« Widethpread Mithogyny Alert | Main | Women Voters As A Destabilizing Social Force »

May 29, 2008

Obama as Robin Hood: Why Soaking the Rich Doesn't Work

For months now, Barack Obama has been campaigning as a latter-day Robin Hood. He touts a vision of an America in which he will take from the evil rich and give liberally (pun fully intended) to the worthy poor:

John McCain has served his country with honor, and I respect that service. But for two decades, he has supported policies that have shifted the burden on to working people. And his only answer to the problems created by George Bush’s policies is to give them another four years to fail. Just look at where he stands and you’ll see that a vote for John McCain is a vote for George Bush’s third term.

Four more years of George Bush’s tax cuts for the wealthiest Americans who don’t need them and didn’t ask for them.

Four more years of a health care plan that works for the healthy and the wealthy while tens of millions go without care, and families struggle with rising costs.

...Four more years of a White House that is run by the kind of lobbyists who run John McCain’s campaign, while Washington tells the American people – “you’re on your own.”

... We can’t continue an economic program that rewards Wall Street at the expense of Main Street because then we all end up hurting. It’s time to end a failed approach that tries to build prosperity from the top down, and renew our common prosperity from the bottom up.

Instead of a tax code that rewards wealth and not work, we’ll provide an income tax cut of up to $1,000 for a working family, and eliminate income taxes altogether for any retiree making less than $50,000 per year.

Instead of more inaction on health care, we’ll finally bring this country together, stand up to the drug companies and insurance companies, and make health care affordable and accessible for every single American.

Instead of putting a secure retirement at risk, we’ll safeguard Social Security, we’ll protect pensions instead of CEO bonuses, and we’ll help all Americans save more so they can have a retirement that is dignified and secure.

But what would Obama's hopeful change really look like? Steve Moore got out his calculator to find out:

Obama would like voters to believe that he's the second coming of JFK. But with his unbelievable spending and new-government-agency proposals he's looking more and more like Jimmy Carter. His is a "Grow the Government Bureaucracy Plan," and it's totally at odds with investment and business.

corporate.gifObama says he wants U.S. corporations to stop "shipping jobs overseas" and bring their cash back home. But if he really wanted U.S. companies to keep more of their profits in the states he'd be calling for a reduction in the corporate tax rate. Why isn't he demanding an end to the double-taxation of corporate earnings? It's simple: He wants higher taxes, too.

The Wall Street Journal's Steve Moore has done the math on Obama's tax plan. He says it will add up to a 39.6 percent personal income tax, a 52.2 percent combined income and payroll tax, a 28 percent capital-gains tax, a 39.6 percent dividends tax, and a 55 percent estate tax.

Not only is Obama the big-spending candidate, he's also the very-high-tax candidate. And what he wants to tax is capital.

Doesn't Obama understand the vital role of capital formation in creating businesses and jobs? Doesn't he understand that without capital, businesses can't expand their operations and hire more workers?

Moore is spot on. Obama's 'big money' rhetoric may be popular with disgruntled voters, but it doesn't survive a collision with the facts. Let's look at what has actually happened to tax revenues in the wake of the evil Bush administration's reduction on corporate income tax. As the chart above shows, tax receipts as a percentage of GDP increased - yet Obama can't wait to close off those horrid "loopholes" that are allowing the economy to grow and corporations to invest and hire more workers.

soak_rich.gif But the worst thing about Barack Obama's vision for change is that, like most of the Reality Based Community's plans for changing the world, it isn't based on anything even remotely resembling reality. Unfortunately for this latter-day Robin Hood, contrary to popular opinion decades worth of data show little correlation between changes in the tax rate and tax revenues. What does appear to increase tax revenues is stimulating the economy, and you don't do that by taking money out of the hands of those who have the greatest ability to produce wealth and giving it to those who are the least efficient at doing so:

The data show that the tax yield (revenues divided by GDP) has been independent of marginal tax rates from 1950 to 2007 (see chart above), but tax revenue is directly proportional to GDP. So if we want to increase tax revenue, we need to increase GDP.

