NationStates Jolt Archive

COMMENTARY: Based on this information, the Suppy Side economists were correct, at least in part. As the remainder of this lengthy article indicates, this is just one bright spot in a mostly gloomy forecast for the next few years ( a major portion of which is the arrival of Baby Boomers at Social Security age in about two years! ). Still, this is a lesson we should make an effort to remember.


Surprising Jump in Tax Revenues
Is Curbing Deficit (http://www.nytimes.com/2006/07/09/washington/09econ.html?_r=1&th&emc=th&oref=slogin)


By EDMUND L. ANDREWS
Published: July 9, 2006
WASHINGTON, July 8 — An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.

On Tuesday, White House officials are expected to announce that the tax receipts will be about $250 billion above last year's levels and that the deficit will be about $100 billion less than what they projected six months ago. The rising tide in tax payments has been building for months, but the increased scale is surprising even seasoned budget analysts and making it easier for both the administration and Congress to finesse the big run-up in spending over the past year.

Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could actually decline this year.

The main reason is a big spike in corporate tax receipts, which have nearly tripled since 2003, as well as what appears to be a big increase in individual taxes on stock market profits and executive bonuses.

On Friday, the Congressional Budget Office reported that corporate tax receipts for the nine months ending in June hit $250 billion — nearly 26 percent higher than the same time last year — and that overall revenues were $206 billion higher than at this point in 2005.

Congressional analysts say the surprise windfall could shrink the deficit this year to $300 billion, from $318 billion in 2005 and an all-time high of $412 billion in 2004.

Republicans are already arguing that the revenue jump proves that their tax cuts, especially the 2003 tax cut on stock dividends, would spur the economy and ultimately increase revenues.

"The tax relief we delivered has helped unleash the entrepreneurial spirit of America and kept our economy the envy of the world," President Bush said in his weekly radio address on Saturday.

Democrats and many independent budget analysts note that overall revenues have barely climbed back to the levels reached in 2000, and that the government has borrowed trillions of dollars against Social Security surpluses just as the first of the nation's baby boomers are nearing retirement.

"The fact is that revenues are way below what the administration said they would be a few years ago," said Thomas S. Kahn, staff director for Democrats on the House Budget Committee. "The long-term prognosis is still very, very bleak, and the administration doesn't have any kind of long-term plan."

One reason the run-up in taxes looks good is because the past five years looked so bad. Revenues are up, but they have lagged well behind economic growth.

The surge could also evaporate as quickly as it appeared. Over the past decade, tax revenues have become much more volatile, alternately soaring and plunging in the wake of swings in the stock market and repeatedly defying government projections.

Nevertheless, the short-term change has been striking. At the beginning of the year, the Congressional Budget Office projected that this year's deficit would be $371 billion and the White House Office of Management and Budget put the figure at $423 billion.

Corporate tax payments are expected to exceed $300 billion, up from $131 billion three years ago. The other big increase is an extraordinary jump in individual taxes that were not withheld from paychecks, usually a reflection of taxes on investment income and executive bonuses.

The jump in receipts is providing Mr. Bush and Republicans in Congress with a new opportunity to assert that tax cuts of 2001 and 2003 are working and that Congress should make them permanent.

Pat Toomey, president of the Club for Growth, a conservative political fund-raising group, said: "The supply-siders were absolutely right. All the major sources of revenue have grown, especially in areas where we said they would."

[ This article is two pages long. Read the rest of the article (http://www.nytimes.com/2006/07/09/washington/09econ.html?_r=1&th&emc=th&oref=slogin). ]

"The long-term prognosis is still very, very bleak, and the administration doesn't have any kind of long-term plan."
I think that statement is more important than reducing a single years deficit from 318bil to 300bil. A long term plan and sustainable changes are what is important...not a single year drop

Now the congress just needs to cut down on its spending habits.

A single-year drop of a few billion does not make a trend. I would be very cautious about this. And the achievement would be especially meaningless if the government was to use it as a complacent justification to increase their deficit spending. They seem to be forgetting that they should be working to reduce the deficit, not maintain it.

Now the congress just needs to cut down on its spending habits.

That alone could fix things. However, considering how much it would have to cut down to remove all deficit in specific timelines would cause problems. Plus, while a 300bil deficit is problematic, history has shown that we work best with a slight deficit.

That alone could fix things. However, considering how much it would have to cut down to remove all deficit in specific timelines would cause problems. Plus, while a 300bil deficit is problematic, history has shown that we work best with a slight deficit.

Which means your country is doomed (ok that was a bit melodramatic :) ).

The US is a country that tends to run strong currency, high private and public debt, low exports, high imports and so forth. While it has been doing this it has dropped from about 60% of the world's economy to about 20%. :headbang:

Which means your country is doomed (ok that was a bit melodramatic :) ).

The US is a country that tends to run strong currency, high private and public debt, low exports, high imports and so forth. While it has been doing this it has dropped from about 60% of the world's economy to about 20%. :headbang:

Hey, you don't have to remind me that we've got idiots in power. :rolleyes:

Don't forget the tax cuts which gave people more money to spend.

In all honesty, the deficits aren't that big a problem. The US economy alone is growing fast enough to accomodate our budget deficit and the world economy is growing by $2 trillion per year, more than enough to absorb our $800 billion current-account deficit. The situation will correct itself without serious difficulty if we moderate our government spending and keep taxes fairly unchanged.

The only real concern from these deficits is inflation, and that's the only reason why they need to be reduced.

The US is a country that tends to run strong currency, high private and public debt, low exports, high imports and so forth. While it has been doing this it has dropped from about 60% of the world's economy to about 20%

That's a good thing, not a bad thing. A bigger world economy means more people are wealthier and have more access to more goods and services. Because of the strong world economy we're also developing technology faster and are able to improve productivity at an accelerated rate, meaning higher living standards and less inflation.

The US economy today is far healthier than it has been at almost any time in its history. Unemployment is lower, real income is higher, poverty is lower and more people are in the labor force...we're simply better off, no doubt about it. This is expanding to the world economy, Europe, and Japan...all of them are getting stronger and may continue to do so for years in to the future.

Don't forget the tax cuts which gave people more money to spend.

Apart from those who lost out from social security cuts, who have less to spend.

That's a good thing, not a bad thing. A bigger world economy means more people are wealthier and have more access to more goods and services. Because of the strong world economy we're also developing technology faster and are able to improve productivity at an accelerated rate, meaning higher living standards and less inflation.

The US economy today is far healthier than it has been at almost any time in its history. Unemployment is lower, real income is higher, poverty is lower and more people are in the labor force...we're simply better off, no doubt about it. This is expanding to the world economy, Europe, and Japan...all of them are getting stronger and may continue to do so for years in to the future.
I think you dream in technicolour but the real world is black and white when it comes to dollars and sense.

The trade deficit grows, the debt grows, US savings are depleted, the housing market will bust, interest rates will climb along with inflation, energy costs will go through the roof, and what are you left with?

The prosect of even more expensive war(s) also looms as the back breaker.

More and more US debt is held by the people that Americans have held in such high esteem over the past 50 years.....the communist country of China.

The markets crash and the depression steps in.

I think you dream in technicolour but the real world is black and white when it comes to dollars and sense.

The trade deficit grows, the debt grows, US savings are depleted, the housing market will bust, interest rates will climb along with inflation, energy costs will go through the roof, and what are you left with?

The prosect of even more expensive war(s) also looms as the back breaker.

More and more US debt is held by the people that Americans have held in such high esteem over the past 50 years.....the communist country of China.

The markets crash and the depression steps in.

Ironically, deficits my be the one thing we need to counterbalance the rise in interest rates. The booming world economy is simultaneously hungry for liquidity while facing inflationary pressures, and we're forced to raise interest rates which restricts that liquidity and slows growth, By running deficits, we may be reducing the impact of higher lending costs worldwide, which in turn reduces the effects of

Even so, a housing bust has not happened. The market is slowing down, but it's not collapsing as was feared in 2004 or 2005; any collapses have been small and localized but the overall trend has been towards a soft landing. Plus, the world real estate market is still strong and is accelerating in new markets as world economic growth continues; the demand for industrial and commercial space in the US, Asia, and the Middle East is helping absorb the slack in the housing market and has been offsetting the decline in residential construction in the US.

Energy costs are still low compared to the 1970's, and there have been few if any signs of a serious cutback in consumption. Prices for natural gas are falling, removing the main threat to consumers from high energy prices; oil prices haven't affected the economy anywhere near as much as natural gas and now that it's falling the effects are also subsiding. We're a long way away from people being seriously harmed financially be high energy prices, especially considering that they are lowering their debt burdens compared to 2004 or 2005. The record travel season and rising gasoline consumption both confirm that US consumers are not as stretched as they were in 2005 and the threat to growth from energy prices is subsiding.

The global economic environment is not that unstable, especially considering the revival of growth in Japan and Europe as well as the Middle East. We're facing at worst a soft landing or mild recession and not an apocalyptic 1930's style collapse, or even a serious 1982 recession.

Apart from those who lost out from social security cuts, who have less to spend.

I don't beleive SS was cut, in fact they got a cost of living (COLA) increase last year if I'm not mistaken. In fact, I know they did because the retired military got the same COLA increase. Now, medicare premiums did go up not by the same dollar amount as the COLA so they at least kept even within a few dollars.

Hey, you don't have to remind me that we've got idiots in power. :rolleyes:

I agree completely Oxymoon. This country will be doomed unless we start to re-realize that the government has a central role in the economy. The government provides stability by making sure the wealth gap doesn't get to large.

The vast majority of Americans wouldn't be able to take care of themselves because they lack an advanced degree from a university, and the republicans are willing to let them just die. Instead, we need progressive polcies to help people get through life. It's time we start using the smart people of the country to instruct the others how to live better.

We need Jon Tester, Jim Webb and Ned Lamont to win!

I agree completely Oxymoon. This country will be doomed unless we start to re-realize that the government has a central role in the economy. The government provides stability by making sure the wealth gap doesn't get to large.
I thought the stagnation of western economies under Keynesian ideas during the sixties and seveties proved that centralization is inefficient and very tough to carry out. It stifles innovation and competition in a very severe fashion.

The vast majority of Americans wouldn't be able to take care of themselves because they lack an advanced degree from a university, and the republicans are willing to let them just die. Instead, we need progressive polcies to help people get through life.
Actually, the Republicans want them to improve their own conditions by themselves, not have mummy and daddy congress come along and do it for them.
Why wouldn't they be able to take care of themselves anyways. Explain this one to me.

It's time we start using the smart people of the country to instruct the others how to live better.
*gags*

The vast majority of Americans wouldn't be able to take care of themselves because they lack an advanced degree from a university, and the republicans are willing to let them just die. Instead, we need progressive polcies to help people get through life. It's time we start using the smart people of the country to instruct the others how to live better.

Heaven help us when everyone needs a Ph.D. to take care of themselves. I think my mechanic does pretty well without the burden of a university education, as does my plumber, and my electrician. So do the machinists and technicians at work, as a matter of fact.

It's odd, but I see this bias crop up time and time again against working in the trades. If one of my kids wanted to be an electrician, I'd find the best apprentice program I could and let them have at it.

We don't need the "smart" people of the world to help us live better. We need them to find a little common sense.

A single-year drop of a few billion does not make a trend. I would be very cautious about this. And the achievement would be especially meaningless if the government was to use it as a complacent justification to increase their deficit spending. They seem to be forgetting that they should be working to reduce the deficit, not maintain it.

Revenues have been growing at a double digit rate since the 2003 tax cut.

The problem is and always has been excessive spending. Period.

I think you dream in technicolour but the real world is black and white when it comes to dollars and sense.

The trade deficit grows, the debt grows, US savings are depleted, the housing market will bust, interest rates will climb along with inflation, energy costs will go through the roof, and what are you left with?

The prosect of even more expensive war(s) also looms as the back breaker.

More and more US debt is held by the people that Americans have held in such high esteem over the past 50 years.....the communist country of China.

The markets crash and the depression steps in.

I will not disagree about the fact that we need to cut the deficit. But it is not the doomsday you seem to imply. The thing of it is, it has been shrinking since we recovered from the Clinton recession. The reason we are running a deficit is that when the economy started to slow down in March of 2001, the tax revenues started shrinking also. We did not cut spending to match. Since the tax cuts of 2003, government revenues are outpacing all expectations. The problem is and always will be spending.

I agree completely Oxymoon. This country will be doomed unless we start to re-realize that the government has a central role in the economy. The government provides stability by making sure the wealth gap doesn't get to large.



So you propose to fix the problems with more of what is causing the problems in the first place?????


Amazing.:rolleyes:

The thing with economics is (IMHO) - no one is ever entirely correct or entirely incorrect.

