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There's excellent political reasons for bringing some fairness back to tax policy and ending the Bush/Republican massive tax cuts to the rich. But there's also smart policy reasons, beyond the massive chunk of the deficit they comprise. The evidence is actually pretty sound that tax cuts to the wealthy just don't stimulate the economy, despite what Republicans would have you believe.

The CBO says so.

[E]conomic research suggests that tax cuts, though difficult for politicians to resist in election season, have limited ability to bolster the flagging economy because they are essentially a supply-side remedy for a problem caused by lack of demand.

The nonpartisan Congressional Budget Office this year analyzed the short-term effects of 11 policy options and found that extending the tax cuts would be the least effective way to spur the economy and reduce unemployment. The report added that tax cuts for high earners would have the smallest “bang for the buck,” because wealthy Americans were more likely to save their money than spend it.

The office gave higher marks to the proposal, now embraced by President Obama, to allow small businesses to write off 100 percent of their investment costs.

Then there's Moody's:

Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell....

When tax legislation was signed by Clinton in 1993 -- raising the top tax rate to 39.6 percent from 31 percent -- the saving rate fell from 12.1 percent in the second quarter to 9.5 percent in the first quarter of 1994. The Standard & Poor’s 500 Index rose 1.9 percent from July through September, after little change the previous three months.

When the first Bush tax cuts were signed into law in June 2001, pushing the top rate down to 35 percent, the wealthy boosted savings. The saving rate climbed to 2.8 percent in the first quarter of 2002 from minus 2 percent in the second quarter of 2001. The increased savings coincided with a 1.1 percent decline in the S&P 500 index.

Saving is good, but now on the part of the people with all the income, anyway. More money in middle class folks' pockets creates more spending, creating more demand, creating more jobs. That's also true of unemployment benefits.

In addition to continuing the massive tax breaks for the very wealthy, what Congress needs to do to address the economy is extend the cuts for the middle class, create a 5th Tier of unemployment benefits for the millions of people whose benefits have run out, and save a quarter of a million existing jobs by extending TANF funding.

That's how to keep the economy moving.

Originally posted to Daily Kos on Thu Sep 16, 2010 at 06:30 AM PDT.

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Comment Preferences

  •  Save, but not invest: (21+ / 0-)

    As widely noted, there's trillions on the sidelines already, waiting for demand to pick up.  Putting an addition few hundred billion on the sidelines isn't needed: what's needed is an additional few hundred billion in demand (or more).

    So tax cuts to rich people makes no sense.  A tax cut of a hundred Gs to the rich guy gets put in the treasury bond issued to borrow the hundred grand.  A tax cut to lower incomes is more likely to be immediately spent becasue they don't have much of a choice in the matter: they are broke.

    Some feel more comfortable with the certainty that comes from losing power and letting republicans stab them in the front. It's a failure of nerve.

    by Inland on Thu Sep 16, 2010 at 06:34:21 AM PDT

    •  I'm usually the first to suggest compromise... (20+ / 0-)

      ...but not on this issue.

      The president needs to hammer this issue for the next three months until congress gets it through: The wealthy HOARD tax cuts. The CBO confirms it. The BLS confirms it.

      On this issue, the president has been unwavering - and he needs to stay that way. The American people, willfully or unwillfully obtuse on a whole host of other issues, are completely with him on this because they understand what's at stake economically.

      "Taxes are the price we pay for a civilized society" -Oliver Wendell Holmes

      by APA Guy on Thu Sep 16, 2010 at 06:38:17 AM PDT

      [ Parent ]

      •  I don't understand why there's a discussion here (9+ / 0-)

        I don't understand why Pelosi had to bring in Stan Greenberg and rally the troops.  Most of all, I don't understand why we don't have votes already scheduled on the Dem tax plan and on the GOP tax plan in both houses.

        Perhaps my last sentence identifies the key problem here--the GOP clearly has had its plan all along, but the Dems still don't seem to have come to a consensus.  The fact that they haven't quickly and decisively capitalized on the political gift that they've been handed here when so many of them face potential (or even likely) defeat boggles the mind.

        Some men see things as they are and ask why. I dream of things that never were and ask why not?

        by RFK Lives on Thu Sep 16, 2010 at 06:56:02 AM PDT

        [ Parent ]

        •  Everything can't boggle the mind (2+ / 0-)
          Recommended by:
          RFK Lives, HylasBrook

          at this point I am inclined to believe it is a feature not a bug.

