That's the Obama model of economics. Cram future demand into the present and hope for the best. The umbers this year look better probably because a lot of people are taking gains and making use of Bush-era tax rates in anticipation of next year being worse. But that only robs from the future for today. It isn't sustainable at all.
Taxes, Spending, the Fiscal Cliff, and Austerity
- Thread starter Wiseacre
- Start date
That's the Obama model of economics. Cram future demand into the present and hope for the best. The umbers this year look better probably because a lot of people are taking gains and making use of Bush-era tax rates in anticipation of next year being worse. But that only robs from the future for today. It isn't sustainable at all.
More to the point, the Obama model is to apply the tax liability immediately, and agree to spending cuts that will kick in later and be spread over a decade or so. Which as we have already discussed, means they won't ever happen.
Trajan
conscientia mille testes
Costco is borrowing to provide a $7 dividend this calender year........yes you heard that right, whats that tell us?
And the CEO of Costco is an Obama fan, big time too.
saveliberty
Diamond Member
- Oct 12, 2009
- 58,760
- 10,853
- 2,030
American society is closer to breaking down than ever before.
Obama helps finish the job of addicting half of the US to government handouts. Then when the other half finally has enough, the handout crowd feels entitled to take from all the others. Stealing direcctly forces the working folks to stay at home and defend theor property. No one works and we have to start all over. THAT is the true cliff.
Obama helps finish the job of addicting half of the US to government handouts. Then when the other half finally has enough, the handout crowd feels entitled to take from all the others. Stealing direcctly forces the working folks to stay at home and defend theor property. No one works and we have to start all over. THAT is the true cliff.
Wiseacre
Retired USAF Chief
- Thread starter
- #225
100% agree, along with reducing or eliminating the subsidies that some industries get that others don't. Most of it goes to the biggest ones, which is probably not the original intention. And I do think it stinks that some big corps pay nothing at all in corp taxes, and even have credit built up for future taxes.
Last edited:
Ah yes, those subsidies to big corporations. Like oil companies? But the dirty little secret is, no liberal is likely to vote to kill them.
Take big oil for instance that currently is receiving about $4.5 billion in subsidies.
$1+ billion of that is for the strategic petroleum reserve.
$1 or so billion is farm fuel credits tor highway taxes on the theory that most farm equipment doesn't use those highways.
A another big chunk goes for the low-income households fuel credits and most of the rest for green energy programs.
The Surprising Reason That Oil Subsidies Persist: Even Liberals Love Them - Forbes
Do you really think those with high powered environmental constituencies will vote to stop subsidizing the Chevy Volt?
Oil companies and every other large corporation enjoys handsome subsidies for keeping operations in the USA and not shipping jobs overseas.
All this is to say that almost every budget item is tied up inside some program or project with a noble sounding title, whether or not it actually accomplishes anything, and any attempt to kill it evokes howls from whoever's ox is being gored.
All of which gave us the wonderful invention of baseline budgeting to ensure that nobody has to ever sacrifice a sacred cow.
Wiseacre
Retired USAF Chief
- Thread starter
- #227
I was speaking about what I'd ideally like to see happen, which as you say has a very remote chance of coming true. There are polls out today or recently that suggest the public wants spending cuts about as much as they want tax hikes on the rich. Which is to say the majority of respondents. But it always comes down to cutting someone else's spending rather than your own. Can't say as I'm optimistic over real and significant cuts happening anytime soon.
I appreciate that Wiseacre and I think we both know that trying to find the best solutions are not in the cards. They will do whatever they have to do that will piss the fewest number of people off. And while some realize that any budget solutions have to include entitlement reform, an amazing number of people want to continue entitlement funding as it is even if it means going trillions further into debt.
The fact is, America has become so dumbed down they don't know how much money a billion dollars is any more, let alone a trillion. These are numbers they can't wrap their minds around and they are therefore meaningless.
From a recent analysis of a NBC/WSJ poll, a majority of Republicans now want their congressional leaders to compromise. That is a major shift.
But. . . .
According to a Fox poll released yesterday:
But overwhelmingly Republicans are losing the PR war and approval ratings on this issue. Again, most Americans don't watch Fox News or listen to conservative talk radio, and most of the rest of the media is giving the Democrats the more favorable press. That is having an effect.
The fact is, America has become so dumbed down they don't know how much money a billion dollars is any more, let alone a trillion. These are numbers they can't wrap their minds around and they are therefore meaningless.
From a recent analysis of a NBC/WSJ poll, a majority of Republicans now want their congressional leaders to compromise. That is a major shift.
