[OAW]

The deficit is at record highs due to lost tax revenues from the Bush Tax Cuts and the Great Recession ... along with the cost of two wars, Medicare Part D, Bailouts, and the Stimulus program. The Bailouts are on track to being mostly repaid while the Stimulus program is starting to wind down. If the economy were a medical patient a fair assessment supported by the facts would say that the Obama Administration can be credited with "stopping the hemorrhaging" and preventing the patient from bleeding out ... but the patient is "still in the ICU". Far from being truly recovered and "released from the hospital".

So the Bush Tax Cuts (which were never paid for by offsetting spending reductions) are set to expire at the end of 2010. The great political debate in the next Congress will be what do do with them. There are 3 basic options being touted:

A: Let them expire: Somewhat advocated by Alan Greenspan who's support for them in the first place was instrumental in getting them passed. Would reduce the 2011 deficit by 230 billion. I don't have a figure for a 10 year projection but it's safe to assume it would be in the trillions in savings. The downside is that an across the board tax increase in the middle of what's not "technically" a recession but is at best a stalling recovery would likely drive unemployment up even higher, further depressing the economy.

B: Extended them (temporarily) for all but the top 2% of income earners: Advocated by the Obama Administration and Democratic Congressional Leadership. Would add 3 trillion to the deficit over the next 10 years. But would not raise taxes on 98% of the population in support of the economy. The cost is partially offset by higher tax revenues from the top 2% of income earners.

C: Extend them (temporarily) for all: Advocated by the GOP. Would add 3.7 trillion to the deficit over the next 10 years. Would not raise taxes on anyone in support of the economy. Though critics say the tax benefit to the top 2% is not worth the cost because they are the least likely to spend the extra money.

CBO report gives both sides ammunition in debate over extending Bush tax cuts - The Hill's On The Money

What say you? Which approach makes the most sense and properly balances taming the deficit with economic growth and recovery?

OAW

[OAW]

It appears that CBO has just issued a report that shows just how disingenuous the GOP is in their newfound concern about the deficit (because as the historical record clearly shows, this only seems to be the case when a Democrat is in the White House ) .....

Even as they hammer Democrats for running up record budget deficits, Senate Republicans are rolling out a plan to permanently extend an array of expiring tax breaks that would deprive the Treasury of more than $4 trillion over the next decade, nearly doubling projected deficits over that period unless dramatic spending cuts are made.

The measure, introduced by Senate Minority Leader Mitch McConnell (R-Ky.) this week, would permanently extend the George W. Bush-era income tax cuts that benefit virtually every U.S. taxpayer, rein in the alternative minimum tax and limit the estate tax to estates worth more than $5 million for individuals or $10 million for couples.

Aides to McConnell said they have yet to receive a cost estimate for the measure. But the nonpartisan Congressional Budget Office recently forecast that a similar, slightly more expensive package that includes a full repeal of the estate tax would force the nation to borrow an additional $3.9 trillion over the next decade and increase interest payments on the national debt by $950 billion. That's more than four times the projected deficit impact of President Obama's health-care overhaul and stimulus package combined.

Senate Republicans unveil a plan to make Bush tax cuts permanent

OAW

[ebuddy]

Both wars, the tax cuts, and Part D were all implemented in the early 2000's yet in 2007 we had a deficit of $161 billion and by 2009 - $1.4 trillion. Why the explosion? Revenues in free-fall due to recession and stimulus spending. Obama rails on the "Bush legacy" by citing an $8 trillion dollar deficit over the next decade, but recent CBO data actually shows a 10-year baseline deficit near $13 trillion at today's rate of taxation and spending. This assumes discretionary spending grows with the economy, war spending decreases, ObamaCare is implemented, and Congress extends all the Bush tax cuts, the AMT patch, and the Medicare "doc fix". It will cost approximately $3.2 trillion to extend all tax cuts, Part D $1 trillion, and both Iraq and Afghanistan at $515 billion = a total $4.7 trillion over 10 years. (which assumes no increased economic activity due to tax cut incentives btw)

So... yes, you can rail on the "Bush legacy" all you want, but with Washington poised to tax $33 trillion and spend $46 trillion over the next 10 years, you'd do well to cite Social Security @ $9.2 trillion, over $12 trillion in entitlements, other non-defense discretionary spending @ over $7 trillion, and a net interest on the debt exceeding $6 trillion; your complaints over giving the folks a little of their money back is going to fall on deaf ears. The budget deficit, historically 2.3% of GDP, is projected to leap to 8.3% of GDP by 2020 under current policies. This is the product of taxing at 0.2% of GDP above the historical average but spending 6.2% above its historical average.

Remember, tax cuts are merely allowing you to keep more of the money you'd otherwise send in to the government. The lion's share of expenditures is not in "depriving the government of revenue" through tax cuts as many on the left would insist, but evidence that we continue to pump water into leaking pipes. If my child continues to be a poor steward of finance, I do not compensate the child's failures with more money. The less the government bails us out of our failures, the less we'll have to bail them out of theirs.

I voted in favor of maintaining the Bush tax cuts, all of 'em.

[smacintush]

Originally Posted by OAW 

So the Bush Tax Cuts (which were never paid for by offsetting spending reductions)

Tax cuts are not a "cost" that needs to be "paid for". The problem wasn't tax cuts, stop buying into the party lies. You are smarter than that. The problem was spending.

I know, this has been said a bazillion times.

YearOOGDPOOOOOTotal RevenueOOSpending
2002OO10642.3OOO1853.40OOOOOOO2011.15
2003OO11142.1OOO1782.53OOOOOOO2160.12
2004OO11867.8OOO1880.28OOOOOOO2293.01
2005 OO12638.4OOO2153.86OOOOOOO2472.20
2006OO13398.9OOO2407.25OOOOOOO2655.44
2007 OO14077.6OOO2568.00OOOOOOO2728.94
2008 OO14441.4OOO2524.00OOOOOOO2931.22
2009 OO14258.2OOO2105.00OOOOOOO3107.36*

*Incomplete data

Keep the tax cuts, make them permanent. Then…wait for it…actually cut spending. Not reduce growth a tiny amount over ten years. Cut. <GASP!>

[hyteckit]

Originally Posted by smacintush 

Tax cuts are not a "cost" that needs to be "paid for". The problem wasn't tax cuts, stop buying into the party lies. You are smarter than that. The problem was spending.

