Explaining Why Federal Deficits Are Needed[W:5330]

[Incisor]

Oh God, liberals have empirical evidence. As usual, cherry picked empirical evidence. The right has "empirical" evidence too.

No, the right has nothing. 35 years of trickle-down and nothing to show for it.

 

[Moderate Right]

But only one side actually does...putting money in the hands of people who will spend it is how you create demand. Not giving a tax cut to a 1%er. They're just going to take that money and stash it overseas in some bank in some socialist country like Luxembourg or Switzerland.



That is a myth. More like a lie passed off as conventional wisdom. But it's wholly untrue. Raising pay for workers does not correlate to an equal raise in prices. Never has and never will. Raising pay for workers does lead to more demand, which creates more revenue. So while you may be paying people more, you're also taking in more revenue because people are spending more. Unless you're not, because you suck at business.

I just explained this to you. Companies don't expand and build more and more stores because someone forced them to pay higher wages. They expand to make more profit while at the same time creating more jobs from the demand that was already there.

 

[Moderate Right]

Tax cuts don't put money in the hands of people who will spend it. Tax cuts result in cuts to basic services the poor rely on. And when those services are cut, the poor must then spend more on them and less in the consumer economy, where 70% of the demand is.

Sure they do. Tax cuts helps businesses expand, creating more jobs, putting money in the hands of people who spend it. This isn't rocket science.

 

[Moderate Right]

Look man...if you don't want to be serious about this, fine. I'd appreciate it if you'd stop responding to my posts, if that's the case.

He is serious. The left says the rich hoard the money and don't spend it. So, I guess that means that it is buried in their back yard. Or maybe conservative is wrong and the rich stuff it in their mattresses.

 

[Incisor]

Bush took office with a 10.2 trillion GDP and left it at 14.7 trillion including the recession

Obama and Bush have had the same growth rate...however, Obama's created 9 million net private sector jobs in 8 years whereas Bush lost 460,000 net private sector jobs in 8 years. Oh, also the stock market is at a record high, nearly double where Bush left it. Is there still work to be done? Yes. We haven't really had a real stimulus in this country. Not one that wasn't heavily weighted toward tax cuts.

The tax cuts on the rich amounted to 80 billion dollars and when eliminated that is the best possible reduction in deficit depending on the behavioral change of the rich.

LOL! The deficit dropped by $400B in the year immediately after the Bush Tax Cuts for the wealthy expired. So what that says is that all those predictions from the right wing on the eve of that expiration were wrong. Because you all were saying, at the time, that letting the Bush Tax Cuts expire on the wealthy would create a recession, job loss, and cause the deficit to spike. Wrong on all three counts.

 

[Incisor]

I just explained this to you. Companies don't expand and build more and more stores because someone forced them to pay higher wages. They expand to make more profit while at the same time creating more jobs from the demand that was already there.

OMG, I feel like you're talking in circles. They expand to make more profit, why? Because of demand. And where does demand come from? Say it with me now: consumer spending from higher wages.

 

[Incisor]

Sure they do. Tax cuts helps businesses expand, creating more jobs, putting money in the hands of people who spend it. This isn't rocket science.

They don't help businesses expand. Not at all. The only thing that helps businesses expand is demand for what they provide. If you don't have any money to spend, either because your pay is low or you're spending it on education and health care, then that stops businesses from expanding. You're right in that this isn't rocket science, the problem you have is that there's no metric of success in the 35 years we've been experimenting with this. Only track records of failure, debt, bailouts, and job loss.

 

[Conservative]

Obama and Bush have had the same growth rate...however, Obama's created 9 million net private sector jobs in 8 years whereas Bush lost 460,000 net private sector jobs in 8 years. Oh, also the stock market is at a record high, nearly double where Bush left it. Is there still work to be done? Yes. We haven't really had a real stimulus in this country. Not one that wasn't heavily weighted toward tax cuts.




