Just to be clear, I know more about economics than you do. Not because I'm particularly smart, but rather because you're an idiot. I studied some economics at both the undergraduate and graduate (MBA) level, but it is certainly not my forte. Regardless, I hold very few economists in high regard, but one whose views carry weight with me is the late John Kenneth Galbraith: On the supply-side nostrum that top-end tax cuts would trickle down to produce unparalleled growth, Galbraith the farm boy was colorfully clear: "After feeding oats to the horses, one should not gaze too closely at what trickles down to the sparrows." http://www.johnkennethgalbraith.com/index.php?page=articles&display=176&from=12
I don't think it would be wise to debate T-Dog on this (or any) point. Why? Well, first off, he is, after all, from Canada, so we know he knows what is best for us 'mericanz. Second, he might not be an expert in economics in the literal sense, but it would appear from his comments that he stayed at a Holiday Inn Express last night.
Spending cuts are just mean sprited and wrong somehow... letting your grandchildren pay off trillions in debt is ok of course.......
Hey Einstein, I was referring to revenue from cap gains. Spending's influence on cap gains is extremely minor. Besides, the levels of revenues changed dramatically when cap gains were first raised, and then lowered. Even Obama recognizes this. It is a FACT that lower cap gains taxes brings in greater revenue, and higher cap gains taxes reduces revenue. One does not need to be a rocket scientist to understand why. With higher cap gains there is less incentive to invest (which raises the cost of capital to firms, and thus slows an economy), and when a person does have cap gains, there is little incentive to sell the security if the profits are just going to be taxed away. The net result is less capital gains revenue to the government when rates are raised. The lag time is only one year as well. That is nearly immediate in macro economics If Obama wasn't going to touch capital gains, as probably 90% of all economists would recommend (myself included. I have 3 degrees in the field), then I wouldn't have as much difficulty with the guy. He wants to raise the taxes knowing full well its counter productive, but "fair". That's just insane thinking. Actually, its just pure politics.
sorry all of you mcbush supporters. taxes are going up no matter what. McCain backs off his no-new-tax pledge Email this Story Jul 28, 9:34 PM (ET) By CHARLES BABINGT WASHINGTON (AP) - Republican presidential candidate John McCain drew a sharp rebuke Monday from conservatives after he signaled an openness to a higher payroll tax for Social Security, contrary to previous vows not to raise taxes of any kind. Speaking with reporters on his campaign bus on July 9, he cited a need to shore up Social Security, saying: "I cannot tell you what I would do, except to put everything on the table." He went a step farther Sunday with his reponse on a nationally televised talk show to a question about payroll tax increases. "There is nothing that's off the table. I have my positions, and I'll articulate them. But nothing's off the table," McCain said. "I don't want tax increases. But that doesn't mean that anything is off the table." That comment drew a strong response Monday from the Club for Growth, a Washington anti-tax group. McCain's comments, the group said in a letter to the Arizona senator, are "shocking because you have been adamant in your opposition to raising taxes under any circumstances."
