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View Diary: Boehner just shot himself in the foot (170 comments)

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  •  True. (26+ / 0-)

    In 1993, when Clinton was trying to pass his economic plan, Republicans came up with the same arguments - That tax increases would put the economy back into recession. His program passed Congress without a single Republican vote.
       Guess, what: No recession.
        This was before the dot.com boom. In fact, there were only about 30 sites on the whole web in those days. So the later computing explosion was not a factor in avoiding a 1993-94 recession.

    •  We were still in a recession in 1993 (5+ / 0-)

      It's the reason Clinton won in 1992.   But we climbed out of that recession, notwithstanding the Clinton tax hike.

      "We have always known that heedless self-interest was bad morals, now we know that it is bad economics." Franklin Delano Roosevelt, Jan. 20, 1937

      by Navy Vet Terp on Sun Dec 02, 2012 at 09:00:28 AM PST

      [ Parent ]

      •  Because of the tax hike. (4+ / 0-)

        Low taxes encourage speculation over growth, outsourcing over expansion, and cost cutting over hiring.
        If it is cheap to take money out of a company (low taxes), that is exactly what you encourage.  A higher tax rate encourages companies to reinvest and expand.

        These capitalists generally act harmoniously and in concert to fleece the people, and now that they have got into a quarrel with themselves, we are called upon to appropriate the people's money to settle the quarrel. Abraham Lincoln

        by Nailbanger on Sun Dec 02, 2012 at 11:44:14 AM PST

        [ Parent ]

        •  Nailbanger - not because of the tax hike (1+ / 0-)
          Recommended by:
          coffeetalk

          Because the dot com boom caused explosive economic growth and windfall taxes from realized capital gains. In all the data I have seen regarding government revenues and tax rates during the Clinton years none of them make the point that higher tax rates were a reason for the growth in GDP. They were certainly an important part of higher government revenues.

          I have performed every analysis regarding expansion and investment from being a junior analyst to a public company CFO and have never seen a case where higher tax rates made it more favorable to invest and expand. It's actually just the opposite. Investments are driven by expected after tax returns, so the higher the taxes the lower the returns, the fewer investments that are made. There are numerous software packages that help companies making expansion or investment decisions. In everyone of them tax rates are a variable and higher rates always are factored in as a negative.  

          "let's talk about that"

          by VClib on Sun Dec 02, 2012 at 02:55:17 PM PST

          [ Parent ]

          •  vclib - have you ever contemplated end of year tax (1+ / 0-)
            Recommended by:
            bluezen

            management in your own business?

            i have operated small (very small by some standards) for perhaps 50 years, and have always looked at more investments in the business at end of year, especially when had good income year, to hold tax rates at the same as well as at the same time, improved the value/efficiency or other aspects of my enterprise.  perhaps i have been an ignoramus  unaware of some your esoteric accounting/analyst big business.

            regards

            •  yes, but vclib's posted over 22K comments. (1+ / 0-)
              Recommended by:
              lostinamerica

              aren't you impressed by that?

              me neither.

            •  OzBill - I have never been an officer, (0+ / 0-)

              director, or significant owner of a Sub S or LLC corporation. All my experience with making investment or expansion decisions within a corporation have come in C corporations, some large, some small.

              I can understand how as a Sub S owner facing a personal tax payment based on corporate net income you might have a different view, particularly if you could purchase something in December that could lower your tax liability. For C corporations a December purchase would not typically impact your tax liability unless there were unusual items that had special tax credits or tax write-offs associated with them.

              "let's talk about that"

              by VClib on Sun Dec 02, 2012 at 07:14:05 PM PST

              [ Parent ]

          •  But This Analysis... (2+ / 0-)
            Recommended by:
            Odysseus, Nailbanger
            Investments are driven by expected after tax returns,
            ...is done at the micro-level (it's individual companies using those software packages, after all, not the US economy doing it) and doesn't capture the macro effects. The simple fact is that shifting the tax burden up the income ladder in this economy will increase overall demand in the economy and THAT will increase after-tax returns.  

            I'd also add that you are making the rather odd assumption that a lack of investment funds is a problem.  Seems to me that the popularity of near-0% treasuries and the couple trillion in corporate cash on the sidelines NOW are telling us that that we have a SURPLUS of investment funds right now...what's missing is the DEMAND to drive OPPORTUNITIES for investment.  

