You mean live within a reasonable budget? Noooo! That’s why we have credit cards to avoid such a fate, ain’t it?
OK- tell us where all the fat is in the budget. If you look at it, discretionary spending is a small part of the budget.
Presumes facts not in evidence: that “basic economics” is of a single mind on the issue, a universal agreement. Clearly not true, at least not without some “true Scotsman/true economist” weaselthink. Mr. Paul Krugman, who disagrees with you frequently and eloquently, is reputed to have some academic background in economics.
It also buggers the question: of what value is any action that makes a system healthier and more robust if that system is, by its very nature, corrupt and unjust. Paris Hilton has done nothing to deserve her advanced life expectancy and access to superlative health care. Nor is she likely to, anytime soon.
The overly simple solution is the 2am bar slut of the mind. The wealth of a nation…its purple mountain majesties, amber waves of ethanol…belongs to its people, the man who takes more of that wealth than is his due is a thief, however legally sanctioned. And, of course, its not that simple, but makes a pretty decent rough draft.
This moronic moose cannot get past the fact that, since Witless Leader cut taxes, the total national debt has doubled. That being the case, one must say that Bush’s tax cuts didn’t work. [Actually they did work, since the real goal was to soak the rich, the federal budget be damned.]
An astonishingly Marxist foundation for Bush policies is revealed. As you might expect, its an “October surprise”.
I wish I could use government style accounting. Just keep getting bigger and bigger payday loans to pay off the last payday loan and chirp merrily about how much I’m getting out of debt.
Bingo.
Instead of taxing the rich, we’re borrowing from them (which means they make out like bandits twice - not only does the gummint not take money from them, it also pays them for the privilege; dammit, this Ponzi scheme must bust someday).
’luci - your ever-sparkling wit has finally jetted over my wee noggin. Huh?
Bush is, of course, talking out of his ass on this. It’s certainly true that changes in the tax code don’t map linearly to changes in receipts, but we simply have no way of knowing what the effects of his particular tax cuts were. And the idea that the only way to reduce the deficit is to cut spending is laughable, Weirdave. One might argue that that is the most desirable way to reduce the deficit, but that’s an entirely different debate. Then we have the war in Iraq. How much that is costing us is mind numbing, although I almost feel guilty mentioning the monetary loss when the loss of human life is so great.
Soak the rich? Why stop there, let’s eat them!
(A simple blunder, unkindly noted).
Jebus, people: it’s October of an election year, which makes anything coming out of a politician’s mouth just so much utter horseshit. The numbers will magically change come December.
Well, we can start by closing many unconstitutional government organizations and departments, such as the Department of Education, Department of Commerce, BATFE, and the Department of Labor. Just to name a few.
This whole issue is so full of crap from both sides that it’s annoying. And the problem is that whether the effects are positive or negative, they are small enough to be swamped by other macro effects, especially in the short run.
Let’s say you cut taxes, and the next year the economy grows by 3.5%. Would it have only grown at 2% without the cut? Or maybe the cut had no effect at all. How do you tell?
In theory, it’s obvious that there are at least two minima on the tax/revenue curve - one at 100% and one at 0%. That means there are some areas of the curve where cutting taxes will increase revenue.
But it gets more complicated than that, because of compounding growth. Let’s say your tax cut increases economic growth by 1% per year. But you lose 10% in revenue. You now have two curves over time - a curve of lost revenue, which is a linear graph, and a curve of increased GDP, which is exponential. At some point down the road, the compounding increase in growth will result in revenues that equal, and then exceed, the revenue lost to the tax cut. At some point further down the road, you will have gained so much new revenue that you’ll have made up for all the revenue lost during the period when net revenue was still negative.
Because one curve is linear and the other exponential, that suggests that so long as the growth effect of the tax cut is permanent, at some point any tax cut will pay for itself - you just have to wait long enough. The more powerful the effect of the cut, the quicker you regain the revenue lost when the tax cut was first implemented. On the other hand, if the growth effect tapers off over time, you may never reach the point where you earn back the money lost.
