GDP decline twice as bad as Obama WH predicted
posted at 10:55 am on August 25, 2009 by Ed Morrissey
The latest retreat on economic credibility at the White House comes at a particularly bad time. Barack Obama has tried to sell his economic agenda on health-care reform and cap-and-trade as economic boons instead of boondoggles. However, his mid-year recasting of American economic performance and admission of the deficit impact of his budgets will continue to erode confidence in his competence:
U.S. unemployment will surge to 10 percent this year and the budget deficit will widen to $1.5 trillion next year, reflecting a “deeper recession” than previously expected, White House budget chief Peter Orszag said.
The Office of Management and Budget also forecasts that the U.S. economy will shrink 2.8 percent this year, worse than the 1.2 percent contraction the OMB projected in May. For next year, the budget office said the gross domestic product will grow 2.0 percent, less than the 3.2 percent expected in May. By 2011, the economy would be well on its way to recovery, growing at a 3.8 percent annual rate, according to the administration’s mid-year economic review, released this morning.
The budget shortfall for 2010 will mark the second straight year of trillion-dollar deficits. The projected deficit for the fiscal year that begins Oct. 1 is higher than the $1.26 trillion forecast in May and reflects expectations economic growth will be slower this year and next because of “the severity of the crisis in the U.S. and in our trading partners,” said Christina Romer, White House chief economist, who along with Orszag briefed reporters on the report.
Let’s recall the difference between Orszag’s OMB projections for the deficit in March, and the CBO’s numbers:
The difference between these projections was the prediction of Obama’s economic advisers of US economic performance. They predicated their numbers, in the light pink, based on the entirely unrealistic expectation of getting -1.2% GDP growth this year, after the first quarter came in at -6% (annualized), later revised to -5.4%. Even while the second quarter continued to look poor, the OMB continued with its sunny analysis. Now that we’re in the middle of the third quarter and growth remains elusive — and more importantly, unemployment continues to rise — the White House has no fig leaf to hide their errors.
Why did the OMB hold out this long against CBO predictions? Simple; the Obama administration needed sunnier numbers in order to justify its plans to spend vast sums of money on its social-engineering agenda. Even in the best of times, these programs would be disastrous, but during a deep recession, they will kill any hope of economic growth. In short, OMB indulged in political hackery, hoping to continue their deception long enough to get ObamaCare and cap-and-trade through a compliant Congress. Now they have to admit that they either conducted an incompetent analysis while most significant economists scoffed at their projections for growth, or cooked the books.
Orszag should resign as OMB director after this performance. (I have no expectations that he will, but he should.) Remaining in the President’s budget office only extends the credibility crisis to everything else produced by the White House on the economic agenda. How can anyone trust Obama and Orszag after the complete failures of Porkulus and the budget projections, especially given the political manipulations involved?
Blowback
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What is your Moral justification for doing so?
Does this mean if you have more money than me, I can rob you at gunpoint?
Can I kick you out of your house because it’s better than my apartment?
Can I take your car because I only ride a bike?
I’m waiting for some answers, what’s the problem?
You seem to be able readily justify governmental theft, why can’t you answer some of these other questions on other forms of theft?
Chainsaw56 on August 25, 2009 at 12:33 PM
Jed_Eckert on August 25, 2009 at 11:29 AM
“AVENGE MEEEEE!!!!”
heh.
catmman on August 25, 2009 at 12:33 PM
Ask Mr. Page if he thinks that stimulus spending helps the government’s fiscal situation. If he says, no, then ask him the difference between a stimulus tax cut and stimulus spending.
Learn the difference between a myth and fact.
blink on August 25, 2009 at 12:36 PM
That has nothing to do with the analysis I provided.
blink on August 25, 2009 at 12:38 PM
Tax cuts don’t work in a vacuum. The budget is designed to grow every year forever. Please note your own term, “fiscal situation.” Spending outstrips revenue. Every time tax cuts have been instituted, more money flows into the Treasury. The fiscal situation won’t improve long as the government increases spending every year. So both spending and taxes need to be cut at the same time for the cuts to work as designed.
Despite Mr’s Pages opinion, the facts bear out that tax cuts increase revenue.
Note terms, please, including your own.
Liam on August 25, 2009 at 12:40 PM
TIMBE-E-E-E-ER-R-R-R-R-R!!!!!!
Yoop on August 25, 2009 at 12:42 PM
But that is exactly what The Precedent wants. His intention is to destroy this nation, and killing all credibility in our institutions is just one step along the way. This is no surprise, at all.
How could anyone have trusted anything connected to The Precedent after everything that came out during the campaign? He showed that he had no idea what he was talking about, that he would say anything without regard to facts, and that he had the mind of a 12 year old – and a 12 year old girl, at that.
The question was how anyone could have trusted The Precedent or Orszag even before the complete failures we have been forced to watch him foist on us?
But … to The Precedent, this is all in a day’s work. The destruction of the US moves closer to fruition with every passing day. Just wait until inflationary pressure leaks out of the monetary system and start to really rear its ugly head. Man, you ain’t seen nothin’, yet!
progressoverpeace on August 25, 2009 at 12:43 PM
Liberals like to think of themselves as modern day, enlightened Robin Hoods, robbing the rich to give to the poor. But, they are too cowardly to actually preform the act themselves, so the get the government to do it for them by proxy. If they actually had the b*lls to try it themselves, they would soon find out they have neither the arms or the ammunition to do so.
djtnt on August 25, 2009 at 12:44 PM
Link.
