Nouriel Roubini: The Exit Strategy

[spursncowboys]

If govt wants to really raise revenue...if they are "REALLY" interested in paying off the debt. Then you do NOT raise taxes on the people your relying on to actually pay it...producers and productivity.

Bush proved that by his tax cuts. No one could predict the increase in taxes we got for his tax cuts.

That is the surest way to decrease the activity you want to increase (if, in fact you really want to increase productivity.) Productivity and Producers are what pays for everything govt does.

If you want a business to come to San Antonio...you don't offer them tax increases...you offer them tax abatements, or decreases.

Or you get the government out of the way entirely.

If you want business to flourish in the US, you don't increase their tax burdens...you decrease it. You'll get more activity and more business in both the San Antonio and US tax reduction scenarios and People making more money.

Tax 50% of nothing...you get nothing. Tax 10% of something...you get something

That's how you increase revenue for govt crap. lol

You make so much sense that all people can do is belittle your idea like it is stupid. Don't forget us Liberals operate on Alinskey's rules. Notice all of your detractors responding to you- what percent is just an attack on you and your writing? How much of it is actually challanging what you wrote? Actually discussing what you wrote and debating the points you make.

[spursncowboys]

If govt wants to really raise revenue...if they are "REALLY" interested in paying off the debt. Then you do NOT raise taxes on the people your relying on to actually pay it...producers and productivity.

That is the surest way to decrease the activity you want to increase (if, in fact you really want to increase productivity.) Productivity and Producers are what pays for everything govt does.

If you want a business to come to San Antonio...you don't offer them tax increases...you offer them tax abatements, or decreases.

If you want business to flourish in the US, you don't increase their tax burdens...you decrease it. You'll get more activity and more business in both the San Antonio and US tax reduction scenarios and People making more money.

Tax 50% of nothing...you get nothing. Tax 10% of something...you get something

That's how you increase revenue for govt crap. lol

"He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt."

Can you find anyone else who predicted this?

Ron Paul, Jonh McCain, Bush, Thomas Sowell, George Will, Rush Limbaugh all predicted what would happen to Fannie and Freddie. By giving govt backed loans to ppl who couldn't afford them.

[mogrovejo]

"He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt."

Can you find anyone else who predicted this?

In all fairness, Roubini has been "predicting" that for decades. So, at some point he'd get it right. It's kind of bizarre to dismiss all his failed predictions.

And yeah, Austrian guys have also been "predicting" the same stuff (for decades as well).

If you want to be the next Roubini, just start making a similar prediction now (or a different one, say, a hyper-inflation crisis or whatever). If you live long enough, you'll end up being right.

[Shastafarian]

Ron Paul, Jonh McCain, Bush, Thomas Sowell, George Will, Rush Limbaugh all predicted what would happen to Fannie and Freddie. By giving govt backed loans to ppl who couldn't afford them.

Any do entation of these savants?

[SouthernFried]

"He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt."

Can you find anyone else who predicted this?

Nope...nobody else figured out how under capitalized mortgage speculation could pose a problem. Not even after Japan lost their ass's in the late 80's and 90's doing the exact same thing. Nobody could have figured that packaging and trading bundles of bad mortgages and selling them as legitimate investments was probably not a good idea....not even when McCain and others started questioning Fannie Mai's practice of backing billions of dollars of loans to people who couldn't really afford them, but was blocked in congress from doing so, could they figure out this probably WAS a bad idea...

nope...not until this genius in 2007 told us, did anyone have a clue what could happen in the mortgage industry.

[Winehole23]

Bush proved that by his tax cuts. No one could predict the increase in taxes we got for his tax cuts.

Wrong. As a percentage of GDP, tax revenues have declined since 2001.




http://www.heritage.org/Research/Tax...art4_lg_1.gifb

In fact the cuts have been deficit-financed, and have worsened the fiscal condition of our government.

Or you get the government out of the way entirely.

Very easy to say. The historical trend runs in the other direction: the government is getting us out of the way.

You make so much sense that all people can do is belittle your idea like it is stupid. Don't forget us Liberals operate on Alinskey's rules. Notice all of your detractors responding to you- what percent is just an attack on you and your writing? How much of it is actually challanging what you wrote? Actually discussing what you wrote and debating the points you make.

Looks like a good description of what you do, spursncowboys. You ignore contradicting points and belittle posters, mainly.

Too bad you don't practice what you preach.

[mogrovejo]

In fact the cuts have been deficit-financed, and have worsened the fiscal condition of our government.

