The Stimulus Package [Archive]

Professor S

02-03-2009, 04:14 PM

And from what I gathered (I haven't been following this bill too closely) is that its a mix of what Democrats and Republicans want and its getting so half assed on both sides that it really won't help much.

I agree, it won't help at all. The main points that were made in the clip above were that while proponents are rushing this bill, most of the spending in the bill doesn't take place until 2010 or beyond.

Another issue I have with it is that it creates work, not necessarily business. Government replaces jobs, it doesn't create them, and from a tax view its a "loss leader" never taking in as much as it puts out. This was the same downfall of The New Deal. Government work programs in the 30's reduced unemployment from 30% to about 15-18%, but in the end when the work was done, there was NO BUSINESS left over to keep the existing jobs or create new ones. Unemployment went back up again, peaking at almost 20% after 8 years of The New Deal. Only a world war got us out of it.

http://encarta.msn.com/media_461546193_761584403_-1_1/unemployment_during_the_depression.html

The "Stimulus Package" is not what it claims to be, its an attempt to transform our economy and not kick start it, and if the proponents believe that the nature of our economy needs to be transformed we should have a discussion with the true intentions of both sides clear for all to understand.

The current bill is Machiavellian in the truest sense of the word, and a HUGE political mistake now that the thin veneer has been stripped from it.

BreakABone

02-03-2009, 04:20 PM

I agree, it won't help at all. The main points that were made in the clip above were that while proponents are rushing this bill, most of the spending in the bill doesn't take place until 2010 or beyond.

Thats not stimulus, its an attempt at transformation, and if the proponents believe that the nature of our economy needs to be transformed we should have a discussion with the true intentions of both sides clear for all to understand.

The current bill is Machiavellian in the truest sense of the word, and a HUGE political mistake now that the thin veneer has been stripped from it.

So I am curious what do you recommend.
I only look at it in a small scale sense really since don't follow politics that much.

But I could see how focusing part of it on stuff like infracstructure creates instant jobs and helps us out over the long haul.
Investing money in education and alternative energy... I see the education but alternative energy only helps those researching it now unless there is some major breakthrough won't help many people in the immediate time.
Tax cuts... I could see why its wanted, but as this holiday season proved, it is difficult for people to spend as freely as they usually do when the country is in a bind. It also doesn't help that even after the bailout banks still are rather tight with their loaning.

Professor S

02-03-2009, 06:16 PM

Well BaB, since you asked...

1) Yes, rebuild the infrastructure and invest in it, but make sure it's PRIVATE companies doing it and actually have OVERSIGHT and legitimate BIDDING for the projects. Private companies create jobs, unlike the government that just creates work. Right now infrastructure is a miniscule percentage of the overall stimulus.

2) A poor person never hired anyone. Lower and middle classes consume opportunities. The very wealthy create them. Sounds like just another evil conservative greedily eating up tax breaks, but ask any construction workers how much they're working right now, and the reason why're not working is because there are no new houses, no decks or porches being built and no pools being installed. Jobs are created by investment. The wealthy purchase/invest in things that create wealth not just for themselves but also others, and when the wealthy get hit hard, the lower and middle classes SUFFER. As we can see, its hard to argue that trickle down economics works when the chips are down.

- Immediately cut income taxes on those who PAY THEM, but with those making over $200k a year only receiving tax breaks if they are BUSINESS RELATED. Meaning: Tax breaks for job creation, expansion, internal investment, etc. DO NOT RAISE TAXES ON ANYONE. Thats stupidity.

Eventually when the economy recovers, install a flat tax so everyone pays the same percentage above 30k, but eliminate tax shelters AND most marginal taxes. Tax laws are far too complicated and they allow those with the education, resources and money to avoid paying taxes while new wealth gets hit hard because they don't know the tricks, so the rich stay rich and new wealth has a hard time keeping it. Make taxes simple, manageable and FAIR. And by eliminating the IRS we'll have a lot of accountants available to more oversight...

- Have a one+ year capital gains holiday, and in 2011 reduce the level of captial gains tazes to no more than 10%. Gapital gains are return on investments, and right now we need to ENCOURAGE investment. And as Charlie Gibson pointed out in this interview with Barack Obama, cutting capital gains taxes actually INCREASES tax revenues to the government. Its a win-win with not much thinking involved.

- Eliminate the estate taxes... PERMANENTLY. They destroy wealth, most importantly they destroy rising wealth, and if you want to know why I wrote a detailed explanation in another post recently. We want to grow wealth at this time, and not destroy it. Besides, it taxes the same wealth twice, which is immoral and IMO unconstitutional.

- To make up for some lost revenue, increase tariffs on incoming goods, coupled with a tax benefit to companies who create manufacturing jobs.

- Create more union oversight and ala Teddy Roposevelt have the government mediate union and company disagreements. Unions are KILLING us in world competition, especially in the automotive sector, and there needs to be a fair and equitable resolution. No one should make $50 an hour to screw it 4 nuts on the door. The reason why we can't compete with foreign companies when it comes to smaller cars isn't incompetence, its LEGACY, not tp mention the fact that Americans just like big cars but they are essentially forced to create small ones that no one buys and they don't profit on.

- Create regulatory oversight, not DIRECTION. There is a difference. The government is just as culpable if not more so for the housing crisis. Fannie Mae was essentially paid to buy bad loans and the Community Reinvestment Act twisted the arms of lenders to create mortgage products for buyer who couldn't afford to buy. Greed was a part of this too once the ball started rolling, but without the governments interference those loan products likely would have never existed.

The next debacle I see is the Green boom that is busting, but the government wants to make more and more mandates for things most consumers don't care that much about. Green is too expensive and sales of hybrids have plummetted since the economy went in to recession. Don't try and make companies sell steak when the world can only afford ground chuck.

That said, we need to regulate the WEALTH, not the business. Seaparate mortgages from securities and never allow them to be sold like stocks again. There were too many spoons dipping into the communal pot, and they didn;t know what they were purchasing.

- We need to let companies fail as well. The last bailout gave billions to companies with no strings attached. There have to be strings and a proposal that is accepted if they're getting public money, and if a company is a bad investment, its never too big to fail. AIG should die as most economists admit its a complete mess. We shouldn't continue to enable FAILURE, especially when we don't even require them to earn our trust before we habd them billions.

- All stimulus should directly allow people to keep more of their money, and all spending should extend unemployment benefits, enable private companies, mainly small businesses to invest in themselves through interest free loans that are potentially forgiveable if they hit various benchmarks in expansion.

- For one year allow individuals to refinance trouble loans at 6% interest.

There's more, but I'm tired and hungry. :D

Acebot44

02-03-2009, 09:21 PM

I'd like to read the bill in full. Is there a link available (can't search right now)?

Bond

02-03-2009, 09:58 PM

If you really want to:

http://appropriations.house.gov/pdf/RecoveryBill01-15-09.pdf

Professor S

02-03-2009, 11:20 PM

Here is the estimate from the CBO in terms of outlays based on the stimulus package.

http://big.assets.huffingtonpost.com/stimsummary.pdf

Here is the full estimate

http://www.cbo.gov/ftpdocs/99xx/doc9976/hr1aspassed.pdf

The funny part is that The Huffington Post cites this estimate, but in the article that links it, they claim it doesn't exist.

http://www.huffingtonpost.com/2009/01/23/a-controversial-cbo-repor_n_160495.html

They're reasoning is that its not an official report and it only analyzes about $300 Billion of $800 Billion, and its just a preliminary estimate based on computer models. Honestly, its $300 Billion of absolute shit scheduled for 2010, not 2009. Huffington is simply throwing up a red herring because of thsi report's inconvenience.

If anything, this goes to prove a point: Government is simply not responsive enough to handle immediate needs. This is why it can never replace the private sector and fails almost evey time it attempts to do so.

BreakABone

02-04-2009, 08:43 PM

One day I shall decipher the Professor's post and respond to it, but here is a bit more on the pre-Obama stimulus/bailout

Among the new restrictions being considered is a $500,000 cap on salaries for executives at companies that receive a substantial amount of government aid, according to a person familiar with the matter.

Some within the Obama administration fear that curbing executive pay will discourage those companies from participating, delaying the financial-sector's recovery. Another faction in the administration believes that banks need to accept fairly punitive terms in exchange for getting government money.

Some banks have already turned down government cash because they worried about the increasing number of new conditions under consideration.

I think the salary cap is both good and bad as it in some ways doesn't encourage people to work harder if they know they are going to hit a glass ceiling. While on the other hand since the gov't is paying these companies it makes sense to have some regulations.

Professor S

02-04-2009, 09:28 PM

I think the salary cap is both good and bad as it in some ways doesn't encourage people to work harder if they know they are going to hit a glass ceiling. While on the other hand since the gov't is paying these companies it makes sense to have some regulations.

Another downside is that the companies that need the most help won't be able to compete for the best high level talent.

An interesting side note is that the same thing was tried during the Great Depression, and it didn't work then either. In fact, it's how employer based healthcare and other benefits were included as part of someone's compensation, because companies literally could not give raises. The more I hear of the plans for stimulus, the more I see us repeating bad policies based on anger and spire, not a wish for success, and those policies extended a previous pitiful economy in the 30's and again in the 70's.

I empathize with the outrage to these bonuses, but after thinking about it over the long haul, I think controlling executive compensation has the potential to do far more harm to these already damaged companies and ecomomy than good.

I think there needs to be oversight and regulation of companies that received government money, but it should be based on their ability to meet payment and peformance benchmarks, not whether they gave out performance bonuses. If these companies that are in dire straits always have inferior talent, they'll never dig themselves out of the hole.

The stimulus should be about learning from previous mistakes and rebuilding the economy, not punishing businesses because of perceived moral indescretions. If you want to punish these individuals, do it throught the legal system, and there are plenty of people who caused this mess that deserve to be prosecuted.

Jason1

02-04-2009, 09:44 PM

The top 1% of the Population in the United States has 40% of the countries wealth. We need to bring back the 70% tax bracket so we can spread this wealth around, and create more equality.

Professor S

02-04-2009, 09:48 PM

The top 1% of the Population in the United States has 40% of the countries wealth. We need to bring back the 70% tax bracket so we can spread this wealth around, and create more equality.

Question: We had 70% tax rates before (even higher, in fact) under FDR and Carter. How did those rates work out for the economy during their presidencies?

Jason1

02-04-2009, 09:52 PM

Question: We had 70% tax rates before (even higher, in fact) under FDR and Carter. How did those rates work out for the economy during their presidencies?

Not nearly as terrible as the Bush tax-cuts turned out now...maybe dont raise it right now, but after the economy recovers a little we need to spread this wealth around, instead of just letting the rich get richer and the poor get poorer.

Carter was an underrated president, he actually did a lot of good for our country.

Professor S

02-04-2009, 09:57 PM

Not nearly as terrible as the Bush tax-cuts turned out now...maybe dont raise it right now, but after the economy recovers a little we need to spread this wealth around, instead of just letting the rich get richer and the poor get poorer.

Not as bad as the Bush created economy? Really? Unemplyment under FDR never went below 14% and averaged well over 20% for all 8 years before WWII. Inflation rates under Carter were at double digits.

I'm not saying that Bush's toleration of harmful regulations and non-existant oversight were good in the end, but lets have some perspective.

Carter was an underrated president, he actually did a lot of good for our country.

How so? (Honest question)

Jason1

02-04-2009, 10:12 PM

Bond

02-04-2009, 10:19 PM

But you probably wouldnt understand any of this, you being a gas guzzling gay hating nascar watching truck driving Republican.
That was a little harsh. Why all the hate?