I’m sure it won’t affect your religious beliefs in any way though.
lorien1973 on August 25, 2009 at 12:45 PM
I call bullshit.
From the April 16, 2008 Debate:
Try to square that circle ***-hole.
PackerBronco on August 25, 2009 at 12:45 PM
They don’t have one, other than “you have it and I want it. Therefore, here’s my gun and I’m taking it. ”
They have no morality, as their creed is solely a pursuit of power. Morality gets in the way of that pursuit at times, and it must be discarded.
In left-thought, yes it does.
Because if somebody has something, it logically must mean that they “took it” from somebody else who is the “rightful owner.” And you’re just giving them a taste of “social justice” by taking something from somebody at the point of a gun yourself.
Morally justified.
It’s just “not fair” that some people own homes and that others have to rent (never mind that the status of “homeowner” and “tenant” are fluid and not static). The relationship currently “exploits” the tenant, where the homeowner lives in relative security and more comfort (ignore the mortgage payment, which is likely more than rent). The homeowner himself, actually, is also a victim because his house isn’t a mansion, so he’s morally justified in kicking some fat cat out of his mansion at gunpoint because the fat cat had the audacity to live larger than the homeowner. Living your life as you see fit is a no-no in Obamatopia (unless, of course, living your life consists of taking freedom, property and money at the point of a gun from innocent citizens trying to make an honest living who want to be left the hell alone).
Morally justified, but cars will have to be eliminated at some point due to their negative effects on the environment and (coming soon) public health anyway. You will have no need for a car in the Obamatopia, as nobody will be working for their own selfish ends.
All for The One, and Nothing for the All.
Good Lt on August 25, 2009 at 12:46 PM
Nice reply.
I loved George Will’s statement back in February. He said something like, ‘instead of a big temporary spending stimulus package, why not provide a temporary tax cut package. We’d certainly stimulate an incredible amount of economic activity.’
blink on August 25, 2009 at 12:46 PM
He still thinks a with-holding change is a tax cut. So take it easy on him.
lorien1973 on August 25, 2009 at 12:46 PM
Sure we’re losing GDP, 1% last quarter; but at least we passe dthe stimulus.
Those fools in Germany who didn’t have a stimulus had a measly .3% growth. Ha, we’re doing so much better with our 1% contraction.
Wait… losing 1% is better than gaining .3%; right? Naah, it must be. Otherwise people wouldn’t be claiming that the stimulus saved us.
Thank you Obama for saving us from any possible economic growth. We wouldn’t want to follow other countries out of recession; we like it here. Hemorrhaging jobs, losing money, it’s exactly what we hoped for…
* What, it would be racist to say this was a stupid plan, that failed, and is damaging the economy… and I don’t want to be called racist.
gekkobear on August 25, 2009 at 12:52 PM
Taxes are part of life in civil society. They are not immoral, they are a necessary evil. There are many theories of taxation, personally I favor the Bleeds Blue Flat Tax (ask me how!). But we as a civil society make choices and then we pay for them through taxes. Roads and bridges. Armies and police. Drug counseling centers. Incentives for oil expolration. Whatever.
Having filled our market basket, we then proceed to the checkout counter. Although there is a certain redistributional character to the choices we have made — certainly Medicaid, public schools and TAMP are underwritten by those with more money and used by those with less. But these programs aren’t primarily aimed at creating an economy in which every has the same stuff. It’s been — for my lifetime — about the safety net, not about punishing the rich and there is absolutely nothing in the mainstream Democratic Party today to suggest otherwise. Jeez – Schumer is an investment banker’s best friend and Barry is well off himself.
But:
1) Exempting low income people from taxation and the effect of most standard deductions throws the burden up the ladder. You can argue that the check-out lady at the Wal-Mart should pay the same percentage of her income in taxes as an insurance company CEO, but it’s a tough argument to sell.
2) The marginal utility of money diminishes as incomes climb. If I earn four million dollars and lose a million to taxes, that hurts me much less than if I earn $60K and you take $15K. Similarly, the $10K Pell Grant that gets my kid through Freshman year in college provides significantly more “utility” than the millionaire from whose hide it presumable came, lost.
However:
Taxes on investing and speculation are generally much lower than taxes on earned income, disproportionately benefiting the well off.
Social Security is a regressive tax, as are sales taxes, which fall most heavily on the working poor (and are significant percentage of their income).
And things like the home mortgage deduction (including that second house in Aspen) and the charitable donations deduction are ridiculously skewed towards the well off.
Bottom line though: If society through its elected officials choose to spend x amount of money, then the “rich” are going to pay a higher proportion of their incomes than those who are not rich. It’s not good or bad, it just is. But they’re doing OK.
Bleeds Blue on August 25, 2009 at 12:53 PM
LOL!
Thank you.
Chainsaw56 on August 25, 2009 at 12:53 PM
There is a CONFLICT OF INTERESTS given that Eric Holder’s former law firm provided the legal defense for GITMO terrorists. THAT explains his disloyalty to the USA and turning the prosecution away from ACORN and the NEW BLACK PANTHERS in order to destabilize the nation’s security via his (along with Obama, Pelosi and the ACLU) take down of the CIA.