But. . . .
According to a Fox poll released yesterday:
But overwhelmingly Republicans are losing the PR war and approval ratings on this issue. Again, most Americans don't watch Fox News or listen to conservative talk radio, and most of the rest of the media is giving the Democrats the more favorable press. That is having an effect.
Wiseacre
Retired USAF Chief
- Thread starter
- #229
Hard to believe that anybody can possibly believe that getting an additional $80 billion or so a year from the higher rates on the top 2% can fix a trillion dollar deficit. Also hard to believe that anybody really thinks Obama and the democrats actually intend to reduce the deficit either, they just want more money to spend.
You are correct. It is all political theater on the Dem side. Because they are in permanent campaign mode. The actual details of governing are beyond them. Nor are they interested. Everything is a political issue. When they accuse the GOP of "politicizing" something, that is political too.
The Democrats are the Hamas of American politics.
PaulS1950
Senior Member
Can't understand or "wrap your head around" a trillion dollars then how about this:
If your income is $56000 and you borrow $28000 a year in order to spend $84000 each year and you never pay the money you borrow back but just pay interest on it; how long will it be before you can't pay the interest and go bankrupt?
For those who are mathmatically inclined and wish to calculate the answer; assume an interest rate of 2% on the loan and an increase in income of 3% per year with an increase in spending of 6% each year. (borrowing 9% more each year)
spending = S =1.06(X + Y + I)
annual income = X + .03X each year (X = 1.03X) compounded annually
debt = Y + .09Y each year (Y = 1.09Y) compounded annually
interest = I = .02Y (constant disregarding rising interest rates)
If your income is $56000 and you borrow $28000 a year in order to spend $84000 each year and you never pay the money you borrow back but just pay interest on it; how long will it be before you can't pay the interest and go bankrupt?
For those who are mathmatically inclined and wish to calculate the answer; assume an interest rate of 2% on the loan and an increase in income of 3% per year with an increase in spending of 6% each year. (borrowing 9% more each year)
spending = S =1.06(X + Y + I)
annual income = X + .03X each year (X = 1.03X) compounded annually
debt = Y + .09Y each year (Y = 1.09Y) compounded annually
interest = I = .02Y (constant disregarding rising interest rates)
Last edited:
I am now convinced that President Obama WANTS us to go off the fiscal cliff. Does anybody with a clue really think that the President of the United States would have been unable to cut some kind of deal with Congress to avoid that if he didn't want it? Do you think the Senate would continue to be as intransigent as they have been if the Senate Democrats didn't want it?
I think they want the 'disaster' to happen because they are confident that the Republicans will be blamed. And the GOP will then be in further disarray and will lose the House and more of the Senate in 2014.
I think they want the 'disaster' to happen because they are confident that the Republicans will be blamed. And the GOP will then be in further disarray and will lose the House and more of the Senate in 2014.
catatomic
Gold Member
- Nov 28, 2012
- 1,078
- 309
- 198
...unless people take care of them (150 people would have to pay for one person)
Isn't the Republican House there to stop that from happening? How would that be possible, if they don't make a deal, get blamed for the result and get voted out?
The point of the extra taxation isn't to close the deficit by itself, but along with budget cuts, to show we're serious. If it looks like we're actually trying to do something, people feel better about the direction of the country. When people feel better, they spend more money. When people are spending more money, new jobs get created to fill the demand. When more people have jobs, even more money gets spent, more taxes are collected to further close the deficit and fewer social services are needed to help the unemployed, easing the strain on the budget. Win-win!
Wiseacre
Retired USAF Chief
- Thread starter
- #236
Higher tax rates does not show we're serious, only spending cuts will do that. It's like all this commotion about higher taxes gets you maybe $80 billion a year in more revenue but the deficit is over a trillion dollars. So we're making a big deal out of 8 cents on the dollar, and that ain't anywhere close to be serious.
Nice scenario you paint, let's hope it works out that way. But we don't need DC to be trying to do something, we need action on several fronts that will be constuctive to economic growth. Frankly, I ain't seeing it, I'm seeing a lot of new regulations coming down the road, and real soon. I'm seeing the president about to use the EPA to choke off fracking for natural gas, and implementing new auto guidelines for gasoline mileage that will make cars a few thousand dollars more expensive than they are now. I'm seeing new rules for ObamaCare and Dodd-Frank going into effect that raise the cost of compliance and cut into full time job creation. What I see are policies that impede economic growth rather than fostering it.
