I hope you’ve enjoyed our National Theater Company’s recent production of “The Debt Ceiling Crisis” as much we enjoyed performing it for you on a world stage. Don’t forget to watch the movie version sequel coming this January!
If the definition of a compromise is something that most folks don’t like, then the $2.4 trillion debt-ceiling deal worked out over the weekend by President Barack Obama and GOP leaders in Congress is a resounding success.
As details of the framework began to leak early Sunday, the far wings of each party quickly rejected the compromise as capitulation. Democrats angrily noted that the plan was all spending cuts and no revenue increases. MoveOn.org, the liberal advocacy group, panned the deal and called on Congress to “pass a clean debt ceiling bill that doesn’t force the middle class and the poor to bear the brunt of this crisis.”
Conservatives, meanwhile, worried that the deal left open the door to revenue increases and could lead to steep defense cuts. “Republican Leaders are asking their members to accept tax increases or massive defense cuts and senior anger right before the election,” blogged Erick Erickson, editor of the conservative website RedState.com.
Clearly, Tony winning writing and acting with a surprise, twist ending like this that is all illusion:
Conversely, the one clear winner from all this seems to be President Obama. If the bill passes, he can now claim the mantle of fiscal conservatism – a surefire defense to ubiquitous Republican accusations of socialism and big government. If the debt ceiling were breached and the economy tanked, he likely would’ve borne the greatest political price. But by swooping in and making the deal at the last minute, Obama can say he saved the day.
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I just want to say that I’m enjoying this discussion. Chris, I don’t know what you do for a living, but it’s clear that you know your stuff and can explain it well. Thanks.
#83, Money out of someone’s pocket is still money out of someone’s pocket.
Something you can’t seem to get your head around is if you tax the upper class, those costs WILL be passed down to the lower class. Taxing the rich IS taxing everyone.
Different tax brackets are to keep people quiet and make themselves feel better about themselves. e.g., “I’m only in the 15% tax bracket. I’m glad I’m not making $250,000/yr!”
It’s almost like a religion. Be content with your low status in life for the meek shall inherit the Earth.
#87, It’s not a stretch at all. $10,000 in 2000 is equivalent to $7,628.85 today.
Where did the other $2,500 go?
It went to interest payments for the bond holders — who just happen to LOVE a higher debt ceiling.
#97, I’m talking about the aggregate actions of all firms.
No, you weren’t. I was quite explicit with my question. Don’t crawfish on us now.
AFA the rest of your post, you are assuming the government has a majic stockpile of money. If they don’t have that money, they have to . . . ta daaaaa . . . borrow it.
I accept no answer that results in the government having to borrow money to perform its function.
Government borrowing of money results in devaluation of our currency, a hidden tax.
#92, MF — Here’s your sign:
http://tinyurl.com/43roseh
When you have something important to contribute, please feel free to do so.
Until then, you can tell us why you would watch a bunch of kids burn to death so you can save your wife.
Different tax brackets are to keep people quiet and make themselves feel better about themselves.
I trust you know the real reason, and this was just a joke.
#105, That is the real reason.
I trust you know that when companies are taxed at higher rates, those costs are passed down?
Companies don’t pay taxes, customers do.
You might do well to read the history of taxation in Britain, which is where the US got its model. Progressive taxation was a feature all the way back to the 14th century. I’m confident that the taxpayers’ feelings were not considered.
And yes, costs are passed down…to the company’s customers. Don’t want to pay the extra tax? Then don’t be a customer of that company. Damn, I’m starting to sound all libertarian.
#101 LL
I really expected you to decry the Homeowner and child tax breaks too. Its the exact same thing.
I’m not even really advocating this idea. There are a lot of possible unintended consequences with this plan. Companies hiring 10 people for two weeks at the end of every year for “inventory” to get the tax break, would be a good example.
My overall point is that if were going to lower taxes or give tax break or incentives to business, they might as well be targeted at the ones helping the economy. To encourage positive economic behavior as opposed to parasitic, greedy, damaging behavior. Lowering taxes and then assuming it will have a net benefit is what we’ve been doing for 10 years, and its not cutting it.
