From Stark
On the Econbrowser blog, University of Wisconsin economist Menzie Chinn argues that there is no painless way to fix the debt crisis that afflicts both our government and the national private sector economy.
The only realistic fix, Chinn contends, involves increased federal revenues. As things stand now, reduced federal spending is likely to worsen recession and thereby reduce federal tax revenues even more.
“We lost the first decade of the 21st century by squandering our wealth and borrowing as if there was no tomorrow,” Chinn writes. “We risk losing this decade to an incomplete recovery and economic stagnation.”
He is among many economic analysts who note that the downgrade in the U.S. credit rating, being dubbed the “Obama Downgrade” by Republicans, is largely due to our government’s apparent inability to increase its revenue. Among other things, Standard & Poor’s analysts noted that they no longer expect the Bush tax cuts to be allowed to expire.
Chinn (and S&P) also note that the President and Congress have postponed any meaningful action on controlling the growth in Medicare, Medicaid and Social Security spending.
Chinn is excerpting his column in the New York Times, co-authored with Jeffry Frieden, professor of government at Harvard.
It’s not lack of revenue……..
IT’S THE SPENDING, STUPID!
Methinks a 100% tax will not cover our overspending, and besides that, who would even be working when their tax bite is 100%?
AFY!!theheelotsheepdog!!!
It’s actually both.
Didn’t you get the talking points, John?
“What the Federal Government needs is a good bill consolidation loan. We could pay off the Chinese and everyone else that has a piece of our collective hide and make one easy payment a month on a 30 year fixed rate mortgage. The amount we’d have to finance is increasing so fast it is hard to pick a principle amount but for calculation purposes, let’s use $14,100,000,000,000 or $14.1 trillion for short. My mortgage calculator won’t accept a number higher than eight digits but adding six zeros to the answers gets us into the billions and trillions we need. And those answers for a $14.1 trillion, 30 year, 5% mortgage is a monthly payment of just under $75.7 billion for a total cost, principle and interest, of $27,249,066,000,000. Call it $27.3 trillion but we will be debt free July 4, 2041, no fireworks, just a big mortgage burning party.
If we all chipped in, we could get this debt paid off. The Census puts our population at around 309,000,000 people. Divide that number into the $75.7 billion monthly payment, and you get about $245 a month for every man woman and child in the nation….
http://soundpolitics.com/archives/014559.html
AFY!!theheelotsheepdog!!!
How will raising taxes on the eve of a double dip not make things worse? Besides, the graph at Chinn’s post clearly shows that while revenues have fallen, spending has risen much faster.
I’m willing to return to pre-Bush tax levels as long as we also return to pre-Bush spending levels. Anybody with me?
Well, if the federal government gave me free medical care for my family, I could afford my $245 no problem, saving that much and more on health insurance. Bring it on.
Here’s a talking point for ya: On the short list of AAA-rated countries are such well-known tax havens as Denmark, Sweden, France and Norway.
John you must like waiting in line!
Just let the O spend 3 years running their governments, and see where they end up! Another 4 years should get us an FFF, don’t ya know!
AFY!!theheelotsheepdog!!!
Scott, if we’re unwilling to reform a dysfunctional tax system now skewed to special interests with one targeting unearned income and off labor and industry, we’ll never see these precious jobs everyone talks about.
You know, Joe, even a broken record is supposed to produce something the listener hasn’t heard over and over eventually.
Would somebody give this one a bump!
“Did you know there’s a U.S. Bureau of the Public Debt? Hey, why not? There’s a bureaucracy for everything else. I’m sure somewhere or other there’s a CBO graph showing that by 2050 all federal revenues will be going either to the Chinese Politburo or to the lavish pension plans of retired officials of the Bureau of the Public Debt. At any rate, the BPD is headquartered in Parkersburg, West Virginia, and it’s easy to find because it’s the only building in the state other than the Klan lodge not named after Robert C. Byrd. The Bureau uses as its motto the words of Alexander Hamilton: “The United States debt, foreign and domestic, was the price of liberty.”…
http://www.nationalreview.com/articles/273876/mad-debt-mark-steyn#
AFY!!theheelotsheepdog!!!
“Which of these is the most important question to ask in the present economic crisis: how can we promote growth? Should we pay off government debt more or less quickly? Is the US in worse trouble than Europe? Answer: none of the above.
The truly fundamental question that is at the heart of the disaster toward which we are racing is being debated only in America: is it possible for a free market economy to support a democratic socialist society?