What happens if we instead raise tax rates? Economists of all persuasions accept that a tax rate hike will reduce GDP, in which case Hauser's Law says it will also lower tax revenue. That's a highly inconvenient truth for redistributive tax policy, and it flies in the face of deeply felt beliefs about social justice. It would surely be unpopular today with those presidential candidates who plan to raise tax rates on the rich – if they knew about it.

Sadly for the Barack Obamas of this world, reality can sometimes spoil a perfectly good campaign promise. The question then becomes, are they willing to look at the hard data on income redistribution, even if it flies in the face of their cherished theories?

Will increasing tax rates on the rich increase revenues, as Barack Obama hopes, or hold back the economy, as John McCain fears? Or both?

Mr. Hauser uncovered the means to answer these questions definitively. On this page in 1993, he stated that "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP." What a pity that his discovery has not been more widely disseminated.

The chart nearby, updating the evidence to 2007, confirms Hauser's Law. The federal tax "yield" (revenues divided by GDP) has remained close to 19.5%, even as the top tax bracket was brought down from 91% to the present 35%. This is what scientists call an "independence theorem," and it cuts the Gordian Knot of tax policy debate.

The truth is out there. The question is whether Barack Obama is interested (and brave enough) to find it.

CWCID: OBH for the Carpe Diem link. Oddly enough, I'd seen the same chart along with a bunch of others this morning on the Heritage.org site, but reading that post really got me thinking!


Posted by Cassandra at May 29, 2008 08:10 AM

Trackback Pings

TrackBack URL for this entry:
http://www.villainouscompany.com/mt/mt-tb.cgi/2168

Comments

If Obama is Robin Hood, can I be Little John? Will I get to wack him with my quarterstaff and dump him in the river?

Oh, who am I kidding. With my middle-aged girth I am closer to Friar Tuck (shakes fist at the indignities caused by time).

Also, that nancy-boy Will Scarlet just flat out gives me the creeps (No, you may not "strum my lute").

Posted by: a former european at May 29, 2008 10:58 PM

Nothing wrong with a life as the Holy Clerk of Copmanhurst. If that's the worst time has in store for you, enjoy the pasty and sack.

Posted by: Grim at May 30, 2008 12:07 AM

Of course Steven Moore, and by association, you, would obfuscate the facts you don't reveal. The Bush Tax program reduced taxes for certain income brackets (as a percentage), as well as providing tax advantages to corporations. He didn't necessarily give them tax percentage cuts, but provided them with great opportunity to earn record profits while average income earning citizens paid a fairly similar rate, and received no economic benefit (better paying jobs, more jobs, profit sharing) for those record corporate profits.

This from the CBO:

Corporate Income Tax Revenues. Roughly two-thirds of the increase of 1.5 percentage points in corporate income taxes relative to GDP can be attributed to increases in corporate profits, according to current measures in the national income and product accounts (NIPAs). With the effects of legislation excluded, NIPA profits before taxes increased from about 9 percent of GDP in 2003 to about 13 percent in 2006, which, at prevailing tax rates, boosted corporate revenues by roughly 1.0 percentage point relative to GDP. In addition, legislation directly increased corporate tax receipts by 0.2 percentage points of GDP, mainly by the establishment and subsequent expiration of provisions that allowed partial expensing of investment in equipment; those provisions first reduced, and then increased, the tax base upon which the corporate tax is levied. The remaining 0.2 percentage-point increase in corporate tax revenues relative to GDP is explained by other factors that influenced the effective tax rate on profits, such as capital gains realizations by corporations.

In 2007, Chevron reported an $18.7 Billion profit, 9% higher than 2006. And that beat record profits in '05 and '06. The tax increase, much like part of Clinton's last term in office were due to record corporate profits. Only difference was that up to the last year of Clinton's term, we all seemed to be in a different economic situation.

Posted by: Miguel Sanchez at May 30, 2008 01:17 AM

Having read all that, Mr. Sanchez, I'm not sure I'm tracking your point. Cassandra said that 'if you cut tax rates, more money is made, which leads to more actual tax receipts. You say, 'No, what happened is that cutting tax rates let corporations increase their profits, which led to the bulk of the increase in tax receipts.'

