And to think, we're all worried about gas prices...

[SEC=UGA]

Sort of like how the economy went into a recession within one year of Reagan becoming president?

 

Correct.

I wasn't implying that Obama would create the recessionary environment, we're headed there, it is time (though I think is will be a shallow one).

 

Though, I do think that increasing taxes and especially the potential of a 25%+ capital gains tax will nudge us toward recession more quickly.

[wiegie]

And GDP is higher due to the lower tax rates stimulating the economy...

uh, that was why I posted the information about ecoonomic growth being much higher in the late 90's than it was from 2003-2008 (so as to preclude someone from trying to make this argument)

 

Also, how in the world has everyone been complaining about the economy during the Bush years, a time of increased GDP, and pining for the good ol years of Clinton...

because while overall GDP has increased, median household income has not increased that much (meaning that much of the gains from the economy's growth have been concentrated among the highest income groups while a great many households have not done well at all)

Edited August 4, 2008 by wiegie

[SEC=UGA]

uh, that was why I posted the information about ecoonomic growth being much higher in the late 90's than it was from 2003-2008 (so as to preclude someone from trying to make this argument)

 

You stated that "GDP is quite a bit higher now than it was in the 90's, so government revenue should be a lot higher than it was then", to which I replied, "and GDP is higher due to the decreased taxes", to which you then replied, "uh, that was why I posted the information about ecoonomic growth being much higher in the late 90's than it was from 2003-2008 (so as to preclude someone from trying to make this argument)"

 

I'm guessing what you are getting at is that all things being equal, had we not have lowered taxes we would have higher tax revenues than we do currently (that is kind of a no brainer)? Do you believe that if we had not lowered taxes that we would have seen economic growth comparable to what has occurred?

 

And as I noted, we have not had the emergence of a "new industry" between 2003 and 2008. The adoption of new technology by the masses spawns unprecedented economic growth look at the post WWI era when the automobile industry began to boom and also the post WWII era when the housing, aerospace, and other new industries began to boom...

Edited August 4, 2008 by SEC=UGA

[wiegie]

You stated that "GDP is quite a bit higher now than it was in the 90's, so government revenue should be a lot higher than it was then", to which I replied, "and GDP is higher due to the decreased taxes", to which you then replied, "uh, that was why I posted the information about ecoonomic growth being much higher in the late 90's than it was from 2003-2008 (so as to preclude someone from trying to make this argument)"

 

I'm guessing what you are getting at is that all things being equal, had we not have lowered taxes we would have higher tax revenues than we do currently (that is kind of a no brainer)? Do you believe that if we had not lowered taxes that we would have seen economic growth comparable to what has occurred?

 

And as I noted, we have not had the emergence of a "new industry" between 2003 and 2008. The adoption of new technology by the masses spawns unprecedented economic growth look at the post WWI era when the automobile industry began to boom and also the post WWII era when the housing, aerospace, and other new industries began to boom...

The tax cuts almost certainly caused some increase in economic growth. However, the bang-for-the-buck increase in growth doesn't seem to be that great. AND, as this thread is about, the tax cuts have almost certainly contributed to the government's budget deficit and subsequent increase in debt.

[SEC=UGA]

The tax cuts almost certainly caused some increase in economic growth. However, the bang-for-the-buck increase in growth doesn't seem to be that great. AND, as this thread is about, the tax cuts have almost certainly contributed to the government's budget deficit and subsequent increase in debt.

 

So what happens if we raise taxes in the near term, especially given the slowing economy? Will it not have a tendency to slow the economy further?

 

I'm of the opinion that we need spending cuts rather than tax increases and am concerned that, much like the Republicans from 2000 - 2004, if Obama wins and we have a Dem legislative and executive that spending will increase even further.

