State of the Union Address: Favor

[Spanky The Dolphin]

Most boring thread hijack EVER.

Hey, look on the bright side: at least you learned something.

BTW: You should ask your sister about the America thing.

[Dalton]

Most boring thread hijack EVER.

Hey, look on the bright side: at least you learned something.

BTW: You should ask your sister about the America thing.

Fairly sure it was for her PR class, but I'll ask her tomorrow.

[Durandal]

One day, I'm just going to go off on my political science prof or some other poor sap for saying "new-kew-lar."

[RedImperator]

Am I just being naive, or is it silly to pledge gobs of money toward various programs and of course, the war in Iraq while taking in less tax revenue? Isn't there a balance sheet somewhere upon which this doesn't work out?

This has been Bush's problem since he was running for election. First, he couldn't recognize the subtle, albeit significant distinction between a projected surplus and an actual surplus. Thus, he blew all the money we were supposed to have but didn't actually get.

The problem with lowering taxes now is that everyone is going to save their money rather than spend it. That doesn't do shit for the government's revenue intake. When the economy is in better shape, then you can lower taxes, and then people will spend their money.

To be fair to Bush, nobody in Washington recognized the difference between projected and actual surplusses. The Clinton administration crowed about trillion dollar surplusses that didn't exist and promised to spend them, Bush promised to spend surplusses that didn't exist but claimed the Clinton administration wasn't reaponsible for them, and when the economy collapsed and the projected surplusses went away, Democrats accused Republicans of spending it all and Republicans accused Democrats of screwing up the economy before they left office.

On to your next point. First of all, even saving money in the traditional sense (putting it in an interest bearing savings account in a bank) increases the amount of money in the economy because banks have more cash available to loan. That's why Federal depositor's insurance exists, so even the most skittish people will put their money in a bank instead of stuffing it in the mattress, which has the same effect, from the economy's standpoint, of lighting that money on fire and tossing the ashes to the wind. Second, very few people save money in the traditional way in America. This is partly because Americans tend to spend at or above the maximum their income level allows, but it's also because Americans have learned that there are other investments besides savings accounts with slightly higher risks but much better rewards, especially now with interest rates practically below the rate of inflation. People are scared off of stocks right now, but that will change when the market gets moving, and a solid, low risk mutual fund is still a good long-term investment. Bush, who's a supply-sider like most Republicans today, thinks that cutting taxes will actually produce more revenue than keeping taxes at their current rate (in Laffer curve terms, the taxation rate is too far to the right of t) by stimulating the economy.

The Democrats are screaming about it already of course, using basically the argument that you did. They're pointing to the two recessions that happened during the Reagan-Bush years as evidence supply-side economics doesn't work. They don't have a shred of evidence that these were caused by supply-side policies (and hope nobody notices that Clinton was basically a supply-sider as well, and nobody was complaining about the economy during his term), but nevertheless they bring them up to prove cutting taxes somehow hurts the economy. In reality, the recession of 82-83 was stagflation's last gasp, and the Bush recession of the early 90's was extremely mild and the result of natural economic cycles. In what's typical of the democratic party post-Clinton, they don't have any coherent alternative to the supply-side model--their program comes down to, eh, we'll raise taxes here, maybe give tax credits there, and spend a shitload of money on whatever's fashionable this week. This does not constitute credible fiscal policy. The closest model to what the Democrats are trying to do is the Keynesian model of using government deficit spending to boost the economy. This worked somewhat during the Depression, and worked fantastically during the Second World War, but that was because production was depressed far below capacity, which isn't the case now. Keynes's model breaks down when production is near capacity, where government borrowing and spending only serves to drive up interest rates and inflation at the same time. This is essentially what happened in the late 70s, as the economy finally paid for the rampant government spending required by the Vietnam War and the Great Society, worsened by the attempts of the Federal government (both parties, by the way) to dig itself out of the hole it was in by raising taxes.

Ugh, okay, long boring rant over. This stuff is interesting only in short bursts.

[RedImperator]

One day, I'm just going to go off on my political science prof or some other poor sap for saying "new-kew-lar."

Most Southerners tend to pronounce it that way. Even Jimmy Carter, who worked on them in the Navy, pronouned it "new-kew-law".

[IRG CommandoJoe]

I actually like economic discussions that are in-depth like that instead of using single words and phrases to argue points when most people don't understand how the hell it all works and what it really means. That is why these politicians can't ever get anything right in their predictions of how the economy will respond to changes in economic policies. That, plus blatant lying. Not that I'm an expert myself...

[Beowulf]

There's two kinds of polisci majors in this country: those that understand economics and those who become leftists.

Sig!

[Alex Moon]

There's two kinds of polisci majors in this country: those that understand economics and those who become leftists.

Sig!

