“… because that’s where the money is.”

You gotta get it from where it is, cuz you ain't gonna get it from where it ain't.

George Rebane

The President keeps pointing his accusing finger at the “rich” (those earning more than $250K annually) for being under-taxed and thereby keeping the nation from solving its financial problems.  That is a lying ruse to keep the sheeple’s attention from the actual taxes that he intends to increase on his hallowed middle-class – remember? those are the people he is forever promising to protect from higher taxes.

Well, taxing only the rich isn’t going to happen for the same reason that we still quote America’s iconic bank robber Willie Sutton.  Liberals are forever doubting the allocation and sourcing of the nation’s income taxes.  They can’t seem to come to grips with the fact that the top earners already pay the overwhelming fraction of income tax revenues to the governments – starting with the feds and going down the tax jurisdiction ladder (see the graphics in RR’s ‘As We Talk About Taxes and Skin in the Game’).

California is on its fiscal last legs because it decided years ago to put the heavy part of its tax yoke overwhelmingly on its job-creating ‘rich’.  Now these people are thundering out of the state, and doing everything possible to deny our stupid and rapacious government additional monies to waste.

Looking at the most recent IRS data available makes it clear where Obama and the progressives will go to get more money for their bamboozle named “tax reform”, the tax increases that they are now calling for daily.  Take a look at the nearby histogram filched from the 18apr11 WSJ, and then read the accompanying piece ‘Where the Tax Money Is’ that considers what if we just stick a gun in the faces of the rich and take ALL their earnings.

Comments

[Russ Steele]

Some insight to CA Tax system which relies on the wealthy from CalPolitical News. (http://capoliticalnews.com/blog_post/show/8325)

It is the rich, not the poor or middle class that keeps California government alive.  As the rich leave the State due to bad regulations and high taxes, with Brown asking for a $70 billion transfer from families and businesses, the revenues of the State are decreasing. In March, our revenues were $370 million less than expected, with corporation taxes down significantly.

"Over the past few decades, California’s budget has become reliant on its richest residents. Roughly a quarter of the state’s General Fund revenue comes from the personal income tax of Californians earning $300,000 or more — a group of tax filers that’s smaller than the population of Stockton.

California faces another multi-billion-budget deficit in part because these rich taxpayers are making less money. Today, many of California’s wealthiest residents earn much of their money not from salaries but from the return on investments. When the economy is good and they’re recording capital gains from selling stocks or real estate, their personal income skyrockets. But when the economy is bad — like it is now — those capital gains dry up. And California suffers.

For example, from 2007 to 2008, the most recent years for which tax data is available, Californians earning $300,000 or more saw their tax liability drop by $7.4 billion, according to figures collected by the Franchise Tax Board. That, of course, coincides with the collapse of the housing market and the larger U.S. economy."

The California Depression will continue, and get worse, unless Sacramento returns money to the makers and cut the takers.

[Todd Juvinall]

Didn't Willie Sutton make the statement? LOL. When we read the newspaper today we see the taxpayers have gien grants of our money to the Nature Conservancy to buy private property around Independence Lake. Now, if the property goes off the tax roles in some phony easement scam, the taxpayers get a double whammy. These are the kinds of things Tom McClintock needs to put a stop too. We have no money to supposedly run our country but the politicians can always find our money to buy property. The Feds and State already own half of California and most of Nevada. Insanity!

[Greg Goodknight]

The ultimate money quote was not from the lips of famed bank robber Willie Sutton... it was fabricated by a news reporter and attributed to Sutton.

Or so Sutton said when being interviewed for his book tour some years ago.

[RL Crabb]

Damn creative media!

[Paul Emery]

Here's a good one from the conservative publication the Weekly Standard in 2005 commenting on the famous Cheney quote "Deficits don't matter," Hmmm Looks like conservative economics take a pretty pragmatic view depending on who's in the Big Chair. The Repubs controlled it all in those days.

http://www.weeklystandard.com/Content/Public/Articles/000/000/005/245esggv.asp?page=1

[Todd Juvinall]

We all disagreed with that so what's yurr point?

[George Rebane]

Paul - Cheney tried to make a point with his 'deficits don't matter' comment, and he didn't make it very well. What counts is not the deficits nor the debt, but our ability to service that debt. The debt service to budget, or debt service to GDP are the real measures that matter. I hope that I made this clear here
http://rebaneruminations.typepad.com/rebanes_ruminations/2010/06/the-rebane-ratio-lives-.html#more and earlier here http://rebaneruminations.typepad.com/rebanes_ruminations/2010/06/fridays-federal-fiscal-follies.html

[Paul Emery]

My point is that as long as things are flying high neither party cares about things like the deficit or the housing and .com bubbles. That's why it is so hypocritical for the Repubs or the Dems to take such an arrogant stand as if they know the answer to the situation they allowed to happen under their watch. What can't be denied, however, is that historically the Republicans set the standard for deficit spending until Obama fumbled picking up the scraps after the Bush disaster.

[D. King]

"...Cheney quote "Deficits don't matter,"..."

I'll see your Cheney and raise you an Obama.

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure…”

Doh!

http://tinyurl.com/2aqln58

[George Rebane]

Paul, many conservatives would agree with your first part but would have trouble with the "Obama fumbled" notion.

The alternative that best fits the data IMHO is that Obama is following an agenda to make America a more compliant and normative member of the community of nations. This is required for the new world order as envisioned by his philosophical peers and mentors ranging from Soros through Cloward-Piven to Trumka. And such a fundamental transformation can only be achieved by weakening America from the inside.