You’re being obtuse to try and make your point. Any business that is in so much trouble that they would have to shut down over their taxes is doing something very wrong, or will be going out of business soon regardless of government policy.
…and dogma never is: “Business doesn’t pay taxes, the people/customers do.” ///// Oh Really? Retained earnings???? Dividends????? Bonus programs????
there is wiggle room everywhere and inbetween.
Business are separate taxable entities BECAUSE THEY ARE!!!!
Simple minded to think much less post otherwise.
Who falls for this mindless BS?
Liebertards===of course. I meant people who can think rather than vomit up the dogma.
Silly Hoomans.
#107, Damn, I’m starting to sound all libertarian.
I’ll teach you the secret handshake when you make the full leap 🙂
#108, To encourage positive economic behavior
Who gets to choose what that behavior is?
This is one of my major gripes — who gets to decide what is good for the economy? Who gets to decide what is fair?
Any business that is in so much trouble that they would have to shut down over their taxes is doing something very wrong, or will be going out of business soon regardless of government policy.
True. But if they are laying people off, they might be in trouble anyway. Why make the situation worse by fining them?
#107, You might do well to read the history of taxation in Britain, which is where the US got its model. Progressive taxation was a feature all the way back to the 14th century. I’m confident that the taxpayers’ feelings were not considered.
It is almost sounding like you saying that the big argument over letting the tax cuts expire was NOT politically motivated to keep the middle and lower classes happy.
We don’t have to go back to the 14th century. We only have to go back a couple of years and listen to Obush say, “I’m gonna spread the wealth.”
That wasn’t politically motivated to make the middle and lower classes happy?
No, I have to disagree with you. Taxing the rich does nothing to help the economy to the extent people think it does. It is strictly a political gambit to get votes.
#112–LL==does it ALL have to be vomit?:
“No, I have to disagree with you. Taxing the rich does nothing to help the economy to the extent people think it does. It is strictly a political gambit to get votes. /// You tax the rich because wealth disparity in the extremes such as we are experiencing now creates social unrest which is good for no one. Poor/less rich people can accept their status in life but not when the conspicuous consumption of their tax bailed out betters are pushed in their faces. Since basic economic mechanisms don’t achieve this result, its up to governmental tax policy to do so.
Where exactly is this political gambit?–rich paying less taxes now than in the past 90 years–since the last Great Depression brought on for the EXACT SAME REASONS this was: stock speculation in an unregulated market.
You can find just about any characterization of our deficit but I most recently hears the Bush Tax Cut comprises 90% of our current periods deficit. Not taxing the super rich and corporations certainly has an effect.
Silly to vomit otherwise.
LL, get real…..one statement by a current leader offsets seven centuries of precedent? It’s too bad he said that, because the opposition has hung a rope around his neck over one poorly-made sentence. Worse, he doesn’t govern that way yet you’re still using it.
The party in charge gets to choose the theme for positive economic behavior. A random selection from memory says Carter chose conservation, Reagan chose greed, Bush1……got nothing, Clinton chose blowjobs, and Bush2 chose greed. Don’t know of a theme for Obama yet. Green Energy, maybe? Whatever.
Problem is, the greed theme isn’t working for the country. It’s working well for a certain demographic, but the country as a whole is on the brink of disaster because of the issues Chris and Bobbo have noted.
This is a good take on the subject:
http://lewrockwell.com/north/north1013.html
#114, I am being very real.
You listen to anybody who wants to tax the rich and it isn’t because they think it is good for the country. Oh, they may say that at first, but once you start arguing with facts and logic they ultimately spout, “They have to pay their fair share!”
At that point, they’ve lost the argument . . . kinda like mentioning Nazis.
You see, they don’t think they are being treated fairly because somebody has more money than they do.
As proof of this, even you agree the taxes are passed down to the consumer. Tell me how this is helping the poor other than making them feel the government is eating the rich?
#116 LL
How convenient that you’ve defined the argument so that any one who disagrees with you has already lost. You’re quite the master debater.