….The hardest obstacle to overcome will be the idea that anyone who challenges the prevailing consensus of the past 50 years is irrational and irresponsible. That is what is being said about the Tea Partiers. In fact, what is irrational and irresponsible is the assumption that we can go on as we are.
http://www.telegraph.co.uk/comment/columnists/janetdaley/8685945/If-we-are-to-survive-the-looming-catastrophe-we-need-to-face-the-truth.html
AFY!!theheelotsheepdog!!!
Well henceforth they can change their motto. It can read, “The United States debt was the price to bailout the super-rich.”
Do they actually pay you over there at Petersen Brothers, Joe, or are you on Grover Norquist’s payroll?
Why no mention of the ‘Super Congress’ and Patti Murray’s selection by Harry Reid?
http://www.dailykos.com/story/2011/08/09/1005126/-Reids-reported-picks-for-Super-Congress:-Murray,-Baucus,-Kerry
http://www.huffingtonpost.com/rw-sanders/the-super-congress-we-did_b_914635.html
http://www.huffingtonpost.com/2011/07/31/super-congress-debt-ceiling-deficit-deal_n_914272.html
http://www.washingtontimes.com/blog/watercooler/2011/aug/2/picket-lawmakers-remain-leery-super-congress/
it’s over on the Tea Party thread, old pal.
Clinton years, millionaires paid a little more, the books improved out of deficit into surplus.
Thanks Newt, Bill, and all.
What’s different now? Many things, one of which is the tax rate for millionaires.
Nixon (R) = 70%
Eisenhower (R) = 92%
.
A tax increase will get the rich off their ample posteriors to quit sitting on their hands and get the economy rolling to make money.
Taxing them will have no detrimental effect on the rest of us, and will start to pay the bill for the last Republican decade of debacles that landed us here.
What were we expecting? Not having to sacrifice for unnecessary wars, while wall street got drunk on their good fortune of having bamboozled the nation and Republicans into doing their bidding through deregulation that allowed all sorts of perversions of economics, then getting the rest of us to bail them out when their film flams fell apart, then blaming us again and trashing our good name — in effect
performing whiplashing feats of incredible hypocrisy and screw the(safety) net for the rest of us……
Taxing the rich will do the job, for sure: let’s tax that fan-of-higher-taxes Warren Buffet 1% percent of the value of the holdings that he holds or controls each year, and he’ll probably shut up about the virtue of the concept of the rich paying their fair share.
That will, for certain, have no detrimental effect on me, will it?
Will it?
If spending is out of control and just keeps going up and up, can there ever be enough revenue?
AFY!!theheelotsheepdog!!!
“I’ve already read newspaper accounts about how these mandatory cuts in discretionary spending may gut a host of programs, from job training initiatives to Head Start to federal education spending, and you can expect more such stories in coming months.
But what many of these media accounts will inevitably fail to do is ask fundamental questions about these programs: What were they designed to do? And is there any evidence they accomplish their purpose? Those questions are significant because much of discretionary spending that our government introduces is speculative in nature. That is, there is little or no evidence when we begin this spending that the money will actually accomplish what we want it to. That’s why we wind up funding anti-poverty programs that don’t reduce poverty, and job training initiatives that don’t get people jobs…..
http://www.realclearmarkets.com/articles/2011/08/10/we_cant_even_cut_programs_that_dont_work_99176.html
AFY!!theheelotsheepdog!!!
Economic activity pays the bills regardless of the level of taxation.
But to get hoarded money out into activity,
you need to increase the level of taxation or at least target the levy to affect the greatest circulation.
Yeah, let’s gut training and education, but “…if there are financial resources available that will bring jobs to our corner of the world, I sure hope we get to partake of those resources…” (now who said that!)
Is that what you free enterprise, fiscal conservative call enlightened self interest, Joe?
Programs that work and programs that don’t are horses of different colors!
AFY!!theheelotsheepdog!!!
Hey, speaking of programs that work (the Bush/Paulson Wall Street rescue) I see we bailed out Bank of America again: http://finance.fortune.cnn.com/2011/08/10/bank-of-americas-back-door-tarp/?section=money_topstories
…Meanwhile, the Fed’s QE2 experiment, which began last September, ended on June 30 with little to show for it. Asset prices rose as the Fed’s bond purchases pushed investors into riskier assets (stocks and commodities). But the prices of those assets have since fallen back down to what investors think they’re worth….
Mr. Bernanke and his Fed majority haven’t gone that far, despite doubling down on zero yesterday. But if monetary policy by itself could conjure growth, or compensate for bad fiscal and regulatory policy, we’d already be booming.
http://online.wsj.com/article/SB10001424053111904140604576498500461086730.html?mod=djemEditorialPage_h
AFY!!theheelotsheepdog!!!
