This Economy sure sucks!

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  • Reply 21 of 214
    sdw2001sdw2001 Posts: 17,036member
    Quote:

    Originally posted by BRussell

    Here's what I don't get. If the tax cuts are what helped the economy, why, when the tax cuts were enacted almost immediately after W. came to office, did it take so long? This was I believe the longest jobless recovery we've ever had. It's taken several years to get things going.



    Second, if it's the tax cuts that have done this, isn't this a kind of false recovery? Clinton raised taxes, and had the strongest economy almost in US history, and then eventually a balanced budget. Reagan also had a strong economy, but a massive deficit at the end of it all. Now Bush will is doing the same. How is that a good thing?




    There is a concept that I have heard referred to as the "Lag Theory"...which basically states that any major economic plan takes at least 2-3 years to take effect. That would fit with what both Reagan and Bush 43 have done re: cutting taxes.



    As for Clinton, there is a little bit of historical revision going on. We need to look at the causes of the boom, which really lasted for about 2 years...from 1998-2000. There was economic expansion, but to listen to Democrats today, you'd think the entire 1990's was fantastic. Back in the early to mid nineties, the economy was referred to as the "anemic" 1990's. It is only the latter part of the decade that saw superb growth, largely fueled by the dot-com bubble and exploding tech sector, not to mention low energy prices for most of the country. On thing I will say for Clinton is that he relentlessly pursued US business interests overseas...though this often came at the price of national security (particularly with China and North Korea).



    In other words, the economy was good in spite of the tax rate. If someone would like to point out what Clinton did to help the economy through his policies, I'd like to see it. It succeeded in spite of him. Once the tech bubble collapsed, the natural business cycle took effect, and energy prices went through the roof, a very different tax policy was needed.
  • Reply 22 of 214
    jimmacjimmac Posts: 11,898member
    Quote:

    Originally posted by SDW2001

    There is a concept that I have heard referred to as the "Lag Theory"...which basically states that any major economic plan takes at least 2-3 years to take effect. That would fit with what both Reagan and Bush 43 have done re: cutting taxes.



    As for Clinton, there is a little bit of historical revision going on. We need to look at the causes of the boom, which really lasted for about 2 years...from 1998-2000. There was economic expansion, but to listen to Democrats today, you'd think the entire 1990's was fantastic. Back in the early to mid nineties, the economy was referred to as the "anemic" 1990's. It is only the latter part of the decade that saw superb growth, largely fueled by the dot-com bubble and exploding tech sector, not to mention low energy prices for most of the country. On thing I will say for Clinton is that he relentlessly pursued US business interests overseas...though this often came at the price of national security (particularly with China and North Korea).



    In other words, the economy was good in spite of the tax rate. If someone would like to point out what Clinton did to help the economy through his policies, I'd like to see it. It succeeded in spite of him. Once the tech bubble collapsed, the natural business cycle took effect, and energy prices went through the roof, a very different tax policy was needed.






    The lag theory.



    That must be like the trickle down effect.



    It's already been pointed out what Clinton did for the economy. We paid our debts. Just like we're going to have to do after this Bush. It's that deficit thing again.



    Just like the early 90's we'll be left with another Bush legacy.
  • Reply 23 of 214
    moogsmoogs Posts: 4,296member
    What Clinton did for the economy? I could be wrong, but isn't balancing the nation's budget and putting us in the black for the first time in God knows how many administrations, worth mentioning? Not saying Clinton did it all by himself (no president does) but, he didn't make a habit of spending out his ass with money he didn't have, thus resulting in the largest debt this nation has ever seen. That's for damn sure....
  • Reply 24 of 214
    brussellbrussell Posts: 9,812member
    Quote:

    Originally posted by SDW2001

    There is a concept that I have heard referred to as the "Lag Theory"...which basically states that any major economic plan takes at least 2-3 years to take effect. That would fit with what both Reagan and Bush 43 have done re: cutting taxes.



    As for Clinton, there is a little bit of historical revision going on. We need to look at the causes of the boom, which really lasted for about 2 years...from 1998-2000. There was economic expansion, but to listen to Democrats today, you'd think the entire 1990's was fantastic. Back in the early to mid nineties, the economy was referred to as the "anemic" 1990's. It is only the latter part of the decade that saw superb growth, largely fueled by the dot-com bubble and exploding tech sector, not to mention low energy prices for most of the country. On thing I will say for Clinton is that he relentlessly pursued US business interests overseas...though this often came at the price of national security (particularly with China and North Korea).



    In other words, the economy was good in spite of the tax rate. If someone would like to point out what Clinton did to help the economy through his policies, I'd like to see it. It succeeded in spite of him. Once the tech bubble collapsed, the natural business cycle took effect, and energy prices went through the roof, a very different tax policy was needed.