I agree when people say that one year does not a trend make, and much research has been done suggesting that the Laffer Curve effect only kicks in at ridiculously high pre-Reagan-type tax rates.

Don't kid yourself, if Bush was interested in sensible economics, he'd stop spending trillions on guns and do some serious reforming of education, welfare and healthcare in the States.

I will not disagree about the fact that we need to cut the deficit. But it is not the doomsday you seem to imply. The thing of it is, it has been shrinking since we recovered from the Clinton recession. The reason we are running a deficit is that when the economy started to slow down in March of 2001, the tax revenues started shrinking also. We did not cut spending to match. Since the tax cuts of 2003, government revenues are outpacing all expectations. The problem is and always will be spending.

I disagree that the recession was Clinton's fault; in fact, the root of the 2001 recession stretches back to the Asian financial crisis in 1996/1997 and so was the fault of those nations' central banks more than anything.

Nevertheless, you're correct that the recession reduced tax revenue considerably; the budget predictions of the late 90's and 2000 were ridiculously optimistic in their projections of economic growth and the performance of US equities (the old Nasdaq 23,000 in 2006) and so were unachievable.

Don't kid yourself, if Bush was interested in sensible economics, he'd stop spending trillions on guns and do some serious reforming of education, welfare and healthcare in the States.

Quite true.

Don't kid yourself, if Bush was interested in sensible economics, he'd stop spending trillions on guns and do some serious reforming of education, welfare and healthcare in the States.

And now people better understand what I was saying.

The thing with economics is (IMHO) - no one is ever entirely correct or entirely incorrect.

I agree when people say that one year does not a trend make, and much research has been done suggesting that the Laffer Curve effect only kicks in at ridiculously high pre-Reagan-type tax rates.

Don't kid yourself, if Bush was interested in sensible economics, he'd stop spending trillions on guns and do some serious reforming of education, welfare and healthcare in the States.


Your thoughts on the Laffer Curve are not bourne out from the evidence we have seen!

Government revenues were on the decline when the economy started to slow down in 2000. They continued to fall until the tax cuts of 2003 sparked the economic growth we enjoy today. Since the tax cuts, revenues have literally exploded.

I disagree that the recession was Clinton's fault; in fact, the root of the 2001 recession stretches back to the Asian financial crisis in 1996/1997 and so was the fault of those nations' central banks more than anything.

Nevertheless, you're correct that the recession reduced tax revenue considerably; the budget predictions of the late 90's and 2000 were ridiculously optimistic in their projections of economic growth and the performance of US equities (the old Nasdaq 23,000 in 2006) and so were unachievable.


I did not mean to imply that it was all Clinton's Fault. It was simply placing in a time period because some people here would try to blame it on Bush.

I DO think that Clinton contributed a bit to it, but the main cause was, as you said, the "irrational exuberance" relating to the stock markets and the crash that followed when people actually realized that these companies did not have viable business models.

A single-year drop of a few billion does not make a trend. I would be very cautious about this. And the achievement would be especially meaningless if the government was to use it as a complacent justification to increase their deficit spending. They seem to be forgetting that they should be working to reduce the deficit, not maintain it.
Agreed. :)

I did not mean to imply that it was all Clinton's Fault. It was simply placing in a time period because some people here would try to blame it on Bush.

I DO think that Clinton contributed a bit to it, but the main cause was, as you said, the "irrational exuberance" relating to the stock markets and the crash that followed when people actually realized that these companies did not have viable business models.

I agree; the recession was going to happen irregardless of who was president. Blaming Bush for the recession or gas prices is a totally specious argument that does nothing but make you look ignorant of economics.

The main mistake Clinton and Congress made was their overzealous emphasis on a budget surplus as the primary goal of the government during the 90's; it withdrew money from the economy simultaneous with rising interest rates and declining liquidity and so made the collapse of the dot-com bubble far worse than it might have been were the money supply looser than it was in 2000.

Apart from those who lost out from social security cuts, who have less to spend.
There have been no "Social Security cuts" of which I am aware. Care to enlighten me?

Your thoughts on the Laffer Curve are not bourne out from the evidence we have seen!
They are if you try to isolate the tax rate as the variable of interest.

Obviously the economic recovery in the States will have many reasons, most of them much more important than the tax cuts. I was talking about the simple theory that you cut taxes, and that gives you more revenue - and that only works if taxes are already at like 80%.

It's time we start using the smart people of the country to instruct the others how to live better.
Sigh. Goodbye democracy, hello oligarchy.

I suppose you count yourself in among the "smart people?" :rolleyes:

Sigh. Goodbye democracy, hello oligarchy.

I suppose you count yourself in among the "smart people?" :rolleyes:

I don't do that well in school, but politically, I would say "yes" to your question. For example, on emergency contraception, while it would reduce abortions, and would be supported by numerous studies by the Center for Science in the Public Interest, the American Civil Liberties Union, and Planned Parenthood Federation, many regular people don't know of it because their church won't tell them about it. That's where you need the government to step-in and make sure people have comprehensive sex education.

I don't do that well in school, but politically, I would say "yes" to your question. For example, on emergency contraception, while it would reduce abortions, and would be supported by numerous studies by the Center for Science in the Public Interest, the American Civil Liberties Union, and Planned Parenthood Federation, many regular people don't know of it because their church won't tell them about it. That's where you need the government to step-in and make sure people have comprehensive sex education.
Almost everyone I know, even the off-the-charts fundamentalists, listens to sources other than "their church." Where the hell do you get these ideas?

And who decides which people are "smart?" They're just "smart" because you agree with them? :rolleyes:

Agreed. :)


It was NOT a single year increase. It has been increasing since the 2003 tax cuts.

Almost everyone I know, even the off-the-charts fundamentalists, listens to sources other than "their church." Where the hell do you get these ideas?

And who decides which people are "smart?" They're just "smart" because you agree with them? :rolleyes:


She has been completely and utterly brainwashed.:(

Well the rich got richer and the poor got poorer. I guess it worked. Although giving money to the bottom so it would ripple up through the economy would have worked also and all would have risen. Any time money is put into the economy it gets hotter and money taken out cools it. We've known that for 100 years. The difference is when the money is put at the bottom they spend it and those who receive it spend it, and they spend it...... Eventually the rich get it but by then it has rippled and improved all levels. When you put the money at the top, they are already spending all they want to spend so they put it in the stock market. Supply and demand causes the market to go up. So it makes things look great when the market goes up but doesn't help those without stock.

I agree; the recession was going to happen irregardless of who was president. Blaming Bush for the recession or gas prices is a totally specious argument that does nothing but make you look ignorant of economics.

The main mistake Clinton and Congress made was their overzealous emphasis on a budget surplus as the primary goal of the government during the 90's; it withdrew money from the economy simultaneous with rising interest rates and declining liquidity and so made the collapse of the dot-com bubble far worse than it might have been were the money supply looser than it was in 2000.


I would put it on the fear that they put into many CEO's by them using the govt. to sue damn near every industry out there. That took a lot of money out of circulation also. (I know govt. sues business all of the time, but there was a very significant uptick in the numbers and in the visibility of them - ie. Microsoft, the Tobacco industry, the Arms Manf. industry and just about every manufacturer and Power company out there.) Also contributing was the dramatic increase in the costs for regulatory compliance.

COMMENTARY: Based on this information, the Suppy Side economists were correct, at least in part. As the remainder of this lengthy article indicates, this is just one bright spot in a mostly gloomy forecast for the next few years ( a major portion of which is the arrival of Baby Boomers at Social Security age in about two years! ). Still, this is a lesson we should make an effort to remember.

I'm sure others have pointed this out, but the only way your thread title comes anywhere near to covering the gist of the article is if you read about a third of the article and ignore everything that's inconvenient to your point of view.

But I guess we should expect nothing less from you. You're the king, after all.

Well the rich got richer and the poor got poorer. I guess it worked. Although giving money to the bottom so it would ripple up through the economy would have worked also and all would have risen. Any time money is put into the economy it gets hotter and money taken out cools it. We've known that for 100 years. The difference is when the money is put at the bottom they spend it and those who receive it spend it, and they spend it...... Eventually the rich get it but by then it has rippled and improved all levels. When you put the money at the top, they are already spending all they want to spend so they put it in the stock market. Supply and demand causes the market to go up. So it makes things look great when the market goes up but doesn't help those without stock.

This is such a huge bit of propoganda. The lower income levels recieved a 100% tax cut - MILLIONS (around 4 million) people were completely relieved of their income tax burden. The wealthy got less than 5%. :rolleyes:

The lies that the left has put out are mind-boggling in both their number and in their scope.

Economics education is so incredibly lax in the US that the left has no trouble getting away with demonstrably false crap like this.:mad:

I'm sure others have pointed this out, but the only way your thread title comes anywhere near to covering the gist of the article is if you read about a third of the article and ignore everything that's inconvenient to your point of view.

But I guess we should expect nothing less from you. You're the king, after all.

That is because the NYT put a HUGE amount of crap in the report so that they could spin this as a negative. They took a report that was absolutely and completely positive and added unsubstantiated crap and a few outright lies so that they could once again bash Bush.

Supply and demand causes the market to go up. So it makes things look great when the market goes up but doesn't help those without stock.

Almost 60% of American households own stock in one form or another, so any improvement in the markets is going to help a lot of people...especially with all the retirees that will need a sizable retirement fund to live off of.

The markets crash and the depression steps in.
Maybe the time is right to invest in pharmaceuticals.

Maybe the time is right to invest in pharmaceuticals.


Nah, if the libs get their way, they will destroy that industry also.

I would put it on the fear that they put into many CEO's by them using the govt. to sue damn near every industry out there. That took a lot of money out of circulation also. (I know govt. sues business all of the time, but there was a very significant uptick in the numbers and in the visibility of them - ie. Microsoft, the Tobacco industry, the Arms Manf. industry and just about every manufacturer and Power company out there.) Also contributing was the dramatic increase in the costs for regulatory compliance.

That's also a factor. In fact, the Microsoft case was the breaking point for the tech industry; if you notice a graph of the Composite from 2000 you see that even after the bubble burst in March the index held to a level around 3500-4000 but once the Microsoft decision was reached the index broke and fell more or less continuously in to December of 2000 where it bottomed in the 2300's.

I don't do that well in school, but politically, I would say "yes" to your question. For example, on emergency contraception, while it would reduce abortions, and would be supported by numerous studies by the Center for Science in the Public Interest, the American Civil Liberties Union, and Planned Parenthood Federation, many regular people don't know of it because their church won't tell them about it. That's where you need the government to step-in and make sure people have comprehensive sex education.

Says the kid who thinks North Korea is morally superior to the rest of the world.

That is because the NYT put a HUGE amount of crap in the report so that they could spin this as a negative. They took a report that was absolutely and completely positive and added unsubstantiated crap and a few outright lies so that they could once again bash Bush.
Oh bullshit. Your absolute defense of this economy shows just how deeply you're in the bag for Bush. There were no lies in that article--there was a discussion from several perspectives of what this unexpected economic news meant for the future. Economics, much as you would like it otherwise, is far from an exact science, largely because there are so many variables involved that it's damn near impossible to make any sweeping generalizations about cause and effect, especially on an economy the scale of the US's. For fuck's sake, kid, get over the idea that there's one good way to run an economy, and that that way is Bush's way. There's a huge, wonderful world out there, and you'll never see it with your head in your ass.

That is because the NYT put a HUGE amount of crap in the report so that they could spin this as a negative. They took a report that was absolutely and completely positive and added unsubstantiated crap and a few outright lies so that they could once again bash Bush.

But "The Nazz" likes to hear that. He only wants to hear statements that are "convenient" to his point of view. :rolleyes:

I'll summarize the entire article:

1. Government revenue is soaring due to strong economic growth, a decent stock market, and rising corporate profits.

2. This may be attributable to tax cuts, but regardless of its origins the revenue is still less in nominal terms than its level in 2000.

3. Short term improvement in the deficit is a good thing, but there are major problems on the horizon for the budget and the economy in the future. Spending has increased at a rate far faster than tax revenue especially when compared with historical averages.

It's not really positive or negative; any analysis of the economy requires looking at all sides because no expansion is perfect and all policies have multiple valid criticisms and benefits.

I'll summarize the entire article:

1. Government revenue is soaring due to strong economic growth, a decent stock market, and rising corporate profits.

2. This may be attributable to tax cuts, but regardless of its origins the revenue is still less in nominal terms than its level in 2000.

3. Short term improvement in the deficit is a good thing, but there are major problems on the horizon for the budget and the economy in the future. Spending has increased at a rate far faster than tax revenue especially when compared with historical averages.

It's not really positive or negative; any analysis of the economy requires looking at all sides because no expansion is perfect and all policies have multiple valid criticisms and benefits.
Thank you--that's a pretty solid summarization.

Thank you--that's a pretty solid summarization.

