CBO: Tax hikes unnecessary

[Gustaf]

First, if you check the figures, you will see that the United States spends billions every year on foreign aid, and billions more on the EPA.  Now, to advocates of big government, a few billion here and a few billion there may seem as nothing, but to me they are real money.

Second, NO I did NOT quote the CBO!!!  Let me note that the CBO is biased to understate domestic spending and understate revenue from tax cuts.  So, apparently YOU are confused!  You are the one who introduced CBO projections.

Third, you really need to understand the difference between the United States and Sweden.  You see, the federal government is the creation of the states, into the United States.  Unlike Sweden, the people of the United States, or at least those legally here, are citizens not subjects of the governments.

Now, the shortfall in government revenue is primarily on the federal government which used the Federal Reserve to create money out of nowhere (monetizing the debt) to cover their spending.

Generally speaking, the state and local governments have acted far more responsibly than the federal government (Illinois being a major exception).

Eh...the billions are not large sums compared to the trillions that the debt is made up of. My point, which I stated explicitly, was that cutting the increases in foreign aid and EPA under Obama will have no effect on solving the problem of the deficit. Do you agree to that?

Your headline of this thread, which you started, was: "CBO: Tax hikes unnecessary" So i twas rather natural for me to use their figures in the discussion, since you introduced them. If you have other projections you prefer, by all means, present them. I doubt they will change the overall picture though.

What the distinction between subjects and citizens has to do with this escapes me. I'm not interested in the ideology of this but in the economics.

I notice that you avoided answering my question: how is the deficit going to dissappear if you use the same revenue as today (not raising any taxes) and only cut spending by 6% at the federal level?

First, you make assumptions which are incorrect.  Revenues will not remain static if we rein in the government, but rather increase. 

This is history, not just a theory. 

Second, as I pointed out, in addition to freezing the manditory spending (i.e. no increases), we should cut expenditures from a number of agencies/departments.  Now, you probably have never seen the GPU publication of the federal budget, but, when printed, it stands several feet tall.  Virtually every department and agency has expenditures which can (and should be) cut.  Listing all of them would take up more room on this forum than Mr. Leip would like to provide.

Third, its interesting to see your changing definition of "Western Europe" to exclude the countries I listed and to consist of "Scandinavian ones." 

Let me suggest that if the people of the scandanavian countries want to emulate lemings and continue on their path to the cliff, its their right.  However, most Americans have some foresight, and do't want to continue on that.

Finally, I am really perplexed by what school of economics believes that unemployment is reduced by increasing taxes?

Heck, even a certain slimebag realized that increasing taxes is bad for the economy.

“You don’t raise taxes in a recession.”

Barrack Hussein Obama, II

August 5, 2009, Elkhart Indiana

Eh...no. Possibly in the long-term but certainly not in the short term. Both Bush and Reagan cut taxes substantially and that led to large deficits.

I haven't changed any definitions. I talked about Sweden from the beginning. And I fail to see how we're walking off a cliff. Our public finances are better than the American. Our growth has been about the same for the last decade. Our productivity level is the same. We have higher social mobility and equality and we tend to score higher on most measures of happiness or quality of life. Right now, Sweden's economy seems to be in much better shape than America's so I'm not sure how you are having such great foresight?

As regards your last point, we're not talking about taxes, but about spending. You're supposed to explain how a decrease in spending will spur growth and you still have not.

[opebo]

...cutting the federal budget by 6% seems like a fairly small cut.

That's amazing.  6% sounds like a huge cut to me, given that spending increases are needed for economic survival. 

I for one could not cut my budget by 6% without experiencing the sufferings of the Damned.

[Gustaf]

...cutting the federal budget by 6% seems like a fairly small cut.

That's amazing.  6% sounds like a huge cut to me, given that spending increases are needed for economic survival. 

I for one could not cut my budget by 6% without experiencing the sufferings of the Damned.

That's because you're spoiled. And given the size of the deficit 6% of the federal budget isn't so much.

[I spent the winter writing songs about getting better]

Remember when Gustaf said that CARLHAYDEN was a good poster treated unfairly by the left?

[Gustaf]

Remember when Gustaf said that CARLHAYDEN was a good poster treated unfairly by the left?

Did I ever refer to him as a good poster? My point has simply been that he's not much worse than posters like Lief, Opebo or you and yet get treated much worse.

But shouldn't my defense of him in spite of not liking him merit me a place in your book of cheek-turning Christians?

[opebo]

That's because you're spoiled. And given the size of the deficit 6% of the federal budget isn't so much.

It is impractical - there is really no feasible way to cut that much.

[CARLHAYDEN]

First, if you check the figures, you will see that the United States spends billions every year on foreign aid, and billions more on the EPA.  Now, to advocates of big government, a few billion here and a few billion there may seem as nothing, but to me they are real money.

Second, NO I did NOT quote the CBO!!!  Let me note that the CBO is biased to understate domestic spending and understate revenue from tax cuts.  So, apparently YOU are confused!  You are the one who introduced CBO projections.

