RKMBs Forums .::Important::. Politics and Current Events Can someone explain Bushconomics to me

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the G-man said:
I was responding to MEM, not you.

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theory9 said:
I wasn't trying to imply that Bush was the first person to do this, only that he did. My apologies for any misunderstanding.

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Pariah said:

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Matter-eater Man said:
Under Bush it's increased every year. That would be less people buying things that you might sell or hold stock in.

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I'm sure it's been brought up many a time (and, not surprisingly, forgotten), but Bush was not responsible for the deficit. Clinton was. Just as Bush got into office, the economy went down the drain--Before he had time to do anything. Then, when Bush was proposing plans to fix it, 9/11 hit.

Stop being an ass-jack and blaming Bush for every goddamn thing.

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r3x29yz4a said:
you are aware that the stock market can be affected by the person in the presidency. investory confidence and whatnot.

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now we're in the hole and spending more and more money.

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the G-man said:
Cutting taxes often leads to more, not less, revenue for the government.

Coolidge cut tax rates in the 1920s, Kennedy cut marginal tax rates in the 1960s, and Reagan cut them in the 1980s.

Under Coolidge, marginal tax rates were cut from the top rate of 73% to 25%. The economy rewarded this policy by expanding 59% from 1921 to 1929. Revenues received by the federal treasury increased from $719 million in 1921 to more than $1.1 billion 1929. That's a 61% increase (there was zero inflation in this period).

Under Kennedy, marginal tax rates were cut from a top rate of 91% to 70%. In real dollar terms, the economy grew by 42%, an average of 5 percent a year from 1961 to 1965. Tax revenue to the U.S. Treasury increased by 62%. Adjusted for inflation, they rose by one-third.

Under Reagan, marginal tax rates were cut from a top of 70% to 28%. Revenues (from all taxes) to the U.S. Treasury nearly doubled. According to the Budget of the U.S. Government, FY 1997, Office of Management and Budget. Revenues increased from roughly $500 billion in 1980 to $1.1 trillion in 1990.

Furthermore, there is a correlation between the Bush and Clinton tax hikes and a change in the revenue received by the Treasury. Martin Feldstien, professor of economics at Harvard, estimates that the U.S. Treasury would have collected two-thirds more revenue during the first three years of the Clinton presidency had his administration NOT raised taxes.

Source: mackinac Center for Public Policy
Published: 1997

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the G-man said:
Cutting taxes often leads to more, not less, revenue for the government.

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The nation's unemployment rate dropped to a 4 1/2-year low as businesses cranked up hiring in January, an encouraging sign that the economy started the year on the right foot.

The latest jobs picture, provided by the Labor Department on Friday, suggested that companies are feeling better about the economy's prospects as well as their own and thus are more inclined to hire. Good weather in parts of the country also helped, especially for construction work.

The unemployment rate dropped from 4.9 percent to 4.7 percent, the lowest since July 2001.

For blacks, the rate fell to 8.9 percent, the best since September 2001. The unemployment rate for Hispanics dipped to a five-month low of 5.8 percent.

Payrolls grew by 193,000 in January, up from 140,000 in December. Job growth for December as well as for each of the months going back to August turned out to be stronger than the government previously reported.

Employment gains were fairly widespread last month. Construction, manufacturing, health care, financial activities and other industries boosted payrolls. That blunted job losses in other areas including retailing, government and broadcasting.

"There's no question we're getting back to better days for job creation," said Ken Mayland, economist at ClearView Economics. "There's been a sense of unease in the American workplace and this should help relieve that."

The president wants Congress to make his tax cuts permanent. Democrats, however, contend that the tax cuts mostly helped the wealthy, did nothing to help the jobs climate and are a big reason why the government's balance sheets are bleeding red ink.

Employees' average hourly earnings, meanwhile, climbed to $16.41 in January, up 0.4 percent from December.

Analysts believe the pickup in workers' wages should help support consumer spending, a key shaper of overall economic activity. Retailers reported Thursday that they rang up better-than-expected sales in January. Economists predict the economy, which grew by an anemic 1.1 percent rate in the final quarter of last year, is rebounding smartly in the January-to-March quarter and should clock in at a 4 percent growth rate.

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r3x29yz4a said:
We had a surplus which is now gone.
We lowered taxes (which lowers money coming into the government).

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the G-man said:
Cutting taxes often leads to more, not less, revenue for the government.

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Can you explain to me then why virtually no one in academic economics believes in supply side economics?

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magicjay38 said:
Can you explain to me then why virtually no one in academic economics believes in supply side economics?