PaulS1950
Senior Member
The leading economists and the Wall Street Journal all seem to agree that the USA is headed for another, deeper, recession than we are in now that will hit in 2013.
I hope you are ready for it.
Stage 1. distraction
Stage 2. disruption
Stage 3. destruction
Stage 4. domination
I hope you are ready for it.
Stage 1. distraction
Stage 2. disruption
Stage 3. destruction
Stage 4. domination
I honestly don't see how it can be avoided. I just posted a new thread (in Politics) re the 10 worst regulations of 2012, and there will be hundreds if not thousands of new ones going on the books for Obamacare alone. Every single one of them costs us something in some way.
Obama is quite confident that he'll come out of any economic collapse unscathed, despite the fact he has not been willing to negotiate in good faith and he and the Democrats have been unwilling to address any spending cuts of any kind in any serious way. He has the media in his corner who will be quite accommodating in keeping the impression alive that the only gridlock is the fault of the Republicans.
It's hard to understand how ideas that are so counterintuitive given our history have gained such a following. Well, not really hard if you've read 'Invisible Hands' by Kim Phillips-Fein, few people question where their ideas come from and the mind once it accepts some pattern of thought usually stays there.
The idea that concentrated wealth creates jobs and opportunity makes no sense, demand creates jobs and jobs require work. How many who complain about the economy buy American made? Does anyone really believe that the rich gave lots of money to Romney because they wanted to create jobs and somehow or another Romney would help by concentrating more wealth in the hands of the few?
America's best years were when taxes were the highest and America was building the infrastructure and educational facilities that made the country the wealthiest on earth. The rich did not create that, FDR and Eisenhower among many others did. Wealth is not created in a vacuum and if you took any wealthy person and placed them on an empty island they'd be lucky if they survived. The worship of the rich and money is a misplaced value in America today.
But the myths continue and big money supported organizations like Cato are a major purveyor of the myths. Consider how many of these so called experts predicted the crash of 2008 as an example of how little they all know. A few educational links:
Oh and austerity programs are hurting Europe not helping. http://www.nytimes.com/2012/02/19/magazine/the-way-greeks-live-now.html
"There is no historical evidence that tax cuts spur economic growth. The highest period of growth in U.S. history (1933-1973) also saw its highest tax rates on the rich: 70 to 91 percent. During this period, the general tax rate climbed as well, but it reached a plateau in 1969, and growth slowed down five years later. Almost all rich nations have higher general taxes than the U.S., and they are growing faster as well." Tax cuts spur economic growth
The Idolatry of Ideology-Why Tax Cuts Hurt the Economy by Russ Beaton
Spending Cuts Vs. Tax Increases at the State Level, 10/30/01
The rich get rich because of their merit.
http://www.usmessageboard.com/education/126617-reagan-and-taxes.html
"The history of the twentieth century can be summarized--excessively briefly--in five propositions: First, that the history of the twentieth century was overwhelmingly economic history. Second, that the twentieth century saw the material wealth of humankind explode beyond all previous imagining. Third, that because of advances in technology, productivity, and organization--and the feelings of social dislocation and disquiet that these advances generated--the twentieth century’s tyrannies were the most brutal and barbaric in history. Fourth, that the twentieth century saw the relative economic gulf between different economies grow at a rapid pace. Fifth and last, that economic policy--the management of their economies by governments--in the twentieth century was at best inept. Little was known or learned about how to manage a market or a mixed economy." J. Bradford DeLong http://econ161.berkeley.edu/TCEH/2000/TCEH_1.html
"The top 1 percent of Americans now take in roughly one-fourth of America’s total income every year. In terms of wealth rather than income,... the top 1 percent now controls 40 percent of the total. This is new. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent." Joseph Stiglitz
The idea that concentrated wealth creates jobs and opportunity makes no sense, demand creates jobs and jobs require work. How many who complain about the economy buy American made? Does anyone really believe that the rich gave lots of money to Romney because they wanted to create jobs and somehow or another Romney would help by concentrating more wealth in the hands of the few?
America's best years were when taxes were the highest and America was building the infrastructure and educational facilities that made the country the wealthiest on earth. The rich did not create that, FDR and Eisenhower among many others did. Wealth is not created in a vacuum and if you took any wealthy person and placed them on an empty island they'd be lucky if they survived. The worship of the rich and money is a misplaced value in America today.
