Anyone still believe the economy is Bush's fault??

[rjd970]

cutting taxes would have been a much more efficient use of the stimilus money. i dont neccasarily mind spending it, but having it go out ot all of obama's pet projects is disgusting and undefensable. $900 bil at least completely down the tubes. for instance, if he really wanted to save jobs he could have cut the payroll tax.

Maybe so. But can you really say that we would be better off fiscally right now with those tax cuts? IMO any difference better or worse would be marginal. The same argument about Obama's disgusting pet projects is the exact same argument the left would say about all of (insert repub president)'s disgusting tax break that benefits the wealthy.

I'm not disagreeing with you, I'm just saying both arguments are just as wrong. It is clear spending the way Obama is isn't good, and on the same token, I don't think tax cuts are the golden ticket everyone thinks they are.

 

[volinbham]

Wrong. Add in supplemental spending and the fiscal cost of tax cuts that the Bush administration didn't include in for political purposes and it does approach a trillion. Look at the national debt increase over the Bush presidency for a more accurate picture.

At total of 4.4 trillion over 8 years = .5 trillion/year. To say he regularly ran up deficits in the $ trillion range is not correct. Allowing for 2 years with no deficit the average is still about 700 billion over 6 years. There is no way to construe that as "regularly running deficits of about $1 trillion".

Obama is in a class of his own here - not all his fault (as is true for any POTUS) but he's certainly playing a role with his fiscal policy.

I find it particularly interesting and galling that he's suddenly become a deficit hawk (after his trip to China). His actions to date show he doesn't care about deficits.

 

[droski]

Maybe so. But can you really say that we would be better off fiscally right now with those tax cuts? .

yes

 

[rjd970]

the fact that the economy is recovering at all is simply a testiment to how well monatary policy works and the trillions the fed has been giving away. if obama did the right thing we surely woudl have been in a better place than we are today. but a decent argument could be made that we would have done just fine if he hadn't spent a cent.

Nonsense. Had we had a repub president and he spent the money in tax cuts you would be touting tax cuts as the reason. But because it is a big spending liberal, it has to be something else.

Your last sentence may or may not be right. I'm of the opinion that Obama, as well as Bush, should have left the stimulus stuff alone and let the economy run it course. It's all political anyway. Bush gave out a stimulus, just like Obama, but Bush gets a pass from you, right?

 

[volinbham]

Who do I blame?

Congress over the years for free spending, removing the regulatory wall between banks and investment houses, social engineering to prevent banking from properly assessing risk, etc.

The Fed for cheap money policies and being behind the curve in cooling overly hot economies.

The SEC for not enforcing regulations (e.g. uptick rule) but over using mark to market.

The past and current administrations for free spending fiscal policies and failure to spot turns in the economy that require changes in fiscal policy.

The public for believing things can only go up and over extending themselves (hanging themselves with the government provided rope).

Did I leave anyone out?

 

[droski]

Nonsense. Had we had a repub president and he spent the money in tax cuts you would be touting tax cuts as the reason. But because it is a big spending liberal, it has to be something else.

Your last sentence may or may not be right. I'm of the opinion that Obama, as well as Bush, should have left the stimulus stuff alone and let the economy run it course. It's all political anyway. Bush gave out a stimulus, just like Obama, but Bush gets a pass from you, right?

THe reason for what? 10.5% unemployment? All the fed did was stop us from going into another great depression and that was well underway before a dime of the stimulus package got spent.

Bush did the stimilus in the right way. It put money directly into the american public who are the ones that drive the economy. Is that so hard to understand?

 

[volinbham]

I think any of us could have designed a better stimulus plan than the one we got from Congress and Count Barakula.

 

[rjd970]

THe reason for what? 10.5% unemployment? All the fed did was stop us from going into another great depression and that was well underway before a dime of the stimulus package got spent.