It's been on the garbage heep of economic thought for 25 years at least. See David Stockman, Reagan's OMB Director's famous interview in the Atlantic Monthly in 1983. The Reaganites gave up on the concept long ago.

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wannabuyamonkey said:

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Can you explain to me then why virtually no one in academic economics believes in supply side economics?

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Care to back that up?

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magicjay38 said:
Supply-side economics is not taught as a comprehensive academic course of study in any institution of higher learning in this country or, indeed, anywhere in the world. Keynesian and monetarist domination of academic faculties remains a stranglehold.

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the G-man said:

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magicjay38 did not say shit. Jude Wanniski said:
Supply-side economics is not taught as a comprehensive academic course of study in any institution of higher learning in this country or, indeed, anywhere in the world. Keynesian and monetarist domination of academic faculties remains a stranglehold.

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That is less a reflection of the merits of one view or another and more a reflection of the fact that something like ninety percent of the faculties of most universities are democrats/liberals who are, naturally, going to espouse the theories that reflect their ideologies.

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Bushenomics 102: Reality

There were two stories in Saturday’s New York Times that reveal the reality of Bushenomics.

One said that Delta Airlines was going to eliminate its pilot pensions. It was in the business section, page C3.

“Where Did the Good Investments Go,” was the headline on the other one. It was an editorial. It said, “By and large, American companies are flush with cash,” and have been for some time, but they can’t find productive places to put the money.

Those of you who are reading this have been living through Bushenomics 101.

The theory is that if you cut taxes for the wealthy they will go out and invest it. That will grow the economy and create jobs.

In the past it’s been called trickle down theory and voodoo economics.

The first thing that happened utilizing this theory was a recession. Bushenomicers blamed it on Clinton.

We have had a slow recovery. Bushenomicists blame it on Clinton, on 9/11, and the subsequent wars. What George Bush fondly calls the ‘trifecta.’

The first of these is odd because under Clinton the economy grew like gangbusters. It produced jobs, the Dow Jones grew over 350%, the deficit left by Bush the Elder turned into a surplus. So Clinton policies should have been a perfect ‘how to.” The second was reasonable, but only for a brief period. A month, two months, perhaps a quarter. That’s all. The third is absurd. War normally produces growth. All around growth. Including jobs.

The so-called recovery has been treated as very mysterious. First, because it did not produce jobs. Now, because it is not producing business either. Yet it has produced an increase in corporate profits and a great rise in real estate.

If you just take the facts and forget about the fantasy, there’s nothing mysterious about any of it.

The great bulk of the tax cuts went to rich people. If someone making a million a year gets to keep an extra hundred thousand, what do they do with it? Go out and start a company? No. They put it in the stock market or real estate. In this case, business has not really been growing. The Dow is still only a few points over where it was when Bush took office. Other factors, like low interest rates, favored real estate. So the money flowed there.

But how can we say that business is somehow bad if corporate profits have risen?

With tax cuts, massive spending and wars, Bushenomics does pump a lot of money into the economy. But what Bushenomics doesn’t do is create places for the money to go. It does not enrich the vast mass of working people who are the ultimate consumers, so their spending does not increase.

Actually, as wages are driven down, pension funds are under funded or looted, public services are cut and the public debt is increased, it means that the money Bushenomics is spending is from the general population. In that circumstance, corporate profits are not so much profits, but a transfer of value and productivity into cash. It is a sort of hollowing out of our businesses and indeed of the entire country.

It’s a big country with a lot of money, a lot elasticity, a lot of creativity and a lot of variety. So this can go on for a while without a major crash. Plus the world depends on American consumption, so the rest of the world will go along with it. For a while.

But the reality is beginning to appear.

It’s like sighting of icebergs. A glimmer here, a shining there. While the band keeps playing in the ship’s ballroom.

Part of the problem is the media.

For example, the Delta story, which involves the pensions of 13,000 people, could be considered a major break in the social fabric. As such, it would be an A1 story, a front page story, not a C3, business section story.

Also, the Times headline was “Delta Takes Steps to Avert Mass Retirement of Pilots.”

That wasn’t false, but it was a hell of a spin on the story. Pilots were entitled to a lump sum payout of half what they were due. The writing on the wall is in very big letters, a lot of them were going to get out while the getting was good, creating something like a run on a bank. But you don’t stop a run on the bank by shutting it down forever, and devil take the people with money on deposit.

The enormity of problem also tends to remain hidden because we don’t have a counter narrative.

That’s a shame. Because the counter narrative is simple, sensible and it works.

Call it trickle up economics.

