The boom that wasn't: economy has little to show for $860Bn tax cuts.

[RandomGuy]

Since 2001 President Bush and congressional leaders have promised that enacting each of a series of tax cuts would strengthen the economy by bringing faster growth, more jobs, and greater investment. With Congress again debating whether to extend past tax cuts and enact new ones, it's time to review how much the last four years of tax cuts have affected the U.S. economy and budget outlook. Unfortunately for most Americans, the tax cuts since 2001 have not made today's economy stronger. Over the last five fiscal years, the tax cuts have had a direct cost of $860 billion and (with interest costs) a total effect on the deficit of $929 billion.1 By creating excessive permanent deficits, they have lowered our future standard of living.

...

The fact that all major economic indicators are higher today than in early 2001 does not mean that the tax cuts have been beneficial. Since the Great Depression, the resilient U.S. economy has always had gains over such four-year periods. The appropriate question to ask is: How well has the economy performed compared to similar periods in the past? If the last four years of tax cuts had worked as promised, the economy should have done better than in previous cycles, when taxes were either not cut or cut much less.

By virtually every measure, the economy has performed worse in this business cycle than was typical of past ones, including that of the early 1990s, which saw major tax increases. The single area that has excelled in the current cycle, housing, has actually done so despite reduced tax incentives since 2001. And the tax cuts certainly didn't boost investment levels: the expiration of over $60 billion a year in business tax cuts at the end of 2004 had virtually no observable negative effect on investment.


--------------------

So all we have to show is tax increases on our kids. Great.

[RandomGuy]

The whole article with graphs and shit to prove the above assertions. (http://www.epi.org/content.cfm/bp168)

[Cant_Be_Faded]

As long as my friend's rich parents got to take an extra trip to Lake Tahoe last summer, those tax cuts seem to be workin just fine to me.

[gtownspur]

^ problem is Random, is that the tax cuts raised more govt revenue. THe only reason we have those deficits, is because we have not trimmed the budget. We've only fattened it. You see you liberals always try to disprove the strenght of the economy by pointing out Govt deficit.(Always the same tactics used to discredit reagonomics) Sorry to hurt your whole premise, but the economy is measured on the private sector's productivity like the GDP AND GNP.

The taxcuts were sold on the premise that they would take us out of the recession, not that they would balance the budget. Now you could say that expanding the govt w/o cuts is the main perpetrator.

[Vashner]

Home ownership is way up. For minorities too. Computers are faster in general. Appliances better. Life is good right now. And considering the economy is still hot after 9/11 2 war campaigns and a lot of natural damage at home and abroad..

Yea . Bush is kicking ass and taking names...

[Nbadan]

Home ownership is way up. For minorities too. Computers are faster in general. Appliances better. Life is good right now. And considering the economy is still hot after 9/11 2 war campaigns and a lot of natural damage at home and abroad..

Yea . Bush is kicking ass and taking names...

Problem is, as a group we aren't making more than we were in 2001, as real wages have remained stagnant and in some years even decreased.

Home ownership and the coastal housing bubble aren't part of what is driving the current economic expansion, it is what is driving the Bush economy and that's about to end. Home prices in parts of the country not affected by refugees of the 05 Hurricane season are actually starting to deflate. This comes at a bad time as consumers who were banking on paying for all the expensive gas they have been piling up on credit cards through the summer is now coming due and there is less and less equity in their homes for owners to borrow from.

I believe we are going into a deflationary period because many consumers are simply stretched to thin thanks to increases in minimal credit card payments, the price of gasoline, and soon many home investors are gonna get a reality check about investing in speculative real estate.

[gtownspur]

i'll take lame post from elpimpo with images and pictures than unrational retarded counter arguments any day.

[gtownspur]

Problem is, as a group we aren't making more than we were in 2001, as real wages have remained stagnant and in some years even decreased.

Home ownership and the coastal housing bubble aren't part of what is driving the current economic expansion, it is what is driving the Bush economy and that's about to end. Home prices in parts of the country not affected by refugees of the 05 Hurricane season are actually starting to deflate. This comes at a bad time as consumers who were banking on paying for all the expensive gas they have been piling up on credit cards through the summer is now coming due and there is less and less equity in their homes for owners to borrow from.

I believe we are going into a deflationary period because many consumers are simply stretched to thin thanks to increases in minimal credit card payments, the price of gasoline, and soon many home investors are gonna get a reality check about investing in speculative real estate.

And guess why homeownership is up. Because peoples' money are in their pocket from all across the spectrum. Instead of paying for a pork barrel project like a dung musuem of art or funding NPR, taxpayers are taking advantage of low interest rates and extra cash to spend.

[Nbadan]

And guess why homeownership is up. Because peoples' money are in their pocket from all across the spectrum. Instead of paying for a pork barrel project like a dung musuem of art or funding NPR, taxpayers are taking advantage of low interest rates and extra cash to spend.

Very amusing. The average earner received $300 from W's tax cuts. That's hardly enough to invest in a new T.V. much less a new home. Non-discretionary spending, that's spending not on the war or hurricanes has gone up at record pace under the current administration. Taxpayers are taking advantage of lower interest rates to over-spend - average household credit debt has jumped to $7000. In the face of the unexplainable continuous rise in interest rates by the feds, that's a tragedy waiting to implode. This is why the new industry-written, bankruptcy laws were rushed into law.

[RandomGuy]

^ problem is Random, is that the tax cuts raised more govt revenue. THe only reason we have those deficits, is because we have not trimmed the budget. We've only fattened it. You see you liberals always try to disprove the strenght of the economy by pointing out Govt deficit.(Always the same tactics used to discredit reagonomics) Sorry to hurt your whole premise, but the economy is measured on the private sector's productivity like the GDP AND GNP.

The taxcuts were sold on the premise that they would take us out of the recession, not that they would balance the budget. Now you could say that expanding the govt w/o cuts is the main perpetrator.

There are a few things wrong with this, so I will try to itemize them for readability.

1) Budget deficits by themselves don't mean much. Remember that a deficit is different than the overall debt. deficit+deficit+deficit+deficit=overall debt

2) Deficits that are less (in percentage terms) than the overall growth rate of the economy are not necessarily bad things. If the budget deficit for any given year is only 1%, and the economy is growing by 3%, your overall debt is not growing as fast as the economy as a whole.

3) Let's stick some concrete numbers to show why your assertion doesn't really hold up to the way things really work.
Given:
Economy=1000
Tax rate of 10%=100

Now, let's say we decide to lower our tax rate to stimulate the economy. We lower our tax rate to 9% (this is a cut of 10% of our revenues, 10-1=9, 1/10=10%)

Question:
How much would the economy have to grow to keep revenues at 100?
Simple algebra gets us there.
x*.09=100, where x=size of new economy, .09 is our new tax rate, and 100 is the desired level of fund for government. Solve for x, and you get x=100/.09, or x=1111

So for this "solution" to growing the economy to work, a 10% tax cut would have have to create an 11% increase in the economy.

Since the private sector is where wealth is created, this should be easy to accomplish, right?

Now let's add a couple of factors and muddy things a bit.

[Vashner]

Is that why the economy is up 3.8 GDP?

Get the fuck out of here ... Bush kicking ass in the face of adversion... hahah..

[RandomGuy]

Continuing from there, let's pretend that we didn't cut government spending.
Given:
The above situation and:

We borrowed the 10 that we cut out of the governments revenue.

As the economy grows, so does the need for government. More business=more streets, more bridges, more airplanes, more weigh stations for trucks, more tax collectors, more building inspectors, more Securities and Exchange Commission agents, more State Auditors, etc.
Let's assume that the demand for government is a direct ratio, say, 10 out of every 100, or 10%.

Question:
How much government will an economy the size of $1111 need?

That much is easy. 1111*0.1= 111

But remember, our current revenue stream is only .09%, so we are only making 100.

We need to get the extra money from somewhere. Let's say we don't like to raise taxes, so we borrow that extra $11.

Our overall debt is now $21.

Anybody see a problem?

You have to pay interest on that $21. This is generally about the same rate as the growth of the economy.

So now the requirement for government revenue is NOT $111, it is 111+(21*.1) or 111+2=113.

OOPS.

Since we don't like to raise taxes, let's borrow that money too.

Our fictional government has built up a total debt of $23 in two years AND raised the amount of money it will have to take out of the more productive economy.

So our requirement for government is actually growing FASTER than the economy is, because we have to make those debt interest payments somehow, AND we have to pay those deficits when the bonds mature.

[RandomGuy]

What I think is happeing is that Reagans debt is coming back to bite us in the ass.

THAT is why our economy now isn't growing as fast as it has in past recoveries.

We have to tax more NOW because Reagan's irresponsible budgets got us into debt we have to pay off, this taking of extra money out of the economy is putting a drag on it.

What will happen in the future as we have to pay on Reagan AND Bush's studipity?

Your whole premise that the economy will grow faster falls apart when you consider the DEBT INTEREST payments. For your magic to work, you have to have an economy that is growing faster than the overall debt, right?

[RandomGuy]

if the economy is growing faster than the debt, the debt as a percentage of the economy should be shrinking.

NOW FOR THE MILLION DOLLAR QUESTION:


Is the debt as a percentage of the overall economy shrinking?

http://mwhodges.home.att.net/debtfull.gif


Nope.

Here's a question for you:
What happens to those interest payments when interest rates go up?

