Alternative to Austerity?

[Spriggs05]

Raise Taxes And Cut Government Spending To Reduce Debt? Not Really - Forbes

Potential Alternative to Austerity?

 

[ksu_aviator]

That's a rather unreliable alternative. Growing our way out of debt is unpredictable at best. Further, as the article illustrates, the debt didn't go away or get smaller, so all it does is delay the problem. Today's debt is a result of just under 100 years of failed fiscal policies.

We need to A: Simply/reduce the tax burden and B: eliminate deficit spending. Until we do that, we are on the road to financial collapse. That road may get extended if the economy ever comes back, but it is still the same road with the same end.

 

[Vern]

Raise Taxes And Cut Government Spending To Reduce Debt? Not Really - Forbes

Potential Alternative to Austerity?

Dont take this the wrong way but can you sum up the article for me. It lost my attention after the first sentence

"At some point, the U.S. government will have to deal with its exploding debt load."

Since President Obama has reduced the deficit every year as a % of GDP, its not really 'exploding' anymore. So the 'editorial' starts off with a 4 year old narrative. There's a whole thread about the 2013 deficit being revised down to 650 billion. While that might sound like alot, its less than half of what Bush's last deficit was.

Hey President Obama promised to "halve it" . Well the promise is a year over due but remember, the Great Bush Recession was the worst since the deprssion so they underestimated the effects. And dont forget, republicans refused to compromise on revenue increases thus keeping the deficit higher longer.

 

[Spriggs05]

Dont take this the wrong way but can you sum up the article for me. It lost my attention after the first sentence

"At some point, the U.S. government will have to deal with its exploding debt load."

Since President Obama has reduced the deficit every year as a % of GDP, its not really 'exploding' anymore. So the 'editorial' starts off with a 4 year old narrative. There's a whole thread about the 2013 deficit being revised down to 650 billion. While that might sound like alot, its less than half of what Bush's last deficit was.

Hey President Obama promised to "halve it" . Well the promise is a year over due but remember, the Great Bush Recession was the worst since the deprssion so they underestimated the effects. And dont forget, republicans refused to compromise on revenue increases thus keeping the deficit higher longer.

Basically he is making the point that rather than raising taxes and decreasing spending, we should be lowering taxes and decreasing spending. Since there is a debt/GDP ratio, lowering the taxes can increase the GDP meaning that government has more money to pay off the debt. Thats a very brief description of it.

 

[ChunkySalsa]

Basically he is making the point that rather than raising taxes and decreasing spending, we should be lowering taxes and decreasing spending. Since there is a debt/GDP ratio, lowering the taxes can increase the GDP meaning that government has more money to pay off the debt. Thats a very brief description of it.

So...the alternative to a little bit of austerity (raise taxes + lower spending) is an epic assload of austerity (lowered taxes + lower spending)?

 

[Republic Now!]

Dont take this the wrong way but can you sum up the article for me. It lost my attention after the first sentence

"At some point, the U.S. government will have to deal with its exploding debt load."

Since President Obama has reduced the deficit every year as a % of GDP, its not really 'exploding' anymore. So the 'editorial' starts off with a 4 year old narrative. There's a whole thread about the 2013 deficit being revised down to 650 billion. While that might sound like alot, its less than half of what Bush's last deficit was.

Hey President Obama promised to "halve it" . Well the promise is a year over due but remember, the Great Bush Recession was the worst since the deprssion so they underestimated the effects. And dont forget, republicans refused to compromise on revenue increases thus keeping the deficit higher longer.

The 2008 deficit was 458 billion. 650 billion is not half of 458 billion.

Basically he is making the point that rather than raising taxes and decreasing spending, we should be lowering taxes and decreasing spending. Since there is a debt/GDP ratio, lowering the taxes can increase the GDP meaning that government has more money to pay off the debt. Thats a very brief description of it.

Why cut spending then? Just lower taxes for the same effect.

So...the alternative to a little bit of austerity (raise taxes + lower spending) is an epic assload of austerity (lowered taxes + lower spending)?

An "epic assload" of austerity would be raised taxes and lower spending.

 

[ChunkySalsa]

The 2008 deficit was 458 billion. 650 billion is not half of 458 billion.

Shoving one's head up one's ass may be a nice way to avoid acknowledging inconvenient facts, but it's not nearly as endearing as one might think. The 2009 deficit was $1,413 billion, which is more than twice 2013's $650 billion.

