Do you think what Michelle Obama said about the car was true

[oldskool]

War, . . .what is it good for? Cash flow. Eliminating radical Islamic terrorists while keeping a nation safe.

[BDK]

yeah, I hope you liked the last one(s) because there are some who are starting to beat the war drum again....

I have a new amendment in mind...

Any elected official who votes in favor of engaging the nation in war should have to send one family member to serve in the war, as a foot soldier, ground troop.

[carnutdallas]

Man, you leave this place (Mye28.com) for a few weeks working 15 hour days and forget how much fun it is......

I doubt he even had a car. Barry probably borrowed one from Alinsky

Here is a something I posted on FB a few weeks ago:

Trying not to be too political this year, as I know it can be FB offensive....but I just saw the dumbest Obama commercial ever. It was on SyFy during Indiana Jones: "Mit Romney pays less than you in taxes. He made $20million last year and only paid about 14% in taxes! Less than you and your friends"
Ahhhhh...he paid $2.8mil in taxes. More than I have made in my lifetime. How is that less than me? That is so stupid. Barry and his Chi town goons are trying to make you think they are so smart. I bet you Barry paid more than me in taxes. I know he spends all that he can!

Rant over. And my apologies, but please be smart this year.....

So I am pretty sure we will have an election. It will be close and it will be fairly evenly divided. I guess the saddest thing, is that a minority group will back B.O. just because of his tan skin. I for one can think of several minority gentlemen and women, I would vote for in a second that truly deserve to be elected, based on skin color alone.....and Thomas Sowell is absolutely brilliant and gifted, but not a politician. I wish he was as popular as rap music, sigh....

To that end, I am going to work my butt off trying to be a 1%'er. I probably will fail at that goal, but at least I am working for myself, employing 10 people and putting in 15 hour days so that when I die, I can look back and say "Government did not build that!"

Oh yeah, I have also committed to reading the BIBLE in its entirety in 90 days. Started on Saturday. Incredibly moving and I have made some mental observations that have really had an impact on my life for the past 4 days. I have started this effort several times before, but I have made some "life structure" changes to ensure success. Peace.

One last note, I am working harder to be less angry and confrontational. I know the above FB statement is not very reflective of that, but that was several weeks ago. Thanks.

[booker]

Here is a something I posted on FB a few weeks ago:

And that's where you lost me.

[twin55]

War, . . .what is it good for? Cash flow. Eliminating radical Islamic terrorists while keeping a nation safe.

? = Answer

[Tammer in Philly]

It's not worth recognizing anything Tammer posts, as he has become an arrogant asshole since achieving his Ph.D. Either that or it's just more apparent. Maybe it's because of the move to Chicago. Either way, he's not worth my time.

No change, though I've more or less quit wasting my time typing out the rationale for my thoughts and any supporting information, because people like Matt simply offer unsubstantiated gainsaying as a response instead of actual ideas founded on data. Why waste my time? So if it comes off as more arrogant, I'd offer that you reflect on the post of yours I quoted which was (drumroll ...) your opinions with no supporting data or information. Kinda like my post that you called arrogant. Hmm.

Chris, on the other hand, is very thoughtful and enjoyable to engage because, while I may disagree with his interpretation of things, I can totally understand where his thoughts come from and it's often educational. So ...

The scale of the deficit and the size of the debt now is heavily influenced by the revenue left on the table due to the Bush tax cuts.

That is quite absurdly incorrect.

The deficit has two components, both equally influencing.

As noted here:
http://www.whitehouse.gov/omb/budget/Historicals

1. On the revenue side.
Receipts as % of GDP went from a high of 20.6% in 2000 to 15.1% in 2009, driven primarily by the loss of income taxes in the 2009 crash. As % of GDP, individual income taxes went from a high of 10.2% in 2000 to 6.6% in 2009. The average in late 90s was in the low 9% range. The average in the 2001-2006 period (to account for the recession and subsequent recovery, avoiding the boom 2007 year) was about 8%. So the Bush tax cut impact was roughly just a touch over 1% over somewhat normal macro economic cycles.

