Forum:Tax cut expiry

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It's no surprise that both sides are playing a game of chicken. This is classic game theory. If either the economy stays stagnant and/or we have brisk price inflation (I am including food and energy here), then Obama loses in 2012. If taxes goes up at the median, regardless of who's ultimately responsible, Obama loses reelection.

But one other thing I think the left has consistently failed to realize, from a purely logical standpoint, the rich do not get a "handout" with a tax cut, they just keep more of what was already theirs. The left seems to feel a sense of entitlement for other people's money, even though the top 1% pay a little less than 40% of all taxes, the top 5% pay a little less than 60% of all taxes, and the top 50% pay almost all of the taxes (97-98%). ConservapediaEditor (talk) 05:15, 5 December 2010 (UTC)

Taxes are still incredibly low, on a historical scale. Maybe the States should add a VAT like everywhere else. Watch everyone complain. – Nick Heer 05:42, 5 December 2010 (UTC)

Some states have sales tax, I remember that one sneaking up on me every time I purchased something. I wish they would quote prices with tax like we have to in Australia. - π 05:44, 5 December 2010 (UTC)

Lucky you guys. In Canada, prices are sans-tax. Lucky it's only 5% where I live. – Nick Heer 05:47, 5 December 2010 (UTC)

We got 10%, although our income tax rates are only a few percent higher than the US. - π 05:49, 5 December 2010 (UTC)

9% here in LA + $0.01 for teacher pay. ^{An iron, yet caring fist} 00:23, 7 December 2010 (UTC)

I hear those numbers (or similar ones) thrown around anytime it's suggested that the rich are over-taxed, and presumably it's to encourage a less progressive tax system than the status quo in the U.S. I have no where you got them, or what exactly you mean by 'all taxes', but certainly every citizen who buys anything pays a sales tax. There are taxes on cigarettes, alcohol, taxes or 'fees' for doing many things like driving a car or living in a house. It would be ridiculous to name all of them, and I can't imagine 50% of people get back all or more of their money in direct aid. ALL that aside, it's stupid in the wealthy's interest in any case to want to horde all their money. To sit on it, howl against inflationary but stimulative measures and spend very little of it (and even less domestically) while also paying very little of it in taxes means a shortage of dollars in the hands of people who spend, and a shortage of dollars that could be used to get people to work. It's largely because of that that unemployment remains so high and many people still so miserable in the United States.

Beyond the obvious moral imperative to alleviate the suffering of others, it's damaging to upper-class interest to create a society of poverty; it will only end up making more extremely difficult. TheDude (talk) 06:08, 5 December 2010 (UTC)

I have no idea why the left continues to parrot this notion that the "rich will hoard money" if we give them back what's theirs. It's as if fiscal liberals are the creation scientists of economics. There two ways essentially to utilize money, consumption or investment (Macroeconomics 101). The left apparently considers rich people's investments to be hoarding. (Even if you invest in a savings account, that money then is invested by the banks in government Treasuries, so maybe even the left implicitly knows that Obama's big government is a failure). Seriously though, what liberals do not realize is that we need to invest in production before we have goods and services to consume; the cool shit that we have in this developed economy is not just created out of thin air.

If I'm barely making ends meet, you honestly think I'd go on a spending spree if I got a tax rebate. Sure if I were a total fucking buffoon, but it seems logical that the rich would have more discretionary income to not have to save compared to someone on economic shaky ground. The problem with the liberal economic analysis is that it is predicated upon the notion that millions of poor Americans are starving and homeless and but not for some new government assistance, they are unable to buy the necessities they need. ConservapediaEditor (talk) 06:39, 5 December 2010 (UTC)

"we need to invest in production before we have goods and services to consume" if consumers have no money, there is no demand for goods and services. An economy is not built by building factories to make stuff, but by creating demand for stuff, whi9ch leads to building factories and creating jobs to make stuff. Supply-side economics is bankrupt. Demand-side economics works. Emerald (talk) 07:21, 5 December 2010 (UTC)

Historically, any time we've cut the taxes of the rich they've bought bonds, in effect loaning that money right back to the government. I'd really love to hear how that type of investment is stimulative.

