99 Weeks Later, Jobless Have Only Desperation

[ishii]

We need to, for once, do the mature, responsible thing: cut spending and raise taxes. And the taxes should be raised on those who can most afford them.

Those who can most “afford” the tax cuts that you support are also the people who own the companies who hire the folks in need of jobs. Tax them and you will stifle job creation. Its really not that complicated; John F. Kennedy and Reagan understood it: cut taxes and get the economy moving again. Or atleast don’t raise them. Raising taxes in the middle of a recession would have the effect of ensuring that the recession continues. I wouldn’t recommend economics 101 but rather, history 101.

Ishii

 

[ishii]

Right now, faced with the current deficit, are the circumstances right to let the Bush tax cuts expire? .
.

No, let them continue. In fact, if Obama today announced that he will allow the Bush tax cuts to become permanent I believe that the economy would start to rebound. Alas, Obama is (unlike Clinton) beholden to a narrow, tax and spend political ideology and that will probably be his downfall. We need to cut spending. The government spends too much. Raising taxes in a recession is the height of economic stupidity.

Ishii

 

[Black_Rose]

No, let them continue. In fact, if Obama today announced that he will allow the Bush tax cuts to become permanent I believe that the economy would start to rebound. Alas, Obama is (unlike Clinton) beholden to a narrow, tax and spend political ideology and that will probably be his downfall. We need to cut spending. The government spends too much. Raising taxes in a recession is the height of economic stupidity.

Ishii

No, I don’t buy this. The Bush Tax Cuts did not result in an enormous rate of job growth as I discussed earlier in this thread.

Second, there is little evidence that the Bush tax cuts lead to a profoundly high rate of job growth, relative the job growth The average annualized rate of job growth in the United States between March 2001 and December 2007, from the trough to the peak of the last economic system, was the lowest of all job cycles since the 1950s.

americanprogress.org/issues/2009/02/pdf/picker_jobs.pdf

Third, I am willing to accept, despite my ideological predilections, that the supply side Reagan reforms were effective during the 1980s recession, since Paul Craig Roberts, the Assistant Treasury Secretary of the Reagan Administration, offered a convincing empirical and theoretical argument for its success. However, this does not mean the same supply-side prescription is warranted right now for the current macroeconomic conditions. Roberts argues that the problem of the 1980s was stagflation and high nominal and low real interest rates as a consequence of inflation, causing a worsening Phillips Curve trade-off for employment and inflation, meaning that standard Keynesian measures of demand management would be ineffective. However, while Roberts agrees that supply-side economics were an effective policy in the environment of the 1980s, he qualifies it by saying that its salutary effects were context dependent, and not a universal panacea for economic growth and development.

Supply-side economics was a major innovation in macroeconomic theory and economic policy. It was a correction of an oversight, not a magical formula. A quarter century ago before the days of the high speed Internet and US offshore outsourcing, supply-side economics revitalized the economy’s ability to grow without having to pay the price of rising rates of inflation. This battle was fought and won long ago. Re-fighting it is a waste of time and energy in an era of new serious problems.

Actually, while the through (defined by NBER being in December 2001) was indeed milder for the early 2000s recession, it took longer for it to return to the level of employment at the peak (March 2001). Because of this, it is not surprising that the annualized job growth rate was abysmally low at 0.6% for the six and three-quarter year period between March 2001 and December 2007. There was a reason why the early 2000s “recovery” was colloquially referred to as a “jobless recovery”.

1.bp.blogspot.com/_pMscxxELHEg/SsdKai2JmWI/AAAAAAAAGgM/69Fd8pPGr0s/s1600/2007Revised.jpg

calculatedriskblog.com/2009/10/comparing-employment-recessions.html

 

[ishii]

No, I don’t buy this. The Bush Tax Cuts did not result in an enormous rate of job growth as I discussed earlier in this thread.

