What the berkeley happened to this country

racerfink wrote: Please read again.

I got your point the first time.

Seems like everyone is running on "lower taxes" or "more spending". No one is running on higher taxes and/or lower spending. I think both speak to your point.

I don't have any readily available citation, so whatever, but I've heard a lot of economists say that lowering taxes is a very inefficient way to stimulate the economy. I've also heard several prominent Republicans and members of former administrations say that even though they favor low tax policy, we should let the Bush tax cuts expire.

Lower spending speaks to his point but higher taxes do not. The higher taxes (needed to pay for the loose spending) is actually what brings the republic down and are (a large part of) what de Tocqueville was warning against...

The only thing worse than running a deficit is raising taxes to pay for it. While lowering taxes may (arguably) be an inefficient way of stimulating an economy (though franky I can't think of much better ways), raising them is an extremely efficient way of slowing one.

The best way to erase a deficit is to freeze (or at least reduce the rate of growth of) spending then grow your way out of it. That's what happened post 1994.

Bill

wcelliot wrote: The best way to erase a deficit is to freeze (or at least reduce the rate of growth of) spending then grow your way out of it.

I don't pretend to be an expert, but common sense suggests that spending less when you're in debt makes sense. I just don't see anyone running for office that makes any serious claim that's what they'd do.

Obama and the Democrats pretty clearly think spending more is the key. I've heard more than a few Democrats say the only problem is we didn't spend enough on the Stimulus.

On the other side, I hear a lot of talk from Republicans about lowering taxes. But I haven't heard the grand plan, or even a small plan, for taking a serious run at controlling spending.

I got into a lot of detail on this in another thread- there are only a few big lines in the budget and no one talks about them. We hear a lot of petty, divisive issues that they present as huge wastes of money but don't add up to much in the scheme of things.

fast_eddie_72 wrote: On the other side, I hear a lot of talk from Republicans about lowering taxes. But I haven't heard the grand plan, or even a small plan, for taking a serious run at controling spending.

I'm absolutely with you on this (and is the main reason I'm not a Republican).

However, there are serious plans out there (Paul Ryan-WI for one... quite the brilliant young man that I've had the chance to chat with at length) but the GOP establishment is very nervous about having to defend his proposed spending cuts while the Dems are relishing exploiting them as the GOP attacking the middle class/less fortunate, THE CHILDREN!, etc.

I'm not completely in line with his plans, but he 's on the right basic track...

Just one more note on lower taxes growing the economy. Not saying that's wrong, again, I'm no expert. But it is clearly not as simple as that. We're taking about the Bush tax cuts like it's life and death for the economy. But they were in full effect when the recession hit. They may be good, I don't know. But our recent experience doesn't bear out that they're as powerful as eveyone is making them out to be. And when people like Greenspan come out and say it's time for them to go I have to think he's more of an expert than me.

wcelliot wrote: Paul Ryan-WI for one... quite the brilliant young man that I've had the chance to chat with at length

Never heard of him before. Thanks, I'll look it up and see what I think.

He and a couple of others just released a book "Young Guns: A New Generation of Conservative Leaders"

Horrible read (even if you're a policy wonk) but with some fresh ideas (at least for the establishment GOP)

fast_eddie_72 wrote: Just one more note on lower taxes growing the economy.

Latest study I saw showed something about rich folks ($250k+) don't spend it. They save it.

fast_eddie_72 wrote: And when people like Greenspan come out and say it's time for them to go I have to think he's more of an expert than me.

Greenspan was completely behind the cuts when Bush enacted them and openly admits that letting them expire will likely slow the economy.

But it's worth noting that he's for letting them expire for everyone and his reasoning is that the deficit is now so extreme due to spending that it poses a more immediate threat than a slower economy.

Not a lot of macroeconomic examples to fall back on here... the theories tend to break down when faced with some of the numbers we're no seeing. Sort of like basic physics go out the window when things get really small and particls behave differently...

Having faith in the basic economic laws, I'm not going to agree with him, but I'm certainly not going to say that I think he's completely wrong. We're off the charts here...

ignorant wrote:

fast_eddie_72 wrote: Just one more note on lower taxes growing the economy.

Latest study I saw showed something about rich folks ($250k+) don't spend it. They save it.