[Paul Emery]

So George, since you are taking the conversation into your personal vision that Obama is prodding this country into the darkness of the new world order by assisting in its its decline you must agree that Bush Jr did a pretty good job setting things up for him to take over. Was Bush and his administration an intentional part of this process? How about Clinton.

[D. King]

How about Clinton.(?)

Really?

Are you asking because you don't know, or, because you want to see if we know?

“The Motor Voter law has also been used to open another vulnerability in the system: the registration of vast numbers of illegal aliens, who then reliably vote Democrat. Herein lies the real reason Democrats are so anxious for open borders, security be damned.”

http://www.americanthinker.com/2009/11/clowardpiven_government.html

“For there to be a tenfold increase in subprime mortgages means that something dramatic had to happen. So what was it?
In this case, it was the Clinton administration.
In 1994, the administration pushed through some fundamental changes to the Community Reinvestment Act of 1977. The goal of these changes was to make sure that banks were “serving low and moderate income geographies” and making sure that these banks “economically empowered persons of low and moderate income”.”

http://www.sundriesshack.com/2008/09/21/the-roots-of-the-subprime-mortgage-mess-have-clinton-all-over-them/

[Paul Emery]

D King

Bush certainly seemed to enjoy the party that you claim Clinton started. You can do better than that.

Here's from an article in the NY Times

"For much of the Bush presidency, the White House was preoccupied by terrorism and war; on the economic front, its pressing concerns were cutting taxes and privatizing Social Security, a government retirement and disability benefits program. The housing market was a bright spot: Ever-rising home values kept the economy humming, as owners drew down on their equity to buy consumer goods and pack their children off to college.

Lawrence Lindsay, Bush's first chief economic adviser, said there was little impetus to raise alarms about the proliferation of easy credit that was helping Bush meet housing goals.

"No one wanted to stop that bubble," Lindsay said. "It would have conflicted with the president's own policies."

http://www.nytimes.com/2008/12/21/business/worldbusiness/21iht-admin.4.18853088.html

More here from Ron Paul

http://www.ronpaul.com/2008-09-26/gw-bush-on-the-housing-boom-oct-2002/

G.W. Bush on the Housing Boom – Oct. 2002

THE PRESIDENT:

Thank you, all. Thanks, for coming. Well, thanks for the warm welcome. Thank you for being here today. I appreciate your attendance to this very important conference. You see, we want everybody in America to own their own home. That’s what we want. This is – an ownership society is a compassionate society.

More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That’s a homeownership gap. It’s a – it’s a gap that we’ve got to work together to close for the good of our country, for the sake of a more hopeful future. We’ve got to work to knock down the barriers that have created a homeownership gap.

I set an ambitious goal. It’s one that I believe we can achieve. It’s a clear goal, that by the end of this decade we’ll increase the number of minority homeowners by at least 5.5 million families. .........

[Scott Obermuller]

When the Chinese take over this country Paul will still be spitting on a picture of Bush.
Paul, can you give specific examples of what Bush, all by himself, did that was so bad? I know the last thing you referred me to pointed out that he wanted to increase home ownership by minorities. Gasp! Put another set of horns on that devil! Of course he was just continuing what Clinton had done. But Clinton good, Bush bad ... Baaah Baah. You might want to climb out of the partisan mud and pay attention. Conservatives were not pleased with the Bush admin. You know that but you keep claiming that we are hypocrites, because it's the only feeble argument you can come up with as the great society redux sinks ever more into the mire. The biggest debt problems we face, by far, are SS and Medicare - both proud creations of the Dems. Bush at least tried, timidly, to fix the underlying problem of SS and you blame him for the mess we are in? He wasn't the best but the debt problem had been building for decades. Trying to blame it all on Bush is ridiculous. If we had stuck to the Constitution, we wouldn't have all these problems, but as a Dem congressman bragged - "Constitution? We don't care what's in the Constitution. We just do what we want to do." And so you do, sir. Thanks.

[D. King]

Paul

I see it linearly from Bush Sr. to Obama.
So, I don't defend GW in this. I concur with George’s view. Whether it’s Global Warming and E.P.A. regulations, or Land use (farming, mining, or grazing rights) the goal is the same; to undermine the status quo. I believe some see this as a game. The problem is that there are real consequences most playing do not understand.

Dave

[D. King]

BTW Paul, here is the guy that wrote the NYT story you linked to.

http://dealbook.nytimes.com/2010/04/09/goldman-said-to-hire-former-nyt-reporter/

[Todd Juvinall]

Scott has it right. We Americans on the conservative side try our best to resist the left's attempts to make everyone a victim. Most of the time we succeed but every once in a while we fail. Bush's comments above show me a leader trying to do the right thing which Paul would applaud if it was a lefty. Bush tried to start the repair of SS but the democrats demagogued him relentlessly in the press, scaring the hell out of everyone. The Schumer negatory machine then filibustered every attempt to even look at repairs. Bush was not perfect by any stretch but he had a much better administration than the present fellow. The economy was humming along and we were able to enjoy peace here at home.

[wmartin]

I would suggest avoiding being drawn into Mr Emery's trap of arguing about political figures rather than policy. In an action-figure view of the world, arguments devolve into madly googling he-said, she-said newspaper quotes. It's a suitable mire for a political junkie to hang out but is only loosely analogous to the real world, made up of the actions of several billion intelligent agents.