          •  It is not seen becuase no one wants to see it. (0+ / 0-)

            No business group is going to say give me more taxes, not industry funded think tank is going to say give more taxes, no consultant working in the fortune 1000 is going to suggest it, no business school looking for endowments is going to study it.
              I just cant believe low tax rates, making it cheaper to remove capital, encourages growth.  It encourages profit taking and cutting costs and speculation, not growth.

            These capitalists generally act harmoniously and in concert to fleece the people, and now that they have got into a quarrel with themselves, we are called upon to appropriate the people's money to settle the quarrel. Abraham Lincoln

            by Nailbanger on Sun Dec 02, 2012 at 09:46:06 PM PST

            [ Parent ]

    •  A Repub Held Up a Sign in Congress "Clinton Reces- (10+ / 0-)

      sion." Of course a boom immediately followed.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Sun Dec 02, 2012 at 09:08:35 AM PST

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    •  You can't look at only part of the Clinton model (3+ / 0-)
      Recommended by:
      ahumbleopinion, Joieau, VClib

      Clinton and the Republican Congress essentially balanced the budget, bringing receipts and spending both to about 19% of GDP.  

      Today, receipts are very low as a percent of GDP (15% - 16%?) and spending is very high as a percent of GDP (24%?).  If you want to talk about the Clinton model, you have to talk about BOTH increasing revenue as a % of GDP, and cutting spending as a % of GDP.

      •  Okay. (12+ / 0-)
        If you want to talk about the Clinton model, you have to talk about BOTH increasing revenue as a % of GDP, and cutting spending as a % of GDP.
        For example: Clinton didn't start two wars and and then lower taxes.
        Obama would like to return to the Clinton model of no wars and higher taxes. Seems to work better than the Bush model.

        -4.38, -7.64 Voyager 1: proof that what goes up never comes down.

        by pat bunny on Sun Dec 02, 2012 at 09:56:17 AM PST

        [ Parent ]

        •  Those are pretty meaningless statements (2+ / 0-)
          Recommended by:
          ozsea1, VClib

          The President's budget assumes that we are winding down and ending the wars.  (In fact, I agree that it includes the budget gimmick -- which it definitely is -- of counting no wars as "cuts to spending" for the next 10 years).  

          And higher taxes than what? And how high?  

          The Clinton model was not "no wars and higher taxes."  It was bringing revenue up to about 19% of GDP and bringing spending -- all spending, including war spending -- down to about 19% of GDP.  It was bringing the budget into relative balance when you look at revenue and spending as a percent of GDP.  

          Now, I don't think we need to bring the into actual balance as Clinton did.  But I do think we need to bring revenues up to about 18% of GDP and spending down to around 21% of GDP.  And -- if you look at real numbers --  neither the President nor the Republicans have any proposal for anything close to that.  

          •  I'm not sure how you define "gimmick" (6+ / 0-)

            If we aren't fighting useless wars, then we are really spending less, right?  So why is that a gimmick?

            The real "gimmick" was when You Know Who fought all these wars and didn't count the spending as actual spending, and instead of having a budget said "we'll spend whatever it takes -- no cost is too great", and when Cheney said "deficits don't matter".  And when afterwards Republicans called Obama the great spender.

            •  Not fighting a war is not a "gimmick." (0+ / 0-)

              However, calling the fact that we are no longer occupying Iraq a "cut" in spending for the next ten years, when nobody intended on doing that in the first place, is a "gimmick."

              It's like saying, "I could have spent $100,000 that I don't have on a sports car, but since I'm not going to, I've cut spending by $100,000."  That's a gimmick.  It makes the phrase "cut spending" meaningless. For the President to say that not maintaining the force we used to have in Iraq is a "cut in spending" for FY 2013 - 2023 (when we never were going to be in Iraq from 2013 - 2013) is an accounting gimmick.  

              Really, we could be spending money invading Iran.  The fact that we are not is not a "cut in spending" for the next 10 years.    

              •  why don't we just forego the rw bullshit tp's & (2+ / 0-)
                Recommended by:
                lostinamerica, pat bunny

                cut to the chase . . .

                you & the r's want taxes for 250K & up to go down (to zero) & those below 250K to go up -- i believe republicans call that (ahem) "broadening the tax base.

                 then everything will be right as rain!

                just like it always is with trickle down!!

                b/c nothing's supposed to trickle down -- & that's the joke.

