# USA better or worse now then it was 6-10 years ago? **URL:** \ **Category:** Great Debates\ **Created:** [September 27, 2006, 7:32am UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328 "2006-09-27T07:32:09Z")\ **Posts on this page:** 12\ **Page:** 3
**Author:** ![Zoe](https://avatars.discourse-cdn.com/v4/letter/z/a4c791/32.png) [@Zoe](https://boards.straightdope.com/u/Zoe)\ **Post date:** [October 1, 2006, 10:22am UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/41 "2006-10-01T10:22:48Z")
Economically, I’ve lost ground because of interest rates, the cost of medical care, the price of oil, and the way that affects everything else. But because I’m a member of the middle class, I can afford not to worry about economics too much just now. What really concerns me most is the lowering of the principles that I thought our government was founded on and that we could depend upon and the loss of civil liberties. Members of at least two branches of our government have made it clear that they feel comfortable in blatant lying to the public. (I can remember being criticized here because I wouldn’t use the word _lying._ I don’t have any trouble now.) Sometimes I feel like rodents are eating at the foundations of a really fine house which will continue to look okay until the day it collapses. I can’t really think of a more lethal combination of personality traits than those held by Bush, Cheney, Rove and Rumsfeld. There would be a Shakespearean play in there somewhere, except there is no one noble to be brought low. Meanwhile, parts of the Southern coast are still waiting for relief from Hurrican Katrina. Let them eat cake. ---
**Author:** ![Monocracy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/monocracy/32/4493_2.png) [@Monocracy](https://boards.straightdope.com/u/Monocracy)\ **Post date:** [October 1, 2006, 1:01pm UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/42 "2006-10-01T13:01:27Z")
[QUOTE=Age Quod Agis] The idea is that tax cuts stimulate the economy as a whole, but because the economy is so large, it doesn’t exactly turn on a dime. In 1981 and 2001, we were in recessions that had nothing to do with the tax cuts. In fact, the tax cuts were put in place to get us out of the recessions. One theory is that the government lets people (and companies) keep more money, so they’ll spend some of the money they’ve kept (and the government will tax that transaction), then the company that received that money will spend some of it (and the government will tax that transaction), then the company that gets that money will spend some of it (and the government will tax that transaction), etc. But that takes a while, in part because the first individual doesn’t save money until tax time, and the government doesn’t make up its money until the cash has changed hands quite a few times. Another theory (the supply siders theory) is that the growth of the economy doesn’t come from money changing hands. It comes from the return on invested capital. And the idea is that lower taxes mean more money invested in capital, and less drag on the growth of that capital. [/quote] Both of these theories are true. It’s common sense. But it it not because of lower taxes, the cause is deficit spending. If spending were cut along with taxes, it would basically negate the effects. If taxes were left alone and spending were increased, the economy would grow larger by way of the above theories. If you borrow money, and inject it into the economy, the economy will grow. The problem is that deficit spending has many disadvantages. But modern conservatives believe that the advantages outweigh them, and they will use spin and untruth to try to justify it. > [@](#): > > So you can’t expect tax revenues to be higher just after the tax cuts because they’re not aimed at making more money immediately. Rather, the proponents of those tax cuts would argue that they stimulated the economy, so later tax revenues were higher than they otherwise would have been. (Naturally, it’s impossible to prove this either true or false.) But how much later are these increases supposed to kick in? From 2000 to 2005, tax revenue increased by 4% while inflation increased by more than 12%. Historically, tax revenue outpaces inflation. Is it going to take 7, 10, 15 years? By the time the benefits kick in, the problems of the deficit will outweigh them. We’re spending $400 billion per year on debt management (basically interest). We are now paying an extra $100 to $200 billion per year on the budget because of the tax cuts in 2001. Taxes will eventually have to be raised because of our foolishness now. ---