          "Senator McCain offered up the oldest Washington stunt in the book - you pass the buck to a commission to study the problem." - Senator Obama, 9-16-2008

          by justmy2 on Thu Sep 16, 2010 at 07:08:59 AM PDT

          [ Parent ]

          •  I wonder about that myself (5+ / 0-)

            How can a party not aggressively pursue such an obvious opportunity?  Why are they still contemplating their respective navels here?

            Some men see things as they are and ask why. I dream of things that never were and ask why not?

            by RFK Lives on Thu Sep 16, 2010 at 07:15:22 AM PDT

            [ Parent ]

          •  Republicans have always been able to frame (0+ / 0-)

            the debate, so Democrats react instead of standing for what they believe in.

            True, the Republican take on things is easier to say - less government, less taxes, less regulation.

            Democrats need to reframe the debate as saving the middle and working class, providing a safety net for people in need, and insuring that Americans can eat what they buy in supermarkets without getting sick.

            But the poor old Democrats keep dancing to the Republican tune at a time when the disasterous effects of Republican philosophy hasn't been clearer.

            Aud, the Deep Minded

            by HylasBrook on Thu Sep 16, 2010 at 08:03:02 AM PDT

            [ Parent ]

        •  We continue to be misled. Conservadems (3+ / 0-)
          Recommended by:
          Vicky, drewfromct, HylasBrook

          ConservaDems Afraid to Vote on Obama Tax Cuts! (w/ Great Obama update)

          By TomP
          On Wed Sep 15, 2010 at 07:19:08 AM PDT

          snip
          When Democrats are afraid to give a tax break to the middle class while raising taxes on the rich just slightly, they signal cowardice.  This is not President Obama's fault: he's doing the right thing.  This is a few chickenshit Democrat House members peeing in their pants because rich people might be taxed.  

          I am sick of these fucking cowards.  Pomeroy can go fuck himself.

          You ask for our votes and to work our asses off, and then cannot even support your own president?  Cannot even do the POPULAR thing?  

          What I'm talkin' about!

          This is why many are planning to go to DC to stand up for the change we voted for:

          Sign Up For This Historic March on Washington  10-2-10

          Demand the changes we voted for

          One Nation Working Together is a social movement of individuals and organizations committed to putting America back to work and pulling America back together. Coming from a diverse set of backgrounds, experiences, beliefs and orientations, we are determined to build a more united country with good jobs, equal justice, and quality public education for all.Learn More »

        •  The "problem" with taxes for the Dems (1+ / 0-)
          Recommended by:
          drewfromct

          Since walter Mondale (D) 1984 said he was going to raise taxes and lost 49 states, no one word has scared dems more ever since. This has been an albatros on their necks as they have come to be perceived as the party of taxes...desptie the fact that Reagan and Bush Sr raised taxes.
          -Usually the GOP wins on this issue no matter the logic. Heck! who wants to pay higher taxes? No one.
          -But then what about the deficit that this same GOP vows is the most urgent issue?
          -Now they don't care that extending the Bush cuts would explode the deficit.
          You see Republicans are bunch of reactionary opportunists. And I would tell you categorically that Repugs have no principles. Don't be fooled. They grap onto what is they see as the "hot" issue of the day and make that their campaign issue.
          -Aren't these same people who orchestrated the largest bailouts in sept 2008, the same ones now wipping up sentiments about bailouts? And unfortunately I don't see anyone reminding people out there that Bush had more bailouts than Obama.

          "When fascism comes to America, it will be wrapped in a flag and carrying a cross." Sinclair Lewis, 1935 --Talk of foresight--

          by tuma on Thu Sep 16, 2010 at 07:34:29 AM PDT

          [ Parent ]

      •  Obama IS proposing a tax cut for the rich! (3+ / 0-)
        Recommended by:
        Vicky, drewfromct, bushondrugs

        the cut in marginal rates on the first $250K of income means the richest get a tax cut too!  It's a compromise already.  The republicans are demanding that MOST of the tax cuts go to the families making five time the median income.  Not just some.  Most.  And the greatest disproporation is at the highest incomes.