The key to understanding the 2008-2010 bust in icnome taxes is to understand two aspects of income tax part of the equation. One is that Bush lowered income taxes on the bottom end, and increased the amount of people who have a net federal income tax benefit (i.e. they get money from the government in forms of credits). This has a doubling effect from the terms of gov't revenue. The way the tax code is structured now and its cut-offs also created a far greater emphasis (you can call it amplification) of tax receipt sensitivity to the upper 5% (and especially upper 1%) of income earners.

And if you think the upper earners have unfairly profited from the most current recession, that is also incorrect.
Share of income for top 5% (top 1% too) has dropped from 37.4% to 31.7% and the bottom 50% grown 12.2% to 13.5%.

So what the Bush tax cuts did was in good times, basically bring revenue somewhat lower through more redistributive effects (you can argue an average of abotu a 1% GDP effect), and increase the sensitivity to significant downturns by increasing sensitivity to top earner income (by as much as 2% in 'bad times).

2. On Spending Side:

However, expenditures went from 18.2% in 2000 to 25.2% in 2009.

Breaking this apart:
About 1-1.5% of increased GDP spending went to funding wars (as can be seen from the jump from about low 18s to mid-to-high 19s in the 2000 to 2005-6 period. This is convoluted with the recession impact on expenditures, but I'm willing to give you that war spending was a large part of that increase (although not majority, if you dig into the defense spending $ and % amounts).

And then on the remainder of the huge outlays (let's say approx 4% increase from high 19s to 24s we're seeing in 2009-2012), is structural from the social programs (aka what's labeled as non-defense direct payments for individuals). And that is a structural shift that changed in 2009-2010 era (note this portion as % of GDP in 90s, 00s, and early 10s). And this was driven mainly by payments related to Health, Income security and social security. And if you note, this 3% effect to spending is structural and goes on past the 2010-2012, to basically all future projects.

3. In conclusion:

So no Tammer, really "it's the spending, stupid." (As our dear Clintonian supporter would say). That's primarily what will hurt us in the future. Notwithstanding the fact that our redistributive income tax policy has also significantly hurt the revenue side, and has yielded perverse incentives at the 40-60%ile income levels. What we need there is a far more broader base, and a policy that isn't as greatly affected by economic downturns.

If you'd like I can hash this out with all the gov't figures you'd want, off-line. But I have gone through this and you don't have a plank to stand on. I don't check in quite often, but feel free to ping me - you know my gchat and email.

I don't disagree with your figures, but how you present it tends to minimize the effect of the tax cuts, and you gloss over some of the reasons for the spending increases. I'd posit that some spending increases are better than others (or at least more necessary), though of course those are the types of opinions that form the basis of interesting political differences (as opposed to "rah rah my team" political differences, which are common on this forum and not interesting at all).

Yes, spending increases have had a larger effect than tax cuts. That does not mean the tax cut effect was insignificant. Using CBO numbers, which are admittedly questionable, Pew research published this analysis: http://www.pewtrusts.org/uploadedFiles/ ... e_2001.pdf In this view, the Bush tax cuts represent 13% of the delta between 2001 CBO GDP projections and 2011 GDP reality (aggregate over the decade). Worth pointing out here is that the horridness of the CBO projection itself represents nearly 30% of that delta.

Now, the argument can and should be made that the tax cuts actually "cost" less due to the recession's effect on income, as you pointed out. Taking the ratio of actual to projected GDP year-over-year and discounting the projected effect of tax cuts by that amount over the 10-year period yields a total revenue cost to the government of ~$1.3T. Over the same period, spending increased $4.2T, so a much larger problem. However, that $1.3T goes straight to the national debt, which now stood at ~$14.9T in Q3 2011. So the Bush tax cuts represent ~9% of the total national debt--not insignificant in my book.

Now, if you want to talk spending--yes, too high, I absolutely agree. One should keep in mind, however, that spending does not come straight off the bottom line, as money pumped into the economy (whether or not it should be) does generate some revenue. A dollar in food stamps is always spent. A dollar in military spending goes into some contractor's payroll, and some fraction of it is spent, and so on. I don't disagree with your analysis of spending levels, but it bears mention that things like "income support" are disproportionately high during a recession, and that will not carry forward indefinitely. And the wars, ill advised and ill managed as they were, will eventually end. The elephant in the room is Medicare (note the impact of Part D), and that will be a rapidly-increasing and sustained drain on the .gov coffers for the next 15-25 years.

