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Discussion in 'West Mall' started by theiioftx, Nov 10, 2016.
Because the mainstream media enables them.
A few reasons. First, the media likes the Democrats' political and social agenda, so they promote Democratic narratives and rarely question them. Second, most academics and economists feel the same way, so they help provide "expert credibility" (in quotes because it's clearly phony) to their narratives. Third, most Republicans are poor advocates.
They think numbers are boring and that most voters will tune them out. To a point that's true, but it can be done without that happening, and it's too important to just ignore.
I agree it shouldn't be ignored. The fact is the Dems are trying to say the Republicans are hypocrites who only care about deficits when a black man is President. But if the revenue has in fact increased then I would be broadcasting it everyday.
The GOP does nothing to help themselves on this. When a Democrat (white or black is the White House), they whine about the deficit all day long. When Bush was in the White House, they didn't give a crap. That hurts their credibility a lot.
I know. It seems like a no-brainer ESPECIALLY if the stats are there to back them up.
This is the old trickle-down argument. And it also goes to the heart of the debate over whether it's better for us to keep more on our paycheck or if the government should take it instead and direct it as needed. Of course, "as needed" is heavily politicized. To me, the Left hated the tax cut because money is what is needed to control things and when it's in our hands they can't control us.
bystander, I think you are right. It isn't even that the government needs the tax revenue to pay for what they want to do. They use monetary policy to "pay" for their activities.
They actually tax us twice. They take money out of our paychecks and they devalue the money we get to keep through money supply (i.e. printing money).
They don't. The assumption is there's a direct line correlation. But that leaves out spending increases, which happen every year, regardless of the president or congress.
You're forgetting the third: It's made up.
The Myth of the Clinton Surplus
"As can clearly be seen, in no year did the national debt go down, nor did Clinton leave President Bush with a surplus that Bush subsequently turned into a deficit. Yes, the deficit was almost eliminated in FY2000 (ending in September 2000 with a deficit of "only" $17.9 billion), but it never reached zero--let alone a positive surplus number. And Clinton's last budget proposal for FY2001, which ended in September 2001, generated a $133.29 billion deficit. The growing deficits started in the year of the last Clinton budget, not in the first year of the Bush administration.
Keep in mind that President Bush took office in January 2001 and his first budget took effect October 1, 2001 for the year ending September 30, 2002 (FY2002). So the $133.29 billion deficit in the year ending September 2001 was Clinton's. Granted, Bush supported a tax refund where taxpayers received checks in 2001. However, the total amount refunded to taxpayers was only $38 billion . So even if we assume that $38 billion of the FY2001 deficit was due to Bush's tax refunds which were not part of Clinton's last budget, that still means that Clinton's last budget produced a deficit of 133.29 - 38 = $95.29 billion.
Clinton clearly did not achieve a surplus and he didn't leave President Bush with a surplus."
"Understanding what happened requires understanding two concepts of what makes up the national debt. The national debt is made up of public debt and intragovernmental holdings. The public debt is debt held by the public, normally including things such as treasury bills, savings bonds, and other instruments the public can purchase from the government. Intragovernmental holdings, on the other hand, is when the government borrows money from itself--mostly borrowing money from social security.
"Notice that while the public debt went down in each of those four years, the intragovernmental holdings went up each year by a far greater amount--and, in turn, the total national debt (which is public debt + intragovernmental holdings) went up. Therein lies the discrepancy.
When it is claimed that Clinton paid down the national debt, that is patently false--as can be seen, the national debt went up every single year. What Clinton did do was pay down the public debt--notice that the claimed surplus is relatively close to the decrease in the public debt for those years. But he paid down the public debt by borrowing far more money in the form of intragovernmental holdings (mostly Social Security).
Update 3/31/2009: The following quote from an article at CBS confirms my explanation of the Myth of the Clinton Surplus, and the entire article essentially substantiates what I wrote.
"Over the past 25 years, the government has gotten used to the fact that Social Security is providing free money to make the rest of the deficit look smaller," said Andrew Biggs, a resident scholar at the American Enterprise Institute.
Interestingly, this most likely was not even a conscious decision by Clinton. The Social Security Administration is legally required to take all its surpluses and buy U.S. Government securities, and the U.S. Government readily sells those securities--which automatically and immediately becomes intragovernmental holdings. The economy was doing well due to the dot-com bubble and people were earning a lot of money and paying a lot into Social Security. Since Social Security had more money coming in than it had to pay in benefits to retired persons, all that extra money was immediately used to buy U.S. Government securities. The government was still running deficits, but since there was so much money coming from excess Social Security contributions there was no need to borrow more money directly from the public. As such, the public debt went down while intragovernmental holdings continued to skyrocket.