"If I'm barely making ends meet, you honestly think I'd go on a spending spree if I got a tax rebate." I really do love that term "spending spree." Yes, when you give money to the poor they tend to spend it on necessities because they are just that, necessities. Your problem is that you're only considering short-term necessities (i.e. things you need now or you'll die). Long-term necessities ("personal investments", if you will) include things like property maintainence, replacing worn-out appliances, and making long-term payments, all of which are directly stimulative. And even if they don't have those sorts of necessities, there will always be things they want. People in this country don't save money.

And then there's the problem Emerald is alluding to: The U.S. has a serious imbalance between supply and demand. Put simply, we have too much stuff and no one to buy it all. Cutting taxes for the wealthy won't help that.

One more thing: "But one other thing I think the left has consistently failed to realize, from a purely logical standpoint, the rich do not get a "handout" with a tax cut, they just keep more of what was already theirs." I hate it when people say things like this. The right seems to feel that taxes are just the government robbing people for shits and grins. We have this little thing called "society" and that society runs on taxes. If there were a way for people to give back societal benefits in exchange for reduced taxes, I'd be with you, but alas, it's rather a package deal. Colonel of Squirrels^{医药是医药，和那个不是医药。} 07:30, 5 December 2010 (UTC)

I think both sides of the argument have merit, and since there's been little evidence in practice of either being more effective (since there are a buttload of variables), it's hard to throw my weight behind one. I can't help but think that, if the wealthy buy things, that money won't go to stimulating the American economy. If a wealthy person buys an expensive car, it's probably going to be Italian, British or German. If they're buying a plane, it'll be Canadian or Brazilian. If they're buying wine, it'll be French or Italian (or Californian – they need some stimulus). – Nick Heer 08:06, 5 December 2010 (UTC)

I, personally, think that the righties who bitch about those "poor wealthiest 1%" forget that, during the longest period of sustained economic growth (not just bubble and burst bullshit) in the United States (from Truman to Kennedy) taxes on the top 1% were between 75% and 91%. On top of that, the wealthy themselves (including Ted Turner, Warren Buffet, Ben Stein, and Bill Gates) admit that raising their taxes wouldn't be a bad idea to fix the nation's bugest crisis. So, let the whining and complaining from the right cease. The fact is, the wealthiest Americans pay less taxes now than they ever have, and to believe otherwise is delusional. Scotch (talk) 08:12, 5 December 2010 (UTC)

What Emerald and the Colonel said. Recessions and depressions do not happen because there's not enough money for investments available - the US is still awash in capital - but because overall demand collapses, making it necessary to shut down production facilities and terminate employment contracts. In the current economic situation, it makes absolutely no sense to invest in additional facilities when there's still a lot of idle capacity left over. And regarding your point about the poor, exploited top 1% of income earners having to shoulder the largest tax burden: there's a rather simple reason for that, they also get a disproportionally high share of the national income. One of the most fundamental societal developments in the US since the 1980s (and, to a lesser extent, in other developed nations as well) has been a massive income redistribution from the poor to the wealthy. That's what supply-side economics does. Röstigraben (talk) 08:32, 5 December 2010 (UTC)

The spooky thing is that you can rely on Americans to vote against their interests. But I think the answer lies in looking at pyramid scams. In America pyramid scams (and MLM which is basically a pyramid scam with a Halloween costume) are hugely popular. Even when we mandate that MLMs reveal up front how much you're going to lose, people believe that applies to some hypothetical person who is dumb, not them. They see that 0.1% of people in the scheme make say $250k per year, and they figure "that's going to be me". But it isn't, it's not going to be even one in a thousand of them, because the schemes are front-loaded, the money makers all know the guy who set it up. When it comes to tax policy - the vast majority of Americans vote as if they made far more income than they do, far more money invested, and way less reliance on the social safety net - which only makes sense if they believe that they will on average soon be doing much better than they are. My conclusion: Unthinking optimism leads America to make bad decisions. 82.69.171.94 (talk) 18:17, 5 December 2010 (UTC)

I guess the longest period of sustained growth was when we had 5 recessions in a 15-16 year period from 1945-1961. Right .... I have no idea why people think that the 1940s and 1950s were the good, old days. I can get why Trent Lott would think those times were good, but not anybody who understands how a significant part of our population was disenfranchised from any type of economic prosperity that may or may not have occurred, or occurred intermittently within those 15 years. Second, I thought we needed to expand the availability of credit. Investing in bonds does just that. One of the problems with liberal economic policy is that it is extremely schizophrenic. On one hand they want to stimulate the economy, but on the other hand they want to raise taxes. Where were the liberals who are now complaining about the size of extension of the current tax policy during the passage of Obama's failed stimulus? Obama needs this tax increase to cover up the fact that there were admittedly "no shovel ready jobs", contrary to the hoax he tried to perpetuate. ConservapediaEditor (talk) 20:16, 5 December 2010 (UTC)