Hopefully, it'll give people a better picture of the entire article rather than just the part quoted.

Hopefully, it'll give people a better picture of the entire article rather than just the part quoted.
Well, even the quoted part had a solid four paragraphs in the middle that noted that even with this unexpected surge, revenues are only now getting back to where they were in 2001, but all the supply-side cheerleaders here are bleating so loudly that it's easy to miss that.

And that crap from USalpenstock claiming that the NY Times was putting lies out there just to bash Bush is just ridiculous.

Well, even the quoted part had a solid four paragraphs in the middle that noted that even with this unexpected surge, revenues are only now getting back to where they were in 2001, but all the supply-side cheerleaders here are bleating so loudly that it's easy to miss that.

And that crap from USalpenstock claiming that the NY Times was putting lies out there just to bash Bush is just ridiculous.

The main problem is that nobody can really tell what exactly is causing the growth in revenues; growth produces more revenue regardless of the tax rate and the economy grew quite strongly even at a higher tax rate than it is at now. I personally feel that the tax cuts helped revitalize growth in 2001 and 2003 but now they're starting to hurt because the crowding-out effect is kicking in and is driving inflation.

That's taken a slice off of real wages in 04/05; they're starting to climb back up over inflation in to real gains again this year, but they have been more or less stagnant since 2001.

COMMENTARY: Based on this information, the Suppy Side economists were correct, at least in part. As the remainder of this lengthy article indicates, this is just one bright spot in a mostly gloomy forecast for the next few years ( a major portion of which is the arrival of Baby Boomers at Social Security age in about two years! ). Still, this is a lesson we should make an effort to remember.
Read the rest of the article (http://www.nytimes.com/2006/07/09/washington/09econ.html?_r=1&th&emc=th&oref=slogin). ][/CENTER][/I][/B]

The supply siders were not right. To extract that message from these numbers is nothing more than wishful thinking.

It's like stabing a guy in the stomach, waiting a half an hour, and saying "see? I told you amateurs can do gastric bypass surgery. The bleeding's already slowing, and he doesn't seem to want to eat anything."

When Clinton came into office a 1% raise in payroll taxes on the top 1% of wage earners was enough to stop the Reagan/Bush deficit in its tracks and turn it around almost immediatly. They actually stopped the NYC "Debt Clock" because it wasn't growing anymore.

Bush came into office and started hemoraging money. That it's taken this long to see what you can even pretend is a turn-around is a testament to Bush policy failure, not subtle signs of its success.

To claim that it's a victory that we are loosing money slightly less quickly this year than in the last 6 is absurd.

Seriously Eut, if I hadn't seen enough of your posts to know what a hack you were I'd seriously think you were trying a Stephen Colbert style parody of FOX News economists.

The simple fact is, you grow an economy by boosting demand. It works almost instantaneously. It doesn't take six years of shortfalls, climbing debts, growing poverty, and record deficits.

I'll summarize the entire article:

1. Government revenue is soaring due to strong economic growth, a decent stock market, and rising corporate profits.

2. This may be attributable to tax cuts, but regardless of its origins the revenue is still less in nominal terms than its level in 2000.

3. Short term improvement in the deficit is a good thing, but there are major problems on the horizon for the budget and the economy in the future. Spending has increased at a rate far faster than tax revenue especially when compared with historical averages.

It's not really positive or negative; any analysis of the economy requires looking at all sides because no expansion is perfect and all policies have multiple valid criticisms and benefits.


I agree with your summary of what the article is saying. What I don't get is how anyone can read this and say "We're in the money, except we don't have any. I guess the supply siders were right. We aren't seeing much success, but we can pretend we are." And then feel happy about it. It's just pathetic.

I agree with your summary of what the article is saying. What I don't get is how anyone can read this and say "We're in the money, except we don't have any. I guess the supply siders were right. We aren't seeing much success, but we can pretend we are." And then feel happy about it. It's just pathetic.

This economic expansion can best be described as steady; there are problems in some areas but others are strong. Given the shocks to the economy in the past 6 years, its performance is remarkable but could be expected given the 5% growth in world GDP and the rise of China and India.

Since 2001, many people have seen their finances improve or remain steady but others have seen them level off or decline. Poverty has risen along with home ownership and real/median income has risen while real wages decline. GDP growth is strong, unemployment is falling and the employment-population and participation ratios are rising. At the same time, inflation is strong and interest rates are rising along with energy prices. By and large, it's to the positive but it's not a miracle economy; there are problems that we have control over and those that we don't, like energy prices.

Hey everybody, let's just believe the Republicans' explanation for the increased revenue... in fact, let's not even think critically about it at all!!!

Reading the whole article, the conclusion that the tax cuts are responsible is a "hopeful guess" at best. I think the following line make the point nicely:Compared with the size of the economy, tax revenues are still below historical norms and far below what the administration predicted as recently as 2003.

I think we need a lot more hard evidence and careful analysis (far beyond what this article provides) before making any explanatory judgments. Hell, even the minimal evidence offered here seems to lean more towards a market fluctuation than a policy-directed outcome.

:rolleyes: Sheesh.

When Clinton came into office a 1% raise in payroll taxes on the top 1% of wage earners was enough to stop the Reagan/Bush deficit in its tracks and turn it around almost immediatly. They actually stopped the NYC "Debt Clock" because it wasn't growing anymore..

However, much of that was also due to the fact that the Cold War had ended and Clinton entered office after the 1991 recession had ended and the recovery had begun. Also, the rise of the Internet and falling inflation/unemployment also helped.

He does deserve credit for reigning in spending and designing a solid tax plan in the 1993 Tax Act but he was also lucky to be in office during a stock market boom and a strong economy. The best way to describe it is that Clinton's policies were sensible and the economy just took it from there.

This economic expansion can best be described as steady; there are problems in some areas but others are strong. Given the shocks to the economy in the past 6 years, its performance is remarkable but could be expected given the 5% growth in world GDP and the rise of China and India.

Since 2001, many people have seen their finances improve or remain steady but others have seen them level off or decline. Poverty has risen along with home ownership and real/median income has risen while real wages decline. GDP growth is strong, unemployment is falling and the employment-population and participation ratios are rising. At the same time, inflation is strong and interest rates are rising along with energy prices. By and large, it's to the positive but it's not a miracle economy; there are problems that we have control over and those that we don't, like energy prices.
And there's the steady hissing of the air going out of the real estate bubble. There was another article today about the rise in foreclosures this year thanks to the adjusting of ARMs from 2001 or so. The signs are all around me here in Florida--it's about to get ugly.

Thank you--that's a pretty solid summarization.


It does indeed summarize the article quite well and it also includes some of the articles lies.

Take the nominal revenues. They are now at an ALL TIME HIGH - that is higher than at ANY point in our history.

In 2000 Federal reciepts were $2,025.5 Billion. They decreased after this, until the tax cut of 2003, reaching the low point of $1,782.5 Billion the year before the tax cut.

The most up to date figures for federal receipts is estimated to be $2,415.9 billion and since the tax cuts, all estimates have been exceedingly low -and the actual revenues have dwarfed the estimates.

And there's the steady hissing of the air going out of the real estate bubble. There was another article today about the rise in foreclosures this year thanks to the adjusting of ARMs from 2001 or so. The signs are all around me here in Florida--it's about to get ugly.

Thankfully, the air is hissing out rather than exploding as was feared in 2004. If we're careful we could avoid a serious slowdown or recession like the aftermath of the dot-com bubble; it seems that we're going to be able to do that given the strength of the world economy and a timely pullback in natural gas prices going in to the hurricane and winter seasons. However, were there to be a major slowdown in the world economy or a huge energy crisis we might not be able to avert a recession.

Flordia's economy is overheated compared to other places in the US; the unemployment rate and job growth were simply too strong for a stable economy and it showed the effects of the housing bubble far more than any other state in the US. In Miami, for example, millions of square feet of speculative residential property is going up with no demand and rising vacancies...it's out of control. Florida going to be harder hit than places like Texas or Virginia which are seeing stronger growth outside of construction and real estate; even California is pretty lucky in that regard especially considering that the rising value and demand for commercial and industrial property is coinciding with the slowdown in housing.

However, much of that was also due to the fact that the Cold War had ended and Clinton entered office after the 1991 recession had ended and the recovery had begun. Also, the rise of the Internet and falling inflation/unemployment also helped.

He does deserve credit for reigning in spending and designing a solid tax plan in the 1993 Tax Act but he was also lucky to be in office during a stock market boom and a strong economy. The best way to describe it is that Clinton's policies were sensible and the economy just took it from there.


Clinton inhereted an economy on the upswing, he left an economy on the decline.

Clinton inhereted an economy on the upswing, he left an economy on the decline.

He had a solid run and some decent policies. The economy of his term was more luck than his design, however and he did make a critical mistake in 1999/2000 of not paying enough attention to the tech bubble.

Almost 60% of American households own stock in one form or another, so any improvement in the markets is going to help a lot of people...especially with all the retirees that will need a sizable retirement fund to live off of.
Put all the stock that the bottom 75% owns together and it is a pitance compared to the other 25%. Your arguement is a case of a bone to the dogs at the bottom and the steak to the lords at the table. It keeps at least some of the dogs happy. There is no question that since 1980 the rich have gotten richer and the rest have stalled out or lost in real terms. The lower on the pecking order the more they have lost. There has only been one raise for the poorest of the poor in 26 years. That raise didn't even come close to covering inflation.

Put all the stock that the bottom 75% owns together and it is a pitance compared to the other 25%. Your arguement is a case of a bone to the dogs at the bottom and the steak to the lords at the table. It keeps at least some of the dogs happy. There is no question that since 1980 the rich have gotten richer and the rest have stalled out or lost in real terms. The lower on the pecking order the more they have lost. There has only been one raise for the poorest of the poor in 26 years. That raise didn't even come close to covering inflation.

That's why our government needs to focus on enabling people in the bottom 75% to move from there to the top 50% or even the top 25% of the income bracket. We should provide the poor with the kind of tools they need to get an education and a better job so that they aren't trapped in poverty despite their willingness and effort to get an education. Whether it's retraining

Income inequality is not bad unless it creates a wall to progress. However, far too many poor people are being trapped by poverty making it impossible for them to climb higher despite their hardest efforts to do so. That has to change if we want America to remain economically competitive and to provide the best life for as many people as possible.

That's why our government needs to focus on enabling people in the bottom 75% to move from there to the top 50% or even the top 25% of the income bracket. We should provide the poor with the kind of tools they need to get an education and a better job so that they aren't trapped in poverty despite their willingness and effort to get an education. Whether it's retraining

Income inequality is not bad unless it creates a wall to progress. However, far too many poor people are being trapped by poverty making it impossible for them to climb higher despite their hardest efforts to do so. That has to change if we want America to remain economically competitive and to provide the best life for as many people as possible.
I have yet to see any credible proof that anyone capable of holding a job, who is trainable, and who is motivated to do whatever is necessary, cannot find an entry-level job. I have also yet to see any credible proof that anyone who truly wants an education can't manage to get one.

Clinton inhereted an economy on the upswing, he left an economy on the decline.

That's bullshit. I'd elaborate, but you're just spouting bullshit with no backup, so really, all you're asking for is a smackdown.

He had a solid run and some decent policies. The economy of his term was more luck than his design, however and he did make a critical mistake in 1999/2000 of not paying enough attention to the tech bubble.

I'm so sick of this "Clinton just got lucky on the economy," line. Give me some evidence. Why was it that under 12 years of Republicans it just went down, down, down, and as soon as Clinton came it we had 8 years of up, up, up, and then when the Repubs took over again it was imediatly down, down, down. This article isn't even showing an upswing. It's showing a slowing down of the down. After 6 years this is the best they've got?

Give me better than this "it was coincidence" thing. If I eat at a new restaurant, and get sick when I go home, eat at that restaurant every day for a week, and throw up in my toilet every night, then go somewhere else and don't throw up that night, you're going to have to try a whole lot harder than "it's a conincidence" to convince me that it's not the restaurants crappy food making me sick.

Don't forget the tax cuts which gave people more money to spend.

They did?

I didn't even notice an increase. I think the increases in power and gas wiped mine out.

So how much of a cut did people get?

So what kind of a cut did people get for following incomes?

100000
75000
50000
25000

I'm so sick of this "Clinton just got lucky on the economy," line. Give me some evidence. Why was it that under 12 years of Republicans it just went down, down, down, and as soon as Clinton came it we had 8 years of up, up, up, and then when the Repubs took over again it was imediatly down, down, down. This article isn't even showing an upswing. It's showing a slowing down of the down. After 6 years this is the best they've got?.

