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Discussion in 'Political Discussion' started by PatsFanInVa, Aug 6, 2011.

  1. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    Everybody knows you spend during a recession/depression.

    Every economist worth his salt has been saying ad infinitum, with nary an ear listening, that if anything the stimulus was too tepid to deal with the enormity of the collapse Bush presided over.

    And since last November, we've done nothing but wail and gnash our teeth about spending too much.

    The issue has not been liquidity for quite some time. The issue is demand. That means money in average people's pockets so they can buy stuff.

    And of course, the issue of believing in our own futures, so we dare to spend whatever we have -- at the "discretionary" end, where people would be spending as a choice (as opposed to the poor and middle class, who just need something to spend on what use to be the "necessities.")

    So what's the jobs plan?

    Obviously, we've tanked things a bit more by squabbling over the so-called debt crisis... yesterday's downgrade was more a judgment on our politics than our fiscal position.

    So come on board, teabaggers et al., and talk to me about creating jobs.

    Infrastructure investment anybody? Or do you still believe Warren Buffet and Ray Dalio need more tax breaks?

    PFnV
  2. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    Well we have spent at a record pace and it has been an abject failure. Think of a different approach. As Einstein said "Insanity is doing the same thing, over and over again, but expecting different results."


    Doing the thing 'everybody' knows we should do, that doesn't work, is insane.
  3. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    It's not a bad idea, and we can make it part of the revenue stream as well. If you don't take a penny from a program, add a penny to a tax bracket. After all, the premise of the solution is, "It's only a penny." Who's going to argue over a penny?
  4. PatriotsReign

    PatriotsReign Rookie

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    Close 75% of our foreign military bases and bring our troops home to work on our infrastructure. We can use (and pay) our troops to re-build roads, bridges and fresh water infrastructure for a decade and save billions vs. paying to sustain bases in foreign nations.

    Convert swords into shovels....just a thought.
  5. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    Beat the swords into plowshares...
  6. PatriotsReign

    PatriotsReign Rookie

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    "For this tired old man we elected king..." End of the Innocence by Don Henly

    Super great song!

    Yeah, I was thinking the same thing, but right now, "Plowshares" doesn't make any sense, so I opted for "shovels".
  7. mcgraw_wv

    mcgraw_wv Rookie

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    My Goodness... Do nothing... The Market needs a contraction, No spending, no central planning, let people work their way out of this.

    Fake Job Creation simply passes the buck down the road... Stop printing money, stop spending worthlessly.

    You know if they took QE1 and QE2 and simply distributed it to the people, we would have all gotten $7,000 EACH!!! For every infant, poor person, rich person, etc...

    Quantitative easing - Wikipedia, the free encyclopedia ( QE1 and QE2 2.1 Trillion divided by 300,000,000 = 7,000 )

    That money would have sloshed through to the mortgage companies and banks to actually PAY Down the public debt burden.

    Instead the geniuses distributed that money directly to banks, leaving the people with less purchasing power, and the same debt... The People took on more debt as a country and recieved NOTHING IN RETURN.

    Now you big gov hawks want the government to stand up and print more, becuase 2,100,000,000,000 wasn't enough???

    ... We all now know why we have arrived at this point ...
  8. PatriotsReign

    PatriotsReign Rookie

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    So what is your opinion on Japan over the last 20+ years regarding stimulus speding? Those who say "they haven't spent enough" don't understand economics because as a percent of their GDP, no nation has ever spent as much on stimulus' in post WWI history.

    What has it done for Japan?

    Unless you support the US defaulting on our debt, the risks of MASSIVE stimulus spending is no future for generations to come.

    Also, we nee to keep in mind that our economy needs to reset all the mechanisms that are out of balance. Real estate needs to find it's natural bottom. If we artificially inflate our economy so that real estate prices actually increase again, then we'll just set ourselves up for another crash.

    I don't know if we'll ever see 4% unemployment (full employment) in our lifetime. I know that sounds dark, but that may be our new reality. But that doesn't mean our gov't should pick up the slack and employ more people...unless we can find a way to fund it without increasing taxes on the middle class.
  9. PatsFanInVa

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    Compared with what?