I know, this has been said a bazillion times.

YearOOGDPOOOOOTotal RevenueOOSpending
2002OO10642.3OOO1853.40OOOOOOO2011.15
2003OO11142.1OOO1782.53OOOOOOO2160.12
2004OO11867.8OOO1880.28OOOOOOO2293.01
2005 OO12638.4OOO2153.86OOOOOOO2472.20
2006OO13398.9OOO2407.25OOOOOOO2655.44
2007 OO14077.6OOO2568.00OOOOOOO2728.94
2008 OO14441.4OOO2524.00OOOOOOO2931.22
2009 OO14258.2OOO2105.00OOOOOOO3107.36*

*Incomplete data

Keep the tax cuts, make them permanent. Then…wait for it…actually cut spending. Not reduce growth a tiny amount over ten years. Cut. <GASP!>

Looks like the problem was the tax cut.

[BadKosh]

Actually the problem IS too much spending. It's hideously obvious to anyone who pays attention to day to day political events.

[hyteckit]

Here are some meaningful numbers, not like the meaningless numbers by smacintush.

Historical Federal Receipt and Outlay Summary


With 1 year lag.

Year surplus/deficit
1978 -59.2
1979 -40.7
1980 -73.8
1981 -79.0

Reagan Years
TAX CUTS TO THE RICH in 1981
1982 -128.00
1983 -207.8
1984 -185.4
1985 -212.3
1986 -221.2
1987 -149.7
1988 -155.2
1989 -152.6


1990 -221.0
1991 -269.2
1992 -290.3
1993 -255.1

Clinton Years
TAX INCREASE in 1993
1994 -203.2
1995 -164.0
1996 -107.4
1997 -21.9
1998 69.3
1999 125.6
2000 236.2
2001 128.2


Bush Years
TAX CUTS TO THE RICH in 2001
2002 -157.8
2003 -377.6
2004 -412.7
2005 -318.3
2006 -248.2
2007 -160.7
2008 -458.6
2009 -1,412.7

[OAW]

Originally Posted by smacintush 

Tax cuts are not a "cost" that needs to be "paid for". The problem wasn't tax cuts, stop buying into the party lies. You are smarter than that. The problem was spending.

Quite frankly ... this is a ridiculous notion. To put it mildly.

Revenues < Spending = Deficit

A deficit is NOT a function of spending. It is a function of the relationship between revenues AND spending. That is just basic mathematics and quite frankly, it's not subject to debate. The minute you start to focus on one side of the equation (i.e. spending) and ignore the other (as many of our good friends on the right tend to do) you have fundamentally failed to grasp the issue.

OAW

[Uncle Skeleton]

Originally Posted by OAW 

Quite frankly ... this is a ridiculous notion. To put it mildly.

Revenues < Spending = Deficit

A deficit is NOT a function of spending. It is a function of the relationship between revenues AND spending. That is just basic mathematics and quite frankly, it's not subject to debate. The minute you start to focus on one side of the equation (i.e. spending) and ignore the other (as many of our good friends on the right tend to do) you have fundamentally failed to grasp the issue.

OAW

Well, the spending half is the bigger half, hence the deficit. It only makes sense to focus on the bigger half.

[OAW]

Originally Posted by Uncle Skeleton 

Well, the spending half is the bigger half, hence the deficit. It only makes sense to focus on the bigger half.

Well suppose you had a household with various expenses. Mortgage, car note, insurance, utilities, food, clothing, etc. And let's say for the sake of discussion that those expenses comprise 90% of your income. Would it then make sense to go an willingly take a pay cut so that your new salary is 70% of what is was? And then turn around and say "well the problem is the expenses"? When you already know for a fact that the mortgage, car note, and insurance are fixed expenses that A) can't be eliminated, and B) comprise the lion's share of your total monthly outlay? That's the kind thinking that is behind this notion of extending 4 trillion dollars in tax cuts over 10 years when the reality is that areas of spending that are the primary contributors to the long-term structural deficit are things that you simply are not willing to address. President Obama addressed this foolishness in a recent town hall meeting ....

QUESTION: My name is Andy Conti (ph). I am a full-time MBA student at Georgetown University right here in the district.

And my question is with regards to those individuals that feel like federal government is getting too large, specifically the Tea Party movement, my dad and I were talking about the midterm election just last night, and he was asking who he should vote for. And the question was, what will the administration do if these activists are elected?

OBAMA: ... I think that America has a noble tradition of being helpfully skeptical about government. That's -- that's -- that's in our DNA, right? I mean, we -- we came in ... (APPLAUSE) ... because, you know, the folks over on the other side of the Atlantic had been oppressing folks without giving them representation, and so we've always had a healthy skepticism about government. And I think that's a good thing.

I think there's also a noble tradition in the Republican and Democratic parties of saying that government should -- should pay its way, that it shouldn't get so big that we're leaving debt to the next generation. All those things, I think, are healthy.

The problem that I've seen in the debate that's been taking place -- and in some of these Tea Party events -- is I think they're misidentifying sort of who the culprits are here.

As I said before, we had to take some emergency steps last year, but the majority of economists will tell you that the emergency steps we take are not the problem long term. The problem long term are -- are the problems that I talked about earlier.

We've got -- we had two tax cuts that weren't paid for, two wars that weren't paid for. We've got a population that's getting older. It's -- we're all demanding services, but our taxes have actually substantially gone down.

And so the challenge, I think, for the Tea Party movement is to identify specifically, what would you do? It's not enough just to say, Get control of spending. I think it's important for you to say, You know, I'm willing to cut veterans' benefits, or, I'm willing to cut Medicare or Social Security benefits, or, I'm willing to see these taxes go up.

What you can't do -- which is what I've been hearing a lot from the other side -- is saying, 'we're going to control government spending. We're going to propose $4 trillion of additional tax cuts,' and that magically somehow things are going to work.

OAW

[Uncle Skeleton]

Originally Posted by OAW 

...When you already know for a fact that the mortgage, car note, and insurance are fixed expenses that A) can't be eliminated...