All the history I have read about progressive taxation uses a different justification. Which is: they can afford to pay more, so they will. There is no fairness about it. In fact, historically during hard times the rich were taxed even harder.
But now we have middle class people fighting to give the rich bigger breaks. It makes no sense.
#117, How convenient that you’ve defined the argument so that any one who disagrees with you has already lost
Anyone who disagrees with me has already lost because I AM right.
I didn’t frame the argument. I pointed out the inadequacies in yours with logic and facts. If you can’t find a logical solution to support your supposition, I can’t help you there.
For instance, what do you consider “Fair Share” to be? I’ll bet you a shiny buffalo nickel your number will be different than mine. Thus, “Fair Share” is not a logical number but a “feeling”. You feel that someone should pay more money. Why? Because they have to pay their fair share?
As I said, it is like a religion. The bible says God exists. How do you know the bible is right? Because God wrote it.
#118, I agree with you on the historical perspective from a factual point of view — the rich were taxed at a higher rate. (I meant to write that earlier and forgot. My apologies for ignoring you on that point.)
Which is: they can afford to pay more, so they will.
That is a very loaded statement, filled with many nuances and meanings 🙂
But times have changed substantially. The rich didn’t have the opportunity to pass down the extra taxation to the poor. They did try to compensate for it in the form of chickens, though.
They didn’t have the opportunity to loan billions of dollars to the government and collect interest on it.
Their money wasn’t tied up in stocks. It was in a strongbox.
Comparing the past reasons for taxing the rich with what is going on today is like comparing apples and oranges. The RICH are the ones running the country and taxing the crap out of everyone else through government loans and passing down the added tax burden through higher prices on the goods their multi-corporations produce.
#119 LL
“Anyone who disagrees with me has already lost because I AM right.”
Then you accuse *me* of a tautology I never used.
{condescending slow clap}
Well done.
#91
Keynesianism did fall out of favor to the rising brand of Monetarism in the mid to late 1970s, but that is a far cry from saying it is without merit. Milton Friedman’s attacks focused on some of Keynes disciples who tried to take his ideas and build a rigorous mathematical interpretation of them. Unsurprisingly, economics being the dismal science, some of the predictive models didn’t work in a low-growth/high-inflation time.
The 1970s was a specific time that had a lot situations that fed into the inflationary environment(I list some in #90). The dissolution of Bretton Woods(where Nixon let the rest of the world pay for Vietnam, smart and devious fucker) was one that I missed in that post.
But anyway, conclusions built off Keynes were proven not to be universal tools. That’s okay, you wouldn’t blame a hammer for not being a saw or a backhoe, it’s grossly unfair for what the tool IS good at.
Why we’d expect Keynes’s ideas to be universally applicable is beyond me. He was focused on a deflationary feedback loop, while the 1970s saw an INFLATIONARY feedback loop. Exactly the opposite kind of problem.
Paul Volcker, and I credit him directly, found the solution to an inflationary spiral: jack up interest rates to take a lot of the investment money off the field. It WILL slow growth, but WILL kill inflation in the medium term.
So, now we have two valid tools to combat two different economic problems. A demand-destruction spiral is cured by Keynes and an inflationary environment is cured by Volcker.
The nuts and bolts stuff has moved SO FAR since Keynes. I think you can credit him with gov’t demand substitution in a deflationary environment, which I maintain is a proven good tool. Saying that other people that followed him, but with the addition of a bunch of other influences, are equivalent to Keynes is unfair to both him and them.
That’s good for one post, but I’ve got a challenge for YOU coming in the next.
#91
Now I’m going to turn to both Keynes and Friedman’s role as public intellectuals, rather than as pure economists. These roles are at least as significant, and likely more important than their economics ideas.
So, I’m going to start by oversimplifying Friedman(as you did to Keynes). The public policy import of Friedman is “cut government ownership, cut government regulation, and cut the government’s ability to ever regain those functions.”
The reason I think these policies took off, rather than ideology, is that selling off government assets is a neat way to help the budget in the immediate term and to gain political contributions in the medium term.