[RandomGuy]

Is that why the economy is up 3.8 GDP?

Get the fuck out of here ... Bush kicking ass in the face of adversion... hahah..

um, "adversion" isn't a word. Perhaps you meant "adversity"?

[RobinsontoDuncan]

Right....we should trust random guys word over the Economic Policy Institute, becuase after all a random guy on the street is more likely to know his shit then a think tank designed to make proper anylasis of the economy and it progression? Dude people can try to rationalize their way into justifing reganomics and all the Bush tax cuts forever, the problem is that you have to turn your head and cover your ears everytime actuall economists tell you your damn theory is wrong, you have to ignore the fact that every time there has been a republican regime attempting to use the trickle down effect, there has been a recession (see regan, bush, and bush) and we never experience real growth ( i.e. growth in real wages and the standard of living for the average american)

[RandomGuy]

Right....we should trust random guys word over the Economic Policy Institute, becuase after all a random guy on the street is more likely to know his shit then a think tank designed to make proper anylasis of the economy and it progression? Dude people can try to rationalize their way into justifing reganomics and all the Bush tax cuts forever, the problem is that you have to turn your head and cover your ears everytime actuall economists tell you your damn theory is wrong, you have to ignore the fact that every time there has been a republican regime attempting to use the trickle down effect, there has been a recession (see regan, bush, and bush) and we never experience real growth ( i.e. growth in real wages and the standard of living for the average american)


um, I actually agree with EPI, and think "reaganomics" is a disaster waiting to happen.

I was using EPI's article as support for this assertion.

[RandomGuy]

no no no robinsontoduncan


if i GIVE money to RICH people, who have demonstrated the ability to keep money
POOR people, who have demonstrated an inability to get money from RICH people, will eventually get the money, by a process akin to OSMOSIS


OSMOSIS sounds like OSAMA, thus, POOR people are anti-american!

Q.E.D.


That's right. Poor people are obviously poor because they CHOOSE to be poor. I mean, there couldn't *possibly* be any other explanation.

[gtownspur]

What I think is happeing is that Reagans debt is coming back to bite us in the ass.

THAT is why our economy now isn't growing as fast as it has in past recoveries.

We have to tax more NOW because Reagan's irresponsible budgets got us into debt we have to pay off, this taking of extra money out of the economy is putting a drag on it.

What will happen in the future as we have to pay on Reagan AND Bush's studipity?

Your whole premise that the economy will grow faster falls apart when you consider the DEBT INTEREST payments. For your magic to work, you have to have an economy that is growing faster than the overall debt, right?

THey way you put it makes it seem that the govt sans disaster and war, grows at an exponential rate that neither taxe increases or decreases would make a difference. you then go on and try to win the argument with saying that reagonomics is a disaster becuase of such irrational point.

Once again you are plainly misguided.

1. You dont measure the economy on govt debt and the workers, you measure it on the output of the whole market.

2.you tried to then prove your poin that govt is always increasing by pointing things out like street signs and municipal ordeals. Problem is that the state, fed, and local govt's split the cost.

3.IT is even stupid to suggest that trimming the budget wouldnt decrease the deficit. If tax cuts have proven to raise revenue, then if you cut govt spending you will have a surplus. Since tax cuts actually raised revenue then that means that they are doing their job. WHat bush and reagan failed to do is cut govt spending. Now Clinton did that with cutting the military drastically. Both Reagan and Bush had wartime presidencies, so cutting any military spending would be stupid on their part. But if they were to cut social spending then you would trim the deficit and have a surplus. Now if any republican cut social spending, the media and democrats would say that the repubs are throwing the elderly outside the streets. The republicans had tried cutting failed social programs or decrease their growth, what then happened in the 80's was that the media and dnc went out and told the public that the republicans were gonna make everyone homeless.

4.Your right that the debt is a looming problem. But what we can do is try to eliminate govt spending, something you totally abhor. Tax cuts do not create deficits. Increasing govt spending does.

Your logic is simply this: THe act of giving one more money back into their hands, only gets them into debt.

you see. It was not more cash that made jim bob go broke, but lack of fiscal restraint that did him in. IF jim bob decided to take that cash and invested and cut his spending then that would have been a different story. But thats not what jim bob did. Jim Bob (bush, repubs and dems) recieved more money and then turned around and spent more of it.

[gtownspur]

That's right. Poor people are obviously poor because they CHOOSE to be poor. I mean, there couldn't *possibly* be any other explanation.

Its all so stupid to assume that poor people came about because of republican administration.

Poor people are poor 80% of the time because they cannot personaly handle fiscal restraint. Lottery winners have proven this exact theory. they win 20 mil one day, and then 5 yrs later theyre worse off than when they were poor.

[RandomGuy]

THey way you put it makes it seem that the govt sans disaster and war, grows at an exponential rate that neither taxe increases or decreases would make a difference. you then go on and try to win the argument with saying that reagonomics is a disaster becuase of such irrational point.

:bang
(sets aside his frustration and takes a deep breath.)

NO. That is not what I am saying. Please read the above couple of posts again.

Spending increases paid for with debt are very bad.
They force government to either borrow more in the future or raise taxes. There is a limit to how much ANY government can borrow, and once you reach that point you get a nasty economic shock.



Once again you are plainly misguided.

Please don't lecture me on my ability to grasp economics issues. I am studing for a masters of accountancy, and have gotten A's in every economics and finance course I have ever taken. I love this stuff, and know more than you do, honest.


1. You dont measure the economy on govt debt and the workers, you measure it on the output of the whole market.

(puzzled) Are you trying to say that GDP is a measure of economic activity? If so, then yes.
If we paid fewer taxes, would we have more economic activity? Yes, to a point. How low would our taxes be if we didn't have to pay interest on the national debt?


2.you tried to then prove your poin that govt is always increasing by pointing things out like street signs and municipal ordeals. Problem is that the state, fed, and local govt's split the cost.


Yup. If you think the federal government is wasteful, get rid of it and try duplicating its functions 50 times, once for each state. Could you imagine the chaos at airports from 50 versions of the FAA?


3.IT is even stupid to suggest that trimming the budget wouldnt decrease the deficit. If tax cuts have proven to raise revenue, then if you cut govt spending you will have a surplus.Since tax cuts actually raised revenue then that means that they are doing their job.

(puzzled) Trimming the budget would decrease the deficit, if accompanied by stable tax rates, and I didn't say otherwise. Please actually take the time to read my posts.



What bush and reagan failed to do is cut govt spending. Now Clinton did that with cutting the military drastically. Both Reagan and Bush had wartime presidencies, so cutting any military spending would be stupid on their part. But if they were to cut social spending then you would trim the deficit and have a surplus. Now if any republican cut social spending, the media and democrats would say that the repubs are throwing the elderly outside the streets. The republicans had tried cutting failed social programs or decrease their growth, what then happened in the 80's was that the media and dnc went out and told the public that the republicans were gonna make everyone homeless.

I am all for holding spending flat across the board for a few years to pay down the debt. This will suck on a lot of levels for a lot of people, but a temporary sacrifice for greater growth in the future is needed, in my opinion. "Clinton this, Bush that" is pointless to what needs to happen in the future.


4.Your right that the debt is a looming problem. But what we can do is try to eliminate govt spending, something you totally abhor. Tax cuts do not create deficits. Increasing govt spending does.

Factually wrong. Spending more than you take in creates deficits.
If you keep spending perfectly flat (a real decrease in spending) AND cut taxes at the same time, you have a deficit.


Your logic is simply this: THe act of giving one more money back into their hands, only gets them into debt.

That is not what I said, please re-read it until you actually understand it, if you read it through the first time.


you see. It was not more cash that made jim bob go broke, but lack of fiscal restraint that did him in. IF jim bob decided to take that cash and invested and cut his spending then that would have been a different story. But thats not what jim bob did. Jim Bob (bush, repubs and dems) recieved more money and then turned around and spent more of it.

Clinton and the GOP controled house of reps actually managed to pay down the debt in proportion to the overall economy. If Bush and the GOP controlled House and Senate had done the same this presidency we could PERMANENTLY REDUCE the federal budget.

What our one-party government has done is to TEMPORARILY reduce tax rates. Eventually we will get sick of Republican mismanagement of the economy, and give the government back to the Dems for a shot at trying to fix the problem. What will the Democrats have to do to fix it? RAISE TAXES to pay for the interest on the decades of built-up debt.

In the end there is no-one to blame BUT the Republicans because they will have controlled the Executive and Legislative branches of the federal government for 8 years and run up so much debt we will ahve to pay them back.

[gtownspur]

Random, You can be fucking the king of economics all you want, and if thats the case i should just take you as a source since i cant even dispute with you. screw your goddamn accounting profession. Just cause your studying economics does not give you the cheap shot benefit of name dropping your study to shut the anyone up. If there wasnt others who disagreed with your analysis of tax cuts in your field, then by all means i will quit posting my conclusions and give you the benefit of the doubt. Look, i'm not even disputing your data. I just have a problem with your use of it to reach a conclusion that tax cuts do not help an economy. Not just me dissenting, but i dare you to bet the house that everyone in your type of field agrees with your way.


You could know all the nuances of the economy and still be blind to the real problem of our govt deficits and spending. There are medical doctors who could have your whole patient history and all the results of your screening. They could have labored and study in the finest institutions but many a times they have had misdiagnosis because of relying on their systems of thinking more than their God given reason.

my point is you may be Dr. Economics but you totaly have misread your winded data and misdiagnosed the problem.