**Author:** ![Clothahump](https://avatars.discourse-cdn.com/v4/letter/c/51bf81/32.png) [@Clothahump](https://boards.straightdope.com/u/Clothahump)\ **Post date:** [October 1, 2006, 4:31pm UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/43 "2006-10-01T16:31:52Z")
[QUOTE=OliverTwistofLime] In our weekly discussion group of about 30 members split about 50-50 conservatives and liberals, the following topic was discussed almost leading to fisticuffs. Is the US worse off or better off since the present president has been office vis a vis the Clinton administration? The "worse off " people mentioned: 1. the national debt is higher than ever. \ Proof? \ 2. unnecessary war in Iraq with loss of American lives and Iraqian lives \ That’s personal opinion only. There is just a strong argument to be made that Iraq was necessary. ,quote\> 3. global warming is officially denied \ 4. the Poor have increased in numbers and the rich are protected in great part to higher taxation For those of you who believe the USA is better off under George W. Bush’s administration, would you please state reasons to support your opinion? [/QUOTE] Proof about the increase in the poor? Not just headcount but as a percentage of the population. And proof about the rich being protected, please? It’s kind of hard to buy that old line when the top 1% of the richest people in the country wind up paying more than 50% of the taxes of the country. ---
**Author:** ![Squink](https://avatars.discourse-cdn.com/v4/letter/s/b5e925/32.png) [@Squink](https://boards.straightdope.com/u/Squink)\ **Post date:** [October 1, 2006, 6:41pm UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/44 "2006-10-01T18:41:04Z")
[Economic Risks Up Sharply for Most Families Since 2001](http://www.americanprogress.org/issues/2006/09/midclassreport.html) > [@](#): > > More families are more vulnerable today to unexpected events such as a layoff or a medical emergency. A few stark indicators of the precarious financial position of America’s middle class provide a much-needed reality check, highlighting why so many families feel economically insecure today. Over the past five years, the number of families with enough resources to weather a layoff or a medical emergency has declined dramatically, wiping out the gains in financial security that many families experienced in the 1990s. Specifically:… With a big fat pdf to back it up: [Middle Class in Turmoil: Economic Risks Up Sharply for Most Families Since 2001](http://www.americanprogress.org/issues/2006/09/midclassreport.html) I’ve no desire to dig through this study, but someone more interested in the debate might find it useful. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [October 1, 2006, 7:29pm UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/45 "2006-10-01T19:29:03Z")
Like the Onion head line said when Bush won. “At last the era of peace and prosperity is finally over.” The Repubs have changed everything. They have changed the tax system to increase the wealth of the super rich. They control most mass media and are able to convince people that they are sharing the proceeds. They have given corporations the opportunity to fleece the people on a grand scale. Oil, Pharm and Medical are 3 examples. The amount of peple without health coverage has skyrocketed. Health problems are the biggest contributor of bankrupsy. Bankrupsy has been changed to make it more difficult. This of course does not affect the rich. Manufacturing has been shipped abroad. With it went high paying jobs. The unemployment rate which has always been disguised is virtually hidden.The middle class has ben evicerated. The military industrial complesx is running the show. They are robbing the system by waging unnecessary wars and looting the treasury. No I do not think as a whole we are better off. ---
**Author:** ![Age\_Quod\_Agis](https://avatars.discourse-cdn.com/v4/letter/a/d07c76/32.png) [@Age\_Quod\_Agis](https://boards.straightdope.com/u/Age_Quod_Agis)\ **Post date:** [October 2, 2006, 12:00am UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/46 "2006-10-02T00:00:25Z")
[QUOTE=Monocracy] Both of these theories are true. It’s common sense. But it it not because of lower taxes, the cause is deficit spending. If spending were cut along with taxes, it would basically negate the effects. If taxes were left alone and spending were increased, the economy would grow larger by way of the above theories. If you borrow money, and inject it into the economy, the economy will grow. [/quote] You’ve got half of it, but only half. According to Keynes, the economy is driven by aggregate demand. So the most important thing we can do for the economy is stimulate demand. One really effective way to do that is to give people more money, and let them spend it. And it doesn’t matter who spends the money, so it’s