                •  Of course, I said nothing of the sort. (1+ / 0-)
                  Recommended by:
                  VClib

                  I said I think  taxes need to increase so that they are back up to Clinton levels, somewhere around 18% of GDP.  And I think that spending needs to come down, not to Clinton levels, but to maybe 21% of GDP.  

                  I'd prefer that revenues be increased through an overall overhaul of the tax code so that people at the same income level pay roughly the same in taxes, measured in effective tax rates, rather than some of the rich paying an effective tax rate of 26% (through the AMT, for example) and some just pay an effective rate of 15% (if they get all income through capital gains).  Something like the Simpson Bowles Tax Plan, but perhaps the top rate a point or two higher so that you get receipts where they need to be as a percent of GDP.  The present tax code is a mess, and I think it needs a huge overhaul.  

                  I don't know how you get "want the rates on those above $250,000 to go down to zero" out of that.  

                  •  oh, gee, i guess i got that idea from a comment (1+ / 0-)
                    Recommended by:
                    lostinamerica

                    you posted a few weeks ago when you were whining about the d's wanting to raise tax rates on the 250K+ crowd & you said there was no reason for the d's to be so insistent about that b/c the prez could have the revenue he wanted if he just accepted the r's proposal -- which was the same fucking plan mitt romney ran on: closing loopholes & eliminating deductions.

                    it's called subtext, btw.

                    the tax code is a mess b/c lobbyists have deliberately written it to be that way . . . & that's why it will never be overhauled, either.

                    but of course, you already knew that.  you're just playing games with heads around here.  8-I

              •  Your analogy doesn't make sense (1+ / 0-)
                Recommended by:
                pat bunny

                We seem to be using differentials when defining "tax cuts" or tax increases.  That is, if the tax rate is lower than it was last year, it's a tax cut.  So why isn't the same definition used for spending cuts?

                You say:

                It's like saying, "I could have spent $100,000 that I don't have on a sports car, but since I'm not going to, I've cut spending by $100,000."

                No. Not the same. Because I haven't been spending $100,000 a year on sports cars in the past.  But we have been spending money on wars in the past.  So if spending on useless wars next year is less than it was this year, I don't see why that's not called a spending cut.

                Accounting "gimmicks" are things like pretending money I've spent/earned this year was really spent/earned in a different year or averaged out over a ten year period or whatever.  Or that gifts my children have received from me aren't really income.  Or that things aren't really income if they're passed through a certain kind of trust. Or lots of the other things the tax code provides to let rich people not pay taxes on things that they do that the rest of us would normally pay taxes on.  In short, legal fictions.

                If we were spending a trillion dollars on a useless war and now we're not, that's a cut.

                •  It's a matter of what baseline you start from (1+ / 0-)
                  Recommended by:
                  VClib

                  to say whether you are "cutting."

                  For FY 2013 - 2023, it makes no sense to say that the "baseline" includes spending for Iraq and Afghanistan, because current policy is that we will not be in Iraq and Afghanistan during those years.  That's the problem.  What is the baseline -- what will happen if all the policies that are in place now continue?  That baseline does not include Iraq and Afghanistan.  In order to say you are cutting spending based on Iraq and Afghanistan, you have to assume that the baseline would be continuing that war spending in FY 2013 - 2023.  

                  For example, what is the baseline on revenues for next year?  If you assume that under existing law, all Bush tax cuts expire, then a plan that continues them for households under $250,000 is a cut in tax revenues.  But if you assume that the baseline is what we have today -- all those tax cuts in place -- then the very same legislation, extending the Bush Tax cuts on Households under $250,000  -- is an increase in  tax revenues.

                  For political reasons, people tend to pick the baseline that supports their preferred narrative.  When people in Washington play with numbers, they fool around with the baseline more than anything else.  It's what allows two groups to look at the same thing and one say they "cut spending" and one say they "increased spending."   They both are telling the truth because they are starting from different baselines.  

                  •  The baseline is what we were doing before (2+ / 0-)
                    Recommended by:
                    lostinamerica, pat bunny

                    That's what is meant when you're not trying to redefine "cut" in some bizarre way.