Well-intentioned people can disagree.

Professor S

02-04-2009, 10:27 PM

Carter did wonderful things for human rights all around the world, and had a very good foreign policy. He was also an advocate for gay rights, and did good things for the environment.

His foreign policy led to a complete mess in the Israel/Palestinian relationship, he backed the Ayatollah against the Shah in Iran that helped lead to the creating of Hamas and Hezbollah and Russia invaded Afghanistan even after Carter tried to appease them. Miserable Fail.

Environment? Maybe he tried, but inevitably failed because his plans dictated to business instead of working with buiness. He also backed rediculous ideas like photo-voltaic cells that are STILL too inefficient and expensive to be a viable energy alternative. Trying to succeed and good intentions does not equal success. Fail.

Gay rights? I agree.

But you probably wouldnt understand any of this, you being a gas guzzling gay hating nascar watching truck driving Republican.

1) My car gets 28mpg

2) I support gay marriage and gay rights. I believe its a civil rights issue not unlike that of the 60's and one of my best friends from high school and college is gay. You're the one in this conversation that has exhibited prejudice and blind hatred, not me.

3) I've watched about 3 minutes of Nascar in the last 10 years.

4) I don't own a truck

5) I am a Republican, so you got one right. Good for you. :drool:

Honestly, these opinions of yours just show that you listen to no one else but yourself. I've posted about gay rights numerous times on these forums, yet you just hand out blanket accusations because of my party affiliation. Everything is good vs. evil. You don't think or bother to inform yourself about anything you speak about and I'm sure you embarrass others that sympathize to your world view.

In the end, your ignorance and hate don't even bother me anymore. All I have to do is ask you questions and let you humiliate yourself. In the end, its more pathetic and sad than irritating.

KillerGremlin

02-05-2009, 01:56 AM

The top 1% of the Population in the United States has 40% of the countries wealth. We need to bring back the 70% tax bracket so we can spread this wealth around, and create more equality.

They also give a lot of people jobs/support a large portion of the economy/contribute to the government etc.

You need people with money to employ people without money, at least that's my basic understanding (and believe me I have minimal understanding) of economy.

Professor S

02-05-2009, 08:47 AM

They also give a lot of people jobs/support a large portion of the economy/contribute to the government etc.

You need people with money to employ people without money, at least that's my basic understanding (and believe me I have minimal understanding) of economy.

Thats is an inconvenient truth for many people. My dad's small construction business is a perfect example of how the system works:

He is middle income and employs about 5-10 people at a time depending on the level of business he has, but his work comes from very wealthy people and large organizations/corporations.

When the wealthy get hit, they stop building new houses, additions, patios, etc. so there is no work for him to do. When the wealthy are not building or expaninding their businesses/homes he has no work, so he is forced to lay off his emplayees, who have been on unemployment since late November. They are out of work because my dad is out of work. Soemtimes I feel like people think businesses WANT to layoff workers. This is not the case as its usually a bad sign for the company as a whole.

Now if we adopt the ethic that wealthy people are the problem and then apply punitive economic measures against them, its takes them that much longer to get back to the level where they can reinvest and create more work, so its takes forever for the economy as a whole to recover, or in the case of FDR's New Deal, it takes a worldwide transformative disaster for it to recover.

This doesn't just affect construction, either. Its affects marketing, advertising, retail, manufactuting (nothing sells, why build more?) and more. Its all interconnected and WE are all interconnected. This idea of us vs. them has to end because we are all part of each other's success. Every time in out history that we've had punitive tax rates for the wealthy we have ALL suffered, and suffered for extended periods of time.

Contempt for wealth will never build it.

BreakABone

02-05-2009, 12:10 PM

http://www.whitehouse.gov/assets/documents/White_House_Releases_Additional_State1.pdf

A breakdown down, state by state on how this bill will help.

Bond

02-05-2009, 01:54 PM

Okay, while I currently don't have time to fully research this bill, from what I do know (which is limited) I am starting to feel sick.

Jonbo298

02-05-2009, 08:06 PM

I'm not becoming a big fan of this "stimulus" either. It feels like I'm hearing the same propaganda that Bush's administration said the first time they wanted the bailout. "Pass it or we're doomed!" to sum it up from Bush's end. Now from Obama's end it's becoming "Pass it or the recession never ends! DOOM!"

Seriously, STFU and drop the non-stimulus bullshit. In fact, just drop it altogether. The economy will recover, it's just needing time instead of just band-aids. Hell, Obama is just not on the right track even after voting for him.

Voting to delay the DTV transition was downright stupid as hell. People will transition once you cut it off. If not, they had AMPLE warning. Hell, I only see a transition ad every 10 minutes anymore. Unless your blind and deaf, you ARE aware. YOU choose to wait. TV is not a right, it's a privilege.

Now the "This might be a stimulus" plan is souring on me too with the useless BS I already discussed above.

Professor S

02-05-2009, 11:38 PM

Seriously, STFU and drop the non-stimulus bullshit. In fact, just drop it altogether. The economy will recover, it's just needing time instead of just band-aids. Hell, Obama is just not on the right track even after voting for him.

I think some people doubt the resiliency of the American economy, as long as it is allowed to follow natural courses. We've had bad recessions before, and we'll have them again.

Working in the Real Estate industry, I can tell you one of the biggest enemies of economic progress is uncertainty. Before the market crash, all I heard was how there were home buyers out on the market, but they were waiting to see how low interest rates would go and if the Fed would drop rates again (nevermind the fact that the rates the Fed dropped had little to no effect on mortagages). Afterv August, it didn't matter anymore as everyone was scared to death. Things appear to be getting better now, though. A lot of realtors I have talked to have said showing and interest have gone up quite a bit.

Our economy needs decisiveness and direction, and has needed it for some time. If the government had made bold statements regarding what they will and will not do and gave the current bill any real focus, the wheels of undustry may have started turning earlier. Companies are frozen, wondering what the hell is going on in Washington. No one wants to make a move until they know what canvass they'll be asked to paint on.

BreakABone

02-06-2009, 01:24 AM

http://cspan.org/Watch/watch.aspx?MediaId=HP-A-15159

If nothing else... this man would be fun to listen to.

Professor S

02-06-2009, 08:31 AM

What frustrates me is that President Obama keeps talking about bipartisanship, but then makes a hard left turn and essentially states "Bipartisanship mean just do what we tell you to". He talks about what the American people call for, yet ignores the massive and growing public opposition to this bill, and then tries to scare them to death by threatening them with a depression if we don't rush in a spending bill (he called it as much)

To me, he has betrayed his campaign promises and its only week 3.
So much for change.

Lindsay Graham is my hero of the week. I tried to find his whole speech from the senate floor, but this clipped version was the best I could find. The part they skipped that I would include is when he said he WANTED to spend to help stimulate the economy, but that this was not the right kind of spending.

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This clip from Hardball is more detailed in his views

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Jason1

02-06-2009, 08:48 PM

Obama tried Bi-partisanship, but there are way too many republicans who are just too stubborn and stupid to possibly agree with anything the Democrats are trying to do to help. Now, the Republicans are being cry babies, sore losers if you will, and making the entire country suffer in the process. Obama actually cares about the American people, thats why he has gotten a little more firm, effectivley stating "look, I won the election, the american people voted for me, and this is what im going to do and I'll get it done wether I have 1 republican supporting me or 35. Real people are suffering too much to delay this any longer, the priority is getting the bill passed, not getting 100% republican approval"

Bottem line republicans really only care about themselves and the rich.

KillerGremlin

02-07-2009, 04:29 AM

Professor S

02-07-2009, 02:11 PM

I think you may have made some generalizations there.

That made me laugh so hard I literally cried.

And Jason, I understand what Obama wants to do and his world view. The problem is that the American people diagree with him in this case.

My question is this: If the public hates this bill, and they keep on hating it more and more as time goes on, if you look at the polls. Knowing this, should Obama still push it through?

Jason1

02-07-2009, 08:06 PM

That made me laugh so hard I literally cried.

And Jason, I understand what Obama wants to do and his world view. The problem is that the American people diagree with him in this case.

My question is this: If the public hates this bill, and they keep on hating it more and more as time goes on, if you look at the polls. Knowing this, should Obama still push it through?

Where are you getting this information that the public hates this bill? Last I heard support had slipped some since a month ago, I'll admit that, but the numbers I saw last were 51% approve and I think 29 or 39% dissaprove, with the rest I'm assuming undecided. Thats still majority supporting it.

Bond

02-07-2009, 09:44 PM

According to Rasmussen Reports Americans oppose the Stimulus Package 37-43%.

Bond

02-07-2009, 11:49 PM

Ron Paul on the compromise stimulus bill:

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TheGame

02-08-2009, 01:30 AM

This whole thread is just funny to me. Starting it with a video from fake news.. I mean fox news first already put it on the wrong foot. From what I know, here are a few pieces of truth.

1) Republican's answer for this financial situation is to have more tax cuts. We watched Bush do tax cut after tax cut after tax cut, and we see how perfectly it worked. If it were up to the republicans we'd get down to 0% tax before they start thinking logically. Tax cuts and giving out free cash to spend to the public does not help the economy, it hurts it.

2) Jason is right to an extent, the republicans do NOT want to play ball with the democrats. As much as Obama is sucking up to them, they truly have no intention of buying into his agenda. NOT because the fact that what he's doing may be bad for hte country in the long run, but because they need something to stand on politically. The fact is Obama could come up with a stimulus package that looked like it was written by the heads of the GOP themselves, it could be exactly what they think the country needs, and they'd still reject it for political reasons. They dont' give a shit about the country, they want to have a chance in the next elections..

Which brings me to my third point...

3) The republican party right now is stuck. By them being such a small minority now, with having such a high approval rating president, they have to be a bit more wise about how they go about voting.

They could sit back and cock block and vote against the stimulus packages that Obama comes up with, and not allow it to pass. If they do this, and the economy gets worse, they will get blamed soley for every problem that happens. Especially considering Obama reached out to them to help them mold the package, they'd be an easy scapegoat for any issues. "We tried to fix things, but they didn't want to help."

I really don't think they have a choice but to go with it in the end. Even though they're talking a lot (since Obama empowered them), it'd be a political nightmare for the party if they fight it.

TheGame

02-08-2009, 01:39 AM

By the way, the whole "its not a stimulus, its a spending bill" makes no sense whatsoever. That talking point is just a very retarded play on words to make people think its bad. I dare someone give real reasoning to why that bill isn't a stimulus package. Yes it has spending, like every stimulus package in history. And yes its purpose is to help stimulate the economy and create jobs.

Bond

02-08-2009, 11:31 AM

1) Republican's answer for this financial situation is to have more tax cuts. We watched Bush do tax cut after tax cut after tax cut, and we see how perfectly it worked. If it were up to the republicans we'd get down to 0% tax before they start thinking logically. Tax cuts and giving out free cash to spend to the public does not help the economy, it hurts it.
Could you please elaborate on your view that tax cuts hurt the economy? Also, do you believe, in reverse, that tax increases help the economy?

BreakABone

02-08-2009, 11:39 AM

Could you please elaborate on your view that tax cuts hurt the economy? Also, do you believe, in reverse, that tax increases help the economy?

Well, he is right in the sense that we've gone through it a bit recently, and aren't in the best condition.

And as stated before, the middle/lower class are less likely to spend the money they get back instead using it to save or pay off debt.

Now the concept is giving larger companies tax breaks will allow them to invest in more jobs and stuff, but there has to be a demand for their product or service and if the lower/middle class people aren't buying that chews up a lot of your potential audience.