One other thing, if demand is not meeting supply, why have we had a current account deficit for the last 20 years? We currently import more than we export. The demand is there. ConservapediaEditor (talk) 20:44, 5 December 2010 (UTC)

Yes, a reduced but still substantial demand for affordable Chinese-made consumer products is certainly there. The demand for the same products at much higher prices due to the cost of American labor? Not so much. The demand for American-made cars? Nope, the Japanese ones are cheaper and more efficient. The demand for American industrial machinery? Nope, the German ones are more advanced. These are all markets in which US companies are at a competitive disadvantage, and that's the source of the US trade deficit (and in the case of the auto market, ultimately also the source of a large number of recent job losses). But in a recession and a greatly increased threat of unemployment, consumers reduce their spending across the board, and that hits a ton of retailers and the service sector as well, jobs that have to be local. Röstigraben (talk) 21:00, 5 December 2010 (UTC)

It simply amazes me that anyone can even try to justify the current taxation levels on the ultra rich. Trickle-down economics is essentially a laughing stock in the field, and income inequality in the US has grown enormously in recent decades to levels near robber-baron levels. Especially absurd is the notion that the ultra-rich have a right to the whole of these earnings, particularly the CEOs making untold millions while their shareholders suffer, and the bankers and investors who profited enormously off the indefensible financial schemes which set off this whole mess in the first place. 04:57, 6 December 2010 (UTC)

I would say let the tax cuts expire is a better thing (at least the republicans can't pass another tax cut for the rich into law). Expecially with a riot somewhere, watch for the ensuing reality. But to be fair, If there is anything that should be done (such as extending/expanding the tax cuts for the poor and implement wage subsidy or employment-based tax breaks), they should be done in the 1st year when the congress is in session, because there should be some parallel to what FDR did during the great depression: Immediate relief (If people have a stable income, at least they can rent some places if they so choose to have their homes foreclosed). And back then the marginal tax rate at some point reached 90% IIRC for some income levels. Most Republicans on TV have always said that FDR made a recession into a depression, and that kind of looks like blatant lies if you look at the GDP and employment. I would say what Obama did wrong is that the relief isn't immediate enough for people to notice it and he kind of focused more on banks and liquidity instead of jobs. Man, someday I might start a blog putting up some really autistic/retarded and working policies that should be in place. [[User:K61824|]][[User_talk:K61824|]] 07:13, 11 December 2010 (UTC)

Trick-down economics

Since it was mentioned above, allow me to create this aside for people to enlighten me. Why is trickle-down economics a crock of shit? I haven't studied it, but on the face of it it sounds sensible: if a rich guy buys a yacht, the low-paid grunt cleaning the toilet in the yacht factory keeps his job. Does the argument boil down to "rich guy's money usually goes abroad" or is it more complicated? ^{ONE / TALK} 15:40, 6 December 2010 (UTC)

Rich people tend to invest their additional money in unproductive ways, rather than putting it back into the economy. Only a small percentage is spent on yachts; most goes into low-yield bonds or the like. On the business end, if a small-businessman wants to build up his business, also, he seldom risks his own money - it's way smarter to get a business loan, which you can discharge in company dissolution if things go sour. And of course, corporations never depend on personal income in that way either.

I'm not an economist, so my explanation is hugely inadequate. But this is my best effort at counterexamples to illustrate the problems with trickledown. Here's more.--^talk 15:53, 6 December 2010 (UTC)

Well using your yacht example, a 20 million dollar yacht will employ about a dozen or so crafts men. It is a high skill job and they are producing only one product. 20 million dollars of socks on the other hand will employ hundreds of people to make hundreds of thousands of products which would generate a more distributed economic growth. - π 00:21, 7 December 2010 (UTC)

Right, but the money has to go somewhere - if high-skilled craftsmen earn a bucketload making a yaught, they'll spend that on more basic goods (like socks), so the chain continues and the money "trickles down". Presumably this isn't entirely true, and that's what I want to understand. ^{ONE / TALK} 09:22, 7 December 2010 (UTC)

