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WASHINGTON: US treasury secretary John Snow said that recently enacted tax cuts will lead to a more vibrant economy and an improving employment picture by the fourth quarter of this year.
“We are going to see the jobless (rate) improve. We’re going to see people going back to work. We’re going to see higher growth rates. We’re going to see a more vibrant economy. And we’re going to see it by the fourth quarter of this year,” Mr Snow said in a taped interview with Fox News Channel that aired on Saturday.
from the House GOP Committee Central May 25, 2001:
The conference report to H.R. 1836 provides $1.35 trillion in tax relief to the American people. It eliminates the marriage penalty for most middle class taxpayers, eliminates the death tax by the year 2010, promotes long-term economic growth and short term-economic stimulus.
Generally, if you try something and you observe the results you should expect the same results when you try it again..... That is a lesson most of us learn by the time we are 2 years old....
Why should this be any different...
The tax cut of 2001 was supposed to improve the economy, get folks back to work etc....
It didn't...
Why should we expect another of the same to return any different results...
Originally posted by sarettah@Jun 8 2003, 04:23 PM The tax cut of 2001 was supposed to improve the economy, get folks back to work etc....
It didn't...
Why should we expect another of the same to return any different results...
IMHO, that tax cut was before 9/11, which in itself pretty much changed all the rules. I'd like to see what a tax cut WITHOUT a national disaster following it can do to stimulate the economy before I snub my nose at it.
"They" are always clamouring to get more of YOUR money, aren't they? It's all a great big conspiracy aimed directly at you.
The Bush tax cuts are about "not feeding the beast" - stimulating the economy is to taxes what WMD were to war in Iraq. Maybe kinda sorta they're there; we'll take whips of smoke and hints that it may work and proclaim it as hard fact.
That's just my public-school educated, non-gated-community, non Republican opinion.
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Originally posted by sarettah@Jun 8 2003, 03:23 PM Eliminates the death tax by the year 2010,
I don't plan on having anything left by the time I die so nothing will be left to take
(my son is more intelligent than I so I don't have to worry about leaving him anything)
If I was not going to have my carcass burnt (burying dead bodies is about the worst use of space I can think of, well beside politicians but how can you tell if they are alive anyway)
I would have my body planted face down with a mistletoe belt buckle on backward over my ass next to any treehugger organizational headquarters so all the treehuggers could kiss my cold dead ass every morning
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Treehuggers? When did treehuggers become the buzzword du jour for anyone to the right of Ghengis Kahn?
I mean, it doesn't surpise me much to see the graduate school students* on GFY use that as if it's some kind of insult with any meaning whatsoever, but it's been appearing more and more on Oprano. That's too bad.
* - Jethro Bodine School of Rocket Science and Soda Jerk Technology
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Originally posted by Serge_Oprano@Jun 8 2003, 05:17 PM Porndoggy,
with your knowledge of economics, politics,
common sense,
I would have opened my own business...
Whatever you say, sir.
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Originally posted by PornoDoggy@Jun 8 2003, 05:08 PM "They" are always clamouring to get more of YOUR money, aren't they? It's all a great big conspiracy aimed directly at you.
OK, then PD, when someone who paid ZERO dollars in Federal income taxes gets a $400 per dependent "refund", who else would that money come from if it's not coming from those of us that DID pay taxes into the fund?
I admit I'm not a math genius and in all honesty I can't balance my check book, but I DO know that this is the only time I've EVER heard of people getting a refund on something they never paid into in the first place.
Again, if you can explain to me how paying someone a refund on money they've never paid makes sense, I'm all ears.
Originally posted by sarettah@Jun 8 2003, 07:36 PM Just for the record in the 2001 tax cut/rebate folks who paid nothing in also were included in the ones who got checks...
That part is nothing new.
