“More political than economic” sounds like a distinction without a difference. We need roads, schools, state services. There is not enough money to fund them adequately. Sounds like an ecnomic problem to me.
So, in your view, state budget crises are just the result of irresponsiblity?
“Tend to” is always safe. However, I don’t think there are enough state and local workers so that a reduction would really have a significant impact on the economy. Furthermore, the laid-off workers might go into private industry and do something actually useful. 
The real problem is that those receiving largesse from the local and state governments will be pissed off, and their votes may be lost.
I have to congratulate my (Democratic) Governor McGreevey of NJ. He just announced that the state would cease funding the arts, because they cannot afford it.
?
You realize that spending cuts currently being undertaken by many if not most states include more than layoffs of state employees… right?
We clearly need to reign in spending on state and local levels. If that means cutting programs and/or laying off workers then thats what we have to do. The problem with stopping taxes, programs, cutting jobs is that they are political nightmares. It is way, way easier to get a tax or program rolling than it is to end it. The millions of tax payers in the state say little when a new tax is suggested or implemented. But try to cut the same program/tax and you get hundreds of people complaining loudly. Those hundreds of loud complainers get thier message across more than the millions who complain quietly. Fiscal responsibility means that you have to spend within your means, not spend more then try to raise the taxes to compensate. So the opposite holds true. When we have fewer taxes coming in we should trim spending accordingly. You cant have it both ways.
Here in Wisconsin, we are having a budget crisis. We just elected a Democratic governor for the first time in about 16 years.
He inherited a budget deficit that he needs to deal with. He proposes cutting spending and laying off thousands of state emplyees. No one in the mainstream is complaining, he is doing what he needs to do. Here`s the sad part, when we had a Republican governor, and he tried to cut programs lay off workers or reduce spending all the liberals came out of the woodwork against it. Now that thier guy is in the office and he implements a conservative approach to the budget they all keep thier mouths shut. The media, and the politicians are backing him. Normally they would have been up in arms.
My point is this, I think the right thing is being done here in Wisconsin, just happens to be a liberal this time. Budgets on the state and local (even national) levels need to be flexible and adjusted according to the tax reciepts. In some extreme cases you need to raise taxes and cut spending just to break even. I would like to see more people in favor of cutting taxes, reducing spending and controlling government waste. We`ve let this spending balloon out of control and we need to make some tough decisions. We need to ask ourselves if we can really live without this program or that program, and free up some of those tax dollars so we can get this economy going again.
Hey, december, wanna swap Governors? Gray Davis’s solution is to maintain the ridiculous level of spending, then raise taxes (during a purported economic crisis, mind you) to pay for it all.
As to Bush’s proposed budget, it does have a stimulus aspect to it (the acceleration of certain tax cuts), but that’s not the only, or even main aspect of it. The main intent of it, to my understanding, has always been future economic well-being. Whether it’s marketed primarily as a stimulus package or primarily a long-term plan seems to be a function of what sells better. If your product has five features, focus on the one most likely to interest the customer.
Jeff
Possibly, but where’s your proof ? :dubious:
In my vodka. 
Can a leopard change it’s spots? 
[slight hijack]
Well, this seems like as good a place as any to post a little lyrical tribute to Bush economy policy that I wrote last night. It is to the tune of “If you’re happy and you know it, clap your hands” (and was admittedly inspired by the “Bomb Iraq” one that is making the rounds on the internet).
[To stave off the inevitable comments: Don’t worry…I have no plans to quit my day job!]
If the surplusses are growing, cut the tax.
If the markets are a-glowing, cut the tax.
Don’t make government a lender,
It is surplus legal tender,
Just return it to the sender!
Cut the tax!
The economy’s now stalling? Cut the tax.
Stock investors are now bawling? Cut the tax!
If stimulus is needed,
Then new logic must be heeded,
But our goal won’t be defeated,
Cut the tax!
Are revenues now slowing? Cut the tax!
Are deficits now growing? Cut the tax!
Supply-side magic is the potion,
It’s a really nifty notion,
Put some “voodoo” into motion!
Cut the tax!
Inequality is rising? Cut the tax!
Corporations are downsizing? Cut the tax!
If being rich just sucks,
While the poor are “lucky ducks”,*
Things have really run a-mucks!
So cut the tax!
If rich folks are taxed twice, cut the tax.
It’s a really horrid vice, cut the tax.
Call it “double taxation”.
It’s a crime in this great nation,
If the wealthy is your station!
Cut the tax!
If the weather’s getting colder, cut the tax.
If you’re feeling a bit older, cut the tax!
It really doesn’t matter,
What issue’s on your platter,
Fattest wallets must get fatter!
Cut the tax!
*This might need a bit of explanation for those who don’t follow the Wall Street Journal editorial page. Here are two links to the novel idea of a “lucky ducky” crowd of undertaxed poor folks:
http://www.opinionjournal.com/extra/?id=110002937
http://www.opinionjournal.com/editorial/feature.html?id=110002938
[/slight hijack]
—If the federal budget is fine, but all the states are broke, isn’t that analagous to “The family is fine, but all the family members are sick.”?—
Were that only so… the federal government is very far from a term synonymous with “all family members.” It is an individual that rules over the family. It has it’s own budget, troubles, expenditures, etc. ON TOP of what the states tax and spend.
