Cut this, cut that - America has a budget crisis - excuse me??!

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This is IMO a very important point that isn't discussed here or in the US at all, and it is deserving of very close attention. It is this simple truth:

America has a revenue crisis - not a budget crisis.
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Got that? Debt, just like budgets, are something that needs to be paid for. With real money. The idea that budget cuts stimulate growth and that that will then golden-shower-like trickle down to the hoi polloi - well that's obscene nonsense. It also didn't generate greater tax revenue. The Bush tax cuts cost 900 billion dollars in revenue lost. Not raising taxes and wanting to pay for debt by cutting government services is irresponsible.

Likewise, Wisconsin's budget crisis was created by Walker throwing away tax revenue through frankly irresponsible tax cuts, combining his cockamamie 'starve-the-beast' and 'tax-cuts-cure-everything' ideology with craven 'thank-you's' to campaign donors and hard nosed 'let's kneecap the opposition by destroying their base of funding and grass roots support' realpolitik. This has apparently begun to dawn on the citizens of the State of Wisconsin - people there now regret electing Walker, too late - he is governor now, and his party has a majority.

Most amazing, while the guy sacrifices union i.e. citizen rights on the altar of partisan politicking, folks on the right stand there and applaud him, because, gee, in times of budget crisis we all need to make sacrifices, unions too. And if it hits the detested partisan enemy, good for them. Yeah right, and what's going the take the place of the unions as intermediary institutions between the individual and the state and corporations? The free market? Never mind!

What Wisconsin tells me that many American voters are willing to embrace top-down radicalism, without giving it too much thought. And the well intentioned fools chanting 'United we stand' are not going to persuade anybody if they don't wake up very quickly, because there is a freight train heading towards them.

A necessary article on that subject is, from Harvard University's Nieman Watchdog: Lowered rates have meant a lot less tax revenue, not more. That's a plain fact. America, we have a revenue problem.

My point: When Americans think they can do away with their fiscal problems without raising taxes, they are in for a rude awakening. They are abolishing their state and will leave their children a wasteland. They are cutting spending on things that are vital for America's future and security. I find the prospect horrifying. For the Republicans here who are a little slow to grasp this: Security is not just the military. Internal (read: economic) stability is security too (i.e. internal security is more than riot police. Not having to use them counts too). The point for Americans to take home here is that when I see that with concerns, I at least have the comfort of not having to live there. This is not going to end well if it continues.

IMO the Republicans are lunatics on the economy, and the Democrats are pussies for not standing up to them. The Republicans have Obama flanked, and he is constantly yielding. Obama is a weak president, which is exacerbated by his political position of weakness. Both parties compete for the same corporate campaign donations (Case in point: In the last election Wall Street, traditionally a Democratic donor, shifted (their TARP fuelled) donations to Republicans, making sure that one can expect future Democrats to not touch financial regulation with the proverbial ten foot pole). Columbia University's Jeffrey Sachs is perfectly right, there is no left in America. The Democrats are centre-right, and the Republicans are much farther to the right. There is no one who cares for the, to use that old world, 'common citizen'. The only advantage the Dems have going for them that they suck less than the Republicans.

Common citizens don't dole out the billion or so it costs to get elected president in the US (the innovative money bomb approach by Ron Paul is worth mentioning though, even though he was far outspent by any of his competitors). The Citizen's United ruling has only exacerbated the financial leverage industries have on politics. As the old proverb goes: Whose bread I eat, is whose song I sing.

This is excellently summarised by Sachs in the video below:

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Where have you been lately man? Do you not know that the Democrats with Obama in the lead are raging socialists who are going to rip the wealthy's unearned money from them and give it all to drug addicts and leeches?

 

Interesting. Does anyone know where we can find comparable info on the 70s and 80s?

 

I disagree with you here. The democrats aren't just weak for not standing up to the Republicans. They suffer from their own form of lunacy: the idea that throwing more government cash at the problem can solve anything. Under Obama, government spending has skyrocketed, even relative to the Bush years. And that's happened with, as the liberals are so happy to claim, complete Republican obstructionism, so you can see that that's the Democrats' idea of a solution, not some comprimise.

You have a horrible habbit of assuming motives that best fit your theory. The problem is actually quite the opposite. Most everyone cares about the common citizen, and absolutely everyone knows that they and only they have the solution.

I do somewhat agree with you, though. America does have a budget problem, but the budget covers both income and expenditures. Sometimes, if the ends aren't meeting, you don't need to cut back so much as take a second job. America needs to do both. And severely.

 

I wrote something about that in general here, in particular #1 on 'Starve the Beast'.

Ideological nonsense.