Third, you really need to understand the difference between the United States and Sweden.  You see, the federal government is the creation of the states, into the United States.  Unlike Sweden, the people of the United States, or at least those legally here, are citizens not subjects of the governments.

Now, the shortfall in government revenue is primarily on the federal government which used the Federal Reserve to create money out of nowhere (monetizing the debt) to cover their spending.

Generally speaking, the state and local governments have acted far more responsibly than the federal government (Illinois being a major exception).

Eh...the billions are not large sums compared to the trillions that the debt is made up of. My point, which I stated explicitly, was that cutting the increases in foreign aid and EPA under Obama will have no effect on solving the problem of the deficit. Do you agree to that?

Your headline of this thread, which you started, was: "CBO: Tax hikes unnecessary" So i twas rather natural for me to use their figures in the discussion, since you introduced them. If you have other projections you prefer, by all means, present them. I doubt they will change the overall picture though.

What the distinction between subjects and citizens has to do with this escapes me. I'm not interested in the ideology of this but in the economics.

I notice that you avoided answering my question: how is the deficit going to dissappear if you use the same revenue as today (not raising any taxes) and only cut spending by 6% at the federal level?

First, you make assumptions which are incorrect.  Revenues will not remain static if we rein in the government, but rather increase. 

This is history, not just a theory. 

Second, as I pointed out, in addition to freezing the manditory spending (i.e. no increases), we should cut expenditures from a number of agencies/departments.  Now, you probably have never seen the GPU publication of the federal budget, but, when printed, it stands several feet tall.  Virtually every department and agency has expenditures which can (and should be) cut.  Listing all of them would take up more room on this forum than Mr. Leip would like to provide.

Third, its interesting to see your changing definition of "Western Europe" to exclude the countries I listed and to consist of "Scandinavian ones." 

Let me suggest that if the people of the scandanavian countries want to emulate lemings and continue on their path to the cliff, its their right.  However, most Americans have some foresight, and do't want to continue on that.

Finally, I am really perplexed by what school of economics believes that unemployment is reduced by increasing taxes?

Heck, even a certain slimebag realized that increasing taxes is bad for the economy.

“You don’t raise taxes in a recession.”

Barrack Hussein Obama, II

August 5, 2009, Elkhart Indiana

Update:

Today Obama is trying to weasel his way around his tax increase proposal.  Here's what he said today:

 “So, when you hear folks saying ‘Well, the president shouldn’t want massive job killing tax increases when the economy is this weak.’ Nobody’s looking to raise taxes right now. We’re talking about potentially 2013 and the out years.”

[True Federalist (진정한 연방 주의자)]

My example (just one of many I could provide) illustrates how the greater the tax burden, the more incentive there is to avoid it

Let me provide another example, in my city the abutting Indian reservations make major profits from sales of items (primarily tobacco) which avoid local sales taxes.

Now, if those sales taxes were lower (when I was a kid they were 5%, now they're 9.1%), there would be less incentive for trips to the reservation.

Those tax breaks and loopholes Boehner is too scared to touch, lest he be electrocuted by the tea partiers, work in exactly the same manner, CARL. They encourage what would non-optimal economic behavior in a tax system where taxation is evenly applied.

In the example you give, the waste is in the extra mileage on the vehicle, and in the time spent driving out to the reservation.  Plus, I'm willing to bet that the pre-sales tax prices are higher on the reservation, so the actual price differential won't be as great as the tax differential, since it behooves the stores on the reservation to try and capture some of the profit on the tax arbitrage.

However, we were talking primarily about the Federal tax code, not differences between jurisdictions.

[CARLHAYDEN]

First, if you check the figures, you will see that the United States spends billions every year on foreign aid, and billions more on the EPA.  Now, to advocates of big government, a few billion here and a few billion there may seem as nothing, but to me they are real money.

Second, NO I did NOT quote the CBO!!!  Let me note that the CBO is biased to understate domestic spending and understate revenue from tax cuts.  So, apparently YOU are confused!  You are the one who introduced CBO projections.

Third, you really need to understand the difference between the United States and Sweden.  You see, the federal government is the creation of the states, into the United States.  Unlike Sweden, the people of the United States, or at least those legally here, are citizens not subjects of the governments.

Now, the shortfall in government revenue is primarily on the federal government which used the Federal Reserve to create money out of nowhere (monetizing the debt) to cover their spending.

Generally speaking, the state and local governments have acted far more responsibly than the federal government (Illinois being a major exception).

Eh...the billions are not large sums compared to the trillions that the debt is made up of. My point, which I stated explicitly, was that cutting the increases in foreign aid and EPA under Obama will have no effect on solving the problem of the deficit. Do you agree to that?

Your headline of this thread, which you started, was: "CBO: Tax hikes unnecessary" So i twas rather natural for me to use their figures in the discussion, since you introduced them. If you have other projections you prefer, by all means, present them. I doubt they will change the overall picture though.

