Bush tax cut analysis

[August]

Originally Posted by mookiemookie

Like a Jew in Berlin circa 1942

For you to say that shows you know absolutely nothing about the subject. Has the government made you wear one of those Obama symbols on your clothing? Have they confiscated everything you had of value and destroyed the rest?

Has anyone carted you and your family off to a death camp?

Frankly your post is an insult to the memory of the millions of people who were murdered or dispossessed by the nazis and it's not at all funny.

[GoldenRivet]

Originally Posted by August

Frankly your post is an insult to the memory of the millions of people who were murdered or dispossessed by the nazis and it's not at all funny.

agreed.

in another since he is practically calling Houstonians or even Texans as a whole "NAZIs"

[August]

Originally Posted by GoldenRivet

agreed.

in another since he is practically calling Houstonians or even Texans as a whole "NAZIs"

The thing is I usually like Mookies post but he went way over the line this time.

[SteamWake]

So... we were talking about??

[tater]

Current revenues as a % of GDP are just shy of 18% (17.7, 17.8, etc) with the Bush cuts in place.

This is an entirely normal value. The cuts did not decrease revenue as a % of GDP in any meaningful way. In addition, you cannot say what losses might have taken place with the previous rates, it's all speculation, and economic forecasting is frankly crap (coming from a physics background, I expect far smaller error bars before I'm willing to call something predictive).

The % has been in this range up and down since WW2 (between 16.something and 20% of GDP, and the vast majority of years in the 17% range).

Since revenues are essentially flat WRT marginal rates, why have them higher? Increase rates, and economy must contract just enough to offset the rise. Decrease rates, and it rises a little, keeping the revenue % nearly constant.

With any substantial changes in either direction, you'll see a spike for the year(s) of introduction, that's it. Then it stabilizes again.

What I'd prefer to see is a rationalization for spending 2/3 of our tax dollars (those of us that actually, you know, pay taxes enough to matter) on charity programs given mostly to people who don't need charity.

[mookiemookie]

Originally Posted by August

For you to say that shows you know absolutely nothing about the subject. Has the government made you wear one of those Obama symbols on your clothing? Have they confiscated everything you had of value and destroyed the rest?

Has anyone carted you and your family off to a death camp?

Frankly your post is an insult to the memory of the millions of people who were murdered or dispossessed by the nazis and it's not at all funny.

Originally Posted by GoldenRivet

agreed.

in another since he is practically calling Houstonians or even Texans as a whole "NAZIs"

Originally Posted by August

The thing is I usually like Mookies post but he went way over the line this time.

Oh stop it. I'm the liberal. I'm supposed to be the easily offended one.

A little light reading for you: http://en.wikipedia.org/wiki/Hyperbole

[Aramike]

Originally Posted by GoldenRivet

Something tells me you dont have it that bad

At any rate we have learned that deep tax cuts dont spur the economy.


we have also learned that taxing peoples asses off and bailing out big business fat cats with the money doesnt do it either.

so what is your solution guys?

Deep tax cuts DO spur the economy, but only on a long term basis when consumer confidence is high. People tend to spend when they have more money in their pockets, but they tend to hoard that money when they feel as though they may need it down the road in the near term.

As far as a solution goes, your guess is as good as mine. However, I would make damned sure not to raise tax rates right now. I also would try further incentivizing companies that do production-oriented business stateside. Finally, I would penalize companies that produce goods in other nation's whose markets are not as open to us as ours are to them.

[Ducimus]

Originally Posted by GoldenRivet

Something tells me you dont have it that bad

At any rate we have learned that deep tax cuts dont spur the economy.


we have also learned that taxing peoples asses off and bailing out big business fat cats with the money doesnt do it either.

so what is your solution guys?

Yesterday I watched some of this program on the history channel called "The crumbling of America." What it was about, was how our infrastructure is falling apart because it is not being maintained properly, or upgraded. This ranges from the sewer systems, highway and transportation, dams and levee's, the power grid, etc. Several examples the program cited were MAJOR eye openers. Particuarly the nations power grid, which, at current rate, according to estimates, will be on par with a 3rd world nation in 20 to 30 years. Imagine that, being equivlant to a 3rd world nation?

Upgrading, modernizing, replacing America's infra structure would be a HUGE source of jobs. Unfortunately, NOBODY wants to spend the money. What I think we should do, is shut down some of our overseas bases, like say in Korea. Also shut down any and all foreign aid, and the like that only bennfit other nations. Use that money, and start a work program to work on our infrastructure. I think this would go much farther to stimulate the economy then a lousy 200 dollar check that most people probably deposit in their saving because income and job prospects are dismal.

[tater]

Cancel all of the unspent "stimulus."