    The historically accurate way to phrase this is more complex. We spent at a record pace cutting taxes when unemployment was half the current rate. We borrowed the money to spend on unsustainable tax cuts. Then we got into a situation where we really did need a stimulus.

    Now then: the spending before the collapse was an abject failure, because it was unnecessary spending.

    The spending since the collapse, to the extent that it actually was stimulative, had a purpose.

    Compared with "what if", which is the only fair way to parse the "abject failure" absurdity, economists say that surprise surprise, it was a resounding success.

    But it's very hard to say "Look at my successful 9.1% unemployment rate!" It only matters if you compare it with 15% or 25%.

    You're right. Think of a different approach. Cutting taxes and keeping them low, at all times, on all levels of society, is wrong, self-destructive behavior that will never pay our bills. It is, as S&P so pointedly mentioned in our recent credit downgrade, unsustainable behavior.

    Think of another approach. Work with me. Let's raise revenues. How?

    What's insane is that you should know (and I think you do know,) I know, and every economist worth talking to knows, that you have two choices, unless you are going to raise taxes:

    You tackle debt
    You have a jobs program.

    One or the other. This is what I mean about "something for nothing" on the right wing. This magical thinking that the economy is going to grow without any demand is insane. You can't cut your way to paying your past bills. So revenue doesn't magically increase just because you've let the monopoly guy buy a new monacle, and put another tranche of tax giveaway money into an offshore corporation. The monopoly guy sees no demand in the U.S. Even if he does see it, he'll address it as cheaply as possible, i.e., through offshore labor where possible. But that's another whole argument.

    There's a lot you do to fight a depression, which thanks to your teabagger buddies, we might be looking at as the next phase. Maybe, maybe not. A double dip is right back in the mainstream of outcomes now, whereas it was receding into the distance by the end of '10 (unless you counted the likelihood that the unlettered twits of the extreme right would succeed in their perhaps well-intended treason.)

    Now: insisting that we tackle debt is their way of attacking the role of government, full stop.

    It has nothing to do with the debt.

    The debt can be analyzed very easily: We owe a bunch of money. We can all get together and pay it. That would be a 100% revenue approach.

    You can't cut something in the future to pay the bills of the past.

    But you can redirect ALL your spending to pay your past debt. That's the 100% "spending cut" approach.

    Frankly, at present, since (as opposed to prior to the collapse of 2-8, and the preceding recession starting in 2-7) we actually need money in pockets, we actually need jobs programs, etc., this is precisely the wrong time to go for a 100% spending cuts approach.

    We were on the debt warning track, but nowhere near downgrade territory, before Norquist's puppets became a fifth column attempting to destroy America from within -- and actually showed that the minority can, in fact, make national policy. Now? We've shown through their insistence on unsustainable and unrealistic fiscal "policy" that they believe in magic, not math, a viewpoint I am sure you're about to jump to the defense of.

    The magic of the markets doesn't work if nobody's buying. Nobody's going to be buying if everybody's broke. Anything.

    The right has made debt its be-all end-all, in a bid to dismantle the great society and new deal programs, hallmarks of a century of much-needed (and to the right, much-lamented) progress. We're now treated to the spectacle of ayn rand study group types thinking that each individual should be responsible for his own meat inspection, road maintenance, etc. It don't work like that. We have a nation-state for a reason, and it does work on the public behalf for a reason.

    We tried feudalism too, didn't work.

    So climb down off the cliche wagon and talk reality. A 100% cuts routine will do nothing but set this country back decades. What it will manifestly not do is lead to a healthy economy.

    "Supply side economics" has been discredited for decades. "The laffer curve" is only remembered because it was so aptly named.

    Jobs or debt reduction?

    There is one way to make progress on both: taxation.

    Pay now, or pay later.

    You can't get something for nothing. Stop with the magical thinking and get real.

    PFnV
    Last edited: Aug 7, 2011
  10. mcgraw_wv

    mcgraw_wv Rookie

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    False, less government funding leads to less taxes, and more money and power held by the people to invest in the things we like best leaving the market to coordinate time and interest at it's most efficient route.

    But if you think Central Planning is the best route, to each their own.