If a bunch of average people have money to spend, business people will arrive to sell them things. That is a law of nature. They will trade and build and invent in order to do so. If they get rich in the process, God bless them.
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magicjay38 quoted Jude Wanniski as saying:
Supply-side economics is not taught as a comprehensive academic course of study in any institution of higher learning in this country or, indeed, anywhere in the world. Keynesian and monetarist domination of academic faculties remains a stranglehold.

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the G-man said:

That is less a reflection of the merits of one view or another and more a reflection of the fact that something like ninety percent of the faculties of most universities are democrats/liberals who are, naturally, going to espouse the theories that reflect their ideologies.

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magicjay38 said:
That may be true of university professors, it's not true of economics professors.

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New data show federal revenues surged in the first three quarters of the current fiscal year. Corporate tax receipts are up more than 26% over the same period last year, ringing in at $250 billion. Individual income tax collections, at $791 billion, are up 14% over the first nine months of fiscal 2005. The Congressional Budget Office projects corporate tax receipts will total $330 billion by the end of the fiscal year. As a result, the deficit for the year is expected to be about $300 billion, down from $318 billion last year and $412 billion the year before.

What, you ask, has led to this miraculous event? A tax cut, it turns out. Or rather, an array of tax cuts, on corporate income, personal income, and capital gains. These tax cuts, passed in 2001 and 2003, appear to be having the desired effect of spurring economic growth by creating addition incentives for work and entrepreneurship.

The latest numbers, moreover, offer some hard data to challenge some of the charges leveled against President Bush and congressional Republicans in respect of tax cuts. These tax cuts haven't exactly benefited "the rich." A third of those higher income-tax revenues came from the highest-earning 1% of households, according to the New York Times.

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President Bush today held a press conference boasting of a reduced US defecit--even though it is still the fourth largest defecit in American history, RAW STORY has learned.

"This good news is no accident," Bush told taxpayers from the East Room of the White House. "It's the result of the hard work of the American people and sound policies in Washington, D.C."

Although Bush inherited a budget surplus, and a national debt that had dwindled in both of Clinton's terms, his administration has since seen a ballooning defecit and record debt. The nation's three highest deficits were seen under Bush.
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RAW

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Ray said:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/07/12/MNGVIJTGEI1.DTL&type=politics

Bush credits his tax cuts, surging revenues with deficit drop, but analysts look to future
07-12) 04:00 PDT Washington -- President Bush used the formal East Room of the White House Tuesday to tout the administration's midyear budget forecast -- news normally relegated to a technical briefing -- as surging corporate and individual income tax revenues pared the federal budget deficit more than expected this year.

Bush credited his signature tax cuts in 2001 and 2003 for an anticipated 30 percent drop in the deficit to $296 billion. Although some analysts agreed that tax cuts helped produce higher economic growth and tax revenue, they warned that Bush and the Republican-led Congress are spending the money very fast.

The revenue burst, while welcome, masks a dangerous longer-term picture, the analysts said.

"I think you should buy yourself a very small brownie, light a candle and blow it out," said former Congressional Budget Office Director Douglas Holz-Eakin. "This is tiny compared to the big problem, and it's on the wrong side of the budget. The big problem is on the spending side, and there is a question of just how permanent this will be."

If Republicans hope to calm their base over spending, they will find scant help from conservative budget analysts.

Since Bush has been president, "We've had the biggest education bill ever, the biggest farm bill ever, the biggest highway bill ever, and the biggest Medicare expansion ever," said Brian Riedl of the conservative Heritage Foundation.

In addition, the cost of the war in Iraq has topped $300 billion and spending on Hurricane Katrina and other hurricanes from last year has now reached $123 billion.

"There is no fiscal discipline at all going on," said Veronique de Rugy, a budget analyst at the conservative American Enterprise Institute. "It's utterly shocking for me to hear an administration that claims to be conservative focus exclusively on the deficit, because the deficit is a pretty meaningless measure of the size of government. ... If they were fiscally responsible, they would want the total size of government to shrink, and that's not happening."

Still, Bush and the Republicans in Congress hope the news of rising tax revenues and declining deficits begins to reassure the conservative base that has been deeply disenchanted with the administration's free-spending ways.

"Some in Washington say we had to choose between cutting taxes and cutting the deficit," an animated Bush told assembled congressional and administration officials. "You endured that rhetoric hour after hour on the floor of the Senate and the House. Today's numbers show that that was a false choice. The economic growth fueled by tax relief has helped send our tax revenues soaring. That's what happened."

For the second year in a row, tax collections are growing at a record clip, up 13 percent in the first half of the year, after rising 14.6 percent last year. Corporate tax receipts rose at a double-digit pace, more than 26 percent, through the first half, reflecting higher corporate profits.