        Some feel more comfortable with the certainty that comes from losing power and letting republicans stab them in the front. It's a failure of nerve.

        by Inland on Thu Sep 16, 2010 at 07:27:49 AM PDT

        [ Parent ]

      •  Thank you for your saying "Hoard" (0+ / 0-)

        Words matter.  Democrats need to stop using value neutral or positive words like "save" when talking about what the rich do with tax cuts.  "Hoard" is exactly what they do with them.  They don't buy anything with them, they don't invest them to create new jobs, they sit on them like Scrooge McDuck on his pile of gold coins.  

    •  Yes (2+ / 0-)
      Recommended by:
      wishbone, kevin k

      When in a recession as deep as this one, capital formation is the least of our worries.

      In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

      by blue aardvark on Thu Sep 16, 2010 at 06:41:29 AM PDT

      [ Parent ]

    •  It's not saving; it's hoarding. (1+ / 0-)
      Recommended by:
      Vicky

      Money is to be spent.  It is a lubricant.  If you deprive the economic engine of lubricant, the gears seize up and then halt.

      People hoarding our money may not have meant to crash the economy.  But then, a teenager who takes the family car to show his buddies how fast it can go, doesn't mean to crash it either.

      Finally, we need to stop using magic words.  What's at issue now is "relief for the rich."  We can't afford it.  While America can afford a considerable number of freeloaders, also known as the country club clan, enough is enough.  The fees are going to have to be raised.  

      Which reminds me.  A transaction fee would be much fairer and cost less to collect.  Indeed, it's been estimated that as little as one half of one percent levied as a user fee on each monetary transaction would bring in enough revenue to fund all public sector expenses.

      The Constitution is not a menu for an exclusive diner.

      by hannah on Thu Sep 16, 2010 at 09:05:10 AM PDT

      [ Parent ]

  •  Of course they don't. (13+ / 0-)

    They have everything they want already. If I'm rich and I get a half-million dollar windfall I find a way to put it into Trust for my kids and their kids.

    It's called generational wealth. Given the current economic circumstances it makes perfect sense, because the last thing the rich want is for their own kids to pay the price of Republican policies.

    •  I think it's become pretty obvious (9+ / 0-)

      that the super rich just use more money to buy more power, either by funding "think tanks" to bolster their agendas, buying up more media outlets to echo those views, or taking the direct route of just outright buying political offices.  None of these things are good for the economy.

      I could buy a parrot and train it to say, `tax cuts,' but at the end of the day, it's still a parrot, not a conservative.

      by MadRuth on Thu Sep 16, 2010 at 07:00:29 AM PDT

      [ Parent ]

      •  And some of them are non-political (3+ / 0-)
        Recommended by:
        MadRuth, drewfromct, kevin k

        They just thank their lucky stars for this ridiculous windfall and hoard it in stable financial instruments for distribution to their heirs.

        •  Not necessarily. (0+ / 0-)

          Rich folks also use their money to play in the Wall Street casino.  They buy, sell and short stocks in the stock market, or they form investment groups with their rich friends and buy derivatives and CDS's as insurance on those derivatives.

          Corporations hoard money (profits) - unless, that is, they're heavily taxed, in which case it makes more sense to invest in plants and equipment and even hire workers rather than give up a big tax bite to the taxing authorities.

          In either case it's good economics to tax those unproductive funds, and in the present envirosement, it's good politics too.

          "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

          by SueDe on Thu Sep 16, 2010 at 11:02:06 AM PDT

          [ Parent ]

    •  It's not even the super rich (4+ / 0-)
      Recommended by:
      tuma, drewfromct, Dartagnan, wishbone

      even the moderately well off won't spend it.

      Why should they? They already can afford the vast majority of things they want. They buy cars, they go on vacations, they have a home (or two or three), a good job, health insurance, they have plenty of clothes, furniture, they can afford to send their kids to college - and STILL save.

      They don't need more money. More TIME maybe - nobody has enough time. But not more MONEY.

  •  I always laughed my ass off (13+ / 0-)

    When Bush would propose "tax credits" in place of any kind of substantial reform or regulation.

    Money I don't have to begin with won't multiply if you give me a "credit" for something I'm not going to be able to afford anyway.

    Tax cuts are a delusion.  They don't do shit for the economy, never have, never will.

    One day I feel I'm ahead of the wheel / the next it's rolling over me / I can get back on / I can get back on

    by slippytoad on Thu Sep 16, 2010 at 06:35:41 AM PDT

    •  Never understood how he could sell (8+ / 0-)

      the idea that taking in less money would result in more money.  It's like telling a working person that the reason they can't pay their bills is that they're making too much money.  Go to part-time!  Cut your income in half, and voila, the bills get paid.

