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COMMENTS:
Either that or lower government spending levels, yes. I can think of a few places that have fat that needs to be trimmed (defence, anybody?).
Im not exactly sure of the figures for the overal budget deficit at the moment, but by the sounds of it taxes will almost certainly need to be raised as well.
The working class effectively assumes ten- trillion dollars in debt, to help out oppressed billionaires. But hey ... they *will* get a few hundred back in taxes for a few years ... before that is reversed by cruel necessity.
It will take the rest of our working lives and probably our childrens' to pay this debt off.
WAKE UP, "conservatives!" Work out the math!
lil_ape: My point is -- it doesn't matter what YOU think can be trimmed. The politicians won't trim it!
There is NO external impediment to the US Republicans doing what they have always claimed they wanted to do: Cut spending.
They ... haven't.
Don't look at what 'could' happen.. Or what 'should' happen.
Look at what is happening.
Actually tax revenue went up after bush cut taxes.
It's called the laffer curve. Look both up if you like.
So if you want to decrease revenue so you can punish the rich that's fine. But just say so.
herz: I am familair with the Laffer curve, thank you.
And I also know that you are mistaken. It has been a conservative wet dream for decades that 'less taxes resulted in more tax revenues.' That is true only if you are looking at a supply- demand situation that is extremely elastic to price.
Allow me to educate you on reality: Changes in tax law since 2001 reduced federal government revenue by $870 billion through September 2005.
You may be confused because the base has expanded, due to apparent population/job increase. Let me clarify THAT ...
Supporters of the misguided Bush tax cuts have touted them as somehow responsible for growth in jobs and pay. But, in reality, private- sector job growth since 2001 has been disappointing, and a closer look at the new jobs created shows that federal spending — not tax cuts — are responsible for the jobs created in the past five years.
Fact: Deficits continue to grow.
My observation: What is being foisted as 'tax cuts' are tax deferrals.
Look it up.
herz: I know yopu mean well and have an ingrained ideology, but many aspects of economics are a science. Simple platitudes are not the way to evaluate economic policy. One needs to know the fundamanetals and be willing to run the numbers ... objectively.
This isn't a matter of 'being right,' it's a matter of stablizing vs ruining an economy. And no one's preferences/ ideologies ... yours or mine ... will affect the outcome. It will be the economics and the math.
http:/ /www.treas. gov/press/ releases / reports/ revenue% 20growth.jpg
herz: You arbitrarily credit any revenue growth to Bush's tax policies.
I draw your attention, again, to the population charts and the basic math of decreasing a revenue source vs increasing costs.
Again, I cite the excellent Angry Bear analysis:
Looking back on the 2001 tax cuts, the 2002 Economic Report of The President (pdf, see page 44) claimed that:
The President laid a strong foundation for growth in 2001 with the Economic Growth and Tax Relief Reconciliation Act. This package provides a powerful stimulus for future growth, with reductions in marginal tax rates that improve incentives ...
The first reduction in marginal tax rates was effective for 2001 and was reflected in lower withholding during the second half of the year. In addition, the new 10 percent tax rate bracket, carved out of the beginning of the 15 percent rate bracket, was reflected in rebate checks totaling $36 billion, which were mailed to 85 million taxpayers during the second half. The timing of these reductions in withholding and rebates proved propitious: they added significant economic stimulus by boosting purchasing power in the hands of consumers during a period of sluggish economic activity. The 2001 tax rate reductions were just the first step in a series of income tax rate reductions to be phased in by 2006...
How did that one work out? Let's take a quick look at those omitted years: (graph at angrybear. blogspot. com/2005/12/ rest-of- story.html
Only in late 2004 were we back to the 2001 levels of employment. Of course, the population had grown from 285.1 million to 294 million over that same period. In fact over the same period cited in the press release and featured in the administration's chart, mid-2003 to November 2005, the population increased from 290.8 million to about 297.8 million (the working-age population grows at about 1.2% per year, so roughly 130k new jobs a month are needed just to stay in place).
The administration is trumpeting 4.4 million new jobs created from May 2003 to November 2005. That's 4.4 million jobs in 29 months, or about 152,000 per month -- modestly above the level of job creation required just to keep up with population growth. For comparison, see the chart in this old post (or see below), which shows that the economy under Clinton rarely had job growth as low as 152,000 per month.
No other Administration has LIED so consistently.
Don't just accept their spin, look at the data. You are bright ... you can come to your own conclusions, if you can look past the spin.
Tax cuts that are offset by spending cuts ... we can have a good old- fashioned liberal vs conservative debate.
Tax cuts accompanied by spending increases?!?
Think about that a moment before you consider defending it.
Or do you believe one can eat their cake and have it, too?
Hmmm, I hardly think the US economy is at the optimum point in the Laffer curve, if thats what you are suggesting Herzog. In fact, The USA could clearly afford to increase taxes. It would certainly help keep your inflation down.
You cant just mention a general economic theory that might support your case IF the conditions are appropriate, without providing the empirical evidence concerning the aforementioned conditions.
i totally agree with cathexis on this issue.
Lil: I did, look at the link I posted. Tax revenue increased after the tax cuts.
That was a study released by the US treasury, I'll defer to their knowledge on this subject.
Deferrals for sure, this debt will have to be paid eventually, the current interest payments for the US govt has to exceed 250 billion a year.
by ABC on Fri May 12, 06 10:10am
[+]
herz: Two items. An assumed causal link. Bad logic, you know better than that.
IMO, the revenues would have been WAY higher without the tax cuts.
The difference is, I am honest enough to put that forth as an opinion and not try to use bad logic to gull people.
herz: Are you asserting that the Treasury study asserts a causal relation? Or are you cavalierly mentioning a 'formal study' and allowing your conclusion to be assumed?
Tsk.
lil_ape's point is an excellent one ... and one you sidestep.
Ok, so why did the revenue increase following the tax cuts?
The economy was booming under bush? People suddenly became more honest and filed all their back taxes?
If you have kids, don't be surprised when they cuss Mister Bush out one day as they're doing their taxes. Mortgage the future to pay for the present. So wise. *Not*.
They're probably only deferrals but taxes should be cut even more. The people should rise up and force the fat cats who spent the money to pay off the debt. The debt that is owed to the FED and to government agencies should be forgiven.
herzog: Because the population is growing and we were slowly surfacing from a prolonged recession.
There is no causal link and any honest economist has already stated that.
Any SLIGHT revenue increase was *in spite of* not because of' the 'Bush tax cuts.
Without the misplaced Bush tax cuts, I believe we'd have been out of recession sooner and would not have nearly the budget deficit (assuming the wars were still undertaken).
Still, 'cutting taxes to increase revenue' fits right in with all of this Administration's other Orwellian pronouncements (Launching War to obtain Peace, Clean Air Act, etc.)
It isn't a 'Tax Cut' unless it is accompanied by a corresponding Spending Cut.
Thus, this last episode was not 'giving people back *their* money,' since it wasn't funded.
Thus ... it is a tax deferral, not a tax cut.
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