Deficit Falls to Lowest Level in 4 Years

[Darwins Friend]

Yes, both sides have contributed. What I don't understand is this mentality that since its been created there is just nothing we can do about it. What makes it even worse is liberals don't seem to understand that creating a national health care system would just make the problem 100 times worse. I'm not saying cut all welfare tomorrow, but it can be vastly downsized. There are lots of single mothers out there that could sure use it, but there isn't any reason at all an able bodied man should ever be on welfare.

Again: decrease the welfare dollars = making more bullets to control the population.

 

[LuvRPgrl]

The scary thing is people actually believe it's true. Do you liberals actually shed a tear every time and American worker gets a raise? Painting caricatures of your opponents will lead you to defeat. As Sun Tzu said, "Know thy enemy."

Your posts indicate you are confused, and this one confirms it. Liberals LIKE pay increases, whether deserved or not.

As Jesus said, "know thyself"

 

[LuvRPgrl]

I commend our President Bush for his tax cuts, which benefit all of us so much, especially the middle class. But, if the tax revenues are now going up, I think our President should pass another tax cut to give us those extra monies back. Otherwise they will just pile up. And that really is a tax increase.

The basic idea is to use those funds to pay off the debt.

 

[Hamiltonian]

Your posts indicate you are confused, and this one confirms it. Liberals LIKE pay increases, whether deserved or not.

As Jesus said, "know thyself"

I was referring to the real wage, and the middle class worker, not a minimum wage increase. Perhaps it would be better and more clear if I had said "Do you think that liberals shed a tear each time they see the GDP go up a percentage point."

 

[LuvRPgrl]

The chart is based on Economic models. How exactly can you present a factual chart saying that you lost (or gained) so much revenue from the tax cuts, because we have no definite way of knowing what revenues would have been without the tax cuts. Therefore you use Economic models. The paper points out the difficulties in estimating the effect of tax cuts. .

Cutting taxes can increase government revenue, or decrease it. As you point out, other factors can increase revenues. However, the Economy is such a complex beast you can't say that all the tax cuts are responsible for increasing the government revenue afterwards. That is unless you're ready to present the growth accounting data to me that I asked for earlier in this thread. .

No, you're misunderstanding. It depends on what you mean by short run. Over the short run is when we have the benefits of the tax cuts. Over time the economy adjusts to them and in the long term they are not beneficial. .

HA ! Above you state that the models CANNOT accurately predict these things, then you state that the very same model shows that long term reduction in revenues will occur, as though its fact. So, do you accept that your model CAN or CANNOT make reasonably accurate predictions?

You're not seeing the big picture. Tax cuts decrease government revenue. This sends us into larger deficit. That is synonymous with greatly decreasing public savings, which hurts our economy in the long run according to the Solow Model. All of this is rather established economics, and I believe taught in Econ 101. It is clear that the tax cuts are sending a negative effect towards our long term growth by lowering the savings rate. The study then mentions two sources of investment which could possibly offset the decrease in the savings rate. It is unequivocal that the tax cuts are sending a negative effect towards our economy. If there was foreign borrowing and we didn't have the tax cuts, then our economy would do even better long term due to a higher savings rate. .

Again, you contradict yourself by claiming, or at least sound like, your model is stating facts, not predictions.

Since we have had one of the best, if not the best, economic engines currently driving our country, which is following the tax cuts, how can you state the tax cuts are sending a negative effect on our economy?

Another thing you are doing is strange. You continue to accept the models PREDICTING long term loses in revenue, but then you reject what is our most accurate indicator of the effects: what did the economy do following the cuts.

"However, the numbers, crunched by Heritage's Brian Riedl, show otherwise (see chart below). In 1980, the last year before the tax cuts, tax revenues were $956 billion (in constant 1996 dollars).

Revenues exceeded that 1980 level in eight of the next 10 years. Annual revenues over the next decade averaged $102 billion above their 1980 level (in constant 1996 dollars)."

FROM THE CATO INSTITUTE:
http://www.cato.org/pubs/tbb/tbb-0302-13.pdf

You're not taking into account the fact that you have to get elected, and get funding from all of these pro-funding lobbyists in order to do that.
.

Its a pure hypothetica. Besides we were discussing the difficulties, or lack of, of cutting spending, NOT GETTING ELECTED. You do this often, change the focus of the subject.

It estimates GDP increase in the short run, not revenue.

Basically the same thing.