Jason1

02-08-2009, 06:08 PM

As GAME said, we have had tax cuts for the last 8 years and look where it's got us. Republicans for some reason think Tax cuts will magically fix all our problems, and that couldnt be further from the truth.

Professor S

02-08-2009, 06:22 PM

This whole thread is just funny to me. Starting it with a video from fake news.. I mean fox news first already put it on the wrong foot. From what I know, here are a few pieces of truth.

Did you bother to listen to anything said in the first clip? Pay attention to any of the content? What about the other opinions in it? It looks like Fox isn;t the only one that is guilty of bias...

1) Republican's answer for this financial situation is to have more tax cuts. We watched Bush do tax cut after tax cut after tax cut, and we see how perfectly it worked. If it were up to the republicans we'd get down to 0% tax before they start thinking logically. Tax cuts and giving out free cash to spend to the public does not help the economy, it hurts it.

Most of the Republicans aren't calling for just tax cuts, they also want spending, but they want it aimed at stimulating the economy, and not attempting to replace it. Its a disingenuous argument and its democrats that are abusing this place and time in history to force through a plan with fear and not ideas

If you want to talk about spending plans, then it should be a discussion for appropriations, not stimulus. Its flat out dishonest.

2) Jason is right to an extent, the republicans do NOT want to play ball with the democrats. As much as Obama is sucking up to them, they truly have no intention of buying into his agenda. NOT because the fact that what he's doing may be bad for hte country in the long run, but because they need something to stand on politically. The fact is Obama could come up with a stimulus package that looked like it was written by the heads of the GOP themselves, it could be exactly what they think the country needs, and they'd still reject it for political reasons. They dont' give a shit about the country, they want to have a chance in the next elections..

I should remind you that 11 democrats voted againt this bill in the House. I'd also challenge you to find a Republican who still believes in handing out "free cash" as you put it. In fact, the "free cash" is integral to Obama's tax plan, not the Republicans.

I find it surprising that you would make these gross accusations and you are one of the people who are arguing on this bill without mentioning any of its content. Do you even know what is in this bill, or are are you just upset that the opposition hasn't simply handed the King his crown? Do you really believe that only one side holds the vanguard of honest discussion and debate? Is it possible that Republicans could be against this bill because they believe it would truly harm out nation?

3) The republican party right now is stuck. By them being such a small minority now, with having such a high approval rating president, they have to be a bit more wise about how they go about voting.

Actually, if you look at polls this is one of the best things to happen to Republicans in a long time. The PEOPLE don't like this bill, and they don;t like it because its garbage.

They could sit back and cock block and vote against the stimulus packages that Obama comes up with, and not allow it to pass. If they do this, and the economy gets worse, they will get blamed soley for every problem that happens. Especially considering Obama reached out to them to help them mold the package, they'd be an easy scapegoat for any issues. "We tried to fix things, but they didn't want to help."

What comprimise did Obama make? He talked to Republicans about his views, and that was that. No Republican was invited to help shape the bill in the least. Even Clinton and Reagan worked hand in hand with the oppositon party to shape important bills like this. Obama has done NOTHING similar beside make bold statements and expect everyone simply to do as he says, and when they disagree, accuse them of partisanship.

I really don't think they have a choice but to go with it in the end. Even though they're talking a lot (since Obama empowered them), it'd be a political nightmare for the party if they fight it.

They likely will pass this vote, but when they do the bill will have been stripped down a bit and in the end thats a good thing.

And you seem to be very strongly behind this bill. Why?

TheGame

02-08-2009, 06:26 PM

Could you please elaborate on your view that tax cuts hurt the economy? Also, do you believe, in reverse, that tax increases help the economy?

"We watched Bush do tax cut after tax cut after tax cut, and we see how perfectly it worked."

That should be answer enough. But, ask yourself this. If the country is in huge debt to the fed and to other countries, where is money supposed to be generated to pay off this debt? Give me an example of how a tax cut will make the government more money, and I'll gladly disarm it.

In my opinion, I think Obama shouldn't have touched taxes.

The republican tax cut strategy is 100% political, and in my opinion makes no sense whatsoever. They keep pushing for tax cuts over and over, even when it makes no sense.. And when their opposition gets into office they're stuck with the tough decision of raising taxes to help the situation.

Tax cuts do not help the economy, they help republicans win elections. But thanks to Bush, a lot more people see things for what they are. Hopefully Obama will take the responceable stance in the long run, and be smart enough to make people understand the truth of the sitation.

(But with how this stimulus bill is, I guess that's too late. Politics defeats common sense again.)

I actually like that the stimulus now is more of a long term thing, and not one of those bush spending bills that's treat everything like an emergency. "Zomg I need 1 trillion to give to my buddies before I leave office!" That helped...

TheGame

02-08-2009, 06:33 PM

Professor.. I'm not behind the bill at all. In fact, I'm not for any stimulus package. I'm just bashing how politics work in general in this situation. Maybe you should read it back with that thought in mind.

I'm not defending the package at all.

And by the way, he met with the house republicans, and allowed their ideas to change the bill to an extent.

Professor S

02-08-2009, 06:38 PM

"We watched Bush do tax cut after tax cut after tax cut, and we see how perfectly it worked."

That should be answer enough. But, ask yourself this. If the country is in huge debt to the fed and to other countries, where is money supposed to be generated to pay off this debt? Give me an example of how a tax cut will make the government more money, and I'll gladly disarm it.

Easy. It's been shown and admitted by Charles Gibson in the Obama interview that cutting capital gains increases revenue from capital gains taxes. Glad that argument is done with...

And if the country is in such debt, like you said, how is borrowing $1,000,000,000,000.00 for the "stimulus plan" going to fix that?

The republican tax cut strategy is 100% political, and in my opinion makes no sense whatsoever. They keep pushing for tax cuts over and over, even when it makes no sense.. And when their opposition gets into office they're stuck with the tough decision of raising taxes to help the situation.

Tax cuts do not help the economy, they help republicans win elections. But thanks to Bush, a lot more people see things for what they are. Hopefully Obama will take the responceable stance in the long run, and be smart enough to make people understand the truth of the sitation.

So in your argument then Obama would be the biggest Republican ever. His plans are to eliminate federal taxes for over 50% of citizens, AND send many of them tax rebate checks. Talk about a vote grab... evil republican Obama...

I actually like that the stimulus now is more of a long term thing, and not one of those bush spending bills that's treat everything like an emergency. "Zomg I need 1 trillion to give to my buddies before I leave office!" That helped...

Thats fine that you like it, but its not a stimulus plan and thaty makes it a dishonest argument for this bill.

Bond

02-08-2009, 06:39 PM

"We watched Bush do tax cut after tax cut after tax cut, and we see how perfectly it worked."

That should be answer enough. But, ask yourself this. If the country is in huge debt to the fed and to other countries, where is money supposed to be generated to pay off this debt? Give me an example of how a tax cut will make the government more money, and I'll gladly disarm it.

In my opinion, I think Obama shouldn't have touched taxes.

The republican tax cut strategy is 100% political, and in my opinion makes no sense whatsoever. They keep pushing for tax cuts over and over, even when it makes no sense.. And when their opposition gets into office they're stuck with the tough decision of raising taxes to help the situation.

Tax cuts do not help the economy, they help republicans win elections. But thanks to Bush, a lot more people see things for what they are. Hopefully Obama will take the responceable stance in the long run, and be smart enough to make people understand the truth of the sitation.

(But with how this stimulus bill is, I guess that's too late. Politics defeats common sense again.)

I actually like that the stimulus now is more of a long term thing, and not one of those bush spending bills that's treat everything like an emergency. "Zomg I need 1 trillion to give to my buddies before I leave office!" That helped...
I'll try to reply to this this coming weekend, when I'll hopefully have time to engage in an economic discussion full of bar graphs and data.

Real quick: I *think* the issue here comes from a fundamental misunderstanding of tax cuts, coupled with the need to consider other economic events in the past eight years.

Bond

02-08-2009, 11:05 PM

"We watched Bush do tax cut after tax cut after tax cut, and we see how perfectly it worked."
It seems the popular thing today to blame all the country's woes on Bush. Now, I wasn't his biggest fan either, but this is unfair. In this hypothetical and highly unrealistic situation, you have held all other factors but tax cuts constant. America's economy is far more complex than this, as is its interaction with the world economy.

Also, the recent banking collapse has nothing to do with Bush's tax cuts. Please see this (http://www.nytimes.com/2009/01/04/magazine/04risk-t.html?_r=1&scp=3&sq=joe%20nocera%20risk&st=cse) ten-page New York Times article for the main cause behind the collapse (which, in short, was due to out-dated risk management software).

That should be answer enough. But, ask yourself this. If the country is in huge debt to the fed and to other countries, where is money supposed to be generated to pay off this debt? Give me an example of how a tax cut will make the government more money, and I'll gladly disarm it.
Here is a fundamental misunderstanding of tax cuts. The recent dramatic rise in debt is not due to tax cuts. It is due to increased spending, above and beyond tax revenue generated by the government.

Remember, there is little correlation between tax rates and tax revenue:

http://www.heritage.org/Research/Taxes/images/chart4_lg_1.gif

However, there is a strong correlation between tax revenue and GDP:

http://www.heritage.org/Research/Taxes/images/chart5_lg_1.gif

Since tax revenue increases with ever-increasing GDP, it makes sense to facilitate private economic growth, through smart tax policies. So, no matter the tax rate, tax revenue (what matters), remains largely the same percentage of overall GDP:

http://www.heritage.org/Research/Taxes/images/table_1_lg_1.gif

Unfortunately, that's all I have time for today. I hope this makes things a little clearer.

KillerGremlin

02-09-2009, 03:04 AM

Bush is an awesome scapegoat though.

Professor S

02-09-2009, 08:40 AM

One thing the charts should also illustrate is that these "new ideas" that are being pushed by President Obama, Pelosi, etc. are not new at all, just tired retreads of old ideas like The New Deal under FDR and The Great Society under Johnson.

Bond, why do you think fiscal conservatives have such a hard time making the argument that you did? It's so straight forward and simple when you put it in those terms. Do you think politicians are simply afraid that people won't understand the tax cut argument beyond the immediate affect to their pocket book?

Its things like this that make me appreciate Reagan more the older I get: He never talked down to the American people or tried to misrepresent his views out of fear his constituency wouldn't "get it". I think there is a lack of trust and confidence by politicians today, and that gets returned in kind.

As for the Bush scapegoating, the dems will get some mileage out of this right now, but they need to be wary of continuing with it. The feeling I get is that most people who disliked Bush want to get BEYOND his presidency, not give it grave dressing, and every time a politician mentions Bush's name people get more and more sick of it.

BreakABone

02-09-2009, 11:07 AM

http://sas-origin.onstreammedia.com/origin/gallupinc/GallupSpaces/Production/Cms/POLL/spkmsc5sue2tgkahrvqrxq.gif

So it doesn't seem like people are turning against Obama for this bill.
And as it stands right now unless I'm mistaken, tax cuts makes up the single largest portion of this new bill.

Professor S

02-09-2009, 12:47 PM

I haven't seen any details on the newer version of the bill, so I'll reserve comment. My comments were based on the House version of the bill.

Bond

02-09-2009, 03:19 PM

Bond, why do you think fiscal conservatives have such a hard time making the argument that you did? It's so straight forward and simple when you put it in those terms. Do you think politicians are simply afraid that people won't understand the tax cut argument beyond the immediate affect to their pocket book?
Your guess is probably as good (or better) than mine. I do have a few ideas, though.

For one, I don't think most people want to deal with quantitative graphs, the distinction between tax rates and tax revenue, real numbers adjusted for inflation, etc.

