NationStates Jolt Archive

If 70% of the national debt came about under the leadership of Reagan, Bush, and Bush, what exactly is the definition of "Conservative"?


http://news.yahoo.com/comics/doonesbury;_ylt=Ajn_fuBcPjkpmCJqgrzQk2cDwLAF


Hey, I'm old enough to slide out, but you in the teens and twenties.......good luck! You get what you vote for.

Well Bush has successful managed to turn a multi-trillion dollar surplus under Clinton into a multi-trillion dollar deficit.

If 70% of the national debt came about under the leadership of Reagan, Bush, and Bush, what exactly is the definition of "Conservative"?


http://news.yahoo.com/comics/doonesbury;_ylt=Ajn_fuBcPjkpmCJqgrzQk2cDwLAF


Hey, I'm old enough to slide out, but you in the teens and twenties.......good luck! You get what you vote for.

Yep and FDR, Truman, Eisenhower, JFK, LBJ, Nixon, Ford, and Carter had nothing to do with it. Yea right :rolleyes: And that still does not look at those before FDR too.

Well Bush has successful managed to turn a multi-trillion dollar surplus under Clinton into a multi-trillion dollar deficit.

Deficit=/=debt

We are talking about the national debt and not the budget :rolleyes: Oh and the deficit is in the billions and not trillions :rolleyes:

Well Bush has successful managed to turn a multi-trillion dollar surplus under Clinton into a multi-trillion dollar deficit.

It wasn't exactly that much.

Still, tax and spend vs. spend and spend. I'll take the former.

Yep and FDR, Truman, Eisenhower, JFK, LBJ, Nixon, Ford, and Carter had nothing to do with it. Yea right :rolleyes: And that still does not look at those before FDR too.
Well, yes. 70% was accumulated under those GOP presidents. That's the point.

Well, you know the saying. You've got to spend money to ...run the nation into the ground?

If 70% of the national debt came about under the leadership of Reagan, Bush, and Bush, what exactly is the definition of "Conservative"?


http://news.yahoo.com/comics/doonesbury;_ylt=Ajn_fuBcPjkpmCJqgrzQk2cDwLAF


Hey, I'm old enough to slide out, but you in the teens and twenties.......good luck! You get what you vote for.

You know, I've been saying this for years(Although I didn't realize the debt was 9 billion, I thought it was around 7-8).

When Bush took office, the debt was at around 2.5 trillion.

In a mere seven years, Bush has more than tripled the debt. For the entire History of the US, from 1776-2000.

That's 224 years to accumulate 2.5 trillion(Granted, government spending was miniscule in for the first 100-150 years compared to today, but that still leaves about 100 worth). And only seven to accumulate 6.5 trillion dollars more.

Yay for faux conservatism.(Actual fiscal conservatism isn't bad-Bushevik/Reaganomics conservatism isn't exactly what would I would call conservative).

Yep and FDR, Truman, Eisenhower, JFK, LBJ, Nixon, Ford, and Carter had nothing to do with it. Yea right :rolleyes: And that still does not look at those before FDR too.

http://zfacts.com/p/318.html

As a percent of GDP the national debt was going down through the years of "liberal" presidents. Yes, the total debt was going up. But under the "conservative" presidents both total debt and as per cent of GDP have jumped considerably.

To be fair, there are extenuating circumstances for all three. The rosy
budget projections of the late 1990's were ultimately a sham, driven by the utterly unreasonable expectations that the stock market boom of the 1990's, and in particular the NASDAQ bubble of the late 1990's, would continue in to the foreseeable future. These projections, of course, were one of the main justifications behind the biggest initial round of tax cuts in 2001; when the revenue stream bottomed in 2001-2002, tax collections were far below where they were projected to be. In fact, the NASDAQ would have to be in the 20-25,000 range in order for it to be anywhere near the level needed to justify the budget projections for 2007 from the late 1990's. It's currently 10% of that.

That's not to say Clinton deserves zero praise for his policies in the 1990's. Careful management of the revenue windfall driven by the strong economy of the period as well as fiscal responsibility on all sides of government drove up tax revenues and ultimately balanced the budget without any major increases in the tax burden. It was the perfect combination of government moderation and strong economic growth.

Well, yes. 70% was accumulated under those GOP presidents. That's the point.

Also have to remember that during most of that stretch, we were also in a cold war with the USSR and had the Korean War, Vietnam War, reconstructing Japan and Germany...

Well, you know the saying. You've got to spend money to ...run the nation into the ground?
I can't see that the money spent on Iraq will be made up from it anytime soon, even if the neocon think tanks thought so.

It wasn't exactly that much.

Still, tax and spend vs. spend and spend. I'll take the former.

I think you mean tax and spend vs. borrow and spend.

Or

We will pay for what we get vs. sc--- our children and grandchildren.

When Bush took office, the debt was at around 2.5 trillion.

No, actually, when he entered office it was around $5.7 trillion or so. Bush has only added $3.3 trillion to that total, a mere 58% increase.

Mind you, of course, the debt as a share of GDP is still lower than it was when Clinton first took office. This is a good thing, because it is testament not only to the low inflation and solid economic performance of the past 15 years but also as the dedicated effort to reduce and contain the deficit under the Clinton administration.

Also have to remember that during most of that stretch, we were also in a cold war with the USSR and had the Korean War, Vietnam War, reconstructing Japan and Germany...

We also went to the moon and built the interstate highway system. Now we don't even repair the bridges.

Also have to remember that during most of that stretch, we were also in a cold war with the USSR and had the Korean War, Vietnam War, reconstructing Japan and Germany...
The US didn't have to take part in Cold War, it was conscious choice by those who believe in foreign nation building and interventionism. Thus it was conscious adventurism.