The recession ended in 1991 and was in a recovery from 1992-1994. During this time, Tim Berners-Lee invented HTML in 1993/94 and the Internet became a practical communications tool, growing exponentially throughout the decade and producing millions of new jobs and billions in investment spending. US tech employment rose from 800,000 in 1994 to 2.147 million in 2001. In 1994, the Federal Reserve successfully contained inflation and was able to stop its interest-rate tightening allowing the stock market to take off in 1995-2000 producing average gains of 20% per year.

Oil and commodities prices plunged following the collapse of the USSR and the 1991 recession and fell throughout the decade due to the weak economy in Europe and Japan and rising production outside of OPEC and other commodity producers. This reduced inflation and enabled the Fed to keep monetary policy looser than it was in the 1980's; this in turn allowed real wages to grow from 1997-2001 and was a major influence on the performance of the stock market since money left commodities and bonds in favor of stocks due to their outperformance during the period. From 1997-2000 the Internet/telco bubble inflated creating millions of tech jobs and over $14 trillion dollars of stock wealth; spending related to Y2K compliance further increased demand for tech equipment and employees and inflated the bubble further.

He had a solid run and some decent policies. The economy of his term was more luck than his design, however and he did make a critical mistake in 1999/2000 of not paying enough attention to the tech bubble.


No doubt, but what I said, still is true and accurate.

That's why our government needs to focus on enabling people in the bottom 75% to move from there to the top 50% or even the top 25% of the income bracket. We should provide the poor with the kind of tools they need to get an education and a better job so that they aren't trapped in poverty despite their willingness and effort to get an education. Whether it's retraining

Income inequality is not bad unless it creates a wall to progress. However, far too many poor people are being trapped by poverty making it impossible for them to climb higher despite their hardest efforts to do so. That has to change if we want America to remain economically competitive and to provide the best life for as many people as possible.
I agree with this totally. But that is not "supply side". The theory of supply side is if you give the money to the rich they will create jobs and "trickle down" the money to the poor. After 26 years it is obvious to anyone who objectivly looks at the situation that the money isn't trickling down. (certainly not pouring down) The poor are poorer and the middle are frozen in place. The rich see no need to pay more than the base minimum. To insure an oversupply of the cheapest labor and keep wages low, the industries that traditionally have been the "way out" are now supplied with illegal immigrants. A matter of supply and demand at the bottom. At the same time those immigrants with college degrees are limited. I remember 25 years ago when a slaughter house job (one of those jobs Americans won't take) was a big step up and a generation away from the family entering the main stream of society. In 1982 I applied for a slaughter house job because it paid more than I could get with a Master's degree.

The point is in the 1950's and 60's and early 70's money went to the bottom. Student loans were 3% and a bank passbook was at 5%. Now my daughter's student loans are at 8% and a passbook is at 2-3%. The way out is becomming very difficult. There is a major wall between the rich and poor. Many poor have to give up education to subsidize the family income. This is one of the reasons boys are dropping out of HS at a higher rate than girls and why girls now are the majority of college students. The boys can get higher paid nonskilled jobs so they are needed to feed the family.

Most on this forum assume this is normal because they are not old enough to remember pre 1980. When the money is put at the bottom it is spent. and those who receive it spend it, and they spend it and it ripples through the economy until the rich get it. When it is put in at the top, the rich are already spending all they want to spend. The money is warehoused in the stock market. Because of supply and demand this drives up the stocks, but the money doesn't ripple through the economy. The new jobs that supply side have created are the lowest paid and that pay is (inflation adjusted) about a third of what it was 26 years ago. And that acts as an anchor on wages all the way up until those who get paid in stock are reached.

The new jobs that supply side have created are the lowest paid and that pay is (inflation adjusted) about a third of what it was 26 years ago. And that acts as an anchor on wages all the way up until those who get paid in stock are reached.

I agree with the rest, but this is a little off. There have been a lot of great jobs created in the past 20 years and incomes have soared for the people that have them, but more and more people can't get them so they're stuck with the leftovers which are mostly low-end service or manufacturing jobs that have little potential and pay even less. Even if these jobs were directly due to supply side policies (which they aren't, they're due to businesses) , those policies are also making it difficult for people to actually get them.

What good are 1, 10 or 100 million new, high-paying jobs if the unemployed can't get them? Businesses are hiring but the fiscal policies of the government aren't allowing those unable to afford an education to get one.

We're creating good jobs but not enabling people to get them; US corporations and small businesses are hiring for high-pay and great opportunity jobs but they're having a hard time of finding people to fill them because too many lack the skills to get them. A good and growing chunk of that is due to the high cost of getting the education for the skills in the first place. If you can't get the skills, it doesn't matter how good the economy is doing because you're forced to stay at the bottom.

That alone could fix things. However, considering how much it would have to cut down to remove all deficit in specific timelines would cause problems.

Shock Therapy.

Make all the cuts all at once right at the start of a presidential term.

Give the people the bad news all at once, and the good news little by little.

Now the congress just needs to cut down on its spending habits.

Like, you know, raising its own salary even though they are at 20% approval.

Money being invested in the stock market is not money taken out of the system – that money is used for investments (i.e. raising money to build a new factory). Money doesn’t just ‘sit there’ unused, even that which is put into a savings account is loaned out to someone else. This is a basic concept of how the financial system works.

It is fairly irrelevant how the money is spent in the system as it is a cycle – money spent “at the top” is invested, which provides jobs, which gets the workers to spend money, which created demand, which increases profits, which are invested… and on and on.

The problem with, to use your imagery, redistributing the money by taxing the hell out of everyone to redistribute it to the bottom is that government and taxation is highly inefficient. Government bureaucracy is not costless – thus forcible redistribution of wealth from those that have it to those who do not (leaving aside the moral question inherent in such an action anyway) removes value from the system.

Most businesses are in business to get a return on their investment – if you remove the benefit of getting that return, why should I risk what I have if there is no return? Why gamble when the odds of loosing are so high with a negligible potential payoff?

If you want to know a good part of the reason why the middle class is being squeezed, take a look at this article: http://www.msnbc.msn.com/id/3079221/

I hear a lot of people complaining and spouting all this doom and gloom rhetoric about how bad the economy is doing, but I think it is mostly propaganda. The democrats are keen on trying to scare people into thinking that the economy is in miserable shape and that if they vote democrat everything will be sunshine and puppies.

I look around and see help-wanted signs everywhere, that section of the newspaper is huge, and unemployment is very low (4.6% is tiny). If you do not have a job in this economy, something is wrong with you.

I have yet to see any credible proof that anyone capable of holding a job, who is trainable, and who is motivated to do whatever is necessary, cannot find an entry-level job. I have also yet to see any credible proof that anyone who truly wants an education can't manage to get one.
And you likewise provide no proof that there is a market for the kind of workforce or that money is being provided to support education.

Look to the official data: http://www.whitehouse.gov/omb/budget/fy2007/sheets/hist01z3.xls

Yes, tax receipts were up in 2005.... after hitting their hitting their lowest level as a percentage of GDP since 1959 in 2004. Real receipts in 2005 were less than they were in the year 2000. That despite the fact that the economy grows every year, and so does the population. Thus, after five years of tax cuts, taxes collected per person are less than they were in the year 2000 (while expenses are greater), and you are hailing this as proof that the Laffer curve works?

First off, the Laffer curve has nothing to do with it.

Secondly, there is something called the business cycle – it was at a peak in 99 (actually a bubble peak so it was even higher than it should have been anyway) and then it declined. To expect to gain even more in tax receipts during a recession than you did during a boom is ridiculous.

And you likewise provide no proof that there is a market for the kind of workforce or that money is being provided to support education.
What kind of proof are you looking for? Drive around and look at the numerous help wanted signs in all the windows. That's the scene in and around Atlanta, anyhow. There are always entry-level jobs for people thar are willing to do them.

Additionally, the trades are always forgotten by the elitists that post here. If you are willing to apprentice, there are all kinds of opportunities in just about any trade you can think of.

I agree with the rest, but this is a little off. There have been a lot of great jobs created in the past 20 years and incomes have soared for the people that have them, but more and more people can't get them so they're stuck with the leftovers which are mostly low-end service or manufacturing jobs that have little potential and pay even less. Even if these jobs were directly due to supply side policies (which they aren't, they're due to businesses) , those policies are also making it difficult for people to actually get them.

What good are 1, 10 or 100 million new, high-paying jobs if the unemployed can't get them? Businesses are hiring but the fiscal policies of the government aren't allowing those unable to afford an education to get one.

We're creating good jobs but not enabling people to get them; US corporations and small businesses are hiring for high-pay and great opportunity jobs but they're having a hard time of finding people to fill them because too many lack the skills to get them. A good and growing chunk of that is due to the high cost of getting the education for the skills in the first place. If you can't get the skills, it doesn't matter how good the economy is doing because you're forced to stay at the bottom.
If there is such a demand for highly educated labor why don't we give a green card with every college degree? The US educates more of the best and brightest from the enitre world than anyone else. Yet those at the top of the educational scale cannot freely immigrate while those at the bottom are welcomed with open arms. Businesses that employ at the top tend to follow the law while those that employ at the bottom are given a free pass to bring in a massive supply of labor to depress wages.

Also it tends to be small businesses that create jobs while large businesses "downsize". Yet, where are the tax and other incentives for small business? If a Wal-Mart wants to build in a town they can cut a deal to pay virtually no local tax (except sales tax which the company doesn't really pay) yet if a "mom and pop" starts they get nothing but regulations. Those who benefit from "supply side" aren't those "mom and pop" stores. Yet they are the ones creating the jobs while the big stores are subsidized by the government. Wal-Mart tells new employees to sign up for food stamps and medicare. In other words, 'we don't pay you enough to survive but the government will make up the difference'. IE. The government will help us pay less than a living wage while those in the company living off of stock get massive bonus' and tax cuts. This is supply side at it's greatest.

Look to the official data: http://www.whitehouse.gov/omb/budget/fy2007/sheets/hist01z3.xls

Yes, tax receipts were up in 2005.... after hitting their hitting their lowest level as a percentage of GDP since 1959 in 2004. Real receipts in 2005 were less than they were in the year 2000. That despite the fact that the economy grows every year, and so does the population. Thus, after five years of tax cuts, taxes collected per person are less than they were in the year 2000 (while expenses are greater), and you are hailing this as proof that the Laffer curve works?

Of course you ignore the fact that reciepts were heading down after the slowdown that began in 2000. In EVERY year since the 2003 tax cut, Revenues have increased dramatically more than the predictions.

The Clinton recession cost us @$358.5 BILLION since Bush's cuts we have recovered nearly all of it.


Secondly, why is the government taking more money as a percentage of GDP a good thing??? That just means that they are taking money that otherwise could be used to create jobs.

Secondly, why is the government taking more money as a percentage of GDP a good thing??? That just means that they are taking money that otherwise could be used to create jobs.

Ideally, the situation would eventually produce rising tax revenue and a narrowing deficit simultaneous with a falling tax burden; of course, the reckless spending does nothing to help the situation. Even if taxes were at their 2000 level we would still likely be running a huge deficit for the simple reason that spending is growing faster than revenues.

If there is such a demand for highly educated labor why don't we give a green card with every college degree? The US educates more of the best and brightest from the enitre world than anyone else. Yet those at the top of the educational scale cannot freely immigrate while those at the bottom are welcomed with open arms. Businesses that employ at the top tend to follow the law while those that employ at the bottom are given a free pass to bring in a massive supply of labor to depress wages.

I agree 100%; you're right on target with your analysis. It's mainly because people don't understand the H1-B and other employment visas; they assume that companies are bringing foreign workers to the US so that they can get the same work done for less cost when in fact most H1-B employees recieve payment equal to or even greater that of their citizen counterparts. A CS graduate from India or China has huge job opportunities at home and it requires a lot to convince them to come to the US instead. We have a dire shortage of skilled workers, but the public's ignorance in regard to these visas prevents us from bringing skilled workers here from other nations or giving foreign graduates of our universities green cards so they can work here full time.

We only graduate about 25,000-30,000 IT workers every year and that is far behind the demand for those positions in the US; in the past year the computer services/design industry alone added 72,000 jobs, to say nothing of the 7,300 in the Internet sector or the 65,000 positions in the engineering and architecture industries. We simply don't have enough tech grads to meet this demand, yet we're also prohibited from bringing in more workers because people are afraid they'll drag down incomes even though these skilled positions are seeing their salaries rise faster than inflation.

Also it tends to be small businesses that create jobs while large businesses "downsize". Yet, where are the tax and other incentives for small business? If a Wal-Mart wants to build in a town they can cut a deal to pay virtually no local tax (except sales tax which the company doesn't really pay) yet if a "mom and pop" starts they get nothing but regulations. Those who benefit from "supply side" aren't those "mom and pop" stores. Yet they are the ones creating the jobs while the big stores are subsidized by the government. Wal-Mart tells new employees to sign up for food stamps and medicare. In other words, 'we don't pay you enough to survive but the government will make up the difference'. IE. The government will help us pay less than a living wage while those in the company living off of stock get massive bonus' and tax cuts. This is supply side at it's greatest.