I've always been confused by this single minded need to find simple causalities in complex systems...and then to attach a face to the deed.

As for the conservatives (or liberals) themselves, my theory is that they come to the table with what is basically an emotional aesthetic to the nature of society, attempt to find some sparse data to back it up, and then assume that everyone on the same side of the aisle feels exactly as they do.

[Mikey McD]

Bush was a piker (with the exception of tax cuts and leadership around 9-11). Obama is a Piker (with the exception of extending the Bush tax cuts). Both have encouraged spending binges (understatement), FED Reserve manipulation, and un-constitutional wars to wage on, and on, and on. Obama's spending is Bush spending on a dangerous mix of crack and steroids. Obama's open war on the wealthy is scary to those of us who wish to help our country by serving our fellow man in a free society.

Clinton was LUCKY to have been president during a booming economy THANKS to producer's (technology revolution).

Clinton = piker
bush = piker
Obama = piker

I see a trend....

[Mikey McD]

As my bumper sticker says "It's not the left versus right; it's the state versus you."

[Todd Juvinall]

I find it interesting that when someone believes in a set of rules they become marginalized by those that believe in nothing. Why is that wmartin?

[Mikey McD]

Why are 'we' morally against discrimination when it concerns people's age, sex, religion, race... but, even our president openly endorses the discrimination of people based on social status (wealth)?

[George Rebane]

"... taking the conversation into your personal vision that Obama is prodding this country into the darkness of the new world order..." Paul, you may have misunderstood my posts on Obama's agenda, and/or not understood the progressives' overarching goal (although I doubt the latter).

That goal of a new world order where socialism rules is not viewed by progressives as being one of "darkness". Obama and cohort sincerely believe that such a global collective is the best destiny for mankind in which the most possible can be given to the most needy. They see such a social order as anything but dystopian, and themselves as saviors of earth and man.

And Obama's agenda to reach that goal is demanded by Occam and more than obvious to at least 40% of the electorate (Pew Research). The local left here always takes such commentary from us (more specifically "personal" to me) as being something unique and rare, cooked up by an agitated and isolated mind under our pine trees. However, becoming aware of attitudes beyond those reported by the lamestream would effectively remove such blinders.

[wmartin]

The problem stems from when rules become too decoupled from reality. It's in the nature of humans to think in analogy rather than from first principles and frankly, we're not smart enough to do otherwise. A knowledge base constructed on television and light internet reading is built on sand.

Given our limitations, probably the best answer is to avoid being too sure and to embrace being proved wrong. It makes life more interesting if nothing else.

In general, I'd say that economic belief systems tend to be the most amusing this way. Aside from huge systemic shocks, a large war for instance will result in known side effects, the ability of people to predict the future is laughably bad. Unintended consequences rule the day and the Monday morning quarterbacks look for patterns.

Take, for example, the arguments about current government deficits or the housing bubble. The strong temptation is to look for simple causes, usually somehow wrapped around US domestic politics. Think about it for a sec. Then look up those same charts for countries around the world. Ask yourself how Clinton or Barney Frank or either Bush caused a run up in house values in the UK. The likelihood of a deeper logic at work is quite high.

[Scott Obermuller]

Please don't take my comments to be "defences" of Bush. He was a bitter disappointment. Just trying to get past this nonsense that he took a completely healthy economy and ruined all by himself. He had plenty of Dem help in running up the deficit in his last 2 years. The country has been lurching leftward under several different admins and congresses. It's laughable to pin this on Bush. It's not R vs D but a question of returning the country to a lawfully run operation. Cutting the budget by itself will lead to huge problems. We have to have a thriving private sector to employ the laid off govt masses. With the govt hostility to a free market and the tax and regulatory mess we have, the job creation just won't happen. But I doubt there will be any real budget cutting any time soon, so it's academic.

[Paul Emery]

W. Martin or anyone else have you read The Big Short by Michael Lewis or seen the film Inside Job ? They both tell the story of how the economic system (worldwide) can be exploited legally by very smart and ruthless people. This did occur while Bush had his hands on the wheel. He sat back and watched it happen then presided over the bailouts in Oct 2008. Obama then raised the bet in 2009 making it a consensus policy. Banks, mortgage companies and insurance companies were reimbursed by the US government to pay for their mistakes and to keep them in business. Nobody helped the families and individuals when they made mistakes in overextending their financial capabilities like the banksters and insurance gamblers who used taxpayer money to hedge their bets.

So we're supposed top do backflips and hi fives over Ryans budget or Obama's entre when it comes from the same crew that sat back and let this happen?

I will content that Bush was the worst president in modern history. He started out with a surplus that he returned to the taxpayers rather than pay down the debt and drove us off the cliff with two unfunded and unending wars and the worst financial crisis since the great depression. I'm not saying he was solely responsible but you must admit he sat back and did nothing to prevent what turned out to be an inevitable process. He was the Captain at the wheel when the ship went down.