    Clinton opened trade, yes, but the other policy that was key was reducing the deficit. That brings confidence to the US economy and keeps interest rates low, which is good for the economy.



    I'd argue that the big dot-com boom you mention of the late 90s probably wasn't a good thing. The slow growth of the mid-90s was the right way to go. The anemic period was more in the early 90s, when, just like in the early 2000s, there was a jobless recovery. But the jobless recovery of the 2000s, which seems to be over now, turned out to be much longer than the one in the early 1990s. And anyway, the entire 1990s was fantastic. It was the longest period of growth in modern American history.



    Tax cuts are good for the economy, but only if they're offset with spending decreases. If they're not offset, they just increase government spending because they increase interest payments on the debt. Tax cuts increase government spending unless they're explicitly offset by spending decreases.
  • Reply 25 of 214
    progmacprogmac Posts: 1,850member
    Quote:

    Originally posted by BRussell





    Tax cuts are good for the economy, but only if they're offset with spending decreases. If they're not offset, they just increase government spending because they increase interest payments on the debt. Tax cuts increase government spending unless they're explicitly offset by spending decreases.




    exactly. I don't propose making an ammendement that requires a balanced budget (running a deficit does have useful purposes), but this 1/2 trillion dollar deficit is absurd. there should be a limit of say, a couple hundred billion or less...basically any joker of a president can increase government spending (what bush has done by cutting taxes without reducing programs signficantly) and have faux "economic recovery."



    The immediate retort here is: "what about FDR and the great depression?" adjusted for inflation, the deficit spending that he introduced to spur economic recovery made the budget deficit about a quarter of what the deficit is today. ($8 billion deficit (at height of spending in 1938) * (1 + .044 ( average inflation rate since 1930s))^66years (amount of time since 1938) = $137 billion of today's dollars = FDR's deficit in today's dollars.



    and that was recovery from the freakin' GREAT DEPRESSION. Bush's answer to a recession is a $500 BILLION DOLLAR DEFICIT? It is absurd and harmful to the future of our country
  • Reply 26 of 214
    sdw2001sdw2001 Posts: 17,036member
    Quote:

    Originally posted by jimmac

    The lag theory.



    That must be like the trickle down effect.



    It's already been pointed out what Clinton did for the economy. We paid our debts. Just like we're going to have to do after this Bush. It's that deficit thing again.



    Just like the early 90's we'll be left with another Bush legacy.




    Your misunderstanding of basic economics is astounding. While deficits can have a detrimental impact (particularly with regard to inflation), they are not necessarily bad for the economy. Government budgets and "the economy" are two separate things, though they affect each other.



    Here's another question jimmac: How did a balanced budget help the economy during the 1990's? Secondly. was Clinton responsible for said balanced budgets, despite the Republican controlled Congress?
  • Reply 27 of 214
    sdw2001sdw2001 Posts: 17,036member
    Quote:

    Originally posted by Moogs

    What Clinton did for the economy? I could be wrong, but isn't balancing the nation's budget and putting us in the black for the first time in God knows how many administrations, worth mentioning? Not saying Clinton did it all by himself (no president does) but, he didn't make a habit of spending out his ass with money he didn't have, thus resulting in the largest debt this nation has ever seen. That's for damn sure....



    umm...see my above post. A balanced budget is not the same as a "good economy". Hello?
  • Reply 28 of 214
    sdw2001sdw2001 Posts: 17,036member
    BRussell:



    Quote:

    Tax cuts are good for the economy, but only if they're offset with spending decreases. If they're not offset, they just increase government spending because they increase interest payments on the debt. Tax cuts increase government spending unless they're explicitly offset by spending decreases.



    This is completely wrong. Government fiscal policy is not a zero sum game. In other words, cutting taxes stimulates growth, which thereby brings in more revenue. Cutting taxes does not necessarily reduce incoming revene. This was proved in the 1980's, as government revenues doubled.



    I do agree that spending cuts are needed...in the sense that spending cannot outstrip the the new found revenue, as it did in the 1980's.
  • Reply 29 of 214
    sdw2001sdw2001 Posts: 17,036member
    Quote:

    Originally posted by progmac

    exactly. I don't propose making an ammendement that requires a balanced budget (running a deficit does have useful purposes), but this 1/2 trillion dollar deficit is absurd. there should be a limit of say, a couple hundred billion or less...basically any joker of a president can increase government spending (what bush has done by cutting taxes without reducing programs signficantly) and have faux "economic recovery."