mccain offers more of this: By ANDREW TAYLOR, Associated Press Writer 26 minutes ago WASHINGTON - The next president will inherit a record budget deficit of $482 billion, according to a new Bush administration estimate. ADVERTISEMENT A Bush administration official said the deficit was being driven to an all-time high by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession. A $482 billion deficit approaching billion would easily surpass the record deficit of $413 billion set in 2004. Government officials confirmed the $482 billion figure Monday on condition of anonymity because the new estimate had not been formally released. Administration officials were scheduled to do that at a news conference later in the day. The new figure actually underestimates the deficit, since it leaves out about $80 billion in war costs. In a break from tradition â and in violation of new mandates from Congress â the White House did not include its full estimate of war costs. White House press secretary Dana Perino had no comment on the new deficit number. But she told reporters that the White House and lawmakers acknowledged months ago that they were going to increase the deficit by approving a short-term boost for the slumping economy. "Both parties recognized that the deficit would increase, and that that was going to be the price that we pay," Perino said. In fact, the White House had included cost estimates for an economic stimulus bill in its earlier projections, so the new figures represent a considerable deterioration in the government's fiscal health. The White House had predicted in February that next year's deficit at $407 billion, which puts the increase in the projections since at $72 billion. Figures for the 2008 budget year ending Sept. 30 will actually drop from an earlier projection of $410 billion to $389 billion, the officials said. The numbers represent about 3 percent of the size of the economy, which is the deficit measure seen as most relevant by economists. That's considerably smaller than the deficits of the 1980s and early 1990s, when Congress and earlier administrations cobbled together politically painful deficit-reduction packages. Still, the new figures are so eye-popping in dollar terms that it may restrain the appetite of the next president to add to it with expensive spending programs or new tax cuts. In fact, pressure may build to allow some tax cuts enacted in 2001 and 2003 to expire as scheduled at the end of 2010, with Congress also feeling pressure to curb spending growth. The deficit for 2007 totaled $161.5 billion, which represented the lowest amount of red ink since an imbalance of $159 billion in 2002. The 2002 performance marked the first budget deficit after four consecutive years of budget surpluses. That stretch of budget surpluses represented a period when the country's finances had been bolstered by a 10-year period of uninterrupted economic growth, the longest period of expansion in U.S. history. In his first year in office, helped considerably by projections of continuing surpluses, Bush drove through a 10-year, $1.35 trillion package of tax cuts. However, the country fell into a recession in March 2001 and government spending to fight the war on terrorism contributed to pushing the deficit to a record in dollar terms in 2004. House Budget Committee Chairman John Spratt, D-S.C., said the $490 billion figure confirms "the dismal legacy of the Bush administration: under its policies, the largest surpluses in history have been converted into the largest deficits in history." The figures to be released later will paint a picture of the financial health of the government that President Bush's successor will inherit, as well as updated predictions of the health of the economy. White House budget director Jim Nussle and Edward Lazear, chairman of the president's Council of Economic Advisors, were scheduled to release the administration's updated forecasts at an early afternoon news conference.
This was what I was afraid of. It seems U.S. Government has adopted a policy of unlimited spending, regardless of party. One decides to tax the rich and borrow the rest. The other relies heavily on borrowing and hopes GDP growth can keep pace.
Obama's Small Spending Limits, Big Tax Cuts May Worsen Deficit By Matthew Benjamin July 29 (Bloomberg) -- Barack Obama, who says he's going to spend most of his presidential campaign talking about the domestic economy, bills himself as a fiscal disciplinarian. ``My plan is detailed and specific when it comes to cutting spending,'' the Democratic candidate said in a July 7 speech in St. Louis. ``In fact, all my new spending proposals would be more than paid for by spending reductions.'' Budget analysts from across the political spectrum disagree. His spending and tax-cut proposals, they say, would do little to curb runaway federal spending, resulting in more red ink at a time when the White House is already forecasting a record $482 billion budget deficit for next year. ``Clearly, this is not a spending-cut agenda,'' said Robert Bixby, executive director of the Concord Coalition, a Washington-based nonpartisan group that advocates budget restraint. ``You're likely to see continuing large deficits from the Obama plan.'' The shortfalls Obama would produce don't approach the size of the deficits John McCain's budget threatens to bring. The Republican candidate's tax cuts alone would increase the debt by $5 trillion by 2018, compared with $3.4 trillion for Obama, says the Tax Policy Center, another