just as effective for the government to spend huge gobs of money as private individuals. In fact, some Keynesians oppose tax cuts in part because if we gave money back to individuals, the individuals tend to save some of that money, while the government tends to spend it all (and then some). They feel that it’s vital to the economy to ensure that lots of money is spent, and the government tends to do that better than individuals. So in that way, injecting more money into the economy – either through borrowing or tax cuts or government spending – helps the economy grow. That seems close to what you believe. But supply siders disagree. They don’t think aggregate demand and money supply are as important. They argue that what grows the economy is the return on invested capital. They think the size of the economy isn’t determined by how much money is spent, it’s determined by how many products and jobs the economy can churn out. So they favor tax cuts directed towards businesses and areas that spend their money on things that increase the capacity of the economy, for example building factories or expanding their work force. And while the government does a really, really good job of spending money, they tend to do a really, really poor job of investing in capital. So supply siders want to get money out of the hands of the government, and they want to get it into the hands of business and individuals. They’re two completely separate, and largely inconsistent, ideas. > [@](#): > > The problem is that deficit spending has many disadvantages. But modern conservatives believe that the advantages outweigh them, and they will use spin and untruth to try to justify it. You were doing so well, and then you had to go and throw that last little bit of partisan wackery in there. A shame really. > [@](#): > > But how much later are these increases supposed to kick in? From 2000 to 2005, tax revenue increased by 4% while inflation increased by more than 12%. Cite please? As for the years you’ve chosen, Bush took office in 2001, so he had no effect in 2000. He got a small tax cut in place after that, but his main, stimulative tax cuts took place in 2003. So a better analysis would be 2003 to present. And I don’t know where you got this idea that from 2000 to 2005, tax revenues increased 4%. Tax revenues were flat for a while, but [they’re certainly increasing now](http://www.nytimes.com/2005/07/13/business/13deficit.html?ex=1159848000&en=88576bb94dc7482a&ei=5070): > [@New York Times](#): > > The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.” > > The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well. And if we include 2006 in your calculations ,the numbers get even better: > [@](#): > > The U.S. government recorded record-high overall and corporate tax receipts on Sept. 15, which was a quarterly deadline for tax payments, the Treasury said Monday. > > Total tax receipts were $85.8 billion on Friday, compared with the previous one-day record of $71 billion on Sept. 15 of last year, the Treasury said. > Within the overall figure, corporate tax receipts Friday were $71.8 billion, up from $63 billion in September of last year. > > Treasury Undersecretary for Domestic Finance Randal Quarles said Friday’s numbers provided a “continuing demonstration of the strength of the U.S. economy.” > > “In fact, Friday’s gross receipts were the largest in a single day in the nation’s history - 20% higher than receipts on the same quarterly tax payment date last year,” Quarles said in a statement. [And here](http://www.nytimes.com/2006/07/09/washington/09econ.html?ex=1310097600&en=ec2d242da8699725&ei=5088&partner=rssnyt&emc=rss): > [@New York Times](#): > > An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief. > > On Tuesday, White House officials are expected to announce that the tax receipts will be about $250 billion above last year’s levels and that the deficit will be about $100 billion less than what they projected six months ago. The rising tide in tax payments has been building for months, but the increased scale is surprising even seasoned budget analysts and making it easier for both the administration and Congress to finesse the big run-up in spending over the past year. > > Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could actually decline this year. > > The main reason is a big spike in corporate tax receipts, which have nearly tripled since 2003, as well as what appears to be a big increase in individual taxes on stock market profits and executive bonuses. So tax receipts now are breaking previous records … which were set last year. Of course, there’s no way to be sure that these gains are the result of Bush’s tax cuts. I tend to believe that the President