Again, no economist, but the way I see it: The rich somehow have taken control of the GOP and have turkeys voting for an early Christmas - they've convinced poor people that they (the rich) need tax cuts. If you're going to take X less in tax revenues, then it's a question of who gets to keep that money. Poorer/middle-class people will (a) likely spend the money on economically stimulating activity (services, products, maintenance) and (b) have a significant quality of life improvement. Rich people are less likely to directly stimulate the economy through services/products etc, and won't feel the quality of life improvement... so the argument has to come from somewhere else. It comes from "voodoo economics" which claims that cutting taxes on the rich means they'll invest it and it'll be good for the economy. I think it's a crock of shit because other countries don't subscribe to it, there isn't huge evidence for it... and so it's better to go with the approach which improves quality of life, and the money stimulates the economy. ^EXTERMINATE 16:01, 6 December 2010 (UTC)

Rich people are less likely to directly stimulate the economy through services/products etc - Perhaps not directly, but isn't that the idea of trickle-down economics? Won't it stimulate the economy indirectly?

The "low-yield bond" argument sounds most compelling but I don't really have any idea what a bond is. It's loaning money to the government, right? ^{ONE / TALK} 09:22, 7 December 2010 (UTC)

(PS I've only just clicked that link from above, haven't read it yet) ^{ONE / TALK} 09:27, 7 December 2010 (UTC)

The problem is that not even the alleged indirect effects of "trickle-down" economics (which is actually an adequately derogatory term for the supply-side nonsense) are likely to materialize in highly developed societies. The argument ist that private investors can allocate capital more efficiently than the government (mostly true, IMHO), and supplying them with additional capital through tax breaks will thus be more beneficial to economic development. The problem is that, first, the investors might conclude that they can get better returns on overseas investments, and second, they might invest into speculative ventures and bubbles that have little or no positive effect on job creation. While they can allocate capital resources more effectively from their own point of view, the same thing is not necessarily true regarding the national economy. An American investor funding a factory in China or gambling with real estate derivatives doesn't do anything to create jobs in the US, while the government could. And while there's an aggregate demand shortage in the US, no sane investor will conclude that additional supply is needed, so he'll look for other opportunities. Röstigraben (talk) 09:41, 7 December 2010 (UTC)

I'm happy with that explanation. ^{ONE / TALK} 12:45, 8 December 2010 (UTC)

These "trickle-down" proponents' other side argument: Higher taxation cause the rich guys to work less. But then who says it's a bad thing? The problem with that argument is that those posts have to be filled. Better yet, 100% of those guys' salaries are tax deductible for the company, so as long as the candidate can keep the ROE at reasonable levels the company can and will hire that candidate if no better alternative is available. If those guys can't put up such a commitment somebody else will, albeit slightly less qualified in a sense. So the result is not that these guys will work less, but a creative response from these guys that make their benefit packages non-taxable like bribes, gifts and stuff, which is expected since we don't usually assume anyone with this sort of decision making power has any ethics or conscience anyways.
As for the "Higher taxes cause people to shrink their business", Why has not anyone thought of employment-related tax credit/subsidies? The amortization rule overhaul thing the congress is proposing doesn't count because that gives the unfair adventage to capital-intensive businesses (One should expect to see the unemployment numbers goes up if the companies manage to automate almost everything). If stimulation in employment is desired one should at least give the labour-intensive businesses some unfair advantage so they will hire more people in expanding their business. [[User:K61824|]][[User_talk:K61824|]] 07:50, 11 December 2010 (UTC)

As one of the beneficiaries of the Bush tax cuts I can weigh in a bit here. The whole idea of trickle-down economics hinges on the hope that those who get the money will go out and spend it right away. The main problem with that is how did most of us get into this bracket in the first place? Personally, I don't go out and spend everything I have. I don't live paycheck to paycheck and I have everything I could possibly need so why wouldn't I put the money where it is safe for my future generations? When I put the money in the bank or in the market it has much less leverage as it would if it went directly to those who actually need it. There is liquidity in cash given to the poor, their is some liquidity in what is in the bank but they have overheard and have to keep reserves...and they don't lend to the poor, so it doesn't help and the stuff in the market is seized up. So the original question as to why trickle-down economics is a crock of shit is easy to answer from here: the money simply doesn't trickle. I am more wealthy thanks to the tax cuts...as is the top %1 as a whole.