But there is no clear distinction between "more money is made" and "corporations had higher profits." It's the same thing. Cutting taxes improves the economy -- for corporations as well as human people.

Am I missing something that you're trying to say? It doesn't seem odd to me that corporations should make the majority of the additional money, because corporations are legal entities organized for no other purpose than pursuing profit. If my family's sole function was to make me money, we'd make a lot more of it -- I'd have the wife working full time, and the boy farmed out to a copper mine. But that isn't the point of a family, and so a familiy often responds to better economic times by doing less work, choosing time over money; which means that, naturally, corporate bodies that always attempt to make economic choices will turn out on the high side when compared to families that often make noneconomic choices.

Posted by: Grim at May 30, 2008 10:33 AM

I came away from the comment made by Mr. Sanchez with the impression that he is not enthused that the Federal government does not have more control over "better paying jobs, more jobs, profit sharing" and "record corporate profits".

Is that the point of your comment Mr. Sanchez? If not, then like Grim, I'm lost wrt the point you are trying to make.

Posted by: bthun at May 30, 2008 11:28 AM

Grim, I appreciate a logical response from you always. Seems Bthun wishes to draw conclusions which suit his politics.

My point is the purpose of tax cuts is to create an economic stimulus. The Whitehouse point was it would create more jobs, and create better economic climate for all. If one reads the CBO report, corporate entities were allowed certain benefits which helped to drive profits. Whatever the definition provided to a corporation, the Bush program specified that it would improve the economic lives of all citizens. During the time frame discussed, most if not all economic trends and indications declined for most wage earners. Thus, the conclusion that can be drawn is that this package, in this economic time, heavily favored corporate entities to earn record profits at a time when the rest of the country (wage earners) is struggling, and consumable goods are increasing in cost.

I did not say that there is collusion between Whitehouse policy and corporate profit, but it appears the policies are quite favorable to those entities. Consider as well the relationships the administration officials have to oil, and the profits of big oil. Believe me, the current Democratic controlled Congress is equally benefiting from this record corporate profits, for they too have relationships with industry.

During Bill Clinton's last term, his tax receipt bonanza was driven by profits in the hi-tech sector. The difference was timing. That time experienced a huge increase in new industries and over valuation of stock. Most Americans benefited from the time. Even the Federal Gov't benefitted by recording a surplus, not a deficit directed by a Republican Congress.

The Bush admins focus on a different economic sector provided benefit to that sector, but not such a benefit to most wage earners. In other words, these policies benefited one sector, but did not provide any benefit to American wage earners. In other words, it failed to reach its stated goal.

Posted by: Miguel at May 30, 2008 12:35 PM

When you clearly state your message Mr. Sanchez I do not have to guess at your meaning.

Since record corporate profits which btw keep corporations in the black thus making it possible to retain employees, give raises and bonuses to those employees, stimulate arterial business all the while compounding tax revenue is apparently not sufficient or satisfactory, I have to ask you, what alternatives in legislation, the tax code, or US policy might you suggest Mr. Sanchez?

Posted by: bthun at May 30, 2008 01:02 PM

m I missing something that you're trying to say?

For M Sanders to be happy, everybody else must be miserable and suffering. I believe that sums it up.

Posted by: Ymarsakar at May 31, 2008 01:18 AM

As you attempt to bait me into a polemic discussion, I would suggest that you look at the success and merits of the Bush plan, not the notion that lower taxes for corporate entities lead to better jobs and a thriving economy (that is the theoretical position of supply-side economic theory foisted by the U of Chicago folks). In this case (the Bush plan), it has failed for most Americans. As far as retaining employees, giving raises and bonuses, and stimulating ecomomic growth, I suggest you look at the data of the past 6-7 years and see if those goals were reached. Do you recall massive corporate lay-offs in multiple sectors over this period? I do. As for growth and stimulus, the Bush numbers are about equal with his father's, taking into account the redefining of unemployment, GDP and growth. But you don't need to go to such trouble in analysis...just ask folks in Iowa, or Texas, or California (in the $40K-80K income bracket) whether they are better off.