[Todd Juvinall]

Paul you are stuck man, you need to give yourself a vacation before you lose it all. LOL

[Paul Emery]

Thanks for your concerns Todd. I'll be OK

[Paul Emery]

Scott

I tend to agree with your rather bleak assessment. As long as we huddle under the blankets provided by the Republicrats thinking we're going to find the way out of this mess we're sunk. The last serious effort from elected leadership to have a Balanced Budget Amendment came from Democratic Senator Paul Simon in 2004 I think. He was brushed aside as an annoyance by both parties. So we elect our Repubs or Dems, they go to Washington, join the club, accept billions in special interest money and expect us to think they are acting for the public good? When it comes to voting we hold our nose and vote according to our slant and perpetuate the whole thing. The TP's have some passion but no strategy. Most are loyal Repubs and will support who ever is presented to them in the end. The Dems have no passion and have a very uninspiring leader in Obama with nobody in the wings. What is it Einstein said
"We can't solve problems by using the same kind of thinking we used when we created them."
That about sums it up for me.

Thanks everyone for the thoughtful discussion.

[Scott Obermuller]

Paul, the Dems covered the criminal activity at Fannie/Freddie to cover themselves. The R's tried to stop it and were called racist. Your version is deliberately ignorant so you can selectively blame the people you don't like. I blame plenty of people regardless of party affiliation. The housing bubble and collapse could only occur after and because of the improper intervention of the fed govt into the free market. The subsequent stupidity and greed and criminal activity could only occur because of what the govt did first. I want EVERYONE to go to prison that committed crimes instead of them being handed my money as Obama is doing. Bankers, politicians, home owners, govt officials, everyone.
The cost of the wars doesn't come close to the reason for the debt we are in. CRO figures are about 1.2 Trillion total while Bush was in office. A group of folks called the Congress approved the expenditures. If they had not, it wouldn't have been spent. That would make them just as responsible. President Obama projects that the gross federal debt will top $15 trillion this year. That's one year. It will get worse next year. According to the Congressional Budget Office, the Fannie/Freddie bailout losses could balloon to $400 billion. Since it's open ended, that is probably a conservative figure. And there is more, lots more.
You hate Bush and all of your ideas follow that. I look at reality in total and care not where the blame lies. I don't worry about you needing a vacation, selective thinking always means there is not too much to think about.

[Paul Emery]

Scott

1.2 Trillion no big deal. Huh? That was a Republican Congress that approved the spending with no thought of how the money was going to be raised other than to go into debt.

[Todd Juvinall]

Paul, the democrats voted for the wars too. Why do you not give them credit? Also, the war in Iraq is a righteous war, especially for the females. Why don't you give them some respect?

[Paul Emery]

Of course the Dems voted for it as well. I don't claim otherwise. The problem as it applies to this thread is that they increased spending 1.2 T and didn't increase revenue. I think George put it this way.

"Paul, I can't add anything to what Russ and Scott have so well appended here.
Deficit = Spending - Revenues"

So Todd what makes a war righteous. Why is the war in Iraq righteous
and the one in Tunisia not righteous. Are you saying it's OK to go to war to protect woman's rights?

As for the situation for woman in Iraq having improved you must be joking.
http://articles.cnn.com/2007-06-26/world/pysk.mohammed_1_honor-killings-baghdad-morgue-iraqi-women?_s=PM:WORLD

"Yanar Mohammed left the comfort of her Toronto, Canada, home to return to Iraq and fight for a cause she says is overlooked in her native country -- women's rights.

"The upper hand was given to the Islamists and to the tribals," Mohammed said of the formation of Iraq's young democracy. "Nobody listened to us," she said in a recent CNN interview. "To the tribals, to the Islamists, but never to women."

In 2003, Mohammed founded the Organization of Women's Freedom in Iraq, in order to give voice to and seek protection for those women in Iraq who are in need."

Or here http://www.globalresearch.ca/index.php?context=va&aid=1054
"Immediately after the invasion, the U.S. embarked on cultivating friendships with religious groups and clerics. The aim was the complete destruction of nationalist movements, including women’s rights movements, and replacing them with expatriate religious fanatics and criminals piggybacked from Iran, the U.S. and Britain. In the mean time the U.S. moved to liquidate any Iraqi opposition or dissent to the Occupation."

You might be confusing Iraq with Afghanistan where that statement might have some validity but was no

[Todd Juvinall]

No, in my opinion they are both righteous. Regarding what is a righteous war. Sometimes blood and treasure are expended for a larger purpose, like helping others break the chains for freedom. Sort of like the French did for us in the Revo War. Of course one must decide when to go so not everyone can receive the help they need when they need it.

[Scott Obermuller]

Paul, I never said 1.2T was nothing. It's a lot. That's why I was comparing it to the 15T that Obama has admitted to as debt in 1 year of his budget. Last time I checked, the 1.2T over several years is a lot less than 15T in one year. And the money he has spent to "save" jobs has just made things worse, much worse. The housing market has just drifted slowly downward in a slow death spiral. We should have let everything bottom out on it's own and we would have been on a rebound years ago. Instead, the slow downward market is taking out even the folks that were making their payments just fine. His energy policy is a suicide pact for our economy. And there were Dems that voted for the war - in fact those were necessary votes. Are you going to claim that after 9/11 if there was a Dem congress and president, we wouldn't have spent any money for any military action? Obama has taken a bad situation in this country and compounded it into a disaster. Everything he criticised Bush for he has either continued to do as well or done even more of. I will note the exception of abortion. He had a perfect 100% rating with NARAL to uphold and he certainly came through for them. Obama is spending more money than even a huge tax increase that he wants will cover. You libs just can't count or face facts. We are going to crash and burn and soaking the rich for every dime they have won't save us.