No, actually, when he entered office it was around $5.7 trillion or so. Bush has only added $3.3 trillion to that total, a mere 58% increase.

Mind you, of course, the debt as a share of GDP is still lower than it was when Clinton first took office. This is a good thing, because it is testament not only to the low inflation and solid economic performance of the past 15 years but also as the dedicated effort to reduce and contain the deficit under the Clinton administration.

That's a little bit misleading. As a percent of when Clinton "took" office. But it's much higher than when he "left" office.

http://zfacts.com/p/318.html

The US didn't have to take part in Cold War, it was conscious choice by those who believe in foreign nation building and interventionism. Thus it was conscious adventurism.

And neither did the Soviets. It was a conscious act of imperialism on their side as well.

We also went to the moon and built the interstate highway system. Now we don't even repair the bridges.

And alot of that stuff is done at the State level and not at the federal level.

The US didn't have to take part in Cold War, it was conscious choice by those who believe in foreign nation building and interventionism. Thus it was conscious adventurism.

And neither did the Soviets. It was a conscious act of imperialism on their side as well.

And it is a toss up on who started the cold war.

That's a little bit misleading. As a percent of when Clinton "took" office. But it's much higher than when he "left" office.

http://zfacts.com/p/318.html

Well, that's what I'm saying. The debt is still at or below its most recent peak level in the early 1990's.

And alot of that stuff is done at the State level and not at the federal level.

And the Feds have dumped massive "mandates" on the states so the Feds wouldn't have to borrow even more.

Also have to remember that during most of that stretch, we were also in a cold war with the USSR and had the Korean War, Vietnam War, reconstructing Japan and Germany...
Um... Nope. Vietnam, Korea, and the reconstruction of both Germany and Japan were well over by the time Regan took office. The Cold War ended on the watch of President Bush Sr. and has been over for a long time by the time the current President Bush took office.

And it is a toss up on who started the cold war.

It was pretty much simultaneous. Neither ideology could abide the other and it was only a matter of time before mutual suspicions turned to outright hostility in the aftermath of WWII.

And the Feds have dumped massive "mandates" on the states so the Feds wouldn't have to borrow even more.

That's where the Federal Highway funding bills come in. You know the bills that give money to states to make sure that the highways are up to snuff.

Um... Nope. Vietnam, Korea, and the reconstruction of both Germany and Japan were well over by the time Regan took office. The Cold War ended on the watch of President Bush Sr. and has been over for a long time by the time the current President Bush took office.

Thank you for proving me right.

Thank you for proving me right.
I did? Can't say that I remember that, I was pointing out that from all the data we have, yes, Doonesbury is right on target and that most of the debt accumulated under Regan, Bush, and Bush. So your comment about previous presidents makes no sense.

But the percent of the "matching" by the states has increased. And the "mandates" aren't just for roads but nearly every area of spending. Except for perhaps war.

Most states have balanced budgets or are running surpluses, and have been for a while...it was only a matter of time before the Feds started to look for ways to dip in to that pool of funds for their own use.

That's where the Federal Highway funding bills come in. You know the bills that give money to states to make sure that the highways are up to snuff.

But the percent of the "matching" by the states has increased. And the "mandates" aren't just for roads but nearly every area of spending. Except for perhaps war.

That's where the Federal Highway funding bills come in. You know the bills that give money to states to make sure that the highways are up to snuff.
Wait a minute, you just said that it's a state responsibility so broken bridges should not be laid at the feet of the federal government, but now you're claiming federal involvement. Which is it?

I did? Can't say that I remember that, I was pointing out that from all the data we have, yes, Doonesbury is right on target and that most of the debt accumulated under Regan, Bush, and Bush. So your comment about previous presidents makes no sense.

Except for the fact of the past. One must look at the past in order to see the decisions made in the present and decisions to come in the future. The past dictates these events and one must remember them.

Between WWII through the present, we've had a series of events that lead to where we are today.

Korea and 'Nam jacked up our debt. Rebuilding Japan and Germany did the samething. Then you had the creation of NASA and the NSA and the USAF and the CIA. Then you had the death stroke of the USSR when Reagan went on his modernization kick of the US military. President Bush to increased that and let us not forget the Gulf War. Then you factor in Clinton, though the debt did not decrease, still contributed with his actions in Kosovo. Bush did worse though when 9/11 went down and money was dispersed. Then we had the Afghan War. Then we had the Iraq War, then we have Katrina. Let us not also forget natural disasters under other presidents to. Everything adds up.

Actually the debt is nearly twice as high as the government admits. The "trust" funds, like social security, don't really exist. The money was "loaned" to the general fund and spent. So when I and all my baby boomer buddies retire the general fund will have to pay back those notes.

In other words, there's enough of us baby boomers to vote the pay check right out of our children and grandchildren's pockets. And since we vote and young people don't vote. We can do exactly that.

Thanks suckers.

Wait a minute, you just said that it's a state responsibility so broken bridges should not be laid at the feet of the federal government, but now you're claiming federal involvement. Which is it?

Both.

Federal money is given to the states to fix the nation's highways.

Except for the fact of the past. One must look at the past in order to see the decisions made in the present and decisions to come in the future. The past dictates these events and one must remember them.

Between WWII through the present, we've had a series of events that lead to where we are today.