What the distinction between subjects and citizens has to do with this escapes me. I'm not interested in the ideology of this but in the economics.

I notice that you avoided answering my question: how is the deficit going to dissappear if you use the same revenue as today (not raising any taxes) and only cut spending by 6% at the federal level?

First, you make assumptions which are incorrect.  Revenues will not remain static if we rein in the government, but rather increase.  

This is history, not just a theory.  

Second, as I pointed out, in addition to freezing the manditory spending (i.e. no increases), we should cut expenditures from a number of agencies/departments.  Now, you probably have never seen the GPU publication of the federal budget, but, when printed, it stands several feet tall.  Virtually every department and agency has expenditures which can (and should be) cut.  Listing all of them would take up more room on this forum than Mr. Leip would like to provide.

Third, its interesting to see your changing definition of "Western Europe" to exclude the countries I listed and to consist of "Scandinavian ones."  

Let me suggest that if the people of the scandanavian countries want to emulate lemings and continue on their path to the cliff, its their right.  However, most Americans have some foresight, and do't want to continue on that.

Finally, I am really perplexed by what school of economics believes that unemployment is reduced by increasing taxes?

Heck, even a certain slimebag realized that increasing taxes is bad for the economy.

“You don’t raise taxes in a recession.”

Barrack Hussein Obama, II

August 5, 2009, Elkhart Indiana

Eh...no. Possibly in the long-term but certainly not in the short term. Both Bush and Reagan cut taxes substantially and that led to large deficits.

I haven't changed any definitions. I talked about Sweden from the beginning. And I fail to see how we're walking off a cliff. Our public finances are better than the American. Our growth has been about the same for the last decade. Our productivity level is the same. We have higher social mobility and equality and we tend to score higher on most measures of happiness or quality of life. Right now, Sweden's economy seems to be in much better shape than America's so I'm not sure how you are having such great foresight?

As regards your last point, we're not talking about taxes, but about spending. You're supposed to explain how a decrease in spending will spur growth and you still have not.

Well, lets take your allegations one a a time.

You said, changed what I said.  I was NOT proposing tax reductions at this time, but rather freezing much of the mandated spending.  Further, yes, revenues do increase over time, reducing deficits.  If you deny this, I will produce the numbers.  The problem is that expenditures increase even faster than revenues.  

In 1978, federal receipts amounted to $446.5 billion dollars, which grew to $997.2 billion in 1988 (223.34%).  However, during the same period, expenditures grew from $478.1 billion in 1978 to $1,118.5 in 1988 (233.95%).

http://www.infoplease.com/ipa/A0104655.html

Next, you said "Western Europe," then changed your definition to the "Scandanavian countries," and now have changed it to "Sweden".  Hmm.  If Swedes believe that big government is the secret to prosperity, then go ahead.  Just don't insist others join you.

Finally, I realize this is difficult for you, but, history has shown that spending in the private sector produces more jobs and prosperity than spending by the government.  So, when we reduce government spending (especially on matters which adversely impact the economy), we grow the economy.

[CARLHAYDEN]

My example (just one of many I could provide) illustrates how the greater the tax burden, the more incentive there is to avoid it

Let me provide another example, in my city the abutting Indian reservations make major profits from sales of items (primarily tobacco) which avoid local sales taxes.

Now, if those sales taxes were lower (when I was a kid they were 5%, now they're 9.1%), there would be less incentive for trips to the reservation.

Those tax breaks and loopholes Boehner is too scared to touch, lest he be electrocuted by the tea partiers, work in exactly the same manner, CARL. They encourage what would non-optimal economic behavior in a tax system where taxation is evenly applied.

In the example you give, the waste is in the extra mileage on the vehicle, and in the time spent driving out to the reservation.  Plus, I'm willing to bet that the pre-sales tax prices are higher on the reservation, so the actual price differential won't be as great as the tax differential, since it behooves the stores on the reservation to try and capture some of the profit on the tax arbitrage.

However, we were talking primarily about the Federal tax code, not differences between jurisdictions.

First, you need to check your facts.  As every analyst has pointed out, the revenues produces from tax breaks and loophole closing is only a small portion of the proposed tax increases.  If those were the sole matters involved in revenue enhancement, a deal would have been stuck days ago.  The truth is that Obama WANTS massive tax increases!!!

Second, you seem to miss my point on legal tax avoidance.  While there is some cost on hiring accountants and tax attorneys to find ways to prevent the government from grabbing money, if the benefits outweight those costs (and the alternative revenues from taxable investments), then people will continue to invest their funds in tax avoidance.

I gave you a simple example (so you might be able to understand it).  Let me give you a more complex one.  American based corporations hold profits made on investments outside the United States for years, rather than repatriating them and paying them to stockholders, waiting for an advantageous point in tax law.  Check out how GE paid almost NO federal income taxes last year (btw, Immelt is a pal of Obama).

[I spent the winter writing songs about getting better]

Remember when Gustaf said that CARLHAYDEN was a good poster treated unfairly by the left?

