in the last several years, obviously as a world we can celebrate that even with American blunders, we have fewer world citizens in poverty.

    The world owes our military an the American taxpayers who fund our military appreciation for keeping the sea lanes open, and thus free trade, which contribute to world GDP growth.

    Secondly, those who wish to tamper with the goose that is laying the golden egg should do so with caution.

    Posted by: Craig Holmes at June 13, 2008 06:39 PM
    Comment #255478

    Jim T, I am well acquainted with people who came here from your neck of the woods. I know a woman who dated Muddy Waters when she was underage. Her husband usually refers to her as “foolish woman”, and his whole family refers to him as “old man”. We all had a good laugh the time she called the police on a fish that woke up in a metal pan on top of her refrigerator, and she thought it was someone breaking in. I have a lot of relatives going way back, buried in Opelousas, LA, a little out of your area.

    On Gospel music, we had a Gospelfest here recently with some acts from your area. Mahalia Jackson was very popular here when I was younger. I guess the Mahalia Jackson Residual Family Corporation might still be making money from her, 36 years after she died.

    People here thought Minnie Riperton would be her successor, but it never happened and she died very young.

    I’m already hopping mad about digital tv. I have satellite instead of cable where I live now, and it goes on strike too often when there is something I actually might want to watch. I’m not looking forward to digital radio.

    Posted by: ohrealy at June 13, 2008 06:41 PM
    Comment #255481

    d.a.n.,
    Balancing a budget for a state is obviously not the same as balancing a budget for the federal government.

    The biggest problem for a state with a balanced budget requirement is that the state finances get whipsawed by economic booms and busts. During the ups, revenues are refunded to the taxpayers. During the busts, budgets fall short, and either taxes must be raised, or services cut. Usually, services take the hit.

    But the worst part is the role balanced budgets play in terms of fiscal policy. During econmic booms, the refunds provide an economic stimulus during the booms- precisely the time when the economy does not and should not be addiitonally stimulated. During economic busts, the opposite happens, which is exactly what should NOT be done.

    A balanced budget is an admirable goal, and it sounds like a wonderful promise coming from any politician willing to pander. But in economic terms, it’s foolish.

    Taxes are similar. Everyone wants low or no taxes. Everyone wants something for nothing. It’s another promise that unscrupulous pandering politicians throw out there time after time. It is no coincidence that the most corrupt and unscrupulous politicians are the same ones who promise low taxes. Those are the guys who dump their starter wives for trophies, schmooze with lobbyists and see nothing wrong with it, engage in cronyism and corrupt practices, and so on. Those are the same guys who detest social services, but will spend money on wars and the military-industrial complex at the drop of a hat.

    You know them by their works.

    Posted by: phx8 at June 13, 2008 06:59 PM
    Comment #255484

    Craig,
    If Obama pursues a tax structure similar to the one previous to Bush, and resets rates as established in the Omnibus bill of 1993-1994, the effects will be enormously positive. That was a part of what it took to set off the boom during the Clinton years.

    “… At the begining of WWII America was roughly the same size economically as Germany, France and England. Today we are roughly the same size as all of the EU. That should show you how our two approaches to economics work over a sixty year period.”

    Come on. That’s silly. What was the size economically of Germany, France, and England AFTER World War II compared with America, when their economies were devastated? Using that as a starting point proves exactly the opposite of what you’re suggesting.

    Posted by: phx8 at June 13, 2008 07:22 PM
    Comment #255485

    phx8, I disagree.

    A budget is a budget.

    Texas is one of the largest economies in the world, and it has a balanced budget amendment, and it gets along just fine with it.

    I don’t think the difference between states and the federal government is so vast. It’s not so vastly different as to call it an apples to oranges comparison. I have not seen adequate reasoning and evidence to support that assertion.

    If it is, then perhaps the reason is because the federal government has been allowed to invade and permeate too many facets of our lives. It has been allowed to grow too bloated; to nightmare proportions. Perhaps a balanced budget is exactly what it needs. It’s worth finding out with a $9.4 Trillion National Debt.

    If 37+ states think it is a good idea, I think Congress should obey the Constitution and allow the states to decide (via Article V).

    As for taxes, that’s a separate issue. Fairness is paramount. Raising sufficient revenues is important. But neither mean $#!+ if spend-happy, pork-happy, do-nothing Congress is out-of-control (which it is).