Korea and 'Nam jacked up our debt. Rebuilding Japan and Germany did the samething. Then you had the creation of NASA and the NSA and the USAF and the CIA. Then you had the death stroke of the USSR when Reagan went on his modernization kick of the US military. President Bush to increased that and let us not forget the Gulf War. Then you factor in Clinton, though the debt did not decrease, still contributed with his actions in Kosovo. Bush did worse though when 9/11 went down and money was dispersed. Then we had the Afghan War. Then we had the Iraq War, then we have Katrina. Let us not also forget natural disasters under other presidents to. Everything adds up.

It adds into total debt and makes the percent that Reagan and the Bush's spent a smaller percent, not a larger one.

What this comes down to is "supply side" has weakened the economy so there simply isn't the money to live as we did before 1980.

It adds into total debt and makes the percent that Reagan and the Bush's spent a smaller percent, not a larger one.

What this comes down to is "supply side" has weakened the economy so there simply isn't the money to live as we did before 1980.

Supply and demand does tend to play havoc with the economy :D

Most states have balanced budgets or are running surpluses, and have been for a while...it was only a matter of time before the Feds started to look for ways to dip in to that pool of funds for their own use.

So the Feds get elected on "we cut taxes" by forcing the states to either increase taxes or not cut state taxes. That's playing musical chairs because ultimately all of the taxes comes out of the same pockets. Except the states use sales tax which bears heavier on the poor.

Actually the debt is nearly twice as high as the government admits. The "trust" funds, like social security, don't really exist. The money was "loaned" to the general fund and spent. So when I and all my baby boomer buddies retire the general fund will have to pay back those notes.

Actually, the way the government calculates the deficits for each year would be criminal if a major corporation were to use them for its expense calculation The form of cash-based accounting it uses violates the principles of GAAP and is a serious violation. The company MicroStrategy, whose accounting scandal in 2000 played a central role in bursting the dot-com bubble, is a classic example of the very same thing the government is currently doing.

A multi-trillion dollar business using an illegal accounting method...no business on Earth could get away with the kinds of things the government does.

Supply and demand does tend to play havoc with the economy :D

"Supply side" has to do with the supply of money not the supply and demand of goods and services. It was a theory that Reagan adopted. Also known as tinkle down because of what it does to the poor and middle. The idea was if you make the rich richer, they will take care of the poor. (Bush 1 called it "voodoo economics" but after becoming president didn't change it.

So the Feds get elected on "we cut taxes" by forcing the states to either increase taxes or not cut state taxes. That's playing musical chairs because ultimately all of the taxes comes out of the same pockets. Except the states use sales tax which bears heavier on the poor.

Exactly. What the government is doing to the states is just like what Qwest Communications or Global Crossing did; they used their own subsidiaries to book sales revenue that didn't really exist.

The government is a model par excellence of all the major corporate scandals of recent history.

Except for the fact of the past. One must look at the past in order to see the decisions made in the present and decisions to come in the future. The past dictates these events and one must remember them.

Between WWII through the present, we've had a series of events that lead to where we are today.

Korea and 'Nam jacked up our debt. Rebuilding Japan and Germany did the samething. Then you had the creation of NASA and the NSA and the USAF and the CIA. Then you had the death stroke of the USSR when Reagan went on his modernization kick of the US military. President Bush to increased that and let us not forget the Gulf War. Then you factor in Clinton, though the debt did not decrease, still contributed with his actions in Kosovo. Bush did worse though when 9/11 went down and money was dispersed. Then we had the Afghan War. Then we had the Iraq War, then we have Katrina. Let us not also forget natural disasters under other presidents to. Everything adds up.
Except that the LOWEST point it was at was during the Carter Administration, PAST everything you mentioned. So... your point makes no sense.

"Supply side" has to do with the supply of money not the supply and demand of goods and services. It was a theory that Reagan adopted. Bush 1 called it "voodoo economics" but after becoming president didn't change it.

I see sarcasm was lost on ya.

Except that the LOWEST point it was at was during the Carter Administration, PAST everything you mentioned. So... your point makes no sense.

That's because you are not looking at the money spent on all projects and reconstruction efforts.

Well guys...its been fun but it is 130AM and I am going to bed.

That's because you are not looking at the money spent on all projects and reconstruction efforts.
http://zfacts.com/p/318.html

Where are YOU looking?

What this comes down to is "supply side" has weakened the economy so there simply isn't the money to live as we did before 1980.
Government debt is not a very good indicator of economic performance, you know. It's an indicator of fiscal policy, and that's pretty much it.

If you want to see whether or not Reagan's government was successful, economically speaking, you'd need to look at things like GNP or GDP growth, unemployment, inflation, perhaps the balance of payments and so on. And if you're that way inclined poverty figures as well. I'm not a big fan of inequality measurements because if someone gets richer and no one gets poorer inequality goes up but no one is worse off.

Plus, before Reagan the top personal income tax rates were in the 70% range. Doesn't that just strike you as being a bit off kilter?

"Supply side" has to do with the supply of money not the supply and demand of goods and services.
No, it does have to do with the supply of goods and services.

Traditionally there was Keynesian macroeconomics, which held that there was Aggregate Demand and Aggregate Supply. AS was more or less taken as a given and any policies targeting unemployment and GDP growth were aimed at AD. So for example the government could spend more to raise the demand for goods and services in the economy.

Supply side policies are those that operate in a similar framework but target the supply of goods and services instead. You could get rid of regulations, lower corporate tax rates and reduce other barriers for business, and that should increase AS and be a more sustainable motor for growth because rather than demand exceeding capacity you would have a growth in capacity. So there's less inflationary pressures.

Reagan did use some supply side policies, but he also tried to strengthen aggregate demand, namely through the tax cuts. It's a little strange that tax cuts seem so connected in people's heads with supply side economics/Reaganomics/Voodoo economics, because income tax cuts are a classic Keynesian option.