Did I ever refer to him as a good poster? My point has simply been that he's not much worse than posters like Lief, opebo or you and yet get treated much worse.

But shouldn't my defense of him in spite of not liking him merit me a place in your book of cheek-turning Christians?

Thing is you are also a pretty judgmental individual and don't seem to forgive easily. And why haven't you defended me, Lief or opebo? (corrected the capitalization by the way)

But yes, that also applies largely to me as well. I'm a very sinful individual. opebo is a better Christian than me, LOL.

[Gustaf]

Remember when Gustaf said that CARLHAYDEN was a good poster treated unfairly by the left?

Did I ever refer to him as a good poster? My point has simply been that he's not much worse than posters like Lief, opebo or you and yet get treated much worse.

But shouldn't my defense of him in spite of not liking him merit me a place in your book of cheek-turning Christians?

Thing is you are also a pretty judgmental individual and don't seem to forgive easily. And why haven't you defended me, Lief or opebo? (corrected the capitalization by the way)

But yes, that also applies largely to me as well. I'm a very sinful individual. opebo is a better Christian than me, LOL.

Judgemental? I'm nowhere near you in that department. On the contrary, I'm perfectly ready to forgive anyone who shows signs of remorse. I always do my best to stay away from bashing the easy targets on here, like Bushie, Josh, Gporter and so on. Unlike you.

And I don't defend you because you have so many people defending you already. I reserve my support for those who need it. You people get away too easily.

[Gustaf]

First, if you check the figures, you will see that the United States spends billions every year on foreign aid, and billions more on the EPA.  Now, to advocates of big government, a few billion here and a few billion there may seem as nothing, but to me they are real money.

Second, NO I did NOT quote the CBO!!!  Let me note that the CBO is biased to understate domestic spending and understate revenue from tax cuts.  So, apparently YOU are confused!  You are the one who introduced CBO projections.

Third, you really need to understand the difference between the United States and Sweden.  You see, the federal government is the creation of the states, into the United States.  Unlike Sweden, the people of the United States, or at least those legally here, are citizens not subjects of the governments.

Now, the shortfall in government revenue is primarily on the federal government which used the Federal Reserve to create money out of nowhere (monetizing the debt) to cover their spending.

Generally speaking, the state and local governments have acted far more responsibly than the federal government (Illinois being a major exception).

Eh...the billions are not large sums compared to the trillions that the debt is made up of. My point, which I stated explicitly, was that cutting the increases in foreign aid and EPA under Obama will have no effect on solving the problem of the deficit. Do you agree to that?

Your headline of this thread, which you started, was: "CBO: Tax hikes unnecessary" So i twas rather natural for me to use their figures in the discussion, since you introduced them. If you have other projections you prefer, by all means, present them. I doubt they will change the overall picture though.

What the distinction between subjects and citizens has to do with this escapes me. I'm not interested in the ideology of this but in the economics.

I notice that you avoided answering my question: how is the deficit going to dissappear if you use the same revenue as today (not raising any taxes) and only cut spending by 6% at the federal level?

First, you make assumptions which are incorrect.  Revenues will not remain static if we rein in the government, but rather increase.  

This is history, not just a theory.  

Second, as I pointed out, in addition to freezing the manditory spending (i.e. no increases), we should cut expenditures from a number of agencies/departments.  Now, you probably have never seen the GPU publication of the federal budget, but, when printed, it stands several feet tall.  Virtually every department and agency has expenditures which can (and should be) cut.  Listing all of them would take up more room on this forum than Mr. Leip would like to provide.

Third, its interesting to see your changing definition of "Western Europe" to exclude the countries I listed and to consist of "Scandinavian ones."  

Let me suggest that if the people of the scandanavian countries want to emulate lemings and continue on their path to the cliff, its their right.  However, most Americans have some foresight, and do't want to continue on that.

Finally, I am really perplexed by what school of economics believes that unemployment is reduced by increasing taxes?

Heck, even a certain slimebag realized that increasing taxes is bad for the economy.

“You don’t raise taxes in a recession.”

Barrack Hussein Obama, II

August 5, 2009, Elkhart Indiana

Eh...no. Possibly in the long-term but certainly not in the short term. Both Bush and Reagan cut taxes substantially and that led to large deficits.

I haven't changed any definitions. I talked about Sweden from the beginning. And I fail to see how we're walking off a cliff. Our public finances are better than the American. Our growth has been about the same for the last decade. Our productivity level is the same. We have higher social mobility and equality and we tend to score higher on most measures of happiness or quality of life. Right now, Sweden's economy seems to be in much better shape than America's so I'm not sure how you are having such great foresight?

As regards your last point, we're not talking about taxes, but about spending. You're supposed to explain how a decrease in spending will spur growth and you still have not.

Well, lets take your allegations one a a time.

You said, changed what I said.  I was NOT proposing tax reductions at this time, but rather freezing much of the mandated spending.  Further, yes, revenues do increase over time, reducing deficits.  If you deny this, I will produce the numbers.  The problem is that expenditures increase even faster than revenues.  