    •  Yep!! What we need is infrastructure investments (1+ / 0-)
      Recommended by:
      drewfromct

      That's  what creates value, tangible wealth with a higher multiplier effect. And that's why Obama's Investment/Infrastructure initiative is a great idea..but only a little late.
      -If only he had not compromized 300B of the stimulus for useless tax cuts pushed by the repugs. What if this much went into infrastructure 20 months ago?
      Just imagine the multiplier value today?

      "When fascism comes to America, it will be wrapped in a flag and carrying a cross." Sinclair Lewis, 1935 --Talk of foresight--

      by tuma on Thu Sep 16, 2010 at 07:54:47 AM PDT

      [ Parent ]

      •  It's hundreds of days late (0+ / 0-)

        and hundreds of billions of dollars short.

        Obama should have proposed a GREEN WPA on inauguration day. If nothing else, it's a matter vital to National Security, as we should be vigorously pursuing every possible alternative to paying trillions of dollars to our enemies for oil that makes us sick by polluting our water when we spill it and our air when we burn it.

        Oh, and as a side benefit, we could revive domestic manufacturing and create millions of good-paying jobs in the process.

        Al Qeada is a faith-based initiative.

        by drewfromct on Thu Sep 16, 2010 at 08:05:39 AM PDT

        [ Parent ]

    •  Tax cuts are code. (1+ / 0-)
      Recommended by:
      Vicky

      To understand the code, you have to remember that conservatives work by indirection.  That is, they do one thing to make another (the opposite) happen.  They do this because they are convinced that there are always two and only two options for everything.

      To make a long story long, money that public corporations collect and spend on public works constitute a two-sided process which leaves out a crucial element -- the middle man.  The middle is where the conservative money man likes to sit and collect a cut of the money that passes back and forth between public and corporation.  In other words, the money men are looking for a "cut" they don't get when our public corporations simply collect and spend.  The money men prefer "lend and spend." The way to achieve that is to constrict the collection -- i.e. reduce tax revenues.  This has the long term effect of causing public assets to deteriorate, because of poor maintenance and upkeep, to the point where they have to be replaced.  And that's where the money men get their cut.  The public corporations issue bonds to borrow money the money men haven't paid in taxes and then, as the interest trickles into their accounts, they get another bonus because government bonds are exempt from the income tax.  It's a triple treat.  It's also a prescription for transferring public assets into private wealth, automatically.

      The Constitution is not a menu for an exclusive diner.

      by hannah on Thu Sep 16, 2010 at 09:20:44 AM PDT

      [ Parent ]

  •  Facts have nothing to do with it! (4+ / 0-)

    Knee-jerk reaction to bad propaganda is everything.

    Even if we don't extend tax cuts for the super wealthy, we're adding 3 trillion to the deficit. Can't we say anyone below $50,000 a year gets to keep their Bush tax cut? Or, better yet, just let the tax cuts expire, as they were set to ... by the Republicans. This is still a time of war, unfortunately. We shouldn't be cutting taxes. We should be raising them.

    Gun control, separation of church and state, women's reproductive rights and the 4th Amendment do matter.

    by sloopydrew on Thu Sep 16, 2010 at 06:36:06 AM PDT

  •  In the last paragraph... (0+ / 0-)

    Don't you mean "In addition to discontinuing the massive tax breaks for the very wealthy...?"

    "Think about how stupid the average person is. Now, realize that half of them are dumber than that." ~ George Carlin

    by MKinTN on Thu Sep 16, 2010 at 06:36:20 AM PDT

  •  Need about $2T in stimulus -- DOMESTIC (3+ / 0-)

    That is, assuming you want the jobs BACK.

    Maybe also enact some reciprocal tariffs to deal with China.

    Happy little moron, Lucky little man.
    I wish I was a moron, MY GOD, Perhaps I am!
    -Spike Milligan

    by polecat on Thu Sep 16, 2010 at 06:37:26 AM PDT

  •  Definition of rich (9+ / 0-)

    If someone gave you $100k, what would you do with it?

    If your answer is "Save it until a good investment opportunity appears", you're rich.

    That's pretty much what these articles say - give a middle class guy $10k, and he pays off his credit cards, or maybe he guys a really nice entertainment suite for the family room.