Wait, what? I shop around on all those things. I refinanced my home for a lower rate/payment, I sold my car and now bike/bus (but you could also downgrade and/or refinance), and insurance companies contact me all the time to "check us again because rates have changed." Of course since I ditched the car I eliminated that insurance payment altogether. Sorry, you lose that analogy.

[smacintush]

Originally Posted by OAW 

Quite frankly ... this is a ridiculous notion. To put it mildly.

Revenues < Spending = Deficit

A deficit is NOT a function of spending. It is a function of the relationship between revenues AND spending. That is just basic mathematics and quite frankly, it's not subject to debate. The minute you start to focus on one side of the equation (i.e. spending) and ignore the other (as many of our good friends on the right tend to do) you have fundamentally failed to grasp the issue.

OAW

It is only ridiculous because you are either misunderstanding me, or are misrepresenting what I am saying.

I don't need a math lesson.

I was referring to that actual reality of the Bush deficits in relationship to the Bush tax cuts, not refuting the mathimatical principles.

During the Bush years revenues averaged about 17% of GDP and spending averaged about 20%. Further, spending rose nearly every year from 18.1% of GDP to 20.6% in 2008 and 24.7% in 2009.

Revenues did drop from 2002-2004, but I am not going to get into an argument about whether it was the Bush tax cuts, 9/11, the Clinton recession or the combination of these and to what degree.

The fact is that even if revenues had remained the same percentage of GDP as they were during the 2001 surplus, spending would still have been higher for 5 of those 8 years. Spending was too high, Period.

My point about tax cuts not being a "cost" that has to be "paid for" really has to do with the attitude of you and people like you that seem to feel government has a right to our money to do whatever the want to with it, and taking less is some kind of gift to us. It is not their money, and they shouldn't be given a pass to take as much as they need to cover their irresponsibility.

[hyteckit]

Originally Posted by Uncle Skeleton 

Well, the spending half is the bigger half, hence the deficit. It only makes sense to focus on the bigger half.

If you are smart, you would focus on increasing revenue by getting people back to work and lowering unemployment, which will later lead to increase consumer confidence and consumer spending.

You are making a big assumption that lowering spending doesn't lower GDP and revenue as well.

[hyteckit]

Originally Posted by smacintush 

It is only ridiculous because you are either misunderstanding me, or are misrepresenting what I am saying.

I don't need a math lesson.

I was referring to that actual reality of the Bush deficits in relationship to the Bush tax cuts, not refuting the mathimatical principles.

During the Bush years revenues averaged about 17% of GDP and spending averaged about 20%. Further, spending rose nearly every year from 18.1% of GDP to 20.6% in 2008 and 24.7% in 2009.

Spending rose nearly every year from 18.1% of GDP to 20.6% in 2008 and 24.7% in 2009, and tax revenues when from 17.5% in 2008 to 14.8% in 2009.

Why? Unemployment went from 5% in 2008 to 9% in Jan. 2009. Less people working, less tax revenue.

Originally Posted by smacintush 

Revenues did drop from 2002-2004, but I am not going to get into an argument about whether it was the Bush tax cuts, 9/11, the Clinton recession or the combination of these and to what degree.

The fact is that even if revenues had remained the same percentage of GDP as they were during the 2001 surplus, spending would still have been higher for 5 of those 8 years. Spending was too high, Period.

My point about tax cuts not being a "cost" that has to be "paid for" really has to do with the attitude of you and people like you that seem to feel government has a right to our money to do whatever the want to with it, and taking less is some kind of gift to us. It is not their money, and they shouldn't be given a pass to take as much as they need to cover their irresponsibility.

Yes, let's just blame everything on Pres. Clinton and 9/11.

Revenues drop because of tax cuts to the rich since tax revenues are largely from income taxes.

[smacintush]

Originally Posted by OAW 

Well suppose you had a household with various expenses. Mortgage, car note, insurance, utilities, food, clothing, etc. And let's say for the sake of discussion that those expenses comprise 90% of your income. Would it then make sense to go an willingly take a pay cut so that your new salary is 70% of what is was? And then turn around and say "well the problem is the expenses"? When you already know for a fact that the mortgage, car note, and insurance are fixed expenses that A) can't be eliminated, and B) comprise the lion's share of your total monthly outlay? That's the kind thinking that is behind this notion of extending 4 trillion dollars in tax cuts over 10 years when the reality is that areas of spending that are the primary contributors to the long-term structural deficit are things that you simply are not willing to address.

This is an incomplete example. Let's try this:

You have a household with the following monthly expenses:
Mortgage ($1,200)
Two car payments ($1,100)
Car insurance ($550)
Homeowners insurance ($450)
Utilities ($500)
Food ($1,500)
Clothing ($800)
Satellite TV service ($100)
Credit cards ($1,000)
High speed internet ($65)
Four adult "children" in home ($??)
Dining out ($400)
Charity and tithes ($750)
Total: $8,415+ per month
Total household income:
$1,000 earned wages
$1,000 government entitlements
$6,000 from various family members
$500 other miscellaneous
Total: $8,500+

Now, your family decides to give you a little less money, and soon after two of them lose their jobs and can't afford to support you anymore. Thus, your income is now about $6,500 per month.

Looking at that list of outlays and where you are getting your money, do you perhaps have a spending problem? Or is it still just a matter of getting more money from people?

[hyteckit]

Originally Posted by smacintush 

This is an incomplete example. Let's try this:

You have a household with the following monthly expenses:
Mortgage ($1,200)
Two car payments ($1,100)
Car insurance ($550)
Homeowners insurance ($450)
Utilities ($500)
Food ($1,500)
Clothing ($800)
Satellite TV service ($100)
Credit cards ($1,000)
High speed internet ($65)
Four adult "children" in home ($??)
Dining out ($400)
Charity and tithes ($750)
Total: $8,415+ per month
Total household income:
$1,000 earned wages
$1,000 government entitlements
$6,000 from various family members
$500 other miscellaneous
Total: $8,500+

Now, your family decides to give you a little less money, and soon after two of them lose their jobs and can't afford to support you anymore. Thus, your income is now about $6,500 per month.