Beat you to it.

[Beowulf]

There's two kinds of polisci majors in this country: those that understand economics and those who become leftists.

Sig!

Beat you to it.

Damn you! Damn you to hell!

[The Dark]

I think the main problem is that government budgets are designed with deficit spending in mind, so there can be both a surplus and a deficit at the same time. For example, let's suppose the planned budget is $10 billion (hypothetical here, I know the budget's insanely higher). Now let's suppose actual revenues are $6 billion. If the government spends $9 billion, they were under budget by $1 billion. They have a surplus. But they were over revenues by $3 billion. They have a deficit. That's why balanced budgets don't seem to exist in the government.

[Alex Moon]

Sig!

Beat you to it.

Damn you! Damn you to hell!

DeMoines?

[Raxmei]

Does the word "american" count? If so, it's exactly fifty.

[Spanky The Dolphin]

Beat you to it.

Damn you! Damn you to hell!

DeMoines?

No, you mean Otumwa.

[Alex Moon]

Damn you! Damn you to hell!

DeMoines?

No, you mean Otumwa.

Ah, ok.

[RedImperator]

There's two kinds of polisci majors in this country: those that understand economics and those who become leftists.

Sig!

Beat you to it.

Now gentlemen, there's plenty of pithy phrase to go around. You can BOTH put me in your sigs!

[RedImperator]

I think the main problem is that government budgets are designed with deficit spending in mind, so there can be both a surplus and a deficit at the same time. For example, let's suppose the planned budget is $10 billion (hypothetical here, I know the budget's insanely higher). Now let's suppose actual revenues are $6 billion. If the government spends $9 billion, they were under budget by $1 billion. They have a surplus. But they were over revenues by $3 billion. They have a deficit. That's why balanced budgets don't seem to exist in the government.

That's one fairly simple trick. A really nifty one they use is figuring out the budget for one program or another by using last year's budget, adding a percentge for inflation and expected increases in demand for the program, and making that the baseline instead of zero. For example, let's say you had a government program that gave money to rude sci-fi webboards. Last year, the program cost $10,000,000. But since AOTC and Nemesis both recently came out, the demand is expected to increase for webboards and there's always inflation, so the baseline is set for next year at $15,000,000. Then, when the president looks at the budget and goes, "$15 mil for sci-fi webboards?!? That's absurd! $12.5, TOPS!", the president can claim he generously increased the budget for webboards while the congess can bitch that the heartless bastard cut the budget. Using this method, it's possible to "cut" spending and still spend more money than you did last year. It's also nearly impossible to cut the budget below last year's total. Note that this is a rather silly example. To really understand what accounting tricks like this cost, add four more zeroes to the numbers.

Another trick they use is to simply not include items in the budget even though money will be spent on them. This is more like "lying" than trickery, and it would send you and I to jail if we tried it on our 1040EZs, but it's certainly painless for congressmen.

[IRG CommandoJoe]

Any more tricks used by the government would be welcome. Now if only the news actually explained it this way...

[The Duchess of Zeon]

Ah, yes. Supply-side economics. I believe Reagan tried that, thus causing the national debt to balloon to $3 trillion.

Reaganomics tripled government revenue in eight years; the national debt increase was caused by the combination of the massive military spending required to drive the USSR into economic collapse, and fiscal irresponsibility in Congress -- Pork Barrel politics and over-eagerness with the sudden revenue jump.

[The Duchess of Zeon]

The problem with lowering taxes now is that everyone is going to save their money rather than spend it. That doesn't do shit for the government's revenue intake. When the economy is in better shape, then you can lower taxes, and then people will spend their money.

Not quite true. People will use the money to pay off immediate debts and contribute to the overall economic health of the nation, and thus feeling financially secure, will proceed to begin spending again. There will be a slight delay in reaction, but especially considering the size of the middle-class cuts, it will be rather small comparatively.

[haas mark]

"lillillegal" is a new word.

No, but seriously, I think that Bush has gone way too far in many things. The war on Iraq. The medicare issues. The taxes. He says all these things about homeland issues, but does nothing.

As far as the tax relief, I believe that he is indeed only concerned in lowering the rich's taxes (somewhat a Republican approach to tax cuts).

We have all these estimates about what Bush plans on doing with our trops. THat it is the most profound decision a president could make. But isd sure as hell doesn't seem like he did a whole lot of thinking about doing so.

As far as my opinions, they are probably not as weel thought out or as well researched as many of yours out there, but I feel that I want my opinion to be heard, too.

[The Duchess of Zeon]

"lillillegal" is a new word.

No, but seriously, I think that Bush has gone way too far in many things. The war on Iraq. The medicare issues. The taxes. He says all these things about homeland issues, but does nothing.