    In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

    by blue aardvark on Thu Sep 16, 2010 at 06:40:49 AM PDT

    •  Let's throw in a definition of Middle Class (3+ / 0-)

      while we're at it.  I'm thinking it's not $5mil/year as McCain tell us.  And let's define what a "Mom and Pop" small business is too.  
      They're bullshitting their way through as usual and now would be a good time to make it clear.

    •  That's where the TARP money and the (4+ / 0-)

      trillion in back-door bank bailouts should have gone....Bush's $600 bribe, only x10.

      Give every person over 18 $50 grand and the banks' problems never would have fucked up our lives.  Most of that money would have gone to them, keeping that house of cards from falling on us.  Houses up to date on the mortgage, credit scores restored due to debt payoff meaning more people could refinance out of fraudulent mortgages.  It would have saved everyone.

      •  even 10 grand to everyone over 18 (1+ / 0-)
        Recommended by:
        PsychoSavannah

        that's enough to put away someone's car loan, <bam> now they have an extra 2-300 dollars a month they can do other things with. (like pay off their credit card)

      •  No, the problem is the financiers' ability (0+ / 0-)

        to siphon the money out of the economy and keep it from circulating.  The Treasury can print more and has (there is now more money technically in circulation than ever before), but if Wall Street keeps capturing its cuts and sequestering the money in their vaults, it's a losing proposition.  While the volume of money is at an all-time high, the velocity of the dollar's circulation in the economy has slowed from something like 2.5 times for every dollar of GDP to 1.2.  We're not getting the multiplier effect because the stuff has slowed to the speed of molasses.
        Banks not lending to Main Street is one piece of evidence.  But, the reluctance to lend to Main Street has been going on for most of a decade.  Washington subsidizing small business loans hasn't made a significant difference, except in adding to the transfer of public assets into private wealth.

        The Constitution is not a menu for an exclusive diner.

        by hannah on Thu Sep 16, 2010 at 09:37:55 AM PDT

        [ Parent ]

    •  People getting out of debt is not (0+ / 0-)

      a desideratum for the interest-earning class.  While you haven't heard about it much, the national savings rate has actually increased to over 5% overall, not just the wealthy hoarding class.  That means the middlemen who thrive on collecting rent on our money are losing out.
      China is partly to blame.  By buying Treasury bonds they are keeping the Fed from raising rates and increasing revenue from that source.
      We're in the middle of a game of chicken.  It's my sense and my hope that Obama won't blink.

      The lovely thing about money is that if you just hoard it, it becomes more and more worthless since it's value lies in being used in trade and exchange.

      The Constitution is not a menu for an exclusive diner.

      by hannah on Thu Sep 16, 2010 at 09:30:55 AM PDT

      [ Parent ]

  •  NO TAX CUTS - The country is broke... (8+ / 0-)

    and our infrastructure is deteriorating.  

    Higher taxes for all.  Lower military spending.  Salary cuts for Congressmen and Senators.

    Student loan forgiveness for all.

  •  The rich don't spend enough (18+ / 0-)

    to keep the economy going. What employs more workers--building a single multi-million dollar mansion, or a few dozen middle-class homes? What creates more jobs--buying a 10 Ferraris, or a thousand Fords?

    The rich can certainly afford to keep the whole economy going. They just don't.

    If the money really did "Trickle Down", we'd all have good-paying jobs. But it didn't, and doesn't, and it won't. They only way for "Trickle Down" to actually work is for us to raise taxes on the rich and very rich, and have the government create jobs itself. What we need is a GREEN WPA that will create millions of jobs building a clean and renewable energy infrastructure that will break our addiction to imported oil purchased from our overseas enemies. Not buying their oil will save trillions, and dry up the funding for Al Qeda and the Taliban. Not needing their oil means we can bring the troops home, thus saving many lives and trillions more dollars. When we stop using oil, our air and water will be much cleaner.

    Raise taxes on the rich. Create jobs. Green the economy. That must be our policy.