[wiegie]

So what happens if we raise taxes in the near term, especially given the slowing economy? Will it not have a tendency to slow the economy further?

probably--but in the long run, it very well might be worth it (in the same way that Fed Chair Paul Volcker pretty much single-handedly created a recession in the early 80's, which, while very painful at the time, killed inflation, thus setting the stage for two decades of solid economic growth)

 

I'm of the opinion that we need spending cuts rather than tax increases and am concerned that, much like the Republicans from 2000 - 2004, if Obama wins and we have a Dem legislative and executive that spending will increase even further.

I think at this stage of the game we probably need tax increases and spending cuts. Why exactly do you think that Obama would be worse than McCain on the budget deficit issue?

[SEC=UGA]

probably--but in the long run, it very well might be worth it (in the same way that Fed Chair Paul Volcker pretty much single-handedly created a recession in the early 80's, which, while very painful at the time, killed inflation, thus setting the stage for two decades of solid economic growth)

 

 

I think at this stage of the game we probably need tax increases and spending cuts. Why exactly do you think that Obama would be worse than McCain on the budget deficit issue?

 

Nationalized health care and an expansion of prescription drug benefits program. This will cost untold Billions of dollars.

And I am of the opinion that increased capital gains and income taxes will slow the economy leading to less revenue.

 

On another note, not as directly related to budget, though it is... No social security reform, no true immigration reform (then again I'm not too happy with either of these guys stance on Illegal immigration), just a couple of things.

[Ursa Majoris]

With a deficit in 2008 alone of nearly half a trillion dollars, where are the spending cuts of that magnitude to be made? If we are to have a balanced budget, the gubment needs to either spend $500bn less or tax $500bn more. Given the right would go nuts about a tax increase of that magnitude (and probably rightly so), let's assume no tax increase at all for the moment - where will $500bn be pared from spending?

[WaterMan]

Nationalized health care and an expansion of prescription drug benefits program. This will cost untold Billions of dollars.

 

Yeah we're too poor as a country to even think about that now.

[SEC=UGA]

With a deficit in 2008 alone of nearly half a trillion dollars, where are the spending cuts of that magnitude to be made? If we are to have a balanced budget, the gubment needs to either spend $500bn less or tax $500bn more. Given the right would go nuts about a tax increase of that magnitude (and probably rightly so), let's assume no tax increase at all for the moment - where will $500bn be pared from spending?

 

1 - Rescind the prescription Drug Program

2 - Abolish the IRS and impose either a federal sales tax or flat tax

3 - Dissolve the Department of Education at the federal level, let states take care of it

4 - Is the National Endowment of the Arts receiving federal money? Cut that $50.

5 - I'm sure there are a bunch of other "small" pork projects that could be culled that add up to a large $ number.

 

I'm probably not near the $500 billion mark, but this is a good place to start.

[WaterMan]

6 - Cut salaries of top Government workers.

[SEC=UGA]

6 - Cut salaries of top Government workers.

 

Actually I was going to propose cutting house and senate members' budgets by 20% but couldn't find out what they were and if this would be reasonable.

[AtomicCEO]

1 - Rescind the prescription Drug Program

2 - Abolish the IRS and impose either a federal sales tax or flat tax

3 - Dissolve the Department of Education at the federal level, let states take care of it

4 - Is the National Endowment of the Arts receiving federal money? Cut that $50.

5 - I'm sure there are a bunch of other "small" pork projects that could be culled that add up to a large $ number.

 

I'm probably not near the $500 billion mark, but this is a good place to start.

 

[Jimmy Neutron]

With a deficit in 2008 alone of nearly half a trillion dollars, where are the spending cuts of that magnitude to be made? If we are to have a balanced budget, the gubment needs to either spend $500bn less or tax $500bn more. Given the right would go nuts about a tax increase of that magnitude (and probably rightly so), let's assume no tax increase at all for the moment - where will $500bn be pared from spending?

 

How about a law that prohibits the addition of pork (now called "earmarks") into legislation that has nothing to do with the money being spent? How about agency oversight auditors with some real teeth - prison sentences for abusers.....

