Debating Warren Buffett
posted at 9:41 am on November 30, 2012 by Ed Morrissey
Earlier this week, I featured a video of an inteview conducted by Matt Lauer of Warren Buffett, in which the multibillionaire recommended tax hikes on the wealthy as a morale-booster for the middle class. “I think would have a great effect in terms of the morale of the middle class,” Buffett told Lauer, while scoffing at the argument that higher taxes on capital gains would have any impact on investment decisions. “Only in Grover Norquist’s imagination,” he chuckled at Lauer’s question. On top of this, Buffett also recommends continued federal spending at 21% of GDP (it’s closer to 25% at the moment) with revenues calculated at 18.5% of GDP, and says not to worry about the debt and deficits as long as they remain stable.
That, however, is not the only opinion on the matter of dynamic consequences of tax-rate increases, deficits and debt, and other budgetary policies. Let’s see if we can identify some of the Wall Street legends who have offered differing opinions on the importance of tax policy and deficits on investment decisions. I’ll have the answer key below:
- “My net worth is the market value of holdings less the tax payable upon sale. The liability is just as real as the asset unless the value of the asset declines (ouch), the asset is given away (no comment), or I die with it….Investment decisions should be made on the basis of the most probable compounding of after-tax net worth with minimum risk.”
- “In the case of WPPSS, the “business” contractually earns $22.7 million after tax (via the interest paid on the bonds),and those earnings are available to us currently in cash. We are unable to buy operating businesses with economics close to these. Only a relatively few businesses earn the 16.3% after tax on unleveraged capital that our WPPSS investment does and those businesses, when available for purchase, sell at large premiums to that capital.“
- “That’s because bonds are as sound as a dollar – and we view the long-term outlook for dollars as dismal. We believe substantial inflation lies ahead, although we have no idea what the average rate will turn out to be. Furthermore, we think there is a small, but not insignificant, chance of runaway inflation. Such a possibility may seem absurd, considering the rate to which inflation has dropped. But we believe that present fiscal policy – featuring a huge deficit – is both extremely dangerous and difficult to reverse. (So far, most politicians in both parties have followed Charlie Brown’s advice: “No problem is so big that it can’t be run away from.”) Without a reversal, high rates of inflation may be delayed (perhaps for a long time), but will not be avoided. If high rates materialize, they bring with them the potential for a runaway upward spiral.“
- “The faith that foreigners are placing in us may be misfounded. When the claim checks outstanding grow sufficiently numerous and when the issuing party can unilaterally determine their purchasing power, the pressure on the issuer to dilute their value by inflating the currency becomes almost irresistible. For the debtor government, the weapon of inflation is the economic equivalent of the “H” bomb, and that is why very few countries have been allowed to swamp the world with debt denominated in their own currency. Our past, relatively good record for fiscal integrity has let us break this rule, but the generosity accorded us is likely to intensify, rather than relieve, the eventual pressure on us to inflate. If we do succumb to that pressure, it won’t be just the foreign holders of our claim checks who will suffer. It will be all of us as well.”
So who are the geniuses who dare to contend with Buffett?
- Warren Buffett.
- Warren Buffett.
- Warren Buffett.
- Warren Buffett.
Daniel Schuchman pulled these quotes from Buffett’s extensive writings of the past for Forbes, in a column that should be read in its entirety. Schuchman blasts Buffett for pretending that his entire history of investment strategy doesn’t exist in order to advance a political agenda — especially an ultimately incoherent agenda:
Mr. Buffett now proposes that the minimum individual tax rate for those making between $1 million and $10 million should be 30%, and for those making over $10 million it should be 35%. No rationale is given for these rates. Why not 25%? Why not 50%? The reader is given no insight as to whether these rates are based on some distributional principle, an attempt to maximize government revenue, or something else. We are left only with The Oracle’s arbitrary decree which we are apparently not to question. Mr. Buffett’s sanctimonious tone is inversely proportional to his willingness to propose any reform that would materially impact his own financial position. Virtually all Mr. Buffett’s wealth is attributable to the ownership of stock, not current wage income. He has commenced a plan to give away his shareholdings to various charitable foundations (a noble endeavor) which will also avoid triggering many billions of dollars in tax payments. He is conspicuously silent about whether he would support a tax reform that eliminates charitable deductions.
But perhaps the most disturbing aspect of Mr. Buffett’s revisionist history comes when he turns to his prescriptions for our nation’s deficit and debt. The federal government’s goal should be to raise revenues of 18.5% of GDP and to spend 21% of GDP, he recommends. Nowhere does he explain why these levels are optimal and whether they derive from a social, economic, moral, fiscal or national security perspective. Mr. Buffett acknowledges that these ratios guarantee future annual deficits but he takes comfort that “assuming even conservative projections about inflation and economic growth, this ratio of revenue to spending will keep America’s debt stable in relation to the country’s economic output.” He seems awfully complacent about the prospect of our country incurring hundreds of billions of dollars of additional debt, every year, potentially forever.