Looking at that list of outlays and where you are getting your money, do you perhaps have a spending problem? Or is it still just a matter of getting more money from people?

You are confusing microeconomics and macroeconomics.

You are not even presenting an economic model that closely represents our global economy.


Let's go with your limited example. Instead of a close system, let's make it a competitive capitalist market.

Say you and your family runs a home business selling cookies online and require 2 cars to deliver cookies around your neighborhood. $6,000 from various family members is 50% of their income from the family run home business.

Suddenly your Chinese neighbor gets into the business and takes half of your business away from you. Your revenue has dropped by half. What are you going to do? You can cut some of your expensive, but you are still spending more than you make.

Reinvest in your home business? Give up on your business and find another business to invest in? Just give up and drown in debt? Let your Chinese neighbor take over the market while you try to keep reducing expenses? Try to spend more money to expand into other markets?

Maybe sell the house and kick your families to the curb. If your family members can get jobs in the competitive job market, screw them. They deserve to live on the streets and live in poverty. You still have your $1000/mo job and can only support yourself. No freaking socialism.

[BadKosh]

Originally Posted by smacintush 

Spending rose nearly every year from 18.1% of GDP to 20.6% in 2008 and 24.7% in 2009.

Who was running congress then? Isn't congress who makes the bills the President can either sign or not?

[OAW]

Originally Posted by smacintush 

It is only ridiculous because you are either misunderstanding me, or are misrepresenting what I am saying.

I don't need a math lesson.

I was referring to that actual reality of the Bush deficits in relationship to the Bush tax cuts, not refuting the mathimatical principles.

During the Bush years revenues averaged about 17% of GDP and spending averaged about 20%. Further, spending rose nearly every year from 18.1% of GDP to 20.6% in 2008 and 24.7% in 2009.

Backdrop duly noted.

Originally Posted by smacintush

Revenues did drop from 2002-2004, but I am not going to get into an argument about whether it was the Bush tax cuts, 9/11, the Clinton recession or the combination of these and to what degree.

I imagine you wouldn't.

Originally Posted by smacintush

The fact is that even if revenues had remained the same percentage of GDP as they were during the 2001 surplus, spending would still have been higher for 5 of those 8 years. Spending was too high, Period.

And therein lies the rub. I'll reiterate the fundamental point. A deficit occurs when spending exceeds revenues. Period. You can increase spending and NOT run a deficit if revenues increase accordingly. Moreover, you can decrease spending and STILL run a deficit if revenues decrease beyond the new level of spending. This bears repeating .....

You can decrease spending and STILL run a deficit if revenues decrease beyond the new level of spending.

Which is EXACTLY what this "make the Bush tax cuts permanent" notion will do even if federal spending is reduced. Because we all know that those making this argument are simply NOT going to to reduce spending enough so that the new level of revenues resulting from such tax cuts are sufficient. They'll talk a good game ... but they don't walk the walk. And we know this because they spout all this BS rhetoric about "cutting federal spending" and focus on the 20% of discretionary spending that wouldn't put a dent in the deficit even if it was eliminated completely .... while totally ignoring the 80% of defense spending, Social Security, Medicare/Medicaid, and two stupid a*s wars.

To look at one side of the equation only simply makes no sense. Cutting taxes and then turning around and massively increasing spending is a recipe for huge deficits. And doing such when there is no national emergency necessitating such action is beyond retarded. Yet that's exactly what the Reagan and Bush II Administrations did by following this "supply side, trickle down economics" theory that says that tax cuts magically "pay for themselves" and the spending side doesn't matter ... until a Democrat gets in the White House.

OAW

[OAW]

Originally Posted by BadKosh 

Who was running congress then? Isn't congress who makes the bills the President can either sign or not?

The GOP controlled both houses of Congress from 1994 - 2006. In the 2006 mid-term elections the Democrats won back clear control of the House and marginal control of the Senate (49 Dems, 49 GOP, 2 Independents who tended to vote with the Dems). In 2008 the Democrats maintained clear control the House and a filibuster proof majority in the Senate until the death of Sen. Kennedy and the election of Sen. Brown as his replacement.

Those are the facts. And it is also a fact that 90% of the deficit over the long-term is a direct result of the policies enacted by the Bush Administration and its GOP allies in Congress between 2000 - 2006.

OAW

[Uncle Skeleton]

Originally Posted by OAW 

To look at one side of the equation only simply makes no sense.

I don't see you addressing both sides

We already know what you think of revenues (too low). What do you think of spending. Too high? Too low? Just right? At what point would spending be "too high" in your opinion?

[OAW]

Originally Posted by Uncle Skeleton 

I don't see you addressing both sides

We already know what you think of revenues (too low). What do you think of spending. Too high? Too low? Just right? At what point would spending be "too high" in your opinion?

I thought I did.

But to answer your question, spending is "too high" when there are not enough revenues to cover it. The bottom line here is A) What services do we want the federal government to provide?, and B) How much do those services cost?, and C) How much are we willing to pay for those services? You can't look at it simplistically and say "Spending is too high". "Too high" compared to what? A % of GDP? Some flat dollar amount? Is it "too high" if these targets are exceeded yet the taxpayers are OK with their level of taxation for the services they are being provided? If the answer to C exceeds the answer to B then there is a problem. And that's the fundamental issue ... because everybody wants to go to heaven but nobody wants to die. So it's not that I think revenues are "too low" ... it's that revenues are too low for the government services that people presently expect.

But if were up to me I'd say that in order to get control of the deficit then the following has to be on the table ...

- End the Iraq and Afghanistan wars.
- Dramatically reduce Defense Spending. It has grown to extremely elevated levels since 9/11. This can be done and we'd still spend more than the next 10 countries combined.
- Raise the retirement age for Social Security and/or means test benefits
- Implement cost controls on the Healthcare industry to make Medicare/Medicaid solvent.

OAW

[BadKosh]

Originally Posted by OAW 

The GOP controlled both houses of Congress from 1994 - 2006. In the 2006 mid-term elections the Democrats won back clear control of the House and marginal control of the Senate (49 Dems, 49 GOP, 2 Independents who tended to vote with the Dems). In 2008 the Democrats maintained clear control the House and a filibuster proof majority in the Senate until the death of Sen. Kennedy and the election of Sen. Brown as his replacement.