I’m a little surprised that conservatives would support a budget like this without some strong criticism.
I concurr with conservative pundit Andrew Sullivan:
http://www.salon.com/opinion/sullivan/2003/02/07/bush/index.html
“Irresponsible at best, deceptive at worst. And certainly not conservative.”
Being a committed conservative does not mean grandly expanding the government: in institutional size, realm of claimed authority (signaled by spending here, confirmed by previous bills), and pure expenditure? To say that conservatives should applaud this bill is to say that conservatives should simply applaud anything Bush does, regardless of whether it embodies conservative principles.
Inflating the apparent size of “new” spending on AIDS in Africa by simply shifting money out of other programs in Africa? Not including any expectation for the cost of the war in the deficit projections?
And the administration is STILL widely using their deceptively ambiguous (especially to the innumerate American public) “average family” or “average senior” talking points, not to mention a litany of other deceptive claims from administration officials.
http://www.spinsanity.org/post.html?2003_01_26_archive.html#90260526
Well you see… in THEORY, cutting taxes will “stimulate the economy”. But you see, in this case, the economy went into a downspin because of two things: 1. Lack of consumer confidence in a Bush administration. This was clearly shown by the abrupt downturn as soon as it was obvious GWB had won the election, and he would implement his polcies. The wealthy investors LIKE their nice tax cuts, but they still have no faith in the Bush administration. They sold their stocks, and continue to stay out.
- A much needed and delayed “correction” in the mad world of tech stocks & such. The NASDAQ was simply insane, the bubble needed to burst. In fact, the bubble started to burst near the end of Clinton’s term. This wasn’t anyones fault.
More “tax cuts for the rich” will only strengthen the lack of confidence in the administration. And no amount of tax cuts will bring back the “bubble”. It was a unique situation. Trying to get the NASDAQ back to 5000 anytime soon is like cargo cultists making fake landing strips… AFTER WWII.
Bush is also making sure that everyone who donated $ to his campaign is paid back tenfold- so they donate more. Not unreasonable from the GOP point of view- but that won’t help the economy.
So - since “tax cuts for the rich” is part of what made the economy so bad- more of them is like drilling holes in the bottom of the boat so that the “water drains out”. The investors will see the Administration is continuing in the policies that made the consumer lose confidence in the first place, and that won’t make them come back.
—This was clearly shown by the abrupt downturn as soon as it was obvious GWB had won the election, and he would implement his polcies.—
Can we demonstrate that the downturn was because of Bush taking the Presidency? I doubt it. And even if so, who knows what polices they were worried about? Maybe they assumed that Bush would be more warlike, which makes economic fortunes more uncertain (but not necessarily worse), and the markets overall hate uncertainty more than anything else.
—Bush is also making sure that everyone who donated $ to his campaign is paid back tenfold- so they donate more. Not unreasonable from the GOP point of view- but that won’t help the economy.—
Why not, exactly? Is there some magical barrier preventing him from doing both at once? Tax cuts DO help the economy, remember. It’s very hard to deny that in theory, and just as hard in practice (just because the economy got worse after tax cuts doesn’t prove that tax cuts hurt the economy: they could have, for all we know, prevented things from getting even worse).
“In the long run, we all die.”
[quote]
**
“In the long run, we all die.”
[/quote**
…So lets screw over future generations because we want to think short term dammit! A lot has happened in the field of economics since the life of the man you quote.
I’ll add to that: why has the OMB officially stopped talking in the traditional terms of 10 year forecasts? Why do most of their front-page financial projections now end in 2008 (even though they still do longer term forcasts)?
—So lets screw over future generations because we want to think short term dammit! A lot has happened in the field of economics since the life of the man you quote.—
It is a little weird to hear conservatives heralding what are essentially the Keynsian dogmas they’ve spent the last 30 years railing against.
But, that said, can you explain how we’re screwing over future generations?
Future generations will almost certainly be richer and better off as a whole than present day individuals. If we seriously believe in progressivity, why shouldn’t we live at their expense? Of course, even if we did want to live at their expense, it’s not entirely clear how we would go about doing so.
Consider the problem of assuring them higher taxes in the future, which seems to be the current plan. Because of runaway spending, Bush can’t credibly claim to be in favor of tax cuts in principle. In the current spending environment, proposing tax cuts today is pretty much the exact same thing as proposing tax hikes tommorow, unless we somehow see rates of growth beyond anything in modern history (of course, I happen to think that even then, the government take growing with the growth of the economy constitutes a very real tax hike: if it’s taking in more absolute dollars, it’s taking more, period).
However, there’s a rosy side to this picture. When the government taxes us less, we have more money. Duh. But where do you think future generations will get large stores of their wealth and investment in their human capital from? Well… that very same capital. So while they may have to pay higher taxes to cover excesses of their parents… they’ll be in general richer than they would have been if their parents had been heavily taxed, benefitting from private investment, inheriting the money that wasn’t taxed away.