Let’s not forget, Joe, the Fed is just another creature of Wall Street and the international banksters. Quantitative Easing (you gotta love that description) worked great for them. It just didn’t do anything for the economy.
But then, the whole program is to keep the rich rich enough to control the government to make them richer and us poorer.
The Fed is their favorite tool for extracting wealth from taxpayers.
Well Bernanke finally tells it all:
http://www.theonion.com/articles/drunken-ben-bernanke-tells-everyone-at-neighborhoo%2C21059/
AFY!!theheelotsheepdog!!!
I’m thinking that another week like what the stock market is currently doing will definitely be bringing us the spectacle of stockbrokers attempting to fly again.
You know what, I got it, that is; how to fix everything, the O just needs to give another speech or better yet; bigger fund raisers, don’t ya know.
AFY!!theheelotsheepdog!!!
Et tu Maureen?
“Withholder in Chief…
Faced with a country keening for reassurance and reinvention, Obama seems at a loss. Regarding his political skills, he turns out to be the odd case of a pragmatist who can’t learn from his mistakes and adapt.
Many of his Democratic supporters here, who once waited hours in line just to catch a glimpse of The One, are disillusioned….
http://www.nytimes.com/2011/08/10/opinion/withholder-in-chief.html?_r=1
AFY!!theheelotsheepdog!!!
You continue little more than a partisan hack. You merely continue the charade, and distract from true discussion of the morass we’re in.
The top U.S. financial institutions have become zombie banks that will need a decade to adjust their businesses to the new realities in the industry, analyst Meredith Whitney told CNBC.
In banking parlance, zombies have little net worth but are backed by the government and continue to meet their obligations…
“It actually reminds me more of the ’70s than 2008. I think the market’s actually harder now than it was in 2008 because it’s a constant beatdown,” she said. “There are structural economic problems that we face…huge swings in the face of uncertainty.
“The certainty is we have real structural problems in this economy that have to be dealt with on a real long-term pragmatic basis, not on a quick-fix solution basis. It’s not necessary for the White House to come out and fix everything. Let’s have a long-term plan around things.”
http://www.cnbc.com/id/44087025
What about any plan (long/short, anything?)?
I’s remember the 70′s, like in peanut man!
AFY!!theheelotsheepdog!!!
Oh, AFY, all this cutting and pasting to bury the fact that we’re collapsing because the Koch Brothers won.
And I still don’t understand why.
I liked John’s comment:
john Says:
August 9th, 2011 at 3:14 PM
“Well, if the federal government gave me free medical care for my family, I could afford my $245 no problem, saving that much and more on health insurance. Bring it on.”
A classic example of Tier one thinking, in my opinion: it brings to mind the phrase, “The seen and the unseen.”
I ran across something that seems to address the subject of increased tax revenues:
“According to the Office of Management and Budget, Historical Tables, Budget of the United States Government, Fiscal Year 2007 (Washington, D.C.: U.S. Government Printing Office, 2006, pp. 25-26, Table 1.3, Jan. 16, 2007), with final 2006 revenue figures added in, there was an inflation-adjusted 20% tax revenue increase between 2004 and ’06, and this represents the largest two-year revenue surge since 1965-67.”
http://www.humanevents.com/article.php?id=45449
Another excerpt: “But the President’s top spokesman also went a step further. When HUMAN EVENTS cited figures from the Office of Management and Budget (OMB) showing that the Bush tax cuts in 2004-06 produced the highest two-year tax revenue increase in the preceding 40 years, Carney dismissed the OMB statistics as “a very convenient slice of a figure.”
It appears that partisan interpretation of statistics is alive and well.
More cutting and pasting and burying.
“It appears that partisan interpretation of statistics is alive and well.”
Yes, it does. One might wonder what part Mr. Greenspan’s real estate bubble and the associated “wealth effect” had on the economy by 2004-2006.
It seems convenient to give much credit to tax cuts. Unless you think pouring gas on the fire that burned down the economy was a smart move.
“Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”
John F. Kennedy
But he was a partisan, don’t ya know!
AFY!!theheelotsheepdog!!!
Now I know you would never beg the question, Joe. And given the question is whether lower rates of taxation were the stimulus in 2004-2006, pray tell, what is the point of quoting some authority speaking of an entirely different economic situation?
But if you want to take some advice from JFK that is more applicable to the situation corporatism and the oligarchs have brought us to, consider this:
“Communism has never come to power in a country that was not disrupted by war or corruption, or both.” John F. Kennedy
And as long as this is quote JFK day, Joe, I remembered this one, I’m sure will stir your heart:
“If a free society cannot help the many who are poor, it cannot save the few who are rich.”
John F. Kennedy