LOL! The deficit dropped by $400B in the year immediately after the Bush Tax Cuts for the wealthy expired. So what that says is that all those predictions from the right wing on the eve of that expiration were wrong. Because you all were saying, at the time, that letting the Bush Tax Cuts expire on the wealthy would create a recession, job loss, and cause the deficit to spike. Wrong on all three counts.

How exactly did Obama do that, what legislative initiative? You do realize that 6 million people today are working part time for economic reasons, do you know what that means. When Obama took office the debt was 10.6 trillion and today it is approaching 20 trillion, how did that happen?

 

[jaeger19]

Ah, but did so responsibly and steadily.

BWAHHHHH... now that's some partisan nonsense. So when Clinton does it.. its responsible.. when it happens under Bush.. its not. Too funny.

First. neither Bush nor Clinton policies forced people to purchase homes they could not afford.. nor forced lenders to lend money to people that could not afford them. So its ludicrous to argue that "bush did it to make it look like the economy was growing".

that belongs in the conspiracy thread forum.

now as to Clinton and Bush;s actions. You seem to conveniently forget that Clinton signed the Gramm Leachy act that deregulated the banks and accelerated the shaningans with the subprime market. and that Bush actually tried to reign in Fannie and Freddie.

Huh? What are you talking about? Did you lose track of the thread? I was saying how austerity as the response to the Great Bush Recession (caused by the Bush Housing Bubble which hit its peak in 2005-6) was a pack of lies sold to us to justify spending cuts.

Right.. the article you linked to was on a paper done done in 2010. After the mortgage crisis.. spending was INCREASED.. in the ARRA. not decreased.

Austerity was not the response to the mortgage crisis.

The budget control act came in 2011. The response to the mortgage crisis was the ARRA.. and it increased spending.

And in fact.. the budget control act allowed spending to further increase to raise the debt ceiling to 2.8 trillion. with the caveat that the deficit would be reduced over the NEXT 10 years.

Yeah..sorry but not the response to the recession.

So here we have you saying that letting tax cuts expire produces revenue which shrinks deficits. Yet, you've been arguing against the tax cuts' impact on the budget with me this entire time

Yes.. but the tax cuts are over and have been and revenue is back to its historical norm. I think you are confused about what is debt and deficit. If you want to argue that the debt has increased because of those past tax cuts? then yes.. you would have a point.

Today;s deficit? No.. because the tax cuts have largely expired and we are back to historic revenue levels.

and by the way.. the DEBT would not have been paid off.

Medicaid expansion saves States and patients money.

But we aren;t talking about states or patients money.. we are talking about the federal budget.. and it cost the federal budget to expand Medicaid.

 

[Moderate Right]

Tax cuts don't put money in the hands of people who will spend it. Tax cuts result in cuts to basic services the poor rely on. And when those services are cut, the poor must then spend more on them and less in the consumer economy, where 70% of the demand is.

I'm surprised John liked that post. He can tell you that cuts aren't needed because we can deficit spend all we want so tax cuts don't really cut spending.

 

[Moderate Right]

No, you want that. Which is referenced in all the posts where you arbitrarily determine peoples' worth and value.

But you want to arbitrarily determine peoples' worth and value by paying them $15 per hour, even if they aren't good enough workers to deserve it. How hypocritical can you be?

 

[Moderate Right]

No, the right has nothing. 35 years of trickle-down and nothing to show for it.

Why do you always blame Republicans when Democrats are in office? Are you saying that under Obama we have had eight years of trickle down? If so, why should we expect any different from Hillary?

 

[ttwtt78640]

OK, but you realize that right now there is a cap on the amount of taxable SS income? Meaning that income over $120K isn't taxed. So someone who makes $1M a year only pays FICA on the first $120K of their income. Don't you think, that in order to strengthen Social Security and pay back what was borrowed from it, that we should lift the cap or remove it altogether, that way those millionaires pay the same 6% everyone else pays for Social Security?