"Higher taxes cause people to shrink their business" This thinking is absolute fucking bullshit. The most rapid growth the world has ever seen (both the industrial revolution AND the Clinton era) were to of the highest proportionately taxed periods in American history. Arguments based on feel-good ignorance like that need to fucking stop because they have no basis in reality. δ_ij$^{i.broke.it.}$ 23:17, 14 December 2010 (UTC)

Comrade Obama has betrayed the Revolution

Comrade Obama is a traitor to the people's glorious Revolution and sold out to the capitalist exploiters and the bourgeoisie. He may defect to the FBI next.

So let's see...the unemployed proletariat get $60 billion over six months...the super rich get $700 billion over 10 years....geez, I'd take that deal everyday. Send that same guy up to negotiate anything, anytime. In fact, that's the guy I want to negotiate nuclear talks with Rooskies, the Iranians, and the North Koreans. Good job. nobs^{don't bother me} 20:45, 8 December 2010 (UTC)

The only people who claimed that Obama was a commie were morons like you and you buddies at Conservapedia. So: congratulations for burning that strawman. Now go wanking somewhere else. --BioGuard (talk) 20:48, 8 December 2010 (UTC)

What the fuck was that Rob? – Nick Heer 07:34, 9 December 2010 (UTC)

Lay off the ad hominem attacks against fellow RW editors, even if it is also against a CP administrator. Conservapedia Editor (talk) 04:07, 10 December 2010 (UTC)

BTW Rob, that was slightly funny (in a good way). Conservapedia Editor (talk) 04:08, 10 December 2010 (UTC)

Republicans are the only friends Obama has left these days; it is now Democrats, Socialists, and other assort sanctimonious ideological purists of the professional left who are obstructing and filibustering the President's agenda and the cause of humanity. nobs^{don't bother me} 18:45, 12 December 2010 (UTC)

Rob, you do realize this is one single vote on one single issue, not some enormous paradigm shift, right? DickTurpis (talk) 18:48, 12 December 2010 (UTC)

SNL writers and the Daily Show can't come up with as good a satire as this; “good deal for the American people;” "the recovery depends on [Reaganomics supply side trickle down]." Who is Barack Obama? the guy who ran on Marxist class warfare & taxing the rich. Now he pitches trickledown because all the economists he's talked to lately tell him it is necessary to create jobs and promote recovery. What the hell did we go through all the suffering and misery of the last two years based on Obama's promise to tax the rich? And to hear him tell it, he knew all the pain and suffering he caused by piling a trillion dollars onto the national debt and through 15 million out of work was pointless anyway.

So why is he caving to the greedy capitalist exploiters and corporate interests now? probably cause he needs campaign donations in 2012 which they coulodn't make if the gubmint expropriated it in taxes.

This is a rich subject. Bottomline, Dems have it completely backwards (synonymous with having your head up your ass). You begin a budget with revenue, then adjust spending appropriately; these asshoile & nitiwts ignored revenue for two years until the lame duck session and spent like drunken sailors in the meantime.

Oh, yeah, and one more thing; the "temporary" reduction in Social Security tax. Pity the Democrat who wants to raise that tax when it expires. And the Social Security payroll tax is not paying benefits right now, according to the CBO (see cp:Social Security. nobs^{don't bother me} 22:05, 12 December 2010 (UTC)

I'm glad to see you've gotten into the holiday spirit and made up with Obama. Merry tax cut, Rob! Röstigraben (talk) 19:39, 12 December 2010 (UTC)

Rob, you do realize that the Republicans did exactly the same thing as the Democrats in terms of spending, right? As for your statement "What the hell did we go through all the suffering and misery of the last two years based on Obama's promise to tax the rich? And to hear him tell it, he knew all the pain and suffering he caused by piling a trillion dollars onto the national debt and through 15 million out of work was pointless anyway" well, the day you say anything that makes any sense I'll get such a shock I'll probably jump in the ocean. DickTurpis (talk) 01:44, 13 December 2010 (UTC)

Wouldn't agree with the statement on spending; see SourceWatch narrative, [1], "First, the Senate voted to waive pay-as-you-go budget rules" on the Collins-Nelson Amendment of the Stimulus bill. We'll see in this upcoming Congress, the GOP will focus on revenue first, then spending. And the 15 mmillion poor, oppressed, starving unemployed is understated; facts are about 40 million persons - approximately one of every three workers - has suffered unemployment at some point over the past three years. nobs^{don't bother me} 20:35, 13 December 2010 (UTC)