How can you go from defending enemy combatants to protecting our nation’s interests? You don’t, and that explains further Holder’s insistence to use the Dept. of Justice to defend our nation’s enemies and prosecute our national government.
maverick muse on August 25, 2009 at 12:54 PM
Except we now know Obamanomics will run up twice as much debt as Bush did.
Please explain your support of that.
Chuck Schick on August 25, 2009 at 12:56 PM
From each according to his ability, to each according to his need.
In other words.
lorien1973 on August 25, 2009 at 12:56 PM
…because we ignore the consitution.
WashJeff on August 25, 2009 at 1:00 PM
So, to fix that, we need to change the tax law to dis-incentivize rich people donating things. So government gets less money -and- charities have less donations to use. Which makes sense, I suppose.
lorien1973 on August 25, 2009 at 1:01 PM
He clearly doesn’t understand the purpose of the “states” and the “federal government” either. It’s quite a list of things he isn’t clear on.
lorien1973 on August 25, 2009 at 1:02 PM
No. It’s bad.
This isn’t about how the rich are doing. This is about obstructing prosperity. Your taxation philosophy obstructs prosperity.
No. That’s not the bottom line. You haven’t justified the need for anything more than a flat tax. What’s wrong with a flat tax?
blink on August 25, 2009 at 1:02 PM
Absolutely false.
If I earn $100 in capital gains and make $50k a year and you earn $100 in capital gains and make a $100k a year, who gets hit harder by a 15% capital gains tax? That’s what a regressive tax looks like.
A sizable majority of Americans have the bulk of their wealth in their homes. So capital gains tax cuts benefit these people come retirement time far more than the rich as retirees need to downsize homes and sell stocks to survive.
This only will be more critical in the future as Social Security collapses. And the current average payment is only $1000 a month, before taxes. Certainly not enough to even survive.
Chuck Schick on August 25, 2009 at 1:03 PM
Still not responding to Obama’s statement that he would raise capital gains even though it would result in less revenue because it would be a way of socking it to the rich? What a tool you are.
PackerBronco on August 25, 2009 at 1:04 PM
Meanwhile, Obama keeps that surley smirk on his face, while thinking to himself….everything is going as planned.
capejasmine on August 25, 2009 at 1:04 PM
He’s also ignored the posted graph that the bush tax cuts raised revenue faster than gdp growth. It’s inconvenient.
lorien1973 on August 25, 2009 at 1:05 PM
And my question is, who is buying the debt from China? Could it be our own Federal Reserve? So we are issuing IOU’s to ourselves? Like thats something new.
I urge everyone here to check out Karl Denninger’s comments on Market Ticker. I am in no way affiliated with him or his investment company. Obviously, he could just be a market short player, but I have a hard time disputing what he is saying. He called this over two years ago.
Once the commercial loans start defaulting, we will see the true depths of our fiscal malfeasance. His call to prosecute most bankers and the bank regulators seems to be correct under the law.
All Ponzi schemes eventually succumb to a lack of new suckers. The American taxpayer has awoken and doesn’t want to pay any more. Someone smarter than me will have to answer the question of how to unravel this mess with the least amount of blood in the streets (literally).
I’m in my forties and scared. I pray for our children. They will be subjects not citizens. At a minimum, I think we eventually see inflation in the 300-400% range a la Argentina. Probably preceeded by deflation (for goods, service fees will continue to rise).
riverrat10k on August 25, 2009 at 1:06 PM
Some of the discussions I have had with liberals regarding this tax cut have been stunning.
Me: It wasn’t a tax cut.
Them: yes it was. There is more in my check. They are taking less out for taxes.
Me: Yes, they reduced your withholding, not your tax owed.
Them: I have more money each week.
Me: Did your tax rate decrease?
Them:
Response 1) That doesn’t have anything to do with it.
Response 2) Huh?
Response 3) You don’t like Obama.
Yoop on August 25, 2009 at 1:06 PM
So you would like to make this more progressive. This would seal the deal by making SocSec a truly wealth distribution program.
WashJeff on August 25, 2009 at 1:08 PM
Its already over 16% if one cares to look at the real number on the BLS website. And of course they don’t mention all the folks losing their homes and selling all their stuff because their benefits have run out.
The folks at the unemployment office say they have never seen anything like it and they are very afraid of what’s going to happen.
For all of Bozo’s vaunted assertions of “concern” about the situation, he does absolutely nothing to repair the problem.
Now if I can figure that out, and know how it can be fixed, why doesn’t “The Won” ? Oh thats right, he doesn’t do capitalism. For him socialism has all the answers.
dogsoldier on August 25, 2009 at 1:08 PM
Ha ha. What did you expect?
Next you’ll be surprised that they don’t understand nuclear physics.
blink on August 25, 2009 at 1:08 PM
We need government programs to pay for the high taxes that government imposes on us.
What?
lorien1973 on August 25, 2009 at 1:10 PM
I posted this in another thread, but worthy of being posted again.
http://www.timhawkins.net/video/government-can.html
teffertoes on August 25, 2009 at 1:10 PM
Except of course that is the money that creates jobs and wealth.