As to clarity, your first statement Bthun was I was unclear. In your last statement, you claim I was very clear. Why the feigned confusion the first time around?
As to Y Guy, I am not happy about the current suffering, but I'm sure the Whitehouse is. They are the one's causing the suffering. Them and a neutered, compliant Congress.

Posted by: Miguel at May 31, 2008 02:40 PM

A polemic discussion? I thought that was what your were after Mr. Sanchez.

You first comment was,

"Of course Steven Moore, and by association, you, would obfuscate the facts you don't reveal. The Bush Tax program reduced taxes for certain income brackets (as a percentage), as well as providing tax advantages to corporations."
Mr. Sanchez. So, we have tax reductions provided for certain income levels and corporations. Taxpayers keep more of their earnings. This is bad? And I was not sure how to interpret (assumptions leading where they do) the part about
" He didn't necessarily give them tax percentage cuts, but provided them with great opportunity to earn record profits while average income earning citizens paid a fairly similar rate, and received no economic benefit (better paying jobs, more jobs, profit sharing) for those record corporate profits.
unless you think that the government should be insuring that the average citizen's economic health improves in some way other than allowing citizens and business to keep more of their earnings and ease government regulation where prudent and effective. Or that the government should assume more direct control over business ala Maxine Waters desire to socialize Big Oil and control individuals thru taxation, regulation, mandated participation in state sanctioned health care, etc.

"My point is the purpose of tax cuts is to create an economic stimulus. The Whitehouse point was it would create more jobs, and create better economic climate for all. If one reads the CBO report, corporate entities were allowed certain benefits which helped to drive profits."
And this is the statement you made in your second comment that allowed me to say that you were clear(er)... or that my perception of you point improved.
"I would suggest that you look at the success and merits of the Bush plan, not the notion that lower taxes for corporate entities lead to better jobs and a thriving economy (that is the theoretical position of supply-side economic theory foisted by the U of Chicago folks). In this case (the Bush plan), it has failed for most Americans."

Please correct me if I am wrong, but does not the US Congress legislate the budget and any changes to the tax code? And far as the government taxing individuals and business to prosperity, nope I don't believe in it.

And yes I worked in Corporate America for close to thirty years. I watched as friends and associates were dismissed from their positions during bad economic cycles. That is the way of it. I have seen the cycles go up and fall down. Adapt and grow, or stagnate and be left behind. And sometimes, karma just sux.

I may be just an old geezer, but I've always thought that if you were not making headway in pursuit of your goals, you might need to reexamine your efforts and where you expend your energy. If you do not receive a raise you feel is deserved, talk to the boss, find another job, another opportunity or start a business... Do something beyond blaming the POTUS for your woes.

Cheers,

Posted by: bthun at May 31, 2008 03:46 PM

All I know is that under the Bush tax cuts my take home pay got bigger, i.e. I got to keep more of my money. Ergo, my tax bill went down. And I am right in the middle of the middle class demographic for earnings.

Posted by: Robohobo at June 1, 2008 01:39 AM

Read the CBO folks. They aren't discussing ideology, they are stating what has happened. The last two comments avoid the current truth we live in. Economically, times are not rosy. Sure some people exercise more caution, frugality and practicality in their economic decisions. Thus, they insulate themselves from economic downturns. Current evidence would support the majority of Americans are not doing that and as a result are strapped. I suggest you watch the film "The Corporation". Milton Freidman is a relatively prominent figure interviewed in the movie. I think Milton Freidman was a genius. Yet, his theories have yet to be realized fully. The Bush tax plan did not work for a number of reasons.

The original point of my comment was the post had indicated that Obama's plan would not work because taxing wealthy individuals more doesn't work. The premise was that by lowering the tax burden of both individuals and corporations, we have higher tax receipts from corporations and better times. What is not mentioned is why those tax receipts occurred. The answer lies in the CBO report; corporate tax rules where changed to benefit the corporations to record profits, yet at the same time (contrary to the premise), the American citizenry on the whole declined in real earnings and in savings, actually moving in a negative direction.