Personal income taxes are also climbing, especially in the top income brackets, where most of the income tax is paid. Withheld individual income and payroll taxes are rising by a strong 8 percent, but such taxes that are not withheld from paychecks are soaring by 20 percent.

These taxes are paid by high-income individuals, small businesses, partnerships, hedge funds, subchapter S corporations and limited liability corporations.

As the income tax relies increasingly on high-income earners -- the top 20 percent pay nearly 85 percent of the income tax, according to the Congressional Budget Office -- economists say it becomes much more sensitive to the stock market. When the stock market is rising, tax receipts move up sharply as they are now; when the market falls, as it did in 2001, receipts plummet.

"It's certainly good news this year, but one cannot reasonably expect corporate income taxes to grow at double-digit rates forever," Holz-Eakin said.

The same goes for personal income taxes, he said. "We're seeing again what we experienced in the late 1990s, which is a tax system that relies heavily on the upper end of the income distribution is very volatile," Holz-Eakin said. "It went away in the '90s and I think it would be prudent to assume that this might not be permanent either."

Republicans said the increases validate Bush's tax cuts, especially the 2003 tax cuts that reduced rates on income taxes, capital gains and dividends.

White House budget chief Rob Portman said the federal budget deficit has now fallen to 2.3 percent of the economy from its peak at 4.5 percent in 2004, and is now in line with the historical average. Portman said the administration will hit its goal of halving the 2004 deficit a year ahead of time.

Democrats said $300 billion deficits are nothing to crow about.

"Despite the administration's spin, the truth is that the projected budget deficit is still the fourth largest in American history," said Rep. Mike Thompson, D-St. Helena. "A nearly $300 billion budget deficit two years before millions of Baby Boomers begin to retire is absolutely nothing to celebrate.''

With the giant Baby Boom generation now just 18 months from the start of its retirement, the federal government stands on the brink of a historic economic juncture. As the 76 million people born between 1946 and 1964 retire, they will stop paying taxes into Social Security and Medicare and start collecting benefits.

The administration's spending has clearly made the problem worse, reversing surpluses inherited from the Clinton administration that could have softened the unprecedented demographic transition.

Bush and the Republican-led Congress enacted the largest increase in Medicare since President Lyndon Johnson created the program in 1965, with a new prescription drug benefit expected to cost $724 billion over the next decade and as much as $2 trillion in the decade after that.

Bush acknowledged that the deficit reduction is short term and that entitlements have to be reined in.

"We need to do something about it, is what we need to do," Bush said.

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the G-man said:

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Ray said:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/07/12/MNGVIJTGEI1.DTL&type=politics

Bush credits his tax cuts, surging revenues with deficit drop, but analysts look to future
07-12) 04:00 PDT Washington -- President Bush used the formal East Room of the White House Tuesday to tout the administration's midyear budget forecast -- news normally relegated to a technical briefing -- as surging corporate and individual income tax revenues pared the federal budget deficit more than expected this year.

Bush credited his signature tax cuts in 2001 and 2003 for an anticipated 30 percent drop in the deficit to $296 billion. Although some analysts agreed that tax cuts helped produce higher economic growth and tax revenue, they warned that Bush and the Republican-led Congress are spending the money very fast.

The revenue burst, while welcome, masks a dangerous longer-term picture, the analysts said.

"I think you should buy yourself a very small brownie, light a candle and blow it out," said former Congressional Budget Office Director Douglas Holz-Eakin. "This is tiny compared to the big problem, and it's on the wrong side of the budget. The big problem is on the spending side, and there is a question of just how permanent this will be."

If Republicans hope to calm their base over spending, they will find scant help from conservative budget analysts.

Since Bush has been president, "We've had the biggest education bill ever, the biggest farm bill ever, the biggest highway bill ever, and the biggest Medicare expansion ever," said Brian Riedl of the conservative Heritage Foundation.

In addition, the cost of the war in Iraq has topped $300 billion and spending on Hurricane Katrina and other hurricanes from last year has now reached $123 billion.

"There is no fiscal discipline at all going on," said Veronique de Rugy, a budget analyst at the conservative American Enterprise Institute. "It's utterly shocking for me to hear an administration that claims to be conservative focus exclusively on the deficit, because the deficit is a pretty meaningless measure of the size of government. ... If they were fiscally responsible, they would want the total size of government to shrink, and that's not happening."

Still, Bush and the Republicans in Congress hope the news of rising tax revenues and declining deficits begins to reassure the conservative base that has been deeply disenchanted with the administration's free-spending ways.