    Al Qeada is a faith-based initiative.

    by drewfromct on Thu Sep 16, 2010 at 06:44:00 AM PDT

    •  An OUTSTANDING point...good form. nt (3+ / 0-)
      Recommended by:
      drewfromct, sherlyle, kevin k

      "Taxes are the price we pay for a civilized society" -Oliver Wendell Holmes

      by APA Guy on Thu Sep 16, 2010 at 06:46:53 AM PDT

      [ Parent ]

    •  How could this not make sense even to T-bags? (4+ / 0-)

      Wish we could get this through to them..you know allthose things you're worried about?  Things like Wall Street stealing your 401k?  Well guess what, guys.  You're right about that, and here's the big secret - we're worried about that too.  Yeah, those hateful violence-prone Liberals also want the casino to close.  They too worry about the future welfare of this nation and of our children.
      But the guys funneling all that money into their own hands have done a masterful job of keeping you from figuring out who your real enemies are.  
      Because they know this - if we ever figure it out and unite against them, they don't stand a chance.  The gravy train comes to a screeching halt.
      So..yeah, you keep swallowing that one about us being the bogeyman.  And just let those vampire bats fastened all over you keep sucking you dry.
      I mean, bats are good, right?  

      •  T baggers love Casinos (1+ / 0-)
        Recommended by:
        sherlyle

        T baggers purport to hate elitism, but they all support the rights and privileges of the billionheir class because they aspire to become rich themselves someday. Some 50% of the country is convinced that they will all be able to join the richest 1%, and it is with this grasp of mathematics that they insist on being allowed--no, forced--to play at what we all know is a rigged game.

        Al Qeada is a faith-based initiative.

        by drewfromct on Thu Sep 16, 2010 at 07:16:19 AM PDT

        [ Parent ]

    •  And they spend it on the wrong things (4+ / 0-)
      Recommended by:
      Odysseus, Vicky, drewfromct, bushondrugs

      Luxury cars, yachts, vacation homes, and penthouse suites are NOT socially useful investments.

      What you said:

      What we need is a GREEN WPA that will create millions of jobs building a clean and renewable energy infrastructure that will break our addiction to imported oil purchased from our overseas enemies.

      I am 110% in favor of this!

      The invasion of Iraq was a war crime, a crime against humanity, and a crime against civilization. Prosecute the crime.

      by Positronicus on Thu Sep 16, 2010 at 07:21:59 AM PDT

      [ Parent ]

    •  The rich invent paper-money tricks & investments (2+ / 0-)
      Recommended by:
      Vicky, drewfromct

      The rich invent paper-money tricks & investment schemes like "collaterized mortgage obligations" as places to stow their excess dollars, rather than invest in new businesses and infrastructure.  Tax cuts for the rich contributed to the housing bubble that crashed the economy for the middle class; those excess dollars in the hands of the rich created a huge demand for more home loans for investors to invest in, which in turn caused banks to loan willy-nilly to anyone.

      This alone is a clear sign that the rich should be paying more in taxes!  

      A Wall Street "bonus" should not be more than what my house is currently worth.

      by bushondrugs on Thu Sep 16, 2010 at 07:34:37 AM PDT

      [ Parent ]

      •  Call it what it is: (2+ / 0-)
        Recommended by:
        Vicky, bushondrugs

        Gambling.

        Picture a bunch of 18th century European aristocrats sitting around a gaming table winning and losing each others' unearned inherited fortunes while the peasants worked, starved, and payed exorbitant rents and taxes, and you have a true enough picture of what's happening now on Wall St.

        They try and tell us that Wall St. is necessary to create jobs and create wealth, and that the money will "trickle down" from the top. But if any of that were true, then where are the jobs? Since 1980 the proportion of wealth held by the rich and very rich has skyrocketed while wages have shrunk or stayed flat and whatever manufacturing jobs that haven't been lost to computers and robots have been shipped overseas to Mexico, India, and China. If unleashing Wall St creates so many jobs, then why hasn't it? The answer is that the rich get rich by making profits. They don't do anything that isn't profitable, and there's not a lot of profit in creating a lot of good paying jobs for other people. Therefore, they don't do it. If it were profitable for the rich to create jobs here, they'd have already done it long ago.

        We need to spread this message virally, because the Corporate Media has a stake in lying to us.

        Al Qeada is a faith-based initiative.

        by drewfromct on Thu Sep 16, 2010 at 07:56:00 AM PDT

        [ Parent ]

  •  Idle money (16+ / 0-)

    Low income money is hard working. It heads out the door to buy groceries, about the minute it comes in.

    Concentrated money is idle and loafing. It can afford to just sit around.

    Especially in a contraction and unemployment, government policy needs to help push all the idle money out the door. Put it to work.

  •  Trickle UP (8+ / 0-)

    Its the only thing that will work.