Those are the facts. And it is also a fact that 90% of the deficit over the long-term is a direct result of the policies enacted by the Bush Administration and its GOP allies in Congress between 2000 - 2006.

OAW

So you claim the Dems didn't spend more but the deficit increased. So, who voted for all the spending increases? Who was running all those appropriations committees? Dems. Who could have reduced the spending but didn't when they were in charge? Dems. Who is spending us into ruination now? Dems. See a pattern?

[Uncle Skeleton]

Originally Posted by OAW 

I thought I did.

But to answer your question, spending is "too high" when there are not enough revenues to cover it.

In that case spending is too high. Just like Smac said. Can you at least concede this much?

From this post, it seems like you're saying "yes I agree so let's move on," but until this post it sounded like "no you're wrong so let's move on." Which is it?

[OAW]

Originally Posted by BadKosh 

So you claim the Dems didn't spend more but the deficit increased. So, who voted for all the spending increases? Who was running all those appropriations committees? Dems. Who could have reduced the spending but didn't when they were in charge? Dems. Who is spending us into ruination now? Dems. See a pattern?

So let's get this straight. You are going to sit here and ignore the deficit spending of the GOP controlled Congress for the first 6 years of the Bush Administration and focus solely on the Democrat controlled Congress of the last 2 years? The last 2 years when Bush Administration and GOP policies had led to the Great Recession that started in 2007 BTW ... necessitating unprecedented emergency spending to stabilize the economy. Oh. Ok.

OAW

[BadKosh]

And I guess Barney Frank and Chris Dodd had nothing to do with the banks tanking?
I guess the Carter Admin didn't allow those who couldn't afford the loan to get them anyway, adding to the toxic assets owned by FANNIE and FREDDIE?
I guess when John McCain spoke about the way Dodd & Frank were mismanaging FANNIE & FREDDIE in '08 he was wrong?
Do you wonder why, up until late July of '08, the Dems were lying about the real financial situation so they could 'blame Bush' for crap they caused by the same irresponsible policies and ideas which are ruining the USA now.

[ort888]

It's like arguing over why the chili tastes bad... when one guy took a poop in it and another guy poured in a bottle of ammonia.

I bet it was your poop that did it... you can't poop in chili!
Nuh-uh, it was the ammonia, that's disgusting, you can't put ammonia in the chili!

Yeah, guess what, the chili tastes bad. Blame the other guy all you want, but we all ****ed it up together.

[OAW]

Originally Posted by Uncle Skeleton 

In that case spending is too high. Just like Smac said. Can you at least concede this much?

From this post, it seems like you're saying "yes I agree so let's move on," but until this post it sounded like "no you're wrong so let's move on." Which is it?

I suppose I don't agree ... because that's not what Smacintush said. What Smacintush (and others) seem to be saying is that spending is the only factor. And that simply is not true. The historical record makes this quite clear ... especially over the last decade. Hell even Alan Greenspan is on record saying that tax cuts don't pay for themselves via increased revenues over the long-term. It's that same old supply side economics ideology that has resulted in massive deficits every time it's been implemented since the Reagan Administration. President George H.W. Bush was onto something when he called it "voodoo economics" when he was running against Reagan for the Republican nomination back in 1980. I'm sorry ... but it is just nonsensical to already be running a deficit ... support making the tax cuts that were among the primary contributors to said deficit permanent ... and then think that the solution lies in just reducing spending. Especially when you know good and damned well that you are unwilling to tackle the political hot potatoes needed to reduce spending by the necessary amounts!

Say, for the sake of discussion, that the government is already running a trillion dollar deficit. Then they go out and "cut spending" by 4 trillion dollars over the next 10 years. Sounds impressive doesn't it? I mean .. that's real money right there. You can then milk that for all kinds of political mileage. But when you also support tax cuts that reduce revenues by 4 trillion dollars over the next 10 years guess where you end up? At the same trillion dollar deficit you started out with!!

I'm not trying to be pedantic here but I really do believe that accurately identifying the problem is important. The problem is NOT spending .... the problem is the deficit. As the example above demonstrates. I'm much more interested in tackling the actual issue which is reducing the deficit. When people rail about deficits (that somehow don't seem to bother them so much when the GOP is in the White House) ... turn around and push for tax cuts that will increase said deficit increase by an additional 4 trillion over the next decade ... and then say the solution is some generic ass platitude like "cut spending" then it's very difficult to take them seriously. Especially when they've yet to specifically identify 4 trillion in spending that should be cut just to cover the tax cuts that they insist upon. Let alone specifically identifying another trillion+ in spending cuts to actually balance the budget.

OAW

[smacintush]

Originally Posted by OAW 

And therein lies the rub. I'll reiterate the fundamental point. A deficit occurs when spending exceeds revenues. Period. You can increase spending and NOT run a deficit if revenues increase accordingly. Moreover, you can decrease spending and STILL run a deficit if revenues decrease beyond the new level of spending.

This bears repeating .....

You can decrease spending and STILL run a deficit if revenues decrease beyond the new level of spending.

I'm not sure what your point is, I didn't argue anything different.

Which is EXACTLY what this "make the Bush tax cuts permanent" notion will do even if federal spending is reduced. Because we all know that those making this argument are simply NOT going to to reduce spending enough so that the new level of revenues resulting from such tax cuts are sufficient. They'll talk a good game ... but they don't walk the walk. And we know this because they spout all this BS rhetoric about "cutting federal spending" and focus on the 20% of discretionary spending that wouldn't put a dent in the deficit even if it was eliminated completely .... while totally ignoring the 80% of defense spending, Social Security, Medicare/Medicaid, and two stupid a*s wars.

So what you are saying is that they should raise taxes by letting the Bush tax cuts expire...because those in power will just spend too much anyway? That's wrong on several levels. One, if this is indeed true, which it probably is, they will overspend either way. Two, what kind of sense does it make to give them the green light to tax whatever they need to cover as much spending as they want? In what world is THIS good logic or morally sound? Three, most of us that are in favor of keeping the tax cuts or even cutting them further are NOT arguing one sidedly like you keep asserting. We are also advocating slashing whatever spending is necessary balance the budget. For my part...in case you somehow missed it...I am for a complete and total elimination of all government entitlement/welfare/subsidies, foreign and domestic. Every single bit. That is not one-sided.