Are you sure? In reading this (and I could be ohsovery wrong ) , it sure doesn't look like people that had no taxable income were eligible:
The Economic Growth and Tax Relief Reconciliation Act of 2001 (H.R. 1836), passed by Congress in May 2001, includes changes in individual income tax rates. Under the legislation, a new 10% rate bracket is established that is retroactive to January 1, 2001. Technically, the benefit of the reduced rate for 2001 is delivered in the form of a tax credit equal to 5% of the taxpayer's 2001 taxable income, up to the top of the new 10% tax bracket range for taxable income. The range applies from the first dollar of taxable income to $6,000 for single individuals, $10,000 for heads-of-households, and $12,000 for married couples who file joint income tax returns. This means that those taxpayers who have taxable income equal to or exceeding the 10% bracket will receive a maximum credit of $300 in the case of single individuals, $500 for heads-of-households, and $600 for married taxpayers filing jointly. The legislation directs the Treasury Department to mail taxpayers rebate checks in anticipation of the 2001 tax reduction delivered by the credit. The checks will be calculated by the Treasury Department based on taxable income reported on tax returns for the 2000 tax year. When taxpayers file their 2001 tax returns, they will reconcile the credit to which they are entitled with the rebate check they received from the Treasury. Any difference between the rebate and the allowable credit will be provided in the form of a tax credit to offset the taxpayer's tax liability for 2001.
Look - I don't understand how you get a refund on taxes you haven't paid in the first place. I don't understand how the elimination of dividend taxes turned into the elimination of all taxes on some money either.
Even though I'm allegedly a "misguided moron" I do know Jack Shit - unfortunately, he doesn't understand the tax laws either. I have no doubt that I am just as mathmatically challenged as you, and am every bit as unhappy when I write out the tax checks. I'm also fucking pissed when I swipe my card at the local Shell station, buy my coffee at the local coffee house, get my groceries at the local grocery store, pay for shirts from Land's End, etc., etc., etc. I made this friggin' money - I want to keep it.
This thread started out about the premise that the tax cuts were about stimulating the economy. I think that's a red herring. I think that the tax cuts are idealogically motivated, and don't really have much to do with stimulating the economy.
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Originally posted by PornoDoggy@Jun 8 2003, 06:47 PM
This thread started out about the premise that the tax cuts were about stimulating the economy. I think that's a red herring. I think that the tax cuts are idealogically motivated, and don't really have much to do with stimulating the economy.
so, you never heard about "Supply Side" economics?
which part of your life expereince and background prepared you for economics debate, especially when and if you clearly state, and nobody disputes that,
that you don't know shit about economics and never had any formal education on the subject?
Tax cuts increase GDP as long as any of the money not paid in taxes is spent. It's right there in the GDP as "Personal consumption expenditures" and "Gross private domestic investment". As long as all of a tax cut is not saved, there will be some increase in GDP by simple definition. To what degree tax cuts will stimulate ethe economy by expanding GDP is the debate rather than whether tax cuts will stimulate the economy. Take an economist like Joseph Stiglitz, for example. Stiglitz was a primary economics advisor to Clinton and a Nobel prize winner in economics. He signed the statement against Bush' tax plan. He wrote a good book on the IMF called "Globalization and its Discontents". In that book he comments on the success of the Keynesian model (cut taxes and increase spending). Now what he is opposed to in the Bush plan is the distribution of tax cuts not the idea of a tax cut itself. (He is also opposed to a permanent tax cut).
One of the most debated questions in economics is how to get the best multiplier for a tax cut. Every dollar is spent more than once. I buy a $2500 television. The guy that owns the store then turns around and invests part of that, distributes some to employees, etc. etc. One dollar is spent many times.
As far as experiments go, the difficulty is no one knows what the economics situation would have been without the stimulus. If one cuts taxes and the economy increases .5%. Who is to say that without the stimulus the economy would have been at -1%?
A simpler example is on the government spending side. If the economy was on pace for -1% but government increases enough to increase the GDP by more than 1% (about $100 billion) then one avoids a recession.