Bush did the stimilus in the right way. It put money directly into the american public who are the ones that drive the economy. Is that so hard to understand?

Yes, Droski, it is. Because we aren't talking about the "public". We are talking about coporations and banks with lobbies in Washington. If every single American got a tax cut it would be one thing, or if every American got stimulus money it would another. Besides, aren't you of the agreement that it was the "public" that had alot to do with this mess in the first place by overextending themselves?

This 10.5% unemployment is just silly. IT HAS BEEN 10 MONTHS. The stimulus isn't even fully spent. It is stupid that I am here actually defending Obama's economic policies because I completely disagree with them, but you are only saying the same tired talking points the repubs spew out. Even if he hadn't done a thing these same numbers and arguments you are using would be used anyway.

You don't like Obama's economic policies...that is understandable...but I refuse to believe tax cuts or anything the repubs could have come up with would have worked any better.

 

[droski]

there is ZERO chance unemployment would be this high if he used the $1 trillion to cut payroll taxes. ZERO

hell it wouldn't be this high if he simply gave the money to local gov'ts to hire people.

 

[volinbham]

You don't like Obama's economic policies...that is understandable...but I refuse to believe tax cuts or anything the repubs could have come up with would have worked any better.

I firmly believe that targeted tax cuts (e.g. payroll) or direct incentives to businesses would have had a greater impact on unemployment than what we have.

The argument for govt spending is that it is the consumer of last resort. Why aren't consumers spending? Job losses and FEAR of job losses. It's pretty simple - put govt resources (funds or tax cuts) directly into job stimulus and you keep the consumer spending so the govt spending doesn't have to fill the gap. Govt spending is inherently inefficient and much of the impact is eaten up in transaction and administration costs.

What's worse is that companies cannot see how the stimulus is going to improve the business environment so they are afraid to hire. Combine that with the uncertainty about HC tax impact on business, looming Cap and Trade policies and other fiscal policy and the employment market is frozen. Policy decisions by this administration are making the jobs environment WORSE.

Put another way, if you can't point to the overall good things of the Obama stimulus how can you argue that nothing else would have worked better?

 

[BeecherVol]

Yes, Droski, it is. Because we aren't talking about the "public". We are talking about coporations and banks with lobbies in Washington. If every single American got a tax cut it would be one thing, or if every American got stimulus money it would another. Besides, aren't you of the agreement that it was the "public" that had alot to do with this mess in the first place by overextending themselves?

This 10.5% unemployment is just silly. IT HAS BEEN 10 MONTHS. The stimulus isn't even fully spent. It is stupid that I am here actually defending Obama's economic policies because I completely disagree with them, but you are only saying the same tired talking points the repubs spew out. Even if he hadn't done a thing these same numbers and arguments you are using would be used anyway.

You don't like Obama's economic policies...that is understandable...but I refuse to believe tax cuts or anything the repubs could have come up with would have worked any better.

So tax cuts are a bad thing? What about tax increases? When you spend what he is spending, you have to get it somewhere. Somewhere, is business owners that create jobs, when they have the money and business to do so. Taking money from them doesn't help that cause.

But a 800 billion $ stimulus package, where we have no idea where the money is going, is?

 

[rjd970]

there is ZERO chance unemployment would be this high if he used the $1 trillion to cut payroll taxes. ZERO

hell it wouldn't be this high if he simply gave the money to local gov'ts to hire people.

I'll be ready to admit I'm wrong it you can show any kind of historical evidence that cutting payroll taxes amid a recession reduces unemployment. I'm honestly saying you may be right, but I'm not going to take your opinion as fact.

 

[droski]

how could it not reduce unemployment?

 

[BeecherVol]

Yes, Droski, it is. Because we aren't talking about the "public". We are talking about coporations and banks with lobbies in Washington. If every single American got a tax cut it would be one thing, or if every American got stimulus money it would another. Besides, aren't you of the agreement that it was the "public" that had alot to do with this mess in the first place by overextending themselves?

