Do Tax Cuts Stimulate the Economy?

[FactFinder]

My home doubled in value in a few years. I knew something was wrong with that and threw the dozens of home equity loan preapproved go buy yourself a yaught crap right into the crapper. But...I'm a bit older. I seen these sorts of things before. Way too many people believed that the values would go nothing but up. True for years until the certain people figured how to drive a falsified demand through unregulated loaning.

Aren't you happy now that you get to pay for people who made the wrong choices?

Just thrilled but I blame it most on those who escaped out the back door of TARP.

 

[FactFinder]

Stop and think this one through ... I'll walk you through it.

Banks are forced to loan money to people who cannot afford it. They default and half claim bankruptcy to avoid paying it back, the other half just don't pay the loans back. The money is still owed even when the house is claimed. So, where does that money come from? They have to raise the prices they resell the houses at to cover their losses and try to break even (no matter how much a house is they rarely sell for what they are actually worth and usually have to be let go at much less). Let's assume that they barely break even with the inflated prices, making no profit at all. This makes investors stop investing and the company loses even more worth and no one gets paid (even the workers for the bank) because there isn't any money to pay them.

Banks were only too glad to. They sold the mortgages to finance houses right away and turned a commission. The finance houses knew these were questionable loans and started the derivatives process to mask their risk. That is why local banks are still well capitalized. If they had to back mortgages themselves they wouldn't have done it. They did have a right to refuse loans.
If people hadn't spun the market so much and priced the homes out of reality most buyers would have been able to make their mortgages. It is foreclosures that is driving the market down not bankruptcies but backruptcies will increase the longer the recession prevails.

Doesn't the politicians have a role in this debacle? Aren't they ones who coaxed the lenders to fork over the bucks to questionable loans? Just askin...

Of course they did but they are mostly pawns, I see the whole create a falsified housing boom by ratcheting up demand as lobbysist function. It would be interesting to find out who the lobbyists pushing for relaxed regualtions on lending were.

 

[glockmail]

Just thrilled but I blame it most on those who escaped out the back door of TARP.

I blame it on Barney Frank, mainly. He's laughing at all of us who used common sense, and with semen on his breathe.

 

[Toro]

Reagan cut taxes AND government spending increased. Clinton raised taxes, but he also cut spending sharply. I believe if you remove government spending from the equation, you'll see that government revenues increased. There's a balance. You can't just say that "Regean cut taxes and the deficit rose."

The Reagan Tax Cuts: Lessons for Tax Reform

I do agree with that generally, when budget deficits are eliminated, it is usually a combination of tax increases and spending cuts. However, just cutting taxes generally does not increase revenues any more than you cutting spending on your bills at home increases your household revenues. The was the gist of supply side economics at the time, that you could cut spending and still balance the budget. Read David Stockman's book about his time as Budget Director under Reagan. Its a fascinating read.

 

[editec]

Read David Stockman's book about his time as Budget Director under Reagan. Its a fascinating read.

I'm an American.

I'll wait for the bumper sticker edition.

 

[Red Dawn]

Why Tax Cuts Hurt the Economy
by Russ Beaton

Never have so many been fooled for so long by an idea so totally lacking in economic logic, facts and theory. I am speaking of the religiously held and seldom questioned premise that (are you ready?): TAX CUTS STIMULATE THE AMERICAN ECONOMY.

I’m fully aware that I risk excommunication from the Church of Economic Science when I argue exactly the opposite: Tax cuts actually hurt the economy. It isn’t just that they don’t help, or that they’re ineffective—THEY REALLY HURT!

I can hear you thinking (even if your values bias makes you otherwise eager to agree): “Here comes the bleeding heart liberal, anti-trickle down, do something for humanity mantra.” No, indeed. I’m talking data here—numbers and empirical evidence. Check your values at the door and come on in.

Let’s start by examining conventional wisdom. You know the drill—Cut taxes. Leave the money in the hands of the people rather than the depraved clutches of the government. That way the people, being good red-blooded (Visa) card-carrying Americans, will dutifully spend the money. This stimulates economic activity, creates jobs and we’ll all live happily ever after. Why, the activity thus stimulated may be so vigorous that collection of taxes on this newly stimulated activity will soon exceed the amount of the original tax cuts! It’s the economic version of perpetual motion.

The Idolatry of Ideology-Why Tax Cuts Hurt the Economy by Russ Beaton

yeah I suppose what JFK did hurt the economy, just like what happened when Reagan cut income, and captial tax.

I won't mention Bush because you get too agitated about that.

LOL, of course you don't want to "mention" Bush. I wonder why?


Kid, let me clue you in on something. JFK never passed any tax cuts. I'm amazed righ twing talk radio has been telling you that myth for 20 years. LBJ passed a tax cut in 1964 or 65.


reagan cut taxes for the wealthiest americans. But he was one of history's greatest tax raisers on the middle class.

that's an indisputable fact. there's no debate on it.