    Also, voters need to get some education about taxes. The tax system is regressive. The rich are not paying an equal percentage relative to gross income, as evidenced by these facts. What ever tax system we get, voters should aske to look at the tax curve relative to gross income (including all types of income not derived from taxes, such as entitlements).

    I read your reasons against a balanced budget, but I’m not convinced.

    As for pandering, that is a problem with a multitude of things. Because pandering exists, it does not disqualify the usefulness of a balanced budget amendment.

    As for manipulating the economy, do you really think it should be the government’s job? In fact, the manipulations your have disdain for may not exist if it were not for that desire to expect government to somehow control it via taxes and exceeding budgets, and running up huge debts for future generations.

    Regarding politicians that are promising low taxes, that can be translated into lower taxes to for the wealthy. Bush got away with it for a while, but it appears enough voters now understand that they were bamboozled, since most of the tax cuts were regressive. This is easily demonstrated by Warren Buffet who paid 17.7% on $46 million while his secretary paid 30% in federal taxes on a $60K salary.

    Lastly, there are few politicians pandering for a balanced budget amendment. 37 states have already submitted the requisite amendment applications, and Congress has ignored them (a violation of Article V).

    Solutions…

    Posted by: d.a.n at June 13, 2008 07:24 PM
    Comment #255486

    Craig, there is no question or argument that our peacekeeping role paid enormous economic and political benefits to enormous numbers of people around the globe. Even China’s growth and industrialization was partly prompted by the politburo’s recognition that their Communism would not survive their population growth and agriculturally based economy and American influence in such a future poverty ridden China.

    There is however, in every investment, a time when it is prudent to draw down that investment and reap the rewards. We have derived nearly all the reward from military hegemony in Europe that we are likely to receive in this century. A prudent time to draw down that investment and open the door for the EU to pick it up.

    With our Naval capacity, we no longer derive net benefit from the expanse of our military bases in Japan, and could dramatically reduce our footprint there as well without undue increased risk.

    I am not suggesting that America’s role as world peace cop is over. Only that the economics and technological platform for that role has changed but our focus, policy, and military footprint hasn’t and that is wasteful and inefficient, and remains an investment in many places without return on those investments. The money and soldiers could be better used and placed today.

    Resistance to this proposition of course, comes from the profiteers supplying that vast and inefficient deployment, what Eisenhower referred to as the military industrial complex that serves not America but its bank accounts on the taxpayers backs.

    I think many of the intelligence analysts now understand the dramatic changes since 9/11 which explains why many of them now call for reductions in the global military posture, and dramatic increases in our international intelligence and policing capacity, somewhat akin to Israel’s Massad and definitely an overhaul of mission for our CIA, which is fairly well underway.

    I commend GW Bush on his choice of Gates to head that effort. Gates has proven so far to be the right man for the job, though a johnny-come-lately through no fault of his own. The Bush adminstration has been stuck in the old paradigm. Partially a reaction to their contempt for Clinton’s attempt to adopt a new paradigm. Big mistake, as we all now know, and in oh so many ways.

    But, that’s history. We need look at the future through eyes fresh to see its realities and educated in the successes and failures of the past, without any propensity to repeat the failures due to ideological habits. I don’t know if Obama is up to this. I do know McCain isn’t.

    In response to a question day before yesterday:

    “Do you now have a better estimate of when American forces can come home from Iraq?”

    McCain responded, “No, but that’s not too important. What’s important is the casualties in Iraq. Americans are in South Korea, Americans are in Japan, American troops are in Germany. That’s all fine.”

    No, Sen. McCain, that is not all fine. That is enormously wasteful and inefficient use of American tax payers dollars. He just can’t see the realities. He is stuck in the old paradigm and reveals this frequently when he speaks. And let’s make no mistake. McCain doesn’t like dissenters. His cabinet will reinforce his views or be gone. His temper trantrums are well documented and reveal a lot about what kind of cabinet he would select and retain.

    Posted by: David R. Remer at June 13, 2008 07:26 PM
    Comment #255491

    David:

    Thank you for your thoughtful response.

    I agree with you in general that we should relook at our military obligations world wide. In fact that should always be done.

    As for Germany, I’m not so sure there is much punch to that argument. We had well over 200,000 troops there from the 50 years from 1945 to 1995. So if now we have 60,000 which looks right by the graphs I have seen, I am not so sure it matters that much.

    What matters more I think is to get troop strength in Iraq down to 60,000 or less.

    I appreciate your quote about McCain. I would argue that Obama was flat wrong about the surge and McCain was correct. Obama had a plan to start removing forces in 2007 as a way to reduce violence in Iraq. Clearly the surge has reduced violence.

