Fair enough; I’m wrong, and if I’d thought long enough to qualify what I was saying correctly, I would’ve realized it. I tend to think of The Republican Party as the national party, including federal officials (i.e., the prez and Congress), and I forget about governors. As far as I can tell, Republican governors as a group have many more responsible members than Republican federal officials.
I should say that I can’t recall Bush, or Dole for that matter, or Delay, or Hastert, or any other prominent Republican federal official, advocating for any tax increases. Certainly some governors have done so.
I strongly doubt you will believe it when you see it, but that’s neither here nor there :).
When soldiers are brought out of Iraq, they will no longer draw active duty pay, right? Health care costs will go down; equipment repair cost will go down; what amounts to very expensive room and board costs will decrease; munitions costs will decrease. It’s hard for me to think of an area of military spending that WON’T decrease. As for your opinion about how many troops will be withdrawn, that opinion appears not to be based on much.
Daniel
What recovery is that. We are not getting close to one.Our economic system is teetering ,thanks to the fiscally twisted repubs. Greenspan thinks it might require nationalizing banks to get loans going. Bernanke’s voice was cracking as he talked about the bank problems. Soros thinks a depression is here and there are safeguards left to put the breaks on it. Whining about spending is the last thing we need. We have to find a way to save the financial system.
How do you figure? While there will be a savings as Guard and reserve troops return to civilian jobs, that hardly applies to the active-duty force, which still makes up most of our deployed strength.
What you’re looking for is imminent danger pay/hostile fire pay. I earned it for exactly two months when I was in the Navy. It amounts these days to a whopping $225 a month for all paygrades, and won’t completely go away with the end of hostilities. I earned it in 1996 - not a particularly dangerous year in our history, but one that put me into some sketchy areas in South America.
The big ticket item is the combat zone tax exclusion - but this only applies while a member is deployed to the combat zone. When his tour is up and he returns to Pendleton or Bragg that goes away.
The final CBO estimate of the stimulus spending is that 75% of the funds will be spent in the next 18 months. This final compromise pushes the money out a mite quicker than the original plans, which frees Obama to change up policy more quickly than we were otherwise anticipating. Or at least, more quickly than I was personally anticipating. Still, for whatever money that’s left to be spent, it’s true that there will be contrary effects on the economy: the tax increases and spending cuts will be contractionary, whereas the remaining spending will be expansionary.
But to what extent?
Tax increases that are passed to balance the budget have contractionary effects that are smaller than in other cases. And the spending on military equipment that is exploded or otherwise used up in a desert overseas is going to be less helpful to long-term economic growth than domestic spending on research, or infrastructure, or other forms of public investment. In that way, it makes sense to shift the budget to domestic priorities even as the time comes to balance the budget. There has always been a balancing act between deficit spending now and budget balancing in the future, and this announcement simply means that that the teeter-totter will be pushed to the budget more quickly than some of us anticipated from the original stimulus plans. It’s possible that this will be timed poorly, but the average conservative doesn’t seem to want deficit spending now, even when there’s a solid economic justification for doing so. It’s hardly a bad thing, from that perspective, if the administration believes that the budget can be balanced more quickly than the liberal economists believe.
And regardless of those technical questions, the one great, indisputably positive aspect of recent budget announcements is that Obama will no longer be outright fabricating predictions of future budget deficits, which the loyal Bushies did as a matter of policy.
It is good that he wants to reduce spending on the Iraq, but as I came to that conclusion six years ago, he’s not going to get much credit for it.
I don’t give him any credit for wanting to tax the rich more. As a libertarian, I am very much opposed to the “Tax the Rich” mindset, and would far prefer that the government be forced to act with more restraint.
But that won’t happen. Retiring some of the 2001 and 2003 tax cut plans seems a first blush solution to thorny downstream issues.
The increases we’re looking at through this solution is:
Top tax rate from 35% to 39.6%
Cap gains rate from 15% to 20%
According to today’s Washington Post.
Note, though, that the target deficit…
So the downstream impact of the fiscal insanity of the last eight years is a budget deficit still higher than any from before 2000. That’ll leave it at about 3% of projected GDP. Still not as happy as I, for one, would like.
To think that there’s a means out of our predicament that doesn’t include higher taxes is blindly shortsighted. Those continuing to advocate for tax cuts in the face of disaster, which is what we’re going through, show a lack of understanding of history. Remember what happened to the American economy when FDR rolled back his recovery programs to cut spending. I don’t think, if we get a recovery going, we want to see a double dip due to ideology.