The reagan model was to shift the tax burden from the wealthy to the middle class. Reagan is the reason Paris Hilton and Warren Buffet pay a lower tax rate than you or I do....because reagan's view, and the conservative view, is that investment income should be taxed at a lower rate than income from wages.

 

[oreo]

Just thrilled but I blame it most on those who escaped out the back door of TARP.

I blame it on Barney Frank, mainly. He's laughing at all of us who used common sense, and with semen on his breathe.

I blame them all. Barney Frank, Criss Dodd & the Clinton administration who on Sept. 30, 1999 New York Times article--"Fannie reduces credit requirements to aid mortgage lending." What a fricken disaster. They all ignored all of the warnings, including republicans. They sold the American taxpayer out by guaranteeing mortgage loans to people who had no income, had no credit, had no down payment--all guaranteed by the American taxpayer.

All our economic woes today come from Fannie/Freddie--which is ground zero of this economic disaster. This is what happens with the federal government works it's fingers into the private sector. They always manage to screw it up.

WE WERE SOLD OUT BY OUR OWN FEDERAL GOVERNMENT!

 

[oreo]

Banks were only too glad to. They sold the mortgages to finance houses right away and turned a commission. The finance houses knew these were questionable loans and started the derivatives process to mask their risk. That is why local banks are still well capitalized. If they had to back mortgages themselves they wouldn't have done it. They did have a right to refuse loans.
If people hadn't spun the market so much and priced the homes out of reality most buyers would have been able to make their mortgages. It is foreclosures that is driving the market down not bankruptcies but backruptcies will increase the longer the recession prevails.

Doesn't the politicians have a role in this debacle? Aren't they ones who coaxed the lenders to fork over the bucks to questionable loans? Just askin...

Of course they did but they are mostly pawns, I see the whole create a falsified housing boom by ratcheting up demand as lobbysist function. It would be interesting to find out who the lobbyists pushing for relaxed regualtions on lending were.

A great article for you which you can look up in the archives of the New York Times:
Date: Sept. 30, 1999
Title: Fannie reduces credit to aid mortgage lending

Unbelievable article--Make sure to read the warnings from economic experts in this article. Oh man--did they call this train wreck clear back then.

 

[rayboyusmc]

I blame it on Barney Frank, mainly. He's laughing at all of us who used common sense, and with semen on his breathe.

Eight years of repbulican rule and a democtatic homo is the one to blame.

Is there a smiley for homophobe?

 

[mash107]

I blame it on Barney Frank, mainly. He's laughing at all of us who used common sense, and with semen on his breathe.

Eight years of repbulican rule and a democtatic homo is the one to blame.

Is there a smiley for homophobe?

Poor guy... you still believe there's a difference between Bush type of Republicans and Democrats.

 

[editec]

Stop and think this one through ... I'll walk you through it.

Banks are forced to loan money to people who cannot afford it. They default and half claim bankruptcy to avoid paying it back, the other half just don't pay the loans back. The money is still owed even when the house is claimed. So, where does that money come from? They have to raise the prices they resell the houses at to cover their losses and try to break even (no matter how much a house is they rarely sell for what they are actually worth and usually have to be let go at much less). Let's assume that they barely break even with the inflated prices, making no profit at all. This makes investors stop investing and the company loses even more worth and no one gets paid (even the workers for the bank) because there isn't any money to pay them.

Banks were only too glad to. They sold the mortgages to finance houses right away and turned a commission. The finance houses knew these were questionable loans and started the derivatives process to mask their risk. That is why local banks are still well capitalized. If they had to back mortgages themselves they wouldn't have done it. They did have a right to refuse loans.
If people hadn't spun the market so much and priced the homes out of reality most buyers would have been able to make their mortgages. It is foreclosures that is driving the market down not bankruptcies but backruptcies will increase the longer the recession prevails.

Doesn't the politicians have a role in this debacle? Aren't they ones who coaxed the lenders to fork over the bucks to questionable loans? Just askin...

Not really a significant part of the problem, I think.

The banks were more than happy to make those highly questionable loans because so long as they could offload them to Fannie Mae, those loans were not their problem.

Now the combined toxic effects of those loans are the world's problem.

 

[glockmail]

Eight years of repbulican rule and a democtatic homo is the one to blame.

Is there a smiley for homophobe?

The last two years there was a Democrat majority in Congress, which furthered Clinton policies of lending to crappy credit. Barney headed up the banking committee and is therefore your poster child. The fact that he's a shit stabber shows that he's as moral corrupt as he is financially corrupt.

 

[glockmail]

I blame them all. Barney Frank, Criss Dodd & the Clinton administration who on Sept. 30, 1999 New York Times article--"Fannie reduces credit requirements to aid mortgage lending." What a fricken disaster. They all ignored all of the warnings, including republicans. They sold the American taxpayer out by guaranteeing mortgage loans to people who had no income, had no credit, had no down payment--all guaranteed by the American taxpayer.