Someone, either you or another one, quoted Reagan’s “Government is the problem” line earlier in this thread. Well, any critical analysis of the ’08 commodity-spike fraud and US property bubble is NOT going to call for less government regulation. Massive fraud can/does happen in under-regulated markets and this fraud can be horrifically damaging to the economy.
Markets, obviously, do NOT self-regulate.
You’ve attacked me on stuff said by followers of the dude I’m speaking of. Can you respond to events which seem to disprove the central plank of Friedman’s view of how things work?
#121, No brag, just fact.
#123, Can you respond to events which seem to disprove the central plank of Friedman’s view of how things work?
One comment to this is why aren’t all of these fuckers in jail?
If we would start prosecuting these guys for fraud (I agree that is what it was), then perhaps the next batch would think twice about it.
Instead, we hire the same bastards that perpetrated this mess to help us write regulations . . . which more often than not benefit the same exact companies they came from.
And people want to give them more money to do it. Amazing.
#125 LL
Here is where we do agree. =)
#126,
I agree with you on more than things than you think I do.
We just disagree on how to solve the problem 🙂
“why aren’t all of these fuckers in jail?”
I think it goes back to Nixon. Ever the schemer, he offered organized crime a pretty good deal. Legitimize the form of your organization and you can keep the bad behavior.
Since then we’ve focused on the crazy violent and substance abusers. How many shows are there about fictional homicidal maniacs, and then you get to the local news that picks stories to give you the worst view of humanity.
The GOP reps are very loyal to their brand. The idea that government needs to get out the way of business holds even when said business is obviously corrupt. I don’t want to sound condescending to them, but it is against the DNA to get involved.
Obama, on the other hand, an absolute perfect opportunity at the beginning of his first term. The economy was already screwed, and public anger could have been easily mobilized to go after the biggest crooks. They were very vulnerable then.
But he didn’t.
Well….I have to add: yes, they should all be in jail. Wallstreet should for the most part be legislated out of business.
But as to the solutions: its to stop the illegality BEFORE the damage is done. You know what that means don’t you? Yes: REGULATION, and its less recognized little brother who has all the muscle: ENFORCEMENT.
In liebertarian terms: an anti-freedom agenda.
You TAX the rich because they have the money. This is just reality. You can justify if you feel the need because in truth they get more back from society by having their wealth to begin with.
Whenever you see someone having to mischaracterizing their opponents argument/position: you know they have an invalid position themselves.
Silly Hoomans.
#128, Of course Obush didn’t. He was beholden to them for getting him into office. Just as Bush II, Clinton, Bush I, et al.
The problem with writing the regulations is the only people who can truly write them are insiders. Who do you trust?
A vast majority of our problems could be solved if we just enforced one of the most basic tenets of civilized society: protecting people from fraud.
Fraud is a very broad statement and covers everything from con-men trying to steal your widow mother’s jewels to Wall St. Banksters trying to steal an entire generation’s savings.
So when we don’t prosecute these guys, the number or type of regulations matters not. How many laws were broken during the last 10 years and how many have gone to jail?
Regulations only affect those who are honest. Like the adage, “When guns are outlawed, only outlaws will have guns,” “when the regulations prevent unlawful behavior, only the lawful will follow them.”
If you don’t prosecute, no amount of regulation or money will solve the problem. Instead, we put them in charge and give them more of our money because we have no choice. They control the police and if you refuse to pay, they come knocking on your door with flash bangs.
#130–LL==I assume you aren’t evilly motivated: not a shill or a tool, but you are a dupe.
You accept the surface of things, the easy dogma, no complexity, nothing difficult to think through. Easy simple bumper sticker stuff. That has an evil result when adopted as public policy regardless of if more innocent source.
for example, you say: “The problem with writing the regulations is the only people who can truly write them are insiders. Who do you trust?” //// simple BS. There are academics, retired professionals, whistle blowers who can write regulations. There is also common sense built on history. Do “anything” and change it as history shows change is needed. Do NOT DO what you so often post do: even more OF THE WRONG THING!!
Sorry LL but you are too simple minded for the real world. Sadly, you are not alone.
Yea, verily.