Reagan would absolutely SHIT...

[Little Stevie]

...if he could see Republicans making the mistakes they are planning to make with the economy today!

The GOP fiscal position pushes the theory that immediate fiscal contraction will accelerate economic growth. LOL! Eek! However, they think that this is only true if that contraction comes in the form of spending cuts. Further, they think any increase in tax revenue will have a devastating impact on the recovery - a laughable piece of sheer idiocy!

Follow history: Republicans made the exact same argument in 1982, and it didn't turn out so well:

Back in 1982, Ronald Reagan was persuaded that the deficit was such a severe impediment to growth that a tax increase to reduce it would be economically beneficial. Many in his party strenuously objected, citing research by Republican economists. For example, on August 12, 1982, U.S. Chamber of Commerce president Richard Lesher sent to Congress an analysis of the proposed tax increase. Said Lesher:

“If H.R. 4961 is passed in these troublesome economic times, we have no doubt that it will curb the economic recovery everyone wants. It will mean a lower cash flow as more businesses pay more taxes, with a depressing effect on stock prices. It will reduce incentives for the increased savings and investment so badly needed to improve productivity and create more jobs. It will mean higher prices for many products and services. It will increase government costs in caring for those who, because the economy is held down, cannot find employment.”

Let's continue while we also contemplate the undeniable reality that they are pushing an almost identical theory today! It would have been hard to find an economic forecast back then that was more wrong in every respect. Looking at real gross domestic product, it grew 4.5 percent in 1983 and 7.2 percent in 1984 – an exceptionally strong performance. The stock market had one of its best years ever in 1983 – both the Dow Jones Industrial Average and the S&P 500 Index rose 35 percent. There was no increase in the rate of inflation, which was exactly the same in 1983 and 1984 as it was in 1982. The unemployment rate fell from 10.6 percent in December 1982 to 8.1 percent by December 1983 and 7.1 percent in December 1984.

The Chamber was not an outlier. Virtually every Republican economist made similar dire predictions. Economist Arthur Laffer told his clients on July 26, 1982, that the Tax Equity and Fiscal Responsibility Act, which raised taxes by about one percent of GDP, “will stifle economic recovery,” “retard economic growth,” and undercut “the economy’s ability to enter into a period of expansion.” On August 20, 1982, he told his clients that TEFRA “will tend to lengthen and deepen the recession.” Writing in the New York Times on September 12, 1982, economist Norman Ture said the administration’s claim that TEFRA would promote economic growth was “bizarre.” He said it would “weaken the impetus for economic growth” and make the economic recovery “less certain and less vigorous.”

Despite these erroneous predictions, Republican economists said pretty much the same thing when Bill Clinton proposed a tax increase in 1993.

The 1993 example has been disproven twice: First, when the economy accelerated after conservatives "economists" predicted the higher marginal rates would kill it, and then again when Dubya reduced the top rate and saw a historically weak recovery as a result. The total net impact of all these examples upon Republican economic thinking about the efficacy of tax cuts was ZERO! (As pathetic as Perry's claim about Texas being an economic success story - added Texas jobs were almost exclusively minimum wage jobs!)



Most of us would prefer to delay any revenue increases (more discretionary income), especially those who are moderate earners with a higher propensity to spend. But the combination of insisting on immediate deficit reduction, but no additional revenue, is not only incoherent but historically repudiated.

[WTF]

Originally Posted by Little Stevie

...if he could see Republicans making the mistakes they are planning to make with the economy today!

.

They have no clue as to the history of tax cuts or hikes. I have not talked to a single one that has a clue just wtf the Laffer Curve really says.

We are at an historical low as far as tax rates go.....should we actually show the world that we are serious about paying our bills and do the things that the Bowels Simpson commission said, the dollar would get stronger and oil prices would drop. That in turn would spur economic growth. That is a simplistic breakdown of course but at least then we could return to more market driven cycle instead of this TreaSURY printing fiasco.

But yes the problem is that Reagan let these clones of his believe the false premis that cutting taxes always results in more income for the government.

If the GOP did wtf they really wanted to we would be in a depression within a year.

[Little Stevie]

Originally Posted by WTF

They have no clue as to the history of tax cuts or hikes. I have not talked to a single one that has a clue just wtf the Laffer Curve really says.

We are at an historical low as far as tax rates go.....
If the GOP did wtf they really wanted to we would be in a depression within a year.