 

Or

 

&

 

Infuriating.

[TimC]

Actually I was going to propose cutting house and senate members' budgets by 20% but couldn't find out what they were and if this would be reasonable.

 

Maybe we could pay them by the hour. Jeebus f'n Chrissy...a 5-week vacation going on right now. Must be nice for the old codgers and Pelosi. :oldrolleyes:

[Azazello1313]

I think at this stage of the game we probably need tax increases and spending cuts. Why exactly do you think that Obama would be worse than McCain on the budget deficit issue?

 

maybe based on their records? mccain has stellar ratings from anti-waste, fiscal conservative type organizations for his 20 year record in the senate. he has voted against tax cuts that were not paid for by offsetting spending cuts. granted, he is now against repealing the same tax cuts he voted against in 2001 and 2003, but before you chalk that up solely to electioneering, consider that instituting a big tax increase right when the country is on the cusp of a recession may not be the wisest timing. isn't raising taxes when the economy is in a down cycle the exact opposite of what basic fiscal economic theory would suggest?

[Azazello1313]

With a deficit in 2008 alone of nearly half a trillion dollars, where are the spending cuts of that magnitude to be made? If we are to have a balanced budget, the gubment needs to either spend $500bn less or tax $500bn more. Given the right would go nuts about a tax increase of that magnitude (and probably rightly so), let's assume no tax increase at all for the moment - where will $500bn be pared from spending?

 

realistically (and everybody knows this but nobody will say it, especially in an election year), it is the entitlements. there has to be serious reform in this area, and by "reform" I don't mean creating billions of dollars in new ones. and I think in general a lot of government expenditures need to be growing at lower rates. cut the rate of growth of everything 1% and suddenly the budget picture looks pretty rosy in a matter of a few years.

 

it's easy to point a finger at the pentagon as well. but, you know, clinton tried that, and by most accounts it really hurt our military and intelligence preparedness for the events of this decade. I mean, I agreed with it at the time -- hey, the cold war is over, right? -- but in hindsight it seems like it may be an idea not worth repeating. can we be smarter about how the money is spent? no doubt. but serious cuts in this area may very well come at our peril.

 

interestingly, look at obama's defense issues page. I see a lot of words like "build", "invest", "restore"....all of which are basically synonyms for "spend". so even in that typically "republican" area of spending, it is hard to see how an obama adminstration would translate into fiscal restraint.

[Ursa Majoris]

realistically (and everybody knows this but nobody will say it, especially in an election year), it is the entitlements. there has to be serious reform in this area, and by "reform" I don't mean creating billions of dollars in new ones. and I think in general a lot of government expenditures need to be growing at lower rates. cut the rate of growth of everything 1% and suddenly the budget picture looks pretty rosy in a matter of a few years.

 

it's easy to point a finger at the pentagon as well. but, you know, clinton tried that, and by most accounts it really hurt our military and intelligence preparedness for the events of this decade. I mean, I agreed with it at the time -- hey, the cold war is over, right? -- but in hindsight it seems like it may be an idea not worth repeating. can we be smarter about how the money is spent? no doubt. but serious cuts in this area may very well come at our peril.

 

interestingly, look at obama's defense issues page. I see a lot of words like "build", "invest", "restore"....all of which are basically synonyms for "spend". so even in that typically "republican" area of spending, it is hard to see how an obama adminstration would translate into fiscal restraint.

We're on the right track here. I've propounded about reinventing the entitlements many times.

 

As far as Defense goes, they are past masters at the art of offering up for cuts that which should not be cut and retaining that which should. In this way, the item that has been cut is either restored or, better yet, reinvented a few years later as an even more grandiose, expensive and unworkable project plus they get to keep the stuff crying out to be cut. What they did under Clinton was, in effect, deliberately damage themselves for long term benefit - to themselves.