nonpartisan group. Obama's proposed spending cuts would touch areas from student loans to Medicare to subsidies for wealthy farmers. Excluding health-care-related savings, they would total less than $30 billion -- 1 percent of the $3 trillion U.S. budget. The plans ``sound good on paper but don't produce much,'' said Isabel Sawhill, an associate budget director during the Clinton administration. `All Very Minor' Sawhill, a scholar at the Brookings Institution in Washington, said the Obama spending cuts ``are all very minor.'' In some cases, the savings would just be recycled back into spending programs, which include universal health care and the doubling of funds to fight poverty. The Illinois senator says he hopes to end the Iraq War within 16 months of taking office, though he would use most of the money saved to strengthen the military, increase veterans' benefits and bolster the war effort in Afghanistan. The U.S. spent about $165 billion last year in Iraq and Afghanistan. ``He'll increase the size of the standing army; that's part of what the Iraq money is going to,'' said Jason Furman, Obama's top economic adviser. Only a small portion of the money now spent in Iraq would go toward deficit-reduction, he said. Washington Panel Several members of an economic advisory panel convened by Obama, including former Treasury Secretary Lawrence Summers, said after a meeting with the candidate in Washington yesterday that stoking economic growth, not deficit reduction, should be Obama's top priority. Most of Obama's cuts and spending programs would be phased in over four years. He would eliminate a student-loan program run by private lenders, saving taxpayers about $3 billion annually. Earmarks, or money set aside for lawmakers' pet projects, would be scaled back, saving about $9 billion, Furman said. Government energy consumption would be reduced to save $1.5 billion a year, while Medicare would encourage the use of generic drugs and allow for the re-importation of medication, chopping $6 billion from that program's costs, Obama advisers say. Like McCain, Obama, 46, promises to make government procurement more competitive and efficient. Obama would also close corporate loopholes and crack down on tax havens and no- bid government contracts. ``Barack Obama is committed to paying for all of his proposals and reducing the deficit,'' said Furman. Medicare Cuts The bulk of savings in his plan are health-care related. He would cut $15 billion in subsidies to a private Medicare coverage program and save tens of billions more by modernizing health-care information systems and insurance-payment processes. Those savings would be used to lower the cost of the Democrat's most-expensive new program, extending health coverage, through tax credits, to most of the 47 million Americans who lack it. The price the campaign attaches to that project -- about $65 billion a year -- is unrealistic, analysts say. ``The savings estimates simply do not hold water,'' said Robert Laszewski, president of Health Policy and Strategy Associates in Alexandria, Virginia, who studied Obama's health plan. He estimates it will cost taxpayers well over $100 billion a year. More Spending In addition to extending President George W. Bush's tax cuts that went to Americans with incomes under $250,000 and reducing the tax burden for middle-income workers and seniors, Obama proposes increasing early-education programs by $18 billion a year and clean energy by an annual $15 billion, though the latter would be offset by revenue from carbon-emission permit auctions. He would allocate an additional $6 billion for infrastructure improvements, $3.5 billion for a national service program, and $1.5 billion for paid-leave assistance. He would also double to $50 billion funds to fight global poverty, an expense the campaign says would be financed by ending the Iraq War. Both Obama and McCain make their proposals look more responsible by using a ``baseline'' going forward that assumes Bush's tax cuts will be extended permanently. Under current law, the reductions will expire at the end of 2010. Making that assumption moves Obama's tax plan from the red into the black and provides funding for many of his new expenditures. David Walker, former head of the Government Accountability Office, says he isn't impressed by McCain's or Obama's plans. ``The math doesn't work for either candidate,'' he said. To contact the reporters on this story: Matthew Benjamin in Washington at mbenjamin2@bloomberg.net. Last Updated: July 29, 2008 00:01 EDT http://www.bloomberg.com/apps/news?pid=20601087&sid=anGhCq5adqhU&refer=home
I agree. Both parties spend like there is no tomorrow. Eventually the economy, or at least the dollar, may collapse, and then the US will be FORCED to balance its books. Until then, I don't see much changing. Fire them all, and put a benevolent dictator on the throne. Someone everybody likes. Maybe Michael Jordan.
I've wondered if that might not be the answer. Although my first choice (never happen) would be a drastic reduction in the size of congress. I think 50 senators and 100 representatives (average of 2 per state) limited to a single term would be a huge improvement. Maybe extend the length of the terms just a bit. The inability to run for re election removes most if not all the incentive for stupid pork barrel (constituent bribes) spending. Not to mention the instantaneous creation of a backbone for politicians, since making the necessary tough choices would no longer be political suicide.