I think were seeing that right now.
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I would think that even if the money you get in a tax cut is saved, it would do something for the economy, unless you're saving it in your mattress. Otherwise it's in the bank or an investment and being used for something.
arguing about economics is about as fruitful as arguing about abortion. if there was a clear formula to execute against, we would be using it. so making an argument for or against is pretty much as waste of time because their is no right or wrong answer. economics is based on theory more than anything because and economy is based on countless critical factors that are all highly fluid and in a constant state of flux. The US Dollar can become worthless tomorrow if people think its worthless and for no other reason. thats how fickle an economy is.
Reagans tax cuts did not stimulate the economy?
life is a matter of perspective. if you look for the bad in something, you will only see the bad in it. if you look for the negative in something, you will only see the negative.
if you are trying to prove something by focusing on half the argument by using half the evidence and half of the facts, then it is not difficult to build a convincing case. it happens all day long, everyday on CSPAN and talk radio. it happens all day long between Republicans and Democrats. Missinformation happens all day long between Republicans and Democrats.
people can argue anyway they want, but i think its safe to assume that the majority of people dont want to pay more in taxes and they want more money back. if nothing else, its just good politics and a popular move. Its going to be even more funny when the tax cuts expire and not voting to continue them will be promoted as one side wanting to raise taxes.
Originally posted by sarettah@Jun 8 2003, 06:36 PM Just for the record in the 2001 tax cut/rebate folks who paid nothing in also were included in the ones who got checks...
thats not true
those that didnt file an income tax statement for the year 2000 did NOT receive any tax rebate checks in 2001
I've been reading this thread; and I disagree with Pd on practically everything he has posted, especially when he says he knows Jack Shit.
The idea that taking money from those who EARN it and giving it to those who DON'T earn it is going to help the economy is straight out of the Liberal playbook. Do that for awhile, and you lose the people who pay all the bills. You also create a class of people who believe that they are 'entitled' to whatever they desire at someone else's expense.
As for stimulating the economy by cutting taxes, before JFK cut taxes, the top tax rate was 90%. He cut that to 70%, and got an immediate economic surge. Reagan's tax cut almost doubled the gov't's revenues because of the increased economic activity. In fact, the budget would have been balanced right then, except that the Democratically-controlled Congress insisted on spending $1.83 for every $1.00 of increased revenues.
Since Clinton left office, it has become known that the 'prosperity' he claims credit for was mostly on paper; and was created in much the same way that Enron, Worldcom, Global Crossing, and other sudden failures created their rosy profit picture.
Face it, the Constitution is a fixed framework; but the economy is a living thing. There is no big pie to be divided up. Each of us makes his own pie. In other words, zero-sum economics is a Marxist pipe dream.
I hear the phrase 'if the money people get to keep is spent'. The only way that money is NOT spent is if someone digs a hole and buries it or tucks it under their mattress. If it is put in a bank, the bank spends it (and gets a very handsome return). If it is invested in the market or in a business, it is still 'spent' (kept in circulation).
Think about this: How many salaries could the tax savings to a company pay?
Ideological...More Liberal BS. Morally, it is wrong for ANYONE to take my hard-earned money and give it to someone else. Even more immoral is using it to buy votes to try to turn this into a Socialist/Communist country.
Get rid of the idea that Something For Nothing is possible; and watch this country prosper. What the HELL do you think got us here (and the USSR whereever it is). Yeah, lots of people claim to hate us; but they still risk their lives to get here. They still turn to us when they need help.
When I was still trying to get back into the computer maintenance field, I was advised by an employment counselor that I might have to make my own job. I did. I was broke and on my ass, but I did that. Nobody was gonna give me a living. Nobody OWED me a living.
Remember this: WE are the economy. WE earn the money. We spend it. Take our money away; and you stifle the economy.
As far as experiments go, the difficulty is no one knows what the economics situation would have been without the stimulus. If one cuts taxes and the economy increases .5%. Who is to say that without the stimulus the economy would have been at -1%?