And there are many other issues that come into play, such as extra interest on debt incured in the interim, economic effects caused by dislocation whenever government regulations are changed, etc.
It’s a very nuanced issue, yet the arguments around it are always simplistic.
Really? What if I argued that government debt always tends to rise to the level of political acceptance, no matter how much revenue the government has? Increase revenue, and you just get more spending pressure. If you graphed the growth of U.S. government revenue, and overlaid it with a graph of deficits, do you think they’d track particularly closely?
The biggest deficits the government ever carried came in the early 1990’s, after a decade of major increases in government revenue.
It seems to me that the way it typically goes is that when the U.S. goes through a long economic expansion, deficits come down somewhat while revenue goes up. Then deficits cease to be a political issue, and government starts to use the revenue for new spending. Then the next recession comes along, but spending doesn’t go down. Instead, the deficit balloons until it becomes a political issue, at which time Democrats start arguing for tax increases to reduce the deficit. Eventually, whether there are tax cuts or not, the economy eventually turns around, revenues start to increase, and then if there was a tax increase, the Democrats claim that they saved the economy and the tax increase was responsible for lowering the deficit. If the Republicans managed to cut taxes, they’ll claim the tax cuts caused all the revenue growth and fixed the deficit. Then the cycle starts all over again, with government revenue even higher at the start of the cycle.
Deficits are a spending problem. Just like a person who runs their credit card up to 30K. Do you think a raise at work will suddenly cause this person to become financially responsible? Would you describe such a person’s problem as one of not enough income, or of poor spending discipline?
Well, you could look at the budget (link warning: pdf. Look for chart 2, it’s on page 13). Revenues are up 15% last year, the largest increase in over 20 years. Revenues also increased dramatically after tax cuts by Reagan, Kennedy and Coolidge. ( cite)
If you are going to cut taxes to stimulate the economy it’s the only way. Spending more than you take in will not reduce the deficit. You could raise taxes and put all the new money raised towards the deficit, but that would have a negative effect on revenue and also on the economy, to quote JFK:
Waging an expensive war with tax cuts, This is fiscal responibility?This is stupid and irresponsible.
That’s just a plain old lie. When Reagan cut taxes, revenues dropped. Your cite cherry picks the numbers. It starts with 1982 when it should be starting with 1981. There was a big drop in revenue that year, and the seven years after that were just playing catch up to try to match revenues the government would have had.
And it’s great that revenues are up 15% this year, because for five straight years after Bush’s tax cuts they were virtually unchanged. We’re gonna need a lot more years of 15% raises before revenues match what they would have been without the tax cuts.
Here is the site, with actual numbers, and no one to cherry pick the numbers for you: http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp?Selected=3#S3 (Table 3.2)
And if you want to cut spending, how about cutting the interest expense on the national debt? Last year, it cost us over $400 billion, which is a huge chunk of the national budget. Tax cuts lead to deficits which lead to increased spending.
Isn’t the national deficit the highest it has ever been? And didn’t he begin his administration with a balanced budget…which I certainly don’t think we have at this point? And aren’t we borrowing money at a greater rate than we ever have? Because that is what I have read in the newspaper, and on the web. Am I wrong?
Also, didn’t Bush’s tax cuts BENEFIT the rich more than anyone else?
I’m really just asking, not trying to pick a fight.
Well if George Bush announced it, then it must be so.
The only thing powering this economy is people spending the equity in their houses. Seen all the mortgage refinancing ads? They don’t advertise unless there is a huge market. Wages are stagnant, and folks are trying to maintain their standard of living any way they can: credit cards, mortgage refinancing, spending down their savings. This is a short term blip before the crash. One year before lights out, max.
Well, if it isn’t Mr. Sunshine!
One pictures the ragged and forlorn CEO of AmEx, standing by the freeway entrance with a cardboard sign “Will Suck Your Life Out for Food”.
Speaking as an Amex finance employee who has met the CEO on several occasions, I can assure you that this is blatantly false. No matter what happens, the CEO will be extremely well dressed.