Secondly, most of our politicians are lawyers, from liberal arts backgrounds. I would have to assume few understand economics. It's very complicated, and I only have a very basic understanding. As you go into more complex economic theory, the conclusions that are drawn become more and more subjective. But, I think it is possible to arrive at at least a few fundamental truths, at the most basic level, which the graphs I posted illustrate.

Also, economic discussions (really arguments) in politics always boils down to class warfare rhetoric, which is neither helpful, nor accurate. Each part of an economy depends on the other part: rich depend on poor, poor depend on rich, etc. The graphs are evident of this. The goal of economic policy, in my opinion, should always be to create the most wealth within the society (as I believe the creation of wealth is unlimited). Once you understand we are all interconnected, and all need to work toward wealth creation, there is no reason to hate thy neighbor, whether they be rich or poor. But that's just my view.

KillerGremlin

02-09-2009, 04:19 PM

I plead ignorant, which is why I'm avoiding this discussion for the most part.

However, I think part of the problem is the media too. I mean, turn on FOX or CNN or even the extreme liberal media (Daily Show), and all they talk about is how the Republicans are all opposing the Stimulus, or how it is Dems vs. Pubs.

There is very little content actually explaining how our economy works, and why our economy is in such a shitty spot right now.

Does the mass media get a cookie for polarizing/stupidizing the American Public? How come the American public are too ignorant to be educated on their own economy. Of course that makes me a huge hypocrite, but when I have some time I would like to sit down and learn US Econ 101 because soon I'll be doing all my own taxes and stuff.

TheGame

02-09-2009, 06:04 PM

Bond, if you don't mind, can you scale that first graph down to the last 10 years? And also include real numbers instead of percentages? (You did post a nice secondary graph that helps, but a 50 year example is too large.)

By the way, I don't think tax cuts are ALWAYS bad, I just don't believe that they're ALWAYS the answer. Two different extremes there.

And of course, I have to toss in the fact that if you put a 50 year example of the debt the country has gotten into, I'm sure the slope would move up a lot faster then even the GDP.

BreakABone

02-09-2009, 07:01 PM

The Senate has voted for cloture on the Stimulus bill.
Not exactly sure what that means.
But it does get us past the filibuster stage, right?

Anyhow a vote of 61-39.

Jason1

02-09-2009, 07:16 PM

http://i2.cdn.turner.com/cnn/2009/POLITICS/02/09/stimulus.plan/t1home.senator.split.gi.jpg

I thank the 3 of you for caring about the people out there that are suffering right now. Thank you.

Professor S

02-09-2009, 10:53 PM

The Senate has voted for cloture on the Stimulus bill.
Not exactly sure what that means.
But it does get us past the filibuster stage, right?

Anyhow a vote of 61-39.

I believe thats correct. At least the debate was able to pear down the stimulus by $106 billion... not that it matters much when we tax payers are already on the hook for $9.7 trillion.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNDaPlDwNZak

Thats a number thats just too big to comprehend. We haven't even gotten to the banks or housing plans yet...

I'm no economic expert and I'll be the first to admit I have no clue how national debt affects mainstreet economies, but this kind if daunting debt and IMO recklessness can't be good. But then again we're in new territory here. No one has ever taken the US or another world power this far into the red. Who knows? Maybe we'll spend so much we'll tear a whole through our own reality into a land of gumdrops and money trees.

In the end we'll see how wallstreet reacts tomorrow. That will be a decent indicator of whether or not this now inevitable spending bill will help or delay economic recovery.

TheGame

02-09-2009, 11:52 PM

I'm no economic expert and I'll be the first to admit I have no clue how national debt affects mainstreet economies, but this kind if daunting debt and IMO recklessness can't be good. But then again we're in new territory here. No one has ever taken the US or another world power this far into the red. Who knows? Maybe we'll spend so much we'll tear a whole through our own reality into a land of gumdrops and money trees.

You should read up on the fed. Its not exactly the best situation to say the least. Though the funny part is they couldn't recollect what we owe them even if they wanted to, but if they were to request any type of plan with any type of reasonable time limit... The economy here is done. lol

Bond

02-09-2009, 11:54 PM

Bond, if you don't mind, can you scale that first graph down to the last 10 years? And also include real numbers instead of percentages? (You did post a nice secondary graph that helps, but a 50 year example is too large.)
I'll do this over the weekend (it will still prove the same point, though).

Will post some more thoughts on the economy then as well.

Bond

02-10-2009, 11:22 PM

In the end we'll see how wallstreet reacts tomorrow. That will be a decent indicator of whether or not this now inevitable spending bill will help or delay economic recovery.
The market is, at least initially, responding very poorly (looking at today's trading numbers).

Professor S

02-12-2009, 12:20 PM

The DOW has dropped 300 points since the stimulus bills passed the cloture vote. Awesome.

By the time the banking and housing plans pass we'll be bartering beads for beaver pelts...

EDIT: Sorry make that a 400 point drop... ugh... I hope I can look at my 401k balance sheet again sometime soon...

EDIT2: Now its back up and finished almost even on the day... I'm just not going to look at it anymore...

KillerGremlin

02-13-2009, 10:20 AM

EDIT2: Now its back up and finished almost even on the day... I'm just not going to look at it anymore...

DOW: THE RIDE!

(warning: pregnant mothers and people with heart conditions not recommended)

Jonbo298

02-13-2009, 03:59 PM

On a similar unrelated note, I liked one of the answers when Leno did his "Presidential Jeopardy" last night. One of the answers was Stimulus Bill. "Bush" responded with "What is Bill's nickname in the White House". I busted out laughing at it and then wondered why I never thought of that.

BreakABone

02-14-2009, 01:19 AM

http://www.whitehouse.gov/the_press_office/arra_public_review/

Think can review the final version of the bill here.

Bond

02-14-2009, 11:04 AM

TheGame, here's the data that you asked for in real (2000) dollars:

http://img444.imageshack.us/img444/5287/budgetad1.th.png (http://img444.imageshack.us/img444/5287/budgetad1.png)

You can view the full budget here (very large document): http://www.whitehouse.gov/omb/budget/fy2007/pdf/hist.pdf

Again, the problem is not that tax revenue is too low, or that tax rates are too high, the problem is spending massive amounts of money above and beyond a nearly constant tax revenue stream.

Jonbo298

02-14-2009, 06:15 PM

I can't imagine what a revised amount would look now based on the fact that data is from '07 right before all hell broke loose.

TheGame

02-15-2009, 08:26 AM

http://www.voanews.com/english/2009-02-13-voa53.cfm

The funny thing is they would never give any specific examples of why they voted against it.

Bond

02-15-2009, 09:48 AM

The even funnier thing is that it is nearly inconceivable that any representative had time to read the finalized bill for a re-vote (not for lack of trying, simply because the bill was slammed through so fast):

<object width="480" height="295"><param name="movie" value="http://www.youtube.com/v/CvnwOjDjnH4&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/CvnwOjDjnH4&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="295"></embed></object>

Professor S

02-15-2009, 06:51 PM

http://www.voanews.com/english/2009-02-13-voa53.cfm

The funny thing is they would never give any specific examples of why they voted against it.

Game, those that were against this bill have been VERY specific about their reasons and have expressed this in multiple televised press conferences. I've even posted video clips of some of the specific reasons why they're against it. If anyone has been vague, it's those that have been FOR the bill, talking more about partisanship and obstructionism than the bill's merits.

In the end it's passed and we'll see what happens. Personally, I think that the economy will recover, because it always does, but it will in spite of the "stimulus bill". I just hope the delay isn't too crippling.

BreakABone

02-15-2009, 06:57 PM

Now barring this stimulus package is a complete and utter blow-up.
I think Obama won the war on words as well. He got the stimulus passed in about the time he claimed he would. He offered to reach out to Republicans for this bill, but they tried to fight it.
And well, he still has a pretty high approval rating of his performance.

Curious to see what the following weeks hold now. And how much Republican opposition will grow or die.

Bond

02-15-2009, 07:15 PM

Professor S

02-16-2009, 08:31 AM

It's interesting how our discussion of the stimulus package has turned away from facts and quantitative economic measures, to more of "feelings" arguments. I think this only mirrors the larger discussion in our country around economic issues, though. Complex economic discussions get boiled down to class-warfare and emotional arguments in the twenty-four hour news cycle that we live under.

Part of this is the idea I maintain and shared earlier, that politicians just think we're too stupid to understand the economics and/or they want to "slip" something past us. I keep being reminded of Rahm Emanuel's statement that a good crisis should never go to waste.

In the end, the Republicans have the best argument based on real numbers but they are afraid to voice it (or apply those pronciples looking at the past 8 or so years), and democrats have the best argument based on "social justice" simply because pandering to class envy and anger is effective. Just look at Jason1's political views for a perfect illustration. Keep someone angry and spiteful against a common enemy and they'll stop thinking.

What has really angered me during all of this is how damaging it has been to our democratic process. We're passing massive bills that haven't been read or understood out of FEAR and ANGER, not reason. The only real argument we hear repeatedly from those that support this bill is that of immediacy; "something has to be done now!". But no one is talking about what that something is or how it will affect our nation beyond broad political arguments.

The last time that happened we ended up with The Great Depression and a lost decade of failed economic policies.

BreakABone

02-16-2009, 05:11 PM

I do wonder how the GOP will continue going forward with this, I mean the House none of them voted for the stimulus and I believe only 3 in the Senate, but when aspects supports their followers... will they continue saying it was a bad move or try and save face.

GOP lawmakers tout projects in the stimulus bill they opposed

By David Lightman | McClatchy Newspapers
WASHINGTON —

Rep. John Mica was gushing after the House of Representatives voted Friday to pass the big stimulus plan.

"I applaud President Obama's recognition that high-speed rail should be part of America's future," the Florida Republican beamed in a press release.

Yet Mica had just joined every other GOP House member in voting against the $787.2 billion economic recovery plan.

Republicans echoed their party line over and over during the debate: "This bill is loaded with wasteful deficit spending on the majority's favorite government programs," as Minority Whip Eric Cantor, R-Va., put it.

But Mica wasn't alone in touting what he saw as the bill's virtues. Rep. Don Young, R-Alaska, also had nice things to say in a press release.

Young boasted that he "won a victory for the Alaska Native contracting program and other Alaska small business owners last night in H.R. 1, the American Recovery and Reinvestment Act."

One provision would have made it harder for minority businesses to win contracts, and Young explained that he "worked with members on the other side of the aisle to make the case for these programs, and was able to get the provision pulled from the bill."

Yet later in the day Young — who recently told McClatchy that he would've included earmarks, or local projects, in the bill if it had been permitted — issued another statement blasting the overall measure.

"This bill was not a stimulus bill. It was a vehicle for pet projects, and that's wrong," he protested.

That was more in line with the Republican message. Young wouldn't return a request for comment on the apparent contradiction of his press releases.

Mike Steel, a spokesman for House GOP Leader John Boehner of Ohio, at first ducked when asked about Mica and Young issuing press releases praising the bill they'd opposed.

"I don't work for Mica or Young," Steel said initially.

But then he explained that what Mica and Young did in touting aspects of the bill was in fact consistent with the Republican message.

"Being supportive of one portion of a trillion dollar bill, but voting against the entire trillion dollar bill, is perfectly reasonable," Steel said.

Mica is the top Republican on the House Transportation and Infrastructure Committee, and a longtime backer of high-speed rail. GOP committee spokesman Justin Harclerode explained that Mica saw the bill's $8 billion for rail as a "silver lining," and "he's encouraged others are supporting high speed rail too."