has less effect on the economy than most of us give him credit for. In fact, I seem to remember a NY Times or Washington Post editorial suggesting that the effects of a President’s economic policies aren’t felt until the _next_ President is in office (although my Google-fu can’t seem to find it now). > [@Monocracy](#): > > Is it going to take 7, 10, 15 years? By the time the benefits kick in, the problems of the deficit will outweigh them. Who knows? But the economy is in really good shape right now (which may or may not be because of Bush’s tax cuts). And I don’t think we’re overwhelmed by the deficit yet. > [@Monocracy](#): > > Taxes will eventually have to be raised because of our foolishness now. I agree with you there. ---
**Author:** ![Monocracy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/monocracy/32/4493_2.png) [@Monocracy](https://boards.straightdope.com/u/Monocracy)\ **Post date:** [October 2, 2006, 7:54pm UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/47 "2006-10-02T19:54:37Z")
[QUOTE=Age Quod Agis] Cite please? [/quote] [http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp?Selected=3#S3](http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp?Selected=3#S3) and go to Table 3.2. Federal Government Current Receipts and Expenditures (A) Current Tax Receipts (millions) 2000 - 1,313,561 2005 - 1,366,243 % change is 4.0106 [http://www1.jsc.nasa.gov/bu2/inflateCPI.html](http://www1.jsc.nasa.gov/bu2/inflateCPI.html) Inflation: CPI change from 2000 to 2004 is 9.7% plus my own lowball estimate for 04-05 to get 12% > [@](#): > > As for the years you’ve chosen, Bush took office in 2001, so he had no effect in 2000. The full year 2000 isn’t being used in the calculations. I’m measuring the rate of change for 5 years, the first year being from Fiscal Year End 2000 (9-30-00) to FYE 2001 (9-30-01) , of which Bush presided for 8 months. And if i recall correctly, his tax cuts were retroactiveto 1-1-01, so his policy affected 75% of the first year. I use the first year as FYE 2000 because that’s the last point before the change. It’s the base for comparison, similar to the control variable in an experiment. > [@](#): > > He got a small tax cut in place after that, but his main, stimulative tax cuts took place in 2003. So a better analysis would be 2003 to present. That makes more sense to me now. There was a noticable drop in revenue in 2003 and i never could figure out if it were because of the Iraq war or after-effects of 9-11. It makes the pattern a little more clearer. > [@](#): > > _[bolding added]_ > And I don’t know where you got this idea that from 2000 to 2005, tax revenues increased 4%. Tax revenues were flat for a while, but [they’re certainly increasing now](http://www.nytimes.com/2005/07/13/business/13deficit.html?ex=1159848000&en=88576bb94dc7482a&ei=5070):And if we include 2006 in your calculations ,the numbers get even better:[And here](http://www.nytimes.com/2006/07/09/washington/09econ.html?ex=1310097600&en=ec2d242da8699725&ei=5088&partner=rssnyt&emc=rss): **So tax receipts now are breaking previous records … which were set last year.** I will name some more years in which tax receipts have broken the previous record: 2000, 1999, 1998, 1997, 1996, 1995, 1994, 1993, 1992, 1990, 1989, 1988, 1987, 1986, 1985, etc. … i could go on for about 200 more years. It’s like the old Chris Rock bit “You’re _supposed_ to take care of your kids!”. You’re _supposed_ to break the tax receipt record every year! This is the why i posted in the first place, and why i let my partisan wackery run loose. I have heard this argument from conservative pundits (and in this thread, among a list of conservative talking points), and it’s pure bullshit and it pisses me off. I hate the misuse of statistics. ---
**Author:** ![Age\_Quod\_Agis](https://avatars.discourse-cdn.com/v4/letter/a/d07c76/32.png) [@Age\_Quod\_Agis](https://boards.straightdope.com/u/Age_Quod_Agis)\ **Post date:** [October 3, 2006, 12:55am UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/48 "2006-10-03T00:55:10Z")
[QUOTE=Monocracy] [http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp?Selected=3#S3](http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp?Selected=3#S3) and go to Table 3.2. Federal Government Current Receipts and Expenditures (A) Current Tax Receipts (millions) 2000 - 1,313,561 2005 - 1,366,243 % change is 4.0106 [/quote] Thanks for the cite. It’s interesting. You’re right that “tax receipts” have gone up 4% between 2000 and 2005, but “government receipts” have gone up 9.3%. The difference appears to be that “government receipts” takes into consideration everything that the government takes in, including “social insurance” (welfare, medicare, medicaid, etc.). I