I mean look at your own damn post. It suggest that tax cuts have not done anything to boost the national economy. The one reason you bring this up, is because we have record deficits. And your facts you used to prove that tax cuts did not boost production were not based on disproving tax cuts efficacy at all, or the fact that it did or not boost production. You wasted your hot air on pulling an imaginary number out of your head on GOvt expansion of already existing institutions and thus telling us that the tax cuts have to make up a bloated percentage of that growth to balance it all out. you did not even give us a source to back up your assertion on the rate of govt growth. You just thought that if you were the lone accounting major on this forum then we'd take your word.

Don't hate me already. You have a point about the deficit. But economic analysist have been saying that we have a great economy, but that if we dont reduce the debt we will suffer later on. You on the other hand are saying something totally different. That we have a fake boom with no growth(when we dont. Look at the GdP), we have no increase in revenues(we do).

[RandomGuy]

Random, You[sic] can be fucking the king of economics all you want, and if thats[sic] the case i[sic] should just take you as a source since i[sic] cant[sic] even dispute with you. screw[sic] your goddamn accounting profession. Just cause[sic] your[sic] studying economics does not give you the cheap shot benefit of name dropping[sic] your study to shut the[sic] anyone up. If there wasnt[sic] others who disagreed with your analysis of tax cuts in your field, then by all means i[sic] will quit posting my conclusions and give you the benefit of the doubt. Look, i'm[sic] not even disputing your data. I just have a problem with your use of it to reach a conclusion that tax cuts do not help an economy. Not just me dissenting, but i [sic] dare you to bet the house that everyone in your type of field agrees with your way.

(sighs) Alright, this is where I stop being halfway nice.
For the 4th-10th times:
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.

BUT

Since federal spending has gone UP and taxes have gone DOWN, that means that the government has had to borrow A LOT to pay for the spending.

SO:

Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.

Hopefully somewhere in there, you finally pick up on what I am trying to say.


You could know all the nuances of the economy and still be blind to the real problem of our govt deficits and spending. There are medical doctors who could have your whole patient history and all the results of your screening. They could have labored and study in the finest institutions but many a times they have had misdiagnosis because of relying on their systems of thinking more than their God given reason.

And that doctor's chances of being right are 20 times the chances that yours are.

If I had to bet money 100 times on a doctor's diagnosis versus your diagnosis, I would bet on the doctor every time. That is what makes him an expert.


my point is you may be Dr. Economics but you totaly have misread your winded data and misdiagnosed the problem.

You say that deficits don't matter, because we can always grow the economy fast enough to pay the increased interest payments.

No, we can't. The debt has been growing at a rate many times that of the economy, AND SO HAVE THE INTEREST PAYMENTS.


economic analysist have been saying that ... if we dont reduce the debt we will suffer later on.


THAT IS EXACTLY WHAT I HAVE BEEN SAYING.:bang


You on the other hand are saying something totally different. That we have a fake boom with no growth(when we dont. Look at the GdP), we have no increase in revenues(we do)>

When the economy expands but people are paid less, that is a bad thing.
Try to understand this, if you can:

Economic growth does not mean a greater standard of living.

I realize this is a very advanced concept, so let me repeat it a few times so you can understand it.

Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.

I will try something else that's really advanced, so please try to follow this:

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

Do you have it yet?

Has it sunk in?

There is much more than simple government debt at play here, but given your poor track record at understanding what you are reading, I am not even going to bother to go there.

[RobinsontoDuncan]

historically it has been proven that the weathiest 10 percent will horde resources, and that the middle class is the engine for economic advancment. So i dont even agree with the premise that tax cuts cause economic gorwth, we didnt see a huge rise on the sock market when middle america got its $300 back did we? Fuck no.

BTW i mis-understood (actually i just quite reading after the first paragraph out of frustration with what i originally intepreted as.... well you know what i saw it as) so I am sorry for misundertanding random guy

[RandomGuy]

historically it has been proven that the weathiest 10 percent will horde resources, and that the middle class is the engine for economic advancment. So i dont even agree with the premise that tax cuts cause economic gorwth, we didnt see a huge rise on the sock market when middle america got its $300 back did we? Fuck no.

BTW i mis-understood (actually i just quite reading after the first paragraph out of frustration with what i originally intepreted as.... well you know what i saw it as) so I am sorry for misundertanding random guy

'salright.

I actually don't think these tax cuts did much either. In general they do some good, but in this case whatever good they did was far outweighed by the long term damage to the economy of the debt interest payments.

[gtownspur]

(sighs) Alright, this is where I stop being halfway nice.
For the 4th-10th times:
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.

BUT

Since federal spending has gone UP and taxes have gone DOWN, that means that the government has had to borrow A LOT to pay for the spending.

SO:

Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.

Hopefully somewhere in there, you finally pick up on what I am trying to say.



And that doctor's chances of being right are 20 times the chances that yours are.

If I had to bet money 100 times on a doctor's diagnosis versus your diagnosis, I would bet on the doctor every time. That is what makes him an expert.



You say that deficits don't matter, because we can always grow the economy fast enough to pay the increased interest payments.

No, we can't. The debt has been growing at a rate many times that of the economy, AND SO HAVE THE INTEREST PAYMENTS.



THAT IS EXACTLY WHAT I HAVE BEEN SAYING.:bang


It seems as if your saying that the economy is and isnt based on standard of living
When the economy expands but people are paid less, that is a bad thing.
Try to understand this, if you can:

Economic growth does not mean a greater standard of living.

I realize this is a very advanced concept, so let me repeat it a few times so you can understand it.

Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.

I will try something else that's really advanced, so please try to follow this:

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

Do you have it yet?

Has it sunk in?


There is much more than simple government debt at play here, but given your poor track record at understanding what you are reading, I am not even going to bother to go there.

I understand what you are saying. But i never posted that the economy is based on a lower or higher standard of living(ofcourse you decide to try to enlighten me on how a low standard of living is a bad thing, as if i didnt already know.). I have been saying all along that it is based on productivity. so i guess your cut and paste was useless.

1.WHere have i said deficits or debts dont matter? YOu have this whole thread to prove where i said so.

2.I have proposed that we should cut spending. you followed by providing a bullshit equation out of nowhere to prove that the govt is expanding at an exponentioal rate and saying that govt cuts wont decrease the spending enough. Then you shift your argument to that tax cuts are not good enough because we have to pay interest when we borrow. WHich i have not dissented to that. My point is. Tell me why tax cuts are not neceessary if we do trim govt spending enough. If we eliminate useless programs we wont have to borrow for their growth or for that matter the tax cuts since they do provide more revenue.

3. I know you know more than me about economic isssues. But as the saying goes " IF the weatherman says the sky is green, must it be so?". RG get a grip. Your the king. But i am still gonna call you when your wrong. I have heard many theories from many economist on the advantages and disadvantages of tax cuts.


4. We were in a recession. We needed the tax cuts. Bush hasnt cut spending growth and eliminated useless programs, nor reagan. Democrats will not let them do that, and the media will not let them get away with cutting social spending. We have had a need to expand the military and the FBI,CIa, and many other agencies and we've done so. We needed some of that expansion and some of it not. Bush and Reagan are guilty of raising spending.

Defense Spending rose in the 80's and during the War on terror.

Defense Spending rose in the 80's and during the War on terror.

Defense Spending rose in the 80's and during the War on terror.


It is increased spending in GOvt defense and social programs that have caused debts and deficits not TAX CUTS. Change the stupid title to this thread and then it'd make sense.

[Marcus Bryant]

historically it has been proven that the weathiest 10 percent will horde resources, and that the middle class is the engine for economic advancment. So i dont even agree with the premise that tax cuts cause economic gorwth, we didnt see a huge rise on the sock market when middle america got its $300 back did we? Fuck no.


Yeah, the wealthy put their $s in shoe boxes and stick it under their beds.

[Marcus Bryant]

Anyways, the basic problem with the deficit is the rate of growth in federal spending. I don't know about you guys, but I'd prefer that growth rate low and I'd like to see tax rates low across the board. If you're into a little retribution against the "rich" who provide risk capital, more power to your hate.

[gtownspur]

I agree. But MB, we still have to reduce social spending in order to make up for military spending. Not doing so is what caused the deficits. People on this board have blamed tax cuts solely for the debt. Which seems like they are misallocating the blame to prove their point.

[RandomGuy]

We agree on more than you think.

The tax cuts have been coupled with spending and THAT is the problem.

No small portion of the spending is interest payments on built-up debt left over from Reagan.

You want an across the board cut on federal income taxes by 10% for everybody?
Get rid of a large portion of our national debt.

I place the blame for all this debt solely on the GOP. They control both houses of Congress AND the White House.

IF they were truly committed to fiscal responsibility, they have had YEARS to do something about it. That betrayal of their ideals has made me into a lifelong enemy.

[Extra Stout]

gtownspur vs. RandomGuy is not a fair fight intellectually. gtownspur is the proverbial knife in a gunfight.

Now, gtownspur has correctly spouted the theoretical conservative ideology, i.e. smaller government coupled with lower taxes. However, that is not the modus operandi of the current Republican Party.

What the GOP has been doing since 2000 is simultaneously cut taxes and increase domestic spending at the fastest rate since LBJ's Great Society, even before taking into account military spending for the GWOT.