[George Rebane]

As I watch this discussion thread develop, it is remarkable that there are still participants who continue to reject the oft and here-posted IRS income data on earners which clearly shows that taking all the rich have will not come close to closing the gap as claimed by Obama. Yet taking the risk that taxing them heavily will have an effect on the economy's output is of no concern to those very same people.

With such blinders firmly in place, the circular course of the debate is established, and its fore ordained termination dictated by fatigue.

[wmartin]

Of course there's not enough money.

The political whack-a-mole will soon progress from George Bush, to Obama, to how 'our money' problems stem from some sort of corporate welfare. It's all based on the premise that if you simply pass out enough pieces of paper with numbers on them, everyone can be well off.

Really, I believe that there's two long term trends at work. The first is fairly obvious, what percentage of the total economy is subsumed into government spending? Nearly 100% is controlled in some fashion, but I mean simple confiscation followed by repurposing US currency.

The second is a bit more subtle. Simply put, there is less real wealth per capita in the US than people think. We are currently going through an adjustment period where the new reality has to settle out. My own model is a sort of Gaian view of the economy, it wants to be in equilibrium but needs to steal from one sector or the other to find it's way. On the ground, this means that one group or the other will take losses as they desperately try to hold on to what they have. Either inflation and/or losses in stock and bond markets and/or house value and/or cuts in pensions and/or etc. is needed to pull the air out of the system.

All of this is in a giant feedback loop and is practically impossible to predict. Consequences will be strange (for instance: tax the rich + money drawn from brokerage accounts = price inflation in hard goods + drop in value of 401(k)s and pension funds) but unavoidable.

[D. King]

GE's Profit Jumps 77%

Well knock me over with a feather!

http://online.wsj.com/article/SB10001424052748703983704576276564256544634.html?mod=WSJ_hp_LEFTTopStories

Just wait until we get mandatory appliance regulations.

Please, can anyone explain to me how this is NOT CORRUPTION…no, really, can you?

[Paul Emery]

Scott

I agree with much of what you say and I am certainly not a big Obama . As far as money spent on military it is my firm conviction that Gore or McCain would not have involved us in Iraq. What's wrong with the idea that if we go to war that there should be some kind of war tax to cover the cost required up front ? It would actually serve as a deterrent,

The Ryan tax cuts are dead in the water and not even worth discussing. It's mostly a matter of how the Repubs can distance themselves from it in the next election cycle. That and the pressure from the TP's for more drastic cuts will certainly serve to the Dems advantage if they get their act together. I say return to the Clinton tax rates as a start because that worked pretty well and balanced our budget for three years. The fact Bush lowered taxes on the wealthy and that it produced few if any jobs is well established.

[Mikey McD]

Not a fact; pure opinion: "The fact Bush lowered taxes on the wealthy and that it produced few if any jobs is well established."

Imagine the economic hell we would be enduring if 1.) Bush had never lowered taxes ON ALL AMERICANS and 2.) his tax cuts were not extended.

Paul, your hatred of the wealthy is not a virtue. Would you have me teach my kids to hate/target/bully a fellow student based on income level?

[Paul Emery]

Mikey

Here are the facts, from Fox news none the less. The economic hell you describe is theoretical. Just because I believe that a return to Clinton tax rates is in the best interests of the country does not mean I hate the rich. I just don't see the historical basis for saying lower tax rates on the wealthy, that increase the deficit, creates jobs and increased productivity that offset the decline in revenue that in turn increases the deficit .

"Under Bush, the economy produced 3.7 million new jobs from January 2001 through December of last year based on nonfarm payroll figures collected by the Labor Department's Bureau of Labor Statistics......

When Clinton was in the White House, the economy generated 17.6 million jobs during the corresponding period — from January 1993 to December 1998. Under Reagan, 9.5 million jobs were created from January 1981 to December 1986.

Read more: http://www.foxnews.com/story/0,2933,242424,00.html#ixzz1KBA7hIbm

[Mikey McD]

those putting their faith in government appear to have selective memory (hypocrisy?)...

Clinton economy had the benefit of a technology revolution (aided by The FED politics/actions) and a bubble which had not yet popped;

Bush economy had the ill affects of the Dot.com bubble burst/9-11 (fueled by The FED and government policy)

Obama economy had the ill affects of the housing bubble burst(fueled by The FED and government policy)

I contend that the Bush Tax cuts have kept America from falling into a deeper recession and that any increase in income taxes should be equitably shared by each American.

If you believe that by taxing the job creators you get more jobs than I agree with Rebane "With such blinders firmly in place, the circular course of the debate is established, and its fore ordained termination dictated by fatigue."

[wmartin]

"I say return to the Clinton tax rates as a start because that worked pretty well and balanced our budget for three years"

You are drawing a huge conclusion here. Budgets consist of outgoing money, the effective tax rate, and the amount of income coming in to the tax payers. The rates are the only part of the equation mentioned in this statement.

I'd love to see the uproar with Clinton era tax rates being reimplemented. The bottom 20% would see a 50% rise in their total tax hit for one thing.

FWIW, the effective tax rate in 1995 for the top 1% was about 23%, in 2005 it was about 20%. Figures from CBO.

[Paul Emery]

Once again, Clinton left us with a surplus when he left office that Bush returned to the taxpayer rather than pay down the deficit. This is historically accurate. Where were the TP legions in those days? Demanding a refund no doubt.

[wmartin]

LOL. So Clinton was single-handedly responsible for the financial situation of the US? That's aside from Gore's work on the internet I suppose.