But nowhere in the Young or Mica statements was any mention that they opposed the bill.

Harclerode wasn't sure why Mica didn't mention his opposition. "It's not really secret," he said. "I guess it just wasn't the focus."

Professor S

02-16-2009, 06:37 PM

To use a cliche: The proof is in the pudding.

If the bill succeeds, the Republicans were against a successful economic policy and they'll be crushed come 2010 elections. If the economy continues to stumble and fail for the next two years, the Republicans look like prophets that no one listened to and when the mid-term elections come, and they will gain seats quite easily.

This bill and the coming banking and housing bills are a huge gamble for both sides, and our political landscape will be shaped by the outcome for YEARS.

In any case, I hope that I am proven wrong by these actions by our legislature. Now that it whas bee passed I truly hope the bill succeeds, because in the end thats what everyone wants, we just disagree in what will succeed. My fear is that it will fail and fail spectacularly.

Typhoid

02-16-2009, 06:59 PM

Jason1

02-16-2009, 07:19 PM

Wether or not Obama turns out to do a good job as president or not, it's nice to have a president who can actually put a complete sentence together.

BreakABone

02-16-2009, 07:31 PM

Personally, I don't think anything will change.

You can pour money into whatever you want, but as long as people are scared enough about another "depression", they will hoarde their money, and not spend it as frivilously (in most cases).

Once things tend to get really bad, they don't get better until they hit what appears to be rock bottom - and I just don't think there is any stopping that. Slowing it down, sure.

That's the bottomline really.
As long as people continue to believe in a recession and hard times, they just won't spend money as much.

Or if they get extra cash will save it or use it to pay down debt more rapidly than spending on frivolous things.

BreakABone

02-17-2009, 10:53 PM

http://www.recovery.gov/

This is a cool idea.
Let's see if it is put to use.

Bond

02-17-2009, 11:15 PM

Nice to know where my parent's money is going.

Jonbo298

02-17-2009, 11:58 PM

Nice to know where my parent's money is going.

and mine unfortunately. College things will help me this fall, but I'd rather have not gotten it from a "package" like this.

Bond

02-18-2009, 12:12 AM

In the end, the Republicans have the best argument based on real numbers but they are afraid to voice it (or apply those pronciples looking at the past 8 or so years), and democrats have the best argument based on "social justice" simply because pandering to class envy and anger is effective. Just look at Jason1's political views for a perfect illustration. Keep someone angry and spiteful against a common enemy and they'll stop thinking.
See, this is the thing that really ticks me off. The Democrat's economic platform doesn't benefit the middle class any more than the Republican's economic platform. In fact, one could argue that Democratic economic policies perpetuate poverty and feed class warfare. So really, they're simply perpetuating a lie to feed political desires.

Here's my question: Why are Chemistry and Physics required classes to graduate from high school, but Economics is not? Why can most high school seniors solve any basic chemical formula, but not balance a check book? Maybe there is something in keeping people uninformed. It creates the ability to tap in to these "feelings" arguments.

TheGame

02-18-2009, 08:18 AM

Here's my question: Why are Chemistry and Physics required classes to graduate from high school, but Economics is not?

Economics is a requirement at all the high schools in my town.

By the way, if you haven't noticed I've pulled out of the economic discussion in his thread. The reason being that I don't want to argue off of anything but results. Everyone is quickly jumping on Obama's back about his plan, even though nothing he has done so far has affected the economy whatsoever.

The republicans had their chance to help the economy, but had a historic fail. The reason for the big fallout is the government not taking enough action and setting stricter regulations for the banks. The reason they didn't do that is because the republicans where over the government at the time, and allowed it to happen.

Professor S

02-18-2009, 08:49 AM

Economics is a requirement at all the high schools in my town.

By the way, if you haven't noticed I've pulled out of the economic discussion in his thread. The reason being that I don't want to argue off of anything but results. Everyone is quickly jumping on Obama's back about his plan, even though nothing he has done so far has affected the economy whatsoever.

The only blame I place on Obama is that he's pushing for "a" plan, not this one. I believe he fears inaction to crisis and how it will shape his public opinion. The bill itself was not written by him, but I think he's felt a little pressure to back it even though even he has disagreements. But in the end, if thats true he's suffered a failure of leadership.

The republicans had their chance to help the economy, but had a historic fail. The reason for the big fallout is the government not taking enough action and setting stricter regulations for the banks. The reason they didn't do that is because the republicans where over the government at the time, and allowed it to happen.

Actually, you could make the argument that regulation helped create the problem. It's called the Community Reinvestment Act that was signed into law by Pres. Carter and expanded by Pres. Clinton. Basically, the act twisted the arms of lenders to offer loan products to low income people who would ordinarily not be approved. This created the need for "bad loans", such as interest only adjustable rate mortgages (ARMs) that were traditionally only for investors who wanted to "flip" houses for quick profit and lower their overhead created by carrying a mortgage from month to month until the house sold. These loans made the homeowners especially vulnerable to time constraints (most readjusted in 5 years for much higher monthly costs) and market conditions (interest only for the first few years, so when the market takes a hit and the owner has to sell he has little to no equity in house). This created whats called "upside down" mortgages, where the owner owes more than the house will bring on the open market and we find ourselves in the housing mess we're in right now.

Also Fannie Mae was compensated by the government for every "bad loan" they acquired from loan originators (those asses are another topic), so literally we all helped to create this mess using our tax dollars. We can thank Barney Frank for that mess, who is a democrat and somehow got out of this entire debacle unscathed.

Not every lender abided by the CRA, and while they lost out on immediate government incentives, those that didn't follow the act have proved to be more resillient in these times (Wells Fargo for example) but even these companis are getting hammered by the credit crunch because most large companies traditionally work on credit, not liquid assets.

Now I'm not saying tat there weren't other factors (loan originators beign a big one), but the topic you posed is about regulation and making blind statements blaming one party or another doesn't help the matter. The fact is that regulation doesn't, the right kind of regulation helps. Also, more than one party was responsible for this debacle, so our discussion should be about IDEAS, not who came up with those ideas.

Keep in mind FDR installed more regulations than one would care to remember, and also resided over the longest (8 years, and it was getting WORSE before WWII, not better) and most severe economic duldrum in American history. If we'e not careful, rushing to place blame and change the nature of economy can do far more harm than good.

Professor S

02-18-2009, 11:00 AM

Back to the stimulus package, probably the biggest and most obvious mistake is the complete lack of any incentives for investment. Our stock market is down almost 50% and from what I've read there were ZERO credits or tax cuts for capital gains or anything else that would spur investment. We can see the effects of this ommission in how the market has reacted, IMO

Also, most the tax "cuts" appear to be credits based on specific qualifiers, which is a big mistake, IMO. Just let EVERYONE share in the relief, not just those with childen or kids in college. I may be wrong, but from what I understand tax credit monies are realized during the refund process making then work more like the useless stimulus checks we got last year. Tax CUTS would have put more money in the pockets of everyone on a regular basis, which makes them less "found money" and more of a manageable boost. Not only that, but I believe tax credits are a trick the government plays on you to give the impression that it's THEIR money, not YOURS. To me refundable tax credits are the equivalent and getting a Christmas present, then rewrapping it and giving back to the person who gave it to you with the thought they'll never notice.

I may be wrong on this, though, as the recovery website was VERY vague about pretty much everything.

Bond

02-18-2009, 05:27 PM

Economics is a requirement at all the high schools in my town.
That makes me a happy camper.

By the way, if you haven't noticed I've pulled out of the economic discussion in his thread. The reason being that I don't want to argue off of anything but results. Everyone is quickly jumping on Obama's back about his plan, even though nothing he has done so far has affected the economy whatsoever.
I thought we were talking about historic results of tax cuts back on page three?

This idea of how to break out of a recession is nothing new. The results will be rather predictable: a short-term boost that sets our economy up for the next, inevitable, bust.

Bond

02-20-2009, 10:14 PM

Looks like Gov. Jindal is going to refuse (http://news.yahoo.com/s/politico/20090220/pl_politico/19092;_ylt=Asq0m3Gf7PWdK7NY6kfaI66s0NUE;_ylu=X3oDMTFhNTgxMXRwBHBvcwM4BHNlYwN5bl9tb3N0X3BvcHVsYXIEc2x rA2ppbmRhbHRvcmVmdQ--) some of the stimulus money. I am proud.

Professor S

02-21-2009, 06:54 PM

The stimulus package tax breaks offers an extra $13 per paycheck on average through 2009...

http://finance.yahoo.com/news/Stimulus-tax-payout-brn-14422717.html

Woohoo?

The Germanator

02-21-2009, 09:47 PM

Bond

02-23-2009, 12:40 AM

Gov. Jindal talks about the Stimulus Package on Meet the Press:

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Professor S

02-23-2009, 09:35 AM

I find that part to be an interesting theory....The idea being that if someone receives a $600 check, they'll probably save that and throw it right in the bank. But, if they have an extra 10 bucks, maybe they'll go out for dinner or a movie because it seems like a more frivolous amount it might turn into frivolous spending. A small step, but probably a good one.

If anything I think it will get thrown into diapers/food/gas etc. The number is so small it's almost too little to be considered beyond necessities, much less stimulus, IMO. The question we have to ask ourselves is this: Does $13 a week build any confidence in a frightened consumer base?

I'm not a fan of tax payers receiving a big check once a year, for reasons I've talked about earlier, but I also don't think an extra $13 a week is going to help anyone pay their mortgage, spring for the extra bedroom addition they need or buy a new car. Stimulus is intended to stimulate the economy that makes work, and work creates jobs.

I've been biding my time on judging the stimulus, hoping that it will work despite my philisophical objections, but I'm confident enough to say that this stimulus bill will fail. The more I read about this stimulus, the more I realize that it isn't one. Small businesses have receive little to no help (unless small business regularly give out huge bonuses and buy private aircraft), and they employ over half of Americans. The middle class has received little to no help. So far the only groups that have made out on any of these legislative actions are large corporations and those that don't pay taxes in the first place because they'll be receiving free money through "tax credits", and are very unlikely to create any jobs with only a few hundred dollars extra a year.

There is NO stimulus to investment at all, and we see the results in how the stock market has reacted to the bill. Investment FUNDS our private enterprise and creates jobs, and it's been ignored.

The housing bill aids those that entered into bad mortgages and speculated using risky loan products, but doesn't help people who signed good motgages but have been laid-off and are having trouble making payments. It's pathetic and rewwards people for making poor choices, rather than helping everyone in trouble across the board. You know what would help people pay these mortages? Keeping a lot more of their own money.

Meanwhile small businesses and the middle class are left holding the bag, with the slim hope that public works projects will get the economy going again... the only problem is public works have NEVER improved the economy or created long term jobs, as illustrated in the Great Depression.

It's just so frustrating to see such opportunity get squandered because politicians only care about private enterprise as far as their campaign contributions take them. It's either big business or no business when it comes to stimulus help... meanwhile storefronts in my area keep emptying and unemployment rises.

Professor S

02-23-2009, 09:51 AM

Here we go!

http://www.politico.com/news/stories/0209/19165.html

If we won't let companies fail, we only enable more failure. LET THEM FAIL. The fact is whethere or not the assets they hold are toxic, they are worth a lot, and someone will purchase them and the company. If the government continues to enable this type of poor management, we will never see an organic, darwinistic reformantion of the financial sector.

Every great success is the result of failure. Failure informs us, while not letting companies fail simply promotes medicrity or worse. Its actions like these that will EXTEND our recession, not improve it.