Yeps. The GOP should definitely forget the over-simplistic "tax cuts promote growth and higher tax revenues" rhetoric. I understand the need for simplification in the realm of politics, but to add that income tax cuts are only virtuous when not financed by additional revenue but by spending caps and that the increase on revenues depends on which side of the Laffer curve you are seems very feasible.

Tax cuts are overrated. Most of Bush tax cuts weren't true tax cuts but just a financial operation of borrowing money from the future generations. The true level of taxation is given by the amount of government spending, not tax rates.

[SouthernFried]

Winehole, you trying to make my case for me?

The first thing I noticed about the "chart," is how taxes didn't seem to be all that affected by those sharp decreases in tax rates.

Then, I looked at the chart a little closer, and noticed you only showed the "top" tax rates and their respective lowering of tax rates...and correlated to "overall tax revenue." Which seemed to make my point as well, tax revenue wasn't all that affected by a DRAMATIC decrease in taxes. If increasing tax rates will bring in more money for govt crap, correspondently...shouldn't lowering tax rates bring in less?

So, I decided to invest some of my precious time on this nonesense...and look at the numbers more relevantly.

If decreasing tax rates on the TOP % didn't affect overall tax revenue all that much...what did it do to the revenue recieved from the TOP % ? I mean, if we're looking at the TOP % tax rates...let's look at the TOP % tax revenues from those tax rate decreases.

Apples to apples...so to speak.

While those tax rates for the TOP 1% were being decreased from 70% to 30%...here's what their tax "revenues" were doing.



Not sure I could have done a better job of showing how decreasing tax rates, increase tax revenues.

Thanks

[SouthernFried]

But, this is just a digression...

The point is...economists are idiots, lol.

Just kidding.

The point is, economists and genius's like this look at everything from a govt vacuum perspective. It is "sensible" to them that they get more money if they raise taxes. So, if they need more money, they want to raise taxes. Their views of how such actions affect productivity is almost negligible. Laffer came out with his curve..and it was like...whoa, what's this?

When any fool could have told them, "Hey, you can only tax us so much before you kill the goose that is funding you pricks."

They live in books, and confined spaces...not in the real world. Which is why very few business actually employ these guys as economists ("you've got an economics degree? Great, can you sell insurance?")...but, so many govts do.

I don't despise economists, I actually have freinds who are them. The younger ones, or the ones still in school don't have much of sense of humor about their profession. The older ones, that have been around 20-30 yrs (almost exclusively in Academia)...well, they can laugh at themeselves a little more.

I respect that in an economist

[mogrovejo]

Not sure I could have done a better job of showing how decreasing tax rates, increase tax revenues.

It's very easy to show, theoretically or empirically, that it's possible to decrease tax rates and increase tax revenues (although I'm not sure you did that). However, that doesn't make your sentence an universal truth. For example, what do you think it would happen if the tax rate was cut to 0.1%? Would the revenues grow? Of course not.

There are some more or less consensual findings about tax reductions. A very important one to keep in mind is that not all tax cuts are created equal. Some tax reductions lead to growth increases, but others are neutral on growth or can even reduce it; and the way the tax cuts are financed is essential to define their long-term economical impact.

This paper about the long-term effects of the "Bush tax cuts" is very good:
http://www.treasury.gov/press/releas...july252006.pdf

p.s. - and what's so great about increasing the government revenues? The lesser they have to spend, the better.

[SouthernFried]

It's very easy to show, theoretically or empirically, that it's possible to decrease tax rates and increase tax revenues (although I'm not sure you did that). However, that doesn't make your sentence an universal truth. For example, what do you think it would happen if the tax rate was cut to 0.1%? Would the revenues grow? Of course not.

There are some more or less consensual findings about tax reductions. A very important one to keep in mind is that not all tax cuts are created equal. Some tax reductions lead to growth increases, but others are neutral on growth or can even reduce it; and the way the tax cuts are financed is essential to define their long-term economical impact.

This paper about the long-term effects of the "Bush tax cuts" is very good:
http://www.treasury.gov/press/releas...july252006.pdf

p.s. - and what's so great about increasing the government revenues? The lesser they have to spend, the better.

Oh, I know your right. The govt does need some money to do the stuff that they do. And I guess that was what Laffer was all about, tho he couldn't find exact percentages or numbers to fit into his stuff ("at some point increasing taxes are not going to increase revenues...what that point is, I dunno... )

But, I do generally take issue with the "how are we going to finance tax cuts." When the more important question to me is..."How are we going to finance tax increases."

One looks at the problem from the vacuum of the governmental standpoint...one looks at the problem from the producers standpoint. Since it's the producers that are actually making the money and financing the govt, I prefer to look at it from their standpoint.