I don't get the martyr act.

The reason for the SS "contribution" cap is that is that SS "contributions" are used to define (cap?) a person's SS retirement benefit level. Folks in the pay grades above the SS cap (generally) have no need for SS supplemental retirement funds. What martyr act?

 

[Moderate Right]

OMG, I feel like you're talking in circles. They expand to make more profit, why? Because of demand. And where does demand come from? Say it with me now: consumer spending from higher wages.

What higher wages? How long has the federal minimum wage been $7.25 per hour? During that time many businesses have expanded many times over. There goes that theory of yours. Higher wages aren't needed to increase demand. The demand is already there. That's why businesses expand and they can do it without increasing wages.

 

[Moderate Right]

They don't help businesses expand. Not at all. The only thing that helps businesses expand is demand for what they provide. If you don't have any money to spend, either because your pay is low or you're spending it on education and health care, then that stops businesses from expanding. You're right in that this isn't rocket science, the problem you have is that there's no metric of success in the 35 years we've been experimenting with this. Only track records of failure, debt, bailouts, and job loss.

You have no concept of reality. Why do you think businesses have been expanding? It is because the poor already have plenty of money to spend. Businesses expand all the time just the way things have been. Do you think Walmart is stupid to open up new stores without the poor getting more money from somewhere? Your problem is that you are so indoctrinated by the left biased propaganda that you believe it without question, just as religious people take stories in the bible on faith. There have been thousands and thousands of new businesses and expanding businesses without the poor getting even one cent more to spend and most of these stores thrive. The fact is, unemployment has been going down so more people have money to spend without any raises to the minimum wages at all. If we were in a recession then businesses would not be expanding and start ups would be down sharply. This is where the money comes from and increases to the minimum wage are not needed.

 

[Incisor]

How exactly did Obama do that, what legislative initiative? You do realize that 6 million people today are working part time for economic reasons, do you know what that means. When Obama took office the debt was 10.6 trillion and today it is approaching 20 trillion, how did that happen?

I don't know what you mean by "economic reasons" that doesn't come back to the wage issue. Those people working part-time for economic reasons, who are they? Retirees whose SS benefits are low? College students? Are they full time workers supplementing their low full time wage with part-time work? It's hard to see how that statistic you are using doesn't ultimately come back to the issue of wages.

And again with these debt concerns! The only negative effect government debt has is on borrowing rates. But right now, even with this $20T debt, borrowing rates for the Federal government remain low. Which is why now is the time to borrow and rebuild our infrastructure. Or raise taxes on the wealthy in order to create jobs. Whichever.

 

[Conservative]

Incisor;1066418318]I don't know what you mean by "economic reasons" that doesn't come back to the wage issue. Those people working part-time for economic reasons, who are they? Retirees whose SS benefits are low? College students? Are they full time workers supplementing their low full time wage with part-time work? It's hard to see how that statistic you are using doesn't ultimately come back to the issue of wages.

They are included in the number of jobs you want to give Obama credit for creating. Do you know what part time for economic reasons means? Look it up, these are under employed, people worth more or more experienced working part time because they cannot find a job in this booming Obama economy that isn't what you want to believe or have been told. What you continue to prove is that you buy rhetoric and have no understanding of even basic business or economics

And again with these debt concerns! The only negative effect government debt has is on borrowing rates. But right now, even with this $20T debt, borrowing rates for the Federal government remain low. Which is why now is the time to borrow and rebuild our infrastructure. Or raise taxes on the wealthy in order to create jobs. Whichever.

Again, you don't understand infrastructure at all, what was the stimulus supposed to do? Debt service is part of the budget, any idea what 250 BILLION(current debt service at low interest rates) a year could do for that infrastructure you are so concerned about? Why is it that misuse of taxpayer money is nothing more than a license by bureaucrats to request more? Until you solve the spending problems why would anyone support giving the Federal Government more money?