Professor S

02-23-2009, 12:10 PM

Jason1

02-23-2009, 10:10 PM

but I'm confident enough to say that this stimulus bill will fail.

Riiiiiight. This is the same person who said Obama would never be able to win a general election, then oh no changed his opinion to say that Obama will win, but it will be a very close election...GIVE ME A BREAK MAN! Obama won by 8 million votes!

I dont know why anyone even bothers to read your posts anymore...:lol:

People said I embarrased myself with my opinions...at at least when im confident in something I actually end up being right...

BlueFire

02-23-2009, 11:33 PM

sigh...

Professor S

02-24-2009, 08:43 AM

Riiiiiight. This is the same person who said Obama would never be able to win a general election, then oh no changed his opinion to say that Obama will win, but it will be a very close election...GIVE ME A BREAK MAN! Obama won by 8 million votes!

I dont know why anyone even bothers to read your posts anymore...:lol:

People said I embarrased myself with my opinions...at at least when im confident in something I actually end up being right...

It's hard to be wrong when you don't say anything substantive... but thats not really the same as being right, is it? Especially when you quote only part of a sentence of my post and ignore any of the previous or continued content or the context in which it is presented...

As for the election, we've already hashed that out long ago with the conclusion you simply ignore the financial collapse in August as a game changer, and I believe it was a game changer (opinion I shared on the day of the collapse). Nothing further needs be discussed as we've said it all before. Call it a difference of opinion.

But in the end, how does this topic have anything to do with the election? We're talking about economics, not politics. If you wish to disagree with my criticisms, all I ask is that you do so on a content basis, and not an emotional one. I don't like the idea that the stimulus will fail. I have a 401k that needs it succeed. But based in the bill' merits, I simply don't see how it will work. I may be wrong, but that is an inherent risk when you put yourself out in the realm of ideas and don't base every argument on anger and spite.

What is it specifically about my concerns do you believe are unwarranted, and why?

What is it about the stimulus do you believe will work, and why?

You seem less convinced that this stimulus will work, than of the idea that I am wrong for the sake of my being wrong. A conversation is not running into a room an screaming "you're a big dummy" and then running out, relishing in your rapier wit. Its an exchange of ideas, and after all these years I'm still waiting for you to share one.

Jason1

02-24-2009, 09:04 AM

Professor S

02-24-2009, 09:30 AM

Look, nobody is saying the stimulus package will make the DOW rise 4000 points in 3 days or anything like that. But the fact of the matter is they say it will create or save at least 3.5 million jobs, and to me, that is money well spent that will help in the long run, and nobody here nor their will change my mind on that.

I'm not saying the DOW should raise that much in 3 days either, but there is a long history of the markets responding immediately to poltiical decisions they like or dislike. When Clinton was elected during a recession in the early 90's, the markets jumped almost immediately. The market liked Clinton and it showed, and in the end the market was right about his long term economic impact. Measuring immediate market reaction isn't about long term success, but instead an indicator of healthy economic policy, and when the markets immediately retreat, negative reaction.

Jason, I've long given up on the idea that I can change your mind. If anyone is steadfast in their political philosophy, it would be you. I simply want to better understand your point of view, and I have to think that if you believe in progressive politics this strongly, I have to believe there must be convincing reasons beyond class warfare and contempt of wealth.

So, I'm not trying to change your mind, I simply want to understand your reasoning:

What is it specifically about my concerns do you believe are unwarranted, and why?

What is it about the stimulus do you believe will work, and why? (aside from throwing money at the problem)

Jason1

02-25-2009, 12:57 PM

I just believe the stimulus will do what they say it will do. For starters, the infrastructure spending is much needed. I also love the money being spent for renewable energy, far too long we have known our dependence on foriegn oil has been a problem yet we have done little to nothing about it. Of course the other things which I would rather not go into detail, are mostly good too. These things will create jobs hopefully soon. Will it be enough to quickly end the recession and see the DOW rise to what it was in 2007? Hardly, but hopefully it will save people's jobs. At the very least, it will do worlds better than just ignoring the problem and giving the rich more tax cuts, which is what John Mcain would have done. How can the Rupublicans get upset over this spending, when they themselves spent ungodly amounts on an unneeded and unnecessairy war. We need to spend a little to get out of this mess that THEY created!

I have a conservative professor who said as he watched the speech last night his wife was furious when Obama again mentioned the tax raise for the wealthy. She claimed that just because they worked hard, got an education and have been successful they shouldnt have to pay more taxes than everyone else. I honestly understand that opinion, but my thinking is that rich people wont suffer from paying more than poor people, and its for the good of the country. This professors wife was also born and raised in Germany. If she dosent like it, go back to Germany I say.

Professor S

02-25-2009, 03:42 PM

First I'd like to thank you for your thorough and level headed response.

I understand why you would want the rich to pay a higher percentage than the poor, if in the end the result was higher revenue to the government. But according to the CBO charts Bond posted earlier in this thread, thats not the case. Revenue actually increased a percent when taxes were lowered on the wealthy. The leading explanation is that when taxes or lowered, more wealth enters the economy and in the end more revenue is created by taxing more wealth less.

Lowering capital gain taxes has been proven to increase revenue to the government by more than that.

So my question is this: If raising taxes lowers revenue in many cases (not all), then to what end do we raise those taxes? Is it fairness? If so, is the purpose of our tax system a means to exact social justice, or solely a means to create revenue to run the government?

Jason1

02-25-2009, 08:34 PM

Im not sure I believe those charts and graphs, and the theory that increasing taxes lowers government revenue. The revenue was probably coming from somewhere else.

TheGame

02-26-2009, 08:49 AM

Im not sure I believe those charts and graphs, and the theory that increasing taxes lowers government revenue. The revenue was probably coming from somewhere else.

I agree with Jonbo, I still don't buy it. There has to be more factors that cause the numbers to appear that way. I don't think taking $5 more from every working person in america is going to bring down revenue. Nor do I think allowing people to keep $5 more of their check will bring revenue up.

But there's something more to it, take into consideration how the value of the american dollar has changed in the last 10 years, and the population. Is the slant of the GDP rising more steep then the one of the value of our money going down? Did higher tax cuts for the rich people really create more jobs in the last 6 years?

Professor S

02-26-2009, 11:22 AM

I agree with Jonbo, I still don't buy it. There has to be more factors that cause the numbers to appear that way. I don't think taking $5 more from every working person in america is going to bring down revenue. Nor do I think allowing people to keep $5 more of their check will bring revenue up.

But there's something more to it, take into consideration how the value of the american dollar has changed in the last 10 years, and the population. Is the slant of the GDP rising more steep then the one of the value of our money going down? Did higher tax cuts for the rich people really create more jobs in the last 6 years?

In saying there is more to it, absolutely. Economics is terribly complicated, but I think it's very hard to ignore the numbers the CBO put together especially when they are from such a robust and lengthy sample.

As for inflation, the numbers use a percentage of revenue compared to GD(N)P, which I believe makes inflation irrelevant in this context. If we were comparing hard numbers, then I would agree adjustments would need to be made to acount for inflation. Even if there are adjustments that need to be made, those numbers are still impossible to ignore, IMO.

As for unemployment, for the majority of the last 6 years we enjoyed historically low unemloyment numbers which I think can be very much attributed to letting those that create jobs keep the revenue they need to generate them. As for the crash, that has more to do with unethical behavior and unrealistic home buying regulations than with the tax rate. When you start mixing taxes with ethics, you begin to use our tax system as a means to create your view of social justice, and they become a punishment rather than a means to generate funds.

In the end it's common sense when it comes to unemployment: The poor and middle class do not create jobs, they benefit from the opportunity to have them. The wealthy provide the opportunity to have a job through their wealth, based on the idea that the job will give them the opportunity to create more wealth than they are spending to create the job. When the welthy are taxed, they simply adjust their spending and hiring and in the end we pay for their taxes through added fees and costs (remember how prices of goods increased along with gas, it works the same with taxes) and also with reduced opportunities for employment.

When you take wealth from the wealthy, you reduce their capacity to invest in their own business and create more and better paying employment opportunities, and real unemployment rises (I do not consider work created by the government for the sake of providing jobs "real", but instead temporary replacements as they were proven to be during the Great Depression). This is shown in many European countries that view double digit unemployment as normal, such as Germany and France.

If anyone can prove this to be incorrect using real numbers and resources, and not just opinion based on what they think should work, I would be willing to completely change my entire view of economics and politics.

Bond

02-28-2009, 11:53 PM

For the sake of argument, I assumed numbers from the Office of Budget and Management of the United States of America is a reliable source.

I agree with Jonbo, I still don't buy it. There has to be more factors that cause the numbers to appear that way.
That is true with regard to GDP.

I don't think taking $5 more from every working person in america is going to bring down revenue. Nor do I think allowing people to keep $5 more of their check will bring revenue up.
That's not what the graphs were meant to illustrate. They are meant to illustrate that there is no correlation between tax rates and tax revenue, but that there is a surprising correlation between GDP and tax revenue. Nothing more, nothing less.

But there's something more to it, take into consideration how the value of the american dollar has changed in the last 10 years, and the population.
The numbers are "real" numbers, meaning that they are adjusted for inflation circa one year.

BreakABone

03-01-2009, 06:10 PM

http://consumerist.com/5157192/hot-cartoon-makes-understanding-credit-crisis-simple-and-fun

Well this helped me understand how the whole problem came about.

KillerGremlin

03-02-2009, 03:54 AM

I like how even though Bond posted hard numbers they are still not being accepted.

TheGame

03-03-2009, 01:59 AM

I like how even though Bond posted hard numbers they are still not being accepted.

I accept the numbers, but I also understand that the country is going deeper and deeper into debt.. even before the bailouts were taken into consideration. Since taxes are continuiously lowered, the only conclusions I can come to is either 1) The economy how it is now, and how it was, simply does not work. There's no escaping the end fate of everything crashing down regardless of what we do. Capatilism fails. Or 2) The government over time has been using the wrong strategy when it comes to generating revenue, which for at least the last 30+ years, the main strategy has been tax cuts.

I won't accept that doing the same thing we have been doing is working, because its not. I'm not sure if total counties get credit scores, but I'm sure if they do, the united state's would be horrid.

The thing that disturbs me about the bailout packages, in a system that's supposed to be capitalism, is that in order for it to work properly the companies need to have the countrie's best interest at heart and not just their own. Which I don't think they have, and the government is giving them little incentive to do so.

Just like when Ford was asking for a bailout, when the CEOs realized they had to sacrifice their own pay in order to get the bail out, they decided its not worth it. Only because it hurt themselves financially, even if the money would have done some good for the company and created jobs. That gives me the impression that companies are willing to lie to get more money. (That's only one of many examples too.)

But I'm off subject somewhat. The fact of the matter is the strategy we have been doing has not been working, and if we stick to it, we'll just get pulled futher and further into a deep pit of debt until we find that some circle of rich people pretty much own the contry. Something has to change, period.

Bond

03-03-2009, 02:53 AM

I accept the numbers, but I also understand that the country is going deeper and deeper into debt.. even before the bailouts were taken into consideration. Since taxes are continuiously lowered, the only conclusions I can come to is either 1) The economy how it is now, and how it was, simply does not work. There's no escaping the end fate of everything crashing down regardless of what we do. Capatilism fails. Or 2) The government over time has been using the wrong strategy when it comes to generating revenue, which for at least the last 30+ years, the main strategy has been tax cuts.
I'm afraid neither of those conclusions are very accurate. To the first, the basics of our economy and capitalism work very well. For example, look at our wealth creation over the course of our country's brief history: it has been the greatest and the fastest the world has ever known. To the second, again, as I have said before, the problem is government spending above and beyond revenue intake. The problem is not the amount of revenue intake, the problem is excess spending.