Monetary policy (ie manipulation of interest rates through the money supply) is a different kettle of fish.

Also known as tinkle down because of what it does to the poor and middle. The idea was if you make the rich richer, they will take care of the poor.
No, the idea is that more stuff is being produced which should reduce prices, offer more and better employment opportunities, reduce the number of people dependent on welfare and offer more opportunities for people to start their own businesses.

I think the short-term value of that is questionable. In the long term though there's no question that greater productive capacity improves standards of living. Just look at China.

I think the short-term value of that is questionable. In the long term though there's no question that greater productive capacity improves standards of living. Just look at China.
You mean the country where a small percentage is currently buying luxury items and living high on the hog whereas most of its population is sunk into poverty and hasn't experienced anything from their country's current explosive growth?

You mean the country where a small percentage is currently buying luxury items and living high on the hog whereas most of its population is sunk into poverty and hasn't experienced anything from their country's current explosive growth?
Yeah, that one. Because that small percentage is growing rapidly, and the number of people living on less than $2 a day has decreased faster in China than in any other country on earth. The number of people in absolute poverty has fallen from 250 million in 1978 to 34 million in 2002. I think that's a pretty decent result.

http://www.adb.org/Documents/Speeches/2000/ms2000025.asp
http://www.china.org.cn/english/2003/Feb/56694.htm

But for a more in-depth look that also illustrates some of the bad sides and areas where there is less success, there's a big pdf file here: www.imf.org/external/np/apd/seminars/2003/newdelhi/angang.pdf

Actually the debt is nearly twice as high as the government admits. The "trust" funds, like social security, don't really exist. The money was "loaned" to the general fund and spent. So when I and all my baby boomer buddies retire the general fund will have to pay back those notes.

In other words, there's enough of us baby boomers to vote the pay check right out of our children and grandchildren's pockets. And since we vote and young people don't vote. We can do exactly that.

Thanks suckers.
Totally sigworthy.

http://zfacts.com/p/318.html

Where are YOU looking?

At that very attractive exit.

http://forums.jolt.co.uk/showpost.php?p=13018583&postcount=43
= *Corneliu Maneuver*

At that very attractive exit.

http://forums.jolt.co.uk/showpost.php?p=13018583&postcount=43
= *Corneliu Maneuver*


So one's not allowed to sleep :rolleyes:

Yep and FDR, Truman, Eisenhower, JFK, LBJ, Nixon, Ford, and Carter had nothing to do with it. Yea right :rolleyes: And that still does not look at those before FDR too.
http://zfacts.com/metaPage/lib/National-Debt-GDP.gif
yea right. The debt is all due to those guys who manage to sucessfully reduce it as a % of GDP for 40 years.:rolleyes:

Just look at China.

What China did was install a one child policy. That consolidated the wealth of the grandparents into one child. That gave that child enough to start a business or invest. This is the same thing the plague did in Europe. Whoever lived through the plague had enough money to start to build business.

So in both China and Europe growth began at the bottom not by increasing the wealth at the top hoping the top would help the bottom. The wealth at the top didn't tinkle down to the poor in the dark ages and the wealth at the top isn't tinkling down to the poor in "supply side".

If you want to raise an economy you put money in at the bottom. Those at the bottom spend the money. That increases demand which the top fills. But before the top gets it, it ripples through the economy and creates wealth all the way along.

No, actually, when he entered office it was around $5.7 trillion or so. Bush has only added $3.3 trillion to that total, a mere 58% increase.

Mind you, of course, the debt as a share of GDP is still lower than it was when Clinton first took office. This is a good thing, because it is testament not only to the low inflation and solid economic performance of the past 15 years but also as the dedicated effort to reduce and contain the deficit under the Clinton administration.

Just a point, out of the deficit, a lot of it isn't actually money. Most of it is future liabilities. For example, public servant superannuation. Australia and New Zealand (plus a few other countries) unlike the US, have been putting surplus's away to make up for this future liability; so whilst the US is going through this credit crunch, us down under have rock solid economies, healthy surplus's, tax rates decreasing, and perish the thought, health systems that don't ask for credit cards for upfront payments.

Yep and FDR, Truman, Eisenhower, JFK, LBJ, Nixon, Ford, and Carter had nothing to do with it. Yea right :rolleyes: And that still does not look at those before FDR too.

Have you no idea what "70%" means? It means that the 30% left over is in teh hands of the remaining presidents. Given that THREE out of FORTY-THREE presidents (7%) are responsible for 70% of the debt, that's pretty staggering. Such was the point of Trudeau's 'toon.

Most states have balanced budgets or are running surpluses, and have been for a while...it was only a matter of time before the Feds started to look for ways to dip in to that pool of funds for their own use.

Most states have balanced budgets? On which planet?

What China did was install a one child policy. That consolidated the wealth of the grandparents into one child. That gave that child enough to start a business or invest. This is the same thing the plague did in Europe. Whoever lived through the plague had enough money to start to build business.

So in both China and Europe growth began at the bottom not by increasing the wealth at the top hoping the top would help the bottom. The wealth at the top didn't tinkle down to the poor in the dark ages and the wealth at the top isn't tinkling down to the poor in "supply side".

If you want to raise an economy you put money in at the bottom. Those at the bottom spend the money. That increases demand which the top fills. But before the top gets it, it ripples through the economy and creates wealth all the way along.

So, you're basically saying that we either need to limit offspring (a good idea, if you ask me, considering how expensive children are to raise, despite being cheap to produce), or we need a nice pandemic to thin the herd and reset the economy. Got it, Jonathan Swift.