 

[Incisor]

BWAHHHHH... now that's some partisan nonsense. So when Clinton does it.. its responsible.. when it happens under Bush.. its not. Too funny.

You know, you keep ignoring the facts. The facts are that the subprime housing market grew safely and steadily during Clinton. That is because the default rates for those subprimes was between 5-7%. When Bush created the subprime bubble in 2004, the default rate for mortgages issued between 2004-2006 was 20-23%. So that's a clear case of steady, sustained growth vs. erratic bubbles. Also, the number of subprimes issued between 1993-2003 was 1.1 million. The number of subprimes issued between 2004-2006 was 800,000. So Conservatives issued in just three years 3/4 of the number of subprimes issued in the 10 years prior. I don't know how you look at those facts and not see a bubble. Denial.

First. neither Bush nor Clinton policies forced people to purchase homes they could not afford.. nor forced lenders to lend money to people that could not afford them. So its ludicrous to argue that "bush did it to make it look like the economy was growing".

Of course he did it to make it look like the economy was growing. Why? Because it wasn't growing. Bush lost over 800,000 net private sector jobs in his first four years (and 460,000 net private sector jobs in 8 years). GDP growth was also pathetically low from 2001 until 2004, when the housing bubble started. So all the actions Bush took in 2003-4 to loosen regulations in the housing market were just a coincidence?

now as to Clinton and Bush;s actions. You seem to conveniently forget that Clinton signed the Gramm Leachy act that deregulated the banks and accelerated the shaningans with the subprime market. and that Bush actually tried to reign in Fannie and Freddie.

Not really. The banks were still not over-leveraged at that point (that wouldn't happen until 2004), and the derivative market for subprime loans was still relatively small. It wasn't until 2004 that there was a sudden spike in subprime mortgages being issued that happens to correspond with the Bush Administration turning a blind eye as standards were weakened, opting instead to "let the industry police itself". How'd that work out for everyone?

Right.. the article you linked to was on a paper done done in 2010. After the mortgage crisis.. spending was INCREASED.. in the ARRA. not decreased.

Sigh....no, spending did not increase. The Sequester cut $85B of discretionary spending in 2013 (with an estimated negative net impact of $160B loss of GDP). Spending was cut on the State and Local levels as well. All because Conservatives were selling lies about austerity because they didn't want to admit that their core fundamental economic ideology was completely fiscally, morally, and intellectually bankrupt. That's why Donald Trump is the standard bearer of those ideas today. Crappy policy leads to crappy politicians.

Austerity was not the response to the mortgage crisis. The budget control act came in 2011. The response to the mortgage crisis was the ARRA.. and it increased spending. And in fact.. the budget control act allowed spending to further increase to raise the debt ceiling to 2.8 trillion. with the caveat that the deficit would be reduced over the NEXT 10 years.

Yes, for a time. But then it ended. And the deficit has been reduced, by more than even Conservatives were predicting. When the Bush Tax Cuts on the wealthy expired, suddenly the deficit dropped by $400B.

Yes.. but the tax cuts are over and have been and revenue is back to its historical norm. I think you are confused about what is debt and deficit. If you want to argue that the debt has increased because of those past tax cuts? then yes.. you would have a point.

OK, so if past tax cuts reduced revenue which increased deficits, which added to the debt, then why have you been arguing with me that tax cuts don't reduce revenue, thus creating deficits and debt?

and by the way.. the DEBT would not have been paid off.

I guess we'll never know because Conservatives messed up so badly with their tax cuts and set 4 record deficits during Bush while doubling the debt.

 

[jaeger19]

They don't help businesses expand. Not at all. The only thing that helps businesses expand is demand for what they provide. If you don't have any money to spend, either because your pay is low or you're spending it on education and health care, then that stops businesses from expanding. You're right in that this isn't rocket science, the problem you have is that there's no metric of success in the 35 years we've been experimenting with this. Only track records of failure, debt, bailouts, and job loss.