I had to cut it down, WTF! LMAO. You can only feed them a few bites at a time or they get all confused and start chanting "Government isn't the answer; government is the problem." Then they misspell a bunch of signs and get on the bus with Glenn Beck and go somewhere wearing guns, carrying Bibles and wearing W.W.J.D. bracelets.

[TexTushHog]

Speaking of this very subject:

http://thinkprogress.org/economy/201...onomic-growth/

[Texas Contrarian]

Little Stevie, you might want to credit the source for most of your opening post's content.

Here, I'll do it for you!

http://www.thefiscaltimes.com/Column...onomy.aspx?p=1

(I read the piece just a couple of days ago and thought it had a ring of familiarity to it.)

Originally Posted by TexTushHog

Speaking of this very subject:

http://thinkprogress.org/economy/201...onomic-growth/

Meaningless.

Consider the 91% top bracket rate, which existed during the 1950s and was only reduced to 70% as a result of JFK's call for across-the-board tax cuts. During this time, the U.S. was enjoying about a 25-year free ride as a result of most of the industrial capacity of what otherwise would have been our primary global competition having been bombed away!

Also consider that hardly anyone actually paid taxes at such a high marginal rate. Prior to the 1986 tax legislation, which lowered rates in return for kicking out a lot of deductions and exclusions, it was very easy to shelter large portions of one's income. Unfortunately, this caused a lot of malinvestment. I believe that started to become a serious problem in the early-to-mid 1970s, when as a result of inflation large numbers of people who weren't really very well off ended up in the 70% bracket and were incentivized to get into tax-advantaged investments of various kinds. Many were almost worthless save for the tax benefits.

As a historical note, it's interesting to take a look at the events leading up to the creation of the Alternative Minimum Tax around 1969 or 1970. A couple of newspaper articles had pointed out that a few dozen of the wealthiest individuals and families in the country paid little or no tax. There was some outrage about this (after all, people said, aren't these people supposed to pay tax at a 70% rate?) and politicians naturally had to react. So they crafted legislation designed to at least get some revenue from the wealthy.

Of course, as with so many things, there have been some unintended consequences. In recent years, due to many years of inflation and bracket creep, the AMT penalizes a lot of middle class taxpayers.

[Little Stevie]

Thanks for posting a live/active link to the source, CM. In my haste to post, I left it off (I generally have to type an instructional disclaimer to any links because I disable their ability to be linked directly from ECCIE.). In the future I think we should all do that especially in the wake of what happened in NM. IMO, It just seems wiser for traffic monitoring software not to keep the ECCIE website coming up as a frequent referrer.

Easy to do and easy to type in the periods to replace the DOT'S.

I'll bet if I checked your machine, you searched for those phrases in an attempt to try to lessen the value of what I posted, but that is only speculation. Go check my stuff. I source more than most and also take the time to prevent live or active linking.

As for current tax codes, CM, you will have to admit that the average corporate tax rate is only a small fraction of the 35% the right whines about. K Street gives Cantor and Boehner their marching orders and they dig in their heels solely to keep their corporate donors paying to re-elect them. There are plenty of Dems who do the same thing but your defense of the right's economic policy comes straight out of the Fox, Chamber of Commerce, Koch et al playbook as well as its constant reinforcement by their fake front groups like Citizens United, Americans for Prosperity, the Heritage Foundation and the rest of the $120 million earmarked for attack ads by Karl Rove and his dirty tricks team.

This cycle's Rovian word: "Deficit" - Rove is smart. He realizes the risks associated with attacking what they use to call "entitlements" when people actually paid into those vehicles so they could take out the benefits when they retire - not exactly an "entitlement" was it? Eventually, the Dems, as dumb as thay are were able to show even the Fox-distracted electorate that getting rid of Social Security was theft and not really an entitlement so here comes Rove on his white steed with the "It's all about the DEFICIT, man!" ploy.

It is really about charging two wars and lowering the revenue stream we needed to pay for them AND allowing the Credit Default Swaps to cover crooked mortgage loan investments until their totally worthless "fake insurance" model finally collapsed.