-tammer

[cgraff]

It's not worth recognizing anything Tammer posts, as he has become an arrogant asshole since achieving his Ph.D. Either that or it's just more apparent. Maybe it's because of the move to Chicago. Either way, he's not worth my time.

No change, though I've more or less quit wasting my time typing out the rationale for my thoughts and any supporting information, because people like Matt simply offer unsubstantiated gainsaying as a response instead of actual ideas founded on data. Why waste my time? So if it comes off as more arrogant, I'd offer that you reflect on the post of yours I quoted which was (drumroll ...) your opinions with no supporting data or information. Kinda like my post that you called arrogant. Hmm.

Chris, on the other hand, is very thoughtful and enjoyable to engage because, while I may disagree with his interpretation of things, I can totally understand where his thoughts come from and it's often educational. So ...

Tammer, although I appreciate your endorsement, I think you ought to give Kohler a break. He's a nice guy at heart...I think (never having met him personally).

The scale of the deficit and the size of the debt now is heavily influenced by the revenue left on the table due to the Bush tax cuts.

That is quite absurdly incorrect.

The deficit has two components, both equally influencing.

As noted here:
http://www.whitehouse.gov/omb/budget/Historicals

1. On the revenue side.
Receipts as % of GDP went from a high of 20.6% in 2000 to 15.1% in 2009, driven primarily by the loss of income taxes in the 2009 crash. As % of GDP, individual income taxes went from a high of 10.2% in 2000 to 6.6% in 2009. The average in late 90s was in the low 9% range. The average in the 2001-2006 period (to account for the recession and subsequent recovery, avoiding the boom 2007 year) was about 8%. So the Bush tax cut impact was roughly just a touch over 1% over somewhat normal macro economic cycles.

The key to understanding the 2008-2010 bust in icnome taxes is to understand two aspects of income tax part of the equation. One is that Bush lowered income taxes on the bottom end, and increased the amount of people who have a net federal income tax benefit (i.e. they get money from the government in forms of credits). This has a doubling effect from the terms of gov't revenue. The way the tax code is structured now and its cut-offs also created a far greater emphasis (you can call it amplification) of tax receipt sensitivity to the upper 5% (and especially upper 1%) of income earners.

And if you think the upper earners have unfairly profited from the most current recession, that is also incorrect.
Share of income for top 5% (top 1% too) has dropped from 37.4% to 31.7% and the bottom 50% grown 12.2% to 13.5%.

So what the Bush tax cuts did was in good times, basically bring revenue somewhat lower through more redistributive effects (you can argue an average of abotu a 1% GDP effect), and increase the sensitivity to significant downturns by increasing sensitivity to top earner income (by as much as 2% in 'bad times).

2. On Spending Side:

However, expenditures went from 18.2% in 2000 to 25.2% in 2009.

Breaking this apart:
About 1-1.5% of increased GDP spending went to funding wars (as can be seen from the jump from about low 18s to mid-to-high 19s in the 2000 to 2005-6 period. This is convoluted with the recession impact on expenditures, but I'm willing to give you that war spending was a large part of that increase (although not majority, if you dig into the defense spending $ and % amounts).

And then on the remainder of the huge outlays (let's say approx 4% increase from high 19s to 24s we're seeing in 2009-2012), is structural from the social programs (aka what's labeled as non-defense direct payments for individuals). And that is a structural shift that changed in 2009-2010 era (note this portion as % of GDP in 90s, 00s, and early 10s). And this was driven mainly by payments related to Health, Income security and social security. And if you note, this 3% effect to spending is structural and goes on past the 2010-2012, to basically all future projects.

3. In conclusion:

So no Tammer, really "it's the spending, stupid." (As our dear Clintonian supporter would say). That's primarily what will hurt us in the future. Notwithstanding the fact that our redistributive income tax policy has also significantly hurt the revenue side, and has yielded perverse incentives at the 40-60%ile income levels. What we need there is a far more broader base, and a policy that isn't as greatly affected by economic downturns.