would have thought that was a form of tax receipts, but I guess I’m wrong. To carry your point forward, in the 2nd quarter of 2006, tax receipts have gone up to 1,570,720. That’s an increase of 19%. And if we look at “government receipts,” which includes tax receipts, we get an increase from 2000 to the 2nd quarter of 2006 of 24%. So we’re outpacing inflation by a pretty hefty margin. > [@Monocracy](#): > > I will name some more years in which tax receipts have broken the previous record: 2000, 1999, 1998, 1997, 1996, 1995, 1994, 1993, 1992, 1990, 1989, 1988, 1987, 1986, 1985, etc. … i could go on for about 200 more years. Care to make a wager on that one? I will bet you one bottle of Johnny Walker blue (full disclosure – this is a $200 bottle of scotch) that we did not break the previous record for tax receipts in all 200 years of our nation’s history. In fact, to make the bet more favorable to you, I’d be willing to bet that we didn’t break the record for tax receipts in every year since 1975. I haven’t looked at the numbers yet. I’ll agree to use the website you cited, which I think we can both agree is politically neutral and shows all the relevant years. If you don’t drink, then you are welcome to choose something that costs $220 or less, which I will mail to you if I lose the wager. What do you say? Do we have a bet? (No fair peeking before answering this.) > [@Monocracy](#): > > It’s like the old Chris Rock bit “You’re _supposed_ to take care of your kids!”. You’re _supposed_ to break the tax receipt record every year! In a perfect world, yes. But in this world, we’ve got economic cycles. And economic cycles tend to cause fluctuations in government tax receipts, separate and apart from the tax rates. Bush was dealing with a recession. Tax receipts go down in a recession, not because tax rates go down, but because economic activity goes down. > [@Monocracy](#): > > This is the why i posted in the first place, and why i let my partisan wackery run loose. I have heard this argument from conservative pundits (and in this thread, among a list of conservative talking points), and it’s pure bullshit and it pisses me off. I hate the misuse of statistics. So why did you use the number of “tax receipts” and not “government receipts”? I’m not accusing you of dishonesty or lying through statistics. It just seems that you chose the number that best made your argument and ignored another number that would have made your argument weaker, and I’m wondering if you’ve got some neutral explanation. ---
**Author:** ![Caridwen](https://avatars.discourse-cdn.com/v4/letter/c/c89c15/32.png) [@Caridwen](https://boards.straightdope.com/u/Caridwen)\ **Post date:** [October 3, 2006, 2:51am UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/49 "2006-10-03T02:51:39Z")
All I know is we weren’t spending a billion dollars a month on a useless war 10 years ago. ---
**Author:** ![Squink](https://avatars.discourse-cdn.com/v4/letter/s/b5e925/32.png) [@Squink](https://boards.straightdope.com/u/Squink)\ **Post date:** [October 3, 2006, 3:13am UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/50 "2006-10-03T03:13:24Z")
[QUOTE=Caridwen] All I know is we weren’t spending a billion dollars a month on a useless war 10 years ago. [/QUOTE] Nor are we today. [Cost of Iraq war nearly $2b a week](http://www.boston.com/news/world/middleeast/articles/2006/09/28/cost_of_iraq_war_nearly_2b_a_week/) That’s $6.00 a week from every man woman and child in this great country of ours. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [October 3, 2006, 6:28pm UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/51 "2006-10-03T18:28:43Z")
Ford Motor announced ending 44 000 more jobs. Closing of 16 more plants. They did not say they were moving off shore. They are. As GM announced a plant closing last yeay a comperable plant opened in China. If it an be done cheaper off shore it will. We are just another market.Our standard of living will eventually have to reach the average across the globe. ---
**Author:** ![Caridwen](https://avatars.discourse-cdn.com/v4/letter/c/c89c15/32.png) [@Caridwen](https://boards.straightdope.com/u/Caridwen)\ **Post date:** [October 5, 2006, 1:03am UTC](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328/52 "2006-10-05T01:03:57Z")
[QUOTE=Squink] Nor are we today. [Cost of Iraq war nearly $2b a week](http://www.boston.com/news/world/middleeast/articles/2006/09/28/cost_of_iraq_war_nearly_2b_a_week/) That’s $6.00 a week from every man woman and child in this great country of ours. [/QUOTE] Thank you for that link. I hope you don’t mind if I use it. [Previous page](https://boards.straightdope.com/t/usa-better-or-worse-now-then-it-was-6-10-years-ago/374328.md?page=2)