Your model has a lot of major problems besides. In one paragraph it states, "...capital investment can only be financed through foreign borrowing or national savings."
NOT true. How about financing it through PROFITS, which have increased due to tax cuts.

Lastly, an article written by a person who believes tax cuts decrease tax revenues was published. His paper is out and out full of lies. I wonder why?
http://www.huppi.com/kangaroo/L-taxcollections.htm

 

[LuvRPgrl]

I was referring to the real wage, and the middle class worker, not a minimum wage increase. Perhaps it would be better and more clear if I had said "Do you think that liberals shed a tear each time they see the GDP go up a percentage point."

Actually, you said, "Do you liberals actually shed a tear every time and American worker gets a raise? "

By saying "EVERY TIME" that would include any and all workers regardless of level or class.

 

[Hamiltonian]

HA ! Above you state that the models CANNOT accurately predict these things, then you state that the very same model shows that long term reduction in revenues will occur, as though its fact. So, do you accept that your model CAN or CANNOT make reasonably accurate predictions?

I said no such thing. I said that you can't definitely know, with 100% certainty what would have happened, because it's a hypothetical, so you have to use Economic models to simulate what would have happened. There is a great difference between being an accurate predictor, and proving beyond any doubt. The models are accurate predictors, but do not prove beyond any doubt, just beyond a reasonable doubt .

Since we have had one of the best, if not the best, economic engines currently driving our country, which is following the tax cuts, how can you state the tax cuts are sending a negative effect on our economy?

The tax cuts are sending a negative effect on our economy yet. That is when the long term sets in, which takes several more years. This negative effect will happen because the tax cuts are reducing public savings.

Another thing you are doing is strange. You continue to accept the models PREDICTING long term loses in revenue, but then you reject what is our most accurate indicator of the effects: what did the economy do following the cuts.

The tax cuts have caused short term losses in revenue, with a short term increase in the Economy. Despite the Economy doing better in short term, the government is still not taking in as much money as if the tax rates were higher. Since they also hurt the Economy in the long run, they decrease revenue in the long term.

"However, the numbers, crunched by Heritage's Brian Riedl, show otherwise (see chart below). In 1980, the last year before the tax cuts, tax revenues were $956 billion (in constant 1996 dollars).

Revenues exceeded that 1980 level in eight of the next 10 years. Annual revenues over the next decade averaged $102 billion above their 1980 level (in constant 1996 dollars)."

What is this all about? I see no segue, no linked citation, and no sort of thesis as to what you are talking about.

FROM THE CATO INSTITUTE:
http://www.cato.org/pubs/tbb/tbb-0302-13.pdf

So you're saying our Economy should be exactly how it was in the 1920s? Perhaps the subsequent Economic expansion after the tax cuts was fueled by the invention of the Assembly line, electrification, mass marketing, and the huge speculation bubble that resulted in the Great Depression.

Its a pure hypothetica. Besides we were discussing the difficulties, or lack of, of cutting spending, NOT GETTING ELECTED. You do this often, change the focus of the subject.

You have to see the big picture. The current political parties try to appeal to different voting bases through benefits. The Republicans appeal to cutting taxes on business and increasing corporate welfare. Democrats run on a platform of increasing social welfare, and increasing funding for education and science. Try running on a platform of cutting funding from your voting base and see how far it gets you. Not to mention, even if you do manage to run a surplus, as soon as you're out of there the next person will just see that as an excuse to be able to increase spending and run up a deficit. While balancing the budget is Economically optimal, I quite doubt whether it's politically possible.

Basically the same thing

Wow, you should really review your position and the Laffer Curve. Government revenue and GDP are not the same thing at all. The tax cuts have increased the GDP, but decreased the government revenue.

Your model has a lot of major problems besides. In one paragraph it states, "...capital investment can only be financed through foreign borrowing or national savings."
NOT true. How about financing it through PROFITS, which have increased due to tax cuts.

I again think you should go back and review introductory economics, because that's why the model doesn't make sense to you. National savings is the sum of private and public savings. The investment of profits is included in private savings, and therefore included in national savings. Keep in mind it is not my model, it is actually the government's model: that chart on Page 2 showing all of that revenue loss is from the Joint Committee on Taxation.

Lastly, an article written by a person who believes tax cuts decrease tax revenues was published. His paper is out and out full of lies. I wonder why?
http://www.huppi.com/kangaroo/L-taxcollections.htm

Now what you've written here is an excellent example of the logical fallacy called an Association Fallacy:

http://en.wikipedia.org/wiki/Association_fallacy