In 17 years of trading markets and watching economic numbers hit the marketplace, the one thing I know for certain is that the market and the economy do not always respond to the stimulus or news they way they are supposed to.
Sometimes, it is is already built into the marketplace, sometimes the "expected result" appears well after the stimulus and sometimes it never appears.
I think JR is accurate for the most part with "economics is based on theory more than anything because and economy is based on countless critical factors that are all highly fluid and in a constant state of flux."
To me, the irrational things that markets and economies display is the result of mass psychology. When mass social psychology is moving in one direction, it is hard to change it with a stimulus policy.
Originally posted by Torone@Jun 9 2003, 06:36 AM Since Clinton left office, it has become known that the 'prosperity' he claims credit for was mostly on paper; and was created in much the same way that Enron, Worldcom, Global Crossing, and other sudden failures created their rosy profit picture.
Money is made out of paper.
Real people had real jobs and made real money. The GDP really increased and unemployment really was low.
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Agreed, Wig. This is why we can very state simple things instead like "Increased government spending increases GDP because governmental spending is a component of GDP". That's not theory, it's definition. :-)
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Originally posted by PornoDoggy@Jun 8 2003, 04:08 PM "They" are always clamouring to get more of YOUR money, aren't they? It's all a great big conspiracy aimed directly at you.
The Bush tax cuts are about "not feeding the beast" - stimulating the economy is to taxes what WMD were to war in Iraq. Maybe kinda sorta they're there; we'll take whips of smoke and hints that it may work and proclaim it as hard fact.
That's just my public-school educated, non-gated-community, non Republican opinion.
And, I'll agree here with PD, except I will add that it is both Liberals and Conservatives that give "smoke and hints that it may work and proclaim it as hard fact."
The fact is, they are both pandering to a block of voters. Whether they truly believe in their individal economic theories is a moot point.
Their only REAL goal is to attain or keep power.
I certainly believe that Government Forced redistribution of wealth is wrong, but so is overspending and waste.
Conervatives like Bush run on a platform of smaller central government and more local control and then do the exact opposite. Democrats never have seen a spending bill they didn't like.
Both the Democrats and the Conservatives are concerned with POWER and CONTROL first! Neither has your individual best interest in mind prior to this.
If anybody was really interested in a better economy, they would dismantle the Federal Gov't down to an appropriate size and eliminate the WASTE!
US government expenditures have been in a very narrow range around 20% of GDP my entire life. Regardless of whether it is Republicans or Democrats occupying the White House and regardless of whether that occupier is "big government" or "small government" the bottom line doesn't seem to change much.
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Originally posted by Colin@Jun 9 2003, 07:14 AM Agreed, Wig. This is why we can very state simple things instead like "Increased government spending increases GDP because governmental spending is a component of GDP". That's not theory, it's definition. :-)
Colin, Agreed!
The question then becomes.... Does this increase in GDP actually have a positive effect on the taxpayer??
My thought is that since the government cannot spend the money wisely (let alone account for it all), the answer is no. But, I agree that this is my subjective opinion.
Originally posted by Colin@Jun 9 2003, 07:25 AM US government expenditures have been in a very narrow range around 20% of GDP my entire life. Regardless of whether it is Republicans or Democrats occupying the White House and regardless of whether that occupier is "big government" or "small government" the bottom line doesn't seem to change much.
Colin, IMHO, what you have described is that both parties (or the combination) spend the same and are consistent in their spending.
The question is whether that 20% of GDP is excessive or not?
What is we could run on 10% of GDP? Would the other 10% in liquidity make a difference?
Originally posted by Torone@Jun 9 2003, 03:36 AM I've been reading this thread; and I disagree with Pd on practically everything he has posted, especially when he says he knows Jack Shit.