An "epic assload" of austerity would be raised taxes and lower spending.

That's predicated on the assumption that you're raising taxes on people that are spending money.

Stagnant demand and record levels of corporate profit indicate that there are a bunch of people holding lots of money who aren't using it to demand things from our economy. Lowering their taxes and giving more money to people that already have lots of unspent money will not increase demand; it will decrease it because the government has less money to spend.

 

[Spriggs05]

So...the alternative to a little bit of austerity (raise taxes + lower spending) is an epic assload of austerity (lowered taxes + lower spending)?

How is lowering taxes austerity?

 

[Spriggs05]

Why cut spending then? Just lower taxes for the same effect.

Accelerates the debt reduction

 

[ChunkySalsa]

How is lowering taxes austerity?

Austerity means decreasing the overall level of demand in the economy.
Lowering taxes decreases government income and the amount of demand they can insert into the economy.
Rich people have extremely low marginal propensity to spend, because they've already bought most of what they want. Extra dollars in their hands aren't spent on stuff (which increases demand), they are invested (which doesn't increase demand).

Lowering taxes reduces demand and replaces it with empty promises that the economy will somehow improve if we make the rich even richer.


Of course, lowering taxes on the people with the highest propensity to spend (poor people) could increase overall demand...but we all know Republicans would never propose anything like that if it wasn't yet another scheme to give rich people the lion's share of the tax cuts.

 

[Fenton]

Austerity means decreasing the overall
level of demand in the economy.
Lowering taxes decreases government income and the amount of demand they can insert into the economy.
Rich people have extremely low marginal propensity to spend, because they've already bought most of what they want. Extra dollars in their hands aren't spent on stuff (which increases demand), they are invested (which doesn't increase demand).

Lowering taxes reduces demand and replaces it with empty promises that the economy will somehow improve if we make the rich even richer.


Of course, lowering taxes on the people with the highest propensity to spend (poor people) could increase overall demand...but we all know Republicans would never propose anything like that if it wasn't yet another scheme to give rich people the lion's share of the tax cuts.

First off, the "deficit" reduction that the mathematically challenged Left wingers keep trumpeting is a deficit based on a new BASELINE.

Obama's average yearly outlays are 3.55 Trillion where Bush's average spending was 2.55 Trillion.

So Obama repeated the " emergency , one time" expenses of 2009 EVERY YEAR, and then claimed " deficit reduction". EVERYTHING that comes out this WH is a lie.

So BO raised the bar by a TRILLION a year and then claims he's lowered the deficit ? BULL SH**.

Second, what "POOR PERSON" pays income taxes ? You made the silly statement that if they lowered taxes on poor people they would buy more, I guess with their EBT cards.

That's the typical drek we can expect from the left on these forums. First, the nonsense of claiming Obama's "lowered the deficit" ( he's added damn near 7 TRILLION to our Debt ) and second the incredibly vapid comment that " taxes need to be lowered on poor people ".

THEY DON'T PAY TAXES.

 

[blaxshep]

First off, the "deficit" reduction that the mathematically challenged Left wingers keep trumpeting is a deficit based on a new BASELINE.

Obama's average yearly outlays are 3.55 Trillion where Bush's average spending was 2.55 Trillion.

So Obama repeated the " emergency , one time" expenses of 2009 EVERY YEAR, and then claimed " deficit reduction". EVERYTHING that comes out this WH is a lie.

So BO raised the bar by a TRILLION a year and then claims he's lowered the deficit ? BULL SH**.

Second, what "POOR PERSON" pays income taxes ? You made the silly statement that if they lowered taxes on poor people they would buy more, I guess with their EBT cards.

That's the typical drek we can expect from the left on these forums. First, the nonsense of claiming Obama's "lowered the deficit" ( he's added damn near 7 TRILLION to our Debt ) and second the incredibly vapid comment that " taxes need to be lowered on poor people ".

THEY DON'T PAY TAXES.

These are the same people that talk about the "Clinton Surplus" Please explain how the debt went up at the same time we had a so called surplus.

 

[head of joaquin]

That's a rather unreliable alternative. Growing our way out of debt is unpredictable at best. Further, as the article illustrates, the debt didn't go away or get smaller, so all it does is delay the problem. Today's debt is a result of just under 100 years of failed fiscal policies.