The problem with liberals is that they do not understand that wealth doesn’t grow on trees and is not created by the gov’t.
And, that money was taxed already when the person earned it and is taxed again when the person invests it. So, really it is double taxation.
Finally, a society wherein 1/2 the populace pays no taxes but votes, is destined for ruin. the 1/2 that pay no taxes will continue to vote themselves greater and greater benefits from the 1/2 that do pay taxes, and that model is not sustainable.
Finally, The top-earning 25 percent of taxpayers (AGI over $66,532) earned 68.7 percent of the nation’s income, but they paid more than four out of every five dollars collected by the federal income tax (86.6 percent). The top 5% had an AGI of over $160,000 and the top 1% had an AGI of over $400k.
So, by your logic someone like me can take a hit b/c it won’t effect me. Unfortunately, even though I’m very conservative w/ my $$, I have school loan payments, mortgage, etc. So, increasing my taxes (I’m in the top 25%) would hurt me severely.
Sure, the Bill Gates of the world can take a hit (even though they won’t ever really take the hit – they don’t pay as much in taxes b/c their money is all in tax shelters, etc.). But, the people in the 5% $160k – $400k could be living paycheck to paycheck for all you know – w/ their money all invested in their own business, for instance.
So the idea that you can simply wave the magic wand over the “rich” and it costs nobody anything is really, really foolish – but stems from an “eat the rich” mentality.
And, those people are the ones who create wealth and jobs.
Monkeytoe on August 25, 2009 at 1:11 PM
This is also false, as you get back what you put in on a sliding scale that proportionally slides downward, making Social Security a very PROGRESSIVE program.
Don’t you get a statement every year? Your benefit is tied to your contributions… and there is a minimum payment, no matter what you put in, as long as it was once something.
Read “FDR’s Folly” the first Social Security recipient was a woman in New Hampshire. She received 1000 times what she put in.
Chuck Schick on August 25, 2009 at 1:12 PM
I would be broadly in favor of a flat tax if it 1) had significant personal deductions, which would make it de facto progressive at low and moderate incomes 2) all income was taxed at the same rate, including capital gains and dividends and 3) virtually all deductions beyond primary residence and charitable giving were eliminated. Your taxes should take ten minutes to do.
You haven’t proved cause and effect. A lot of things were happening at the time capital gains tax revenue rose — tradiong volumes up dramatically, a long-term market rally that likely had as much affect or more than the tax rates. (Be civil! I’m only one troll, I can;t get to everybody)
70% of the benefit of the lower capital gains tax accrues to the top 5% of income earners (because most other people’s capital gains come through their tax-exempt retirement plans). I’m happy with the one-time homeowner exemption thing. Works for everybody and — especially, the middle income people.
Bleeds Blue on August 25, 2009 at 1:16 PM
A more personal story here.
In 2005, my IRS tax form showed that I made $200,000 (or something like that – maybe 192,000. Anyways). After my accountant came at with with that news. I was like, “Where is it? I never made that much”
It was, of course, tied up in inventory for my store and in other assets for the company (as an S-corp it transfers to your personal taxes). So while, on paper, it seemed like we made a ton of money. In reality, we were (and still are) struggling with mortgage payments like everyone else in the world.
It’s a fallacy to believe that because your tax return says you made 500,000, you have that sitting in the bank. For most people (business owners, etc) earning that money, it’s just a myth.
lorien1973 on August 25, 2009 at 1:16 PM
Interesting that in one case you say that the “And because rich people’s actual taxes as percent of money earned is much lower than is believed in some circles” and yet in another example (2nd quote) you are using the same tax rate of 25%. Your examples don’t match up. Try using real world figures, or can’t you figure out the tax code?
CBP on August 25, 2009 at 1:17 PM
Trading volumes went up because of capital gains cut. You have cause and effect reversed, as usual.
lorien1973 on August 25, 2009 at 1:18 PM
Long on words, short on answers.
Some someone would be morally justified robbing you if you ‘have’ more than them?
Taxes are Immoral when that are they are an unlimited taking from some to buy the votes of many.
Okay since you were unable to morally justify the robbing of the rich,Try this:
Every Statist system ultimately fails because it punishes achievement and rewards looting.
What are you Statist going to do when more and more rich decide to stop taking it in the shorts and get out of the system and it collapses?
Chainsaw56 on August 25, 2009 at 1:19 PM
CBO asks, “Is SocSec Progressive?“
WashJeff on August 25, 2009 at 1:19 PM
OK, I’ll be the one to say it. Obama IS the problem with the economy. It is not that his policies are harming markets, or his plans for health care are eroding assets. The real problem is Obama himself.
The markets began to crumble after the 2008 primaries, when it became clear to many that we were headed to a general election in which the hard left had a good chance of winning. Smart money began pulling out of everything that it was possible to pull out of. Then after the fall election and the announcement that Obama won, the smart money went into hiding; where it remains today, and where it will remain as long as this communist moron and his friends like Barney Frank and Pelosi are in charge.