Things are going to get done, now, far-reaching things which will put our country back on the right track. Especially with the decisive control of Congress.

We're already seeing progress like it was impossible before with Democrat obstruction.

The war on Iraq is being waged for reasons which are vital in the War on Terror, and necessary to bring about an end to fanatical Islamism; it is a campaign in a War which may last a long time, and is necessary for our security.

I think the willingness to commit government money to alternative fuel sources proves that His Excellency the President is not the puppet of the oil industry that we've seen prattled about as his motivation.

As far as the tax relief, I believe that he is indeed only concerned in lowering the rich's taxes (somewhat a Republican approach to tax cuts).

Family of four, makes $40,000 a year. Their taxes will go from nearly $1,200 to $45 a year. Over 92 million Americans will see their taxes reduced by over one thousand dollars a year. I rest my case.

As for the Dividend Tax, that is totally and wholly deserved as a break on the people who earn such profits.

We have all these estimates about what Bush plans on doing with our trops. THat it is the most profound decision a president could make. But isd sure as hell doesn't seem like he did a whole lot of thinking about doing so.

I'd respectfully submit that the idea that His Excellency the President is stupid is based entirely on Democrat campaign propaganda.

[Spanky The Dolphin]

I just want to know why so many people seem to hate the idea of the wealthy receiving tax cuts...

[The Duchess of Zeon]

I just want to know why so many people seem to hate the idea of the wealthy receiving tax cuts...

Marxism has had a lasting influence on society. Even people who aren't Marxists are influenced by Marx's ideals of "Class Warfare", and many tend to regard rich people as evil individuals who need to be punished. Marx, no matter how stupid or crazy he was, certainly has a tremendous - if monstrous - legacy.

[Spanky The Dolphin]

Marx never should have been born.

Ironically, his ideals were based on a false premise, and solely formed by then-current conditions of European industrial labourors. I'll bet they were out of date before he even died.

[haas mark]

"lillillegal" is a new word.

No, but seriously, I think that Bush has gone way too far in many things. The war on Iraq. The medicare issues. The taxes. He says all these things about homeland issues, but does nothing.

Things are going to get done, now, far-reaching things which will put our country back on the right track. Especially with the decisive control of Congress.

We're already seeing progress like it was impossible before with Democrat obstruction.

[opens a can of worms on self] Can it be demonstrated?

The war on Iraq is being waged for reasons which are vital in the War on Terror, and necessary to bring about an end to fanatical Islamism;

Yet we can't be bothered with ending fanatical Christianity at home, dealing with the anti-gay/black/female/etc issues? We can't be bothered with trying to put an end to the fanatics at home that prove to be as much terrorists as those out in the rest of the world, even if of a different sort?

it is a campaign in a War which may last a long time, and is necessary for our security.

So is spending money for the well-being of our own nation.

I think the willingness to commit government money to alternative fuel sources proves that His Excellency the President is not the puppet of the oil industry that we've seen prattled about as his motivation.

And what else is he spending money on? Is he spending money on trying to better the educational system? Is he spending money on trying to better the situations of states like my own (New Mexico) that lead the nation in poverty and a number of other really bad things (can't pull them all of the top of my head).

As far as the tax relief, I believe that he is indeed only concerned in lowering the rich's taxes (somewhat a Republican approach to tax cuts).

Family of four, makes $40,000 a year. Their taxes will go from nearly $1,200 to $45 a year. Over 92 million Americans will see their taxes reduced by over one thousand dollars a year. I rest my case.

Many Americans will have their taxes released by that much, but how much is that $1000 in comparison to how much they make? In that family of four, it seems more likely to have both parents working instead of just one. Also, WHat about families like mine, where there is a 7-person family (myself NOT included) and my mom has to stay at home while my dad (in the Navy, ranking Chief Petty Officer) goes abroad and out to sea each year for six months? What plans are there for the welfare system?

As for the Dividend Tax, that is totally and wholly deserved as a break on the people who earn such profits.

What about people that have no way of earning that much? Like I said, there are places where it can be next to impossible to find a job without experience (i myslef am having that trouble). What about the unemployment rate? My aunt's semiconductor plant is shutting down this year. She just bought a house last year. She can't find another job with comparable pay anywhere in the state. Unemployment doesn't pay enough. What about situations like that?

We have all these estimates about what Bush plans on doing with our trops. THat it is the most profound decision a president could make. But isd sure as hell doesn't seem like he did a whole lot of thinking about doing so.

I'd respectfully submit that the idea that His Excellency the President is stupid is based entirely on Democrat campaign propaganda.

Elaborate.

Also, like I said, I don't have much research on the matter. These are just my opinions, and my questions are based on my seeking knowledge pertaining to these matters. If I'm wrong somwhere, don't hesitate to point out.