That course is not sustainable, and the GOP has done considerable long-term damage to the U.S. economy with these fiscal policies.*

If the Democrats are tax-and-spend, then the Republicans are borrow-and-spend-even-more.

*There are a few theories behind why the GOP Congress is behaving this way:
1) Any politican who suggests raising taxes or cutting spending loses elections
2) The leadership is looking out for its own narrow interests and doesn't give a shit about what happens to their children and grandchildren
3) Since an expansive welfare state is politically popular, they are trying to create a financial crisis in order to force austerity measures.
4) Our elites realize that due to changes in the world beyond our control, we are fucked no matter what we do, so we might as well party it up now.

[SWC Bonfire]

4) Our elites realize that due to changes in the world beyond our control, we are fucked no matter what we do, so we might as well party it up now.

To hell with our children's children, kids shouldn't be having kids anyway. :lol

[Mr. Peabody]

(sighs) Alright, this is where I stop being halfway nice.
For the 4th-10th times:
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.
Tax cuts DO provide a boost to the economy.

BUT

Since federal spending has gone UP and taxes have gone DOWN, that means that the government has had to borrow A LOT to pay for the spending.

SO:

Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.
Borrowing too much is bad.

Hopefully somewhere in there, you finally pick up on what I am trying to say.



And that doctor's chances of being right are 20 times the chances that yours are.

If I had to bet money 100 times on a doctor's diagnosis versus your diagnosis, I would bet on the doctor every time. That is what makes him an expert.



You say that deficits don't matter, because we can always grow the economy fast enough to pay the increased interest payments.

No, we can't. The debt has been growing at a rate many times that of the economy, AND SO HAVE THE INTEREST PAYMENTS.



THAT IS EXACTLY WHAT I HAVE BEEN SAYING.:bang



When the economy expands but people are paid less, that is a bad thing.
Try to understand this, if you can:

Economic growth does not mean a greater standard of living.

I realize this is a very advanced concept, so let me repeat it a few times so you can understand it.

Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.
Economic growth does not mean a greater standard of living.

I will try something else that's really advanced, so please try to follow this:

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

The debt left over from the Reagan era is dragging the economy down, making this recovery much less strong than it should be.

Do you have it yet?

Has it sunk in?

There is much more than simple government debt at play here, but given your poor track record at understanding what you are reading, I am not even going to bother to go there.

So what you're saying is that debt is a bad thing? Mmmmm, I'm sorry. Not buying it.
________
spanish girl Webcam (http://www.girlcamfriend.com/webcam/latin-girls/)

[RandomGuy]

So what you're saying is that debt is a bad thing? Mmmmm, I'm sorry. Not buying it.

I assume that isn't sarcasm. If so:

Debt in and of itself isn't a bad thing.

Too much debt IS.


http://mwhodges.home.att.net/nat-debt/debt-total-ratio-trend.gif

[Extra Stout]

So, RG, which country do have in mind for relocation once the U.S. goes to shit? I'm thinking Chile -- it's sort of like the West Coast, but upside-down. The Andes are nice. And, it's more stable than Argentina.

[RandomGuy]

gtownspur vs. RandomGuy is not a fair fight intellectually. gtownspur is the proverbial knife in a gunfight.



I'll take that as a compliment. Thank you. :)

[RandomGuy]

So, RG, which country do have in mind for relocation once the U.S. goes to shit? I'm thinking Chile -- it's sort of like the West Coast, but upside-down. The Andes are nice. And, it's more stable than Argentina.

I have honestly considered that very question.

Since I have a degree in German and an accounting background, Switzerland (they will always have money and banking there) or possbily Austria (net exporter of electricity-not to be scoffed at when oil starts getting expensive)

Worst case scenario, I might just chuck western life altogether, and live in an Iron-Age fishing village in Madagascar. I woulnd't have to work so hard to survive. Contrary to popular belief, hunter/gathers in the tropics don't really work that hard.

Chile would work too. Good wines.

I might just buy a plot of land in the US and live as a farmer here. It is fairly easy to grow enough food for a few people. A good simple, honest life.

I just hope I have another 10 years or so to build the off-the-grid house I want.

[Yonivore]

I might just buy a plot of land in the US and live as a farmer here. It is fairly easy to grow enough food for a few people. A good simple, honest life.

I just hope I have another 10 years or so to build the off-the-grid house I want.
Until, of course, it's decided to condemn your land for economic development reasons.

[Marcus Bryant]

gtownspur vs. RandomGuy is not a fair fight intellectually. gtownspur is the proverbial knife in a gunfight.

Now, gtownspur has correctly spouted the theoretical conservative ideology, i.e. smaller government coupled with lower taxes. However, that is not the modus operandi of the current Republican Party.

What the GOP has been doing since 2000 is simultaneously cut taxes and increase domestic spending at the fastest rate since LBJ's Great Society, even before taking into account military spending for the GWOT.

That course is not sustainable, and the GOP has done considerable long-term damage to the U.S. economy with these fiscal policies.*

If the Democrats are tax-and-spend, then the Republicans are borrow-and-spend-even-more.

*There are a few theories behind why the GOP Congress is behaving this way:
1) Any politican who suggests raising taxes or cutting spending loses elections

True. It is, also, a cornerstone of GOP philosophy post-1970s. Reagan v Bush in 1980 cemented that. The other, of course, is a limited government, which means little or no regulation and a low rate of spending growth.



2) The leadership is looking out for its own narrow interests and doesn't give a shit about what happens to their children and grandchildren


Absolutely. I'd also add that the behavior of the White House isn't hard to understand. The GOP is a party today that is driven by social issues moreso than economic ones. It's a lot easier keeping the blue collar voters in the fold when you continue to give them the government programs they want. Also, that mandate is driven by the White House. Congressional conservative Republicans are having a difficult time acting like, well, conservative Republicans when they would have to say no to a popular (in the party) GOP president.



3) Since an expansive welfare state is politically popular, they are trying to create a financial crisis in order to force austerity measures.


Nah, I don't think anyone has thought that far ahead. Bush's 1st term was all about spending whatever it took to get his ass re-elected.



4) Our elites realize that due to changes in the world beyond our control, we are fucked no matter what we do, so we might as well party it up now.

Well, at some point the general populace is to blame. We want it all. We want ever increasing growth federal spending while at the same time desiring a low tax burden and of course, all of the cheap ass foreign goods and services we can enjoy. There's no real political penalty on such prolifigacy, so long as there isn't hell to pay.

[gtownspur]

I agree. But MB, we still have to reduce social spending in order to make up for military spending. Not doing so is what caused the deficits. People on this board have blamed tax cuts solely for the debt. Which seems like they are misallocating the blame to prove their point.


Extra stout. i have said that bush is responsible for not limiting social spending. ANd i have said everything you basically have spouted that i was lacking.

I know i'm not the best here at economic issues. I have given RG his credit. But i also think that the title of this thread is bogus. And i dare you to defend it for RG because he has not done so. He hasnt even proved that the Debt is dragging the economy that is his only theory. THe only thing he has are data charts on how big the debt is and basic tenents of economy. aNd with all his theory is not that the tax cuts are dragging the economy, but the the debt has, according to him.

So for one:

1. His begining argument as well as the title to this thread have not been proven.

2. HE only has a peice of paper to back him up, but no facts that the debt is eroding our standard of living, only assumptions.

Mortgage rates have been proven to paralyze inflation and not increase in GOvt debt. My sources the libertarian Cato insitute's senior fellow Alan Reynolds.

So what if Rg is the grander intellect. RG is just a student of economics and not the source. He deserves to be questioned and not blindly followed.

[RandomGuy]

[Random Guy] He deserves to be questioned and not blindly followed.

YAYAYAY!!!

I agree with this 100%

Blindly following anybody is a bad thing.

[RandomGuy]

In Fiscal Year 2005, the U. S. Government spent $352 Billion of your money on interest payments* to the holders of the National Debt. Compare that to NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion.


Here is a happpy fun graph for you.

http://www.federalbudget.com/chart.gif


For the amount of money we spent on interest payments this year ALONE, we could have a colony on Mars.

[RandomGuy]

But i also think that the title of this thread is bogus. And i dare you to defend it for RG because he has not done so.

Be careful what you wish for...

[RandomGuy]

Part One
Since 2001 President Bush and congressional leaders have promised that enacting each of a series of tax cuts would strengthen the economy by bringing faster growth, more jobs, and greater investment. With Congress again debating whether to extend past tax cuts and enact new ones, it's time to review how much the last four years of tax cuts have affected the U.S. economy and budget outlook. Unfortunately for most Americans, the tax cuts since 2001 have not made today's economy stronger. Over the last five fiscal years, the tax cuts have had a direct cost of $860 billion and (with interest costs) a total effect on the deficit of $929 billion.1 By creating excessive permanent deficits, they have lowered our future standard of living.

A pivotal debate over the last four years has concerned whether tax cuts should emphasize stimulus or long-term restructuring of the tax code. For purposes of stimulus, tax cuts should focus on moderate-income, liquidity-constrained taxpayers, and they should expire after a limited period. But the winners of the legislative process pushed for tax cuts that do not expire and that focus on those taxpayers with high income and wealth. If their tax cuts had truly strengthened the economy, we would be observing it in the data by now.