Nearly all of the market system is based on trust and how investors feel about the potential of their money in the markets producing a return for them. Whether if it racism, conservatism, fear, greed, common sense or some mixture of all those factors, the bottom line is that smart money is not going to expose itself to the risks Obama represents. That is why you will see some gains every time it appears that Obama might be losing steam, and why you’ll see markets tank whenever it appears he is gaining ground on anything. The bottom line now is that anything that is good for Obama is bad for the economy, and anything that is bad for Obama is good for the economy.
The only hope for restoring prosperity into the capitalistic system is to give investors hope that Obama can’t get to them. And at present we are a long, long way from that point. If Obama continues to tank in the polls, we might see some recovery. Other than that the only hope is for the midterms to convince investors that there is some light at the end of the tunnel.
MikeA on August 25, 2009 at 1:24 PM
How?
BadgerHawk on August 25, 2009 at 1:25 PM
Liberals see “rich” (defined, of course, as anyone better off than themselves) and immediately think “hey, we should tax them to get money to fund X social pie-in-the-sky program over here”.
And then they come back with arguments like blue’s “taxes are part of life”.
Well, yes, taxes are a part of life. that does not mean that they a) should be as high as possible or b) should be aimed at punishing the successful. Nor does it give gov’t carte blanche to redistribute wealth through ever-expanding entitlement programs.
Monkeytoe on August 25, 2009 at 1:26 PM
Obama and the Democrat leadership own this recession.
daesleeper on August 25, 2009 at 1:27 PM
Great- but that money has already been taxed.
So assuming we are at the top income bracket the capital that created the gain was what was left over after 39.6% (in a year) + 6.4% (SS) + 1.5% (Medicare) + 9.3% (in CA) = 56.8% plus the maximum rate AMT
So they are already losing at least 60% of the income before that money makes a cent. Of course it should be at a lower rate than income or the rate of return on stocks would be abysmal.
Chuck Schick on August 25, 2009 at 1:31 PM
Libs have opposed everything that would balance scales, like term limits, a balanced budget, and a flat tax. Taxes are truly a part of life, yet about 50% of citizens don’t pay taxes. I’m all for deductions so the poor can get a leg up, maybe save a little to get more and better. The Dems don’t buy that notion.
Remember last year when gasoline was so expensive? The government refused to forgo the gasoline tax for a lousy six months. Congresscritters scattered like antelopes ahead of a wildfire when the idea was floated.
How about some real welfare reform, this for a start: if a recipent has a talent, like painting and can sell his/her work on the street for a few extra bucks, why should that person be thrown off the rolls? Set a dollar limit, tax and penalty free, to give that person a chance to move up the social ladder. With a time limit for that, also.
The GOP isn’t much batter, really. They have gotten caught up in non-issues like family values when it’s not the place of government to approve how I raise my family to decide our views on abortion, contraception, church, et. al.
We can make our country work to the benefit of all. Why should we oppose our neighbor’s gains with a notion of taking more of what he has earned because I or someone else has less? Why not balance things out so everyone has opportunity to be the next Bill Gates?
The problem with capitalism is some will have and some will not. The problem with socialism is that everyone is made equally miserable. (Winston Churchill)
Liam on August 25, 2009 at 1:33 PM
Thank you, those were better answers that what he had.
Chainsaw56 on August 25, 2009 at 1:33 PM
Aw, jeez, BH. You’re not supposed to actually do it.
Yoop on August 25, 2009 at 1:34 PM
Gee, it looks like the deficit in Obamy’s first year will be about equal to the sum of the deficits in Bush’s 8 years.
What a surprise.
notagool on August 25, 2009 at 1:38 PM
Second that one. Throw in paying for business mortgage. The amount you pay for principal shows up as income (less building depreciation).The money only shows up in your bank account until the building is sold.
WashJeff on August 25, 2009 at 1:39 PM
Set tax rate at a level designed to bring in appropriate revenues. Say, 25%.
Allow personal deductions per household equal to again — not writing in stone here — $10,000 per wage earner and $5000 per dependent.
Eliminate virtually all deductions with the possible exception of primary residence, charity and capped retirement savings plan.
So this way, single mom with two kids earning 25K at Target and tithing $20/week to church pays $1K in taxes: 4%
Yuppie couple with one kid earning $150K with $30K in mortgage payments, saving $10K in the 401K and donating $2.5K each to the ACLU and the Human Rights Fund pays $20K: 13%
Banker making a million a year, 200K mortgage, giving a $100K to the opera and the art museum currently single pays $175K — 17.5 %
You’d probably have to start with a higher nominal tax rate than 25%, but you get the drift. Simple, progressive, but not punitive.
Bleeds Blue on August 25, 2009 at 1:40 PM
Make more sense to have a tax that applies to everyone (businesses and persons) at 10% (or so) with no deductions and no one is exempt. That’d make everyone taxable and everyone would have a chip in the game.
lorien1973 on August 25, 2009 at 1:44 PM
I’m not going to even pretend to be smarter than you, but it would seem like the only way this country is going to survive this whole thing is for the Leftists and especially Obama to realize that the change they want is not going to work.
It doesn’t matter what you want to call it – for now they aren’t calling it anything – any form of collectivism has not worked and will not work.
It’s simply a matter of logic – punish achievement and you get less achievement. Reward looting (for votes) and you get more looting.
Any system based on punishing achievement and the rewarding looting will collapse in on itself.