^{ONE / TALK} 20:46, 13 December 2010 (UTC)

Good to see you haven't changed and henceforth I remain quite dry. Oh, and thanks for reminding me that when the Republicans were in control our budget was balanced; somehow I had forgotten about the 2000-2007 deficit-free era. Those Republicans sure did begin a budget with revenue, then adjust spending appropriately. And your figures on the number of people who have at one point been out of work, very helpful. While we're on the topic (we aren't, but since when has that ever been a factor?) tell me again how Fred Phelps, who agrees with you 99% of the time, is a liberal. DickTurpis (talk) 12:46, 14 December 2010 (UTC)

See Phelps DNC-Soros funded talking points: "Dick and Lynn Cheney ... know the iniquity they’ve wrought, but they’re not at all ashamed of it...God hates the Cheneys and all of doomed america!" [2] And look at the number of jobs created after the Bush taxcuts. nobs^{don't bother me} 21:32, 14 December 2010 (UTC)

Holy shit - 8,000 jobs over five years?! Too bad he couldn't have a third term. It makes those 225,000 green jobs Obama created seem ridiculous. --Leotardo (talk) 21:39, 14 December 2010 (UTC)

Well, the 8000 looks WAY bigger if the Y axis doesn't start on zero. Way to beat your data until it tells the story you want, Rob. Corry (talk) 21:44, 14 December 2010 (UTC)

If I'm reading the chart correctly, multiply by 1000. Is that right??? Occasionaluse (talk) 21:46, 14 December 2010 (UTC)

That would make it more substantial. Axis manipulation is still one of my graphical pet peeves. Corry (talk) 21:51, 14 December 2010 (UTC)

(EC) That's 8 million, but still, post hoc fallacy much there, Rob? I note you conveniently leave out the pre-recession numbers, so many of those jobs can be attributed to economic cycles, and the rest is the result of huge deficits (just like under Reagan). You know, the deficits that under Obama are horrible and economy destroying, but under Republicans are a huge boon?

As for Phelps, insulting Cheney = liberal? Considering hos VP approval numbers were around 15%, I guess the country is 85% liberal, eh? DickTurpis (talk) 21:52, 14 December 2010 (UTC)

Would you really expect the axis to go to zero? Occasionaluse (talk) 21:53, 14 December 2010 (UTC)

Damn, I think that's the second time one of these charts screwed me up. A better chart is here at the Wall Street Journal entitled "Bush On Jobs: The Worst Track Record On Record". Bush created a net of 3M jobs. --Leotardo (talk) 22:00, 14 December 2010 (UTC)

(EC) @Occasionaluse: It depends on the range of data being displayed. Zero may or may not make sense, but the baseline you use is important. The axis can easily be fixed to accentuate a change in a value to make the range seem more impressive than it really is. For example, if I weighed you before and after having a crap, I could then construct a graph with an axis chosen to make it look like you lost a large amount of weight. The numbers are still there, but it's visually deceiving. It is customary to have a break in the axis or some other visual cue to show that the axis does not start at zero. Corry (talk) 22:02, 14 December 2010 (UTC)

Macroeconomics 102

Ok Dick, let's have a serious discussion for a minute. You say, 'jobs...the result of huge deficits'; why then are no jobs being created now? (let's leave aside the effect of taxation on 'economic cycles', to use your term, for awhile). nobs^{don't bother me} 22:11, 14 December 2010 (UTC)

Jobs are being created, just not enough of them. You may have noticed that we are emerging from the most economic meltdown in generations (and no, Obama is not to blame; neither is Bush I'll grant you). Increasing spending and cutting taxes can help boost the economy, but it isn't a magic cure. Additionally, any recession is likely to lead to temporary deficits, based on the fact that revenue is down, while burdens like unemployment benefits increase, even if tax rates and discretionary spending remain the same. I'd like to think I'm not telling you anything you don't know here; I'm hoping your not one of those "spending is killing the economy" idiots I keep hearing. The teatards want to cut taxes, eliminate the deficit, and create jobs all at the same time, apparently unaware that those work against each other. This is sort of a classic "pick any two" scenario, only it's really more like pick any one. We could perhaps come close to balancing the budget in the next fiscal year or two if that was priority #1, but we'd kiss the recovery goodbye. DickTurpis (talk) 05:53, 15 December 2010 (UTC)

Well Dick, the way you stated it there, I'm about 98%+ in agreement. Now we can continue with, Bush coulda woulda shoulda or the Reinvestment & Recovery Act coulda wouilda shoulda, or we can move forward with the facts on the ground, using CBO, OMB, Federal Reserve and perhaps some qualified private data and projections. I move we continue with the second option.