Buffett wins this debate, of course … but not the latest iteration of Buffett.
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Great Grandpa Bishop once said to me: “Listen here you worthless little shiite, don’t never ever trust a politician with dog eyes. Now get out of here and go sweep the barn!”
Durbin is the hackiest of liberal hacks who wouldn’t last a week out here in the private sector. I wouldn’t trust the man to take out my trash correctly.
Bishop on March 18, 2013 at 10:06 AM
Dick “Double-talk” Durbin dishes dishonest deceitful dreck.
hillbillyjim on March 18, 2013 at 10:07 AM
Canned Dem responses:
Bush did it..
Higher taxes will cure anything…
If Repubs would just stop being the party of no…
My President has a plan…
melle1228 on March 18, 2013 at 10:07 AM
The only way Durbin could’ve told the truth was to follow that up with “I’m resigning immediately”.
Bitter Clinger on March 18, 2013 at 10:08 AM
Time to change the terminology from deficit reduction to deficit elimination.
Greek Fire on March 18, 2013 at 10:09 AM
Turdbin should just be flushed like all turds.
bgibbs1000 on March 18, 2013 at 10:09 AM
Aahh, Democrats; ya gotta luv ‘em!/
FOWG1 on March 18, 2013 at 10:11 AM
and then they wonder why Congress has approval ratings in the outhouse!
Durbin, Schumer, Pelosi, Hoyer, etal….need to go along with the old guard Rs including Boehner who NOW TRUSTS OBAMA! ESH
CoffeeLover on March 18, 2013 at 10:13 AM
Dickless Durbin isn’t especially known for the “truth”.
GarandFan on March 18, 2013 at 10:13 AM
melle1228 on March 18, 2013 at 10:07 AM
You forgot the big one, “We need a balanced approach.” Every time I hear that I feel like throwing up. If they’re going to keep saying it, at least they could define it.
bflat879 on March 18, 2013 at 10:15 AM
Canned Dem responses:
Bush did it..
Higher taxes will cure anything…
If Repubs would just stop being the party of no…
My President has a plan…
Your Government is here to help you………
And,…..If you don’t like my President’s plan, you’re a racist.
melle1228 on March 18, 2013 at 10:07 AM
Rovin on March 18, 2013 at 10:15 AM
And yet, the liberal fools that infest the once great state of Illinois (my former home) will send this jerk back to the Senate with 67% of the vote in 2014.
Mind-boggling.
Common Sense Floridian on March 18, 2013 at 10:17 AM
bflat879 on March 18, 2013 at 10:15 AM
Rovin on March 18, 2013 at 10:15 AM
Yeppers feel free to add to the list. They have gotten so predictable, and so detestable. They say the same things and do absolutely nothing. And then when people have buyers remorse for voting for them like Bill Maher, I want to slap them. How can you not know these people were incompetent, are your frickin out of touch or just stupid?
melle1228 on March 18, 2013 at 10:18 AM
After watching Chris Wallace give Durbin a pass we got to see Matt Kibbe make fun of that stalwart La Tourrette (RINO-OHIO) guy defend unssutainable defecit spending on the GOP side. Kibbe answers at least a couple of La Tourrette’s rejoinders with the simple “we don’t look at the color of people’s skin” in response.
The GOP needs a house cleaning. The old spend along to get along crowd is not in favor any longer.
DanMan on March 18, 2013 at 10:19 AM
LOL– Grew up in Illinois. Moved away due to my husband’s military career. My hubby recently retired in Tennessee. We had a chance to move back to where our family was in Illinois and we both wanted no part of that. Illinois is run by Chicago and California lite with the pensions driving its economic solvency.
melle1228 on March 18, 2013 at 10:21 AM
“But they were, all of them, deceived, for another deal was made. In the land of Washington, in the fires of the White House, the Dark Lord Obama forged in secret a master plan, to control all others. And into this plan he poured his cruelty, his malice and his will to dominate all life. “One plan to rule them all.” One by one, the Free Lands of America fell to the power of the Ring. But there were some who resisted. A Last Alliance of Men and Bloggers marched against the armies of Washington and on the slopes of Capitol Hill, they fought for the freedom of America. Victory was near. But the power of the plan could not be undone.”
The problem with Durbin and the other Nazgul is they believe in what they are saying.
May as well tell a meth addict the dangers of meth. They just don’t care.
BobMbx on March 18, 2013 at 10:21 AM
I’m so very frustrated these days. Everybody knows what the problem is. Even worthless terrorist-loving military-hating bastards like Durbin will admit what the solution has to be when outside the glare of media lights.