Rich folks might save it but "rich" folks who save start a heck of lot higher up than $250k....

fast_eddie_72 wrote: Just one more note on lower taxes growing the economy. Not saying that's wrong, again, I'm no expert. But it is clearly not as simple as that. We're taking about the Bush tax cuts like it's life and death for the economy. But they were in full effect when the recession hit. They may be good, I don't know. But our recent experience doesn't bear out that they're as powerful as eveyone is making them out to be. And when people like Greenspan come out and say it's time for them to go I have to think he's more of an expert than me.

Here's some more research you may want to conduct:

Following the Bush tax cuts, federal tax revenues increased to record levels. The caveat to that is federal spending increased to levels beyond the revenue stream.

With Bush tax cuts set to expire, that is a tax increase over current rates. The current administration also has its' own taxes increases ready to roll - if they can maintain control of Congress. We still facing additional tax increases even if the Dems are voted out; there inumerable tax burdens included in the health care reform bill.

The business community sees itself in a tunnel and the lights at both ends are the tax-increases trains headed right at them. People wonder why the private sector is sitting on a few trillion dollars but can't wrap their heads around the idea that a significant portion of that money has been set aside for anticipated, but, as yet, uncalculated heavier expenses.

If Republicans want to get serious about governing, we'll see action to freeze spending. With the mid-term primaries essentially over (as of today), look for things to get really serious over the next few weeks.

wcelliot wrote:

ignorant wrote:

fast_eddie_72 wrote: Just one more note on lower taxes growing the economy.

Latest study I saw showed something about rich folks ($250k+) don't spend it. They save it.

Rich folks might save it but "rich" folks who save start a heck of lot higher up than $250k....

once again, you bring conjecture to a data fight.

http://www.bloomberg.com/news/2010-09-13/rich-americans-save-money-from-tax-cuts-instead-of-spending-moody-s-says.html

the cutoff is actually $210k..

basically the data says the rich couldn't give two craps about tax cuts. They spend with the stock market is up and contract when it is down.

wcelliot wrote: Having faith in the basic economic laws, I'm not going to agree with him, but I'm certainly not going to say that I think he's completely wrong. We're off the charts here...

Don't take this the wrong way- for all I know you teach economics at some University- but I'ma go with Alan on this one. I agree. Same point on my call to raise taxes. Slow the economy? The one we artificially inflated for decades? Sounds like a call. Suck for us, but it will be good for our kids. Sure hope they don't kill Social Security while they do it though. Had my retirement tied up in a 401k. Guess how that's done for the last three years.

I think you have a little (willful?) misrepresentation of the study.

For the $210k figure the study says:

The Moody’s research covering couples earning more than $210,000 found that spending by the wealthy is more likely to be influenced by the ups and downs of the stock market than changes in income-tax rates.

I wouldn't disagree with that.

Further, the study didn't say that that the "rich" (to use your term) saved all the amount; only that their saving rate rose when their taxes dropped. A further comment in the article said that despite that, most of the increase in consumer spending came from this group.... meaning the tax decrease had exactly the desired effect (though not as much as it would have had if they spent it all)

Please refer to Virginia, and then come back to the thread.

WTF happened to this thread?

It's right on target with discussing the issues of your first post, albeit not in the type of response that you expected. ;-)

wcelliot wrote: Further, the study didn't say that that the "rich" (to use your term) saved all the amount; only that their saving rate rose when their taxes dropped. A further comment in the article said that despite that, most of the increase in consumer spending came from this group.... meaning the tax decrease had exactly the desired effect (though not as much as it would have had if they spent it all)

ohhh bill... Please tell me another story backed up by conjecture..

Please.......

ignorant wrote: ohhh bill... Please tell me another story backed up by conjecture.. Please.......

Not my story; you linked the article.

me thinks

LOL! ;-)

I aspire to someday be rich enough to become an American leftist, too! ;-)

I have often said there needs to be a stable third party.. one that is centrist. I believe we may be on the verge of it happening. In that respect I encourage the Tea party. If they survive the next couple of elections intact, they should split the republican party down the middle, taking all the extremists with them. This would allow the republicans to become the party they used to be, before they wrapped themselves in the flag and church.

Eisenhower Republicans might make a resurgance. That will leave the dems all the extremists on the left, the tea party with all the extremists on the right.. and the Republican party smack dab in the centre