Those who blame the poor and the Community Reinvestment Act are grasping at straws since that act was passed into law under CARTER and didn't cause a problem then. It wasn't until crooked investors started using CDS's to "cover" the loans they never should have made that the hole in the dike began to grow. The lenders and subsequent investors who bought the paper did so because of greed. They only began making the questionable loans NOT MANDATED by the CRA when they found a way to bypass sound lending guidelines by using these supposed foolproof mortgage protection instruments. These instruments were derivatives that had no basis in sound actuarial principles and they purposely circumvented insurance regulation where they would have been rejected by calling something besides mortgage protection insurance with the contingent regulation an insurance instrument would have generated.

http://videoDOTpbsDOTorg/video/1302794657

This is a PBS documentary - is there any wonder why the people exposed here are giving millions of dollars to politicians and fake front groups who advocate de-funding PBS.

Watch it. See if you can refute the report. Warning - it names Clinton, Bush, Greenspan and even Ayn Rand, the darling of Libertarians.

[Texas Contrarian]

Originally Posted by Little Stevie

I'll bet if I checked your machine, you searched for those phrases in an attempt to try to lessen the value of what I posted, but that is only speculation.

If that's representative of the accuracy of your speculation, then I might suggest that you stop speculating.

I read every one of Bartlett's columns. I recommend that others do, too. He's a conservative with real bona fides in my opinion, and he's pretty good at debunking some of the happy talk such as that offered by GOP figures like Pawlenty recently.

The same is true of David Stockman, who fought some of these battles himself in the 1980s.

Originally Posted by Little Stevie

As for current tax codes, CM, you will have to admit that the average corporate tax rate is only a small fraction of the 35%...

I agree that what is called the effective rate is low, but submit that the problem is not with the statutory rate, but rather with the ridiculous level of complexity in the code. Nowadays, our corporate tax rate is close to a blended national average of 40% if you include state corporate tax, yet the tax collects far less revenue than the OECD avaerage -- althought the mean OECD rate is in the mid-20s. The reason is that there are so many deductions and exclusions available to the biggest players who can afford their own K Street brigades, but not to smaller businesses.

The Bowles-Simpson commission suggested lowering the rate to 26% in return for knocking out what are referred to as "tax expenditures" (deductions and exclusions). I agree with this approach, and for that matter so did Jason Furman when he wrote a piece on it in The Washington Post a few years ago.

With regards to your discussion of entitlements, in my view the problem is that we didn't craft a tax system that comes remotely close to funding them,and it's just going to get worse and worse when a growing number of baby boomers turn 65 each year.

Politicians don't have the guts to tell people how much tax they'll have to pay to cover all this. Taxes have been drastically cut for all income groups, not primarily for the "rich" as so many uninformed people seem to think.

[Little Stevie]

Let's get to the basics. COMPLEXITY in the code is not the underlying problem. Will CPA's and Tax Attorney's exploit loopholes? Of course. The whole thrust of U.S. corporations has changed unlike many in other countries. There is no building for the future, no investing in infrastructure among American mega-corporations these days.

It is all about the bottom line today - not tomorrow or at least not several years out. Acquisitions are made in order to cripple competition and mergers are made to feed on the dead flesh of those companies acquired while making labor and employees work harder for less or lose their jobs to cheaply-paid Malaysians or Filipinos.

Instead of the type of protectionism afforded insurance companies that can charge higher rates by bribing legislators and using actuarial data based on even county or parish or borough sized regions, U.S. workers are told they must compete with Sri Lankans or Guatemalans in a new synonym for rampant exploitation: "competing in a global economy".

They even prohibit U.S. citizens from shopping for medicine in Canada in order to protect the higher U.S. profits of Pharmaceutical giants.

With Medicare Part D, Bush allowed Big Pharma to thumb its nose at competitive bidding instead of forcing them to bargain with Medicare like they have to do with the VA!

It AIN'T about the tax code but I'll agree the tax code needs clarification.

This is about a fundamental problem of having a median wage that has not gone up appreciably in almost 15 years and a willingness of many government officials to perpetuate the ability of corporations to keep a stranglehold on the economy. Corporations continue to increase their exploitation of the workforce, their flouting of regulations designed to keep them from turning out dangerous products and their ongoing refusal to take responsibility for wrecking much of the planet.

Fighting two wars and deregulating Wall Street and the Banks was the cause of the current abyss.

Despite the warnings of Brooksley Born and Elizabeth Warren, whose appointment corporate-owned Republicans are FIGHTING, Wall Street regulation and to a large extent Banking regulation is still poised to repeat many of the thefts that started the collapse!