The longer it takes to restore the revenue base and reduce the deficit, the higher the price that Americans must ultimately pay. The "rebate" checks of mid-2001 did provide stimulus that reduced the depth of the 2001 recession by putting tens of billions of dollars into the hands of liquidity-constrained households just before the terrorist attacks of September 11 shook consumers' confidence.2 But the enduring tax cuts passed that year have not enhanced the economy's performance, and have in fact caused a permanent boost in the federal budget deficit. Foreign lenders have largely financed that deficit, and they will have to be repaid by Americans in the future.

The fact that all major economic indicators are higher today than in early 2001 does not mean that the tax cuts have been beneficial. Since the Great Depression, the resilient U.S. economy has always had gains over such four-year periods. The appropriate question to ask is: How well has the economy performed compared to similar periods in the past? If the last four years of tax cuts had worked as promised, the economy should have done better than in previous cycles, when taxes were either not cut or cut much less.

By virtually every measure, the economy has performed worse in this business cycle than was typical of past ones, including that of the early 1990s, which saw major tax increases. The single area that has excelled in the current cycle, housing, has actually done so despite reduced tax incentives since 2001. And the tax cuts certainly didn't boost investment levels: the expiration of over $60 billion a year in business tax cuts at the end of 2004 had virtually no observable negative effect on investment.

In fact, over the last four years, nearly every indicatorfrom job gains to economic output to spendinghave fallen far short when stacked against comparable periods in past cycles.

Comparing economic performance between business cycles
The economy was in recession from March to November 2001. The first major tax cuts were enacted in May 2001. A second round of tax cuts focused on businesses in March 2002. With jobs still shrinking in the spring of 2003, Congress passed sizeable additional tax cuts in May 2003.

To assess the economic contribution of these tax cuts, this report compares roughly the last four-and-a-half years (17 quarters) to similar stages of past business cycles. The economy had entered a recession not long before the first tax cuts were enacted. After the shallowest recession on record, economic output entered an expansionary phase in November 2001, almost four years ago. We now have monthly data for 54 months and quarterly data for 17 quarters since the last business cycle peak. For comparison purposes, we look at data from previous cycles that lasted as long as the current cycle. Because the recessions varied in depth, the standard procedure is to compare cyclical patterns by starting at the peak of the cycle.

This report also examines two recent episodes when taxes rose: the tax increases in the early 1990s and the expiration of business tax cuts at the end of 2004. In both cases, the economy took the increases in stride and there is no convincing evidence of economy-wide harm.

[RandomGuy]

Part 2

A NOTE ABOUT THE FIGURES

An explanation of the format used in Figures A-L is in order. These figures all compare the current business cycle (since March 2001) to comparable 17-quarter (and, in places, 54-month) periods for all previous business cycles dating back to the late 1940s (when these data first began to be collected). Except for Figures C, D, and E on labor indicators, these figures show changes in real (inflation-adjusted) dollars. The dashed line represents the average change for the six previous cycles; the gray area shows the high and low range in those six cycles. The solid line depicts the current cycle since March 2001.



The aggregate economy
Since the start of 2001, the economy has grown markedly slower than the average of the last six cycles that lasted 17 quarters. We have two measures of the overall economy that should, in theory, have exactly the same growth rate, but often do not because of measurement difficulties. The more commonly used yardstick, the gross domestic product (GDP), increased by 12.3% over the last 17 quarters, for an average annual rate of 2.8%. That performance falls well below the average 3.5% GDP growth rate of the previous six cycles (Figure A). The gap is even wider for the second, equally valid measure of overall activity, gross domestic income (GDI).3 By that measure, activity has expanded at only a 2.3% rate, more than a full percentage point slower than the 3.4% GDI rate of past cycles. No prior cycle has had such a low growth rate of GDI (Figure B).

http://www.epi.org/briefingpapers/168/fig-a-b.gif

[RandomGuy]

Part 3

Employment
The prosperity of the typical American family depends on strong job growth, not only to provide job opportunities but also because a tighter labor market delivers faster pay gains. Despite several rounds of tax cuts, the labor market has seriously underperformed in the current cycle compared with previous ones. The United States has only 1.3% more jobs today (excluding the effects of Hurricane Katrina4) than at the last business-cycle peak 54 months ago in March 2001. At this stage of previous cycles, jobs had grown by an average of 8.8% and never less than 6.0% (Figure C).

Because tax cuts are touted as creating private-sector jobs, it is instructive to look at changes in this area of employment in isolation. Private-sector jobs would be only 0.8% higher than in March 2001 without the effects of Hurricane Katrina. The substantial rise in employment supported by increased defense spending more than accounts for this modest gain in private-sector jobs.5 In comparison, private-sector jobs rose by an average 8.6% in past cycles, and the lowest previous gain was 5.8% (Figure D).

http://www.epi.org/briefingpapers/168/fig-c-d.gif

[RandomGuy]

Part 5
Keep in mind that the working-age population has been growing more than 1% per year. When researchers at the Cleveland Federal Reserve analyzed employment as a share of the working-age population, it found "the same sad story" as in the payroll figures above.6 As with payroll jobs, the gains of the last two years lag those of previous cycles. The employment rate remains 1.3 percentage points below March 2001 (Figure E). With a working-age population of 226.7 million, employment would be almost 3 million higher if the employment rate had recovered the level of the last peak. The unemployment rate has become a poor indicator of labor market conditions because so many people have withdrawn from the labor force.7 This unprecedented decline in labor force participation itself undermines a key argument made for the tax cuts: that lower marginal rates would substantially increase incentives to enter the labor force.
http://www.epi.org/briefingpapers/168/fig-e.gif

[RandomGuy]

Part 6
In making the case for the tax cuts of 2003, the Bush Administration acknowledged that strong job growth should be expected without tax cuts. It projected that 4.1 million jobs would be created between mid-2003 and the end of 2004 without the 2003 tax cuts, and that 5.5 million jobs would be created with the tax cuts.8 In fact, Congress enacted even deeper tax cuts than those on which the Bush Administration's estimates were based. Even so, only 2.6 million jobs were created over that 18-month period. Thus, by the Bush Administration's own analysis, the 2003 tax cuts failed to create more jobs than would have been expected without the tax cuts.

Wage and salary income
Along with anemic job growth, the current cycle stands out for the stagnation of wage and salary income. Most people's standard of living depends on their wages and salaries. The 1.3% annual growth rate of wage and salary income in this cycle falls below the pace of all six past cycles and almost 2 percentage points below their 3.2% average growth rate (Figure F).

Personal income
Because other forms of income have been rising faster than wages and salaries, total personal income (including fringe benefits, rent, interest, dividends, proprietor's income and transfer payments, in addition to wages and salaries) has increased at a modestly faster 1.8% pace over the last four-and-a-quarter years. That is barely half the average pace of 3.4% of prior cycles. Moreover, as shown in Figure G, personal income grew faster in all previous cycles of this duration since 1948.

http://www.epi.org/briefingpapers/168/fig-f-g.gif

[RandomGuy]

Part 7
Spending
Spending has grown somewhat faster than GDP and income over the last four-and-a-half years, but it still trails the pace of earlier cycles. Total U.S. spending ("final sales to domestic purchasers" including households, businesses, and government) has grown at a 3.1% pace compared to the 2.8% pace of GDP. Spending has grown faster than output because imports have grown faster than exports (as foreign governments and investors have financed a growing trade deficit). U.S. spending gains have nonetheless lagged the 3.7% average gain of previous cycles.

The story is much the same for personal spending. Additional borrowing (and vanishing saving) has allowed households to boost their spending at a 3.2% growth rate, much faster than the 1.8% pace of their income gains. Even with the boost from borrowing, household spending has failed to keep pace with the 3.7% average of previous cycles.

Investment
With Congress again debating new tax cuts for business investment, a review of the effect of recent tax cuts on investment is in order. Over the last five fiscal years, the tax cuts tied to business investment have reduced revenue by an estimated $203 billion. This large revenue loss for government brought a large windfall to businesses, but it appears to have had a negligible effect on investment.

Proponents of cuts in individual taxesparticularly lower rates for dividends, capital gains, and the highest income levelshave argued that the cuts would spur investment generally. In addition, the justification of the business tax cuts of 2002 was based on the notion that they would boost investment. Here again, the results have been disappointing.

Business investment in structures, equipment, and software (so-called "non-residential investment") was only 3.6% higher in the second quarter of 2005 than it had been in the first quarter of 2001. That is less than half of the 8.2% growth found in the worst of the six prior cycles, and but one-eighth of the 27.5% growth rate in the strongest prior cycle (Figure H).

http://www.epi.org/briefingpapers/168/fig-h.gif

[RandomGuy]

Skipping parts 8-12, I will go directly to the source material for the article.


Endnotes
1. The Joint Committee on Taxation is the source of all the numbers in this report on the direct cost of tax legislation. Numbers that also include interest costs come from the Center on Budget and Policy Priorities.

2. Mark Zandi, "Assessing President Bush's Fiscal Policy," The Dismal Scientist, July 2004.

3. The Bureau of Economic Analysis makes independent estimates of both GDP and GDI, with the former compiled from production side data sources and the latter from income side data sources. In theory, the two measures should be identical in value. In practice, there is always at least a modest "statistical discrepancy." GDP receives most of the attention, but in periods such as this when the two measures persistently diverge, GDI deserves equal attention.

4. To eliminate the effect of Katrina on the job market, September was assumed to have had the same gain as the average for the three months up to August.

5. Lee Price with David Ratner, "Without defense-related spending, private sector would still be in a jobs hole," August 3, 2005, http://www.epi.org/content.cfm/webfeatures_snapshots_20050803.