I didn’t think you would. Your link was to a typical lefty website with an ideological ax to grind. Two can play that game:

article.nationalreview.com/438478/keep-the-bush-tax-cuts/deroy-murdock

Careful, reading it with an open mind might change your opinion on the subject. My favorite line: "While Democrats routinely denounce “the rich” as if they were un-American, the sad truth is that very few poor people create jobs.

Ishii

 

[Ridgerunner]

And I specifically noted one cop out response: that it might be, but not while Obama is President. Because you know, I know, my seven year old knows, and my dog probably knows that if the Republicans were in power, the tax cuts would be extended. So, you may as well just be straightforward and say “never.”

Did I get an answer to the question? Hmmm…I see here, “straw man”…diversionary indignation this, laughable that…Obama “shenanagins”…certainly NOT George Bush’s fault, perish the thought…hard to tell. Wait, here it is!

So, the answer is: “under no circumstances that could exist in reality.”

What was the point of all the window dressing then, all the indignation and hyperbole? Your answer is that the tax cuts should NOT expire if the people who WILL let them expire are in office, and that they SHOULD (possibly) expire if the people who will NOT let them expire are in office. We already went over that.

A false choice. Presently, it is not reasonable to believe that this administration and congress will actually reduce government spending since their actions have been consistently in the direction of greater spending. And yes, this administration and congress has consistently favored raising taxes. When it comes to both, this group is a known quantity.

It may or may not be reasonable to believe a different administration and congress would raise taxes. It would not necessarily be an all-Republican group, nor would an all-Republican group necessarily disfavor raising taxes. Assuming there is any merit in the idea of raising taxes, it would not be unprecedented for Republicans to favor it. Recall that Bush I acquiesced in raising taxes. Imaginably, a different administration and congress; perhaps more responsive to public wishes, might actually reduce spending or at least not increase it at the rate the current group has done. Recall that government spending increases were rather modest during Clinton’s administration. A different group in power would, at least, be an unknown quantity.

Since there is no reasonable possibility the current government will reduce spending or even moderate it, there is no reason to raise taxes just so they can throw that money around as well, particularly if, as many agree, raising taxes in a recession is not a good thing to do.

 

[Ridgerunner]

No, let them continue. In fact, if Obama today announced that he will allow the Bush tax cuts to become permanent I believe that the economy would start to rebound. Alas, Obama is (unlike Clinton) beholden to a narrow, tax and spend political ideology and that will probably be his downfall. We need to cut spending. The government spends too much. Raising taxes in a recession is the height of economic stupidity.

Ishii

I agree in part and disagree in part.

I am not persuaded that Obama simply announcing that he would allow the Bush cuts to be permanent would, alone, cause the economy to rebound. Personally, I don’t think that, alone, would do it.

True, employers would at least be able to figure that one item of future cost. Yes. But there are too many other things they can’t figure out. Cost of health insurance, cost of energy and all products made with or transported with petroleum, costs associated with increased regulation, interest costs due to excessive borrowing by the government, some of the more “hidden” taxes, possible business disruptions if this government revives “card check”. All of those things are just “out in the air”, and this government is determined to do things that will increase the cost of all of them to a degree nobody can figure out. Business people can’t plan in the face of all those unknowns, particularly when the direction of all so far is, or promises to be, unfavorable to them.

 

[Good_News_1]

A false choice. Presently, it is not reasonable to believe that this administration and congress will actually reduce government spending

You can twist and squirm all you want.

You support the tax cuts. You are in favor of adding hundreds of billions of dollars to the deficit. There is no way to pay for them. That’s fine. You support huge deficits. Lots of people do.

Just don’t pretend you have the slightest credibility in calling anyone else fiscally irresponsible.

 

[Ridgerunner]

You can twist and squirm all you want.

You support the tax cuts. You are in favor of adding hundreds of billions of dollars to the deficit. There is no way to pay for them. That’s fine. You support huge deficits. Lots of people do.

Just don’t pretend you have the slightest credibility in calling anyone else fiscally irresponsible.

For now, I’ll ignore the personal insult, something that’s forbidden on here. But I won’t tolerate it again.