    I agree with McCain’s approach to gradually draw down forces depending on events on the ground as the safest way to protect human life across the board.

    I disagree with Obama, Pelosi and Reid that the surge was doomed to fail. (comments made in 2007 before the surge was fully operational). I think at that time McCain’s judgment will be proven to have been the correct one. It is hard to defend that the surge is a failure with death rates declining across the country.

    Posted by: Craig Holmes at June 13, 2008 08:25 PM
    Comment #255492

    Phx8:

    If Obama pursues a tax structure similar to the one previous to Bush, and resets rates as established in the Omnibus bill of 1993-1994, the effects will be enormously positive. That was a part of what it took to set off the boom during the Clinton years.

    Actually federal spending as a percentage of gdp declined under Clinton particularly because of the peace dividend and restrained social spending. Lower relative federal spending was also a factor.

    In addition, the Internet increased productivity. The tech bubble has a bit to do with it.

    I would need to see your sourse for the clinton tax increase as the cause of the tech bubble.

    All that aside, are you really saying you want to raise taxes across the board back to Clinton’s tax rates? Wow what a tax increase on the poor and middle class.

    Posted by: Craig Holmes at June 13, 2008 08:39 PM
    Comment #255494

    Phx8:

    You don’t really want to do what you suggest up above. We can’t go backwards. Here are a couple of reasons:

    1. If you “reset rates” back to 1993-1994. That would be a huge increase. Taxes need to be adjusted downward regularly just to keep the tax burden constant because of inflation. If you do nothing, taxes go up. (Tax bracket creep).

    2. Clinton and Bush have both cut taxes since 1993-94. Many of those tax cuts were targeted at the poor and middle class. For instance, there was no child credit.

    Here is a quote on the child credit:

    The per-child amount was originally set at $400 in 1998, and has since increased to $1000 through tax-year 2010. There is a sunset provision to the Act that set this amount which will bring the amount down to $500 per-child in 2011. However, this credit is phased-out for taxpayers above certain thresholds defined in 26 U.S.C. Sec. 24(b)(2). If the taxpayer’s taxable income is over the threshold, the total credit decreases by $50 for each $1000 (or part thereof) over the threshold

    Hope scholarships were started in 1998 I think. That is a tax credit.

    I am actually not sure what you are suggesting. Are you really suggesting we go back there? It would really hurt the poor.

    Posted by: Craig Holmes at June 13, 2008 09:02 PM
    Comment #255503

    Craig said: “I would argue that Obama was flat wrong about the surge and McCain was correct.”

    Wrong! Obama continues as he has for at least 6 months now to reiterate the point that the goal of the Surge was never to reduce violence. Reducing the violence was the means to the goal of the surge which was to give the Iraqi government space to get their political act together. What it did was give the Iraqi government space to strengthen its ties to Iran, which is in direct opposition to the goals Bush set out for the Surge.

    McCain is playing the sophist to an ignoring audience when he says the Surge succeeded. It reduced the violence. That was never the goal of this administration for the Surge. The historical record is extremely clear on this point.

    “Obama had a plan to start removing forces in 2007 as a way to reduce violence in Iraq.”

    Clearly the surge has reduced violence. And very possibly if our troops had been drawn down and removed from the Green Zone, the al-Malaki government would have taken far more strenuous efforts to reduce the violence as well. On their dime and casualty cost, instead of ours.

    Afterall, the government of Iraq would have been one of the targets. Ergo, the Iraqi forces would have been deployed with orders of a sufficient nature to reduce the violence against the seat of government. That effort would have been made, that much is not speculation.

    “I agree with McCain’s approach to gradually draw down forces depending on events on the ground as the safest way to protect human life across the board.”

    Precisely the exact same words Obama has used many times over for a very long time. Nice of McCain to catch up to Obama’s speed.

    “I disagree with Obama, Pelosi and Reid that the surge was doomed to fail.”

    But it has failed to a large extent by the very definition of the goals stated for the Surge. The Iraqi government is no more capable of being weaned of the American teet than before the Surge began. That is failure as defined by the goals set out for the Surge. So far, anyway.

    I am sure if we leave our forces there long enough, an Iraqi government will emerge that is capable of fighting its own insurgents, but not before milking the American taxpayer for every dollar, and every American casualty possible in place of those same Iraqi resources. That is the flaw of remaining in Iraq. The cost to Americans and the windfall for Iraqi dependence upon American taxpayers is $150 billion dollars per year. More than a quarter trillion dollars already, if I recall correctly. Pretty steep price for what we didn’t get out of this invasion / occupation that was assured to the American public and Congress.