Why can’t people like “Bleeds Blue” figure that out?
Chainsaw56 on August 25, 2009 at 1:46 PM
You linked a website named “huppi” or something, this guy is just some blogger…
What he doesn’t take in account (I am sure it was an “oversight”) is that less taxes spurs economic growth…something he doesn’t measure, except through some arithmetic, multiplier of 8…very, very, weak and amateur.
As I said, don’t embarrass yourself by quoting “huppi” as an economic expert….whoever the hell he or what is.
right2bright on August 25, 2009 at 1:46 PM
That’s just Forbes’ plan (at a different rate, obviously). I hope you understand that capital gains are not income, but wealth.
progressoverpeace on August 25, 2009 at 1:47 PM
Bleeds Blue on August 25, 2009 at 1:40 PM
How about taxing corruption, stupidity and incompetence?
Between the Democrat Congress and the Obama “administration”, we’ll rake in billions.
Taxing the brain dead voters who put these clowns into office, will erase the deficit.
Problem solved. Next issue?
NoDonkey on August 25, 2009 at 1:47 PM
Try this from a real expert, the Wall Street Journal:
Feldstein, or “huppi”…I think Feldstein may have an edge…
right2bright on August 25, 2009 at 1:49 PM
Seems reasonable, with quibbling about numbers.
But I would refuse political groups as charities. Donations that do genuine work on immediate needs, like clothing the naked and feeding the hungry, are acceptable. Bringing gifts for Christmas should also be allowed but not for religious reasons. Children tend to expect gifts at Christmas, and an argument can be made even Moslem children would like something on December 25th.
I say this because charity should be politically neutral. Feed the hungry and clothe the naked–that’s something on which both sides of the political aisle can surely agree.
(Did I just agree with a liberal?)
Liam on August 25, 2009 at 1:50 PM
Don’t bother, his economic adviser is some blogger named “huppi”….he has no idea what he is talking about.
right2bright on August 25, 2009 at 1:53 PM
They never appreciate growth or dynamics, which is why, while many on the left are indeed statists, they are of a type that is far more insidious – they are staticists. To them, the world is static and unchanging, which is why they even believe that a central authority can control everything and, thus, leads to their statism.
progressoverpeace on August 25, 2009 at 1:55 PM
Stop. Nuff said.
It benefits the entire country.
It’s interesting that you don’t like it, just because you think it benefits one group. Lowering that tax reduces the penalty to everyone (and make no mistake – tax is a penalty).
blink on August 25, 2009 at 1:55 PM
No, with Forbes, that is Forbes plan…the poster gets his info from “huppi.com”.
Current Job What I am doing now…I don’t Know!
and here is “huppi” resume
A real economic genius….
right2bright on August 25, 2009 at 1:57 PM
huppi … wee wee … no difference. But it is nice to hear libs calling for Forbes’ flat tax.
progressoverpeace on August 25, 2009 at 1:57 PM
These problems that have bother both Right and Left can be addressed, if only the buttnuts in DC would make the moves needed.
We need solutions, not rhetoric. I don’t like the welfare system but it exists. Now, how to reduce it…
I’m a total conservative, a Constructionist. I was a kid when the Great Society was forced through, and Johnson muscled Republicans to get it passed. We can’t go back to 1787, so I wish to get whatever reversion I can back to then.
The ‘fix’ is easy, really. Still, it will take time. I’m just just an average man, of modest means. If I can figure this out, what can’t all those Harvard and Yale lawyers do it? (rhetorical question, I know)
Liam on August 25, 2009 at 2:05 PM
A flat tax would be preferable, but without any restraint on the government, they could simply raise the deductions for certain voting groups and raise the taxation rate for others.
Eliminating virtually all deductions would make it that much easier to control people, and that’s the whole point of taxation for the Leftists(and everything else they do).
Chainsaw56 on August 25, 2009 at 2:09 PM
And don’t even get me started on how artificially low interest rates (to the banks from the Fed) have destroyed not only the buying power of many of the elderly, but also reduced tax revenues to the government!
1 million in CD’s at 5%= $50,000 in interest income and will probably pay some taxes but may be enough to live on.
1 million in CD’s at 1%= $10,000 in interst income, probably no taxes paid, and not enough to live on.
Why should a bank look for deposits (assets) when they can borrow at 0% and create other assets (loans) for nothing?
Maybe we should withdraw all our funds from commercial banks and join/start credit unions? At a minimum, any interest payments go to the members of the credit union. Any default is shared by the depositors. This should allow better loan quality, but with higher interst rates to be charged on loans. However, the profits go back to the depositors. Slower growth but safer loans, maybe.
riverrat10k on August 25, 2009 at 2:11 PM
I agree with most parts of that plan. I’d still like to see Capital Gains taxes stay at 15% and the corporate tax rate drop to 25%.
And obviously a massive reduction in government spending.
BadgerHawk on August 25, 2009 at 2:12 PM
Remember when, under Reagan, the annual CD rate was 9.5%
Your money would have doubled in eight years.
Liam on August 25, 2009 at 2:16 PM
In a sense, I suppose you’re correct. A bankrobber doesn’t ‘hate’ banks, because that’s where the money is. However, a bankrobber’s feelings about that which he chooses to rob is superfluous to his criminal results.
anuts on August 25, 2009 at 2:19 PM
Just a thought…
Seems we have what we call a liberal who is making sense.