In 1978, federal receipts amounted to $446.5 billion dollars, which grew to $997.2 billion in 1988 (223.34%).  However, during the same period, expenditures grew from $478.1 billion in 1978 to $1,118.5 in 1988 (233.95%).

http://www.infoplease.com/ipa/A0104655.html

Next, you said "Western Europe," then changed your definition to the "Scandanavian countries," and now have changed it to "Sweden".  Hmm.  If Swedes believe that big government is the secret to prosperity, then go ahead.  Just don't insist others join you.

Finally, I realize this is difficult for you, but, history has shown that spending in the private sector produces more jobs and prosperity than spending by the government.  So, when we reduce government spending (especially on matters which adversely impact the economy), we grow the economy.

Both expenditures and revenues will always be increasing as long as the economy grows, ceteri paribus. Besides, unless I'm mistaken those figures are not inflation adjusted so they're sort of irrelevant.

I never claimed that every country in Western Europe was successful. But several of us are. You have still not come up with any counter to those facts.

You keep claiming that private spending is better than public spending. That's fine. What you haven't shown is how a reduction in public spending increases private spending when taxes are left unchanged.

[Torie]

You must be logged in to read this quote.

In the event taxes are unchanged, presumably over time the public debt would be less than otherwise, and then the issue is what happened to the money that would have otherwise been used to buy that public debt that would have occurred if public spending had not been decreased.  And what happens to that money probably depends on a lot of factors, including the attractiveness of alternative investments, and potentially some impact downward on interest rates - again depending on the world macroeconomic climate at the time, and on and on.  I have a headache. 

[True Federalist (진정한 연방 주의자)]

you seem to miss my point on legal tax avoidance.  While there is some cost on hiring accountants and tax attorneys to find ways to prevent the government from grabbing money, if the benefits outweight those costs (and the alternative revenues from taxable investments), then people will continue to invest their funds in tax avoidance.

Didn't miss the point at all.  What you apparently keep missing is that tax avoidance only becomes possible when there is disparate tax treatment for different economic activities.  Whether those disparities are due to location (as in your reservation example) or in the type of activity (as in the case of specialized tax breaks) the effect is essentially the same, and will still be there under whatever supposed base tax rate is there.

I gave you a simple example (so you might be able to understand it).  Let me give you a more complex one.  American based corporations hold profits made on investments outside the United States for years, rather than repatriating them and paying them to stockholders, waiting for an advantageous point in tax law.  Check out how GE paid almost NO federal income taxes last year (btw, Immelt is a pal of Obama).

Which is a broken area of the tax code and has been for decades under both Republicans and Democrats.  I'd love to see corporate income taxes changed from their current net worldwide income basis to a gross domestic sales basis. Doing so makes most corporate tax avoidance strategies impossible, and I fail to see why the US should be taxing foreign economic activity in the first place.

[CARLHAYDEN]

you seem to miss my point on legal tax avoidance.  While there is some cost on hiring accountants and tax attorneys to find ways to prevent the government from grabbing money, if the benefits outweight those costs (and the alternative revenues from taxable investments), then people will continue to invest their funds in tax avoidance.

Didn't miss the point at all.  What you apparently keep missing is that tax avoidance only becomes possible when there is disparate tax treatment for different economic activities.  Whether those disparities are due to location (as in your reservation example) or in the type of activity (as in the case of specialized tax breaks) the effect is essentially the same, and will still be there under whatever supposed base tax rate is there.

I gave you a simple example (so you might be able to understand it).  Let me give you a more complex one.  American based corporations hold profits made on investments outside the United States for years, rather than repatriating them and paying them to stockholders, waiting for an advantageous point in tax law.  Check out how GE paid almost NO federal income taxes last year (btw, Immelt is a pal of Obama).

Which is a broken area of the tax code and has been for decades under both Republicans and Democrats.  I'd love to see corporate income taxes changed from their current net worldwide income basis to a gross domestic sales basis. Doing so makes most corporate tax avoidance strategies impossible, and I fail to see why the US should be taxing foreign economic activity in the first place.

You still keep missing my point.

If taxes are further increased by the federal government, more employers will 'off-shore' employment to save on costs.  So, do you want to increase unemployment by raising taxes?  Oh, and omitting taxes on foreign operations, as you propose, will do nothing but make this even worse!

[True Federalist (진정한 연방 주의자)]

You still keep missing my point.

If taxes are further increased by the federal government, more employers will 'off-shore' employment to save on costs.  So, do you want to increase unemployment by raising taxes?  Oh, and omitting taxes on foreign operations, as you propose, will do nothing but make this even worse!

Omitting taxes?  If a US based company sells something in Germany that it produces in Germany, do you think it is fair that economic activity is taxed by the United States?  What goes on now is that if a good is sold in the United States, then it is possible at present to avoid the tax by exporting the production overseas.  In some cases they don't even bother with that and just set up foreign shell companies to massage the money for tax purposes.  By contrast what I am proposing is that if a company sells a good or service here in the United States, the tax treatment is identical no matter where it is produced, and setting up foreign shell companies would have no effect on the tax owed.