We need to A: Simply/reduce the tax burden and B: eliminate deficit spending. Until we do that, we are on the road to financial collapse. That road may get extended if the economy ever comes back, but it is still the same road with the same end.

Yeah, because it's sooooo hard to fill out a 1040EZ.

The IRC is complex because the economy is complex,at least for businesses, who lobby for the complexity to reflect economic reality. It has nothing to do with 99% of American taxpayers. Another rightwing meme that just keeps getting repeated.

 

[Republic Now!]

Shoving one's head up one's ass may be a nice way to avoid acknowledging inconvenient facts, but it's not nearly as endearing as one might think. The 2009 deficit was $1,413 billion, which is more than twice 2013's $650 billion.

Okay, and? Obama halved his own budget? That's nice.

That's predicated on the assumption that you're raising taxes on people that are spending money.

Stagnant demand and record levels of corporate profit indicate that there are a bunch of people holding lots of money who aren't using it to demand things from our economy.

Because, of course, when people have a lot of money, they stuff it under their mattress. It never re-enters the economy.

Lowering their taxes and giving more money to people that already have lots of unspent money will not increase demand; it will decrease it because the government has less money to spend.

You're implying the government can't spend without taxing. If so, why do we have deficits at all?

 

[blaxshep]

You're implying the government can't spend without taxing. If so, why do we have deficits at all?

Got you there Salsa.

 

[imagep]

That's a rather unreliable alternative. Growing our way out of debt is unpredictable at best.

Yet that is what has been happening fairly steady for the past few years.

 

[imagep]

Austerity means decreasing the overall level of demand in the economy.
Lowering taxes decreases government income and the amount of demand they can insert into the economy.
Rich people have extremely low marginal propensity to spend, because they've already bought most of what they want. Extra dollars in their hands aren't spent on stuff (which increases demand), they are invested (which doesn't increase demand).

Lowering taxes reduces demand and replaces it with empty promises that the economy will somehow improve if we make the rich even richer.


Of course, lowering taxes on the people with the highest propensity to spend (poor people) could increase overall demand...but we all know Republicans would never propose anything like that if it wasn't yet another scheme to give rich people the lion's share of the tax cuts.

Yup. You've got that exactly right. The overall tax rate doesn't matter, what matters is who and what you are taxing.

It's really a huge opportunity for the Obama administration. If Democrats proposed lowering middle class taxes, Republicans would have to go along with it because if they voted against lowering taxes (any taxes on anyone) it would be the same as voting for increasing taxes - and many of them pledged not to increase taxes.

It would have been nice if Dems already made such proposal, but they really couldn't do that because they have been pushing for higher taxes on the top 1%. They really couldn't justify lower taxes on the middle class at the same time they were proposing higher taxes on the rich. And Obama didn't really want lower taxes on the middle class because he was facing so much heat for the high deficit. As our deficit continues to shrink due to economic growth, he will have more political clout to start pushing tax cuts for the middle class as a economic stimulous to increase demand. The vast majority of Americans will love the idea, and since those on the far right can't vote against a tax decrease, it could pass with overwhelming support.

Of course conservatives won't like the idea, but if they don't vote for it, they will not win another election for decades, so they will have to go along with it, hoping that they can claim that it was their tax cuts for the middle class that turned our economy around.

If Obama doesn't pursue this opportunity, he will have proven to be the stupidest president since George Bush.

 

[ChunkySalsa]

Okay, and? Obama halved his own budget? That's nice.

And...you lost that point of contention about the campaign promise.

Because, of course, when people have a lot of money, they stuff it under their mattress. It never re-enters the economy.

No, they don't stuff it under a mattress; they stuff it in investments like the stock market. Right now, we can all see that the stock market is booming. Investors are tripping over each other trying to find good places to put their money. The government taking measures that increase the amount of money in investor hands will not improve the economy. It will just encourage them to invest in increasingly crappy places as all the good places get filled. That's exactly what caused the Great Recession in the first place, too many ****ty investments.

Right now, under/unemployment is what ails us. To ameliorate that, we need to increase demand for the goods and services that necessitate employing people. Decreasing the amount of government demand is the exact opposite of what will improve the economy.

You're implying the government can't spend without taxing. If so, why do we have deficits at all?

Not really, I'm just limiting myself to a discussion about income and spending. Deficit spending obviously exists, but bringing it up isn't necessary for the topic. Its like mentioning the gravitational influences of Jupiter and Saturn when making a simple point about tides and the Moon. Invoking extra variables needlessly complicates things without adding anything to the discussion.