The two main causes of the financial collapse were: excessive toxic loans (which destroy a bank's balance sheet) and over reliance on outdated risk management software.

The main cause of our enormous debt is excessive spending.

The thing that disturbs me about the bailout packages, in a system that's supposed to be capitalism, is that in order for it to work properly the companies need to have the countrie's best interest at heart and not just their own. Which I don't think they have, and the government is giving them little incentive to do so.
Not really... in order for the current bailout system to work, the banks must raise their value back up to where the government purchased them (as the government purchased the banks at a premium) or above. So the banks simply need to do what any company is meant to do: return profits to shareholders (in this case, the government).

TheGame

03-03-2009, 08:30 AM

Bond, I disagree with everything you just said. If the economy is going so great here, why do we owe money.. and more importantly why are we even borrowing money from other countries? (<< You could ignore the rest of this post if you want, the only thing I want is a clear answer to this question )

And no, this isn't an issue that just started 4-6 months ago. Its been like this.

And no again, I made no reference to banks to why I think the bailouts are bad. I'm more focused on the buisnesses that are taking them which are by a LONG shot not all banks. These companies are in it to make as much money as possible, as my Ford example showed, they're willing to lie and say things are going bad to get more free handouts from the government, but when they'd personally have to take a pay cut their whole story changed.

Companies are also trying to find loop holes and make up incentives for their leaders without calling it bonuses.

Like I said once again, I refuse to take middle ground. Either the strategy we have isn't working and something major needs to change, or the american capitalism project is failing.

Professor S

03-03-2009, 11:22 AM

Game, the reason why we are in debt is the same reason a family can be in debt: They spend more than they take in and live above their means.

I'm having a hard time understanding why people seem to be confused regarding how our country makes money, especially after seeing those charts Bond posted.

Government revenue is related to the nations GDP, not how it taxes it's people. As the charts show, increasing taxes on the rich does NOTHING to increase tax revenues. Instead, a government that does more to increase GDP increases its tax revenues. Progressive taxes have nothing to do with it.

Increase GDP = Increased revenue. Decreased GDP = Decreased revenues.

So a government should do more to increase GDP as a means to increase its revenue. I fail to see how punishing businesses that make over $250,000 a year, reducing tax exempt charitable donations and raising capital gains taxes accomplishes this goal.

And to say that capitalism has failed, or even to call it a project, is myopic thinking. Capitalism is what is the NORM, not the experitment, and it has been the norm since man first began bartering beads for animal pelts. Socialism is the experiment and it's the experiment that has FAILED every time it's been attempted from the USSR to FDR to LBJ to Castro's Cuba. European nations that have socialist constructs live with normal unemployment rates raging from 9-13%.

I can see where you're coming from, but I also believe you're letting the myth of "perfect" get in the way of the achieveable "good". Is capitalism perfect? No, but to this point in history it's the only system that has been proven to actually work on a large scale. There have always been crashes and recessions, but they've also always been followed by priods of growth that far exceeded the previous crisis.

http://futurist.typepad.com/my_weblog/2006/02/the_stock_marke.html

IMO, recessions are overall necessary for continued growth. Like any environment, homeostasis is achieved by the ability of an environement to weed itself. Organisms that are sick or weak will be consumed during this process, but in the end the best run and most healthy organisms live and prosper. When this is allowed to happen, we go through terrible pain, but in the end always end up back on track and pushing to new heights.

The problem comes when natural selection is interfered with, and the entire process is extended through interference. Sick companies are not being allowed to die or be consumed by healthy ones, nor are they being forced to fundamentally heal themseves by changing the nature of their business. They are simply on life support hoping their cancer will just go away.

IMO, if we want to see the quickest recovery possible, the government needs to clearly state when they will NOT provide assistance or bailouts, so that these companies can feel comfortable in making moves confident that the government will not step in change their business environment. Billion of private dollars will need to be risked tfor companies to recover, but I can't see these companies taking that risk not knowing the totality of what the government will and will not do.

Fyacin

03-03-2009, 02:40 PM

Proffessor as a big lurker in these types of threads I woul just like to commend you on your ability to clearly explain these complex matters in a calm way. *high five!*

Professor S

03-03-2009, 04:35 PM

Proffessor as a big lurker in these types of threads I woul just like to commend you on your ability to clearly explain these complex matters in a calm way. *high five!*

Well thank you. I have tried very hard over the years to deminish my tendency to turn unto a flaming asshole whenever I come across someone I fundamentally disagree with.

I credit Dennis Praeger for enlightening me and Jason1 for testing that enlightenment ;)

Jason1

03-03-2009, 05:23 PM

The Government makes money in 2 ways: Taxes or borrowing it. End of discussion. No more big words, stupid graphs and charts, or conservative mind tricks.

One of my Professors put this situation in a good way (not the same one I was talking about earlier). He said this:

"In this situation, its better to be too agressive that not agressive enough"

That pretty much sums up my view of the stimulus.

Bond

03-03-2009, 07:14 PM

KillerGremlin

03-03-2009, 09:27 PM

I give up.

I have tried to concisely and quantitatively explain economic concepts, and it just seems they're met with the same warped responses and views.

This is like banging my head against a brick wall.

Maybe I'll start another thread with a fresh start some time in the future.

I agree with you (hence my comment a few posts up about no one listening to the numbers). Although I've been reading everyone's posts with great interest. And I'm enjoying Prof S' sense of humor.

I enjoy the Postal Service. Nice avatar.

Professor S

03-03-2009, 10:15 PM

The Government makes money in 2 ways: Taxes or borrowing it. End of discussion. No more big words, stupid graphs and charts, or conservative mind tricks.

1) You don't make money by borrowing it, you end up owing more than you borrowed because of interest.

2) The government also makes money via tariffs, and no, they are not the same as taxes as we normally think of them. There are all kinds of taxes, and they all impact out lives and busineses in different ways.

3) Those stupid charts and graphs only use actual data, so please continue to ignore them. Logical.

4) No one is arguing that taxes don't generate revenue. We are arguing that progressive taxes don't generate any more revenue so in the end they are pointless. Please refer to the charts for supporting evidence. Do you know what evidence is? Evidence is data that supports informed opinion. You should look into it.

Why is it every time people post a reality that doesn't fit with your personal universe, you make wildly inaccurate and ignorant statements, and then stomp off as if its the end of discussion? Do you think that any opinion can be made reality simply by wishing hard enough? Do you still wonder why I continue to state that you embarrass yourself by continuing in this manner?

But please continue to not read any facts regarding the topics you discuss, misinterpret anything you manage to accidentally read, and confabulate wild, idiotic generalizations of anyone's point of view that doesn't exactly repeat your sentiments.

TheGame

03-04-2009, 02:16 AM

Professor S

03-04-2009, 08:25 AM

Strangler, I agree with most of the second half of your last reply to me.

But I'll need to clear up a couple of points, for one.. I call capitalism an experiment only because in history its shown that in all civilizations it can only last so long before socialism, or concepts of socialism start to take over.

Because we are romantics and let a dream of a uptiopian society (or nightmares of a controlling shadow government) get in the way of our own happiness and self-actualization.

Also, lets not go completely black and white. I still believe that some socialist constructs are useful, such as medicare and medicaid, unemployment benefits (not welfare) and public schools. Where my support ends is where we try to impose these constructs on the entirety of society instead of reserving them for those who truly need it.

What's happening in this day in age in america, is that we allowed certain companies to get so big, that the goverment is actually >>scared<< by the idea of them failing. The most true thing you said is that capitalism is not perfect, and we're just being presented with an example now of why it isn't.

And we are presenting an argument of how is does work when you take the time to look at it in the long view and outside of recent events, and how socialism has failed to the point of catastrophe every time it's been attempted. Each time it is attempted, people ignore the past and simply state "last time we didn't try hard enough/spend enough money on it".

Looking just at the 20th century you will see how economic crisis have been comparative blips on the radar and they never stopped the exponential growth of wealth across America. Our current standard of living in this recession is far better than it was for most of the 20th century, possibly excluding the mid-late 90's and mid-late 80's. And as a non-sequitur for Jason1's benfit, both of those time periods were marked by low tax rates.

In my last post, when I said what we're doing now isn't working.. I'm not still saying we should raise taxes, I'm just saying that somewhere along the line the system is broken. Maybe once everything crashes down we'll be able to see what the biggest flaw was.

Are you equating our tax system with the economic meltdown? If so, please explain.

Standing alone, I'll agree that the tax system is broken, but we're not currently fixing any of it, but instead we're smashing it harder to make sure that it's REALLY broke up good.

Even though the graphs display raw data on tax rates vs government revenue, I'm still going to say the numbers are misleading. Before you cry about me saying that, remember, I do accept the fact that Tax cuts do not hurt government revenue directly. But somehow it hurts them indirectly, because it has created the need for the government to spend more. If the government is spending more then its increase in revenue, then its broken.

What evidence do you base this on. It makes no sense to me. Taxes and spending are mutually exclusive concepts. We have not been good at reducing spending at any point in our history, regardless of tax rates.

Now, you could say that there is other reasons spending went up, just as much as I could say there's other reasons government revenue went up. But the fact remains that right NOW we're spending money to help patch up some failed buisnesses because we're scared of what will happen if they fail.

Once again, please show evidence that decreased taxes equals increased spending. We've provided evidence of our argument, please provide it for yours. To use out current situation, we're in the middle of spending more money now than in the entirety of out nations history, and I see the taxes going UP for the wealthy, not down.

I'll agree the government is scared of what will happen if companies fail, but I believe the concept of "too big to fail" is incorrect and damaging. These companies assets are tied to collateral so they have inherent value. When one company goes down, they are consumed by the stronger one, and we saw that starting to happen when this crisis first began. Do you see it happening now? No, because everyone is waiting for what the government will dictate to them.

Meanwhile we've bailed out AIG four times now... and I believe that if a company is big enough to not fail, its big enough to be divested into smaller parts. In the end I think you are confusing taxes for a means of social justice and/or means to regulate companies, and I think that is a damaging concept.

One could venture to say that your tax cuts to the upper class actually caused them to gain too much power and influence over the economy.

Keep in mind the very wealthy also got their wealth decimated by this crisis, and you could say on a relative basis that they were hit HARDER than the average person because this was a financial meltdown that has trickled down to mainstreet. One German businessman killed himself over it. Bear Stearns went down with the ship and many people were ruined within the company. Stock options all but disappeared.

Lets also not forget the government's role in all of this, pushing lenders to give bad loans through incentives and preferential treatment. I still urge everyone to google the Community Reinvestment Act and it's expansion.

I'm not saying the data ont he graphs are wrong, but there's a lot more factors that cause that end result to be true. Just like if you were to post a graph of GPD vs government spending, or Tax rates vs ticket prices to NFL games. While their end revenue may not have changed, what HAS changed is that we're getting deeper and deeper into debt. Tax cuts may have nothing to do with it, but I believe it has everythign to do with it. I think Tax cuts have everything to do with the widening of the gap between the upper and lower classes.

1) Once again, please provide any supporting evidence that decreased taxes cause increased spending. I fail to see how they relate. We spend regardless of taxes.

2) Yes, the gap has widened between the upper and lower classes, but what they don't tell you is that while the upper class has grown 70% adjusted for inflation over the last 30 or so years, the lower classes have grown 30% adjusted for inflation. They're both growing, its just that the wealthy are growing faster, and I see no problem with that. Most of the top 5% are our risk takers, investors and small business owners and they be rewarded if they make good economic decisions.