                    If I "lost" weight, it means that I weigh less than I did last year.  Not that I weigh less than some "baseline" based on some "policy".  That's how my investment people define my gains and losses in stocks or mutual funds.

                    I'm a math nerd, and that's how you define what a change is.  DeltaY where y = f(x) means f(x+deltaX) - f(x).  If x is this year, and if deltaX is a year, then it's f(nextYear) - f(thisYear).  None of this "policy" and "baseline" stuff.

                    •  That works when you are comparing one year (1+ / 0-)
                      Recommended by:
                      VClib

                      to the year before.  It doesn't work when you are talking about projecting cuts in spending for the next 10 years, which is how our government does budgeting.  In order to do that, you have to have a "baseline" for the next 10 years -- what spending would have been.  Then reductions from what spending would have been are your cuts.  

                      •  That's what it is everywhere else. (1+ / 0-)
                        Recommended by:
                        lostinamerica

                        When they talk about NASA budget cuts, they mean it's cut with respect to last year, not with respect to a 10-year NASA baseline that was projected.

                        That's how it is everywhere else in business, too.  When I got a salary increase of 3%, it was called a salary increase of 3%, not a salary cut of 1% even if some policy forecast said that over 10 years I should be getting an average 4% increase per year.  Calling it an increase wasn't a "gimmick"; it was the normal way of describing the event.

                        •  I wish the terms everyone used were the (1+ / 0-)
                          Recommended by:
                          coffeetalk

                          same for government spending and executive compensation. It would be nice if the word "cut" was reserved only for actual, real dollar reductions where Year B spending was actually lower than Year A. The problem with the word "cut" as it relates to federal budget issues is that no one knows what it actually refers to. In addition, "budget cuts" for any year past the next two are complete fiction. The current Congress can't dictate anything past the 113th session.  

                          "let's talk about that"

                          by VClib on Sun Dec 02, 2012 at 09:15:49 PM PST

                          [ Parent ]

                  •  I believe the CBO's budget numbers have already (0+ / 0-)

                    baked in the Iraq war ending and a reduced presence in Afghanistan. The CBOs budget also has ALL the Bush tax cuts expiring at the end of the 2012.

                    "let's talk about that"

                    by VClib on Sun Dec 02, 2012 at 09:19:43 PM PST

                    [ Parent ]

          •  You Keep Mistating This (1+ / 0-)
            Recommended by:
            pat bunny

            It was NOT

            and bringing spending -- all spending, including war spending -- down to about 19% of GDP
            ...it was growing the economy faster than growing spending so that the ratio decreased while spending still increased.  And you can't do that right now by cutting spending.  See: Britain, Spain, Italy, Greece, et al.
      •  We pay more for military/intelligence (10+ / 0-)

        than the next ten nations combined. And that spending has more than doubled since 2001, NOT counting either of the Shrubbery's wars (which were "off the books").

        Roll back spending on the MIC to pre-2001 levels tomorrow and we don't have much of an economic problem anymore. Jobs lost to that downsizing could stand investments in retraining and development of other industries (like renewable energy), maybe a serious government jobs program for infrastructure. Over a decade the whole thing would start returning a surplus to pay down the excess debt incurred by changing the workforce over to the 21st century, and we could all live happily ever after.

        Yeah. In my dreams.

    •  "dot.com boom" is shorthand for the "digital boom" (1+ / 0-)
      Recommended by:
      Odysseus

      that started with the sale of personal computers in the 1980's... Apple, Microsoft, IBM, AOL, Compuserve and and a lot of Silicon Valley software entrepreneurs were employing people and making investors rich while the internet still consisted of Eudora and Usenet.

      We really should be referring to the Clinton-era "Dot.com Bubble", fueled by the profits made off the "Microprocessor Boom".

      Government deserves much credit for funding the development of the microprocessor, constructing the original internet backbone and educating a generation of software engineers in public universities.

      But something else put disposable income into the pockets of tech-savvy consumers... I think it was Reagan's deficit-fueled military spending. A lot of the early PC buyers I knew were civilian guys with good-paying "mil-spec" aerospace jobs.

      That's what creates jobs: Consumers with disposable income.

      Have you noticed?
      Politicians who promise LESS government
      only deliver BAD government.

      by jjohnjj on Sun Dec 02, 2012 at 05:40:57 PM PST

      [ Parent ]

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