Corporate subsidies need to be cut in order to allow small businesses to compete; it's not fair to allow these companies to get special tax breaks and priveleges simply because they're large enough to have influence in Congress. There's a huge difference between small businesses going under because they can't compete and going under because government is against them; unfortunately, the trend is mostly to the second option which means the small businesses can't compete on a level playing field. That is unfair and it has to change if we want to keep the engine of our job market growin.

That's bullshit. I'd elaborate, but you're just spouting bullshit with no backup, so really, all you're asking for is a smackdown.


Bullshit you say??? I say YOU are full of bullshit.

Look at the figures.

Lets start with the stock market. You will notice it was rising for nearly a year before Clinton was elected and took a DRAMATIC dive in the first quarter of 2000. (in case your hatred for Bush interferes with your abilty to recall history - Bush was not even the Republican nominee yet.)

http://chart.finance.yahoo.com/c/my/_/_ixic


Now the stock market is not a perfect measure of the economy, so as damning as that graph is, lets look at some more FACTS.

Growth in real GDP was 4.5% in 1999 and fell to .8% in 2001 before any of Bush's policies had taken effect.

Clinton inherited an economy that had grown from a -2% to a healthy 3.3%

Source: table B-4 2006 ERP

http://www.gpoaccess.gov/eop/index.html


SO GDP was on a sharp downward trend when Bush took office.


Lets look at unemployment rates.


They were at their low point of 3.8% in April of 2000. By the time Bush was sworn in they had risen to 4.2% and were at 5.5% by the time Bush passed his first budget (not when it took effect, when it passed).

Clinton inherited an unemployment rate that had gone down from it's peak of 7.8% in June on 1992 to 7.3% when he was sworn in. By the time he passed his first budget (not when it took effect, when it passed), it had shrunk to 6.7%

Source: Bureau of Labor Statistics

http://www.bls.gov/data/home.htm



Nearly EVERY SINGLE economic indicator showed we were headed downward for quite some time before Bush took office.


The lies of the left cannot stand up to the truth.

Corporate subsidies need to be cut in order to allow small businesses to compete; it's not fair to allow these companies to get special tax breaks and priveleges simply because they're large enough to have influence in Congress. There's a huge difference between small businesses going under because they can't compete and going under because government is against them; unfortunately, the trend is mostly to the second option which means the small businesses can't compete on a level playing field. That is unfair and it has to change if we want to keep the engine of our job market growin.

Another place we need to look at is our regulatory structure. Every new regulation that requires an outlay of money hurts the small businessman far more than the multinationals. The large companies have a more favorable economies of scale situation - they can spread the costs of the regulations over far more product. The small businessman does not sell nearly as much, so the costs have to be made up with fewer product sold. This forces the small businessman to charge more per unit and this increased price helps the large companies to gain more and more of the sales.

... Conservative bullshit blah blah blah *ignore the truth here*
Hey look! I converted it into lib speak! Stop wasting your fingers, they aren't even going to read the whole thing. Instead, just point and laugh.
/me points and laughs

Another place we need to look at is our regulatory structure. Every new regulation that requires an outlay of money hurts the small businessman far more than the multinationals. The large companies have a more favorable economies of scale situation - they can spread the costs of the regulations over far more product. The small businessman does not sell nearly as much, so the costs have to be made up with fewer product sold. This forces the small businessman to charge more per unit and this increased price helps the large companies to gain more and more of the sales.

And, of course, most of the regulations are designed to be as friendly as possible to the multinationals because of the politics involved with the process. So, they not only hurt the small and medium sized businesses but the regulations actually accomplish next to nothing, leaving the consumers and entrepreneurs left with the bill.

Ideally, the situation would eventually produce rising tax revenue and a narrowing deficit simultaneous with a falling tax burden; of course, the reckless spending does nothing to help the situation. Even if taxes were at their 2000 level we would still likely be running a huge deficit for the simple reason that spending is growing faster than revenues.


If taxes were at the same rate as they were in 2000, we would never have made it past the 9-11 attacks, The corp. corruption scandals, the Hurricanes of 2004 and Huricane Katrina in 2005.

Revenues were on a STEEP downtrend after the slowdown that started in 2000. The tax cuts turned that around.

And, of course, most of the regulations are designed to be as friendly as possible to the multinationals because of the politics involved with the process. So, they not only hurt the small and medium sized businesses but the regulations actually accomplish next to nothing, leaving the consumers and entrepreneurs left with the bill.

Yep. And who is generally in favor of larger and more harmful regulations? The Left.

So, I would submit that, through their support of socialistic regulations, the left has been fooled into supporting the very companies that they rail against.

Yep. And who is generally in favor of larger and more harmful regulations? The Left.

So, I would submit that, through their support of socialistic regulations, the left has been fooled into supporting the very companies that they rail against.
The catch to this is no area of business has ever been regulated BEFORE someone in that industry abused either the public or their workers. It's wonderful to say 'let's do away with regulation' but in truth there is a need for regulation because someone in every industry will do the unethical. Of course the problem is once the government has it's nose in the door it just can't stop passing laws. A lot of this is because the public won't take responsibility for itself. The prime example is the McDonalds coffee decision. We now have a regulation that says coffee can only be so hot. At the same time, we wouldn't want to live in a place where there was no regulation of quality we can't see or dangers we can't see, such as in medicine.

The other area of regulation comes in when technology is available but industry refused to use it. Seatbelts in cars were known to cut injury and death in the '40's but it took regulation 30 years later to make them mandatory. (after the auto industry argued that people wouldn't buy a car if it cost $50 more for seatbelts) The same was true with nearly every auto safety development. Interestingly, AFTER they are forced to make the auto safer they put out a big advertising splash about how much safer their autos are now that they have seatbelts, or whatever. Now, I do have to question the regulation making mandatory use for adults. However; injury and death through non use does cost the society as a whole. So where is the balance? That is the question of all regulatiion.

The catch to this is no area of business has ever been regulated BEFORE someone in that industry abused either the public or their workers. It's wonderful to say 'let's do away with regulation' but in truth there is a need for regulation because someone in every industry will do the unethical. Of course the problem is once the government has it's nose in the door it just can't stop passing laws. A lot of this is because the public won't take responsibility for itself. The prime example is the McDonalds coffee decision. We now have a regulation that says coffee can only be so hot. At the same time, we wouldn't want to live in a place where there was no regulation of quality we can't see or dangers we can't see, such as in medicine.


No doubt it is a tricky thing to design. I wish it were as simple as: "don't lie cheat or steal." That SHOULD work, but unfortunately it does not work in practice.

The other area of regulation comes in when technology is available but industry refused to use it. Seatbelts in cars were known to cut injury and death in the '40's but it took regulation 30 years later to make them mandatory. (after the auto industry argued that people wouldn't buy a car if it cost $50 more for seatbelts) The same was true with nearly every auto safety development.

I agree here also. I think MAYBE (not sure) that the better method would be to shame them into acting responsible. Put enough market disgust into the equation and people will stop buying their products. On the other hand, some people have no shame.

I would settle for a review of regulations after a period of time, to check whether or not it is achieving the desired result, and then if the realized results justify the regulation as it is written. The way things work now, we just pile another, sometimes contradictory regulations on top of the old ones.
Companies could grow broke trying to satisfy the sometimes mutually exclusive regulations out there.

Interestingly, AFTER they are forced to make the auto safer they put out a big advertising splash about how much safer their autos are now that they have seatbelts, or whatever. Now, I do have to question the regulation making mandatory use for adults. However; injury and death through non use does cost the society as a whole. So where is the balance? That is the question of all regulatiion.

I DO think it should be a choice. But to solve the cost to society issues, the people who insist on not wearing them should be charged higher insurance premiums to cover the increased costs associated with their choice.

Bullshit you say??? I say YOU are full of bullshit.

Look at the figures.

Lets start with the stock market. You will notice it was rising for nearly a year before Clinton was elected and took a DRAMATIC dive in the first quarter of 2000. (in case your hatred for Bush interferes with your abilty to recall history - Bush was not even the Republican nominee yet.)

http://chart.finance.yahoo.com/c/my/_/_ixic


Now the stock market is not a perfect measure of the economy, so as damning as that graph is, lets look at some more FACTS.

Growth in real GDP was 4.5% in 1999 and fell to .8% in 2001 before any of Bush's policies had taken effect.

Clinton inherited an economy that had grown from a -2% to a healthy 3.3%

Source: table B-4 2006 ERP

http://www.gpoaccess.gov/eop/index.html


SO GDP was on a sharp downward trend when Bush took office.


Lets look at unemployment rates.


They were at their low point of 3.8% in April of 2000. By the time Bush was sworn in they had risen to 4.2% and were at 5.5% by the time Bush passed his first budget (not when it took effect, when it passed).

Clinton inherited an unemployment rate that had gone down from it's peak of 7.8% in June on 1992 to 7.3% when he was sworn in. By the time he passed his first budget (not when it took effect, when it passed), it had shrunk to 6.7%

Source: Bureau of Labor Statistics

http://www.bls.gov/data/home.htm



Nearly EVERY SINGLE economic indicator showed we were headed downward for quite some time before Bush took office.


The lies of the left cannot stand up to the truth.



One of the problems in talking of "supply side" is arguing of Clinton vs. Bush vs Bush. That arguement is really irrelevant. Reagan started "supply side" so we have to look at pre 1980. Nothing has happened in the last 26 years that equals to prosperity of the 50's through the 70's. There were ups and downs (Reagan came in on a down) but overall the economy of that time was so hot that there isn't even a comparison to the last 26 years under "supply side".

There was a time in my memory when I worked below minimum wage ($1.50 vs $1.65 per hr.) (gas was 26 cents, or 15.75% of an hour of minimum wage, now it's 49%) and on that I paid for college, put money in a savings account (I graduated with nearly $5,000 in the bank) and bought a brand new car. At the same time most families could live on one paycheck. The second income was for luxuries.

The top tax bracket---90%. The 90% wasn't on total income, just that over a certain number of millions of dollars. The point is the money was taken from the top and services were given to the poor and society as a whole. Just think--In the 50's we fought Korea and rebuilt Europe---In the 60's we fought Vietnam and went to the moon and built the Interstate Highway system.--In he '70's we fought Vietnam even more and went to the moon and built the space shuttle. In 1980 Reagan was elected and "supply side" was put in. Since then we....uh...well we fought Grenada, Lebanon, Samolia, Iraq, Afganistan, and Iraq.......all relative minor wars and we built...........uh......we built...........well we did some repairs on the Interstate, although not enough to keep it in top shape, we did a little with the shuttle, but have quit building them.......Sorry I can't think of one major societal project in 26 years....The life of most of those on this forum, the life of "supply side". What's the difference? No dreamers or no $$$$$ in this wonderful economy?

One of the basics of economics is you cut taxes when the economy is down and you raise taxes when the economy is up. Are any of you ready to raise taxes yet?

One of the problems in talking of "supply side" is arguing of Clinton vs. Bush vs Bush. That arguement is really irrelevant. Reagan started "supply side" so we have to look at pre 1980. Nothing has happened in the last 26 years that equals to prosperity of the 50's through the 70's. There were ups and downs (Reagan came in on a down) but overall the economy of that time was so hot that there isn't even a comparison to the last 26 years under "supply side".

There was a time in my memory when I worked below minimum wage ($1.50 vs $1.65 per hr.) (gas was 26 cents, or 15.75% of an hour of minimum wage, now it's 49%) and on that I paid for college, put money in a savings account (I graduated with nearly $5,000 in the bank) and bought a brand new car. At the same time most families could live on one paycheck. The second income was for luxuries.

The top tax bracket---90%. The 90% wasn't on total income, just that over a certain number of millions of dollars. The point is the money was taken from the top and services were given to the poor and society as a whole. Just think--In the 50's we fought Korea and rebuilt Europe---In the 60's we fought Vietnam and went to the moon and built the Interstate Highway system.--In he '70's we fought Vietnam even more and went to the moon and built the space shuttle. In 1980 Reagan was elected and "supply side" was put in. Since then we....uh...well we fought Grenada, Lebanon, Samolia, Iraq, Afganistan, and Iraq.......all relative minor wars and we built...........uh......we built...........well we did some repairs on the Interstate, although not enough to keep it in top shape, we did a little with the shuttle, but have quit building them.......Sorry I can't think of one major societal project in 26 years....The life of most of those on this forum, the life of "supply side". What's the difference? No dreamers or no $$$$$ in this wonderful economy?