    Give the hundreds of billions of dollars directly to people and it will filter back into the system beautifully.

    Capitalism won't be hurt, the wealthy will still make gargantuan profits.

    But, if it makes commoner's lives better, they are against it.

    Bad form.

    Spray tons of carcinogens into the ocean to hide petroleum spewed from a hastily-drilled hole from a greedy corporation, but don't smoke pot.

    by xxdr zombiexx on Thu Sep 16, 2010 at 06:47:25 AM PDT

    •  Tax free weekends until Xmas (0+ / 0-)

      would be a simple way to increase consumer spending.

      Spray tons of carcinogens into the ocean to hide petroleum spewed from a hastily-drilled hole from a greedy corporation, but don't smoke pot.

      by xxdr zombiexx on Thu Sep 16, 2010 at 06:49:39 AM PDT

      [ Parent ]

      •  Not really (2+ / 0-)
        Recommended by:
        Odysseus, drewfromct

        not having to pay 7% sales tax hurts the state, and besides - if you don't have the $100 to spend, not having to pay $7 sales tax isn't much of an incentive.

      •  Only if the tax holiday (0+ / 0-)

        is restricted to gods that were Made In America. And good luck finding any. But a tax holiday on retail goods that were all imported from China does very little to create any jobs, except for a few more Wal Mart greeters.

        We need a Green WPA, and we need to levy punitive tariffs on goods and services imported from nations which manipulate their currency, disrespect or ignore human rights, and refuse to meet our standards for the protection of workers, consumers, and the environment. We need to shred the uneven and unfair "free" trade treaties such as NAFTA, CAFTA, and the WTO. We need to stop running in the Race To The Bottom.

        Al Qeada is a faith-based initiative.

        by drewfromct on Thu Sep 16, 2010 at 08:16:39 AM PDT

        [ Parent ]

    •  People with hope for the future (0+ / 0-)

      have this nasty habit of standing up to bullies.  How are they going to get us all to accept the idea that Third World Status is inevitable?  That we should kiss the toes of the UberRich for allowing us to live at any level whatsoever?  

      •  The rich should be scared of us (1+ / 0-)
        Recommended by:
        sherlyle

        Thanks to the PATRIOT Act, they won't have to be.

        Can't organize any serious resistance to these robber barons.

        Petitions ain't going to cut it.

        Spray tons of carcinogens into the ocean to hide petroleum spewed from a hastily-drilled hole from a greedy corporation, but don't smoke pot.

        by xxdr zombiexx on Thu Sep 16, 2010 at 07:10:21 AM PDT

        [ Parent ]

        •  So what do you think's going to happen, doc? (1+ / 0-)
          Recommended by:
          xxdr zombiexx

          Are we really doomed to go through another reign of Greed and watch this country fall to "failed" status?  Do we really have to hit bottom before the people who've bought into this crap suddenly wake up and say, "Hey.  Wait a minute"?  
          Sometimes it's hard not to despair, isn't it?  Yes, we've been here before, in deep trouble, and come back out again.  But as you point out, with things like the Patriot Act, I have to wonder if they've ever had their hooks this deep in our flesh before.  

          •  I think there is TOO MUCH money (2+ / 0-)
            Recommended by:
            drewfromct, sherlyle

            and therefore power concentrated into the hands of a very few who appear to be in ideological lock-step. None are liberals. It's all robber barons and their pet government agencies and congresspeople.

            We have been conditioned to not make suggestions of violence, but this situation isn't going to be chnaged by petitions and "please and thank you".

            The PATRIOT act will be used against those who might seek to do something effective: they'll be called terrorists and smeared in the conservative media.

            I think they have completely taken over, we're their cattle and we're highly replenishable so none of us really matter.

            I also think they want to wipe out 3/4 the human population because they are unneeded.

            Spray tons of carcinogens into the ocean to hide petroleum spewed from a hastily-drilled hole from a greedy corporation, but don't smoke pot.

            by xxdr zombiexx on Thu Sep 16, 2010 at 07:49:44 AM PDT

            [ Parent ]

            •  Some of us are going to be unruly cattle. (1+ / 0-)
              Recommended by:
              xxdr zombiexx

              We might do things like barter with each other, figure out ways to power our homes with solar power.  What if we just refused to play?  I hear Wall Street's noticed a lot of us are pulling our money out, and now they're becoming alarmed.