And yet, instead of working on the obvious course of action, we have people like Durbin lying for Satan-in-a-hoodie and his radical administration/party.
Happy Nomad on March 18, 2013 at 10:22 AM
Well, we don’t have a plan, but we don’t like yours.
BobMbx on March 18, 2013 at 10:23 AM
Dems never have to answer to hypocrisy, even when asked directly.
Cindy Munford on March 18, 2013 at 10:24 AM
A”bit of a rhetorical shell game”? Look, I understand we are all trying to be polite but at some point can’t we just describe meaningless blather for what it is? Lets not degrade political discourse completely! If a politician is so morally relativistic that any insult, theft, hypocrisy or general scumbaggery can somehow be justified as “good”, that doesn’t mean we have to take that effort as a serious discussion.
MTF on March 18, 2013 at 10:31 AM
this is another “elected” tool that should be un-elected!
but in insane illinois aka. cook county, would that ever happen, nah.
losarkos on March 18, 2013 at 10:31 AM
Duck Durbin.
mchristian on March 18, 2013 at 10:31 AM
I sooo wish I could run against him in 2014; now if I could just find a birth certificate somewhere…
Nutstuyu on March 18, 2013 at 10:33 AM
Nice. Drudge.
Nutstuyu on March 18, 2013 at 10:34 AM
…and look at the fiscal strength of his state!…there’s your good news …Dickhead!
KOOLAID2 on March 18, 2013 at 10:42 AM
That’s true. I used to live in the Chicago suburbs; now I live in the Detroit suburbs. Detroit is a pit, but, unlike Chicago, it doesn’t have enough power to control the state.
bw222 on March 18, 2013 at 10:44 AM
We definitely need “Jane you ignorant slut” moments more often in political discourse. The failure of the media, particularly on the Sunday chat factories, is that they don’t call these liars out when they dodge the obvious questions, flat-out misreprent the truth, or otherwise apply spin to a particular issue. Is running up $16T in debt unpatriotic- it is a yes or no question.
Happy Nomad on March 18, 2013 at 10:47 AM
They literally promised that in 2006 in order to win control of both houses of Congress in the Nov 2006 elections.
2006:
2007:
Democrat majorities are now responsible for the six biggest deficits in the history of the USA, with no end in sight.
Democrat majorities more than doubled the Debt Held By The Public in just four years (increasing it from $5.0 Trillion at FY-end 2007 to over $10.1 Trillion at FY-end 2011).
Democrats promised “fiscal discipline” and “no more deficit spending”.
They LIED.
ITguy on March 18, 2013 at 10:49 AM
We need to clarify the terms: deficit and debt. Too many people don’t understand and therefore, tune out the problem.
Deficit – current year’s shortfall in revenue versus expenses; in other words, you spend more than you take in for the current year
Debt – accumulated deficits over time.
Thus, every deficit simply increases the debt.
MN J on March 18, 2013 at 10:50 AM
You’re kidding, right? I lived in West Michigan and, frankly, the whole region is seen as nothing but an ATM to prop up Detroit, Flint, etc. The state is essentially run by the MEA, AFSCME and UAW (or was until right-to-work came about). Detroit itself may be a third world city but it definitely is the center of where decisions are made for the entire state.
Happy Nomad on March 18, 2013 at 10:51 AM
And, while on the subject, let’s stop calling reductions in the rate of spending a “cut.”
Happy Nomad on March 18, 2013 at 10:52 AM
At the risk of insulting Baghdad Bob…
Durbin could easily be mistaken for a twin of his seperated at birth except this would be the one that had the cord wrapped his neck.
acyl72 on March 18, 2013 at 10:53 AM
…I’m going to start doing “THE bluegill“!…copy and paste the same thing…to other threads!
.
.
…cracked record…cracked head!
KOOLAID2 on March 18, 2013 at 10:57 AM
“$9 trillion was diiiffffeeerrreeennntt!”
- Senator Dick Durbin
Resist We Much on March 18, 2013 at 11:00 AM
Balance is like pornography they can’t define it but they’ll know it when they see it. It probably will involve the massive transfer of wealth from the productive to the parasite class.
Happy Nomad on March 18, 2013 at 11:05 AM
“Chris here’s the good news” As we continue to rape future generations and destroy there opportunity, the politicians and bankers continue to get rich from the stupidity of the Amerikan people. We will keep the sheeple distracted with perverts and same sex marriage while ripping them off. Isn’t this a great country? Oh and by the way Chris, if I gave a damn about the Amerikan people I would start in Chicago by helping to restore the family.. But I could not care less.
david kumbera on March 18, 2013 at 11:10 AM
That’s easy to explain (everyone knows or is told constantly that):
Republican = evil
Democrat = good
That’s all you need to know, and unfortunately apparently all that a majority of Americans now know …
ShainS on March 18, 2013 at 11:10 AM
We have been pleading with these idiots for years to stop spending money we don’t have. They keep on doing it and then claim we don’t have a spending or debt problem. Either they don’t know the difference between deficit and debt or they think we don’t know. Probably both.