Yes, there are unethical exceptions to the rule, but they remain exceptions when you consider that the top 2% of our earners equals 2.5 million people.

I think that how spending has been handled in the government has been irresponceable and is mostly meant to patch up what issues that face us today while ignoring what issues face our children. And I think that has been the case for a LONG time, and I think that a part of what's happening now is we're paying for the mistakes that have been made over the last half century, and we're trying to hand our issues off to the next generation without dealing with it ourselves.

I agree with most of what you say about irresponsible spending, but please explain the half a century of of mistakes. Exactly what are you referring to? I can point out blips on the radar, but as a whole the 20th century, especially the latter part of it, was an amazing time for America and it's economy.

I take any gross income chats with a grain of salt, how about some NET incoming numbers for the last 10 years, taking into consideration the spending too and not just the raw revenue that the governemnt has gained.

Thats called the deficit, and we're at apporximately 1.7 trillion or so, and expected to grow considerably.

TheGame

03-04-2009, 09:04 AM

Once again, please show evidence that decreased taxes equals increased spending.

Nice way to ignore:

I take any gross income chats with a grain of salt, how about some NET incoming numbers for the last 10 years, taking into consideration the spending too and not just the raw revenue that the governemnt has gained.

I have 7 minutes until I take off for work, but this is the #1 point I want to reply to. From 1999 to 2009, have taxes been lowered or raised? From 1999 to 2009 has spending been lowered or raised? I don't need to find a graph to show this point. Because you KNOW what the facts are. :)

Lets make it high school level so that everyone can understand the flaw in what you're saying and the flaw in that graph. Lets say Mcdonalds drops the price of their big mac, and the graphs show that their GROSS income is the same, and the amount of customers have risen. That's pretty much what Bond's chart illustrates.

GDP (On his chart would equal the cusotmers on the mcdonalds chart) went up, while taxes (which would be the price of the big mac on the Mcdonalds chart) went down. And GROSS revenue stayed the same. If you posted a chart like this, it makes it seem like its favorable to drop the price of the big mac because you service more customers.

But wait!

Since you have more customer's you have to hire more people, and you need more equipment to service them. So while your gross income stayed the same, and your customer amounts went up, your SPENDING went up also. So that chart suddenly is deemed pointless by the fact that yor NET income went down.

What the goverment is doing now, is like what would happen when Mcdonalds goes bankrupt. Now the spending jumps up a ton, because they're trying to save their asses by taking out loans to get themselves out of their current bad situation.

That's why a chart that shows gross income while ignoring spending is bullshit and misleading. Have a nice day and see you guys in 9 hours. :)

Professor S

03-04-2009, 10:22 AM

Nice way to ignore:

I didn't ignore it, I told you it was the DEFICIT. Turn on the news and you'll hear all about it. Its not like its some tightly held secret.

I have 7 minutes until I take off for work, but this is the #1 point I want to reply to. From 1999 to 2009, have taxes been lowered or raised? From 1999 to 2009 has spending been lowered or raised? I don't need to find a graph to show this point. Because you KNOW what the facts are. :)

Lets make it high school level so that everyone can understand the flaw in what you're saying and the flaw in that graph. Lets say Mcdonalds drops the price of their big mac, and the graphs show that their GROSS income is the same, and the amount of customers have risen. That's pretty much what Bond's chart illustrates.

GDP (On his chart would equal the cusotmers on the mcdonalds chart) went up, while taxes (which would be the price of the big mac on the Mcdonalds chart) went down. And GROSS revenue stayed the same. If you posted a chart like this, it makes it seem like its favorable to drop the price of the big mac because you service more customers.

But wait!

Since you have more customer's you have to hire more people, and you need more equipment to service them. So while your gross income stayed the same, and your customer amounts went up, your SPENDING went up also. So that chart suddenly is deemed pointless by the fact that yor NET income went down.

What the goverment is doing now, is like what would happen when Mcdonalds goes bankrupt. Now the spending jumps up a ton, because they're trying to save their asses by taking out loans to get themselves out of their current bad situation.

That's why a chart that shows gross income while ignoring spending is bullshit and misleading. Have a nice day and see you guys in 9 hours. :)

Game, none of anything you have posted has any meaning at all when faced with the fact that regardless of tax rates government revenue remains a constant percentage of GDP. KNOWING this is the ONLY CONSTANT OVER 100 YEARS, shouldn't we manage our SPENDING not our TAXES RATES? Your anecdotal evidence holds no water here. Please find real evidence from an equal sample base. All I ask is quid pro quo.

And I'm sorry, but your McDonalds metaphor makes absolutely no sense. Your assumptions are incorrect, since the added cost of hiring and developing product is absorbed by the private businesses we tax, and not by the government itself. When a company hires an employee, it is because they want to INCREASE REVENUE. If it does not profit, they don't do it or as we have seen they cut the spending (unemployment rising). When was the last time you heard of the government laying people off when their revenues dropped?

To continue your business example, we are in trouble because we borrow more money than we bring in and invest them in areas that have no chance to grow revenue. I'm not saying that the government should spend to make money back, but knowing this is the case we can't make the same decisions that a business would. We have to base spending on revenue, and not attempt to increase revenue by increasing spending. The nature of government spending is to support the public, not profit from them. We tried to profit from investing in bailouts once during the late 80's and took a bath on the investment, selling the investment for pennies on the dollar.

Government revenue is currently plummeting due to a lower tax base and a lack of pressure on wages, and to respond we are hiring more government employees and spending more money than at any point of our history.

HENCE WHEN YOU SPEND MORE THAN YOU BRING IN YOU GO BANKRUPT. To use your languagem you shouldn't need a high school example to understand this. All you need is a credit card.

Clinton was able to balance the budget on historically lower taxes, so why are you so convinced that the idea is a myth?

Professor S

03-04-2009, 10:52 AM

Hopefully the following will put this very frustrating argument to rest.

The results of this more reliable test indicate that tax changes have very large effects: an exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent.

http://www.nber.org/digest/mar08/w13264.html

OECD in Figures (2003) shows total taxes as 45.3 percent of GDP in France, compared with 29.6 percent in the United States. But it would be a mistake to conclude that the higher average tax burden in France is a result of that country’s more steeply graduated income tax. French income tax rates claim half of any extra dollar at incomes roughly equivalent to $100,000 in the United States, and exceed the highest U.S. tax rates at even middling income levels. Yet these high individual income taxes account for only 18 percent of revenues in France, about 8.2 percent of GDP, while much lower individual income tax rates in the United States account for 42.4 percent of total tax receipts, or 12.5 percent of GDP. Countries such as France and Sweden do not collect high revenues from high marginal tax rates, but from flat rate taxes on the payrolls and consumer spending of people with low and middle incomes. Revenues are also high relative to GDP partly because private GDP (the tax base) has grown unusually slowly, not because tax revenues have grown particularly fast

http://www.econlib.org/library/Enc/MarginalTaxRates.html#lfHendersonCEE2-105_table_032

TheGame

03-04-2009, 11:51 PM

And I'm sorry, but your McDonalds metaphor makes absolutely no sense. Your assumptions are incorrect, since the added cost of hiring and developing product is absorbed by the private businesses we tax, and not by the government itself.

My point wasn't to illustrate that the government goes through the exact same cycles as a single buisness. My point was to illustrate that a GROSS INCOME CHART by its very nature is meant to be misleading.

BreakABone

03-05-2009, 12:26 AM

Quotes and words following them scare me, but saw this...

http://www.treehugger.com/files/2009/03/stimulus-dollars-maryland-100-hybrid-buses.php

Stimulus money in action.
Basically
-It saves money with the switch especially with the summer coming up.
-Reduces noise pollution
-And creates/sustains jobs.

http://edition.cnn.com/2009/POLITICS/03/03/stimulus/index.html
* New highway resurfacing project in Maryland is expected to support 60 jobs
* President Obama: Highway spending will create or save 150,000 jobs by end of 2010
* Another 200 construction projects to be launched in next few weeks

http://www.sacbee.com/topstories/story/1659989.html
-The effects of energy efficiency part of the stimulus.

Numbers and stuff is fun, but at least we are getting some practical signs now.

KillerGremlin

03-05-2009, 05:26 AM

We shoulda let the banks/stupid people crash and burn. It might have been rough for a few years, but from the looks of things...it's going to be rough for a few years.

Bailing out the auto industry...okay not totally bad.

We should have bailed the porn industry out though, I heard they took a shot to the face.

Professor S

03-05-2009, 09:08 AM

My point wasn't to illustrate that the government goes through the exact same cycles as a single buisness. My point was to illustrate that a GROSS INCOME CHART by its very nature is meant to be misleading.

And I posted far more than you quoted that dispoved much of your apples vs. oranges reasoning.

I'm sorry the charts are not misleading because:

1) Your example that is meant to disprove them equates the way businesses treat investment and debt with how the government treats revenue and debt, and the two are completely different, as I illustrated throughout the entirety of my post. Companies borrow to eventually see a return on their investment that is greater than the deficit and debt they accrue. If they can't do that, they FAIL. The problem is that the government does not gain any revenue now or ever from it's spending, and the last time it tried in the late 80's (S&L crash) the government, meaning the taxpayer, got HOSED on the deal.

2) You continue with the incorrect assumption that taxing and spending are connected at the hip and when one goes up, the other must also. I have yet to see anything beyond anecdotal evidence from you to support this specious reasoning and overly simplistic rationale. Clinton already proved you wrong in the 90's by balancing the budget with relatively low tax rates.

What did you think of the last two resources I posted? They are directly related to our discussion.

I will repeat my question: Since the government has been shown to consistently garner the same percentage tax revenue regardless of tax rate, why do you believe that we should mess with taxes and not spending?

At this point, we've begun to go in circles, so unless you address the specific points I've raised I think it's safe to end the dialogue as all opinions have been addressed.

We shoulda let the banks/stupid people crash and burn. It might have been rough for a few years, but from the looks of things...it's going to be rough for a few years.

KG, I'm not of the opinion that we shouldn't have helped at all, but I think enough is enough. I also think the help we gave was blindly handed out with no expectations attached. AIG is getting bailed out again, and every financial expert I've heard only talks about how poorly run that company is. Plus, the banks that have been bailed out are sitting on the money, and I think that until the government states "Hey, thats all, folks!" they'll continue to sit on it hoping for more and not begin the businss transactions that will get us back on our feet. Funny how corporate welfare has the same effect as personal welfare...

Yesterday Gordon Brown gave a speech that claimed that one bad bank can corrupt all of them, and I think he's exagerrating. Regardless of cross-investment and information connectivity, businesses that were run well are survivinga dn some still doing well. I fear our politicians have become so populist in this crisis that they aren't looking to find a thoughtful solution, but instead simply out to give universal help and then condemn them for taking it, all the while passing social programs that they've purposely mislabeled stimulus, taking advantage of the crisis to push through an otherwise unpalatable agenda.

Throughout all of this from Bush/Paulson to Obama/Geitner, I've never felt confident that anyone knows what the hell they're doing, but instead simply taking wild risks with trillions of our dollars in the HOPES that it will do something or if they keep messing with the money, they'll eventually get it right.

In my mind, if we are going to take wild risks, I'd rather us put the risk in the hands of the businesses as they were on the ground floor of this mess and I believe most want to work they're way out of it. But that will never happen because we are still in the blame-game faze of this financial disaster, and mistaking what was for the most part negligence and a failure of proper planning for malice and abuse.

And meanwhile we still ignore the government's role in this whole mess, and instead of reevaluating the same regulations that helped cause it, we look to be expanding those failed programs.