Of course the government can deficit spend; there's no hard limit where the money suddenly runs out. Its like an elastic band where the further you stretch it, the more resistance you encounter. You can stretch it to the point of breaking, but we aren't there and...:shrug: this is all kinda extraneous. Easier to discuss things by assuming tension on the band remains the same unless stated otherwise.

 

[ChunkySalsa]

If Obama doesn't pursue this opportunity, he will have proven to be the stupidest president since George Bush.

Good point on how he can get one up on the Republicans...but you gotta admit that of all the presidents we've had since G-dub, Obama is undoubtedly the stupidest :mrgreen:

 

[Republic Now!]

And...you lost that point of contention about the campaign promise.

I haven't lost anything. I don't care about a silly campaign promise that was obviously not going to be kept.

No, they don't stuff it under a mattress; they stuff it in investments like the stock market.

Okay, good. And where does money in the stock market go?

Right now, we can all see that the stock market is booming. Investors are tripping over each other trying to find good places to put their money. The government taking measures that increase the amount of money in investor hands will not improve the economy.

How is this opinion relevant?

It will just encourage them to invest in increasingly crappy places as all the good places get filled. That's exactly what caused the Great Recession in the first place, too many ****ty investments.

Um, I don't know which Great Recession you're talking about that was caused by "all the good places getting filled resulting in ****ty investments." Care to point out which one that is?

Right now, under/unemployment is what ails us. To ameliorate that, we need to increase demand for the goods and services that necessitate employing people. Decreasing the amount of government demand is the exact opposite of what will improve the economy.

What is Government demand?

Not really, I'm just limiting myself to a discussion about income and spending. Deficit spending obviously exists, but bringing it up isn't necessary for the topic. Its like mentioning the gravitational influences of Jupiter and Saturn when making a simple point about tides and the Moon. Invoking extra variables needlessly complicates things without adding anything to the discussion.

What? You said cutting taxes hurts the economy because the Government has less to spend. Government spending is not limited by tax revenues.

Of course the government can deficit spend; there's no hard limit where the money suddenly runs out. Its like an elastic band where the further you stretch it, the more resistance you encounter. You can stretch it to the point of breaking, but we aren't there and...:shrug: this is all kinda extraneous. Easier to discuss things by assuming tension on the band remains the same unless stated otherwise.

Again, don't understand the relevance.

 

[Republic Now!]

Yup. You've got that exactly right. The overall tax rate doesn't matter, what matters is who and what you are taxing.

It's really a huge opportunity for the Obama administration. If Democrats proposed lowering middle class taxes, Republicans would have to go along with it because if they voted against lowering taxes (any taxes on anyone) it would be the same as voting for increasing taxes - and many of them pledged not to increase taxes.

It would have been nice if Dems already made such proposal, but they really couldn't do that because they have been pushing for higher taxes on the top 1%. They really couldn't justify lower taxes on the middle class at the same time they were proposing higher taxes on the rich. And Obama didn't really want lower taxes on the middle class because he was facing so much heat for the high deficit. As our deficit continues to shrink due to economic growth, he will have more political clout to start pushing tax cuts for the middle class as a economic stimulous to increase demand. The vast majority of Americans will love the idea, and since those on the far right can't vote against a tax decrease, it could pass with overwhelming support.

Of course conservatives won't like the idea, but if they don't vote for it, they will not win another election for decades, so they will have to go along with it, hoping that they can claim that it was their tax cuts for the middle class that turned our economy around.

If Obama doesn't pursue this opportunity, he will have proven to be the stupidest president since George Bush.

What income range is the middle class?

 

[ChunkySalsa]

I haven't lost anything. I don't care about a silly campaign promise that was obviously not going to be kept.
Ok, sure, whatever.

Okay, good. And where does money in the stock market go?
Good question. I'm no economist, but I'd guess it cycles around the market, influences the amount of capital businesses have available, and goes back to investors. Wherever its going, it doesn't seem to be creating enough demand to support more jobs.

How is this opinion relevant?
This appears to be a premise that the stock market is doing well, some hyperbole restating that fact, and an assertion that pumping more money into the market will not improve the economy. I have no idea how that could possibly be relevant to the position that the government can improve the economy by funneling even more money towards investors.

