Republicans are going to turn down a tax cut?

[chopcrazy]

You are overlooking some factors I mentioned that will stimulate hiring, not just a savings in the cost of hiring another employee.

Employees having more money to spend from each and every pay check will stimulate demand for products, which will stimulate production of those products, which will stimulate demand for more workers to produce those products, for example.

What about savings or paying down personal debt? Are you proposing to do away with Social Security? Without payroll taxes, will people have the discipline to save for retirement? Social Security is not enough now to live on now. Americans have not shown the ability to live within their means so what money will they have for retirment if it is all spent?

Social Security taxes have been made part of the general fund, so cutting them would have no different effect on Social Security than cutting any other tax in the general fund.

Now you are just being funny...thinking that if you cut close to $900B in ss taxes that there would be no effect and expecting Congress to cut spending by $900B to offset the drop in taxes.

 

[The Rabbi]

You are overlooking some factors I mentioned that will stimulate hiring, not just a savings in the cost of hiring another employee.

Employees having more money to spend from each and every pay check will stimulate demand for products, which will stimulate production of those products, which will stimulate demand for more workers to produce those products, for example.

Yet another one who believes in the myth of consumer demand.
Let's get it straight: government cannot create demand. It cannot create it by taking money from one segment of the population and giving it to another. That does not stimulate anything except bigger government.
What government can do is arrange incentives for people to invest more and earn more. It does this by cutting taxes at the margin, not across the board. Giving a tax cut to people for installing a new AC system is not going to stimulate anything. The Cash for Clunkers debacle should have shown the falsity of this idea to anyone with half a brain.

The right kind of tax cuts or increases can stimulate the economy but not across the board cuts. Fiscal stimulus that increases demand is good, but the effects do not last, however stimulus is useful to slow a downturn.

NO! How many times does this have to be demonstrated? Fiscal stimulus is not good. It has a multiplier of less than one, meaning that every dollar the gov't spends results in less than a dollar's worth of growth, because that dollar had to come from somewhere. It has no positive effect. This should have been evident in the Obama stimulus and the ten stimulus programs Japan has had.

 

[edthecynic]

What about savings or paying down personal debt? Are you proposing to do away with Social Security? Without payroll taxes, will people have the discipline to save for retirement? Social Security is not enough now to live on now. Americans have not shown the ability to live within their means so what money will they have for retirment if it is all spent?

Social Security taxes have been made part of the general fund, so cutting them would have no different effect on Social Security than cutting any other tax in the general fund.

Now you are just being funny...thinking that if you cut close to $900B in ss taxes that there would be no effect and expecting Congress to cut spending by $900B to offset the drop in taxes.

What I actually said was that cutting SS tax would be no different than cutting any other tax in the general fund, like extending the Bush tax cuts. I am simply substituting a payroll tax cut DOLLAR FOR DOLLAR in place of extending the Bush tax cuts. Mine is not a NEW tax cut, only a substitution.

 

[Flopper]

Yet another one who believes in the myth of consumer demand.
Let's get it straight: government cannot create demand. It cannot create it by taking money from one segment of the population and giving it to another. That does not stimulate anything except bigger government.
What government can do is arrange incentives for people to invest more and earn more. It does this by cutting taxes at the margin, not across the board. Giving a tax cut to people for installing a new AC system is not going to stimulate anything. The Cash for Clunkers debacle should have shown the falsity of this idea to anyone with half a brain.

The right kind of tax cuts or increases can stimulate the economy but not across the board cuts. Fiscal stimulus that increases demand is good, but the effects do not last, however stimulus is useful to slow a downturn.

NO! How many times does this have to be demonstrated? Fiscal stimulus is not good. It has a multiplier of less than one, meaning that every dollar the gov't spends results in less than a dollar's worth of growth, because that dollar had to come from somewhere. It has no positive effect. This should have been evident in the Obama stimulus and the ten stimulus programs Japan has had.

Of course there is a positive effect. The home buyer credit stimulated home sales and construction as did the credit for auto purchases. Granted they were short lived but it provided a temporary boost to the economy when it was needed. Stimulus builds confidence and softens the fall. There will be a future drag on the economy because down the road the stimulus has to be paid for with taxes or more debt.

To expect any congress or administration to respond to an economy in free fall with cuts in government spending is not going to happen regardless of who controls the white house or congress. It's just not politically possible.