So now we have the prospect of two simultaneous simulus', the Fed's $600B bond purchases and the compromise payroll tax holiday. Are fears of inflation, and hyperinflation, well founded? nobs^{don't bother me} 22:02, 15 December 2010 (UTC)

98%+ in agreement? I know it's cold out right now but did hell just freeze over? As for inflation, that's always a concern, and is almost always occurring to at least some extent, but I don't see it as anything to panic over, short of another oil crisis like we had in the 70s. When inflation is as low as it's been of late, panic over hyperinflation is completely unfounded. Some of you folks have been ringing that bell for years now and nothing's come of it. QE2 or whatever will, I suppose, ipso facto lead to some inflation, but it doesn't appear to be a highly significant amount. So what exactly are we arguing about here? It seems to me you keep trying to pin everything negative about the current economic state on Obama, and then basically admit that the government doesn't have much control over the economy.

For other points of contention: did the Bush tax cuts help create jobs? Probably, but at the expense of increased deficits, which for some reason were not a problem under a Republican administration but become a matter of utmost importance as soon as a Democrat took office. Fact is if we want to balance the budget some taxes will have to go up, and obviously spending will have to be cut. If taxes are going to rise it makes sense that they should on the wealthiest people, who are about the only ones who can afford to pay. We're not talking about going back to an 85% bracket or whatever it was at its height, just going back to what they were when Reagan was in office. People we're complaining so much then. I know you're probably going to gripe about punishing the job creators, but as you pointed out above, there ain't that many jobs being created anyway. As for cutting spending, you can nickel and dime all you want, but eventually defense will have to go on the chopping block. Likewise the age at which Social Security benefits kick in will have to go up noticeably. That will be particularly hard for the Republicans to sell now, as they owe much of their recent election gains to scaring old people. If the Dems weren't losing the House at the same time the tax cuts expire the their solution would be easy. Let all the cuts expire, then first day back in session introduce a new bill reinstating them for everyone earning below $250,000. Let the Republicans filibuster a middle class tax cut and see how that goes. DickTurpis (talk) 06:33, 17 December 2010 (UTC)

┌────────────────────────────────────────────────────────────────────────────────────────────────────┘ Some points.

• The Federal Reserve in 2007 began to dramatically expand the size of its balance sheet....this expansion...has the potential to greatly expand the nation's money supply when economic activity rebounds, policymakers are, thus, confronted with the potential problem of designing an effective policy to reduce the size of the Fed's balance sheet to prevent a rapid acceleration in money growth that may destabilize inflation expectations. [3]
• Thus the Fed created the liquidity to fund the TARP, Bush, and Obama stimulus'.
• FY 2009 federal budget, with it's deficit at 10% of GDP, likewise was funded through this massive expansion of the aggregate bases. Expansion of monetray aggregates has the result of allowing the federal government to dramatically increase its aggregate bases to fund bailouts or expand permanent government sepnding. The Keynesian mulitplier effect, in theory, dramatically expands aggregate GDP (Nominal GDP). Expansion of all these aggregate bases was supported by groups such as the US Chamber of Commerce. [4]
• Expansion of the aggregatge bases (monetary, federal budget, and nominal GDP) was necessary because of the debt overhang that sparked the 2007-2008 crisis.
• USA Today reports that within roughly 5 years, Social Security benefits for retiring babyboomers will consume an amount equal to 100% of what now is total aggregate federal revenues (personal, corporate, annd FICA tax). [5]

• US economic growth, as exemplified by the slow job growth, is not producing enough to meet demand payments on the system, but we are awash in cash.
• By providing a disincentive for savings, the Federal Reserve & elected officials can force cash off the sidelines to spark a consumer driven economy.
• Reinflation is the only way to saving the housing market & make real estate a good investment again.
• Even Obama understands the one half trillion ($500B) in unsold housing inventory must be liquidated first before housing construction & employment picks up (housing construction has replaced auto manufacturing as America's primary manufacting job base since the late 1970s).