Um, I don't know which Great Recession you're talking about that was caused by "all the good places getting filled resulting in ****ty investments." Care to point out which one that is?
Must be talking about the Great Recession of 2719BC, because there certainly hasn't been any recessions in recent history caused by ****ty investments inflating bubbles that've popped and staggered the whole economy.

What is Government demand?
Who knows what that mysterious phrase means? If only one of us was familiar with the concept of demand, we could deduce how it could be created by the government. Oh well, I guess we'll just have to sit back and marvel at the intellectual prowess of those who meet the insurmountable prerequisites of high school economics.

What? You said cutting taxes hurts the economy because the Government has less to spend. Government spending is not limited by tax revenues.
Your opinion is somehow very compelling despite being unsupported by the evidence and directly contradicted by a cursory understanding of the topic. I have no choice but to concede that there is absolutely no relation between tax revenues and government spending. I'll let you spread the word to the Tea Party.

Again, don't understand the relevance.
There is no relevance. Saying that we should ignore deficit spending in our discussion of revenue/spending is completely irrelevant to our discussion of revenue/spending.

:mrgreen:

 

[Republic Now!]

Good question. I'm no economist, but I'd guess it cycles around the market, influences the amount of capital businesses have available, and goes back to investors. Wherever its going, it doesn't seem to be creating enough demand to support more jobs.

By this logic, I could argue the 1.4 trillion dollars in government spending doesn't create enough demand to support more jobs. The purpose of the stock market is not to create jobs but to supply a means for businesses to obtain finances it doesn't have the capacity to obtain, and while this does to some degree facilitate jobs, it more importantly allocates resources in a productive way while also supplying a means of investment and thus savings.

This appears to be a premise that the stock market is doing well, some hyperbole restating that fact, and an assertion that pumping more money into the market will not improve the economy. I have no idea how that could possibly be relevant to the position that the government can improve the economy by funneling even more money towards investors.

I don't understand what you're saying here. It seems like you're trying to be sarcastic and while doing so you make three or four points in a single sentence. What is "This appears to be a premise that the stock market is doing well, some hyperbole restating that fact, and an assertion that pumping more money into the market will not improve the economy" supposed to mean?

Must be talking about the Great Recession of 2719BC, because there certainly hasn't been any recessions in recent history caused by ****ty investments inflating bubbles that've popped and staggered the whole economy.

You're talking about the mortgage crisis? What did that have to do with tax rates?

Who knows what that mysterious phrase means? If only one of us was familiar with the concept of demand, we could deduce how it could be created by the government. Oh well, I guess we'll just have to sit back and marvel at the intellectual prowess of those who meet the insurmountable prerequisites of high school economics.

You said "Government demand" without any context whatsoever. Now I see that Government demand is demand you believe is created by the government. Now, what Government demand is hurt by lower tax rates?

Your opinion is somehow very compelling despite being unsupported by the evidence and directly contradicted by a cursory understanding of the topic. I have no choice but to concede that there is absolutely no relation between tax revenues and government spending. I'll let you spread the word to the Tea Party.

How about presenting this evidence then or explaining your position? How does decreased tax rates hurt "government demand" if spending is unaffected? If spending is always affected by decreased tax rates, demonstrate how.

There is no relevance. Saying that we should ignore deficit spending in our discussion of revenue/spending is completely irrelevant to our discussion of revenue/spending.

Actually, what were talking about is the definition of austerity. Your claim seems to be that lower taxes somehow magically imply greater austerity (a position that, itself, makes no sense) and your justification for that is lower taxes with increased spending would increase the deficit? Do you know the definition of austerity?

 

[ksu_aviator]

Yeah, because it's sooooo hard to fill out a 1040EZ.

The IRC is complex because the economy is complex,at least for businesses, who lobby for the complexity to reflect economic reality. It has nothing to do with 99% of American taxpayers. Another rightwing meme that just keeps getting repeated.

I don't know anyone that uses a 1040EZ...no one. That's for high school kids. The rest of us are filling out Schedule C, D, E, SE, W2, W4, W7 and so on. My personal taxes are 10 pages long and I couldn't possibly do it myself. Nor can the IRS possibly know if anything I tell them is true. Enforcement is a huge issue because the code is so complicated.

And, as far as I'm concerned, we shouldn't tax businesses. That only hurts our economy.

 

[ksu_aviator]

Yet that is what has been happening fairly steady for the past few years.

What country are you living in?