All along, the Dems have been polarizing us, making us fight each other along political lines. And the GOP, too, with those notions of ‘family values.’
No, I’m not warm and fuzzy, to be sure.
How about we get to solutions, rhetoric and ideology aside? I tend to be hopeful, and Bleeds Blue might have set a new tone, something fresh, a way for Right and Left to come to mutual understanding if not agreement?
I think Right and Left can work this out, as citizens. Face it–politicians are against us all. Politicians are the real enemy of a free people, which is why Washing opposed political parties.
An idea, friends. We’re here not only for debate but, really, solutions. Stuck as we are and much as I hate the Left, we need to work with those on the other side who are reasonable to solve the problems we face.
Divide and conquer–the mindset of Washington. Let’s not only beat them, but break them.
Liam on August 25, 2009 at 2:27 PM
Yeah, left over from Carter. Resulted mostly from, are we ready?, fraud by bankers! As the tax cuts took effect and the FDIC and SPIC (?) closed the most offensive savings and loans, the rates started coming down.
Home loan rates at that time were, IIRC, around 14%. Few houses were being purchased at those rates. Many types of businesses were stagnant. But now we are seeing what happens when we force rates down artificially. We create economic bubbles and “malinvestment” (love that phrase).
The unraveling of which takes longer and costs more than letting a collapse happen, IMO. Complex stuff, willing to listen to what we can do to fix it.
I don’t think fascism/corporatism is the answer.
riverrat10k on August 25, 2009 at 2:28 PM
Looks like Jethro goofed again on his cipering ability.
bluegrass on August 25, 2009 at 2:29 PM
Ok, I agree. How do we institute term limits? They are probably unconstitutional, but I see no other way to get rid of career politicians. My feeling is that many of our issues are due to the desire of politicians to keep their jobs. It is almost impossible to fire one for bad management. So they must be voted out, but incumbency allows fiefdoms to be set up at taxpayer expense with the promise of ice cream and circuses.
I keep picturing Byrd drooling in his oatmeal, and Kennedy’s brain turning to oatmeal. Oh, and McCain passing oatmeal (being a horses ass.)
An elitist political class invites corruption, absolutely.
riverrat10k on August 25, 2009 at 2:36 PM
For sweeping term limits, by Constitutional amendment, as was done for the Presidency.
progressoverpeace on August 25, 2009 at 2:40 PM
Bleeding Blue
Actually, we should have done a complete investment in infrastructure overhaul. Train people to weld, lay wire, lay concrete… Instead they have used only 1/10 of the stimulus money — with most of that being wasted. They are paying financing immediately on 100% of the money. In effect taking out a loan of over 50% interest on what was spent this year. Moreover, they are not getting much good out of what is spent. I see they are putting up — get this — orange stimulus signs along the roads in NC with a guy holding a shovel and the caption “putting America back to work.”
Otherwise we should have done what Bush I did: Nothing! When you are too deep in debt and go into an economic downturn, the best step is to do nothing and let the recession burn itself out. This is called a Phillips Curve. It was named after an American who worked at Cavendish laboratory in Cambridge. He developed a hydraulic computer to prove this in the days before microchips.
Basically, if you allow a recession to burn itself out both unemployment and inflation fall more than is typical with intervention and stay very low for a considerable period of time. This is what Bush I did instead issuing more debt. It cost him his presidency. But, it worked out great for Clinton giving him leeway to cause a large part of the mess we are in now.
trollkiller on August 25, 2009 at 2:40 PM
Did you live at that time, as an adult with a family? Not to be snide, please.
I recall a BK offering jobs for high-schoolers at %6.50 and hour and the minimum wage was about $3.30 an hour.
I married under Carter and watched food prices go up every second or third day. Congress, under Carter, trashed the economy. Before 1979, unemployment payouts weren’t taxed. But the economy got so bad the Dem Congress made those payouts taxable for the first time.
We prospered, me and my wife. Our combined medical insurance, paid in full by our employers, cost me $50 out of pocket for my son and $100 for my daughter. It was a better time, and people prospered. Truly and fully.
The S&L matter came out of Congress. I can’t say who signed onto that as President, b/c I was ignorant of the details; I wasn’t political at the time. But, to compare, Congress writes and PASSES the laws. I don’t blame Carter for the fiscal mess of that time, but Congress–which was run by…~drum roll~..DEMOCRATS.
I oppose fascism, too–then under Carter and a Dem Congress like I oppose it now under Obama and a Dem Congress.
I’m also not a believer in lassiez faire capitalism either.
But I know what I saw, what I lived. Reagan’s ideas worked, though undercut by an overspending ideaological Dem Congress.
You and me, Right and Left, aren’t the problem. Government is the problem.
Liam on August 25, 2009 at 2:45 PM
We institute term limits the right way: Demand a new Amendment.
Liam on August 25, 2009 at 2:46 PM
Haha what do you know. I like it.
Chuck Schick on August 25, 2009 at 2:49 PM
I have to say that I would pretty much agree w/ Bleeds Blue’s flat tax proposal (Forbes). Obviously, we would need to quibble about numbers, but the idea itself I’ve long endorsed.