Comment: an analgous situation did occur in the lost decade of the 1970s when the Federal Reserve monetized the debt overhang from the federal spending binge of the 1960s (Vietnam, War on Poiverty, NASA Space Race). But today's deficits are funded by foreign investors, and are more structural rather than the result of temporary spending measures.

As to blaming Obama for AIDS & hurricanes, I'll quit that when I stop hearing Reagan's decision to make ketshup a vegetable by Executive Order (for the purpose of starving school children) originiated in the Oval Office. nobs^{don't bother me} 19:11, 18 December 2010 (UTC)

No. Röstigraben (talk) 22:24, 15 December 2010 (UTC)

Well duh, the question is on future inflation, not the recent past inflation. Add $1.8 trillion business investment + $600 billion Federal Reserve Quantativie Easing + $112 billion payroll tax holiday = $2.512 trillion stimulus cash pumped in to the economny to create jobs. How much is $2.512 trillion? it roughly equals the total revenues (from personal income, corporate, and FICA tax) the federal government now takes in, or roughly two and one half times both the Bush and Obama stimulus plans thus far. One advantage however, is little of this is borrowed money. nobs^{don't bother me} 18:09, 16 December 2010 (UTC)

The Unemployment rate fell fom 2003 to 2007 after the Bush taxcuts took effect.

(EC,unindent, and please excuse the horrible formatting)Looking at changes in the total number of jobs is pretty meaningless when you've got a steadily growing population. The indicator of interest is the unemployment rate. Bush inherited a nearly optimal employment situation and left office during one of the most severe crises in US history. The crisis he had to weather early in his first term was admittedly not caused by him, but despite all of these tax cuts, he never managed a return to the Clinton numbers even in the boom years of 06/07. Bush's accomplishments here are just as bad as those on foreign policy, the deficit etc. So much for the vaunted trickle-down effect. Röstigraben (talk) 22:18, 14 December 2010 (UTC)

Can't respond to all of it, but Total employment figures are really all we have to work with. The Unemployment Rate is largely guesswork, more of a socio-political term, and not really scientific economics. nobs^{don't bother me} 22:30, 15 December 2010 (UTC)

OK, this is where you stop making any sense whatsoever. I won't clutter this thread with more pictures, so just consider One's message above my final reply as well. Röstigraben (talk) 14:11, 16 December 2010 (UTC)

Let's spell it out: Total Employment figures are hard numbers, actual bodies that can be counted, working, producing, and paying taxes. The Unemployment Rate is a percentage figure calculated by guessing how many working age, eligible non-totally disabled unretired adults are either working, or wanting to work. How is this figure (workforce participation) calculated? Example: A woman leaves her job to have a baby; an economist in the Dept of Labor decides she plans to drop out of the labor force (or become ineligible) for five years until her child starts school; however, three months after the birth of the newborn she returns to work. The Unemployment Rate is calculated at a lower rate for the months prior to her returning to work because she is deemed ineligible, and the rate is calculated as a percentage of eligible adults. Hence, the doctored figures. And we just saw this in the few months prior to the Novemeber elections when workforce particiaption rates were falling, and unemployment remained flat. As soon as the election was over, participation rates were increased, and unemployment rose. nobs^{don't bother me} 18:09, 16 December 2010 (UTC)

"why then are no jobs being created now?" Because the lack of regulation on the banking industry came to light and now that employers know what a stack of cards the economy is they are afraid in insolvency and have put hiring freezes in place. Remember that our market was on the verge of never-before-seen disaster when George the monkey left office. Moreover, George allowed all the manufacturing jobs to head overseas by giving companies who import goods a huge advantage over those that don't. The only jobs we have left in America are professional, service (as in McDonald's) and farm. Can't do much with an economy that functions by 70% gambling. (That's right, the finance industry is 70% of the American economy...it produces absolutely nothing but crooks and robbers.) δ_ij$^{i.broke.it.}$ 23:30, 14 December 2010 (UTC)

Good partisan spew, but lacking in updated facts. See for example today's NYT, “The shift from safe haven investments to equity markets is full on", [6] meaning the 1.8 trillion corporate cash on the sidelines is now coming into play. (Oh, and if this 1.8 trillion comes into play, why do we need $600 billion Federal Reserve bond purchases or a payroll tax holiday?) nobs^{don't bother me} 22:30, 15 December 2010 (UTC)