[Little Stevie]

Originally Posted by TexTushHog

Speaking of this very subject:

http://thinkprogress.org/economy/201...onomic-growth/

An excellent long-term picture, TTH!


The big picture doesn't lie. The opposition's only hope is to deceptively post the one, two and three-year snapshots used by the people who want to blame the Dems or Obama.

No one is blameless but over the long haul, you post shows how poorly the Republican tax policies have performed for everyone but the Uber Wealthiest.

[Texas Contrarian]

Originally Posted by Little Stevie

An excellent long-term picture, TTH!

No, Little Stevie, it isn't "an excellent long-term picture."

It's meaningless without context, as are so many other things.

Back in post #5, I pointed out the main reason why. Since you moved blithely on, I guess you simply don't understand that during the post-WWII period when marginal tax rates were highest, we obviously enjoyed a 25-year free ride becasue we were the only significant industrial power left standing.

Also note that during the 50% top-bracket period, we were restoring sound money and breaking the back of the disastrous inflation of the Nixon/Carter years. Additionally, it was still possible (until 1986) to shelter active income (salaries, fees, etc.) with passive-income shelters. Very few wealthy investors paid an effective rate anywhere near the statutory top-bracket rate.

On the other hand, during the 35% bracket era we were fighting costly wars and blowing the budget in other irresponsible ways as well. Additionally, unstable monetary policy drove down the dollar and drove up oil prices.

During the 39.6% period (Clinton era), the rate was still within moderate bounds. We also enjoyed a nice tech boom and the benefits of budgetary restraint, reasonable monetary policy, and a strong dollar. During the period, government spending grew at the slowest rate in modern history. In fact, it declined significantly as a percentage of GDP. It's not an accident that those factors coincided with a period of prosperity.

Do you guys seriously think that restoring the top bracket rate to the 70-90% range would be good policy? Do you not understand that it wouldn't collect anywhere near the revenue most people would predict, and that it would reintroduce distortions that would be very damaging to our fragile economy?

And in response to my post linking the article you plagiarized, you posted this:

Originally Posted by Little Stevie

Thanks for posting a live/active link to the source, CM. In my haste to post, I left it off (I generally have to type an instructional disclaimer to any links because I disable their ability to be linked directly from ECCIE.). In the future I think we should all do that especially in the wake of what happened in NM. IMO, It just seems wiser for traffic monitoring software not to keep the ECCIE website coming up as a frequent referrer.

Easy to do and easy to type in the periods to replace the DOT'S.

If you think this is such a big problem, why didn't you whine about it when someone else on the left (TexTushHog) did the same thing in a previous post?

A bit of hypocrisy, perhaps?

[Doove]

Originally Posted by CaptainMidnight

No, Little Stevie, it isn't "an excellent long-term picture."

It's meaningless without context, as are so many other things.

Noted.

Do you guys seriously think that restoring the top bracket rate to the 70-90% range would be good policy?

We're closer to falling off the edge of a cliff now, with it at 35%, than we were with it at 70%. Maybe it's just a coincidence. Or maybe "trickle down" isn't only wrong in theory, maybe it's truly disastrous in practice.

A bit of hypocrisy, perhaps?

Sort of like posting long term statistics to back your point, and calling it "meaningless" when someone else does the same thing.

[Texas Contrarian]

Originally Posted by Doove

We're closer to falling off the edge of a cliff now, with it at 35%, than we were with it at 70%...

And that has nothing whatsoever to do with the reasons we're falling off a cliff. If you wish to gain a better understanding of the issue, you can start by going back and actually trying to understand my previous posts. Actually make an effort to learn how the 70% bracket "worked" in the 1970s, the distortions and malinvestment it incentivized, and how it really didn't collect all that much revenue from the wealthy.

Originally Posted by Doove

Sort of like posting long term statistics to back your point, and calling it "meaningless" when someone else does the same thing.

Nope.

I simply pointed out some of the reasons for faster or slower GDP growth during various periods, and why at times we could get away with very bad policies that would make matters even worse today. The author of that biased thinkprogress.org piece clearly suggests that the creation of ultra-high (70-90%) tax brackets would be good policy, or at the very least quite acceptable.

Of course, he is correct in his assertion that lower income tax rates don't automatically produce faster growth, since an economy is always made up of a huge number of moving parts. But it's clear that his bias or ignorance (I think it's probably a healthy dose of both) leads him to some pretty silly insinuations.