    Posted by: David R. Remer at June 13, 2008 11:36 PM
    Comment #255508

    David:

    Reid and Pelosi declared the surge a failure before the troops even arrived. how can one declare the surge even a failure today? Let’s say I concede your point that it’s goals have not been met because the reduced violence is a means to and end. Ok, but that certainly doesn’t mean it’s a failure!! It’s still going on!!

    Democrats must fess up that they declared the surge a failure before it even started.

    Precisely the exact same words Obama has used many times over for a very long time. Nice of McCain to catch up to Obama’s speed.

    Well then great we have George Bush and Obama in agreement!! The difference is that Obama is for unilateral withdrawal without conditions. He has been for bring them home in lock step no matter what the conditions are on the ground.

    McCain is for bringing them home in victory over time and leaving forces there as we have done in after our civil war in ,Germany, Japan, Italy, Kuwait, South Korea etc.

    In other words, McCain is for ending the war the way we have ended other wars where we have been successful.

    Obama if for moving our troops out the way we did after WWI and after Vietnam.

    Posted by: Craig Holmes at June 14, 2008 12:29 AM
    Comment #255554

    Craig said: “Let’s say I concede your point that it’s goals have not been met because the reduced violence is a means to and end.”

    You must, or lie to yourself. In January of 2007, Bush said in his announcement of the Surge, “If we increase our support at this crucial moment and help the Iraqis break the current cycle of violence, we can hasten the day our troops begin coming home.” At that time we had a little over 130,000 troops in Iraq. Bush has declared the Surge is a success. May 2008 we have 155,000 troops in Iraq.

    By Bush’s own definition, the surge has failed.

    Also, in Jan. 2007’s speech declaring the objectives of the Surge, Bush said: “”Al-Maliki’s government must move forward on a national reconciliation plan that includes regional elections and an oil law to ensure fair distribution of revenue to Iraq’s ethnic and religious groups to help ease tensions between Shias, Sunnis and Kurds.”

    This was the end goal of the Surge, Craig. Reconciliation between the Shias, Sunnis, and Kurds. Iraq has not significantly improved uncoerced relations between these groups, nor removed the fears and suspicions they have toward each other upon U.S. withdrawal. Which is McCain’s justification for keeping our troops there indefinitely.

    So, again, by Bush’s own words, the Surge has failed to meet its goals. Reducing the violence, which has been somewhat successful, was the means to these stated ends. Those ends remain unfulfilled as our troop strength remains above pre-surge levels, and the cost of our occupation has risen 25% from pre-surge levels.

    “It’s still going on!!”

    Yes, and will continue to go on in perpetuity unless Obama is elected president instead of McCain. That is absolutely correct.

    Posted by: David R. Remer at June 14, 2008 01:50 PM
    Comment #255582

    David:

    You say the surge has failed but concede it is sitll going on.

    The surge has worked to the point that this last month there were fewer casualties in Iraq than in Afghanistan.

    No it will not go on forever unless Obama is elected. obviously we have reached turning points in spite of the negativism of the Democratic party.


    Great progress is being made in Iraq.

    Even Obama says that!!

    Posted by: Craig Holmes at June 14, 2008 06:04 PM
    Comment #255584

    Craig, please don’t play games. The reason I said the surge continues is precisely to point out that the Surge has failed so far to meet its objectives, by definition. And I pointed out the cost of this failure to date.

    Craig, reducing violence was the means to an end, not the goal of the Surge. We can throw every Iraqi in Iraq into concentration camps and that will halt the violence on the streets, but, it does NOT meet the objectives or goals of the Surge, which I outlined in Bush’s own words.

    The prejudice and refusal to acknowledge facts presented to you in your comment on this issue is obvious. Simpler to just say you disagree, than to display such prejudice against facts and denial of them.

    Progress regarding the violence has never been contested, Craig, by Obama or me or most folks who read about what is going on. Any fool knows that with sufficient troops, we could lock the whole nation down. But, that comes with the price of having to keep our troops there in perpetuity to keep them locked down, for they cannot, and will not, learn how to govern themselves as long as our troops our governing for them. That is the fundamental flaw in the Surge and McCain’s view of Iraq going forward. His policy is to continue Iraq’s dependence upon the US for money and troops. The alternative is to leave Iraq to Iraqis to govern on their own which we could have done years ago. But, that is not an option for McC. & Bush.