6. Mark Schweitzer and Guhan Venkatu, "The Employment Surveys Are Telling the Same (Sad) Story," Research Department, Federal Reserve Bank of Cleveland, May 15, 2004.

7. For an extended analysis of why the unemployment rate is not providing an accurate picture of labor market slack and an alternative measure of slack taking account of rising school attendance and employment of persons 55 and older, see Jared Bernstein and Lee Price, An Off-Kilter Expansion: Slack Job Market Continues to Hurt Wage Growth, EPI Briefing Paper, September 2, 2005, http://www.epi.org/content.cfm/bp164.

8. The Economic Policy Institute did a monthly analysis of the failure of the 2003 tax cuts to deliver the promised benefits on its jobwatch.org Web site. It also preserved Council of Economic Advisers, "Strengthening America's Economy: The President's Jobs and Growth Proposals," February 4, 2003 on its Web site after the CEA pulled it down (See http://www.jobwatch.org/creating/bkg/cea_on_bush_tax_cuts_20030204_macro_effects.pdf).

9. Congressional Budget Office, "Monthly Budget Review," October 6, 2005.

10. Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2005-2009, January 12, 2005, p. 33.

11. Max Sawicky, "Red Ink Rising," EPI Economic Snapshot, September 21, 2005, http://www.epi.org/content.cfm/webfeatures_snapshots_20050921.

[RandomGuy]

IF you want me to go on I can.

But few will read it all.

GTown, you got a defense. Wot you got to say now?

(wait wait, let me guess, it will be something like: "but you still haven't given me any evidence about [random topic here]")

[Extra Stout]

Some more questions for RG:

1) Keynesian theory supports the notion of cutting taxes and increasing deficit spending to soften the blow of a recession. What effect did the tax cuts have on the 2000-2002 recession?

2) Does the return on investment for the government's deficit spending (i.e. economic growth), exceed the interest that will be incurred?

[Extra Stout]

He hasnt even proved that the Debt is dragging the economy that is his only theory.
No, that's not his only theory.
In order to justify the scary deficits we have, we need to have strong enough economic growth to pay them off. We have to outgrow the debt, otherwise we're like the dumb consumer who runs up his credit card bill and only makes minimum payments.

The point of supply-side economics is that lower taxes are supposed to spur large enough economic growth that taxing a smaller percentage of a bigger pie yields a larger piece. In this recovery, that has not happened.

And the spiraling debt means that in the future, either we will have to incur much higher taxes to cover the debt, or basically eliminate all social spending and much of our defense spending, or do neither and simply let the dollar become worthless. In democracies, since the first two choices are unpopular, usually the third one happens. Or, we can institute a dictatorship to force us to accept one of the first two options.

We are spending ourselves into a crisis where the collapse of our economy and way of life, and the collapse of our democracy are the two best remaining options.

What he's showing is that we're not even close to covering the debt we're incurring, and that means big trouble. And Congress doesn't seem to care --> they're spending at a rate that makes liberal Democrats look like fiscal conservatives. It's like Huey Long writ large.


THe only thing he has are data charts on how big the debt is and basic tenents of economy. aNd with all his theory is not that the tax cuts are dragging the economy, but the the debt has, according to him.In other words, you've already made up your mind, so he needs to quit confusing you with the facts.

In one sense, given that the size of the debt and some basic tenets of economics go a long way toward making his point, that should be pretty scary.


2. HE only has a peice of paper to back him up, but no facts that the debt is eroding our standard of living, only assumptions.
This should be really simple.

If you spend more than you make, and charge the difference to your credit card, you can keep a high standard of living. For a while.

But once you reach your credit limit, you go bankrupt and lose everything.

We're approaching our credit limit.


Mortgage rates have been proven to paralyze inflation and not increase in GOvt debt. My sources the libertarian Cato insitute's senior fellow Alan Reynolds.
Mortage rates are low because interest rates are low.

Once interest rates go up, mortgage rates go up.

Interest rates depend upon how much our foreign creditors want.

Beijing controls our interest rates, and therefore our mortgage rates, and therefore inflation, and our ability to finance our debt, and the sustainability of our economy.

BEIJING CONTROLS THAT. NOT US. NOT US. WE'RE NOT IN CONTROL OF OUR DESTINY. WE'RE NOT FREE.

Is that getting through?

[RobinsontoDuncan]

Kensyian theory also assumes that the governemnt will not be running at a defecit druign times that are not a recession, and that a nation's debt will therefore not be at a level that will harm the nation for running the defecit, however, if a nation runs at a defecit during a depression/ recession after it has been during a boom or a period of even moderatre growth, then the effect will be counterproductive, and the governemnt will have to actually cut spending and wait for deflation to occur.

[RobinsontoDuncan]

Deficit spending on social security reform would trigger a dollar collapse and a serious recession.

Robert Kuttner , co-editor of The American Prospect, DECEMBER 2, 2004, URL:
http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=8912

What ails the dollar? Two things. Our trade deficit grows bigger every year, as does our budget deficit. Both deficits require foreigners to supply capital. The more capital they have to supply, the more nervous they get about the dollar. Lately, private foreign investments in U.S. stocks and bonds have both declined, leaving the United States precariously dependent on two foreign central banks -- China and Japan – to finance its twin deficits. The U.S. trade deficit is now close to 6 percent a year and rising. In theory, a very cheap dollar should improve the trade balance by making exports cheap and imports expensive. But it doesn't work out that way. For one thing, many foreign producers, such as Japanese automakers, "price to market." That means that when the yen rises against the dollar, they just eat the cost in order to maintain their market share. So the dollar price of a Toyota doesn't change and the trade deficit doesn't improve. China, meanwhile, keeps its currency pegged to the dollar, so a cheaper dollar doesn't improve our trade balance with the Chinese either. High oil prices also worsen the trade deficit. Most oil transactions are priced in dollars. As the dollar's value sinks, oil exporting nations just raise the price of oil. By continuing to increase the federal budget deficit, most recently with a plan to privatize Social Security, the Bush administration only worsens the problem. And there is a growing risk of a financial meltdown with the following elements: First, as foreign confidence in the dollar keeps shrinking, so does the dollar. The Federal Reserve then has to raise interest rates defensively to make investments in U.S. securities more attractive to foreigners. But high interest rates slow U.S. economic growth, hurt the stock market, and could contribute to a long-anticipated crash of housing prices. We could face a serious recession with no easy cure, since the usual fix is to run temporary deficits plus low interest rates. But in this case, overly large deficits were part of the problem, and higher interest rates would be necessary to prevent a further dollar collapse. But won't the Japanese and Chinese central banks, whose economies rely so heavily on exports to the United States, keep buying American bonds? Perhaps -- it's a kind of co-dependency in which they willingly buy paper that is losing its value because the exports help develop their real economies.

[Marcus Bryant]

Beijing controls our interest rates, and therefore our mortgage rates, and therefore inflation, and our ability to finance our debt, and the sustainability of our economy.

BEIJING CONTROLS THAT. NOT US. NOT US. WE'RE NOT IN CONTROL OF OUR DESTINY. WE'RE NOT FREE.[/b]

Is that getting through?


And yet, the value of what Bejing holds is dependent upon a somewhat strong US economy. In addition, Bejing needs access to the US consumer market just as badly. So both parties "control" each other.

If the US wants the benefits of freer trade, then it's going to have to put up with the reality of a volatile labor market and trade deficits. Employment in the US is moving up the food chain. Of course, when you have a decrepit, outmoded government-dominated education system then you have a problem.

[Extra Stout]

And yet, the value of what Bejing holds is dependent upon a somewhat strong US economy. In addition, Bejing needs access to the US consumer market just as badly. So both parties "control" each other.
For now, yes. But China's internal markets are growing rapidly. There will come a time in the near future when they aren't as dependent on their export market to the U.S. When that time comes, they'll be able to raise the price of lending us money. We will have no other options.


If the US wants the benefits of freer trade, then it's going to have to put up with the reality of a volatile labor market and trade deficits. Employment in the US is moving up the food chain. Of course, when you have a decrepit, outmoded government-dominated education system then you have a problem.
A volatile labor market and trade deficits aren't the crux of the problem. The crux of the problem is that we don't have much in the way of actual wealth anymore and are sustaining our economy on credit. We're using imported money to buy the imported goods.

[Marcus Bryant]

For now, yes. But China's internal markets are growing rapidly. There will come a time in the near future when they aren't as dependent on their export market to the U.S. When that time comes, they'll be able to raise the price of lending us money. We will have no other options.


In a vacuum, sure. But its not like China's internal markets are that stable. Their banking system is a house of cards. It's going to be quite a while before they can build up the level of internal economic activity to replace what they currently enjoy with the US. Also, there will be continued pressure on the Chinese to free up their currency.

Shit, in 5 years the US could be running a trade surplus.




A volatile labor market and trade deficits aren't the crux of the problem. The crux of the problem is that we don't have much in the way of actual wealth anymore and are sustaining our economy on credit. We're using imported money to buy the imported goods.

That credit only becomes a problem when the economic growth is not there to be able to service it with ease. The economic growth ultimately gets back to success at what the economy specializes in, which is moving up the value chain, the IP. That is where a piss poor educational system becomes the issue, as well as immigration.

I don't have a problem with the trade deficit or volatile labor markets in principle.