The idea that taking money from those who EARN it and giving it to those who DON'T earn it is going to help the economy is straight out of the Liberal playbook. Do that for awhile, and you lose the people who pay all the bills. You also create a class of people who believe that they are 'entitled' to whatever they desire at someone else's expense.
As for stimulating the economy by cutting taxes, before JFK cut taxes, the top tax rate was 90%. He cut that to 70%, and got an immediate economic surge. Reagan's tax cut almost doubled the gov't's revenues because of the increased economic activity. In fact, the budget would have been balanced right then, except that the Democratically-controlled Congress insisted on spending $1.83 for every $1.00 of increased revenues.
Since Clinton left office, it has become known that the 'prosperity' he claims credit for was mostly on paper; and was created in much the same way that Enron, Worldcom, Global Crossing, and other sudden failures created their rosy profit picture.
Face it, the Constitution is a fixed framework; but the economy is a living thing. There is no big pie to be divided up. Each of us makes his own pie. In other words, zero-sum economics is a Marxist pipe dream.
I hear the phrase 'if the money people get to keep is spent'. The only way that money is NOT spent is if someone digs a hole and buries it or tucks it under their mattress. If it is put in a bank, the bank spends it (and gets a very handsome return). If it is invested in the market or in a business, it is still 'spent' (kept in circulation).
Think about this: How many salaries could the tax savings to a company pay?
Ideological...More Liberal BS. Morally, it is wrong for ANYONE to take my hard-earned money and give it to someone else. Even more immoral is using it to buy votes to try to turn this into a Socialist/Communist country.
Get rid of the idea that Something For Nothing is possible; and watch this country prosper. What the HELL do you think got us here (and the USSR whereever it is). Yeah, lots of people claim to hate us; but they still risk their lives to get here. They still turn to us when they need help.
When I was still trying to get back into the computer maintenance field, I was advised by an employment counselor that I might have to make my own job. I did. I was broke and on my ass, but I did that. Nobody was gonna give me a living. Nobody OWED me a living.
Remember this: WE are the economy. WE earn the money. We spend it. Take our money away; and you stifle the economy.
hehe.. quoting Sean Hannity almost word for word and you threw in some Rush Limbaugh.
when you post Torone, you should put it in quotes.
Originally posted by wig@Jun 9 2003, 07:26 AM The question then becomes.... Does this increase in GDP actually have a positive effect on the taxpayer??
Good question. No one knows. (Back to JR).
I think we've come a long way towards knowing how to minimize the damaging effects of economic cycles. Ever since Keynes, depressions have been much less frequent and much less damaging than the ones of the late 19th and early 20th centuries.
Deficit spending is an interesting success story. During the depression the paradigm was to balance the budget and a difficult lesson was learned from that. Tax revenues continually decreased because incomes dropped and so tax rates were raised every year in order to balance the budget. Rising taxes cut consumer spending and investment and it was a real ugly loop that resulted.
Lesson learned. Deficit spend during recessions. A completely laissez-faire economy sounds so beautiful and elegant in practice but as you alluded to people and markets are not rational and as you flat out out stated "the market and the economy do not always respond to the stimulus or news they way they are supposed to."
So deficit spend during economic downturns seems the reasonable way to play the game. One could adopt the laissez-faire doctrine and wait for the markets and economy to 'correct themselves" but who thinks a generation should suffer through a depression-like economy waiting for the inevitable correction? Not me.
What should economic policy be during good times then? Are we doing it right? Who knows? Maybe we've found the right balance now. US federal debt is about 62% of GDP (I thinks an updated figure or close enough) . In the mid-1990's it was 74%.
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Originally posted by wig@Jun 9 2003, 07:32 AM Colin, IMHO, what you have described is that both parties (or the combination) spend the same and are consistent in their spending.
The question is whether that 20% of GDP is excessive or not?
What is we could run on 10% of GDP? Would the other 10% in liquidity make a difference?
Well, you know I would like it to be less. :-) From a philosophical standpoint.
Excessive in philosophy or excessive practically (increased government debt, etc)?