The net effect was that the national debt most definitely did not get paid down because we did not have a surplus. The government just covered its deficit by borrowing money from Social Security rather than the public.
Consider the following quotes (and accompanying links) that demonstrate how people have known this for years:
In the late 1990s, the government was running what it -- and a largely unquestioning Washington press corps -- called budget "surpluses." But the national debt still increased in every single one of those years because the government was borrowing money to create the "surpluses." So the table itself, according to the figures issued yesterday, showed the Federal Government ran a surplus. Absolutely false. This reporter ought to do his work. This crowd never has asked for or kept up with or checked the facts. Eric Planin--all he has to do is not spread rumors or get into the political message. Both Democrats and Republicans are all running this year and next and saying surplus, surplus. Look what we have done. It is false. The actual figures show that from the beginning of the fiscal year until now we had to borrow $127,800,000,000. - Democratic Senator Ernest Hollings, October 28, 1999 Video: CSPANAn overall "downsizing" of government and a virtual end to the arms race have contributed to the surplus, but the vast majority is coming from excess Social Security taxes being paid by the workforce in an attempt to keep Social Security benefit checks coming once the "baby-boomers" start to retire. Of the $142 billion surplus projected by the end of 2000, $137 billion will come from excess Social Security taxes.When these unified budget numbers are separated into Social Security and non-Social Security components, however, it becomes evident that all of the projected surplus throughout this period is attributable to Social Security. The remainder of the budget will remain in deficit throughout the next decade.Despite a revenue shortfall, full benefits are expected to be paid out between 2017 and 2041. The system will draw on its trust fund, a collection of special-issue bonds from the government, which borrowed prodigiously from the program's surplus over the years. But since the country is already running a deficit, the government will have to borrow more money to pay back its debt to Social Security. That's a little like giving with one hand and taking away with the other. The surplus deception is clearly discernible in the statistics of national debt. While the spenders are boasting about surpluses, the national debt is rising year after year. In 1998, the first year of the legerdemain surplus, it rose from $5.413 trillion to $5.526 trillion, due to a deficit of $112.9 billion... The federal government spends Social Security money and other trust funds which constitute obligations to present and future recipients. It consumes them and thereby incurs obligations as binding as those to the owners of savings bonds. Yet, the Treasury treats them as revenue and hails them for generating surpluses. If a private banker were to treat trust fund deposits as income and profit, he would face criminal charges.
This is only the case if you take the Social Security Trust Fund seriously. It shouldn't be. It's a scam for two reasons. First, the trust fund is always raided through the BS, commingling bond racket the article discusses, so it gets robbed on that end. And then it is backed by the full faith and credit of the United States, so it raids the general revenue when it needs to. Commingling is the norm. The trust fund is illusory, which mean "intragovernmental debt" in this context is fake. If it wasn't being done by the government which gets to decide what's legal and what's not, it would be fraudulent.
It seems that if they borrow to make the payments that they've merely swapped one debt for the other. Kind of like refinancing. Except now they've sold public debt incurring interest. I assume they have some actuarial table that determines the defined benefit liability. They pay as it comes due but if they are short then they borrow (refinance) but that means they are insolvent at that point because "sales" isn't paying for it. So the "net worth" of the government is further negative to the extent of this debt.
bystander and Deez, that is my understanding of Social Security. The Trust Fund has been one of those persistent lies the government tells to assure people that everything is okay. I even saw a meme last night that quoted Reagan describing the trust fund in order to promise that it could never add to the deficit.
I don't think Reagan really understand what causes deficits. Maybe that is why he increase them so much.
Simply put, the deficit is the amount our outlays exceed our inflows. Both outlays and inflows fluctuate. If after a tax cut the deficit increases but so do the inflows then you can't blame the tax cut.
Where are the real stats to prove what happened in the 80's and what is happening now?
It's hard to know if the Trump cuts are causing the deficit or not. Spending has gone up. Had he not cut the taxes would the spending have been covered? In such a short period of time I can see why someone could say the tax cut cause the increase in the deficit because spending rose "...in defense spending, as well as increases for Medicaid, Social Security and disaster relief." Other than disaster relief, it seems the other spending outlays were predictable. However, disaster relief is starting to look like an operating line item and not extraordinary (in other words, you can't blame them for not seeing it coming).