[hyteckit]

Originally Posted by OAW 

The problem is NOT spending .... the problem is the deficit. As the example above demonstrates. I'm much more interested in tackling the actual issue which is reducing the deficit.

Exactly.

Just look at the historical numbers.

Every-time there is a tax cut for the rich, our receipts goes down and our spending goes up in relationship to our GDP.
Every-time there is a tax increase on the rich, our receipts goes up and our spending goes down in relationship to our GDP.

The point where outlays > receipts, we have a deficit.
The point where outlays < receipts, we have a surplus.


It's not how much we are spending, but where and how we are spending that money.

Code:
With 1 year lag.

Year    surplus/deficit     Receipts %GDP   Outlays %GDP
1978    -59.2               
1979    -40.7
1980    -73.8
1981    -79.0               19.6%           21.7%

Reagan Years
TAX CUTS TO THE RICH in 1981
1982    -128.00             19.2%           23.1%
1983    -207.8              17.5%           23.5%
1984    -185.4              17.3%           22.2%
1985    -212.3              17.7%           22.8%
1986    -221.2
1987    -149.7
1988    -155.2
1989    -152.6


1990    -221.0
1991    -269.2
1992    -290.3              17.5%           22.1%
1993    -255.1              17.5%           21.45

Clinton Years
TAX INCREASE in 1993
1994    -203.2              18.0%           21%
1995    -164.0              18.4%           20.6%
1996    -107.4              18.8%           20.2%
1997    -21.9               19.2%           19.5%
1998    69.3                19.9%           19.1%
1999    125.6               19.8%           18.5%
2000    236.2               20.6%           18.2%
2001    128.2               19.5%           18.5%


Bush Years
TAX CUTS TO THE RICH in 2001
2002    -157.8              17.6%           19.1%
2003    -377.6              16.2%           19.6%
2004    -412.7              16.1%           19.9%
2005    -318.3                          
2006    -248.2
2007    -160.7
2008    -458.6              17.5%           20.7%
2009    -1,412.7            14.8%           24.7%     (unemployment rate of over 9%)

[OAW]

Originally Posted by smacintush 

We are also advocating slashing whatever spending is necessary balance the budget. For my part...in case you somehow missed it...I am for a complete and total elimination of all government entitlement/welfare/subsidies, foreign and domestic. Every single bit. That is not one-sided.

If you explicitly laid out this position in this thread then I certainly must have missed it. My apologies if I did. Having said that, what you are saying is ideologically consistent. Unfortunately, it's simply not politically realistic. And I guess that is what my overall point is. You have people frothing at the mouth about "government takeover of healthcare" ... but you better not touch their Medicare! You have people in townhall meetings screaming at the top of their lungs about "socialism" .... but you better not touch their Social Security! You have people losing their minds about "out of control government spending" .... but don't want to end two stupid wars because that would be "soft on terror". Cutting the Defense Department budget would be "job killing". And therein lies the rub. The places where the real money is being spent by the federal government are those very areas where people simply don't want cuts to be made. Simply put .... nobody who advocated the position you just outlined would get elected. A Ron Paul or two might sneak in ... but people of that ideology are too far out the political mainstream to affect policy. The bottom line here is this ....

People want cuts in government spending ... but only in those areas that they feel is benefitting other people and not them.

So IMO ... we have to evaluate the wisdom of making the Bush tax cuts permanent under the light of political reality. And when that is done the most likely result is an even larger deficit over the long run because the politicians ... GOP and Democrat ... simply are not willing to make the hard choices when it comes to the spending cuts that would be required to offset the revenue loss. And the politicians are unwilling to do this because the American people are unwilling to do this. Like I said earlier .... everybody wants to go to heaven but nobody wants to die. People love the idea of tax cuts. But they hate the idea of spending cuts that benefit them. Some recent words from President Clinton are instructive here ....

Originally Posted by President Clinton

The people only hire us when things are messed up. They'd much rather hear the Republican rhetoric than ours. We only get hired when the country is in a mess. The Democrats should focus on what we're going to do.

The part in bold is this "supply side, trickle down, voodoo economics" notion that you can cut taxes and not cut spending ... and then grow the economy into a balanced budget. And he's right .... it does sound great on paper. The problem is that it hasn't worked anytime it's been tried. Ever.

OAW

[CRASH HARDDRIVE]

*yawn*
Do you ever do anything but make up other people's arguments? No advocated cutting taxes without cutting spending. Cut both.

[Wiskedjak]

Originally Posted by CRASH HARDDRIVE 

*yawn*
Do you ever do anything but make up other people's arguments? No advocated cutting taxes without cutting spending. Cut both.

Perhaps, but it's a rather common behavior for conservatives to cut taxes and *increase* spending (while liberals increase taxes and increase spending).

It's pretty easy to find someone in the opposition party blathering on about cutting spending, but it's a very rare occurrence to find someone brave enough to *actually* cut spending.

[OAW]

Originally Posted by Wiskedjak 

Perhaps, but it's a rather common behavior for conservatives to cut taxes and *increase* spending (while liberals increase taxes and increase spending).

It's pretty easy to find someone in the opposition party blathering on about cutting spending, but it's a very rare occurrence to find someone brave enough to *actually* cut spending.

Exactly!

When one of these conservatives has the balls to tell these 55+ year old Tea Partiers that they are going to make the Bush tax cuts permanent AND eliminate (or even significantly reduce) their Medicare and Social Security (as Smacintush advocated) then I will take them seriously on this issue. So it's not a matter of "making up people's arguments". It's a matter of observing the actual behavior, as opposed to the rhetoric, of conservatives on this issue. And as Crash has just demonstrated .... the only thing you will get from the vast majority of them is some generic ass platitude ... just like I said earlier. Long on rhetoric and ideology ... short on specifics and practicality.

OAW

[CRASH HARDDRIVE]

Originally Posted by Wiskedjak 

Perhaps, but it's a rather common behavior for conservatives to cut taxes and *increase* spending

Actually, that's not common for any true conservative.

(while liberals increase taxes and increase spending).