Certain conservatives are in favor of a flat tax that would eliminate Fed. income taxation on anyone making under a certain threshold (say $40K)
When an idea like that is instituted, then we are looking at a system that would benefit most individuals, and allow corporate entities to abide by similar rules, and potentially still reap large profits. Then we may see Mr. Freidman's ideas come to fruition.

Finally, I am always amazed when something goes right during an administration's term, the credit always goes to the President's leadership (this includes liberals as well...por ejemplo, Clinton's terms). HOwever, when things go wrong, or poor decisions are made, it is never the responsibility or fault of the President. Case in point, Clinton supporters gave him credit for the boom of the mid to late 90s, yet blamed the Rep. Congress for cuts in public welfare spending. In actuality, they both were responsible for policies which helped the economy, and it was the Clinton plan which David Gergen assisted in outlining which allowed him to be reelected and cut welfare spending.

Remember, the conservatives had control of both houses by majority for 4 years (early Bush term), and this is when many of these decisions were made. Both for war, war funding, appropriation bills, and tax laws. And with that purity in numbers, the current course was set.

Why

Posted by: Miguel at June 1, 2008 03:26 PM

Miguel,

I suggest that you know nothing of me or the reality of my working/economic life, but if I have said anything that is not correct, please feel free to point it out. I would also be willing to wager that most of the VC readership understands who is responsible for what in our government, without the aid of your pointers.

Pointing out the failure of others is a national pastime, and one that is not very interesting when it is not followed with alternative solutions offered by the person sharing the criticism. So I'll ask you again, tell me what exactly, you would do differently if you were the POTUS? I believe that was the question I asked you after reading your rather cryptic first comment and your follow up comment.

And you can start as POTUS 42 considering Welfare Reform and move right on through to the present if you wish... Provided of course Milady Cass does not throunce you. If you can not do that, I'll not take the time to respond to you again, and instead I'll wish you a good day.

Posted by: bthun at June 1, 2008 04:34 PM

Oh yeah, instilling individual responsibility for ones own fiscal conduct, professional growth, or even job, much less satisfaction plus legislating a flat tax is beyond the scope of what a US President can do... unless I am mistaken.

Posted by: bthun at June 1, 2008 04:45 PM

As to Y Guy, I am not happy about the current suffering, but I'm sure the Whitehouse is.

The white house is way above your pay grade, as has been attested to given your cowardice in the face of BT's challenges.

Posted by: Ymarsakar at June 1, 2008 08:08 PM

I am sorry if you take personal umbrage to my statements. If you read, I made no comment to you personally. I made a comment regarding the standard of the economy as it relates on a whole in this nation. And my comment about avoiding the current truth is relative to the only responses which seem to appear and say that all is good. I feel their is a fair share of denial if that is the position. And you didn't ask me what I would do....you said I should do something other than blame the Prez. And to be clear, I am not in woe. I actually am one of the frugal ones who has been able to protect himself. As well, I contribute often to everything from churches, to soup kitchens, to Center for American Progress, to

Posted by: Miguel at June 1, 2008 11:50 PM

Sorry hit send....to Boys and Girls Club. I see everyday the hardship Americans face when attempting to make a buck. I see the struggle of people trying to educate their children. The sacrifices they make . It is not a flourishing economic times.

The Prez sure can advocate a flat tax system, if he can convince Congress and Senate of these things. Steve Forbes had advocated that. Unfortunately, our government and lobbyists are not interested in new ideas, so your challenge, while fair and "what if" is really irrelevant. There are good ideas with both Conservative minds and liberal minds, but the ideas that might reshape our nation are not to the liking of profiteers, think tankers driving public policy for special interest, and welfare state proponents who aren't willing to make radical changes which might provide a new frontier for all entities, personal or corporate.

Originally, you asked me about tax policy and I responded. I wasn't giving pointers, I was referring to the CBO which is a factual report of the result of the tax laws in place, and what is occurring in our country. When I put that forward and surmised that based upon the information at hand, the plan hasn't worked, I was hit with ideological responses. So, I've answered your question (I advocate a flat tax), now answer me if you would: if you believe that the economy is great now (and for the last 5-6 years after the Bush tax plan), how do you explain the bleak report of the state of our economy? As well, if you believe the policies of the past 8 years have helped our country, please explain how?