    Also, for full disclosure, your livelihood is based on the market am I correct? If so, I don't think your ever going to argue or accept anything that doesn't equate to an artificial bubble am I also correct?
  11. PatriotsReign

    PatriotsReign Rookie

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    I propose our federal gov't re-establish Social Security as a stand-alone fund. Stop putting it into the general fund and stealing from the American people now!

    We still have millions of baby-boomer contributing into it but it doesn't exist! Stop using our money for purposes it was not intended to be used for!

    That would instill some confidence from the American people...it's a start anyway.

    Oh yeah...and fire Bernanke and Geitner.
    Last edited: Aug 7, 2011
  12. PatriotsReign

    PatriotsReign Rookie

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    Decade of Stimulus Yields Nothing but Debt

    Decade of Stimulus Yields Nothing but Debt: Caroline Baum - Bloomberg

    "Ten years and $8.35 trillion later, what do we have to show for this decade of deficit spending? A glut of unoccupied homes, unemployment exceeding 9 percent, a stalled economy and a huge mountain of debt. Real gross domestic product growth averaged 1.6 percent from the first quarter of 2001 through the second quarter of 2011.

    It doesn’t sound like a very good trade-off. And now Keynesians are whining about discretionary spending cuts of $21 billion next year? That’s one-half of one percent. And it qualifies as a “cut” only in the fanciful world of government accounting."
  13. mcgraw_wv

    mcgraw_wv Rookie

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    8,350,000,000,000 / 300,000,000 = 27,833.33 / 10 = $2,783.00 a year per person in this country!

    This article is 100% on point, The Keynesians were 100% flat WRONG and we should find them out and call them out and they should become embarrassed to show their face in the public sector again. They have sold out our country for the profit of a select few.
  14. PatriotsReign

    PatriotsReign Rookie

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    For those who believe our economy is the responsibility of our federal gov't, I ask you;

    Do you really want our politicians running our economy when these same people couldn't even see a real estate bubble or the impending financial collapse coming?

    Simply put, no one or group is qualified to run, manipulate or stimulate our economy to get desired results...it's an impossible task.
    Last edited: Aug 7, 2011
  15. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    Lovely open-ended question. To avoid a 20-part series of TL; DR posts, let's bottom-line some of Japan's outcomes.

    Their debt's the highest in relation to GDP in the world, at ~225%. That's bad.

    Their unemployment is below 5% - 4.6%, according to this source -
    Japan Unemployment Rate
    ... or about half of ours.

    I'd expect that to rise as the full effects of the tsunami and earthquake continue to be felt.

    They were an "economic miracle" with growth rates averaging in the double digits for decades, then about 5% in the 70s and 4% in the 80s. Then came the lost decade, or more accurately, decades.

    Yet still their unemployment is at half our level. Strange, innit?

    Sort of points out the debt vs. jobs conundrum in a nutshell.

    Most recently, they've been attempting to stoke inflation as a way out of debt, from what I can tell. And ultimately, if and when debt becomes an intractable problem, that's what you do -- that's always, without exception, what you do. Inflation erodes savings, and erodes debt. It's also a goddam pain in the ***** on the personal side.

    Just like higher taxes, yeah? Except higher taxes take a predictable chunk, that we've all been able to pay before. And all the higher taxes that were under consideration, before Grover Norquist became president, were targeted to take from those who were already much more capable of paying. But sure, if you prefer inflation, that's another way to do it.

    Oooooh the use of "massive," accompanied by all caps. The ne plus ultra of internet debate.

    Let's climb off the parapets and think.

    - you can pay debt, or
    - you can have debt

    There's no magical option of "not paying more hypothetical debt in the future."

    The mechanism by which future budget cuts become debt payments, is that we continue to collect the taxes, and refuse to provide any services. Those include, basically, supports to the economy. Now they will go away. That seems to be a given. So we're saying "Keynes is last year, because the '10 election said so." But what's popular is not what's correct; it's just what gets a clutch of idiots elected, in this particular case.

    Now, to boil down what we're talking about now -- an all-future-cuts approach -- we mean to say that we will continue to collect some taxes (an unsustainably low rate, of course,) but we will use all that money to pay our debts, not provide the citizens of this nation any services.

    This is obviously using the reductio ad absurdum version, right? I mean, there are some services we will retain. Some amount of money would be put into the voucher version of Medicare, just not enough to stay healthy or in some cases alive. That sort of thing.