But the myths continue and big money supported organizations like Cato are a major purveyor of the myths. Consider how many of these so called experts predicted the crash of 2008 as an example of how little they all know. A few educational links:
Oh and austerity programs are hurting Europe not helping. http://www.nytimes.com/2012/02/19/magazine/the-way-greeks-live-now.html
"There is no historical evidence that tax cuts spur economic growth. The highest period of growth in U.S. history (1933-1973) also saw its highest tax rates on the rich: 70 to 91 percent. During this period, the general tax rate climbed as well, but it reached a plateau in 1969, and growth slowed down five years later. Almost all rich nations have higher general taxes than the U.S., and they are growing faster as well." Tax cuts spur economic growth
The Idolatry of Ideology-Why Tax Cuts Hurt the Economy by Russ Beaton
Spending Cuts Vs. Tax Increases at the State Level, 10/30/01
The rich get rich because of their merit.
http://www.usmessageboard.com/education/126617-reagan-and-taxes.html
"The history of the twentieth century can be summarized--excessively briefly--in five propositions: First, that the history of the twentieth century was overwhelmingly economic history. Second, that the twentieth century saw the material wealth of humankind explode beyond all previous imagining. Third, that because of advances in technology, productivity, and organization--and the feelings of social dislocation and disquiet that these advances generated--the twentieth century’s tyrannies were the most brutal and barbaric in history. Fourth, that the twentieth century saw the relative economic gulf between different economies grow at a rapid pace. Fifth and last, that economic policy--the management of their economies by governments--in the twentieth century was at best inept. Little was known or learned about how to manage a market or a mixed economy." J. Bradford DeLong http://econ161.berkeley.edu/TCEH/2000/TCEH_1.html
"The top 1 percent of Americans now take in roughly one-fourth of America’s total income every year. In terms of wealth rather than income,... the top 1 percent now controls 40 percent of the total. This is new. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent." Joseph Stiglitz
Last edited:
Wiseacre
Retired USAF Chief
- Thread starter
- #240
The Roaring 20s economy was good because two repub presidents cut the tax rates after Wilson left office. When the recession hit, Hoover raised taxes from 25% to 63%, and look what happened. Roosevelt raised taxes during his 2nd term and the depression deepened. The Clinton surpluses in his 2nd term didn't happen until the Gingrich-led repub Congress cut taxes in 1997. And the Bush tax cuts in 2003 ushered in a strong period of growth up until the recession came along. And of course my all-time fav, when Reagan cut taxes in his 1st term and fostered a 25 year period of economic boom.
The Left doesn't get it, or doesn't want to get it. You don't tax and spend your way to prosperity. Roosevelt tried that and so is Obama, and it don't work for the long term. Sustained prosperity requires a strong and vibrant private sector, and high tax rates are counter producive to that. The Left always points to the high tax rates from WWII to Reagan, as though that caused that period's growth. The effective tax rate that people paid was quite a bit lower than that, we saw the beginning of the loopholes, tax breaks, and deductions that permeate our tax code today. We had a huge rush of men coming home from the war, looking for work. Many started their own businesses, it was a heck of a lot easier to do that back then than it is now. The US economy was the only game in town, the rest of the developed world was in shambles, the cost of energy was very low and there wasn't an EPA and a ton of regulations to have to deal with.
The Left doesn't get it, or doesn't want to get it. You don't tax and spend your way to prosperity. Roosevelt tried that and so is Obama, and it don't work for the long term. Sustained prosperity requires a strong and vibrant private sector, and high tax rates are counter producive to that. The Left always points to the high tax rates from WWII to Reagan, as though that caused that period's growth. The effective tax rate that people paid was quite a bit lower than that, we saw the beginning of the loopholes, tax breaks, and deductions that permeate our tax code today. We had a huge rush of men coming home from the war, looking for work. Many started their own businesses, it was a heck of a lot easier to do that back then than it is now. The US economy was the only game in town, the rest of the developed world was in shambles, the cost of energy was very low and there wasn't an EPA and a ton of regulations to have to deal with.
Last edited:
Similar threads
New Topics
-
Woman tried to burn a tick off a dog. Instead, it lit a fire that caused $400K in damage, suit says- Started by EvilEyeFleegle
- Replies: 0
-
-
US President Trump has finally admitted to European leaders this week that putin has no interest in peace- Started by Litwin
- Replies: 0
-
-
The hidden provision in the Big Ugly Bill that makes Trump king - Don't let this happen- Started by C_Clayton_Jones
- Replies: 12
Latest Discussions
-
Zone1 Theoretical question regarding Christian duty to forgive- Latest: The Irish Ram
-
-
-
-
Washington State Takes More Rights Away From Parents Of School Children- Latest: OhPleaseJustQuit