As for raising taxes, CARL, to eliminate the deficit, the government must raise tax revenue and/or slash spending. (The available evidence indicates that we are likely not even close to the part of the Laffer curve where a decrease in tax rates will increase tax revenues.)  I haven't seen you suggest spending cuts sufficient to eliminate the deficit or even come close to what I've suggested as spending cuts.  So it appears you favor continuing on with our deficits until we're in the situation Greece is in now.

I think the Federal deficit is a bigger long term problem than than what the level of taxation is.  In the short term, the economic situation certainly does call for no increase in raising general tax rates at present.  However, the economy is no reason for failing to deal with our bloated tax code by undertaking the immediate triage step of eliminating tax breaks and loopholes.  Those tax inequities encourage our economy to be inefficient, which is the very last thing we should be doing during a recession.

[I spent the winter writing songs about getting better]

Remember when Gustaf said that CARLHAYDEN was a good poster treated unfairly by the left?

Did I ever refer to him as a good poster? My point has simply been that he's not much worse than posters like Lief, opebo or you and yet get treated much worse.

But shouldn't my defense of him in spite of not liking him merit me a place in your book of cheek-turning Christians?

Thing is you are also a pretty judgmental individual and don't seem to forgive easily. And why haven't you defended me, Lief or opebo? (corrected the capitalization by the way)

But yes, that also applies largely to me as well. I'm a very sinful individual. opebo is a better Christian than me, LOL.

Judgemental? I'm nowhere near you in that department.

Uh, take a look at what you say about me and opebo. Kind of hypocritical too since you've admitted to not having a problem with people you know in real life who have been to strip clubs and hired prostitutes...

On the contrary, I'm perfectly ready to forgive anyone who shows signs of remorse. I always do my best to stay away from bashing the easy targets on here, like Bushie, Josh, Gporter and so on. Unlike you.

Please find a post of me making fun of gporter. I've probably defended Josh more than mocked (especially around 2006.) Yes I've gone after Bushie but certainly less minor than the stuff he was doing. It was largely out of disgust with his False Christianity and promotion of a Church of Evil anyway rather than the ridiculous schaudenfreude of some people.

And I don't defend you because you have so many people defending you already. I reserve my support for those who need it. You people get away too easily.

What I am not understanding is why CARL is so deserving of this with the type of crap he's posting here and his "creative math" which is on par with J. J. and pbrower.

[CARLHAYDEN]

Eh...the billions are not large sums compared to the trillions that the debt is made up of. My point, which I stated explicitly, was that cutting the increases in foreign aid and EPA under Obama will have no effect on solving the problem of the deficit. Do you agree to that?

Your headline of this thread, which you started, was: "CBO: Tax hikes unnecessary" So i twas rather natural for me to use their figures in the discussion, since you introduced them. If you have other projections you prefer, by all means, present them. I doubt they will change the overall picture though.

What the distinction between subjects and citizens has to do with this escapes me. I'm not interested in the ideology of this but in the economics.

I notice that you avoided answering my question: how is the deficit going to dissappear if you use the same revenue as today (not raising any taxes) and only cut spending by 6% at the federal level?
[/quote]

First, you make assumptions which are incorrect.  Revenues will not remain static if we rein in the government, but rather increase.  

This is history, not just a theory.  

Second, as I pointed out, in addition to freezing the mandatory spending (i.e. no increases), we should cut expenditures from a number of agencies/departments.  Now, you probably have never seen the GPU publication of the federal budget, but, when printed, it stands several feet tall.  Virtually every department and agency has expenditures which can (and should be) cut.  Listing all of them would take up more room on this forum than Mr. Leip would like to provide.

Third, its interesting to see your changing definition of "Western Europe" to exclude the countries I listed and to consist of "Scandinavian ones."  

Let me suggest that if the people of the Scandinavian countries want to emulate lemmings and continue on their path to the cliff, its their right.  However, most Americans have some foresight, and don't want to continue on that.

Finally, I am really perplexed by what school of economics believes that unemployment is reduced by increasing taxes?

Heck, even a certain slimebag realized that increasing taxes is bad for the economy.

“You don’t raise taxes in a recession.”

Barrack Hussein Obama, II

August 5, 2009, Elkhart Indiana



[/quote]

Eh...no. Possibly in the long-term but certainly not in the short term. Both Bush and Reagan cut taxes substantially and that led to large deficits.

I haven't changed any definitions. I talked about Sweden from the beginning. And I fail to see how we're walking off a cliff. Our public finances are better than the American. Our growth has been about the same for the last decade. Our productivity level is the same. We have higher social mobility and equality and we tend to score higher on most measures of happiness or quality of life. Right now, Sweden's economy seems to be in much better shape than America's so I'm not sure how you are having such great foresight?

As regards your last point, we're not talking about taxes, but about spending. You're supposed to explain how a decrease in spending will spur growth and you still have not.
[/quote]

Well, lets take your allegations one a a time.