One of the basics of economics is you cut taxes when the economy is down and you raise taxes when the economy is up. Are any of you ready to raise taxes yet?
You seem to have a great knack for putting this whole topic in perspective. :)

One of the problems in talking of "supply side" is arguing of Clinton vs. Bush vs Bush. That arguement is really irrelevant. Reagan started "supply side" so we have to look at pre 1980. Nothing has happened in the last 26 years that equals to prosperity of the 50's through the 70's. There were ups and downs (Reagan came in on a down) but overall the economy of that time was so hot that there isn't even a comparison to the last 26 years under "supply side".

Reagan popularized "supply side" that is true, but it hardly has been practiced consistantly since. You ignore the multitude of other variables that have developed during that period. There were other factors that led to the growth of the 50's-70's. You had low oil prices, the baby boomer generation was at it's peak in the later part of that time period and recovering from the great depression in the earlier part of that time period. There are simply far too many variables to make the generalized statement that you do.

There was a time in my memory when I worked below minimum wage ($1.50 vs $1.65 per hr.) (gas was 26 cents, or 15.75% of an hour of minimum wage, now it's 49%) and on that I paid for college, put money in a savings account (I graduated with nearly $5,000 in the bank) and bought a brand new car. At the same time most families could live on one paycheck. The second income was for luxuries.

Again, you are placing the blame in the wrong place. First off, oil prices are independant of any single country's economic system. It is simply a function of supply and demand, supply has remained flat while demand has risen exponentially. In the U.S. there are several other factors that are contributing to the higher prices, namely the lack of refining capacity, a mandate for "botique fuels" and an absolute refusal to develope the resources we have. Oil prices affect the cost of nearly every thing else also.

Other factors that have helped to drive prices up are the fact that technology has made it possible, and marketing has made it desireable to get all of the latest gadgets on our purchases as is possible.
For example:
A car used to be transportation. No air conditioning (unheard of in a new car now), basic AM/FM radio, maybe seat belts - you get the idea. Now all of those items are standard equipment.

We have had a massive inflow of labor during that time period also. The women's movement brought literally millions of new workers into the marketplace. Again this was simply supply and demand at work. With a huge increase in the supply of labor, the price of that labor (wages) were kept much lower than they otherwise would have been.

As far as inflation and oil prices, During the mid-late 1970's we experienced an economic crisis that threatened our very way of life. Credible sources were talking about the end of American prosperity, the inevitable decline of our standard of living - our President even comented on the "Malaise" that we were experiencing. This was caused in large part, to the Vietnam war and the Nixon watergate scandal as well as the bumbling economic and foriegn policies of President Carter. Inflation was running at a staggering 13.3%, Interest rates for a 30 year mortgage peaked at 18.9% (NOT a TYPO) and unemployment peaked at 9.7%. - a "misery index" of 41.9%. We are STILL recovering from that awful period.We have brought the "misery index down to an extremely healthy 14 to 15% range, but real wages are still low compared to that time. Wages have been increasing for a decade now, but still are below the Pre-Ford/Carter years.

The other powerful factor in this equation is the formation and increased power of OPEC and the Oil shocks of the early and late 1970's.

Finally, and perhaps most importantly, in the early part of the time period, we did not saddle our economy with the enormous regulatory burdens we currently have. Since the 1970's, the compliance costs have absoutely exploded.

The top tax bracket---90%. The 90% wasn't on total income, just that over a certain number of millions of dollars. The point is the money was taken from the top and services were given to the poor and society as a whole. Just think--In the 50's we fought Korea and rebuilt Europe---In the 60's we fought Vietnam and went to the moon and built the Interstate Highway system.--In he '70's we fought Vietnam even more and went to the moon and built the space shuttle.


That we did, and we paid for it in the mid 1970's through the first year and a half of Reagans initial term. (see above misery index) Meanwhile, Europe opted to increase the socialistic tendencies and Reagan saved Americans from that fate. Have you compared the number of jobs created in the United States to those of the EU?? How about income mobility ( the ability of the poorest to improve their economic lot) How about nearly every measure of economic health.




In 1980 Reagan was elected and "supply side" was put in. Since then we....uh...well we fought Grenada, Lebanon, Samolia, Iraq, Afganistan, and Iraq.......all relative minor wars and we built...........uh......we built...........well we did some repairs on the Interstate, although not enough to keep it in top shape, we did a little with the shuttle, but have quit building them.......Sorry I can't think of one major societal project in 26 years....The life of most of those on this forum, the life of "supply side". What's the difference? No dreamers or no $$$$$ in this wonderful economy?

We rebuilt a defense force that could not fly a group of helicopters over the Saudi desert (referring to the ill-fated rescue attempt of the Iranian hostages).


One of the basics of economics is you cut taxes when the economy is down and you raise taxes when the economy is up. Are any of you ready to raise taxes yet?



That is a basic of KEYNESIAN economics, which has largely fallen out of favor because of the results it had in the 1970's. Reagan helped to slay that group of myths.

Correlation does not mean causation. Just because tax revenues are rising doesn't mean it is the result of supply side economics working the way they were theorized to. In order to make that claim, additional evidence is required. There are far too many variables involved in macroeconomics to use this trend as a justification for the merits of "supply side" economics.

Correlation does not mean causation. Just because tax revenues are rising doesn't mean it is the result of supply side economics working the way they were theorized to. In order to make that claim, additional evidence is required. There are far too many variables involved in macroeconomics to use this trend as a justification for the merits of "supply side" economics.


Absolutely, the variables are in the thousands. That is what my modeling programs do, and the verdict is astoundingly clear. The tax cuts worked. Period.

Reagan popularized "supply side" that is true, but it hardly has been practiced consistantly since. You ignore the multitude of other variables that have developed during that period. There were other factors that led to the growth of the 50's-70's. You had low oil prices, the baby boomer generation was at it's peak in the later part of that time period and recovering from the great depression in the earlier part of that time period. There are simply far too many variables to make the generalized statement that you do.

It can always be said there are variables. But we've given "supply side" 26 years. Surely somtime during that period there should have been an upturn for the common worker just because of business cycles. The ecomnomy has cycled at the top but the mid and bottom have been flat.


We have had a massive inflow of labor during that time period also. The women's movement brought literally millions of new workers into the marketplace. Again this was simply supply and demand at work. With a huge increase in the supply of labor, the price of that labor (wages) were kept much lower than they otherwise would have been.
The influx of women was partially due to the movement but more due to the need for more income. This is especially true at the bottom. Then we had massive imigration at the bottom fueled by administrations that totally ignored employers. I don't know of one job that an American won't take. I remember when a slaughter house job was a wonderful way up. When was the last time Tyson was raided by the INS?



As far as inflation and oil prices, During the mid-late 1970's we experienced an economic crisis that threatened our very way of life. Credible sources were talking about the end of American prosperity, the inevitable decline of our standard of living - our President even comented on the "Malaise" that we were experiencing. This was caused in large part, to the Vietnam war and the Nixon watergate scandal as well as the bumbling economic and foriegn policies of President Carter. Inflation was running at a staggering 13.3%, Interest rates for a 30 year mortgage peaked at 18.9% (NOT a TYPO) and unemployment peaked at 9.7%. - a "misery index" of 41.9%. We are STILL recovering from that awful period.We have brought the "misery index down to an extremely healthy 14 to 15% range, but real wages are still low compared to that time. Wages have been increasing for a decade now, but still are below the Pre-Ford/Carter years.

The other powerful factor in this equation is the formation and increased power of OPEC and the Oil shocks of the early and late 1970's.

I agree that the economy was in the tank in the late '70's. A lot of that had to do with oil but it also had to do with the Fed not reacting sooner and with a refusal to raise taxes to cool the economy sooner.


Finally, and perhaps most importantly, in the early part of the time period, we did not saddle our economy with the enormous regulatory burdens we currently have. Since the 1970's, the compliance costs have absoutely exploded.

There probably were too many regulations but we have also seen several cases where there have been too few regulations. One is broadcasting laws that allow a few companies to control information. Another is the monopoly laws which no longer exist. There are few industries today that have any real competition. Most are interlocked not only by buying but by owning each other's stock. Capitalism can't operate properly without competition. When was the last time a merger was denied?



We rebuilt a defense force that could not fly a group of helicopters over the Saudi desert (referring to the ill-fated rescue attempt of the Iranian hostages).

And where is that defense now? Reagan built a 100 ship navy even though the Navy said they didn't want 100 ships. It was just a good sounding number. Most are now in storage. And "star wars"----Do you remember that we were going to develop the technology then give it to Russia so we could have "mutually insured protection"? There has yet to be a successful test. Bush really hesitated when asked if we could shoot down one Korean rocket. Then couldn't say yes.
And as for the dirt in the helicopters. I have a God-Son in Iraq who uses computers for communication between the battlefield and the pentagon. With all our technology, dirt still wins, bullions of dollars later.


That is a basic of KEYNESIAN economics, which has largely fallen out of favor because of the results it had in the 1970's. Reagan helped to slay that group of myths.
And that is exactly what we are debating. Are the new theories better than the old theories? After 26 years of "supply side" it is obvious that the US economy had enough inertia comming out of the 50-70 boom to carry us a while. But it is also obvious that the friction of supply side is making the rich richer, the poor poorer and the general economy slower than what was taking place before. It has been a grand experiment. I just hope a few people in power will remember what a real economy without the brakes dragging is like.

As opposed to regulation, I would support treating corporate criminals, folks like Jeff Skilling, as little more than regular criminals. Don't send them to some luxury resort white collar jail, send them to serious pound-'em-in-the-ass jail. And take away their money. And charge them for every single person they defrauded.

Reagan popularized "supply side" that is true, but it hardly has been practiced consistantly since. You ignore the multitude of other variables that have developed during that period. There were other factors that led to the growth of the 50's-70's. You had low oil prices, the baby boomer generation was at it's peak in the later part of that time period and recovering from the great depression in the earlier part of that time period. There are simply far too many variables to make the generalized statement that you do.

Amongst other factors, the US economy was even more dominant in the global market than it is today. The rest of the world had been destroyed during the war, and that left plenty of demand for US goods, but very little local competition. Most of the world had to buy our stuff if they wanted to have anything. People across the country found themselves awash in money, and they spent that money, which is another factor that contributed to the economic boom of the fifties. Keynesian ideas, which were practiced by the government, probably only limited the effects of the boom, instead of causing it.

Amongst other factors, the US economy was even more dominant in the global market than it is today. The rest of the world had been destroyed during the war, and that left plenty of demand for US goods, but very little local competition. Most of the world had to buy our stuff if they wanted to have anything. People across the country found themselves awash in money, and they spent that money, which is another factor that contributed to the economic boom of the fifties. Keynesian ideas, which were practiced by the government, probably only limited the effects of the boom, instead of causing it.

Yup.

As opposed to regulation, I would support treating corporate criminals, folks like Jeff Skilling, as little more than regular criminals. Don't send them to some luxury resort white collar jail, send them to serious pound-'em-in-the-ass jail. And take away their money. And charge them for every single person they defrauded.

Personally, I think that because corporations claim that they are entitled to the same rights as real people, they should be jailable like real people. If a corporation commits a crime, then each shareholder should take a share of that sentence according to their share. Most the rank-and-file shareholders would recieve .0001 percent of a convition, which would round off to no criminal record, but if you get 30% of a multiple life sentence for 20 cases of negligent homocide, well, you might start acting like a responsible corporate citizen.

Amongst other factors, the US economy was even more dominant in the global market than it is today. The rest of the world had been destroyed during the war, and that left plenty of demand for US goods, but very little local competition. Most of the world had to buy our stuff if they wanted to have anything. People across the country found themselves awash in money, and they spent that money, which is another factor that contributed to the economic boom of the fifties. Keynesian ideas, which were practiced by the government, probably only limited the effects of the boom, instead of causing it.

That's what Keynesian economics are supposed to do. It doesn't promote booms, it softens bangs. Look at the tech bubble. It was great, and then it burst. That was really really bad. Bankrupcies all over the place.

Keynsian economics would have slowed the growth of the Bubble, and allowed the rest of the economy to make it's adjustments, then the fallout wouldn't have been so bad, and the government would be sitting on better funds to help alleviate the problems that would result. e.g. if you're a computer programmer who's just been downsized, along with all the others in town, it's not your fault that you're unemployed. You're a programmer, not an economist, how could you have seen this coming?

Considering ..9/11...two wars.....and cripes how many hurracaines and other natural disasters..The Bush administration has done a wonderfull if not excellent job with thhe economy..and I am no longer upper middle class..I ( my choice ) went into a different field that made me middle class...and I have prospered with Bush . Not only that but he didnt destroy social programs like I was afraid he may do..My non profit I work for got killed more by Clinton than in any year Bush has been in office...ask anyone who works in any field of social welfare . clinton did the reforming almost like a Republican .

Now please someone do something about health care before it implodes .