    Some amount of unemployment insurance will be paid. But not for the length of time it goes at present.

    So some people will go from scraping by to poor. As in homeless, on other forms of public assistance.

    But leave aside "MASSIVE" stimulus spending for a moment, since it's not even on the table. Let's talk about what is on the table -- how we handle the options that are in front of us now.

    There is no option to increase the U.S. debt to 225% of GDP, as in the Japanese case.

    There is also no option to:
    1) preserve current levels of service,
    2) Keep taxes artificially low,
    3) Lower the debt-to-GDP ratio, and
    4) Eschew inflationary solutions.

    So let's look at our debt fixation. If you want to lower debt, okay.

    Do you want
    1) the unemployment you can predict will result from lower levels of service on the part of the government,
    2) Inflation, or
    3) Higher taxes?

    Shall we include the artificial supports for low oil, meat, and milk prices? Shall we complain if we remove those supports, and inflation is the result?

    I'm just saying bear in mind, this week's cries of "artificial" market mechanisms aren't the only ones that have any public sector money in them. We do in fact live in a mixed economy. Your argument is that it's not a mixed economy, it's a market-purist, Adam Smith economy with intrusive government features, I take it. I view the public and private sector actors as what they are, both participants in an economy that would long ago have vanished were this not the case. But let's move on. This is a whole different discussion.

    You've packaged a statement about general inflation with a statement on a specific sector, home prices.

    What do you regard as allowing real estate to find its natural bottom? Must it be more "natural" than previous policies, or should we just refrain from introducing new supports to the home market?

    One example: there is a huge write-off for home-owners, the mortgage interest deduction. Do you mean we must eliminate that deduction, so that home prices will be more "natural"?

    Or do you mean, don't spur demand by offering new homebuyer tax credits and the like?

    Or finally, should we prosecute those who buy, can afford to hold, but "walk away" from their debt obligations? After all, various forms of default laws are essentially arbitrary. A perfect system, from the point of view of market purism, would insist that every contract be honored, including inconvenient ones.

    On the subject of inflation, that is one of your options (above.) An overall rise in inflation will make home costs more affordable, if the inflation becomes structural (i.e., if we get wage inflation.) We're anywhere but on the cusp of wage inflation at the moment, since there is such a lack of inflationary pressure on wages.

    However, what can still happen in housing is that with a better economy (hence an ability to pay a higher price,) rent prices increase. With every increase to rent, total cost of ownership on the buying side becomes that much more attractive. That's one of the fundamentals to watch. Pressures on all of those things will be minimal while were are doing things like turning the formerly-working poor into the homeless.

    To your point, Japan's damn close ;) According to another link, in 2009 they seem to have peaked at 5.7%, but I'm not sure if that was out of date and they peaked a tad above that level.

    Well there's your answer my friend. We increase taxes on the upper and upper middle classes and stop weeping and gnashing our teeth about the pain of the hedge fund manager.

    Thanks for bringing up Japan. Like you I am horrified by their outcomes, as measured by economic stagnation. Perhaps unlike you I think Japan has some very special features: no natural resources, the skyrocketing growth prior to the late 80s, some cultural differences, etc.

    But I am glad I started poking around. What you've done is put your finger on the keynesian trade-off - they seem to have gotten jobs out of the deal, as opposed to the US case.

    I don't think that makes Japan paradise, but it's a striking example of how our stock-watching viewpoint can miss aspects of a story. When we quote low economic growth stats, one big implication is "OMG, that means no jobs." While it points in that direction, it's evidently also the case that you can prioritize low unemployment, and choose another price to pay.

    That's what I've been trying to talk about today on here - it's all tradeoffs. Which one(s) do you want?

    PFnV
    Last edited: Aug 7, 2011
  16. mcgraw_wv

    mcgraw_wv Rookie

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    In Summation, the leadership and guidance of both the Dueling GOP and DEMs have failed us no matter who is in power we spend, without limits simply at different targets?

    Time to out all entrenched politicians and call them out for their failure of leadership over the past 10-20 years.
  17. patsfan13

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    The premise is false from the start so of course all the conclusions are false. Government is overhead for the society a certain amount of overhead is necessary. Of course we have gone far beyond that.