    The immediate retort here is: "what about FDR and the great depression?" adjusted for inflation, the deficit spending that he introduced to spur economic recovery made the budget deficit about a quarter of what the deficit is today. ($8 billion deficit (at height of spending in 1938) * (1 + .044 ( average inflation rate since 1930s))^66years (amount of time since 1938) = $137 billion of today's dollars = FDR's deficit in today's dollars.



    and that was recovery from the freakin' GREAT DEPRESSION. Bush's answer to a recession is a $500 BILLION DOLLAR DEFICIT? It is absurd and harmful to the future of our country




    Well first, let me say that we do need to cut spending. Our government is a bloated nightmare. However, it is worth noting that as a percentage of GDP, this is not the largest deficit we've run. And, as terrible as a 7 trillion dollar debt sounds, that debt is actually quite manageable from a "debt service" perspective.
  • Reply 30 of 214
    neutrino23neutrino23 Posts: 1,529member
    Quote:

    Originally posted by SDW2001

    BRussell:

    ...Cutting taxes does not necessarily reduce incoming revene. This was proved in the 1980's, as government revenues doubled.

    ...




    You have to be careful with that. Reagan cut taxes early but raised taxes nearly every year after that. This was recently pointed out by a Republican congressman.



    I think that part of what Clinton did that was good was to reduce the deficit which lowered interest rates which put a huge amount of money in the hands of ordinary people through refinancing their homes. Interest rates around 1990 were about 10 - 11%. At the end of the Clinton administration they were much less, even while the economy boomed.



    The problem with Bush's tax cut was that most of it went to a sliver of the richest people in the country. They are only likely to invest that money around the world where they get the best return. To put money in the hands of ordinary people we could have had a one year moratorium on the payroll tax, for example.



    Tax cuts are the equivalent of service cuts. I'm an agnostic on both. I think we should find the appropriate level where the pain of taxes is balanced by the blessing of investment in our country.
  • Reply 31 of 214
    brussellbrussell Posts: 9,812member
    Quote:

    Originally posted by SDW2001

    BRussell:







    This is completely wrong. Government fiscal policy is not a zero sum game. In other words, cutting taxes stimulates growth, which thereby brings in more revenue. Cutting taxes does not necessarily reduce incoming revene. This was proved in the 1980's, as government revenues doubled.



    I do agree that spending cuts are needed...in the sense that spending cannot outstrip the the new found revenue, as it did in the 1980's.




    I disagree. Bush's dad called that voodoo economics. Revenues could have risen due to inflation, increased population, the business cycle, and a host of other factors. Sure, revenues can rise after tax cuts. I just don't believe that cutting taxes increases revenues beyond what they would have been without the tax cuts.



    And neutrino is right that when revenues were falling after the initial Reagan tax cuts, he raised them right away, so it's hard to evaluate the effect of those initial tax cuts.
  • Reply 32 of 214
    brussellbrussell Posts: 9,812member
    Quote:

    Originally posted by SDW2001

    Here's another question jimmac: How did a balanced budget help the economy during the 1990's? Secondly. was Clinton responsible for said balanced budgets, despite the Republican controlled Congress?



    1. Reducing deficits keeps interest rates low, which helps the economy in the long run (not the short-run, where deficits help the economy). There's debate on that, and it cuts across party lines, but that's the predominant theory anyway.



    2. Clinton was totally responsible for the balanced budgets. Not a single Republican voted for his 1993 plan, and Dems probably lost the Congress due (in part) to that. After that, Congress and Clinton stalemated, and the gov't was shutdown in the standoff. When Congress and Clinton finally did come to an agreement, it made the deficit worse, not better. You could argue that Congress exerted indirect pressure on Clinton by talking about the deficit, just as Perot did. But in the end, it was Clinton who did it.



    BTW, Bush is now using Kerry's deficit-reduction votes during that period against him in negative ads.
  • Reply 33 of 214
    trumptmantrumptman Posts: 16,455member
    Quote:

    Originally posted by BRussell

    1. Reducing deficits keeps interest rates low, which helps the economy in the long run (not the short-run, where deficits help the economy). There's debate on that, and it cuts across party lines, but that's the predominant theory anyway.



    2. Clinton was totally responsible for the balanced budgets. Not a single Republican voted for his 1993 plan, and Dems probably lost the Congress due (in part) to that. After that, Congress and Clinton stalemated, and the gov't was shutdown in the standoff. When Congress and Clinton finally did come to an agreement, it made the deficit worse, not better. You could argue that Congress exerted indirect pressure on Clinton by talking about the deficit, just as Perot did. But in the end, it was Clinton who did it.



    BTW, Bush is now using Kerry's deficit-reduction votes during that period against him in negative ads.