If you'd like I can hash this out with all the gov't figures you'd want, off-line. But I have gone through this and you don't have a plank to stand on. I don't check in quite often, but feel free to ping me - you know my gchat and email.

I don't disagree with your figures, but how you present it tends to minimize the effect of the tax cuts, and you gloss over some of the reasons for the spending increases. I'd posit that some spending increases are better than others (or at least more necessary), though of course those are the types of opinions that form the basis of interesting political differences (as opposed to "rah rah my team" political differences, which are common on this forum and not interesting at all).

Yes, spending increases have had a larger effect than tax cuts. That does not mean the tax cut effect was insignificant. Using CBO numbers, which are admittedly questionable, Pew research published this analysis: http://www.pewtrusts.org/uploadedFiles/ ... e_2001.pdf In this view, the Bush tax cuts represent 13% of the delta between 2001 CBO GDP projections and 2011 GDP reality (aggregate over the decade). Worth pointing out here is that the horridness of the CBO projection itself represents nearly 30% of that delta.

Now, the argument can and should be made that the tax cuts actually "cost" less due to the recession's effect on income, as you pointed out. Taking the ratio of actual to projected GDP year-over-year and discounting the projected effect of tax cuts by that amount over the 10-year period yields a total revenue cost to the government of ~$1.3T. Over the same period, spending increased $4.2T, so a much larger problem. However, that $1.3T goes straight to the national debt, which now stood at ~$14.9T in Q3 2011. So the Bush tax cuts represent ~9% of the total national debt--not insignificant in my book.

Now, if you want to talk spending--yes, too high, I absolutely agree. One should keep in mind, however, that spending does not come straight off the bottom line, as money pumped into the economy (whether or not it should be) does generate some revenue. A dollar in food stamps is always spent. A dollar in military spending goes into some contractor's payroll, and some fraction of it is spent, and so on. I don't disagree with your analysis of spending levels, but it bears mention that things like "income support" are disproportionately high during a recession, and that will not carry forward indefinitely. And the wars, ill advised and ill managed as they were, will eventually end. The elephant in the room is Medicare (note the impact of Part D), and that will be a rapidly-increasing and sustained drain on the .gov coffers for the next 15-25 years.

-tammer

Setting aside the questionable CBO numbers (and their 'technical adjustments', in that report...oh dear lord...), addressing the facts, I think it overall does say the same message:

1. Tax cuts had an effect, but lesser to the spending increases.
2. If you note the #s, your tax cuts are ~$1.3BN of the deficit, over 10 years, so that comes out close to my ~1% of GDP per year impact. So it doesn't tie out exactly, but it's in the right ball part. Or your 9% divided by about 10 years...either way, it's close.
3. On the spending side I have to pull out more details when I have time. It's a more complex story, but suffice it to say, it has a greater impact than the 1% on taxes side. And like you said, the Medicare/Healthcare costs are the elephant in the room. Agree 100%. As for "income support", I will leave you with this - this line item has ballooned, and remains elevated now, in the near term, and long-term according to the link I had in my previous post. Why? One would think like you that it's temporary, so why does it remain so high? This is what I mean by a structural change in the spending.
4. My only other comment is that I think part of the problem with the CBO projections and what people didn't see was that the Bush tax cuts effectively increased the sensitivity of income tax revenue during economic downturns by reducing the tax base, increasing effective negative federal income tax rates on <50%iles, and increasing share of income tax receipts from >95%ile groups. I'll have to dig into the historical figures and give you comparisons, but it's amazing to see the huge effect this had in the most recent downturn. Personally I think people who call for increasing the tax base have slightly different agendas than my more sustainability viewpoint, but alas, that's what we have.

As for positing spending increases are better than others, I like to come from the perspective (more Friedman-esque) that only spending the amount that you take in should be prioritized, but spending *increases* avoided as much as possible, so long as the economic framework and appropriate incentives are in place. Also that with regards to monetary and fiscal policy, there really is no such thing as a free lunch, and the modern policies that are based out of or claim to follow Keynesian thought leaves out a lot of practical realities, and ends up being political cronyism, instead of true incentive for growth or stimulus. Yes, that's a throw-away line, but we can expand on that in future posts.

-Chris