Tanks 2 to tango. The banks and lenders have to cooperate in the deal as well. They have no one to blame but theirselves, for their fall.



This 10.5% unemployment is just silly. IT HAS BEEN 10 MONTHS. The stimulus isn't even fully spent.

That is the point, what has been spent is not going toward the problem. No reason to think when the rest is spent, it will be either.

 

[rjd970]

how could it not reduce unemployment?

I would think businesses fold and unemployment increases during a recession because people don't buy things so employers can't pay their employees.

I'm sure you say that cutting payroll taxes allows people to keep jobs so they go buy things and people keep jobs as a result.

It is a cause and effect argument. Cutting payroll taxes in a recession isn't going to save jobs if people are losing money anyway. Go show me where cutting payroll taxes in a recession staves off unemployment and I will concede your point. But my guess is you can't, because, it is a chicken and egg argument. It all goes back to the cutting taxes solves everything argument. While easy to say and easy to sell, I am still waiting for hard proof that it makes economic and fiscal sense.

Spending is, and always will be the key. Cutting spending makes the most sense, I'm sure you agree with that. But this cutting taxes business is smoke and mirrors.

 

[volinbham]

Spending is, and always will be the key. Cutting spending makes the most sense, I'm sure you agree with that. But this cutting taxes business is smoke and mirrors.

Cutting spending in a recession? That's already going on. How would that reduce unemployment?

Payroll taxes are shown to either 1) lower effective wages or 2) increase prices of goods. If they are lowered that savings can either raise wages or lower product costs - either of which should stimulate more economic activity. More economic activity requires more jobs. It is a much more direct way to stimulate short term employment than say pumping money into the NIH for research grants. I've seen first hand how this latter strategy is raising the level of grant monies allocated to our university but isn't doing diddly-sqwat for employment. Also, there are huge transaction costs in this form of stimulus and I bet sub-par research is being funded do to pressures to get the grants out the door by both the researchers and funding agencies.

Payroll taxes are likely a better short-term stimulus than a general tax cut since they are directed right at employment costs.

 

[BeecherVol]

Redistribution/government control is driving this admins. economical decisions. That is why it will fail.

 

[rjd970]

At total of 4.4 trillion over 8 years = .5 trillion/year. To say he regularly ran up deficits in the $ trillion range is not correct. Allowing for 2 years with no deficit the average is still about 700 billion over 6 years. There is no way to construe that as "regularly running deficits of about $1 trillion".

Obama is in a class of his own here - not all his fault (as is true for any POTUS) but he's certainly playing a role with his fiscal policy.

I find it particularly interesting and galling that he's suddenly become a deficit hawk (after his trip to China). His actions to date show he doesn't care about deficits.

Well I was counting the surplus Clinton left over, plus the money he shifted from the SS trust fund to mask what his real deficit was. Clinton's last year in office saw a surplus of 236 billion, so that would have to be added onto Bush's first deficit. In 2004 alone, he shifted 150 billion over from the SS trust fund to mask his deficit. Maybe it wasn't in the trillion dollar ranges, but it was definitely shady the way the numbers are portrayed. Switching money from one pocket to the other doesn't give you more.

Now Obama is definitely worse, no doubt about it. But the difference between him and Bush isn't as great as all the repub pundits portray.

 

[droski]

I would think businesses fold and unemployment increases during a recession because people don't buy things so employers can't pay their employees.
.

the overwelming majority of companies don't go under during a recession. a payroll tax reduces the employers cost of labor and therefore people can keep someone they might not have been able to afford to keep before. most of the people employed in this country work for small businesses and most small businesses hesitate to fire people until absolutely neccasary. a payroll tax cut would help these businesses considerably.

 

[rjd970]

Cutting spending in a recession? That's already going on. How would that reduce unemployment?