Methinks if govt would do the same, and pose the question to themeselves..."ok, how are the producers going to finance our increased spending" it might change how they view their spending in the first place. They are not financing us...we are financing them.

I've never liked this subtle shift in the last decade at govt looking at producers money as the govts, and how will the govt pay for letting the producers keep more of their own money. It's subtlely changed the perspective of taxes.

But, yeah...not all tax cuts affect govt revenue the same.

[coyotes_geek]

Any do entation of these savants?

The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices.

Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.

http://www.lewrockwell.com/paul/paul128.html

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

http://www.nytimes.com/2003/09/11/bu...gewanted=print

A bonus quote from the article above.

'These two en ies -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

http://www.govtrack.us/congress/reco...Elementm0m0m0m

[MannyIsGod]

So we're still pushing the meme that Frannie and Freddie were the cause?

[Winehole23]

Freddie and Fannie will be significant sinkholes well into the future, and the perverse incentives that led to their bust remain.

I personally think Fannie and Freddie are more symptom than cause. The cause was a massive credit bubble, aggravated by implicit (and now, more or less explicit) public guarantees for the GSEs.

[Winehole23]

But, I do generally take issue with the "how are we going to finance tax cuts." When the more important question to me is..."How are we going to finance tax increases."

By cutting spending til it hurts, then cutting some more.

[Nbadan]

If we were truly in growth periods during the Bush years then Dubya should have cut spending, of course, that didn't happen.... for many months, Bush relied on the growth of the federal govt to insure economic growth that business couldn't support, so Dubya couldn't cut spending....now when we need the govt to keep business from going into a tailspin by spending, the costs are much higher...

[Bender]

blah blah

jeez, top tax rate used to be over 90% ?

[spursncowboys]

If we were truly in growth periods during the Bush years then Dubya should have cut spending, of course, that didn't happen.... for many months, Bush relied on the growth of the federal govt to insure economic growth that business couldn't support, so Dubya couldn't cut spending....now when we need the govt to keep business from going into a tailspin by spending, the costs are much higher...

Did the big W cut spending if you take out Defense spending? Also do you believe it is the governments role to keep business from going down?

[angrydude]

How much revenue the govt. takes in really doesn't matter because whatever they don't raise through taxes they just borrow and tax us through the long term with the problems that causes.

the tax rate really only matters when it comes to shifting sectors of the economy around.

[Nbadan]

Did the big W cut spending if you take out Defense spending? Also do you believe it is the governments role to keep business from going down?

No....non-discretionary spending went way up under Dubya....

[Nbadan]

Also do you believe it is the governments role to keep business from going down?

No...when we try and buffer the effects of small down-turns we wind up making the problems much worse....that's what the Bush administration was doing...it was putting this recession off by any means possible, hoping to make it till Dubya was out of office and they almost made it...

[spursncowboys]

No...when we try and buffer the effects of small down-turns we wind up making the problems much worse....that's what the Bush administration was doing...it was putting this recession off by any means possible, hoping to make it till Dubya was out of office and they almost made it...

So, is Obama bailing out companies wrong? Is becoming a shareholder wrong. Is it because they are only bailing out the big companies?
When you say Bush, what policies? Do you mean what Greenspan was doing?

[spursncowboys]

Wrong. As a percentage of GDP, tax revenues have declined since 2001.




http://www.heritage.org/Research/Tax...art4_lg_1.gifb

In fact the cuts have been deficit-financed, and have worsened the fiscal condition of our government.

Very easy to say. The historical trend runs in the other direction: the government is getting us out of the way.


Looks like a good description of what you do, spursncowboys. You ignore contradicting points and belittle posters, mainly.

Too bad you don't practice what you preach.

http://www.heritage.org/Research/Taxes/wm1891.cfmSummary:Higher

taxes on capital will hinder the growth of investment and capital stock. The decrease in capital will reduce economic growth, which will lead to higher unemployment and reduced personal income. Tax rates should not be a determining factor in allocating investment dollars, and lower tax rates mitigate the lock-in effect.
Investment is a forward-looking enterprise, and companies are already making decisions about their future. Making permanent the lower tax rates on capital gains and dividends will make future investment more attractive to businesses and investors. This will ensure more capital stock and economic growth. Congress should therefore make permanent these reductions on the cost of capital.

This is just the summary and is a good research paper.

[Winehole23]

jeez, top tax rate used to be over 90% ?

During Eisenhower, yeah.

[Winehole23]

[url="http://www.heritage.org/Research/Taxes/wm1891.cfmSummary:Higher"]

This is just the summary and is a good research paper.

Did you notice the graph refutes your point about enhanced tax receipts since 2001? The Bush tax cuts? Deficit financed?

o?