    From what I recall, Clinton, even after his tax increase was projecting $250-$300 billion dollar per year deficits for as far as the eye could see. The only thing that changed this equation was the change in Congress in 1994. It is the Republican Congress that forced Clinton to trim the deficit. I wish they would do the same for Mr. Bush but many of the deficit hawks, like John Kasich, returned to private life.



    There is talk of an internal fight, even now, between house and Senate Republicans over the current overspending.



    Nick
  • Reply 34 of 214
    a_greera_greer Posts: 4,594member
    Quote:

    Originally posted by Not Unlike Myself

    Hum... just because we don't like Bush doesn't mean we don't like jobs. I'm sure Bush will take ALL the credit, and I'm sure my fellow liberals will be all to happy to give him NO credit when in truth I think the credit is somewhere in between.



    tax cuts spur growth...it worked with JFK, and Regan, in the first bush admin, he raised taxes and blam, the early 90's resession, in '93 slick willie raised taxes, then the repubs in '94 lowered taxes and bam, the late 90's boom, in '98 or '99 clinton again raised taxes and thus the econ tumble of this decades first quarter, now taxes are, again lower, and the econ is on the way up.



    tax cuts work.



    after thought:

    if you think taxes are too low, show it by writeing a check for the ballance of what you concider fair. when income taxes are between 20%-35% and then there is social security, medicare, payroll, interest, capitol gains, telecom, and a few more that I cant recall at the moment, we feed the government way too damnd much as it is.
  • Reply 35 of 214
    fellowshipfellowship Posts: 5,038member
    I just wanted to say I am pleased to see the respectful discussion within this thread.



    Keep up the great work everyone



    Fellows
  • Reply 36 of 214
    a_greera_greer Posts: 4,594member
    Quote:

    Originally posted by Moogs

    *jeopardy theme plays in the background*



    "...something D-o-o economics... Anyone? Anyone?"



    "Voo-DOO economics..."







    Im sorry the judges tell me that is not corect, we were looking for "WHAT IS Voo-DOO economics"



    and for those of you at home, it is a name given to an economic system that works by people who for some reason think it doesnt....
  • Reply 37 of 214
    jimmacjimmac Posts: 11,898member
    Quote:

    Originally posted by SDW2001

    Your misunderstanding of basic economics is astounding. While deficits can have a detrimental impact (particularly with regard to inflation), they are not necessarily bad for the economy. Government budgets and "the economy" are two separate things, though they affect each other.



    Here's another question jimmac: How did a balanced budget help the economy during the 1990's? Secondly. was Clinton responsible for said balanced budgets, despite the Republican controlled Congress?




    That's rich coming from you ( no pun intended ). I've been talking to you for what 2 years now? You've been wrong about almost everything. Sure the economy's showing signs of some improvement. You've been predicting it would do this for a year and a half now. If I talk about the sun blowing up long enough that'll probably happen to!



    By the way nobody buys your double speak about this deficit not being bad.



    Yes we know the Bush rhetoric. Black is white, bad is good. Yada, yada, yada!
  • Reply 38 of 214
    naplesxnaplesx Posts: 3,743member
    Quote:

    Originally posted by jimmac

    That's rich coming from you ( no pun intended ). I've been talking to you for what 2 years now? You've been wrong about almost everything. Sure the economy's showing signs of some improvement. You've been predicting it would do this for a year and a half now. If I talk about the sun blowing up long enough that'll probably happen to!



    By the way nobody buys your double speak about this deficit not being bad.



    Yes we know the Bush rhetoric. Black is white, bad is good. Yada, yada, yada!




    That is funny, because if you are honest, that could be the motto of the democratic party, particularly the liberal wing.
  • Reply 39 of 214
    jimmacjimmac Posts: 11,898member
    Quote:

    Originally posted by trumptman

    From what I recall, Clinton, even after his tax increase was projecting $250-$300 billion dollar per year deficits for as far as the eye could see. The only thing that changed this equation was the change in Congress in 1994. It is the Republican Congress that forced Clinton to trim the deficit. I wish they would do the same for Mr. Bush but many of the deficit hawks, like John Kasich, returned to private life.



    There is talk of an internal fight, even now, between house and Senate Republicans over the current overspending.



    Nick




    Oh god!



    So now things were good in the 90's because of the republicans?



    Geez!
  • Reply 40 of 214
    naplesxnaplesx Posts: 3,743member
    Quote:

    Originally posted by jimmac

    Oh god!



    So now things were good in the 90's because of the republicans?



    Geez!




    No you can't even elude to that being a possibility, because then you would have to then admit that the economy that bush inherited was partly a result of the previous administrations decisions.



    We wouldn't want to put you in that dilemma.



    Edit: It is much easier to just blame bush for everything. Go with what is easy, that usually works.
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