Yeah.. that's not quite true. Because there has to be enough end all profit so that its worth the risk of investing.

If you tax me at 70%... its very conceivable that there is not enough profit at the end of the day to justify keeping my doors open.

 

[Incisor]

But you want to arbitrarily determine peoples' worth and value by paying them $15 per hour, even if they aren't good enough workers to deserve it. How hypocritical can you be?

No, I want to set a minimum wage that results in increased demand. It's not about "worth" in my view. It's about economics.

 

[Incisor]

Why do you always blame Republicans when Democrats are in office? Are you saying that under Obama we have had eight years of trickle down? If so, why should we expect any different from Hillary?

Yes, we have had 35 years of trickle-down including the Democratic Presidents. Despite for the brief time in the 90's when taxes were raised and prosperity occurred, largely economic growth over the last 35 years sucksssssssssss.

 

[Incisor]

The reason for the SS "contribution" cap is that is that SS "contributions" are used to define (cap?) a person's SS retirement benefit level. Folks in the pay grades above the SS cap (generally) have no need for SS supplemental retirement funds. What martyr act?

OK, but you didn't even address what I was talking about.

The martyr act of taking pride in struggling. There's nothing prideful about it.

 

[Incisor]

What higher wages? How long has the federal minimum wage been $7.25 per hour? During that time many businesses have expanded many times over. There goes that theory of yours. Higher wages aren't needed to increase demand. The demand is already there. That's why businesses expand and they can do it without increasing wages.

Sigh....so here's the thing. You can't say on the one hand that growth is poor, while saying on the other that business "expands". The growth rate over the last 15 years has been between 1-2 percent. That's it. That's not expansive growth. The only thing that has expanded in the last 15 years has been the wage gap.

 

[Incisor]

You have no concept of reality. Why do you think businesses have been expanding?

OMG - you were just saying in several posts earlier that they're not expanding! Sheesh. You flip-flop more than Trump.

Businesses haven't been "expanding" in the sense that they're creating jobs and making a more competitive labor market. In fact, the opposite has occurred, as you correctly state when 6 million people are working part-time "for economic reasons". That doesn't signal business expansion to me.

Do you think Walmart is stupid to open up new stores without the poor getting more money from somewhere? Do you think Walmart is stupid to open up new stores without the poor getting more money from somewhere?

Walmart has been closing stores, not opening them.

There have been thousands and thousands of new businesses and expanding businesses without the poor getting even one cent more to spend and most of these stores thrive.

Where are you getting this? What are you even talking about? Just this year alone, Walmart closed about 150 stores. All those "expansions". And BTW - most small businesses fail after their first year.

 

[Incisor]

Look it up, these are under employed, people worth more or more experienced working part time because they cannot find a job in this booming Obama economy that isn't what you want to believe or have been told. What you continue to prove is that you buy rhetoric and have no understanding of even basic business or economics

I don't think you're right about that, and you still haven't bothered to answer the question. When you say someone is working "part time for economic reasons", to me, that means people like retirees who need to supplement their Social Security, young mothers who work part-time in order to get benefits, students, etc. The people who have given up looking for work, or "discouraged workers", is lower than when Obama took over. So again, how does this not come back to the wage issue? Why are businesses only "creating" part-time jobs?

Again, you don't understand infrastructure at all, what was the stimulus supposed to do? Debt service is part of the budget, any idea what 250 BILLION(current debt service at low interest rates) a year could do for that infrastructure you are so concerned about? Why is it that misuse of taxpayer money is nothing more than a license by bureaucrats to request more? Until you solve the spending problems why would anyone support giving the Federal Government more money?

You're the ones who gave us this debt in the first place. We could have paid it off if you had done literally nothing to the tax code. So how is this not a case of you complaining about a problem you created in the first place?