Payroll taxes are shown to either 1) lower effective wages or 2) increase prices of goods. If they are lowered that savings can either raise wages or lower product costs - either of which should stimulate more economic activity. More economic activity requires more jobs. It is a much more direct way to stimulate short term employment than say pumping money into the NIH for research grants. I've seen first hand how this latter strategy is raising the level of grant monies allocated to our university but isn't doing diddly-sqwat for employment. Also, there are huge transaction costs in this form of stimulus and I bet sub-par research is being funded do to pressures to get the grants out the door by both the researchers and funding agencies.

Payroll taxes are likely a better short-term stimulus than a general tax cut since they are directed right at employment costs.

I meant cutting spending in general, not just a recession.

As far as the payroll taxes, again, you and droski may be right. But during a recession? Any effects it would have would be minimal, either way, good or bad. Just like with you and droski, this is my opionion. I am not aware of any hard evidence supporting what you are saying.

 

[rjd970]

the overwelming majority of companies don't go under during a recession. a payroll tax reduces the employers cost of labor and therefore people can keep someone they might not have been able to afford to keep before. most of the people employed in this country work for small businesses and most small businesses hesitate to fire people until absolutely neccasary. a payroll tax cut would help these businesses considerably.

But this is my whole chicken and egg point. Would the company need that person if no one is buying its products? Companies, small business or otherwise, don't keep people employed out of kindness. It is about maximizing the bottom line.

 

[BigPapaVol]

Who do I blame?

Congress over the years for free spending, removing the regulatory wall between banks and investment houses, social engineering to prevent banking from properly assessing risk, etc.

The Fed for cheap money policies and being behind the curve in cooling overly hot economies.

The SEC for not enforcing regulations (e.g. uptick rule) but over using mark to market.

The past and current administrations for free spending fiscal policies and failure to spot turns in the economy that require changes in fiscal policy.

The public for believing things can only go up and over extending themselves (hanging themselves with the government provided rope).

Did I leave anyone out?

this is solid. The free wheeling spending and social engineering are the biggest culprits, but all are additive.

 

[droski]

But this is my whole chicken and egg point. Would the company need that person if no one is buying its products? Companies, small business or otherwise, don't keep people employed out of kindness. It is about maximizing the bottom line.

i doubt many companies have had their sales go to zero. i'm sure many people here are currently doing the job of 2 or 3 people because their company laid people off. many companies would keep good people around until the economy recovered if they could afford to. that actually makes economic sense.

 

[rjd970]

i doubt many companies have had their sales go to zero. i'm sure many people here are currently doing the job of 2 or 3 people because their company laid people off. many companies would keep good people around until the economy recovered if they could afford to. that actually makes economic sense.

It depends. If you need someone to dig a ditch you can bring someone in with little training. If it is a high-tech job requiring training and a learning curve, the cost of training weighed against the length of the recession would need to be taken into account.

I suspect most small business hire people that need very little training and are generally more expendable.

 

[g8terh8ter_eric]

I would love to hear you explain how the economy right now is Clinton's fault.

Under Clinton, economic growth was modest and fiscally we actually saw surpluses. Obviously this wasn't all Clinton, he had a repub congress, tech bubble, etc...but saying our situation now is Clinton's fault seems pretty short-sighted with partisan glasses. Bush's economic growth was spurred by one of the greatest real estate bubbles in modern history. So placing too much blame or credit on either with regards to economic growth is wrong.

Lest you forget, Bush is the one that spent like a liberal and cut taxes like a republican. Fiscally that only leads to disaster. No argument from me on Obama making it worse right now, but let's all be honest here, the foundation of our current fiscal situation was set in place by the Bush administration unconstrained by a republican congress. Now we have a Dem president and a Dem congress, so expect it to get worse.

For all his faults, Clinton worked well with a repub congress on economic decisions and was surprisingly pro-business for a democrat.

Simply put, Clinton brought back the old Community Reinvestment Act and the rest is history.