So, you're basically saying that we either need to limit offspring (a good idea, if you ask me, considering how expensive children are to raise, despite being cheap to produce), or we need a nice pandemic to thin the herd and reset the economy. Got it, Jonathan Swift.

Kind of a different subject. But what the US has done is just the opposite. In order to drive down wages over the last 27 years, a massive population has been imported. Through supply and demand wages have dropped and the common person has less to start a business.

Also have to remember that during most of that stretch, we were also in a cold war with the USSR and had the Korean War, Vietnam War, reconstructing Japan and Germany...

Most of which were pointless aggressions by the US.

Most of which were pointless aggressions by the US.

Excuse me what? I can probably grant you 'Nam but Korea and World War II? Hardly.

What China did was install a one child policy. That consolidated the wealth of the grandparents into one child. That gave that child enough to start a business or invest.
Fine, then look at Taiwan. Or South Korea, or Malaysia, or any other economy that's been successful over the second half of the 20th century.

Ultimately it's productive capacity that is required to produce the goods and services that raise the standard of living.

I definitely agree that decent saving rates are vital (or, alternatively you could attract a lot of foreign direct investment) to expand productive capacity. But I wasn't so much making a point about supply side economics as about the fact that restricting the expansion of supply is a bad idea in the long run.

If you want to raise an economy you put money in at the bottom. Those at the bottom spend the money. That increases demand which the top fills. But before the top gets it, it ripples through the economy and creates wealth all the way along.
Again: the income tax cuts were not supply side economics. Deregulation is and corporate tax cuts are.

The point is that putting money at the bottom (ie Keynesian AD management) doesn't expand productive capacity and can't move the economy away from some equilibrium growth rate. It always returns because it ends up raising prices and thus the interest rate increases, pushing demand back. It doesn't really matter whether you give the money to the poor or to the rich, it'll still be spend somewhere. The only difference might be that the rich are more likely to save it than the poor, so you could try to increase the savings rate and therefore the amount available to invest in new machines and stuff.

The reason Reagan and Bush targeted higher tax brackets was firstly because they thought taxes were too high from an ideological point of view rather than an economic one (and in Reagan's time you'd have to agree that they definitely were), and secondly because the idea in AD management is to add a certain lump sum to people's spending every year. It's a fact of life that the rich pay the most taxes, and that by cutting taxes for them you can generate a much larger lump sum than when you cut taxes for the poor.

Conservatives try to return to the old times. Such as when they wore loincloths and the daily activity was "club critter to death and eat it".

Well guys...its been fun but it is 130AM and I am going to bed.
amazing how often and regular 'real life' interferes with your debating - and how coincidently it always does when you're getting pwned.

Yeah, that one. Because that small percentage is growing rapidly, and the number of people living on less than $2 a day has decreased faster in China than in any other country on earth. The number of people in absolute poverty has fallen from 250 million in 1978 to 34 million in 2002. I think that's a pretty decent result.

http://www.adb.org/Documents/Speeches/2000/ms2000025.asp
http://www.china.org.cn/english/2003/Feb/56694.htm

But for a more in-depth look that also illustrates some of the bad sides and areas where there is less success, there's a big pdf file here: www.imf.org/external/np/apd/seminars/2003/newdelhi/angang.pdf
couple of points:
1st, their definition, according to your first article, of absolute poverty is $84US /year, which is so low that it's unsurprising to find 'only' 20 million live below that level.
2nd, this is official PRC numbers we're talking about. In which case doubling anything negative (and 1/2'ing positive) numbers is prob a good idea. Look at the numbers of slaves found recently working in kilns in just one province - I bet none of them were counted in their absolute poverty figures.
3rd, the official average income in Rural China (were around 80% still live) is 200RMB /month (~$25US). This means it's prob closer to $100RMB ($13US).

thus, there's still a helluva lot of poverty in China and most of the new wealth is getting to them.

couple of points:
1st, their definition, according to your first article, of absolute poverty is $84US /year, which is so low that it's unsurprising to find 'only' 20 million live below that level.
Is that price adjusted, or did you just take the exchange rates?

2nd, this is official PRC numbers we're talking about.
It's just an example. I think we can both agree that without the expansion of productive capacity, we wouldn't have seen as many people lifted out of poverty and the growth of a well-off middle class.

If you want you can pick any other successful economy.

Plus, before Reagan the top personal income tax rates were in the 70% range. Doesn't that just strike you as being a bit off kilter?


That isn't 70% of everything. That's 70% of the income over and above a certain level. I don't remember that level but it was the income over millions of dollars. In other words, the person paid 10% on the first X thousands, then 20% on the next X thousands, then 30% on the next X thousands, etc. So the actual percent of the total income is far less.

The whole idea is taxes are not charged on money needed for basic expenses. Taxes are charged on that money over and above the basics. It was recognized that rich people have higher basic expenses than poor people. Their house costs more, etc. But above a certain point more of the income is disposable and therefore taxable.

Under the current virtual flat tax, the middle pays at nearly the same rate as the top. So the taxes are cutting into the middles basic expenses and the rich aren't paying any extra on the money above their living expenses.

I think it is worthy to note, (if "conservative" means the way things were done in the past) that for most of the history of the US, ONLY the rich payed taxes. Those below the top 20% payed no taxes. The poor and middle didn't pay taxes because it was felt they needed their money for basic expenses and to develop small businesses. Those that had been winners in the economy felt that taxes were their way of paying back the country for allowing them to prosper. Besides, the poor and middle would buy things produced by the rich so the rich would eventually get the money and it would be taxed at that point.