To make matters short, I see Republican rhetoric and I see who benefits of their economic and fiscal politics and I can't escape the assessment that Republican politics serve corporate interests at the expense of the common folks, their rhetoric notwithstanding i.e. I think they are bad because I see them doing bad.

And then: Cutting spending and getting another job (if they can find one) doesn't cut it. Who exactly will need another job? Those whose jobs don't suffice to meets ends any more - in a word, the wealthy (sarcasm). Does the term 'working poor' mean anything to you? America as a nation will have to raise taxes, and that will practically mean to increase taxes and to let tax cuts expire.

The ones benefiting most of the tax cuts are those who earn most. Period. Tightening the belt is for everybody, including those who earn most. It would require them to, say, sell off a second house, or a third car. That's unpleasant, but hardly a disaster (also, they too could get a second job and keep all that). It certainly is about as unpleasant as having two jobs or working 70 hours a week. But it isn't about fairness and spreading burdens equally. It should be. As it is now, the burden sharing is lopsided, and favouring the really rich.

In any event, I'm off into carnival now, so I won't (be able to) post again till Wednesday. Naturally because of time constraints. PS: And now I'm really off. PPS: Really.

 

Ragusa - Ralph Nader was right.

 

Just a small, but potentially very important nitpick: do you mean to say, "anything" or "everything" in the end of that sentence? There is a huge difference between the two in this case.

"Care" in an abstract case, perhaps. I certainly would agree no one thinks that common people being better off would be an undesirable thing. However, I doubt either really puts taking care of Johnny & Jane Average on top of their "to do" list at the expense of everything else either. It's more like "Oh, this sounds like a good idea for the below reasons:
...
...
12: #2, 3, and 6 can, under optimal conditions, improve the lifestyle of the average voter with 5% within 3 years of entering into force."

Ok, I probably exaggerate. Slightly. Now, reining in spending is also a measure that should be kept in mind, but I think right now things are actually quite tight in most areas. On the other hand, income tax rates are iirc the second lowest that they've been since WWII (I think only the 1986-91 or so years had lower), and a tax increase seems to me to be a viable idea for a measure to reduce the deficit, possibly less counterproductive than cutting spending further. Not the ONLY measure, perhaps - but quite possibly a necessary one.

 

It's nothing more than partisan nonsense, designed to divert from the real issue, and easily dispelled with a few real facts.

This is what "throwing cash" looks like, and by Republicans:



Yes, those are piles of hard, US currency.

http://www.guardian.co.uk/world/2007/feb/08/usa.iraq1

 

Shaman gets it just right.

The GOPers, as a result of carefully litmus tested intellectual incest (You like taxes, regulation? You don't like Jee-zuz? You're out), the tea partiers even more so, are so ideological as to believe, unshakably, that trickle down and starve the beast will be good for the country as a whole, and that by giving breaks to the top earners, this money will then trickle down, i.e. it will be reinvested, and generate palpable benefits for common folks.

Say in China. China has become rather wealthy as a result of these trickle down effects.

 

I'm not sure I believe their explanations of the data. If you look at the raw data about collections you will see that in the early Bush years total collections went down, and then they increased to a point that 2005 through 2008 were the highest tax collection years in our nation's history (look at the total column on the right). Now it is true these numbers are not adjusted for inflation so you can't compare them to the 1920s, but over the past ten to fifteen years inflation really hasn't been an issue so I believe the numbers are credible.

Now as to what the esteemed Harvard liberals have determined, I can only hazard a guess. All of their conclusions are based on taxes per capita, meaning per person. If the population growth exceeds the tax growth then their conclusion is what you would expect to see. However, I don't think it is an outrageous statement to make that the majority of this population growth is in the lower income tax paying strata. If you see my post in the Michael Moore thread 70% of the taxes are paid by 10% of the population. Does anyone think that the 10% that is paying all the taxes are responsible for all of the population growth? I know I sure don't.

All this discussion about per capita is an attempt to raise taxes on the higher income earning segment of the population with some sort of voodoo explanation that since the per capita rate went down they can be taxed to get it back up to some other number. While the collection numbers appear to show that collections were at an all time high before the economic meltdown. It is probably a fairer statement to make that when the economy rebounds it is far more likely that the collections and per capita will increase on their own.

 

Sorry, we have been through this like a dozen times over the many years spent on this board. That 10 percent controls a majority of the wealth, so yes they pay most of the taxes. BTW, Michael uses the same web site that you use, he just uses different data, in a different way.

This is up to 2006, and Obama cut the tax rate for 95 percent of taxpayers in 2008. It was one of the first things he did, which of course, set the Teas off to start protesting "high taxes."