(Aside: If intentional, this is actually very savvy strategy for Republican administrations: cut taxes without cutting spending to a degree that is completely unreasonable and unreconcilable with a philosophy of a consistently low tax burden. By the time reality hits and the deficit seems ridiculous, it will be someone else’s problem, and the government that has to deal with the mess is likely to look bad no matter what. And chances are, because things move in cycles, it will be the Democrats that get hit with the burden. The only problem with the strategy is that the good PR is so good for Republicans that the bad PR often seems to hits the wrong party: as happened to the elder George Bush. If Jeb Bush or Bill Frist wins in 2008, they’ll likely face the same problems.)
Also of interest is the difference in the rates between government borrowing and private borrowing. Government bonds have some of the lowest rates out there. When the government borrows to cut your taxes, this is not unlike you taking out a loan with an uncertain time-come-due. Consider your credit card bill, which almost certainly has a higher rate. If your taxes are cut, you can pay off your credit card debt. If they aren’t, you can’t. Obviously, lower taxes will come due sometime in the future as future taxes. But the kicker is that you’ll be getting a lower rate of interest all that time than you would if you’d stuck with your tax bill.
Obviously, this story doesn’t describe everyone. But it demonstrates one sort of basic factor in the larger picture that we can’t help but consider when we get into the “will this hurt the children?!” debate over deficit spending and lower taxation. It’s one of the things that makes the answer very ambiguous.
Indeed, the only sure way I know of to profit at the expense of “the children” is to use up what otherwise would have been their share of natural resources faster. Of course, even THIS can’t guarantee that the growth and technology advances that come out of this consumption won’t increase the economic well-being of our children.
Apos wrote:
I could be wrong here, but I believe that I recall Hawthorne explaining in another thread that macroeconomists no longer prognosticate in that fashion. Certainly, if they do, then whatever they predict is essentially arbitrary.
This isn’t about macroeconomics per se (trying to track the course of the economy that far, which IS essentially a shot in the dark), but rather about the government’s balance sheet over time. You can’t predict accurately the growth rate of the economy, interest rates, etc. but you can play with reasonable ranges and see what sorts of possible situations you need to be thinking about under certain scenarios. Private organizations do this all the time when looking to the future. They can’t predict their market anymore than the government can predict growth (and hence, for one thing, tax revenue). But they can project on the most plausible scenarios and see what things might look like down the road. It’s more than worth it to know that, even if things progress steadily with no bumps, you’ll run out of money.
*I have more income than I do bills so I have a surplus. Good!
So, I decide to give my surplus back to my employer because it was his money to begin with.
Oopsy! No more surplus! In fact, I now have way more bills than I do income.
So, I’m supposed to give more money to my boss in the hopes he may give me a raise?*
Welcome to the “George Whiskey Bush Economic Stimulus Packge.”
Let me guess the reply: “You’re a typical liberal!”
—Let me guess the reply: “You’re a typical liberal!”—
No, I’ve never heard that argument before. Which isn’t to say that it’s a fair argument.
First of all, it is unequivocally wrong to associate the government with an employee who works for money in any simple sense. People work for money. The government taxes it away to pay for things which the people may or may not need, but there is hardly any viable sense in which the government is “paid” a set amount for an agreed upon delivery of services rendered. The closest analougy that has the government as an employee would be if a firm employed a worker who could not be fired, who could set his own pay scale, and could pretty much decide for himself what he wanted to do all day, and could direct the firms finances. That’s pretty darn far from both the practice and the spirit of your example, and it completely undermines your portrayal of the situation as being some sort of crazy drunken plot.
Hmmmph. No doubt they’re 10 Nobel Prize winning Keynsians, and that colors their judgment in my mind. Keynsians love meddling and tinkering, but only when it is of the sort that pleases them. A Keynsian would not take credit for the growth in the economy during the 80’s after Reagan’s spending, even though that’s a completely Keynsian approach. More often we hear “Keynsian” in the context of the sort of central planning meddling embodied by the Federal Reserve and that Greenspan with his busy hands.
When will people realize that tax cuts are the rising tide that lifts all boats? Why, with all the direct evidence to the contrary, do people continue to think that tax cuts “cost money”, when in fact tax revenues are almost entirely a result of the size of the economy?
Apos, you’re right to point out that one ought to make a “best guess” of sorts, to estimate future revenues. But history shows that such a guess is likely to be way off. Tax cuts to the wealthiest Americans sometimes increase overall tax revenues when the economy grows as a result (Reagan’s 82 cuts, Clinton’s 95 capital gains cut) but sometimes the economy simply continues to languish and revenues drop.
Of course, IMHO, tax cuts are the right thing to do regardless of consequence. Hopefully the consequence would be a drop in revenue, something to force our monstrous federal government to begin it’s non-defense scale-down back towards where it ought to be. But you consequentialists can dicker about it all you want if it makes you happy, I’m for tax cuts all the way, and the richer Americans affected the better, they’re the ones on whose backs this nation is being supported…just my thoughts