Kissmygrits on March 18, 2013 at 11:23 AM
Rub it in why dontcha. Detroit’s better? Ouch.
Some of us are stuck here for a while. The sad thing is, as bad as the Democrats are, the Republicans here aren’t much better. Do you want to elect a Democrat who is going to hire and protect unions and family members or a Republican who is going to hire and protect family members and unions? The entire state is run by people who are getting “theirs,” feeding at the trough, one hand washing the other, scratching backs, the end justifying the means and just about every other disfunctional cliche or saying out there. They don’t care who they are taking money from or whether they will eventually bleed the state dry, they just want to line their own pockets. The state is a giant pyramid scheme.
Fallon on March 18, 2013 at 11:26 AM
Was Wallace smart enough to counter with follow-up questions and points that you bring up, Ed? Without such pointed response, slick politicians like Durbin and his ilk try to buffalo voters.
onlineanalyst on March 18, 2013 at 11:31 AM
+1…
Khun Joe on March 18, 2013 at 11:40 AM
There’s a reason we (few conservative) Illinoisans refer to Durbin as Eddie Haskell.
Colony14 on March 18, 2013 at 11:46 AM
If Durbin’s lips are moving——–he’s lieing.
Herb on March 18, 2013 at 11:49 AM
Don’t be a Dick… Durban.
psrch on March 18, 2013 at 11:54 AM
You left out time travel.
rogerb on March 18, 2013 at 12:03 PM
Question for Sen Durbin:
If the Fed prints $85B per month to pay for about 40% of our spending and that’s not a problem, why can’t they print $220B per month and then no one will have to pay taxes?
I’m just afraid that it might give him an idea…
NOMOBO on March 18, 2013 at 12:05 PM
Durbins’ prevaricatin’ prevarication of falsely falsifyin’ is a mendacious mendaciousness…
He is fraudulent dishonest deceptive deceitful insincere duplicitous perfidious fallacious and as untruthful as many politicians are by issuing/speaking mendacious claims and counter-claims.
In other words a lying liar…
Now that I got that off my chest, I feel better! :-)
Scrumpy on March 18, 2013 at 12:10 PM
This Miserable excuse for a Bag of Contemtpt-Filled Protoplasm that Passes for a Human INITIATED THE MURDER of THOUSANDS of INNOCENT Iraqis and Americans with his “Our troops are like Soviets in their Gulag, Pol Pot in his Killing Fields….” speech!!!
LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR LIAR
HE IS A MURDERER!! – A MURDERER!! – A MURDERER!!!!!!! AND CONSQUENCES AND HARM SHOULD COME TO HIM AND HIS LOVED ONES – HE IS A MURDERED
I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS – I HATE HIM – HE HAS MURDERED OUR TROOPS -
williamg on March 18, 2013 at 12:41 PM
I Meant to Say:
“HE IS A MURDERER!! – A MURDERER!! – A MURDERER!!!!!!! AND CONSQUENCES AND HARM SHOULD COME TO HIM AND HIS LOVED ONES – HE IS A MURDERER!!”
williamg on March 18, 2013 at 1:47 PM
“If I had a world of my own, everything would be nonsense. Nothing would be what it is because everything would be what it isn’t. And contrary-wise; what it is it wouldn’t be, and what it wouldn’t be, it would. You see?” – Lewis Carroll, “Alice in Wonderland” We’ve arrived!
GodogGo on March 18, 2013 at 2:13 PM
here’s the good news: the people whom we are stealing from haven’t been born yet and can’t get mad at us
burserker on March 18, 2013 at 3:42 PM
The DEMS keep handing gift-wrapped campaign ads to the RNC and yet the moss-covered politicians refuse to hit back.
This clip should be running every day in every blue-state market until the 51% finally get the message…or at least 2% of the 51%.
RNC…THIS IS WHAT YOU SHOULD BE DOING TO THE DEMS!
JetBlast on March 18, 2013 at 3:46 PM
My wife & I are not far behind you. If our small business weren’t here in NW Illinois, we’d be where you are right now.
Owen Glendower on March 18, 2013 at 3:49 PM
I’m disappointed that this poast hasn’t received more comments.
I wish more people cared about holding the Democrats accountable for what they promised in 2006 vs. what they have done 2007-present.
Here’s what they said in 2006:
And here’s an updated version to reflect the reality of the last six years:
ITguy on March 19, 2013 at 8:46 AM