I’m not twisting and squirming. I do not favor reversing the Bush tax cuts if it serves no purpose other than to put more money into the hands of wild spenders who have no history whatever of doing anything but increasing deficits. That’s a very simple concept.

I do not support increased deficits. I made that clear. I think a great deal of deficit control could be effected by spending reduction. I simply oppose raising taxes when there is no evident desire on the part of the government to do anything but spend the money and continue to increase the deficits.

Could I support tax increases under any circumstance? Yes I could, if it was reasonably certain the proceeds would:

1. Actually go to deficit reduction once the government stabilized spending and borrowing at a more reasonable level; one that did not require ever-increased borrowing. I probably would, and I think the American people would. I would be concerned about doing it in a recession, though. Therefore, I would need to be pretty convinced that simultaneous improvements in the business environment in other ways would accompany the increases.
2. Go to the truly needy. We presently have a government that:
   (a) At least says it intends to cut Medicare benefits. Most (though not all) elderly really do need that, and don’t have the resources to replace it in the private sector.
   (b) At least says it intends to cut food stamps in order to pay for the 26 billion dollar public employee bailout.
   (c) Has done absolutely nothing, or even mentions doing anything for the neediest of all; those disabled needy on SSI, who are obliged, by law, to impoverish themselves in order to even receive the chiseling $600/month (sometimes less) they currently receive.

Hurling personal insults does not, in any manner, answer my objections or speak to those situations in which I feel a tax increase might be justifiable.

 

[ishii]

For now, I’ll ignore the personal insult, something that’s forbidden on here. But I won’t tolerate it again.

I’m not twisting and squirming. I do not favor reversing the Bush tax cuts if it serves no purpose other than to put more money into the hands of wild spenders who have no history whatever of doing anything but increasing deficits. That’s a very simple concept.

I do not support increased deficits. I made that clear. I think a great deal of deficit control could be effected by spending reduction. I simply oppose raising taxes when there is no evident desire on the part of the government to do anything but spend the money and continue to increase the deficits.

Hurling personal insults does not, in any manner, answer my objections or speak to those situations in which I feel a tax increase might be justifiable.

Ridgerunner, that was a good, substantive post in response to the personal attack post. The fact is, there is no evidence that raising taxes results in anything but more spending by corrupt politicians in Washington D.C. who are addicted to spending. Raising taxes in expectation of lowering the deficit is like giving money to a drug addict thinking that they’ll use it for something other than drugs.

Ishii

 

[Good_News_1]

For now, I’ll ignore the personal insult, something that’s forbidden on here. But I won’t tolerate it again.

What personal insult? That you lack credibility on the deficit because you support deficit spending?

Since you have an issue with the discussion, then I’ll gladly leave it lie.

I will say this: you know as well as I do that the Democrats are almost certain to lose seats in the midterms. The Bush tax cuts are a hole that I read, variously, is from $600 billion to $3.1 trillion (depending on economic projections, whether certain aspects are continued). It is exceedingly likely that the Republicans will be able to hold the line against Democratic spending dreams. And, even if the Democrats were gaining seats, the logic doesn’t make any sense. If the tax cuts expire, and we save $3 trillion, and the Democrats spend one trillion, then we are still two trillion ahead.

Have a good weekend.

 

[CatholicGerman]

Aww… It was just getting interesting. Do you two always have to butt heads like that? Is this an alpha male competition?



In my opinion, they’re going to have to cut spending dramatically *and *raise taxes, just to break even. Ever.

 

[Ocean52680]

If the tax cuts expire, and we save $3 trillion, and the Democrats spend one trillion, then we are still two trillion ahead.

Wrong. CBO deficit projections are based on current law. Under current law, the Bush tax cuts expire at the end of this year. Therefore, any additional revenue from the expiring the tax cuts is already incorporated into the baseline. The Democrat spending spree is added on top of the baseline.

To some what paraphrase the Soup Nazi: “No savings for you!”