Now that I think of it, who was dominant in the House and Senate at the time? That would have been FY2000 I guess. It's been awhile and I'm too lazy to look it up.

[Paul Emery]

No problem. It was a Republican House and Senate, something that I noted way back in this thread. I never said Clinton was solely responsible. We cannot dig ourselves out of this hole, however, without a similar tax rate. What do people do if they are in debt? Spend less and increase income. Same with the Fed budget. Spend less and increase income which means increased taxes or, as some of you may believe increase overall prosperity to increase tax revenue. Nice trick if you can pull it off. The predictable response is less regulations (which ones ?) and free markets which no one can explain in practical language will increase prosperity. These ideas mean nothing without specifics.

[Scott Obermuller]

Paul - The tax hikes aren't going to do it. Proven fact. The well to do in this country don't have enough money. And you want to cut spending, but bad mouth the TP. That's what the TP wants to do. Cut spending. Yes, we have to increase revenues by increased prosperity. That is the only way. There is no other way. And yet you mock the idea. There have been detailed articles about bad regulations for decades. The fact that you don't know any shows that you don't pay attention to any thing other than the hate Bush echo chamber. The free market does increase prosperity for producers. But not for slackers, layabouts, left wingers living on handouts and so forth. The free market is color blind, gender neutral and greatly decreases govt corruption. If producers and consumers can carry on business without having to drag along a lot of dead weight, there has to be more prosperity. What 2 large institutions in this country have had their costs escalate far more than the rate of inflation? And when did this trend start? Answer - education and health care. And they started the trend right after the fed govt started subsidizing them. And how does over priced education and health care make us prosperous?

[wmartin]

It sounds to me that what Mr. Emery is wanting to argue about, and perhaps (like anyone really) set up strawmen to fight with, is the notion of 'policy' generally.

The mere notion of it is a thing that's worth mulling over.

It seems that 100% of the people on the 'Left' and many of those on the other side of the aisle have this idea that if you just pick the right wise man or cabal, that everything will be right. They will make wise decisions, the decision will result in known outcomes, and the sun will shine.

My own view is that things that seem major at the time, and everything seems major at the time, that are the direct outcomes of various wise men tend to disappear in the noise of the crowd. In the long run, the crowd determines where the ship travels.

Really, something like the Iraq war will just be a history footnote in not too many years, much like the Spanish-American war (which it rhymes with), but the country will end up in strange places determined by the net results of 300M people pulling on various ropes.

Want to make a difference in the long run? Worry less about legislating morality, picking winners/losers via the tax code, spend less time in the WWF echo chamber called politics. At the same time, somehow encourage yourself and your neighbors to perform truly useful jobs for a living, eschew debt, pick up litter when you see it, think about vice and avoiding it.

Utopia built on top-down design is doomed to failure.

[George Rebane]

I fully agree that the free markets are blind to all manner of political correctness - just take a look at global trade. We don't care whether our tennis shoes are made by blacks, browns, Chinese, or HIV-laden homosexuals in SF (hot button warning), we just want the best ones at the lowest price.

And I fully agree that when government laid its heavy hand on healthcare and education, things went down and costs through the roof. What other industry is allowed to kill about 100,000 of it clients annually year after year without so much as a peep? And what other industry can disgorge legions of clueless double dummies on society without any accountability whatsoever?

Wise words by Scott and wmartin - where do I sign?

[Todd Juvinall]

I remember the 90's economy and in my view it is too simplistic to say Clinton had a wonderful formula for success so we need to emulate his policies again. There was a lousy housing market during most of the 90's and it wasn't until the mid 90's the welfare state got transformed. Soon after the hi-tech industry went viral and when coupled with welfare reform, the country got rich quick. And maybe Paul remembers the silicon valley commercials during the Super Bowl then? Well even California had a surplus then but the legislature refused to acknowledge the "bubble" the surplus created and they spent it all (Pete Wilson tried to put it into a rainy day fund). Well, when it burst, Clinton and California took a huge deficit hit. The problem is the government never looked back and adjusted to the results of the burst bubble. They just kept spending. So, in my view, the only rational people in this argument/discussion on the economy are the Tea Party types who want common sense and frugality to return to the mega spending governments at all levels of American life.

[Paul Emery]

Todd
But where were these "types" when Bush refunded the surplus in 2001 rather than pay down the deficit? Back then everyone was demanding to have their money back rather than paying the bills.

wmartin Well spoken though I disagree about the Iraq war. Ask that question to the families of the dead and wounded in 20 years and see what they have to say and that includes the innocent victims in Iraq.

George

Please clarify the 100,000 victims slant. Who, where, when?

[Todd Juvinall]

Paul, wjy do you never put 9/11 into your Bush bashing? The stock market dived s few trillion didn't it?

[Paul Emery]

Todd
When you get into Bush bashing there is so much material that it's hard to include everything. Are you willing to engage me in a 9/11 conversation? If so you'd better be prepared.

As for the purposes of this discussion I'm still interested why the fiscally responsible conservatives of the day were not interested in paying down the debt with the surplus in 2001. It was a stretch for me to use the TP dig but those of you out there know who I am talking about. A simple "yes we should have" would go a long way towards influencing me that we have indeed evolved and recognize the mistakes of the past. The famous Einstein quote rings again,,,
"We can't solve problems by using the same kind of thinking we used when we created them."