Which IS common for just about every Big Government cheerleading liberal- and also pretty much the absolute WORST course to take.

It's pretty easy to find someone in the opposition party blathering on about cutting spending.

No it isn't. No Democrat ever blathers on about cutting spending, because virtually NONE of their cheerleaders among the rank and file ever calls for istt. Usually, just the opposite- raise taxes, raise spending. Only Republicans are actually defying their base when they raise taxes or spending, and they get flack for it from conservatives. No liberal ever bats an eye over either.

Once more, I notice the liberal side of an argument just revolves around myths, distortions, lies and just making up the other side's argument.

[OAW]

Case in point with the recently unveiled GOP "Pledge to America" ....

The pledge is a political document in the guise of a governing agenda. If there are any real surprises in the blueprint for conservative government, they come in the form of pulled punches rather than new initiatives.

.....


The overall thrust of the pledge is a call for smaller and limited government - but within limits. Republicans have embraced many of the easy proposals - easy in the sense that they are broadly popular within their coalition. They include extending all the Bush tax cuts and overturning Obama's health-care reforms.

But there is a paragraph halfway through the pledge that sums up the limits of the Republicans' willingness to wade into controversial territory. Under the innocuous title of "Reforming the budget process to focus on long-term challenges," Republicans say this:

"We will make the decisions that are necessary to protect our entitlement programs for today's seniors and future generations. That means requiring a full accounting of Social Security, Medicare and Medicaid, setting benchmarks for these programs and reviewing them regularly and preventing the expansion of unfunded liabilities."

That paragraph neatly skirts one of the toughest challenges facing both parties in the years ahead, and one that may come quickly to the fore when the president's debt and deficit commission issues its recommendations at the end of this year.

Identifying the scope of the long-term financial liability is one thing. Offering solutions, whether through raising the Social Security retirement age, changing the cost-of-living formula, offering personal or private accounts or other measures to put the system into long-term balance is another. Faced with an opportunity to offer voters a clearer indication of how they would tackle entitlements, Republicans flinched.

There are other gaps in the document. Republicans pledge to roll back most government spending to the levels that existed before the economic collapse. (OAW: Something the Obama Administration already planned to do over the next few years anyway as the economy recovers!) After that they promise to establish "hard caps" on new discretionary spending. That, they say, will save hundreds of billions of dollars. Extending the tax cuts for the wealthiest Americans, however, would cost an estimated $700 billion.

The pledge sets no specific targets for reducing or eliminating the deficit, promising only "a responsible, fact-based conversation with the American people about the scale of the fiscal challenges we face and the urgent action that is required to deal with them."

That's language Boehner has used repeatedly this year. Is it cover for a set of policies Republicans already know they want to try to enact, or tentativeness that the revolutionary-era rhetoric of tea party activists is more than the broad swathe of the public will accept?

Republicans: From 'party of no' to 'party of stop'

So here is the GOP "Pledge" in a nutshell ....

Extend Bush tax cuts

Budgetary impact? 4 trillion in additional deficits over the next 10 years. Even more thereafter.

Repeal Healthcare Reform

Budgetary impact? 100 billion in additional deficits over the next 10 years. Even more thereafter.

How to address the spending side of the equation?

Generic ass platitudes.

OAW

[ebuddy]

Originally Posted by hyteckit 

Here are some meaningful numbers, not like the meaningless numbers by smacintush.

Historical Federal Receipt and Outlay Summary


With 1 year lag.

Year surplus/deficit
1978 -59.2
1979 -40.7
1980 -73.8
1981 -79.0

Reagan Years
TAX CUTS TO THE RICH in 1981
1982 -128.00
1983 -207.8
1984 -185.4
1985 -212.3
1986 -221.2
1987 -149.7
1988 -155.2
1989 -152.6


1990 -221.0
1991 -269.2
1992 -290.3
1993 -255.1

Clinton Years
TAX INCREASE in 1993
1994 -203.2
1995 -164.0
1996 -107.4
1997 -21.9
1998 69.3
1999 125.6
2000 236.2
2001 128.2


Bush Years
TAX CUTS TO THE RICH in 2001
2002 -157.8
2003 -377.6
2004 -412.7
2005 -318.3
2006 -248.2
2007 -160.7
2008 -458.6
2009 -1,412.7

I always remind myself when reading your posts that the LARGE print giveth, the small print taketh away. Why don't you go ahead and plug in Reagan's tax INCREASE at the appropriate time and Clintons tax REDUCTION at its appropriate place in 1997, then have a look at your numbers.

Oh... just so you don't forget, rich is now $250k a year.

[Wiskedjak]

Originally Posted by CRASH HARDDRIVE 

Actually, that's not common for any true conservative.

And, when was the last time one of *those* made it in to the White House?

[hyteckit]

Originally Posted by ebuddy 

I always remind myself when reading your posts that the LARGE print giveth, the small print taketh away. Why don't you go ahead and plug in Reagan's tax INCREASE at the appropriate time and Clintons tax REDUCTION at its appropriate place in 1997, then have a look at your numbers.

Oh... just so you don't forget, rich is now $250k a year.

Are you saying Pres. Reagan, the conservative hero, not only increase spending and increase our national deficit, but he also increase taxes?

[CRASH HARDDRIVE]

Originally Posted by Wiskedjak 

And, when was the last time one of *those* made it in to the White House?

We're still waiting.

Personally, I don't care as much about the white house, as I'd love to see a majority of fiscal conservatives in congress, and even state and local governments.

Granted- people with actual fiscal know-how being a majority of elected officials, and doing the opposite of what all the nanny state suck-ups want is a talllll order. Several miraculous things would have to happen first, namely: a kneepad shortage, a massive national IQ jump of the electorate, and the discovery of cures for PC-Disease and Jealous Busybody Syndrome. Believe me, I'm not holding my breath.

[Wiskedjak]

Originally Posted by CRASH HARDDRIVE 

We're still waiting.

And, that's all I'm saying. Yes, the true conservative will cut taxes and cut spending, and that conservative, should they ever show up, will have my vote in a heartbeat. But, I've only ever seen one of those get to any level of importance and he was *incredibly* unpopular because of his spending cuts even though he was in a heavily conservative province.