As for the 1981 tax reform it appears to have had a slight effect on the subsequent years revenues (Corporate and Individual). It jumped up more after the 1986 cuts. The question is how much was inflation and how much was economic activity spurred by the cuts. I do vividly recall the problems with the S&L crisis back in the 80's. It's complicated as to what was happening.
Here is a comment from Wikipedia:
"Critics claim that the tax cuts worsened the deficits in the budget of the United States government. Reagan supporters credit them with helping the 1980s economic expansion that eventually lowered the deficits. After peaking in 1986 at $221 billion the deficit fell to $152 billion by 1989. Supporters of the tax cuts also argue, by using the Laffer curve, tax cuts increased economic growth and government revenue. That is hotly disputed, and critics note that the 6% rise in government income tax receipts was due to the 12% inflation rate, not tax cuts, and would have risen more if the tax cuts had not occurred. The Office of Tax Analysis estimates that the act lowered federal income tax revenue by 13%, relative to where it would have been in the bill's absence.
The non-partisan Congressional Research Service (in the Library of Congress) issued a report in 2012, analyzing the effects of tax rates from 1945 to 2010. The CRS concluded that top tax rates have no positive effect on economic growth, saving, investment, or productivity growth; reduced top tax rates do, however, increase income inequality:
The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution."
Well, yeah. I knew that but we're talking about whether or not tax cuts cause deficits. The Left seems to believe they always do.
No because revenue went UP after the cuts, due to the economic stimulus of the cuts. No cuts, tax revenue is stagnant, the deficit is worse. Revenue ALWAYS goes up after a tax cut, but that does not stop the Dems from pretending otherwise.
It's a very short time frame. So instead of the dollar going to the government directly, it is spent or saved by the taxpayer. If it pays down on credit card debt does that increase government revenues? I think a person who is paycheck to paycheck won't increase the government revenues. But it's a good thing that they have more money in general. So you have to then move up the tax bracket to find that $1 available as disposable income that is not put into savings (whatever vehicle). Were the cuts deep enough to spur incremental spending (and subsequent revenue increases to the government) that would not have happened in the absence of the cuts?
Finally, if you give a person a dollar how much does the government get back? A % of that dollar assuming it's spent on taxable goods and services. I understand Laffer Curve arguments in theory but we're nowhere near that level with our tax brackets.
The problem with the wikipedia argument is that confidently asserts things which are projections. You can't say that revenues would have increased by 13% without the tax cut. They have assumed without stating it that the tax cuts had 0 effect on economic growth. So they are speaking about a pure fantasy: economic growth without causation and tax revenues without a tax cut.
The little secret is that the inflation is caused by the government. So if the tax cuts only looked good because of inflation, the government could clear the picture up by not inflating. Then the 6% revenue increase would have looked like a 6% reduction (12% inflation).
Even more importantly, the 12% inflation allows for higher spending by the government. That is the primary reason for the money supply growth to begin with. So in another way it proves the tax bill had a positive effect. Even with the "hidden tax" of inflation the revenue collected by the government grew.
That is the worst part of this to me that inflation is still the "hidden tax" on consumers. It drags down poor and middle class buying power and most of us don't realize it.
What I found interesting from the first link was how the percentage of personal and corporate taxes started skewing apart. In the 1940s, personal went up 20 percentage points while corporate started lowering.
From the mid 40s, corporate has fallen from 39% to the mid teens by 1971.
Anybody want to guess who controlled both houses of Congress during most of that time period?
It looks like Democrats from the chart, but who cares corporations pass through those costs to consumers.
It's also worth noting that in 1958, the S Corp option became available. That didn't shield businesses from taxes, but it allowed business income to be taxed at the individual shareholder level.
Remember when Netanyahu was mocked by the media for saying Iran was still working on the bomb? He was right. CNN Mocked Netanyahu’s Revelations About Iran’s Nuclear Program. New Report Shuts CNN Up With Facts.
US Q3 GDP advanced estimate up to 3.5% (vs 3.4% expected)
These last 2 quarters are the fastest 6 months of growth in 4 years and this is only the second time in the last 13 years that we have put together two quarters in a row of decent GDP growth. The last time the economy topped 3% for a full year was 2005
•2018 Q1: +2.2%
•2018 Q2: +4.2%
•2018 Q3: +3.5%
As if liberals needed anything else to drive them crazy ....
Now we haz #hashtag #BLEXIT
Bravo to Brasil. I may move their someday. They actually threw politicians in jail over corruption there.
GOP office shot up in Florida. No one was hurt. Florida GOP Office Fired Upon, No Injuries | National Review
I did not get the memo on blexit
Had to look it up
And still don't get it.
Kanye will make money off it.
Free enterprise, That I get