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=456&Topic2id=20&Topic3id=22

You can see how the actual tax rate has fallen since 1979.

During the last, almost 10 years, we have also fought two very expensive wars, without raising tax rates. How do people believe we are going to pay for them?

 

I'm not sure why if that 10% owns the majority of the wealth they should be on the hook for all of the costs. Should we give them more votes because they own more? All this talk about per capita seems to imply we should scrap everything and go to a flat tax, or course that would make everyone in the country pay the same amount. That is probably the fairest thing, but it is also the most unworkable situation.

You can only make that statement because of the tea party protests. Without the protests the Bush tax cuts would have expired and we would have seen an overall tax increase. Everyone knows that is what he wanted and he thought people were stupid enough to believe his inaction would be Bush's fault.

 

I have no idea what you are talking about - they don't pay ALL the costs.

Criminals should not be able to vote at all.

I always thought it would be the same percentage. Heh, getting nervous already, eh?.

Well, all those tax accountants would have to find new jobs [see above].

That was actually in 1773. I guess they were ahead of their time. As for the Tea Cronies, I don't recall any of their nonsense in 2008, before we had a "prez from Kenya." Obama first proposed the tax cuts in 2008, during the presidential campaign.

http://money.cnn.com/2008/06/11/news/economy/candidates_taxproposals_tpc/index.htm

I thought you were the tax accountant? Here's some help for you on the tax cut:

As you can see it has nothing to do with Bush, or the corporate communists, commonly known as the Tea Party, which began in 2009, after we had a president they didn't "approve" of.

 

Allow me to explain for you are clearly missing something. When Bush put in his tax cuts the current law required them to "sunset" or "expire" in 2010. If Obama, Pelosi, and Reid did nothing (which is what they wanted to do) when they expired that would have been a defacto tax increase.

To use math skills if you took your tax bill and then subtracted Obama's cuts and then added the expiring Bush cuts you would have seen an overall increase in your total tax bill.

The major focus of the "Tea Party" in 2010 was to get the government to not let the "Bush cuts" expire.

So while you are technically correct that taxes have decreased since Obama has been elected, overall it had nothing to do with what he and his party wanted.

 

You are the one who is missing something, like the actual dates that Obama's tax cut was passed and when the Bush cuts were extended. It was part of the Recovery and Investment Act, which the Teas protested against. In other words, the cronies were protesting lower taxes. You can stop trying to give credit to Bush now.

Note the phrase "new tax credit." The Bush tax cuts were extended in December of 2010.

http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

 

Not lowering taxes was one of the points I agreed with the tea partiers (possibly the only one). Based on our current deficit and inability to balance the budget we don't need to lower taxes. Lowering the SSA tax was really stupid. We need to cut spending and stop with the constant tax cuts (especially for the wealthy). That's the way the average person balances their budget (lower costs and do whatever they can to increase income) there's no reason the government can't do the same.

Deficit spending should be illegal.

 

Totally agreed. It isn't a question of spending cuts OR tax increases. We need to do both – even if only for long enough to climb out of the hole.

 

Now you have managed to confuse me. I think we are saying the exact same thing, but coming up with different conclusions.

Obama passed his tax cut in 2009. The Bush tax cuts were extended in December of 2010 against the wishes of Obama and the Democratic leadership. If the Tea Party had not made such a stink about the Bush Tax Cuts expiring they would have expired and overall the net of the 2009 tax cut and expiration of the Bush tax cuts would have been a tax increase.

How you are coming up with Obama being a tax cutter when his overall plan would have raised taxes I don't follow. How you are saying the Tea Party was against tax cuts when the only reason the Bush tax cuts were extended were because of them I also don't follow. Unless you are claiming that the Tea Party wasn't in favor of "The Tax Relief Act of 2010". If that is what you claiming maybe we were watching two different things. The conservatives and Tea Party people I know were all in favor of it.

For the record I'm not trying to praise Bush as I think he was a fool to pass a tax law that had an expiration date.

 

I see. I was speaking of Obama's tax cuts, not Bush's. Tax cutter: A Person who cuts taxes = Obama [I posted the results of the tx cuts above].

You really are missing something: That Obama got the extension of unemployment benefits for another year in return for not allowing the Bush tax cuts to expire - from Republicans. . Those were badly needed, especially by the middle-class, which the Dems are trying to save from extinction. Also, he wanted to extend the Bush tax cuts for the poor and working classes all along, so it's misleading to say he was "against extending the Bush tax cuts." It is true he did want to raise taxes on those making 250k, or more. That seemed arbitrary, at least to me [and a lot of others as well]. He should have went with the millionaire tax increase instead, IMO. But I'm sure you don't agree.