[gtownspur]

For now, yes. But China's internal markets are growing rapidly. There will come a time in the near future when they aren't as dependent on their export market to the U.S. When that time comes, they'll be able to raise the price of lending us money. We will have no other options.


A volatile labor market and trade deficits aren't the crux of the problem. The crux of the problem is that we don't have much in the way of actual wealth anymore and are sustaining our economy on credit. We're using imported money to buy the imported goods.

Well then your previous post saying that CHina controls our mortgage rate is deeply flawed since they havent reached that rate. ES, we are talking about the now. Now you can only assume that the debt is dragging the economy down. You cannot by any method of data or scientific method conclude that the debt is the sole cause or main. You and Rg have only vague assumptions on what is dragging the economy now. You try to prove for the present for "what could happen in the future".

I can be the proverbial knife in the gunfight, even not the sharpest one at that. But I will bet the house on the guy with the knife against the guy with a gun that doesnt shoot straight.

Rg has data and knowledge. But that data just sits there and doesnt conclude his main arguments. Basically his gun is all smoke and a "bang!" flag.

Next time you come across somebody that is more knowledgeable than you on a certain area. I dare you to blindly take his word. In that case, i should never catch you or random disputing a preist on subjects of religion, or questioning a cop on law procedures. Nice try. :lol

[gtownspur]

Since 2001 President Bush and congressional leaders have promised that enacting each of a series of tax cuts would strengthen the economy by bringing faster growth, more jobs, and greater investment. With Congress again debating whether to extend past tax cuts and enact new ones, it's time to review how much the last four years of tax cuts have affected the U.S. economy and budget outlook. Unfortunately for most Americans, the tax cuts since 2001 have not made today's economy stronger. Over the last five fiscal years, the tax cuts have had a direct cost of $860 billion and (with interest costs) a total effect on the deficit of $929 billion.1 By creating excessive permanent deficits, they have lowered our future standard of living.

...

The fact that all major economic indicators are higher today than in early 2001 does not mean that the tax cuts have been beneficial. Since the Great Depression, the resilient U.S. economy has always had gains over such four-year periods. The appropriate question to ask is: How well has the economy performed compared to similar periods in the past? If the last four years of tax cuts had worked as promised, the economy should have done better than in previous cycles, when taxes were either not cut or cut much less.

By virtually every measure, the economy has performed worse in this business cycle than was typical of past ones, including that of the early 1990s, which saw major tax increases. The single area that has excelled in the current cycle, housing, has actually done so despite reduced tax incentives since 2001. And the tax cuts certainly didn't boost investment levels: the expiration of over $60 billion a year in business tax cuts at the end of 2004 had virtually no observable negative effect on investment.


--------------------

So all we have to show is tax increases on our kids. Great.


See what i'm talking about. His post was on the efficacy of tax cuts. basically he's judging the economy by his own standard. He has not taken into consideration that this economic period is way different than others than just superficial reasons, and by doing so he is trying to parrallel those time periods with this one.

Here is some concrete reasons why you cannot parrallel the tax cuts and this economy to others like the post war economy of ww2, the reagan years, and the clinton years.

1.We have extremely high energy prices in this economy. Right now inflation should be running extremely amok on all levels like the late 70's ala carter. Energy prices were never high when we had boom economies in the past.

2. This is a war economy and not a post war economy like eisenhowers and clinton's.

3.These tax cuts came to relieve the recession that took place when bush took office in 01. As a resut, all economist have stated that the 01 recession was the shortest in history.

4.We are producing a 3.8 Gdp when we just went through the most tragic natural disaster in american history, all while keeping interest low and unemployment at a low level. iF you want to complain about lower standard of living, then illegal immigration is your devil. The reason why pay wages are low in the katrina reconstruction is because companies can hire illegaly. Even Mayor Ray Nagin has acknowledge the fact. Maybe Rg can now say that illegal immigrants are the buffaloe soldiers of the war on poverty. :lol

5. We dont have the oxymoronic security of MAD like in the cold war economies. We are at a disadvantage in that we are more likely to encounter a huge bio threat or nuke now more than in the past because Al queda is willing to die for their cause and they're not a country. you cannot retaliate back at alqueda like you could UNcle Joe. and the USSR.


All this and our economy is doing fine and wall street is going strong and not even flinching.

Its also ludicrous to say that tax cuts alone cost the govt. FOr your info. those taxes are private individual's money and not the govt. What is costing us is not the tax cuts but the inaction of cutting spending immediately because tax cuts take time to expand the tax base. One does not look at the fed fiscal budget and see tax cuts listed as a fed program like MEdicare with its annual expenses. THat 929 billion was the cost of inaction on behalf of Bush to slash pork and overspending that should accompany tax cuts.

[gtownspur]

Where are the enlightened economic progressives.

[gtownspur]

.

[Extra Stout]

Once agin, gtwerp cannot expand his feeble mind beyond a narrow partisan argument about whether the tax cuts gave us a great return or nut.

I asked RG to quantify that a little bit back, and got no response.

What gtwerp can't get his mind around is that I was talking about something bigger than just the Bush tax cuts. Since gtwerp views the entire world in terms of us vs. them partisan arguments, this does not compute.

My point was that the U.S. economy is sustained on credit. gculo responds by saying, "Prove to me the debt is slowing down the economy." My point is the opposite: THE DEBT IS THE ONLY THING KEEPING THE ECONOMY GOING.

gtwerp probably would respond, "Ha ha, Bush is right." What he doesn't get, is that our credit line is not infinite. Soon, our remaining creditors will demand higher interest rates, or stop buying T-bills altogether. Once that happens, there is nothing else to keep the economy going, and it will crash.

Since I can see it coming, I can move my assets out of dollar-based investments and weather it reasonably OK. If you choose to do nothing, you will suffer greatly.

[Extra Stout]

Just thought I'd mention...

Though the Republicans certainly aren't helping things, our debt problems go far past anything the government is doing. Our businesses are carrying too much debt. Individual households are carrying too much debt. Our 290 million citizens don't have enough savings to cover much if any economic downturn, or any kind of jump in interest rates.

Ordinarily, in a downturn, our central banks can cut interest rates, like they did in 2000, and flood the economy with cheap liquidity to soften the blow. But we've backed ourselves in a corner now. We're facing a double whammy of economic contraction and rising interest rates at the same time. That's going to hurt really, really bad. That's the sort of thing that triggers hyperinflation.

Our Latin American neighbors provide multiple object lessons in what happens when a country keeps spending money it doesn't have. If we weren't the United States of America, things would have gone south long ago. But with sufficiently irresponsible behavior, even we can wreck our own economy.

And we're doing it.

[gtownspur]

^^You were not debating me the fiscal debt deficit at first. You just came in and attacked me for not being an economist on the idea. I already agreed with RG that fiscal debt was really bad to not deal with many post ago. you should actually read the other post not b4 opining but criticizing.

THe fact is the premise of the thread is bogus and you (since you at first took sides with RG) or Rg have not proven it with factual data.

RG's point is is that the tax cuts cost the the nation money. How can that be so when it's our own money.

My point is that it is the act of not preparing for a tax cut's delayed promises by cutting spending in the begining of its practice that cost the govt money. I have blamed BUSh already for not cutting spending

I have blamed bush for not cutting spending.

i have ....you get the idea.

So dont respond with your ad hominem "cheerleader" defense.

[RandomGuy]

Shit, in 5 years the US could be running a trade surplus.


Um, not likely. This trend is a decade in the making.

http://mwhodges.home.att.net/trade_all.gif

[RandomGuy]

Some more questions for RG:

1) Keynesian theory supports the notion of cutting taxes and increasing deficit spending to soften the blow of a recession. What effect did the tax cuts have on the 2000-2002 recession?

2) Does the return on investment for the government's deficit spending (i.e. economic growth), exceed the interest that will be incurred?


Very valid and cogent questions.

1) Not a lot, if the data from EPI is any indicator. Either the tax cuts weren't targeted well and went to unproductive parts of the economy, or the interest payments we are having to throw out the window on our debt is dragging the economy down. I think it is a combination of both.

2) I don't think so. I think the interst incurred will end up being much higher than the economic growth that those cuts fostered. It is a question that I wish I had time to dig up the answer to.

[RandomGuy]

And yet, the value of what Bejing holds is dependent upon a somewhat strong US economy. In addition, Bejing needs access to the US consumer market just as badly. So both parties "control" each other.

If the US wants the benefits of freer trade, then it's going to have to put up with the reality of a volatile labor market and trade deficits. Employment in the US is moving up the food chain. Of course, when you have a decrepit, outmoded government-dominated education system then you have a problem.


Very good points as well.

I actually see the results of the chinese education system first-hand in the form of my classmates who are studying for their CPA and/or MBAs.

From what I have seen, the analysis that the chinese educational system doesn't produce people capable of critical thinking is pretty much correct. Not that my classmates are dumb, it is just that they have not been taught to think or act for themselves much. This is something that will limit long-term chinese growth considerably for a number of reasons.

Every country's competitiveness boils down to ONE factor:

How well they invest in their human capital. People are the most important asset of any nation. Short change education, health care, or individual achievement at your own peril.

[RandomGuy]

Well then your previous post saying that CHina controls our mortgage rate is deeply flawed since they havent reached that rate. ES, we are talking about the now. Now you can only assume that the debt is dragging the economy down. You cannot by any method of data or scientific method conclude that the debt is the sole cause or main. You and Rg have only vague assumptions on what is dragging the economy now. You try to prove for the present for "what could happen in the future".