It can always be said there are variables. But we've given "supply side" 26 years. Surely somtime during that period there should have been an upturn for the common worker just because of business cycles. The ecomnomy has cycled at the top but the mid and bottom have been flat.

For 12 of the last 26 years we absolutely did NOT give supply side even a whisper of a chance. In the remaining 14 years, we STILL only gave Supply side economics a partial try. THose part we did try worked wonderfully well.


The influx of women was partially due to the movement but more due to the need for more income. This is especially true at the bottom. Then we had massive imigration at the bottom fueled by administrations that totally ignored employers. I don't know of one job that an American won't take. I remember when a slaughter house job was a wonderful way up. When was the last time Tyson was raided by the INS?


I was not commenting on the why, I was simply bringing up the result of the increase in the labor force because of the large amount of women entering the workforce. As for the immigration issues, I forgot to add them and yes it absolutely contributed to lower wages. I simply forgot that - my bad - and thank you for pointing that out.


I agree that the economy was in the tank in the late '70's. A lot of that had to do with oil but it also had to do with the Fed not reacting sooner and with a refusal to raise taxes to cool the economy sooner.

I could not disagree more on your tax position, that would have hastened and deepened the recession. You did nail it on the FED though.


There probably were too many regulations but we have also seen several cases where there have been too few regulations. One is broadcasting laws that allow a few companies to control information. Another is the monopoly laws which no longer exist. There are few industries today that have any real competition. Most are interlocked not only by buying but by owning each other's stock. Capitalism can't operate properly without competition. When was the last time a merger was denied?

I agree wholeheartedly that Capitalism needs competition, although I differ with you on your belief that there is a lack of it. Except for a very few industries, the competition is fierce. One of the reasons that competition is decreasing however, is the regulations that many on the left push on business under the guise of "fairness" or "the environment". The laws could have been written much better than they were, but it is my belief that many "green" organizations are more about destroying capitalism than they are about saving the environment. The laws they push are often counter productive environment wise, but they absolutely devastate small businesses.

I also beg to differ on your assertion that there are no anti-monopoly laws - what do you think Microsoft was being sued over a couple of years back?


And where is that defense now? Reagan built a 100 ship navy even though the Navy said they didn't want 100 ships. It was just a good sounding number. Most are now in storage. And "star wars"----Do you remember that we were going to develop the technology then give it to Russia so we could have "mutually insured protection"? There has yet to be a successful test. Bush really hesitated when asked if we could shoot down one Korean rocket. Then couldn't say yes.
And as for the dirt in the helicopters. I have a God-Son in Iraq who uses computers for communication between the battlefield and the pentagon. With all our technology, dirt still wins, bullions of dollars later.

We now have the finest military in the entire world. Reagan did much more than just build ships, he took over a military that (and I admit I can't remember the exact numbers here) could not put 65% of it's tanks in the field. Pay rates were abysmally low and the Soviet Union was absolutely dominating the world stage. Reagan ended that. Star wars may very well prove to be our saving grace in the Korean situation. Even after being de-funded in the Clinton administration, we are right on or slightly ahead of the timetables that were given for developement back when Reagan first proposed it.

Dirt absolutely wins, but the fact of the matter is, it wins less frequently. We now are capable of flying helicopters in the desert. We just need to clean them frequently. Before, we could not even manage a simple rescue mission without crashing half of the aircraft.


And that is exactly what we are debating. Are the new theories better than the old theories? After 26 years of "supply side" it is obvious that the US economy had enough inertia comming out of the 50-70 boom to carry us a while. But it is also obvious that the friction of supply side is making the rich richer, the poor poorer and the general economy slower than what was taking place before. It has been a grand experiment. I just hope a few people in power will remember what a real economy without the brakes dragging is like.

Again, we have not had 26 years of supply side economics. The inertia was after Reagan, and it will be again, after Bush - IF he can get his shit together and control spending.

Also, as has been mentioned, and this is a MAJOR reason why the 50's and 60's were boom years - we had virtually ZERO competition. Europe and Much of the pacific were absolutely destroyed in WWII.

That's what Keynesian economics are supposed to do. It doesn't promote booms, it softens bangs. Look at the tech bubble. It was great, and then it burst. That was really really bad. Bankrupcies all over the place.

Keynsian economics would have slowed the growth of the Bubble, and allowed the rest of the economy to make it's adjustments, then the fallout wouldn't have been so bad, and the government would be sitting on better funds to help alleviate the problems that would result. e.g. if you're a computer programmer who's just been downsized, along with all the others in town, it's not your fault that you're unemployed. You're a programmer, not an economist, how could you have seen this coming?

The problem is, that it does not work that way. The policies you ascribe are exactly what bought us the "stagflation" of the mid-late seventies.

THe best and most sure way to economic prosperity is to reduce govt. interference to the greatest practical amount and provide for the rule of law.

One of the basics of economics is you cut taxes when the economy is down and you raise taxes when the economy is up.
Only if you're a Keynesian. ;)

Some of us are a fan of keeping the government out of our pocket-books.

And where is that defense now? Reagan built a 100 ship navy even though the Navy said they didn't want 100 ships. It was just a good sounding number. Most are now in storage. And "star wars"----Do you remember that we were going to develop the technology then give it to Russia so we could have "mutually insured protection"? There has yet to be a successful test. Bush really hesitated when asked if we could shoot down one Korean rocket. Then couldn't say yes.
What rock have you been living under? NMD systems have shot down multiple test inbounds, and the equipment that's being put on AEGIS cruisers to knock down ballistic missiles is quite likely to be even more accurate.



And that is exactly what we are debating. Are the new theories better than the old theories? After 26 years of "supply side" it is obvious that the US economy had enough inertia comming out of the 50-70 boom to carry us a while. But it is also obvious that the friction of supply side is making the rich richer, the poor poorer and the general economy slower than what was taking place before. It has been a grand experiment. I just hope a few people in power will remember what a real economy without the brakes dragging is like.
The economic boom only lasted from the end of the war to the early sixties, and that was only because of the reasons that USAlpenstock and I both illustrated. The Stagflation of the economy that set in was only alleviated after Reagan and Paul Volcker managed to lift the Keynesian weights off of the US economy. Since then our economy has been gangbusters. Growth in the nineties accelerated rapidly, and many of the fields in which the regulation was heaviest have radically changed. Telecommunications and transportations most obviously. Airfare is now cheaper, airlines are safer and the market is more competitive. There has not been a major accident in the US airline industry since since six years ago. Telephone rates are more flexible, competition has driven down prices for long distance (remember the days when Sprint only charged a dime per minute? That's nigh outrageous prices these days) and no longer do we operate with mere telephone lines, now that broadband is available across the country at reasonable prices. None of these things could have happened under the strict regulation that existed prior to the eighties.

We rebuilt a defense force that could not fly a group of helicopters over the Saudi desert (referring to the ill-fated rescue attempt of the Iranian hostages).

Dirt absolutely wins, but the fact of the matter is, it wins less frequently. We now are capable of flying helicopters in the desert. We just need to clean them frequently. Before, we could not even manage a simple rescue mission without crashing half of the aircraft.
Just calling you on your sensationalism. How many crashed? Only one? Pilot error? Carter's fault?

Two helicopters broke down in a sandstorm and a third one was damaged on landing. The mission was aborted, but as the aircraft took off again one helicopter clipped a C-130 and crashed, killing eight U.S. servicemen and injuring more than four.

Dirt absolutely wins, but the fact of the matter is, it wins less frequently. We now are capable of flying helicopters in the desert. We just need to clean them frequently.
Are you sure about that? It only took me a few minutes to come up with these:

Miami (AFP) Jun 1, 2006

Four US soldiers dead in helicopter crash in southern US (http://www.spacewar.com/reports/Four_US_soldiers_dead_in_helicopter_crash_in_southern_US.html)

WASHINGTON, May 27, 2006

U.S. Helicopter Crashes; Marine Killed in Iraq (http://www.defenselink.mil/news/May2006/20060527_5259.html)

Saturday, May 6, 2006

Ten Killed In U.S. Helicopter Crash In Afghanistan (http://www.rferl.org/featuresarticle/2006/05/9cc10f2b-5e3e-4d20-a09a-aae1ba9d3baf.html)


Saturday, April 1, 2006

U.S. helicopter crashes near Baghdad (http://edition.cnn.com/2006/WORLD/meast/04/01/iraq.main/index.html)

Monday, January 9, 2006

U.S. helicopter crash kills 12 in Iraq (http://edition.cnn.com/2006/WORLD/meast/01/08/iraq.main/index.html)

Monday, June 27, 2005

U.S. Helicopter Crash Kills 2 in Iraq (http://www.foxnews.com/story/0,2933,160754,00.html)

January 27, 2005

U.S. helicopter crash in Iraq kills 31 troopers (http://washingtontimes.com/world/20050127-120534-7805r.htm)

Wednesday, 25 February, 2004

US helicopter crashes in Iraq (http://news.bbc.co.uk/2/hi/in_depth/3485956.stm)

January 8, 2004

U.S. HELICOPTER CRASHES IN IRAQ; NINE KILLED (http://www.pbs.org/newshour/updates/iraq_01-08-04.html)

11/23/2003

Helicopter crash kills 5 U.S. soldiers (http://www.usatoday.com/news/world/2003-11-23-afghan-crash_x.htm)

There are more but I think your statement was erroneous. I guess all these helicopter crashes are Bush's fault?

I also beg to differ on your assertion that there are no anti-monopoly laws - what do you think Microsoft was being sued over a couple of years back?

Yes I remember. And what happened? If there is a virtual monopoly in the world it's Microsoft. Apple is hanging in but not a real competitor and Linux (sp) doesn't even move the needle. Let's face it. Monopoly laws are for all intents and purposes gone. Anyone who wants to buy out or buy a considerable interest in any competitor has a free hand.

Another area that most don't know about because they are not involve in agriculture is slaughtering plants. Bought a steak lately? 25 years ago there were at least 10 major beef markets. Today there are 3 with interwoven ownership that means really no competition at all. They are also one of those employers that hire illegals with no fear of retribution. 25 years ago a slaughter house worker was paid twice what a worker is paid today. Figure in inflation and we're talking less than a fourth. That's some of those new jobs created under "supply side".

Questions:

1. Has supply side economics affected the infastructure of the States?

2. How many US jobs have been created because of the US wars in Iraq and Afghanistan? I would imagine that when you factor in bombs, bullets, equipment, clothing, troop wages, etc., that much of the rebounding economy has a lot to do with the war effort?

3. Many people talk about real wages now versus 5 or 6 years ago. Are increases keeping with inflation?

4. I have been reading a lot about sharply increased costs of health care services and prescriptions in the US, and that many companies are either reducing or eliminating coverages. Surely this affects the employee that has to pay more out of pocket to maintain coverage?

I think that Good Lifes is driving home some very good points.

Questions:

1. Has supply side economics affected the infastructure of the States?
Yes, in several key areas. Telecommunications is more efficient and cheaper than it was prior to deregulation. Transportation is more efficient, safer and cheaper than it was prior to deregulation. Inflation is far lower than it was during the days prior to deregulation.

2. How many US jobs have been created because of the US wars in Iraq and Afghanistan? I would imagine that when you factor in bombs, bullets, equipment, clothing, troop wages, etc., that much of the rebounding economy has a lot to do with the war effort?
Not a large quantity on the basis that this is a limited war. Much of the equipment, espescially the heavy equipment has been in American arsenals for years. Many weapons, such as the Beretta 9mm Handgun is purchased overseas. The bombs that are currently in use are typically older bombs that have been upgraded with guidance packages. Clothing and troop wages are holding steady, as per the fact that there hasn't been much of an enlargement in the size of the military in recent years. The positive impact of the current war effort on the economy is probably sizably less than that of Vietnam, and certainly less than that of Korea. In fact, because of the instability caused in the oil producing regions by the current wars, there is most likely a net drag on the economy.

3. Many people talk about real wages now versus 5 or 6 years ago. Are increases keeping with inflation?
They're either matching pace with inflation, or slightly exceeding it.

4. I have been reading a lot about sharply increased costs of health care services and prescriptions in the US, and that many companies are either reducing or eliminating coverages. Surely this affects the employee that has to pay more out of pocket to maintain coverage?
The increasing costs are typically associated with new drugs, which are being used increasingly more commonly in the place of surgery. Because of the way the American healthcare system is designed, it is geared to instinctually favor the single shot tremendous expense of surgery, as opposed to the long term, lower costs of a single drug. This rise in the expense of healthcare does indeed have something to do with the sluggish growth of wages when adjusted for inflation.

I think that Good Lifes is driving home some very good points.

Point 1)
The rich people and corporations are paying more taxes now than before. Their share in total tax revenue has increased.