That isn't 70% of everything. That's 70% of the income over and above a certain level. I don't remember that level but it was the income over millions of dollars. In other words, the person paid 10% on the first X thousands, then 20% on the next X thousands, then 30% on the next X thousands, etc. So the actual percent of the total income is far less.
I know, but my question doesn't change. Is there nothing that strikes you a bit odd about the idea that you do a dollar worth of work, and all you get is 30c?

The whole idea is taxes are not charged on money needed for basic expenses. Taxes are charged on that money over and above the basics. It was recognized that rich people have higher basic expenses than poor people. Their house costs more, etc. But above a certain point more of the income is disposable and therefore taxable.
Well, the definition of disposable income is that which is left over after taxes, but nevermind.

If you're going to make an economic argument on tax cuts for the rich, you're essentially engaging in a trade off. There is a choice between that money being available for the rich to spend and invest, or it being part of the government's budget to spend and invest.

You'd probably be happy to assume that the government's ideas of spending the money are more directly going to improve the living standards of the poor. Depending on the government in question, I'd agree with you at times.

On the other hand we know that governments are not very good at investing in economically sustainable ventures. When governments invest in infrastructure it generally becomes a big mess of interest groups, groupthink and reckless spending. That's more obvious the bigger the project gets (like the Three Gorges Dam in China).

Furthermore, government doesn't usually invest in productive capacity or things that earn significant profits. As a result, ways of combining resources that could have yielded greater economic benefit are foregone in order to change the distribution of economic surpluses. These surpluses cannot be spent on anything, they can't end up in anyone's pockets and they can't be added to GDP.

So a decent case can be made that in the long term the way government spends money is not improving the capital base of the economy as much and therefore limits the potential long-term growth rate. People who invest money with profits in mind instead look for returns, and returns are ultimately a reflection of how efficiently the resources in question are allocated. So on average and over time, private individuals and firms are better investors than the government.

In conclusion, even if a rich person's money isn't used to satisfy basic needs, it still serves a vital purpose. If government taxes that money, it takes resources away from this purpose, which has consequences for the future of the economy. It's a trade-off between the positive effects of improving the lives of the poor in the immediate future through welfare, healthcare and the like, and the negative effects of the capital growth rate falling over time meaning the size of the whole pie is reduced, regardless of the distribution.

Unfortunately neither side usually presents this dilemma honestly and openly.

I think it is worthy to note, (if "conservative" means the way things were done in the past) that for most of the history of the US, ONLY the rich payed taxes. Those below the top 20% payed no taxes.
Well, that would be worth a look, but you'd also have to look at the size of the government budget back then (virtually nothing) and the welfare and income redistribution programs in force (none).

I know, but my question doesn't change. Is there nothing that strikes you a bit odd about the idea that you do a dollar worth of work, and all you get is 30c?


Well, the definition of disposable income is that which is left over after taxes, but nevermind.

If you're going to make an economic argument on tax cuts for the rich, you're essentially engaging in a trade off. There is a choice between that money being available for the rich to spend and invest, or it being part of the government's budget to spend and invest.

You'd probably be happy to assume that the government's ideas of spending the money are more directly going to improve the living standards of the poor. Depending on the government in question, I'd agree with you at times.

On the other hand we know that governments are not very good at investing in economically sustainable ventures. When governments invest in infrastructure it generally becomes a big mess of interest groups, groupthink and reckless spending. That's more obvious the bigger the project gets (like the Three Gorges Dam in China).

Furthermore, government doesn't usually invest in productive capacity or things that earn significant profits. As a result, ways of combining resources that could have yielded greater economic benefit are foregone in order to change the distribution of economic surpluses. These surpluses cannot be spent on anything, they can't end up in anyone's pockets and they can't be added to GDP.

So a decent case can be made that in the long term the way government spends money is not improving the capital base of the economy as much and therefore limits the potential long-term growth rate. People who invest money with profits in mind instead look for returns, and returns are ultimately a reflection of how efficiently the resources in question are allocated. So on average and over time, private individuals and firms are better investors than the government.

In conclusion, even if a rich person's money isn't used to satisfy basic needs, it still serves a vital purpose. If government taxes that money, it takes resources away from this purpose, which has consequences for the future of the economy. It's a trade-off between the positive effects of improving the lives of the poor in the immediate future through welfare, healthcare and the like, and the negative effects of the capital growth rate falling over time meaning the size of the whole pie is reduced, regardless of the distribution.

Unfortunately neither side usually presents this dilemma honestly and openly.


Well, that would be worth a look, but you'd also have to look at the size of the government budget back then (virtually nothing) and the welfare and income redistribution programs in force (none).

Obviously if we are talking of investing the private sector is better. But government doesn't invest, it provides services. Eventually someone will have to pay for those services. Will that be the generation that used the services or their children and grandchildren? If you pick the latter as we have done over the last 27 years, then you are saying that this generation is so greedy for the good life that it is willing to steal from the future to do it.

When it comes to who pays taxes, it is a decision of taking from the basics of the poor and middle and taking from small business (usually owned by a middle class worker not incorporated) which is the area of business that creates the most jobs by far, or you can take from the rich (who's life style won't change as they are already spending all they want to spend) which will lower the cost of stock but do little else when it comes to helping or hurting the economy.

Obviously if we are talking of investing the private sector is better. But government doesn't invest, it provides services.
In which case my argument is even more powerful.

Eventually someone will have to pay for those services. Will that be the generation that used the services or their children and grandchildren? If you pick the latter as we have done over the last 27 years, then you are saying that this generation is so greedy for the good life that it is willing to steal from the future to do it.
Unfortunately, that's how the baby boomer generation works. Always has.