    Posted by: David R. Remer at June 14, 2008 06:26 PM
    Comment #255591

    Craig Holmes,

    Perhaps you could answer the following questions?

    Regardless of the reasons and false intelligence used as an excuse to invade Iraq, and Bush’s numerous blunders that followed, it is interesting that those advocating that the U.S. remain in Iraq are unable or unwilling to answer a few simple questions:

    • (1) Is risking life and limb of U.S. troops in Iraq making the U.S. safer?

    • (2) If the answer to (1) is Yes, then how?

    • (3) If the answer to (1) is Yes, then are there possibly better ways to make the U.S. safer than boots on the ground witin Iraq?

    • (4) If terrorists following us home from Iraq (as asserted by John McCain) is the true concern, then why not secure the U.S. borders and ports, and enforce illegal immigration laws better? Especially since 18 of the 19 perpetrators of 11-SEP-2001 (some who were illegal aliens and/or had violated several immigration laws), possessed 13 state-issued drivers’ licenses and/or 21 ID cards (source: www.9-11pdp.org/press/2004-12-03_factsheet.pdf), and all 19 hijackers had obtained Social Security numbers (some real, some fake; source: www.cis.org/articles/2002/back1202.html).

    • (5) If Iran is making trouble in Iraq, why not secure the 250 mile border (which is less than one-third the 830 mile border between Texas and Mexico)? Put 12,500 troops on that 250 mile Iran/Iraq border and that would be 50 troops per mile (on average, a soldier ever 105 feet); 12,500 is only 8.3% of the 150,000 U.S. Troops in Iraq. Better yet, put Iraqi troops on the borders too.

    • (6) Lastly, should U.S. troops ever have to risk life and limb for missions that are not making the U.S. safer, or when there are better ways to make the U.S. safer?
      • Especially when Congress is giving itself 9 raises in the last 10 years between 1997 and 2007, cu$hy benefits, and perk$, while U.S. troops risk life and limb, go without armor, adequate medical care, and promised beneifts?

      • Especially when the 27.5 million Iraqis have had over 5 years to get it together, the Iraqi government officials are taking 1-to-2 month vacations, and (as of May 2007) only 6,000 Iraqi troops were trained and able to function independently of U.S. Forces. 6000 (or even twice or triple that many) is not not nearly good enough for a nation that has 27.5 million people. If that ratio of 1/2033 (150,000 U.S. troops per 305 Million U.S. population) is used for Iraq, the Iraqis should have at least 13,500 troops (much more if the ratio of all U.S. troops per total U.S. population is used).
        Should 150,000 U.S. troops be used to continue trying to nation-build and police the Iraqis, when that relative peace is very fragile and temporary only as long as U.S. troops remain to police the Iraqis?

      • Is the humanitarian argument strong enough to sacrifice U.S. troops to nation-build and police the Iraqi population, when Iraqis have had over 5 years to get it together? How long is long enough? The U.S. has $53.2 Trillion of naiton-wide debt, and serious economic issues. Is the human and monetary cost worth pursuing this mission?

      • How many Al-Qaeda are now left in Iraq (compared to 27.5 Million Iraqis)? Some estimates place the numbers of Al-Qaeda in Iraq at about 1,300. When will 27.5 Millioin Iraqis be able to deal with what remains? Which country has more terrorsts? Afghanistan or Iraq? Afghanistan is slipping away (source: www.washingtonpost.com/wp-dyn/content/article/2007/10/26/AR2007102601955.html).

    If these questions can not be answered, then doesn’t it raise questions about the true motives and reasons for maintaining U.S. troops in Iraq?
    Especially when John McCain keeps saying (as least 3 or more times) that Iran is assisting Al-Qaeda (which is false), tried to spin things as being more rosy than reality?, and makes comments about “bomb, bomb, bomb, Iran” ? www.npr.org/templates/story/story.php?storyId=9688222

    Posted by: d.a.n at June 14, 2008 06:57 PM
    Comment #257229

    “LobbyDelegtes.com is a great tool, I have contacted all my State Delegates for free through email, I have come accross another tool from the same company www.statedemocracy.org its also free and I can contact my lawmakers, apply for an absentee ballot & voter registration and on election day I can locate my polling places. Great tool…. use it”

    Posted by: Kathy at July 28, 2008 07:53 AM
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