Point 2)
Rich people paying less taxes doesn't necessarily stimulate spending. If you talk about spending only - many rich people already spend as much as they want to, and are likely to simply save the extra money. Which isn't necessarily a bad thing, especially in the US with its debt situation. But it doesn't increase spending by as much.

Point 3)
Given that corporations and rich people with their shares pay most taxes these days, or will soon...is it possible to fund a state entirely on those revenues? It might be! Then we could get rid of income taxes, which has got to be a good thing.
Unfortunately, it also means that revenues will be much more volatile. Income remains relatively stable, profits on shares or companies can be high one year, negative in the next. So a government funded by taxes coming from such profits would have to find a way to balance that, perhaps by re-investing some of its revenue to guarantee a stable income stream if the top bit of the economy isn't doing too well.

Just three points worth considering, although they may or may not have been mentioned before.

Just calling you on your sensationalism. How many crashed? Only one? Pilot error? Carter's fault?

Not Carter's fault entirely. The fact that we needed to rescue them in the first place was his fault, but Ford also neglected the upkeep and renewal of our equipment.

Yes there have been other helicopter accidents. But the event I referred to was specifically the spectacular failure of a whole mission because 3 of the eight helicopters malfunctioned on that SINGLE mission - before the first stage of the operation was complete. Completely different.

They are also one of those employers that hire illegals with no fear of retribution. 25 years ago a slaughter house worker was paid twice what a worker is paid today. Figure in inflation and we're talking less than a fourth. That's some of those new jobs created under "supply side".

Illegal aliens are not counted in the unemployment figures. The real average wage for hourly workers is higher now than at any time in the past 27-28 years - when they crashed under Ford and Carter.

In nominal terms, wages are the highest EVER.

Point 1)
The rich people and corporations are paying more taxes now than before. Their share in total tax revenue has increased.

This is true. So what about those tax cuts being only for the "rich"? seems that is a lie now isn't it.

Point 2)
Rich people paying less taxes doesn't necessarily stimulate spending. If you talk about spending only - many rich people already spend as much as they want to, and are likely to simply save the extra money. Which isn't necessarily a bad thing, especially in the US with its debt situation. But it doesn't increase spending by as much.

Again this is true. That money they "save" actually gets invested into new technologies that create jobs, help our environment, save peoples lives and feed millions.

Point 3)
Given that corporations and rich people with their shares pay most taxes these days,

(about 95%)


or will soon...is it possible to fund a state entirely on those revenues? It might be! Then we could get rid of income taxes, which has got to be a good thing.
Unfortunately, it also means that revenues will be much more volatile. Income remains relatively stable, profits on shares or companies can be high one year, negative in the next. So a government funded by taxes coming from such profits would have to find a way to balance that, perhaps by re-investing some of its revenue to guarantee a stable income stream if the top bit of the economy isn't doing too well.

Just three points worth considering, although they may or may not have been mentioned before.


Well said.

two words: cyclical recovery...

This is true. So what about those tax cuts being only for the "rich"? seems that is a lie now isn't it.
It depends on how you look at it. The tax cuts were indeed heavily focussed on rich people, that's where most of the tax cuts were, in nominal terms. There's no denying that.

Nonetheless, rich people have been making a lot more money, such that they ended up paying more taxes, despite perhaps paying a lower percentage.

Generally I think tax cuts are a good idea whenever the government can afford them. It's unfortunate that Bush did them despite not really having the money to do so. I mean, Clinton with his budget surplus gave him pretty much an ideal platform to start with, particularly if you consider all the things the government will have to pay in the future (baby boomers and all that). As it was, Bush went for the easy, short-term route of giving people tax cuts, when it might have been a better idea to keep running a surplus for a while to reduce the total debt, and put future governments in a better position to deal with the structural changes in American society over the next twenty or thirty years.

I'd feel better about the tax cut's if they included a repeal of the 18.4 cents per gallon federal gas tax. Wait, repealing the gas tax would be the last thing this adminstration would do, since that tax would affect most everyone equally. Better cut Capital Gains or the "Death Tax." Those help their base.

It depends on how you look at it. The tax cuts were indeed heavily focussed on rich people, that's where most of the tax cuts were, in nominal terms. There's no denying that.

That is ONLY because 4-5% cut on a million dollars is greater than a 100% cut on $30,000. Percentage - wise the poor got a MUCH larger break.

Nonetheless, rich people have been making a lot more money, such that they ended up paying more taxes, despite perhaps paying a lower percentage. True - and the fact that something like 4 million lower income individuals pay no income taxes at all due to the Bush tax cuts

Generally I think tax cuts are a good idea whenever the government can afford them. It's unfortunate that Bush did them despite not really having the money to do so.

If you look at things purely in a maximization of government revenue terms, the tax cuts are always a good Idea - up and until the revenue curve reverses itself. So far, evidence points to the fact that we still could cut taxes (in many areas) and it will stimulate enough economic growth to make up the losses due to a lower percentage. It is the whole "volume discount" theory that the large chain stores use very successfully to increase thier profits. They take a bit less of a percentage profit in the knowlege that they will make it up by selling more product. There is a limit to this of course, but we do not seem to have reached it yet.


I mean, Clinton with his budget surplus gave him pretty much an ideal platform to start with,

Except Clinton's surplus was never real. It was a projection. If we had truly had a surplus, the debt would have gone down. That NEVER happened.

particularly if you consider all the things the government will have to pay in the future (baby boomers and all that). As it was, Bush went for the easy, short-term route of giving people tax cuts, when it might have been a better idea to keep running a surplus for a while to reduce the total debt, and put future governments in a better position to deal with the structural changes in American society over the next twenty or thirty years.

Except that the recession that got started in 2000 robbed the economy of $358.5 BILLION and THAT was one of the major causes of the larger deficit - in addition to our leaders absolute aversion to fiscal restraint. Regardless, if Bush had simply left the tax rates alone, we never would have seen the rebound in revenues that we did BECAUSE the tax cuts stimulated economic growth.

The key is to encourage high economic growth (with tax cuts and regulatory reform) and combine that with restrained spending. So far we have only gotten the first part of the equation right.

I know I'm the old man but during the 1980 election Reagan made a big point that under Carter the total national debt had reached $1 Trillion. And that he would never allow the government to have such debt.

When Reagan left office the debt was over $2 Trillion. Before Bush 1 left office it was over $3 Trillion.

Anyone want to guess what it is today? ............. $8.4 Trillion +

You can complain about spending and war costs and all of the other problems in the last 26 years. You can even add in inflation. BUT The cost of the Roosevelt programs, WW2, Korea, Vietnam, rebuilding Europe, Going to the moon, building the interstate, building the space shuttle, civil rights, all that regulation that was so evil, the drag of that 90% tax rate............ALL of that put together only put us down $1 Trillion.

For 26 years there has not been one program (I think WW2 would offset any Reagan defense buildup) that the youth of this nation can look at with pride. An entire generation has grown up with no dreams of a greater and better future. Not one government (I'm including both administration and legislation) has pointed out a goal and said 'Let me lead you to a better future." $7.4 Trillion in debt and not ONE goal. Not ONE dream. Not ONE reason to be proud. No wonder we argue about things like flag burning and call it patriotic. We can see no accomplishment to be proud of.

What has been different the last 26 years as compared to the 40 years before.........Just two things........Conservative? (well, socially not economically) government and "supply side" economics that gave to the rich hoping they would help the poor rather than putting the money at the bottom and letting it ripple through the economy thereby helping BOTH the rich and the poor.

I know most of you don't remember anything other than this so it seems normal. I know anything before 1980 is ancient history to most of you. But we should learn from history. Wouldn't you like to have a national dream and goal at least once in your life? Before that can come we need an economy that can support dreams and goals. This we have not had for 26 years.

Questions:2. How many US jobs have been created because of the US wars in Iraq and Afghanistan? I would imagine that when you factor in bombs, bullets, equipment, clothing, troop wages, etc., that much of the rebounding economy has a lot to do with the war effort?

As much as I loathe to agree with CanuckHeaven on just about anything, he brings up a very good point on number #2, although that is not the only factor involved in our recovering economy, by any means.

Surely, all this talk about how well the US economy is doing is all smoke and mirrors? Somewhere along the line, someone will get the bill for all of this?

America's Total Debt Report - Update 2005 (http://www.financialsense.com/editorials/hodges/2005/0313.html)
$40 Trillion - and Soaring

I continue to believe that Good Lifes brings a realistic perspective to this topic.

[QUOTE=Good Lifes]I know I'm the old man but during the 1980 election Reagan made a big point that under Carter the total national debt had reached $1 Trillion. And that he would never allow the government to have such debt.

When Reagan left office the debt was over $2 Trillion. Before Bush 1 left office it was over $3 Trillion.

Anyone want to guess what it is today? ............. $8.4 Trillion +

The current debt is in large part due to the programs that began under Roosavelt and Truman and continue to automatically grow - they are off budget items but still add to the debt. When you take those programs and add to them the newer programs, the deficit and hence the debt rises.

This is all contrary to supply side economics and it proves the point. Despite the non supply - side spending, the economy has done well enough with the supply side tax cuts to reduce the deficit.

You can complain about spending and war costs and all of the other problems in the last 26 years. You can even add in inflation. BUT The cost of the Roosevelt programs, WW2, Korea, Vietnam, rebuilding Europe, Going to the moon, building the interstate, building the space shuttle, civil rights, all that regulation that was so evil, the drag of that 90% tax rate............ALL of that put together only put us down $1 Trillion.

See above. The cost of of those programs have skyrocketed and it is impossible for politicians to cut them. (politically suicide) Those programs alone cost more now than that $1 trillion. Without those off budget programs, no one would be talking about the national debt or the deficit.


"supply side" economics that gave to the rich hoping they would help the poor rather than putting the money at the bottom and letting it ripple through the economy thereby helping BOTH the rich and the poor.

This illustrates a fundamental misunderstanding of supply side economics. No one gave the rich anything. They simply did not take as much from the rich when they invested their money into job creating enterprises.

THAT is how the "trickle down" works. The jobs created by such have been high paying and plentiful.

I know most of you don't remember anything other than this so it seems normal. I know anything before 1980 is ancient history to most of you. But we should learn from history. Wouldn't you like to have a national dream and goal at least once in your life? Before that can come we need an economy that can support dreams and goals. This we have not had for 26 years.

I actually remember Nixon. :eek:


1980 seems like yesterday. :(

Buwh... US government economics confuses me.

According to http://www.publicdebt.treas.gov , since Bush junior took office the US national debt has increased by about 2.5 trillion dollars, yet the interest paid on the debt each year has decreased by 7 billion dollars (having been as low as 40 billion less in 2003).
http://www.publicdebt.treas.gov/opd/opdint.htm

Well I guess that's one way to reduce the defiect. Reduce interest rates.

It seems that US economic recovery was as much dependent on low interest rates as it was tax cuts. With interest rates being slashed in 2001 and the US economy beginning to respond to these rate cuts in 2002.
http://www.bankrate.com/brm/news/fed/key-interest-rates.asp
http://www.heritage.org/Research/Economy/images/wm_601_chart3.gif

It's my ignorant guess, but I suppose low interest rates would be more of a stimulant to the economy than low tax rates. After all you only pay corporation taxes if your company earns a profit, whereas you're stuck repaying the loan whether or not your company is doing well or not. Simply taxes affect the size of entrepreneurial opportunity, whereas interest rates affect the size of the risk than the entrepreneur is taking.

Interest rates have gone up considerably in the last couple of years. Sooner or later the US economy will feel the effects. Consumers will have less to spend as the interest payments on their mortgages increase and growth will slow as businesses become less willing to risk their capital in such an economy with high interest rates and lower consumer confidence.

But yeah, that's a pretty neat trick of the Bush administration to increase the deficeit by over 30%, but reduce interest payments on the debt.

PS. It also amuses me that people become so enthused by a slightly smaller deficit. Screw actually managing to balance the budget. :p

[QUOTE]



I actually remember Nixon. :eek:


1980 seems like yesterday. :(
I campaigned door-to-door for Nixon. I even campaigned for and met Bobby Kennedy. I feel sorry for anyone that doesn't remember 1968. The best of times and the worst of times. :) :(

Surely, all this talk about how well the US economy is doing is all smoke and mirrors? Somewhere along the line, someone will get the bill for all of this?

America's Total Debt Report - Update 2005 (http://www.financialsense.com/editorials/hodges/2005/0313.html)
$40 Trillion - and Soaring

I continue to believe that Good Lifes brings a realistic perspective to this topic.


And as a percentage of GDP????? Not all that significant.

[QUOTE=USalpenstock]
I campaigned door-to-door for Nixon. I even campaigned for and met Bobby Kennedy. I feel sorry for anyone that doesn't remember 1968. The best of times and the worst of times. :) :(


I was too young to campaign for Nixon, And I don't remember Bobby Kennedy so I guess you got me on that "geezer" thingy!:D