    Tax cuts are not spending unless you think the government intrinsically 'owns' the money and allows the citizen to keep what the government deems necessary. This is a popular notion among communist. In fact the money in a free society belongs to those who earn it, it is their property.

    The revenue grew when the rates were lowered, what exactly is 'unsustainable' about growing revenues.

    The spending and the growth in spending is unsustainable. it has to change.



    Spending by the pubs is bad spending by dems is good, how trite.




    Partisan drivel.


    The administration predicted the result of their policy would be unemployment peaking below the result of doing nothing would be unemployment peaking at 8.4%. The chart from the administration has been posted many times according to their criteria they failed. The 8.4% is better than what happened speculation of what could have happened is mental masturbation by losers.



    Clearly one sets the rate so as to maximize revenues, since revenues are ultimately constrained by the size of the economy you set the rate to the maximum level that will allow for the greatest economic growth.

    You have everything backwards the type of thinking you exhibit is the resaon this mess exists.


    You really need to take a math class and perhaps read a Freidman or Sowell book to try to understand why you are so wrong.
  18. PatsFanInVa

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    "The premise is false," but I don't know precisely what "the premise" is, from this screed. That we live in a nation-state? But we do live in a nation-state, not a single romanticized hamlet in the middle ages.

    ""Overhead"? "Of course, we have gone far beyond that?"

    Define overhead. Inspection of agricultural products so we don't have outbreaks of food-borne disease and parasites, is that overhead? Building and maintenance of roads, bridges, and other infrastructure, is that overhead? Insurance for the elderly, whom markets can not, did not, and will not affordably provide for, is that overhead?

    Before you answer make sure that none of your marching blue-hairs from the anti-healthcare debate are around. The right used them as pawns, scaring them about losing any part of their own government healthcare... now you say that's "overhead".

    So is Medicare "overhead"?

    Or is it the case that the services named, and others, are for the public good, but are not amenable to being provided by the private sector, because to make money on them you have to pervert a very clear common goal into a new goal to enrich one or another private player?

    "Of course" my big fat furry buttocks. We have a government to "...form a more perfect union, establish justice, ensure domestic tranquility, provide for the common defense, and insure the general welfare" of the United States of America.

    When you have spend money, and you owe it, you pay it.

    The various established programs are one place you can find money, by continuing to charge taxes but not providing services. Or, you can raise taxes in one way or another, and provide the equivalent level of services. However, if someone wants cash for a debt instrument issued from the United States, "somebody else" doesn't owe it. You and I do. Your tax money and mine pays that debt. So you will not have a zero tax bill next year, and neither will I.

    Even in your perfect universe in which no further services are provided by the government, you owe our creditors, through your government, your personal share of our 14 trillion dollar debt. You still would have to pay those taxes. You would still owe those taxes. Unless you personally secede, you can't get away from that.

    Moving on to what we, as a society, have decided we want and need, you have to reverse the collected wisdom of the majority of your countrymen at present, as well as preceding generations, in order to assert that we don't "owe" anything for those things. I don't care if you're personally against it. Put your taxes in an escrow account and go to jail for it, if you like. That's what war-tax protesters did. But we're still on the hook, and you don't get to personally say that you "aren't included."

    As Jesus put it, render unto Caesar what is Caesar's. It's established that in a democracy, whatever the will of the people is in terms of the obligations we take on, is what we owe. Not what you and a bunch of numb nuts in three cornered hats say.

    So -- what does that majority say if you say "sorry, no more roads"? "Sorry, we're defaulting on our debt (with all that comes with that)"? "Sorry, but no more social security"?

    "The premise" is false, all right. But it's your promise. Your radical agenda to drive middle class America into poverty and to drive the poor in America into despondency is not the mainstream, it's some ideological pronouncement on your part. Check your poll numbers after you start naming the programs you'll cut. That's why teabaggers and pubbies never named the actual cuts until that recent vouchers-instead-of-medicare debacle.