Spend a good fraction of it on infrastructure repair.

Save the rest.

Very little of the stimulus was actually roads, and other things that are both stimulating, and useful. Most was pork (estimates I've seen show ~90% of the "stimulus" was BS political payback).

[GoldenRivet]

Originally Posted by Ducimus

Yesterday I watched some of this program on the history channel called "The crumbling of America." What it was about, was how our infrastructure is falling apart because it is not being maintained properly, or upgraded. This ranges from the sewer systems, highway and transportation, dams and levee's, the power grid, etc. Several examples the program cited were MAJOR eye openers. Particuarly the nations power grid, which, at current rate, according to estimates, will be on par with a 3rd world nation in 20 to 30 years. Imagine that, being equivlant to a 3rd world nation?

Upgrading, modernizing, replacing America's infra structure would be a HUGE source of jobs. Unfortunately, NOBODY wants to spend the money. What I think we should do, is shut down some of our overseas bases, like say in Korea. Also shut down any and all foreign aid, and the like that only bennfit other nations. Use that money, and start a work program to work on our infrastructure. I think this would go much farther to stimulate the economy then a lousy 200 dollar check that most people probably deposit in their saving because income and job prospects are dismal.

I can agree with this statement to some extent. a few points though.

1. What happens to South Korea when the United States closes a couple of bases? North Korea senses the US is weakening in its stance in the Pacific? Perhaps attacks them? maybe maybe not

2. Sure we need to upgrade our infrastructure but the fact is that almost every spending bill out there is filled with "pork spending" in other words. if you sign a bill for $1.5B you can bet the first half of that money is going to go to some BS like teaching Africans to wash their genitals or to study foot odor or some other nonsense.

3. In a time when a lot of people are fed up with government spending and stimulus packages to bail out big business and the ever increasing and astronomical national debt ... how do you as a representative of the people justify spending the trillions of dollars to upgrade all of the things you have mentioned?

The fact is that the federal government has its hands in too many things. and needs to shrink.

the government needs to do what it was meant to do and simply:

1. regulate interstate and international trade

2. levy fair taxes

3. defend the borders of our nation from invasion, intrusion or attack.

4. Let the states handle everything else.

When the top marginal rate dropped in the early 80s (hugely dropped from a top rate ~70%), tax revenues initially fell by a percent or two, then came back up.

And the whole point is that the theory is crap because the losses during the initial fall are never made up by the eventual rise.
So all it does is increase the debt which has to be serviced.

[Ducimus]

Originally Posted by GoldenRivet

I can agree with this statement to some extent. a few points though.

1. Who the ******* cares? America First IMO.

2. Pity we can't purge washington of professional politicians worried about re election and special interest groups. That's why this is all academic, and nothing will ever be accomplished.... ever. All we'll get is the same old BS. I question if "We the people" have any real say in the country anymore.

3. Idea was to reallocate (as much as possible) money that was being spent that was not a direct bennffit to the American people. Foreign aid, bases where people spit in our faces, etc. Again, America first. Ideally you'd want infrastructure repair at the state level, but that is clearly not going to happen if California is any example.

We can sit here and wish, and armchair politico all we want, vote, whatever, but in the end, nothing will ever happen.

[tater]

Originally Posted by Tribesman

And the whole point is that the theory is crap because the losses during the initial fall are never made up by the eventual rise.
So all it does is increase the debt which has to be serviced.

Huh? The revenue generated does not fall over any meaningful time period as a % of GDP.

GDP, OTOH, increases, so the total revenue actually does increase.

So you get a 1% drop for 1 year, then back up, say, and the GDP rises 3%. Net gain is 2%.

Regardless, doom and gloom that states that tax cuts HURT are similarly BS. If the claims they were harmful were true, revenue would plummet, and stay there with tax cuts. Neither are true. The idea that cuts contribute to growth seems true since revenue seems constant WRT GDP with cuts or tax increases. Raise taxes, and you get a 1 year spike, maybe, but GDP stagnates and total revenue remains constant.

[Aramike]

Oh stop it. I'm the liberal. I'm supposed to be the easily offended one.

A little light reading for you: http://en.wikipedia.org/wiki/Hyperbole

Heh, fair enough - but perhaps for everyone's sake you could keep the Holocaust hyperbole to a minimum?

So you get a 1% drop for 1 year, then back up, say, and the GDP rises 3%. Net gain is 2%.

No because the net gain is no where near 2% and the lost revenue is lost with interest.
One reason why the tax cut boost doesn't work is because to match the loss of revenue you have to cut the expenses, but in the wonderful way government and nations work cutting expenses is expensive so it either isn't done or would have been better if not done.
Its a never ending loop