Depends on what you mean by “realistic”. If you mean that he will really do it, probably not. He might raise taxes, but he isn’t going to save any money by removing troops from Iraq if he raises troop levels in Afghanistan. But to the extent that any recovery is dependent on continued spending, of the sort of “digging holes and filling them up” proposed by some on these boards, then once the pork stops, the jobs disappear and we aren’t any better off. To the extent that infrastructure spending will get us out of a recession and productive again, that depends on the time line. Education spending might be a good idea, or it might not, but it isn’t going to stimulate the economy in the next three years. And rather little of the infrastructure spending is going to be complete enough to raise productivity anywhere near enough to pay for itself.
This also assumes that the deficit in Obama’s first year remains $1.5 trillion, not more. IOW, that the $1.2 trillion that Pelosi and Reid and Bush saddled us with won’t be replicated with any more that Pelosi and Reid and Obama will saddle us with - more bailouts for the auto companies, for instance. Since your cite mentions -
That part about health care sounds like money being spent.
The debt was borrowed at interest, so he is going to have to raise taxes by significantly more than a trillion dollars per year in order to pay it all back.
Can’t speak for anyone else, but let’s see him do it first.
The tax increases Obama mentions are on investment as well as income -
Well, right off the bat I will pooh-pooh the idea that we can reduce the deficit by raising taxes on someone else, or in some pain-free way. There is a major crunch coming in Medicare and Social Security.
Obama will have to cut spending. And I mean cut, not simply stop increasing, or increase less than projected, or the other tricks.
I don’t think he’ll do it.
On a side note, I notice the spin has begun. Obama inherits a $1.2 trillion deficit, and works like a beaver to increase it by $350 billion. Either the economy recovers due to the increase in deficit spending, in which case Obama gets the credit for the recovery and Bush gets the blame for the deficit. Or it doesn’t, in which case Bush gets the blame for the deficit and the recession. And, of course, a deficit of 3% of GDP is sustainable and fine under Obama, but the cause of our latest recession under Bush.
It will be interesting to see how the “the economy does better under Democratic Presidents” crowd will spin the figures in 2013.
So, the people here are totally in favor of raising business and investment taxes during a recession?
Do you realize that if you pay for the stimulus by increasing taxes, you aren’t stimulating anything? The only way a stimulus works is if you borrow the money and don’t pay it back until the recession is over. If you start taxing people, your ‘stimulus’ simply becomes a transfer of funds from the private sector to the public sector. This will in no uncertain terms harm the economy.
Give it a rest, Sam. You and I generally agree on many matters budgetary but on this one you’re just plain wrong.
The stimulus is projected to mainly be spent in the next two years. Well and good. We could certainly debate the wisdom of the stimulus and I wouldn’t be sure what side I’d take, frankly.
The tax increases, or to honestly describe it, the allowing of existing breaks to expire exactly as was promised when they were passed if anyone believed that piece of political dishonesty, are scheduled to kick in with the 2011 budget, or after most of the stimulus money has been spent.
In addition, this statement from Obama, in his radio address:
Source: The Washington Post 2/22/09
Indicates, in my opinion, that the President considers a deficit at 8%+ a greater threat to growth than a marginal increase in taxes on specific groups. In my opinion right now that’s a proper assessment, especially given the political palatability of ‘allowing cuts to expire’ instead of passing new taxes. That’s something one can get away with right now whereas sharp decreases in spending or new taxes are probably non-starters.
Merijeek, unless you’re suggesting that “-Joe” is a prominent Republican advocating responsible tax increases, your post mystifies me. I take it you read the whole thread before replying, and saw my subsequent exchange on this point?
Regardless if this passes Congress or not, one significant benefit will be the debate will expose the contradictory beliefs of the conservative deficit hawks who continually cry for more tax cuts on the rich.
If it exposes them as frauds, that will be a great thing in and of itself. If the program passes into actual law and the deficit is reduced - so much the better.
Sam, we have to get our budget under control. The deficit has exploded under the last eight years. This has to stop. Now, sad story, we’re in a pretty severe recession right now. Oh, and we’re gonna stimulate the economy, and how do we do that? With more deficits.
But that can’t go on forever. If in two or three years we’re still mired in a recession, more government deficit spending isn’t the answer. Continued borrowing sucks up capital that could be used for private investment just as surely as continued taxes.
We have to live within our budget. For the past 8 years we’ve engaged in what amounts to a massive economic stimulus package, and look at the result.