...or you can take from the rich (who's life style won't change as they are already spending all they want to spend) which will lower the cost of stock but do little else when it comes to helping or hurting the economy.
But that's my point: it does hurt the economy in the long run. Even if money isn't spent on goods and services, it sits in accounts, managed funds and private equity firms which use it to invest in stuff.

Saving is required to invest in increasing capital stock, and can come either from home or from abroad. The reason countries like Singapore and South Korea could grow so fast is because they encouraged saving through things like forced saving schemes and tax deductions on long-term accounts.

Taxing those with the capacity to save very highly has the opposite effect in that it reduces the total amount of saving available to be invested in future productive capacity. If you're now saying that government doesn't invest at all (or almost, anyways), then the loss of future potential is huge.

As I said, it's a trade-off between short-term gain and long-term pain.

which will lower the cost of stock but do little else when it comes to helping or hurting the economy.

The financial services sector is one of the most economically important in our country. It generates a lot of capital and personal income that goes a long way towards driving economic growth in other sectors. A drop in stock prices can wipe out trillions of dollars, dollars that would be spent on things like corporate and public retirement funds for workers, individual retirement funds, income, and even capital raised by new businesses when they have their IPOs. The stock market is a vital part of our economy and equally as important as manufacturing, agriculture, or any other component.

We shouldn't penalize anyone for being successful, but rather collect taxes that accurately reflect their place in society. The wealthy benefit the most from a healthy economy, and so should contribute a larger share of the tax revenue needed to produce those benefits.

Well, that's what I'm saying. The debt is still at or below its most recent peak level in the early 1990's.
That is really not saying much is it now?

http://zfacts.com/metaPage/lib/National-Debt-GDP.gif

From Wiki ---History of income tax. (before income tax the government ran on tariffs which only the rich paid because they were the only ones buying imported goods)

The first federal statute imposing the legal obligation to pay a federal income tax was adopted by Congress in 1862, to pay for the Civil War. The 1862 law levied a 3% tax on incomes above $600, rising to 5% for incomes above $10,000.

Congress re-adopted the income tax that same year, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000.

At first the income tax was incrementally expanded by the Congress of the United States, and then inflation automatically raised most persons into tax brackets formerly reserved for the wealthy until income tax brackets were adjusted for inflation. Income tax now applies to almost ⅔ of the population.

Well Bush has successful managed to turn a multi-trillion dollar surplus under Clinton into a multi-trillion dollar deficit.

Clinton kept appointing Alan Greenspan and his policies which gave us the high tech bubble and now the housing bubble. Thanks!

Clinton kept appointing Alan Greenspan and his policies which gave us the high tech bubble and now the housing bubble. Thanks!

Greenspan is probably one of the most mediocre Fed chairmen in history. He road Volcker's coattails (reaping the benefits of Volcker's policies) and the oil and commodities price collapses said policies helped bring about (which kept inflation low outside of Fed policy), with the result being that the economy was primed for growth regardless of the Fed's actions.

Actually, pretty much all Greenspan did was fan the NASDAQ bubble and the housing bubble. Bernanke's a world better than he ever was.

Conservatives try to return to the old times.
Wrong. Reactionaries do that. Conservatives try to preserve the current political system, thus 'conserving' it. Moderates favor progressive change, liberals more active change, and Radicals a complete change whatsoever. So in a few decades 'conservative' may mean something completely different than it does today. (I'm not saying the label is correct, but rather the technical definition).

I think that we should make an effort at least to fix our current fiscal situation.

In which case my argument is even more powerful.


Unfortunately, that's how the baby boomer generation works. Always has.


But that's my point: it does hurt the economy in the long run. Even if money isn't spent on goods and services, it sits in accounts, managed funds and private equity firms which use it to invest in stuff.

Saving is required to invest in increasing capital stock, and can come either from home or from abroad. The reason countries like Singapore and South Korea could grow so fast is because they encouraged saving through things like forced saving schemes and tax deductions on long-term accounts.

Taxing those with the capacity to save very highly has the opposite effect in that it reduces the total amount of saving available to be invested in future productive capacity. If you're now saying that government doesn't invest at all (or almost, anyways), then the loss of future potential is huge.

As I said, it's a trade-off between short-term gain and long-term pain.

Saving money is a little different than buying stock. When you save in a bank the money goes into the economy as loans and is spent and cycled through the economy.

This is also what happens when there is a new offering of stock. But after that first money goes into the stock things change. The stock becomes a commodity that is traded from one person to another without the company getting any of the new money. An increase in stock value allows the company to borrow against the increased value of the company (getting money from those traditional savings) but it doesn't get further money from the old stock. Stock prices like any other commodity are based on supply and demand. So if you give the rich lots of money you create more demand which pushes up stock prices. Or when that money runs out, you can offer people IRA savings which creates more demand for stock. Or you can tell them to invest their Social Security in stock which would increase demand. All of these things drive up the price which looks good, but except for the initial offering doesn't add to the money the company has to invest in creating goods services and new wealth. So basically the money is retired from the economy until the stock is sold and the money is spent. Since the rich don't need to sell to obtain cash that's not going to happen until they have to pay inheritance tax. Which is another problem. The market doesn't like inheritance tax because it lowers demand thereby putting downward pressure. But what it does for the economy is encourage the Bill Gates and Warren Buffets to take money out of the warehouse and return it to the economy.