In my experience, there are many people who think they're conservative and want spending cut but will get very upset if any of those cuts affect government services that they currently enjoy.

[hyteckit]

Tax Relief Act of 1997
1. Increase Earned Income Tax Credit (EITC or EIC) for families making $100k/yr or less. Eliminated EIC for families making more than $100k/yr.
2. Created the Welfare to Work Tax Credit (WtWTC) to help both the poor and small businesses

So more welfare for the Poor, as Republicans would like to put it, is good for the economy.

So in effect, tax cuts for the poor and tax increase for everyone making over $100k/yr.

Another reason to let tax cuts to those making over $250k/yr expire.

Code:
Clinton Years
TAX INCREASE in 1993, EXPANDED EITC (Earned Income Tax Credit)
1994    -203.2              18.0%           21%
1995    -164.0              18.4%           20.6%
1996    -107.4              18.8%           20.2%

RAISE THE MINIMUM WAGE. Increase by about 23.5% from the minimum wage in 1996.
1997    -21.9               19.2%           19.5%

INCREASE IN EITC (welfare) for families making less than $100k/yr. Eliminated EITC for those making over $100k/yr.
CREATION OF A NEW WELFARE PROGRAM CALLED Welfare to Work Tax Credit
1998    69.3                19.9%           19.1%
1999    125.6               19.8%           18.5%
2000    236.2               20.6%           18.2%
2001    128.2               19.5%           18.5%

[OAW]

Originally Posted by Wiskedjak 

And, that's all I'm saying. Yes, the true conservative will cut taxes and cut spending, and that conservative, should they ever show up, will have my vote in a heartbeat. But, I've only ever seen one of those get to any level of importance and he was *incredibly* unpopular because of his spending cuts even though he was in a heavily conservative province.

In my experience, there are many people who think they're conservative and want spending cut but will get very upset if any of those cuts affect government services that they currently enjoy.

Indeed. I agree wholeheartedly. I would love to see the Bush tax cuts made permanent. I mean ... who wouldn't want a tax cut? But the government would need to develop the political will to get federal spending in order. Not based on ideology ... but based on practicality. The government would have plenty of money even if the Bush tax cuts were made permanent if it had its spending priorities in order. But clearly it does not. And that is why extending those tax cuts is a bad idea. It's easy to be for "cutting federal spending" in the abstract. But when the rubber meets the road and the time comes to get specific we end up where I said before ....

People want cuts in government spending ... but only in those areas that they feel is benefitting other people and not them.

OAW

[turtle777]

-t

[ebuddy]

Tax Relief Act of 1997

• Passed in tandem with the Balanced Budget Act of 1997 designed to cut federal spending by about $260 billion over five years, with $115 billion of that from Medicare cuts and reform.
• Cut taxes by approximately $95 billion over 5 years with over 800 changes to the tax code
• Penalty-free withdrawals from IRA
• Cuts in estate taxes
• Cuts in Capital Gains taxes including a cut of the top capital gains tax rate from 28% to 20%
• Repeal of AMT for small businesses under $5 million.

So... tax cuts for the rich as Democrats like to put it and cuts in spending are good for the economy. So in effect, tax cuts for the rich, entitlement spending cuts, and reform.

Another reason to cut spending and maintain the Bush tax cuts across the board.




Weeeeeeeeeeeeeeeeeeee

[hyteckit]

Originally Posted by ebuddy 

Tax Relief Act of 1997

• Passed in tandem with the Balanced Budget Act of 1997 designed to cut federal spending by about $260 billion over five years, with $115 billion of that from Medicare cuts and reform.
• Cut taxes by approximately $95 billion over 5 years with over 800 changes to the tax code
• Penalty-free withdrawals from IRA
• Cuts in estate taxes
• Cuts in Capital Gains taxes including a cut of the top capital gains tax rate from 28% to 20%
• Repeal of AMT for small businesses under $5 million.

So... tax cuts for the rich as Democrats like to put it and cuts in spending are good for the economy. So in effect, tax cuts for the rich, entitlement spending cuts, and reform.

Another reason to cut spending and maintain the Bush tax cuts across the board.




Weeeeeeeeeeeeeeeeeeee

Hah..

Sounds a lot like the Small Business Jobs Tax Relief Act of 2010.

Funny thing is that Republicans voted against the Small Business Jobs Tax Relief Act of 2010 that basically provided for most of what you listed above.

Like cuts in capital gains tax, payroll tax holiday, income tax credit, healthcare tax credit, and a number of tax cuts for small businesses.

Republicans in congress are idiots and more reason to vote them out.


What needs to be done:
1. Increase income taxes on the rich
2. Keep income tax cuts for those making $250k/yr or less.
3. Reduce capital gains tax and provide tax credit to small businesses to encourage business investment and hiring.

Similar to what was done under Pres. Clinton's administration.

[ebuddy]

Originally Posted by hyteckit 

Hah..

Sounds a lot like the Small Business Jobs Tax Relief Act of 2010.

Yeah, except now $250k is "rich", there is no Balanced Budget Act, and businesses struggling to meet their obligations do not need additional loans granted them through the US Treasury. The problem is people aren't buying their products and for the government to pop in and create its own temporary "winners" has been the problem, not the solution. Just another ticking time-bomb initiative that does little more than give Dems something to talk about during their fall recess.

So... tax cuts are good unless they're tacked on to a small-business welfare package paid for by larger businesses, and brought to the floor for a vote the day it was completed with 0 Republican input.

[ebuddy]

Our tally so far? 11 of 16 want the tax cuts across the board.

So it is, 11 cigar-chomping, "tax cuts for the rich" wingers then. You zealots!

[BadKosh]

And the rest are liberal tax-n-spend Marxists with no real world experience?

[The Final Dakar]

Originally Posted by BadKosh 

And the rest are liberal tax-n-spend Marxists with no real world experience?

Proof?

[olePigeon]

Originally Posted by hyteckit 

What needs to be done:
1. Increase income taxes on the rich

That will do nothing except make rich people put their money into other forms of non taxable income. What the Government needs to do is close the tax loopholes that allow rich people to commit tax evasion and get away with it.

Go ahead and lower the income tax on the rich, just make sure they actually pay income tax.