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Jr,
"hehe.. quoting Sean Hannity almost word for word and you threw in some Rush Limbaugh.
when you post Torone, you should put it in quotes."
That's doing pretty good, considering I get no time to listen to either one. We must all be doing the research (and doing it properly, i.e. somewhere bedised CNN, Reuters, et al).
Wig,
"Economic cycles have become more pronounced because we took away the stabalizing mechanism when we switched to a fiat currency."
On that we can agree...I have always said that Watergate was unimportant; and that the worst thing Nixon did was taking us off the gold standard w/o substituting something else. Our dollar is now subject to world opinion, making it vulnerable to forces from within and from outside.
And, I will go out on a limb and predict that the equity markets and economy will visit the extreme opposite to what we witnessed the last two decades BEFORE we experience another round of prosperity like that again.
As the saying goes... It's not if, but when. h34r:
Originally posted by wig@Jun 9 2003, 08:06 AM Economic cycles have become more pronounced because we took away the stabalizing mechanism when we switched to a fiat currency.
What used to be small ripples of overgrowth and recession are now swings to the extremes.
During prosperity this is great, but it is equally devastating during the downturn.
The ebb and flow is still there, it is just with more amplitude and perhaps elongated cycles.
I see the opposite. We've had nothing like the bust of the 1930s or those of the late 1800s and nowhere near the frequency of the pre-depression recessions. A post WW II recession is a 2-4% drop in GDP and a 10% unemployment rate. Not bad at all compared to the recessions of old.
Of course, the gold standard itself is arbitrary (yellow metal) and had it's own problems.
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Originally posted by wig@Jun 9 2003, 09:47 AM The bust in the 30's was due to the fiat currency scenario which started with the creation of the Federal Reserve in 1914 and the easy money that followed.
This was then followed by the confiscation of gold in 1933.
I agree that the frequency has declined, which is what I meant by elongated cycles.
I do not think we have had the amplitude in expansions and contractions prior to the fiat system.
And of course there are many more theories than that out there. I rather suspect a combination of factors.
I just read John Kenneth Galbraith's "The Great Crash" a few weeks ago in which he contradicts that. There is a chapter at the end titled "Cause and Consequence" in which he points out that credit has been easy many times before and after without causing a similar boom and bust. Furthermore, he says, "money, by the ordinary tests, was tight in the late 1920s".
I would argue that the system of fractional reserve banking and fiat money has been quite successful. Life is good. If the creation of the federal reserve was the cause of the depression, how have we done so well since then?
I think one would find the amplitudes of the booms and busts in GNP pre-depression to be about twice that of the post-recession booms and busts. Maybe for other good reasons but difficult to know.
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There is a chapter at the end titled "Cause and Consequence" in which he points out that credit has been easy many times before and after without causing a similar boom and bust. Furthermore, he says, "money, by the ordinary tests, was tight in the late 1920s".
Okay, so in the early part of the expansion money was real easy and then they tightened it at the end (to try and cool it down) and the inevitable happened??
The Fed was created on the heels of the 1907 banking crisis. The idea was to always have enough liquidity to fend off recession (and worse, a run on deposits). Some say this crisis was "helped along" to support a central bank creation. Central banking certainly was not invented here and it was something the founding fathers tried to avoid.
Quote:
I would argue that the system of fractional reserve banking and fiat money has been quite successful. Life is good. If the creation of the federal reserve was the cause of the depression, how have we done so well since then?
The fed did not cause the depression in and of itself. It did create an environment where the normal balances could get further out of wack because it gave HUMANS more ability to try and manipulate economies.
IMO, the creation of the Fed and paper money elongates expansion and contraction and increases the amplitude.
You simply cannot create greater prosperity (expansion) through paper money and deficit spending without being subject to the same degree of amplitude on the contraction.
06-08-2003
) , it sure doesn't look like people that had no taxable income were eligible:
h34r:
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