So the stock market really isn't an indication of the overall economy. It's an indication of how much money the top has left over that they can warehouse. It doesn't help Joe Sixpack at all until he retires and if he is fortunate enough to have a retirement plan. Then the stock is sold and Joe sends the money back into the economy.

There really isn't a single index that indicates the health of the economy. Which shows that you can't cite it as a reason for anything, really. As said above, stock market is a bogus indicator; poverty line is a bogus too (my cousin is a 2nd grade teacher, he has very little hard money and is considered part of the poverty line, but most of his assets are not liquid. Thus, it is a poor indicator, as he has a hobby of collecting DVDs, which he watches on his plasma screen TV.) Unemployment measures one thing (how many people don't have a job) so it can't measure the economy either.

So the stock market really isn't an indication of the overall economy. It's an indication of how much money the top has left over that they can warehouse. It doesn't help Joe Sixpack at all until he retires and if he is fortunate enough to have a retirement plan. Then the stock is sold and Joe sends the money back into the economy.

However, stock is much more than just a way for the wealthy to stash away surplus income; the trading of stock generates additional income that individuals and companies use to finance new projects or to spend on themselves and their future financial needs. Without a stock market, it would be very difficult for most companies to really get off the ground and raise the money needed to grow beyond their current size. Without some level of growth, your business will eventually fall apart or be accquired.

The stock market is one of the backbones of the financial system; without it, we would be far, far less economically developed and stable than we are now, and our government wouldn't be able to afford even a fraction of the things it currently can. Employment, economic growth, industrial production, interest rates, inflation and all of the other economic indicators are all affected by swings in the stock market.

A weak stock market affects all of us, and a strong stock market affects most of us every single day of our lives. It's not always immediately visible, but it's there.

Saving money is a little different than buying stock. When you save in a bank the money goes into the economy as loans and is spent and cycled through the economy.

The stock market follows a similar pattern. When stock prices go up, that creates additional income which can then be used in the economy. Its specifics operate differently from a loan, but the ultimate effect is the same: both provide a way for individuals and investors to generate additional income, and both ultimately lead to stronger economic growth.

Very true, very true. A weak stock market is not necessarily good for anyone.

Very true, very true. A weak stock market is not necessarily good for anyone.

Well, except for short sellers and the like, which also serve a vital role by helping to cushion the blow caused by declines.

The stock market follows a similar pattern. When stock prices go up, that creates additional income which can then be used in the economy. Its specifics operate differently from a loan, but the ultimate effect is the same: both provide a way for individuals and investors to generate additional income, and both ultimately lead to stronger economic growth.

The rise in the stock market doesn't create income, it creates capital gains which are taxed differently (and there has been a major effort to do away with capital gains tax) and it only creates capital gains when the stock is sold and not reinvested. As long as it's in the warehouse there isn't tax and the money isn't circulating in the economy. The money the company got from the initial offer is long gone. The best it does for the company is allow the company to borrow against the value of the company based on it's total stock value.

Saving money is a little different than buying stock. When you save in a bank the money goes into the economy as loans and is spent and cycled through the economy.

This is also what happens when there is a new offering of stock. But after that first money goes into the stock things change. The stock becomes a commodity that is traded from one person to another without the company getting any of the new money.
So? People with a greater net wealth spend more money, that much should be somewhat obvious. There's obviously a limit to it though.

The point is that whether there's changes in equity, whether companies borrow against the cash flows they generate - it all serves to provide the firm with the money it needs to invest in the future and/or eliminates inefficiencies in the economy and the firm itself.

Because share prices are not only a supply and demand thing. Because it's all about dollars changing hands we don't have to simply assume that we don't know how demand comes about, because every individual is after the same thing. So there's no demand for a share for no reason - they are valued by investors according to the future cash flows they can generate, which includes dividends and potential increases in them as well as the rise in price due to such increases.

So a booming share price is simply a symptom that the firm offers good opportunities for future growth in value.

Plus, there are more reasons for a firm to go public than just that initial lump sum earned in the IPO. Because a public firm is more transparent, the cost of capital can decrease quite significantly. It generally becomes much easier for the firm to raise new capital by issuing new shares and can therefore start new investment projects much easier.

So I think you're being overly simplistic by saying that rich people invest all their wealth in the share market (though many other assets they might use are much less liquid) and that the value of shares is lost to the economy. The share market serves an important function for firms as a provider of money and as a driver for efficiency and good management. And in the long term, it'll find its way either into someone's spending or into the capital stock anyways.

Plus, we're really missing the point because I was talking about investment in the economics sense, not the finance sense: http://en.wikipedia.org/wiki/Investment#Economics

So the stock market really isn't an indication of the overall economy.
I never said it was.

So a booming share price is simply a symptom that the firm offers good opportunities for future growth in value.

Shouldn't it be that a booming share price is a symtom of expected opportunities in value growth?

We're really getting off the original subject which was: What's going to happen to those who are now in their teens and twenties when the Reagan, Bush, Bush debt comes due at the same time the general fund is forced to redeem the Social Security loans, at the same time the boomers are selling their stock and pulling their savings out of banks, at the same time all of the road, bridges, airports and other infrastructure falls apart due to 40 years of neglect, at the same time China starts sending people to the moon and Mars........?

And all because it's "conservative" not to pay the bills.

That is really not saying much is it now?

http://zfacts.com/metaPage/lib/National-Debt-GDP.gif

Why are Eisenhower, Nixon, and Ford blue on that graph?

Why are Eisenhower, Nixon, and Ford blue on that graph?

The blue is where the debt as a percent of GDP was going down. The red is where the debt as a percent of the economy is going up. It's not political it's the difference between tinkle down economics and normal economics.