In fact, I would get rid of all deductables EXCEPT the wage earner and dependent deductibles.
If you start such a system w/ some deductibles, then congress is going to start adding to it to win votes and/or try to coerce / incentivize people to use their $$ the way congress wants – just like the current tax code.
Monkeytoe on August 25, 2009 at 2:58 PM
The discussion on the flat tax only addresses how taxes are raised, it doesn’t answer the question of the morality of seeing “The rich” as a virtual ATM for the Left’s vote buying schemes.
The fact is we have to deal with the situation as it currently exists, the moral component of the whole argument is still out there.
Chainsaw56 on August 25, 2009 at 2:58 PM
I would do 20% income and corporate (I would do away with all corporate deductions and credits as well – their tax return should simply state how much in revenue minus how much overhead / spending) and 15% capital gains.
Monkeytoe on August 25, 2009 at 3:00 PM
Then we slam them for that, take away their power by showing up at townhalls.
If Cons and Libs, individual citizens, I mean, can come to polite terms, we can defeat Washington every time.
Left alone, Americans of all races and classes can get along; we can exchange ideas and come up with fixes. Politicans seek to destroy that beauty among the populace.
The Left isn’t really our enemy. Government is the enemy.
Liam on August 25, 2009 at 3:01 PM
No, I was in high school. Class of ’80. Voted for Reagan. What I remember about that period vs. what I have learned about it, was that nobody was buying homes, homebuilders were crying, S&L’s were failing, but fixed income buyers were celebrating. Old folks were trying to lock in the high interest rates.
Economy seemed good, I had no trouble finding a job, beer and gas were pretty cheap, relatively.
Food prices were rising, I do remember that.
I agree that more government does not usually fix a perceived problem, but instead, usually exacerbates it. Government should be very limited in what it can do. No, not anarchy, but very limited.
For example, while I think cap and tax is ridiculous (I am a carbon based life-form), I do agree with Federal restrictions on pollution. Air and water pollution (not carbon!) knows no state bounds. Under our Constitution, the feds have a right to implement some regs. in this regard as an arbiter between State interests. You should not be allowed to piss in your neighbors water supply.
Conversely, the feds have no right to be involved in childrens education. State governments should have that power under our founding document.
I always thought the tax structure was inverted; we should pay the largest portion to local government, then state, and then the feds.
Lynching the corruptocrats in your State capitol is much easier than flying to Washington and trying it. Don’t know the exact figure but sending a dollar to Washington, to have it come back as 50 cents after bureaucratic overhead seems silly. Why not keep the money in the State?
riverrat10k on August 25, 2009 at 3:16 PM
I would agree that Government is the problem, and that both sides sometimes favor different aspects of big government.
The question really is how do you limit government?
Chainsaw56 on August 25, 2009 at 3:17 PM
It has to be Bush’s fault; After all, Obama didn’t see it coming! And he demonstrates what a “Visionary” he is every day. (barf)
Cybergeezer on August 25, 2009 at 3:21 PM
And a whole lot of kool-aid drinkers will be seriously shocked when they realize they have to write a check to Uncle Sucks on April 15th.
chemman on August 25, 2009 at 3:22 PM
Has anyone else been listening to the liberal media nitwits talking exclusively about how “the economy is showing clear signs of recovery“?
I keep wondering wtf they’re talking about.
Jaibones on August 25, 2009 at 3:25 PM
Because the fix involves giving up power and control and those Harvard and Yale lawyers believe that they are the best and the brightest and SHOULD have control over their fellow man. They only want fixes that enhance their power.
PackerBronco on August 25, 2009 at 3:33 PM
Less government, the more liberty for the people. There are things beyond our control–for now.
I was Class of ’76, the end of the hippie influence.
DC and the media have polarized Right and Left, making us suspicious of and willing to insult each other rather than coming to some way to make this Country work to the benefit of all, as Citizens.
Stand to the Constitution. Consider this: Our Founders were so stupid they more or less had to come to the point. Take their words plainly, not literally, and your mind is free. Understand their intent, and work from there.
The Constitution is ‘living’, but only in the sense it can be amended as per the IXth Amendment: “Nothing in this Constitution shall be construed as to deny other rights retained by the People.”
Liam on August 25, 2009 at 3:35 PM
Hannity just said it and I agree. Obama wanted to push the Healthcare garbage on through before this little bit of news came out.
kingsjester on August 25, 2009 at 3:37 PM
No, sir. The fixes are within the realm of the People, not government. Government is about power alone.
What I suggest is both sides of the political aisle come to acceptable mutual choice and break Washington to the betterment of us all.
Liam on August 25, 2009 at 3:38 PM
Ironically the red graphics on the chart in this article look like prison bars ready go into locking position…not too far from the reality now is it
justonevictory on August 25, 2009 at 3:41 PM
This is one of the most stupid and dishonest posts I’ve ever read here. “That’s where the money is” ???
It’s THEIR money, you libtard moron–and you DO hate them, as you reveal in your Terminally Dumb posts, time after time: You resent them and mistrust the wealthy because your child-like ‘ideology’ makes you believe that they stole their money from po’ folks like you.
Janos Hunyadi on August 25, 2009 at 3:48 PM
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