"Some in Washington say we had to choose between cutting taxes and cutting the deficit," an animated Bush told assembled congressional and administration officials. "You endured that rhetoric hour after hour on the floor of the Senate and the House. Today's numbers show that that was a false choice. The economic growth fueled by tax relief has helped send our tax revenues soaring. That's what happened."

For the second year in a row, tax collections are growing at a record clip, up 13 percent in the first half of the year, after rising 14.6 percent last year. Corporate tax receipts rose at a double-digit pace, more than 26 percent, through the first half, reflecting higher corporate profits.

Personal income taxes are also climbing, especially in the top income brackets, where most of the income tax is paid. Withheld individual income and payroll taxes are rising by a strong 8 percent, but such taxes that are not withheld from paychecks are soaring by 20 percent.

These taxes are paid by high-income individuals, small businesses, partnerships, hedge funds, subchapter S corporations and limited liability corporations.

As the income tax relies increasingly on high-income earners -- the top 20 percent pay nearly 85 percent of the income tax, according to the Congressional Budget Office -- economists say it becomes much more sensitive to the stock market. When the stock market is rising, tax receipts move up sharply as they are now; when the market falls, as it did in 2001, receipts plummet.

"It's certainly good news this year, but one cannot reasonably expect corporate income taxes to grow at double-digit rates forever," Holz-Eakin said.

The same goes for personal income taxes, he said. "We're seeing again what we experienced in the late 1990s, which is a tax system that relies heavily on the upper end of the income distribution is very volatile," Holz-Eakin said. "It went away in the '90s and I think it would be prudent to assume that this might not be permanent either."

Republicans said the increases validate Bush's tax cuts, especially the 2003 tax cuts that reduced rates on income taxes, capital gains and dividends.

White House budget chief Rob Portman said the federal budget deficit has now fallen to 2.3 percent of the economy from its peak at 4.5 percent in 2004, and is now in line with the historical average. Portman said the administration will hit its goal of halving the 2004 deficit a year ahead of time.

Democrats said $300 billion deficits are nothing to crow about.

"Despite the administration's spin, the truth is that the projected budget deficit is still the fourth largest in American history," said Rep. Mike Thompson, D-St. Helena. "A nearly $300 billion budget deficit two years before millions of Baby Boomers begin to retire is absolutely nothing to celebrate.''

With the giant Baby Boom generation now just 18 months from the start of its retirement, the federal government stands on the brink of a historic economic juncture. As the 76 million people born between 1946 and 1964 retire, they will stop paying taxes into Social Security and Medicare and start collecting benefits.

The administration's spending has clearly made the problem worse, reversing surpluses inherited from the Clinton administration that could have softened the unprecedented demographic transition.

Bush and the Republican-led Congress enacted the largest increase in Medicare since President Lyndon Johnson created the program in 1965, with a new prescription drug benefit expected to cost $724 billion over the next decade and as much as $2 trillion in the decade after that.

Bush acknowledged that the deficit reduction is short term and that entitlements have to be reined in.

"We need to do something about it, is what we need to do," Bush said.

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I agree with these analysts for the most part.

If you look at what they said, they indicated that Bush and Congress should cut spending.

They didn't say that tax cuts caused the deficits. They said it was spending.

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r3x29yz4a said:

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It's still perfectly accessible to anyone who cares.

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Captain Sammitch said:

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r3x29yz4a said:

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It's still perfectly accessible to anyone who cares.

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r3x29yz4a said:
So you hid my anti-bush thread inside of a topic that has a more neutral header?
Good one, fucktard.

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the G-man said:

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r3x29yz4a said:
So you hid my anti-bush thread inside of a topic that has a more neutral header?
Good one, fucktard.

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So, what are you saying? That you're less interested in discussing a topic or issue? And only interested in repetitive bashing of the President?

There was already a topic about the budget and Bush's tax cuts. It was a topic that YOU started, apparently, as an attempt to bash the President's policies.

Why would you think you need a second thread about the exact same thing? Simply because not everyone agreed with you on the first thread?

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r3x29yz4a said:

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Captain Sammitch said:

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r3x29yz4a said:

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It's still perfectly accessible to anyone who cares.

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ah, but why would you assume i care to see your whiny anti-liberal, anti-evolution threads?
its called free speech, look it up.

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The hell are you talking about? I forget the last time I started a thread in here. You would've been more effective retorting with a 'your mom' joke. Thanks for playing.

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the G-man said:
Cutting taxes often leads to more, not less, revenue for the government.

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the G-man said:

Federal tax receipts for October and November [2005] were $288 billion. This is up from the first two months of fiscal 2005 ($271 billion), 2004 ($254 billion), and 2003 ($244 billion).

Despite cutting tax rates in May 2003, tax receipts for this two-month period have risen for three consecutive years.

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