[George Rebane]

Paul, oops my mistake. The medical profession annually kills about 195,000+ patients through identified mistakes, accidents, etc. http://www.medicalnewstoday.com/articles/11856.php

It used to be just a 100K, but it is still absolutely amazing that so few people are aware of that carnage. Talk about adding to the cost of healthcare. I bet Obamacare has a hidden clause in there somewhere that says when Aunt Jane kicks the bucket at the local hospital after her appendectomy, all you get is 'Tough s%#t' card from the HHS Dept.

[Paul Emery]

That's a rather shocking number George that I don't dispute. It's a good thing doctors are required to have malpractice insurance. It sure creates a lot of jobs for lawyers and judicial types. I know you are in favor of tort reform as a way to cut medical expenses. How do you see that fitting into this scenario?

[Todd Juvinall]

As I remember the batt;es over the so called surplus and the projections of immense wealth for the country I recall this. The Republicans did want to pay down the debt but the democrats wanted more programs which would have eaten up the "surplus". They filibustered the Senate, remember that Paul? No, I bet you don't. So, when Bush got elected there was no draw down on any supposed "surplus" until 9/11 happened. I sure hope you aren't a truther. So, tell us this Paul, how is it the projections for the "surplus" were about 5 trillion buckos and if so, where did it go? You can't use the wars because they were about one trillion, so where is the rest?

[Paul Emery]

Todd, George, wmartin

Before we go any further you should read this by N. Gregory Mankiw published in Fortune March 2000 From 2003 to 2005, Mankiw was the chairman of President Bush's Council of Economic Advisors.

Candidates Need Clues, Not Tax Plans

By N. Gregory Mankiw

What a long, strange trip it's been. Eight years ago the federal government faced tremendous, mounting deficits, and not even candidate Bill Clinton had the temerity to promise that he would balance the budget. Today the budget is in surplus, and a major campaign issue facing George W. Bush, John McCain, and Al Gore is what to do with all that extra cash. Assuming, of course, the surplus actually materializes. Despite all the talk, we may never actually see it.

To examine the possible scenarios, it's important to understand how we got to this happy state. Clinton tries to take credit by saying he's reduced the size of government. There is, surprisingly, some truth to the claim. Federal outlays as a percentage of GDP have fallen from 21.5% in 1993 to 18.7% in 1999, the lowest level since 1974. This fall of 2.8 points of GDP compares with a drop of only 1.0 point during the eight years of the so-called Reagan revolution. Perhaps we've learned an important lesson: A Democratic President with a Republican Congress may be more fiscally conservative than the opposite combination.

Of course, tax revenue is on the other side of the ledger, and the story there is simple: Federal taxes are now at a historic high as a percent of GDP. This is partly because the elder George Bush broke his campaign promise of no new taxes, and partly because Bill Clinton kept his campaign promise of even more new taxes. But some of the revenue increase is due to forces beyond any policymaker's control. The booming stock market, for instance, has raised revenue from capital gains taxes. The growing gap between rich and poor, while decried by everyone in Washington, D.C., has also added to government coffers by pushing more income into higher tax brackets.

Because of all these changes, the next President will take office with something his recent predecessors never imagined--more revenue than needed to cover current spending. The Congressional Budget Office estimates that the surplus over the next decade will total about $2 trillion. (An additional $2 billion surplus is accruing in the Social Security system, which is now off budget.) With this projection, presidential candidates can promise tax cuts with a credibility impossible in previous campaigns. Paying off much of the national debt, now $3.6 trillion, is more than an election-year fantasy.

But the $2 trillion surplus is not exactly money in the bank. Like all budget projections, it is based on a host of murky answers to key questions. Will Congress stick to the spending caps it has imposed on itself? Will the low unemployment, rapid growth, record-breaking expansion, and booming stock market of the past few years prove sustainable? CBO's $2 trillion projection is based on reasonable guesses by some of the best, and least partisan, minds in Washington. But they are guesses nonetheless.

Consider how much the budget changes if you alter a few assumptions. According to an optimistic scenario, Congress lives within the spending caps and the economy continues to boom, resulting in a ten-year budget surplus of more than $5 trillion. In a pessimistic scenario, Congress abandons the caps, and the economy reverts to slower growth. In this case, the surplus quickly dissipates and turns into a ten-year budget deficit of $3 trillion. It's easy to imagine an even more pessimistic scenario in which--believe it or not--the U.S. economy actually experiences a recession once again, together with the usual adverse effects on the budget. (For more on the recession outlook, see Fortune Investor.)

So should the next President aim to enact a tax cut, and if so, what size? This question will dominate the presidential campaign. But it's not a very relevant one. More vital than choosing a President with the right tax plan is electing a President with the political courage to change course when events demand it. If we have learned anything from the past decade of fiscal history, it's that we shouldn't look too hard into any budget forecaster's crystal ball.