You said, changed what I said.  I was NOT proposing tax reductions at this time, but rather freezing much of the mandated spending.  Further, yes, revenues do increase over time, reducing deficits.  If you deny this, I will produce the numbers.  The problem is that expenditures increase even faster than revenues.  

In 1978, federal receipts amounted to $446.5 billion dollars, which grew to $997.2 billion in 1988 (223.34%).  However, during the same period, expenditures grew from $478.1 billion in 1978 to $1,118.5 in 1988 (233.95%).

http://www.infoplease.com/ipa/A0104655.html

Next, you said "Western Europe," then changed your definition to the "Scandanavian countries," and now have changed it to "Sweden".  Hmm.  If Swedes believe that big government is the secret to prosperity, then go ahead.  Just don't insist others join you.

Finally, I realize this is difficult for you, but, history has shown that spending in the private sector produces more jobs and prosperity than spending by the government.  So, when we reduce government spending (especially on matters which adversely impact the economy), we grow the economy.

[/quote]

Both expenditures and revenues will always be increasing as long as the economy grows, ceteri paribus. Besides, unless I'm mistaken those figures are not inflation adjusted so they're sort of irrelevant.

I never claimed that every country in Western Europe was successful. But several of us are. You have still not come up with any counter to those facts.

You keep claiming that private spending is better than public spending. That's fine. What you haven't shown is how a reduction in public spending increases private spending when taxes are left unchanged.
[/quote]

First, I must emphatically reject your assertion that there is NOTHING that government expenditures inexorably will increase as fast or faster than revenues!

Second, the instance I cited (with url source) came during a period of tax rate cutting.  So, are you asserting that that there can be revenue increases when rates are cut but not when they are kept static?

Finally, the term is "ceteris paribus."  For those without latin, that simply means "everything else being equal."  I will assume the omission of the "s" in ceteris, is merely a typo.  Further, while tossing in a latin phrase may impress the impressionable, it has absolutely no significance otherwise.  The facts speak for themselves. Do I need to give the phrase in latin?

[Gustaf]

Remember when Gustaf said that CARLHAYDEN was a good poster treated unfairly by the left?

Did I ever refer to him as a good poster? My point has simply been that he's not much worse than posters like Lief, opebo or you and yet get treated much worse.

But shouldn't my defense of him in spite of not liking him merit me a place in your book of cheek-turning Christians?

Thing is you are also a pretty judgmental individual and don't seem to forgive easily. And why haven't you defended me, Lief or opebo? (corrected the capitalization by the way)

But yes, that also applies largely to me as well. I'm a very sinful individual. opebo is a better Christian than me, LOL.

Judgemental? I'm nowhere near you in that department.

Uh, take a look at what you say about me and opebo. Kind of hypocritical too since you've admitted to not having a problem with people you know in real life who have been to strip clubs and hired prostitutes...

On the contrary, I'm perfectly ready to forgive anyone who shows signs of remorse. I always do my best to stay away from bashing the easy targets on here, like Bushie, Josh, Gporter and so on. Unlike you.

Please find a post of me making fun of gporter. I've probably defended Josh more than mocked (especially around 2006.) Yes I've gone after Bushie but certainly less minor than the stuff he was doing. It was largely out of disgust with his False Christianity and promotion of a Church of Evil anyway rather than the ridiculous schaudenfreude of some people.

And I don't defend you because you have so many people defending you already. I reserve my support for those who need it. You people get away too easily.

What I am not understanding is why CARL is so deserving of this with the type of crap he's posting here and his "creative math" which is on par with J. J. and pbrower.

There's a difference between pointing out that something is wrong in a discussion on a political message board and preaching about it to friends who disagree. I'd have thought that pretty obvious, even to you. What bothers me is not being in favour of legal prostitution or even attending a strip club but the callous attitude to the issue that the two of you display. It's frankly disgusting. It's like thinking the Iraq war was a good thing because you can make cool computer games off of it. It's immature and narrow-minded.

Of course, I've defended JJ as well. Both JJ and CarlHayden are far superior to your beloved idol. That says more about him, obviously.

[Gustaf]

Carl,

First, your statement seems to miss a word so I'm not sure what you're saying. I will assume that it was a typo and not because you don't know Latin.

Second, I'm sure you are aware of how useless it is to use nominal figures, especially starting in a period of very high inflation. Besides, my argument was never that it cannot increase over the long run - that's when the dynamic effects of a more efficient economy would start kicking in. Furthermore, we're still not discussing tax cuts. We're talking about spending cuts, but you keep try to change the subject.

Finally, yes that was a typo. Since I study economics I'm fairly used to the term and did not use it to scare you.

I refer to my question which you still have not answered: how does cutting public spending while keeping taxes unchanged increase private spending, in the short run?

[CARLHAYDEN]

Carl,

First, your statement seems to miss a word so I'm not sure what you're saying. I will assume that it was a typo and not because you don't know Latin.