Interesting website: http://www.economyincrisis.org/

Posted by: Miguel at June 2, 2008 12:06 AM

This is something I agree with. From the Brookings Institute

* commit to a balanced budget
* take every reasonable step to constrain the rising cost of heath care and retirement programs Social Security and, most especially, Medicare
* make clear to Americans that taxes cannot be cut over the long-term unless programs are cut commensurately, and
* prevent total spending, taxes, or debt from reaching levels that could reduce economic growth and future standards of living.

Is this so contrary? Sounds like fiscally conservative ideals.

This is something Bob Barr advocates, as well as getting out of Iraq. I am not a fan of Bob Barr, but he seems to be making more sense then John McCain.

Posted by: Miguel at June 2, 2008 12:13 AM

A few more tidbits about our economy.

"Moreover households lost net worth in three of the last 10 years (the three years following the "dot-com" collapse that began in 2000). In 2005, the gains in financial assets were well below median percentage gains over the past 50 years, while the increases in liabilities were well above their median. Personal savings as a percentage of disposable personal income was actually negative in 2005 for the first time since the great depression."

Posted by: Miguel at June 2, 2008 12:25 AM

In 2005, the gains in financial assets were well below median percentage gains over the past 50 years, while the increases in liabilities were well above their median. -- Miguel

And, further upstream in the comments,

Sure some people exercise more caution, frugality and practicality in their economic decisions. Thus, they insulate themselves from economic downturns. Current evidence would support the majority of Americans are not doing that and as a result are strapped. -- Miguel

My father taught me about money when I was a kid --

Lesson 1: If you can't afford it, don't buy it.

Lesson 2: If you really need it and can't afford to pay in full, make sure you can either earn the difference or work off the debt *fast*.

There are ants and there are grasshoppers.

*waiting for Cricket to chime in with the boric acid trick*

Posted by: BillT at June 2, 2008 06:18 AM

Apologies to all for the excessive bandwidth of this rant...

Miguel,

I take very little said in a blog personally, certainly not to the extent that one could call umbrage. Nor do I make assumptions without admitting that it is firmly rooted in a WAG. At least that is my goal when yapping online. I just do not agree with folks who wish to lay all blame for economic fluctuations at the feet of the POTUS when it is the Congress who creates the US budget.

Even then, to fail to consider the impact of the global economy on our own is head-in-sand foolish.

Do you think that operating costs, particularly labor costs do not force employers to cut US labor in favor of offshore labor? If so you must be drinking the Kool-Aid. Which is why I earlier commented about people who are not making progress in the pursuit of their goals suggesting that they should reexamine their direction and where they are expending their energy. If you do feel happy or satisfied with your lot in life, make a plan to change it... Act. Waiting for someone else to fix it, especially the government, is a doomed plan. And I was not speaking directly to your woes Miguel. Rather, to those who are having difficulties.

Business is about little more than making a profit, ROI, making investors happy. If the business fails in that, they are not going to be able to provide jobs, much less fluff the employees salaries and benefits packages.

Look at the US auto industry. Everyone buys offshore brands then those same customers of autos from the orient and/or europe will turn around and poo-poo the mean ole GM, Ford, Chrysler corporate bosses who attempt to salvage profits and keep the corporation viable by scaling back on labor demands.

And what's the cost of a barrel of crude these days? So other than giving the domestic energy industry a kick in the seat through legislation and tax incentives to explore, develop and bring in domestic supplies along with building modern refineries with fewer regional blends as a result of government mandates... what else should the government do on that front?

There are many things that the government could and should do to assist business and the individual taxpayer. IMHO, that would be mostly through reducing the weight of taxation and regulation on business and the individual. A smaller federal government constrained by the US Constitution.

Again, this is nothing more than my opinion, but Bush can hardly be blamed for not inspiring the nation and the Congress when all we hear from the major media outlets, their talking-heads, the loyal opposition, the truthers and kindred spirits is that the POTUS and his admin are inept, criminal or that they are deviously clever in their cabalistic pursuits. That he should be skewed more towards seeking international cooperation in his efforts towards national security, the GWOT, the environment, energy, law, labor, blah, blah, blah... And yet, these same people will turn around and bitch because Bush does not create jobs, repeal NAFTA, expand our markets or inspire them to greater heights through bully-pulpit rhetoric. Please...

