Re: The Stimulus Package
 

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.

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.

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

That makes me a happy camper.

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.

Re: The Stimulus Package
 

Looks like Gov. Jindal is going to refuse some of the stimulus money. I am proud.

Re: The Stimulus Package
 

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

http://finance.yahoo.com/news/Stimul...-14422717.html

Woohoo?

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

Re: The Stimulus Package
 

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...

Re: The Stimulus Package
 

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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)

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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?

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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?

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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.

That is true with regard to GDP.

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.

The numbers are "real" numbers, meaning that they are adjusted for inflation circa one year.

Re: The Stimulus Package
 

http://consumerist.com/5157192/hot-c...simple-and-fun

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

Re: The Stimulus Package
 

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

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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.

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).

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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_weblo...ock_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.

Re: The Stimulus Package
 

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!*

Re: The Stimulus Package
 

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 ;)

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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.

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.

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.

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.

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.

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.

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.

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 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.

Re: The Stimulus Package
 

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.

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.

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.

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.

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.

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.

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 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.

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

Re: The Stimulus Package
 

Nice way to ignore:

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. :)

Re: The Stimulus Package
 

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.

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?

Re: The Stimulus Package
 

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

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


http://www.econlib.org/library/Enc/M...-105_table_032

Re: The Stimulus Package
 

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.

Re: The Stimulus Package
 

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

http://www.treehugger.com/files/2009...brid-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...lus/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.