    The deficit grew when the rates were lowered, every time. When the rates were raised, under Clinton, the deficit disappeared. Now: If you're arguing that we should spend and cut tax rates, the usual pubbie prescription (when there is a pubbie president,) you can make that argument. In a vacuum, however, you're just arguing that it's good to borrow money, not tax, and use the borrowed money to stimulate selected sectors of the economy, very notably the military-industrial complex.

    Under George II, because of the obscene extent of the cutting orgy, there was an actual decrease in revenues even in absolute terms, and of course, because of the 08 collapse there was another one. Here's a good article from the Bush era, from factcheck.org, your best friend on the rare occasion that they agree with you, on the subject of the supply-side spin on the Bush cuts:

    FactCheck.org: Supply-side Spin

    To bottom line it - did the Bush cuts lead to higher revenues? Oh hell no.

    Here's another source establishing the wishful thinking of the supply-side myth that revenues grow because you cut taxes:

    Tax cuts increase tax collections

    Measured in constant dollars, when a tax cut was passed in 81, revenues did not recover to their former level until 85. In 1993, the Clinton rates increased taxes from the lower rates under George I. There were immediate increases in revenue the year following that, and the years following that year.

    You're just saying another bumper sticker that's not true over and over again, 13.

    From the disinterested soul of moderate sentiment himself. Moving right along.

    Ah. I see. So you can only measure whether they had 100% prophetic accuracy, not whether the recession was too deep for the level of stimulus attempted.

    And we'll leave aside the fact that the recent data have filled in that little gap as well; the recession was, in fact, deeper. Their data were, in fact, incomplete.

    However, regardless of how insulting a specific point of rhetoric is employed, it is rather the central question as to whether the present policy succeeded or failed: Did it help?

    Naturally it will be treated as unimportant.

    However, had you some semblance to the understanding of basic logic that real scientists must employ, you'd have to conclude that since Obama thought unemployment would peak at 8.4%, and in fact, it's now at 9.1%, two things could be the problem:

    1) the tools Obama et al are using to bring unemployment down were all a terrible bad idea, or

    2) The 8.4% prediction was wrong.

    We have data that say the latter is the case. You have no data to establish that "Obama failed" in saving/creating jobs. You just like to say it. It's just the flip side of the mental masturbation -- you have no idea what would have happened under other scenarios, so you just imply life would be puppy dogs and rainbows.

    You set it that way if you have no debt, and if there is no value to any of the services you provide that could ever possibly override an economic growth number.

    However, as a percentage of GDP, our rates are aberrantly low. They exacerbate the debt problem. So if you really want lower debt, pay it.

    No, the type of thinking I exhibit examines the actual facts of the matter, rather than bumper stickers and slogans.

    Since 2001, we have been in one long extended period of the lowest tax rates in living memory. Shouldn't we just have a supercharged economy?

    We don't, genius. Growth has been anemic measured over the full decade. Revenues as a percentage of GDP, just as you would expect, are far lower than they would otherwise be.

    The supply-side wishful thinking bullcrap has once again been disproven, but it does not seem to matter. You guys live by making stuff up.

    There's no magical solution. If you don't collect any tax money, you won't have any treasury money. If you have so little that you borrow money to take care of your society's needs, that's called debt.

    I saw no math in your post, just a lot of pronouncements of how right you are.

    But while we're on the subject of math, you never answered me in that japan nuke thread... is one inch bigger or smaller than a radioactive particle?

    PFnV
  19. The Brandon Five

    The Brandon Five Rookie

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    #75 Jersey

    You're doing it all wrong! True stimulus comes from increased spending without any tax cuts (if I understand the argument correctly)...only borrowed dollars stimulate, not dollars left in the hands of taxpayers. Because of the Bush tax cuts those deficits don't count as "stimulus" (apparently).
  20. Titus Pullo

    Titus Pullo Banned

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    some of my left leaning allies here are going to get annoyed with me, but I'm just gonna say it again:

    growth is over. .... that's not "hopelessness," that's reality and acceptance.

    there is nothing that raised taxes, lowered taxes, jobs programs, free market utopia, spending cuts, or stimulus packages are going to do about it. ... we had better start preparing to mitigate the affects, and begin paving the way for a smaller, and far more localized economy.

    You can not have economic growth in a world of expensive energy. And, according to the IMF, US DoE, Joint Chiefs and IEA, the world of expensive energy is here to stay.

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