 

[Good_News_1]

Wrong. CBO deficit projections are based on current law. Under current law, the Bush tax cuts expire at the end of this year. Therefore, any additional revenue from the expiring the tax cuts is already incorporated into the baseline. The Democrat spending spree is added on top of the baseline.

I don’t follow. If we extend the tax cuts, we create a greater deficit, regardless of where the accounting baseline is today.

 

[Ridgerunner]

What personal insult? That you lack credibility on the deficit because you support deficit spending?

One last time. I will assume you don’t know any better than to tell someone he/she lacks personal credibility, or don’t understand why that’s offensive or forbidden on CAF.

One’s argument may lack foundation, even credibility due to the lack of it. One does not accuse another poster of lacking credibility.

I really am trying to be a good sport here because you’re fairly new. But you can’t keep doing this. If you acknowledge having made an error in understanding on here, and soon, I will not report your having violated the rules.

 

[Ocean52680]

I don’t follow. If we extend the tax cuts, we create a greater deficit, regardless of where the accounting baseline is today.

You said the following:
"If the tax cuts expire, and we save $3 trillion, and the Democrats spend one trillion, then we are still two trillion ahead. "

This is incorrect. CBO deficit projections are based on current law. Under current law, the Bush tax cuts expire at the end of this year. Therefore, any additional revenue from the expiring the tax cuts is already incorporated into the baseline.

An example:
Let’s say a bill is scored by CBO to increase the deficit by 200 billion for the next 5 years. This means that this deficit increase is on top of the baseline. The current baseline for next fiscal year includes the projected revenue gains as a result of the expired tax cuts.

Here’s where you are confused

You’re saying this:

(baseline x)
+3 trillion revenue from dropping the tax cuts

• 1 trillion more in Democratic spending
  = a net 2 trillion in deficit reduction.

What I’m telling you is this:

(baseline x) already includes the 3 trillion in revenue from dropping the tax cuts

• 1 trillion more in Democratic spending
  = 1 more trillion more in additional deficits

See the difference. No savings for you!

 

[Black_Rose]

Maybe the optimal scenario from solely a budget balance perspective is where Congress is dominated by one party and the presidency is dominated by another; that way, the Bush tax cuts expire, and no new tax cuts/extensions would be enacted, while new spending would either be vetoed by the President, or it would not go through in Congress.

 

[Good_News_1]

Here’s where you are confused

I am not confused, but you are welcome to tell me I have a confused argument.

(baseline x)
+3 trillion revenue from dropping the tax cuts

• 1 trillion more in Democratic spending
  = a net 2 trillion in deficit reduction.

What I’m telling you is this:

(baseline x) already includes the 3 trillion in revenue from dropping the tax cuts

• 1 trillion more in Democratic spending
  = 1 more trillion more in additional deficits

See the difference. No savings for you!

I see your point. Extending the tax cuts will raise deficits under current projections, letting them expire will only maintain the status quo. Bad for Democrats, that math, since there’s no way the can hide additional spending by folding it into the savings from the expiration of the cuts.

 

[Ocean52680]

Maybe the optimal scenario from solely a budget balance perspective is where Congress is dominated by one party and the presidency is dominated by another; that way, the Bush tax cuts expire, and no new tax cuts/extensions would be enacted, while new spending would either be vetoed by the President, or it would not go through in Congress.

I see “no new tax increases” was not included!

 

[Ocean52680]

I am not confused, but you are welcome to tell me I have a confused argument.

Sorry, I didn’t mean it that way.

I see your point. Extending the tax cuts will raise deficits under current projections, letting them expire will only maintain the status quo. Bad for Democrats, that math, since there’s no way the can hide additional spending by folding it into the savings from the expiration of the cuts.

BINGO

 

[Black_Rose]

I see “no new tax increases” was not included!

I said from a budget balance perspective. Tax increases would generally increase revenue, unless you can show that it would decrease economic activity enough that it would actually cause a decrease in revenue that an increase in the tax rate cannot make up.