Second, I'm sure you are aware of how useless it is to use nominal figures, especially starting in a period of very high inflation. Besides, my argument was never that it cannot increase over the long run - that's when the dynamic effects of a more efficient economy would start kicking in. Furthermore, we're still not discussing tax cuts. We're talking about spending cuts, but you keep try to change the subject.

Finally, yes that was a typo. Since I study economics I'm fairly used to the term and did not use it to scare you.

I refer to my question which you still have not answered: how does cutting public spending while keeping taxes unchanged increase private spending, in the short run?

Gustaf,

Not sure whether you consistently are unable to comprehend what I am posting, or merely misrepresent the same.

Next, you again engage in evasion.

You seem to (finally) acknowledge that revenues can increase without increases in tax rates, or imposition of new taxes.

Will you finally also acknowledge that spending can increase at a lower rate than revenue increases?

Finally, while you (incorrectly) assume that when government spends money, it is somehow magical, and that if such expenditures are not made by the government, then the economy shrinks.  This simply is not the case.  Government 'crowds out' the private sector with its expenditures (as well as with borrowing).

[Gustaf]

Carl,

First, your statement seems to miss a word so I'm not sure what you're saying. I will assume that it was a typo and not because you don't know Latin.

Second, I'm sure you are aware of how useless it is to use nominal figures, especially starting in a period of very high inflation. Besides, my argument was never that it cannot increase over the long run - that's when the dynamic effects of a more efficient economy would start kicking in. Furthermore, we're still not discussing tax cuts. We're talking about spending cuts, but you keep try to change the subject.

Finally, yes that was a typo. Since I study economics I'm fairly used to the term and did not use it to scare you.

I refer to my question which you still have not answered: how does cutting public spending while keeping taxes unchanged increase private spending, in the short run?

Gustaf,

Not sure whether you consistently are unable to comprehend what I am posting, or merely misrepresent the same.

Next, you again engage in evasion.

You seem to (finally) acknowledge that revenues can increase without increases in tax rates, or imposition of new taxes.

Will you finally also acknowledge that spending can increase at a lower rate than revenue increases?

Finally, while you (incorrectly) assume that when government spends money, it is somehow magical, and that if such expenditures are not made by the government, then the economy shrinks.  This simply is not the case.  Government 'crowds out' the private sector with its expenditures (as well as with borrowing).

I never said revenue can't increase in the long-run. That's not even the issue here. I also never claimed spending cannot increase at a lower rate than revenue increases. Why do you leep attributing positions to me that I never claimed to have?

But perhaps we're finally getting somewhere. I don't know why it had to take you 4 pages of arguing to provide a coherent analysis (I'm being generous, I suppose - the embry of a coherent analysis), but that's water under the bridge.

Given what you said before, I suspect your crowding out argument is based on the notion of Ricardian equivalence. That notion is, however, largely discredited in its pure form. While there certainly are crowding out effects they are nowhere near 100% (I believe something like 25% has empirical support). This has many reasons, one of which is imperfect rationality, another whic is liquidity constraints.

[CARLHAYDEN]

Yes, we appear to finally be getting somewhere.

First, let me say it is nice you have heard of David Ricardo (I enter that name for the purpose of educating others who may be reading this thread).

Second, it is nice that you now admit "While there certainly are crowding out effect."  Now, one of the problems with econometrics is that there are no permanent ratios between different parts of the equation.  In this case, some government expenditures are more productive/less unproductive than others, as is the case for private expenditures.  In addition, a government expenditure for infrastructure may be reasonably beneficial up to a certain point, and wasteful beyond that point (building of dams illustrates this).  Now, your supposition that it is at a fixed 25% ratio is simply misguided (its like the bi-metalists of the 19th century who sought a permanent ration between gold and silver).  Some expenditures by government, like many of those for the EPA actually depress the economy.

[Gustaf]

Yes, we appear to finally be getting somewhere.

First, let me say it is nice you have heard of David Ricard (I enter that name for the purpose of educating others who may be reading this thread).

Second, it is nice that you now admit "While there certainly are crowding out effect."  Now, one of the problems with econometrics is that there are no permanent ratios between different parts of the equation.  In this case, some government expenditures are more productive/less unproductive than others, as is the case for private expenditures.  In addition, a government expenditure for infrastructure may be reasonably beneficial up to a certain point, and wasteful beyond that point (building of dams illustrates this).  Now, your supposition that it is at a fixed 25% ratio is simply misguided (its like the bi-metalists of the 19th century who sought a permanent ration between gold and silver).  Some expenditures by government, like many of those for the EPA actually depress the economy.

Heard of? I've been teaching university students on his model of trade for 3 years now.

It is obviously true that both public and private spending can have different levels of efficiency. And of course 25% is not a fixed number, it's merely a number I seen suggested by empirical literature on the topic.

My point is simply that if pure Ricardian equivalence does not hold (and it does not) a spending increase will not be entirely off-set by people saving up for future tax increases. Thus, it will still lead to an overall increase in spending in the economy.