All our economic woes today come from Fannie/Freddie--which is ground zero of this economic disaster. This is what happens with the federal government works it's fingers into the private sector. They always manage to screw it up.

WE WERE SOLD OUT BY OUR OWN FEDERAL GOVERNMENT!

Amen ma brutha. The GOP didn't have the balls to bring the facts of the situation to the public. Bush should have taken this right to the people on prime-time.

 

[Red Dawn]

Just thrilled but I blame it most on those who escaped out the back door of TARP.

I blame it on Barney Frank, mainly. He's laughing at all of us who used common sense, and with semen on his breathe.

I blame them all. Barney Frank, Criss Dodd & the Clinton administration who on Sept. 30, 1999 New York Times article--"Fannie reduces credit requirements to aid mortgage lending." What a fricken disaster. They all ignored all of the warnings, including republicans. They sold the American taxpayer out by guaranteeing mortgage loans to people who had no income, had no credit, had no down payment--all guaranteed by the American taxpayer.

All our economic woes today come from Fannie/Freddie--which is ground zero of this economic disaster. This is what happens with the federal government works it's fingers into the private sector. They always manage to screw it up.

WE WERE SOLD OUT BY OUR OWN FEDERAL GOVERNMENT!

LOL

Do you still have bush's dick in your mouth?

So your position is that the republican party is the defender of consumers, the defender of regulating the free market, the defender against predatotory lending practices?




My, my, what a change of heart and talking points a second great republican depression has caused.

Fannie Mae didn't cause this. The official government statisitcs have been poster here over and over, even if you pretend you didn't see them. The subprime meltown was overwhelmingly and almost universally caused by private lenders.

Only one of the top 25 lenders were even subject to the government rules you cons cry about. And the subprime lending that was going on was overwhelmingly being conducted by private lenders, without regard to government programs.


Are you really making the argument that republicans were out to regulate the markets and defend consumers?

 

[Bern80]

It's pretty sad that peole like Mr. Beaton are responsible for the education of our young adults. What an incredibly cowardly article. As a 'scholar' he knows he can't simply write an article essentially bashing the wealthy and be taken seriously from an academic perspective. So he couches it in 'data' about how 'unfair' the system just so he can get to his lat two paragraphs and get his digs in.

 

[editec]

My home doubled in value in a few years. I knew something was wrong with that and threw the dozens of home equity loan preapproved go buy yourself a yaught crap right into the crapper. But...I'm a bit older. I seen these sorts of things before. Way too many people believed that the values would go nothing but up. True for years until the certain people figured how to drive a falsified demand through unregulated loaning.

Aren't you happy now that you get to pay for people who made the wrong choices?

You mean all those bankers, Hedge Fund managers , high risk bond investors who bought that derivative crap?

Not especially. That';'s wehere the NINE TRILLION dollars is going , ya know...to prop up those people.

We would NOT be in a financial crises if ONLY the NINA mortgages were the problem, Glock...there just weren't enough of them to melt down our economy.

The problem is the debt gambling that was played by the big boys based on these specious risk instruments.

Standard and Poor and Moody's lied (or were just completely WRONG) about the true natue of the risks associated with these dereivatives.

At least, that's my understanding of this mess.

 

[glockmail]

You mean all those bankers, Hedge Fund managers , high risk bond investors who bought that derivative crap?

Not especially. That';'s wehere the NINE TRILLION dollars is going , ya know...to prop up those people.

We would NOT be in a financial crises if ONLY the NINA mortgages were the problem, Glock...there just weren't enough of them to melt down our economy.

The problem is the debt gambling that was played by the big boys based on these specious risk instruments.

Standard and Poor and Moody's lied (or were just completely WRONG) about the true natue of the risks associated with these dereivatives.

At least, that's my understanding of this mess.

Most of the basis for our paper currency is in real property values. The boom followed by the subsequent bust reduced confidence in the system and that's why we're in the current depression.

 

[glockmail]

Is there a smiley for homophobe?

How else does Barney get that funny shape to his mouth and lisp if not for sucking dick?

 

[sealybobo]

This is like asking, "does candy taste good"? Well ask someone who has been forced fed too much candy to where it made them sick. Would you get the same answer? No.

Too much of a good thing.

PS. This article is great. The bogus GOP claim that Obama is bleeding the wealthy.

Is Obama Declaring War on the Wealthy? | Newsweek Voices - Daniel Gross | Newsweek.com

 

[Meister]

Is there a smiley for homophobe?

How else does Barney get that funny shape to his mouth and lisp if not for sucking dick?

When Barney Franks talks, it always reminds me of "Yosemite Sam" ...."sufferin succotash"