And regarding people in varying states of distress, economic and otherwise, I have a heart just as most everyone else does. Some folks merit an assist (a one-shot, rather than a perpetual assist) while others, like adjustable mortgage speculators on both the lender and borrower side of the fence, merit, IMO, none. They knelt down to the blanket to roll the dice. They may have crapped out but that is not the taxpayers problem.

My parents taught me the same lessons Bill mentions about spending what you have, on what you need, versus spending what you do not have on what you cannot afford or do not need. Hardships hit when least expected. Lean times happen.

Regarding,

"* commit to a balanced budget

* take every reasonable step to constrain the rising cost of heath care and retirement programs Social Security and, most especially, Medicare

* make clear to Americans that taxes cannot be cut over the long-term unless programs are cut commensurately, and

* prevent total spending, taxes, or debt from reaching levels that could reduce economic growth and future standards of living."
In theory, there is nothing I can argue with in that list. Yet if the Iranian mullah's were allowed to develop and produce nukes, deploy them against Israel, Europe and/or the US, a balanced budget might fall pretty far down on the list of priorities .
"The Prez sure can advocate a flat tax system, if he can convince Congress and Senate of these things. Steve Forbes had advocated that. Unfortunately, our government and lobbyists are not interested in new ideas, so your challenge, while fair and "what if" is really irrelevant."
See bully-pulpit comment above. And with respect to irrelevant ideas, I disagree. If ideas are irrelevant, how did Boortz and Linder's ideas on the fair tax you've mentioned, as put forth in the The FairTax Book, gain so much traction? I read a few blogs every day simply because there are many [above]average people who come up with terrific ideas that merit discussion, if not action.

I suppose it boils down to one of my character flaws. I do not care to hear complaints without alternate ideas being offered in their place. Children complain, adults seek solutions.

Now this old curmudgeon has to get busy doing something productive today.

Again, apologies to the Villains and especially to Milady Cass for the excessive space/time/rant.

Regards,

Posted by: bthun at June 2, 2008 11:47 AM

I appreciate your thoughtful response. No complaints about this administrations policies and spending over a time when his party controlled things for six years? Likewise, did you have complaints of Clinton in a time of prosperity? Many rationalize the global economy as a reason that are policies have to cow to this "animal". I would argue that we have to be wary, and somewhat protective. Paul Krugmann's "The Great Unraveling" is quite insightful. He was making predictions which have occurred, in 2003.

The current state of World economics and politics is not a liberal or conservative thing. transnationals are not inherently good or evil. However, the intentions of many of these groups do not always consider the humans they propose to help.

I would posit that the economic World economy (including all players and dynamics) is a much bigger threat to the US and the World than is a crazy man in Iran. If we applied the same standards that the rhetoric is saying about Ahmadinejad (sic?), than we would be threatening Pakistan, N. Korea, some African nations, Syria, even China. Strange that we sat down with Kim Jong Il who arguably poses a greater threat than Iran. We even gave into some of his requests. So, McCain/Bush rhetoric is really hollow about not negotiating with despots.

Having said that, I am not naive enough to think the World isn't a dangerous place. That terrorism isn't real. I also believe that our selective emphasis on "who" are terrorists is not helping us. Very unpopular to say this on this site, but the Iraq War is a major reason why we are economically in a bad spot, as well as politically in upheaval. So, I believe you can have a strong defense without invading countries by choice, and keeping places like Iran honest. Heck, even Nixon excelled at this kind of foreign policy. Council on Foreign Relations has some very good position papers currently addressing all of these f.p. topics.

Posted by: Miguel at June 4, 2008 12:39 AM

Kindly explain how we are 'economically in a bad spot' due to the war in Iraq.

I'm all ears.