__________

N. GREGORY MANKIW is an economics professor at Harvard and the author of Principles of Economics.

http://www.economics.harvard.edu/files/faculty/40_mar00.html

[Scott Obermuller]

Wow, Paul - they pay lying morons like this to teach economics at Harvard? And I thought Krugman was the head honcho of partisan bull bleep. First of all, Lying Willie did promise a tax cut, but when he got into office, he promptly decided that the debt was just so high, he couldn't do it. The amount he stated that the debt was, was lower than what he had stated the debt was the summer before when he was running and promised the tax cut. The left wing pundits roundly approved of his lies. The general consensus was that he had engaged in "campaign talk" that was necessary to fool the roobs and he was wise to ditch it and go for the tax hike. The economy was starting it's dot com boom as he came into office and the capital gains revenues were through the roof. He cut govt spending by a combo of Tea Party-type approved cuts in welfare and a left wing approved gutting of the military. Non military fed employment actually went up, but he constantly bragged about reducing the federal workforce. He had fun with his little war that we had absolutely no business being engaged in and blew off cruise missiles like bottle rockets. Did he replenish the stock or pay for them? No - that was left for the poor sucka that came after. The % of fed outlays compared to GDP only looked so good because of the booming GDP. This had nothing to do with anything Willie did. The last spring and summer of his second term saw a declining stock market and in the fall the unemployment was edging up. If the booming economy was his achievement, why couldn't he work his magic and turn things around? Because he couldn't. He made sure there were all kinds of expenses that were dumped into the following year's budget so he wouldn't be around when the piper came calling. He moved a lot of the debt into a much heavier bias of short term debt. That kept the debt service cost lower in his term but meant a lot more short term notes coming due when ... oh gee, I won't be here then. Too bad.
As I have said before Paul, you can maybe balance the yearly budget for a while with tax rate increases, but only by also first slashing the budget down to a level that would see massive bloodshed and rioting in the streets by the left. After that, the loss of money from the private economy would ensure plummeting tax revenues and the need for further tax rate increases and a further declining economy. With the coming explosive costs for the entitlements of SS and Medicare, we would be ruined in short order. As it is, I think we are ruined anyway. Just a bit later perhaps. Everyone have a nice day!

[Scott Obermuller]

Oh yeah, in case you think I can't back it up, here's a little something from that Tea Party publication about the lies Willie told.
http://www.nytimes.com/1993/02/18/us/clinton-s-economic-plan-campaign-gambling-that-tax-cut-promise-was-not-taken.html
Paul - you really must run with a better class of yahoos. The ones you quote are making you look bad.

[George Rebane]

The role of the technology fueled dotcom boom in increasing both GDP and the federal take is always ignored by the left, and Slick Willie is made into a genius instead. In these pages, having pointed this out has drawn a yawn and no-show rebuttal from the left. Scott, maybe your reprise of it within the context of other expenditures and the absence of all predicted revenues will evoke another look.

[Paul Emery]

"Paul - you really must run with a better class of yahoos. The ones you quote are making you look bad"

This is really getting exasperating. You don't even give credence to one of the leading conservative economists of our time.
N. Gregory Mankiw is a visiting scholar at American Enterprise Institute and was Chairman of President Bush's Council of Economic Advisors and you still won't give him an ear and call him a yahoo. You can't have better conservative credentials than to run with that crowd. Here's more from Mankiw. At least take the time to know what you are talking about.
http://www.aei.org/article/23634
I must admit I have my bias that Bush Jr was a lousy President and Reagan was greatly overrated but at least I have somewhat of an open mind and I don't completely shut my mind to new ideas. To look at the path that got us here with an open mind is essential otherwise we are just joining a parade because it makes us feel good. Give me a break.

[Paul Emery]

One more from Mr Mankiw this was March 28 2011
http://www.nytimes.com/2011/03/27/business/27view.html?_r=2

[Scott Obermuller]

Sorry Paul, you are just too hung on partisan politics. The fact that he was an advisor to Bush doesn't make him a conservative. I am giving him an ear. He is not a conservative. Add 2 dollars to a gallon of gas? Just tax everyone and we'll be happy? Yes, he does advocate cutting some, but over all he is a "grow govt and they will make things good" kind of guy. That's not a conservative. That's why Bush jr ended up with approval ratings in the toilet. The Dems never liked him and the independents smelled a confused mix of middle of the road to no where type of policy. The conservatives were pounding him. You are getting frustrated because what you advocate just won't work. It's been proven. Being open-minded doesn't mean that anything anyone says is correct. We can not tax our way out of this mess. We have to have a complete 180 in our policies. I honestly don't believe you (and millions of others) have a grasp of the enormous costs coming at us like a freight train. Where is the money going to come from? The wealthy don't have it even if you confiscate every dime they have. Believing otherwise isn't being open minded, it's just just factually wrong. Sadly, it looks like the proof will be coming soon. You will get your tax increases and we will still go broke.

[Paul Emery]

I guess the AEI isn't conservative enough for you since they employ lying morons as scholars.

[Scott Obermuller]

OK Paul - I shouldn't call anyone a lying moron. I mean it. I will back off of that. The thing is, I do know about this guy and he's not a conservative. In his heart of hearts he believes that govt is the answer. And it's not. For all of his education and training he isn't terribly good at actually understanding the economy. (he thinks that that QE won't lead to inflation - wrong, it has) The main reason he wants expensive gas is so he won't have a lot of traffic to deal with on his commute to work. What a genius. He may have a great grasp of statistics and the workings of finance, but natl econ quickly gets into politics and daily lives. He has no understanding whatever about how the average American lives. He hasn't given an once of thought to what happens to our economy when petrol is 7 a gallon. He has swallowed the cool-aid about global warming, because it's de regueur amongst his chums. And for that reason, I dissed him mightily. I don't disparage educated folk automatically. I wouldn't get into an argument with some one with a masters in chemistry - I would ask questions and learn. That doesn't mean I would agree with everything he would think, but chem was never a good subject with me. I know base vs. acid and plastics are long chain polymers, but I would defer to a person of knowledge there. I don't consider Mankiw a conservative because he is not.