China does control our mortgage rates through its saving rate. Interest rates are rather complicated things with lots of interrelated factors working on them. (shrugs) You simply don't understand the interrelation, and I doubt could explain to you why he is correct in a way that you would understand.

As for the rest of this paragraph, it isn't really clear what you are trying to say, so I won't comment too much other than to say I have more than "vague assumptions".


Rg has data and knowledge. But that data just sits there and doesnt conclude his main arguments. Basically his gun is all smoke and a "bang!" flag.

The data just sits there for you because you lack the knowledge or framework of understanding to interpret it. I say this with no anger or intended mean-ness. It just is the way things are. If you want to dis-believe me, that's ok. I don't expect anybody to jump up and say, "halelujah!"


Next time you come across somebody that is more knowledgeable than you on a certain area. I dare you to blindly take his word. In that case, i should never catch you or random disputing a preist on subjects of religion, or questioning a cop on law procedures. Nice try. :lol


I don't ask anybody to blindly take my word for it.

I do ask that you take what I have to say seriously though. I read and think things through, and have some reasonable basis for what I say.

If you want to pooh-pooh something simply because you don't understand it, that is your business.

[RandomGuy]

See what i'm talking about. His post was on the efficacy of tax cuts. basically he's judging the economy by his own standard. He has not taken into consideration that this economic period is way different than others than just superficial reasons, and by doing so he is trying to parrallel those time periods with this one.

No, not the efficacy of tax cuts. THESE tax cuts in particular aren't doing near the good the administration said they would. You can blindly keep believing Bush knows what he is doing if you want to though.


Here is some concrete reasons why you cannot parrallel the tax cuts and this economy to others like the post war economy of ww2, the reagan years, and the clinton years.

I am sure the laws of supply and demand have been repealed when I wasn't looking...


1.We have extremely high energy prices in this economy. Right now inflation should be running extremely amok on all levels like the late 70's ala carter. Energy prices were never high when we had boom economies in the past.


Wrong, check your figures. Energy is actually pretty cheap historically. That will change in about 10 years, but that is another thread.


2. This is a war economy and not a post war economy like eisenhowers and clinton's.

Wrong again. Check your figures on percentage of the economy spent on the military.


3.These tax cuts came to relieve the recession that took place when bush took office in 01. As a resut, all economist have stated that the 01 recession was the shortest in history.

Um, sure.


4.We are producing a 3.8 Gdp when we just went through the most tragic natural disaster in american history, all while keeping interest low and unemployment at a low level. iF you want to complain about lower standard of living, then illegal immigration is your devil. The reason why pay wages are low in the katrina reconstruction is because companies can hire illegaly. Even Mayor Ray Nagin has acknowledge the fact. Maybe Rg can now say that illegal immigrants are the buffaloe soldiers of the war on poverty. :lol

If you really understood how GDP is measured, you would realize why this is not exactly spectacular. But if it makes you feel good, go for it.

Immigration legal and otherwise is the only thing keeping our economy afloat.


All this and our economy is doing fine and wall street is going strong and not even flinching.

Actually our economy isn't doing fine. Unless you blindly believe the Bush administration's word on it. I happen to know how they are lying, so I will keep my opinion, thank you.


Its also ludicrous to say that tax cuts alone cost the govt. FOr your info. those taxes are private individual's money and not the govt. What is costing us is not the tax cuts but the inaction of cutting spending immediately because tax cuts take time to expand the tax base. One does not look at the fed fiscal budget and see tax cuts listed as a fed program like MEdicare with its annual expenses. THat 929 billion was the cost of inaction on behalf of Bush to slash pork and overspending that should accompany tax cuts.

The tax cuts do take time to expand our economic base. Time we don't have because of the deficit spending and looming collapse of oil production.

[RandomGuy]

Once agin, gtwerp cannot expand his feeble mind beyond a narrow partisan argument about whether the tax cuts gave us a great return or nut.

I asked RG to quantify that a little bit back, and got no response.

My apologies. I have work and school and family and job search and extracurricular stuff and mentoring and... sigh. I get to this when I can. :)


What gtwerp can't get his mind around is that I was talking about something bigger than just the Bush tax cuts. Since gtwerp views the entire world in terms of us vs. them partisan arguments, this does not compute.

I agree.

My point was that the U.S. economy is sustained on credit. gculo responds by saying, "Prove to me the debt is slowing down the economy." My point is the opposite: THE DEBT IS THE ONLY THING KEEPING THE ECONOMY GOING.

gtwerp probably would respond, "Ha ha, Bush is right." What he doesn't get, is that our credit line is not infinite. Soon, our remaining creditors will demand higher interest rates, or stop buying T-bills altogether. Once that happens, there is nothing else to keep the economy going, and it will crash.

Since I can see it coming, I can move my assets out of dollar-based investments and weather it reasonably OK. If you choose to do nothing, you will suffer greatly.[/QUOTE]

It is always best to diversify your holdings anyways. :)

Erg, gotta get back to work. (working late at a bookkeeping client)

[gtownspur]

I'm gonna stop speaking for myself and let the facts speak for themselves.

But before i go into this. I will remind you that the tax cuts were sold as a stimulus package for recovery in 2001 to the congress.

1. The economy is doing fine if not better.
http://news.xinhuanet.com/english/2005-10/28/content_3697904.htm


2. The tax cuts have been doing their job in keeping consumer spending high and un perturbed despite 911 and the war in iraq.
http://www.fdic.gov/bank/analytical/fyi/2005/012605fyi.html

If you think i or bush is lying to you about the effects of the tax cuts, then take it up with the FDIC who believes that the tax cuts have helped keep our economy strong.

3.Despite what you say about the tax cuts. Leading Fed Chairman Greenspan stated that he'd still support the Bush tax cuts, and that the economy is strong and sturdy growing and advancing.

http://sfgate.com/cgi-bin/article.cgi?f=/news/archive/2005/11/03/financial/f072101S75.DTL&type=business

Despite your efforts on the contrary. The dollar is doing fine, and wages are on the rise.

http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20051104-000869-1330

4.Wrong again. Recession was short lived.

http://www.americanprogress.org/site/pp.aspx?c=biJRJ8OVF&b=15120&printmode=1

[RandomGuy]

You didn't even read half the stuff you posted.

Here are some of the excepts from your links:
http://www.fdic.gov/bank/analytical/fyi/2005/012605fyi.html

One of the statistics … quoted a lot [in 2004] … was about the loss of jobs. Typically, you would see that you would recover all of those jobs within two years after the start of a recovery. Now we're three years into it and we still haven't recovered all of those jobs, which is yet another way of looking at this point about how slow employment growth has been in this recovery. And that, obviously, affects consumers a lot.”

Real wages are going down now for a couple of reasons. One reason is we've had a bit of an acceleration in inflation. That, obviously, undercuts purchasing power.

http://sfgate.com/cgi-bin/article.cgi?f=/news/archive/2005/11/03/financial/f072101S75.DTL&type=business

Greenspan used strong language to warn Congress to get the nation's fiscal house in order. Bloated budget deficits, if not curbed, could pose a danger to the economy's long-term health, he warned.

"Unless the situation is reversed, at some point these budget trends will cause serious economic disruptions," Greenspan said.

Greenspan said given the facts known at the time, he would still support the tax cuts because of projections, which later proved wrong,that the federal government was facing huge surpluses.

And, Greenspan called on Congress to pay for any future tax cuts with either increases in other taxes or reductions in spending.

http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20051104-000869-1330
Average wages are still rising slower than inflation, however.

With its offsetting factors, most analysts said the routinely market-moving jobs report did little to argue against bets for higher U.S. interest rates in coming months.

http://www.americanprogress.org/site/pp.aspx?c=biJRJ8OVF&b=15120&printmode=1
The Bush administration failed to enact the kinds of policies that would have spurred demand most. Too few of the tax cuts were targeted to households with either slow income growth or high proportions of their budgets devoted to necessities, as is the case with most low income families. Had fiscal policies been more effective, demand would have been higher, overcapacities would have shrunk, and investment would have increased.

Thanks for the articles that supported my position.

http://www.trephination.net/gallery/macros/unimpressed.jpg

[gtownspur]

The sfgate article which qouted Greenspan was used by me solely to show greenspan's oppinion on the efficacy of the tax cuts. I could careless what the journalist oppinion's on the tax cuts are. The big red meat was Greenspan's own words and not the journalist. The article did stated on it's own volition, not greenspans that the projections were wrong. Greenspan though said he would still support the tax cuts. NO point made on your behalf.

the american for proggress article was a liberal source which was critical of the Bush tax cuts. Yet at that, they, contrary to your oppinion, believed the recession was short. I figured it would take your own damn liberals to convince you of the fact that the recession was short. Although i didnt expect them to blow bush's nut, i used their words to slash your argument that anybody that believed that the recession was short lived was a republican or bush lover.

And according to the FDIC statement, It made my argument more than yours. The jobs that were loss wont be totally recovered till we build back the WTC. On that day we lost 50,000 jobs. Another reason why we will not get back the amount of jobs we had is becuase jobs have been sent oversees.


Despite your argument of lagging wages, and debt(which for the upteenth time, I AGREE WITH YOU!!)

YOur still wrong that this economy is weak and that the tax cuts are useless.

ANd the points that i did make you still cannot prove them wrong.