Posted by: Cass at June 4, 2008 12:47 AM

I knew that would ruffle someone's feathers. If you are all ears, you might also need to be all eyes. I will simply point you to many reports, research centers, an analysis that can provide more information and facts than I might post here. Joseph Stiglitz and "The $3 Trillion War"; Center for Economic Policy Research; Paul Krugmann (I know you love him); George Friedman on Stratfor.com; the fact that oil production was pulled off the World market (many sources report the manipulation of production in Iraq to drive up World oil prices and allow for record profits. The argument that production was disrupted by terrorist has been disproved by UK financial and media sources, as well as reporters such as Greg Palast (read "Armed Madhouse"). Clearly, the War (of Choice) is the primary reason, but not the only, why oil prices are skyrocketing. This war is one of the main reasons why our economy is struggling. You could identify other significant reasons, yet most economists would indicate that the price of oil and the War in Iraq maybe two of the top five reasons things are not fairing that well.

Posted by: Miguel at June 4, 2008 01:34 AM

I knew that would ruffle someone's feathers.

Is there something more that a chicken master must learn to do?

Posted by: Ymarsakar at June 4, 2008 06:00 PM

I'm just getting too old. That being the case, I'm not going to waste my time hoeing these same rows over and over again. For instance the economy as a subset of the global economy, the federal budget -discretionary versus mandatory spending, tax revenue as a function of stimulating the economy by allowing the working segments of our society to actually keep more of their earnings rather than seize them for redistribution, oil prices as a function of supply versus demand -which, btw, can not be fixed by the POTUS... Oh wait, Maxine Waters can fix those prices... Never mind... The GWOT, tax rates, employment by other than government employers, or any of the rest of the shotgun blast of items.

G'day!

Posted by: bthun at June 4, 2008 06:57 PM

I suppose economists who look at World oil prices daily and see the impact from global conflict have no business concluding that war in an OPEC nation can impact the U.S. economy.

When discussion turns into reductionist statements, their is no attempt to reflect honestly what the root of discussion is. To simply say things cannot be fixed by the POTUS (why use such acronyms?), is to render him completely impotent. That, in our current case, I may agree with. However, history as proof, presidents of all ilks have been very instrumental in mending the onslaught of specific economic issues...and even impacting the function of oil on economies (through foreign and economic policy). Entirely change no; but surely impact. Reagan's policies, driven by foreign policy experts who used containment and detente, along with strategic military power, helped ebb the rush of OPEC prices being driving high in the late 70s. He also benefited from positive World economic forces, and other than spending, strong US economic policies. So, again, some impotent, some not. For one to disregard the impact of the Iraq War on the U.S., let alone the World economy is to reject information which is substantiated by many who "know" in favor of easier, self-serving explanations.

With such comparisons above one would think the yoke of tyranny was on all our necks (seized for redistribution?). In other words, it seems, and correct me if I'm wrong, when the explanation fits your ideology (i.e. eliminate tax and the economics will be grand), the matter is simple, but when the explanation doesn't fit, it is far to complex and varied to even consider. In fact, you deem it preposterous.

Have you read any of the books or folks I mentioned? I would be interested in hearing of any books or articles which would be contrary to these folks writings and analysis (if you wish to recommend) specifically about the war's effect on our economy, or any measurement of the War and how the U.S. has benefited from it. Other than the notion that we are safer. Too much information to the contrary, and a bit off point. I am serious when I say I'd like to read it.

Posted by: Miguel at June 4, 2008 09:25 PM

Back to the author's original point, here is an economist's analysis and discussion about the Hauser's Law graph and theory that was posted.

http://www.portfolio.com/views/blogs/odd-numbers/2008/05/20/lying-with-charts-wsj-edition

Interesting conclusions.

Posted by: Miguel at June 6, 2008 04:07 PM

This guy gets even more indepth at defining Hauser's Law and the flawed theoretical conclusions.

http://usbudget.blogspot.com/

Posted by: MIguel at June 6, 2008 04:26 PM

Post a comment

To reduce comment spam, comments on older posts are put into moderation 5 days after the last activity. Comments with more than one link also go into moderation. If you don't see your comment after posting it, try refreshing the screen. If you still don't see it, your comment is probably in the moderation queue.




Remember Me?

(you may use HTML tags for style)