              •  If I had money, I'd pull it out just to hurt them (2+ / 0-)
                Recommended by:
                Brooke In Seattle, sherlyle

                but I'm lucky to have a home and live indoors.

                I get very agitated hearing about those rich fucks who make millions of dollars a year not being much brighter than me.

                I have spent my life working with the poor, like an idiot.

                All along I should have been positioning myself to cater to the rich. THAT'S where the money is.

                I still like the feeling of "helping the poor".

                Doesn't pay the bills but I feel like I'm doing the right thing.

                Spray tons of carcinogens into the ocean to hide petroleum spewed from a hastily-drilled hole from a greedy corporation, but don't smoke pot.

                by xxdr zombiexx on Thu Sep 16, 2010 at 07:57:02 AM PDT

                [ Parent ]

                •  You ARE doing the right thing, and that still (0+ / 0-)

                  counts for everything, doc.  You feed not only your own soul, but ours too.  As long as one person, just one, is still out there in service to doing what's right, there's still hope.  

      •  It's easy (1+ / 0-)
        Recommended by:
        sherlyle

        How are they going to get us all to accept the idea that Third World Status is inevitable?  That we should kiss the toes of the UberRich for allowing us to live at any level whatsoever?

        And they've already done it: They managed long ago to convince all the "Reagan Democrats" that each and every one of them has an equal shot at making it to the top, and the suckers ate it up with spoons. The New Peasantry loves the New Feudalism because they've been duped into believing that they deserve to be included in the New Aristocracy, and that they'll have their chance soon enough. They've also been duped into thinking that a crowd composed of gamblers and heirs deserves their wealth because they "created it" when in fact the truth could not be more to the contrary.

        Al Qeada is a faith-based initiative.

        by drewfromct on Thu Sep 16, 2010 at 08:21:50 AM PDT

        [ Parent ]

  •  You don't even need charts (6+ / 0-)

    and numbers and all the science stuff.

    Just ask people what the unemployment rate was when Bush came into office (4.2%) and what it was when he left (7.2%).  And remind them that tax cuts were in full effect during that entire time.  The jobless rate did not EVER go down during that time.  Never, not once.

    This is so fucking easy, people.  Use it!

  •  On the radio Dems are going to extend the Bush (1+ / 0-)
    Recommended by:
    sherlyle

    tax cuts for everyone.   They think its a politcal winner.   Has anyone heard the latest?  

    dump f*cks... extend the tax cuts for the rich and then cut social security to reduce the deficit.   They need to quit listening to their blue dogs.

    Don't tax the rich, starve the poor.

    by dkmich on Thu Sep 16, 2010 at 06:52:42 AM PDT

    •  Heard it on CNN this morning (0+ / 0-)

      Announcer said 40 Dems in the House sent a letter to Pelosi saying they would only vote for extension of ALL tax cuts - announcer said they're breaking with Obama on this one.

      "Statistics are people with the tears washed away." Sociologist Ruth Sidel

      by Vicky on Thu Sep 16, 2010 at 09:37:41 AM PDT

      [ Parent ]

      •  Funny how they wouldn't break with Obama (0+ / 0-)

        for the public option.  With Dems like these, who needs Republicans.  My critter Peters is in the judas lot.  I've called.  If he goes with this, I'm not voting for him.  

        Don't tax the rich, starve the poor.

        by dkmich on Fri Sep 17, 2010 at 03:09:24 AM PDT

        [ Parent ]

  •  $119 million dollar Senate seat (4+ / 0-)
    Recommended by:
    Vicky, Churchill, sherlyle, kevin k

    Know what the rich spend their money on? Politics. What more evidence do you need than Cal GOP gubernatorial candidate Meg Whitman contributing $119 million dollars into her campaign.

    Corporation's To Do Lists

    1. CEOs/Executives earn millions of dollars per year for perfecting the Ponzi scheme.
    1. Purchase Politicians to help Corporations accumulate more wealth by working the Ponzi scheme.
    1. Use psychological manipulations to socially influence our way of thinking onto others by preying on their weaknesses.
  •  Rampant spending is what caused this whole mess (4+ / 0-)

    The housing bubble was encouraged by government as a way to offset the "dot.com" bubble that burst in the earlt 2000's and now the idea is to create another? The only thing that will end this vicious cycle is a return to savings, investment,  and production based on sustainable growth.  The idea that savings=hoarding is a massive economic fallacy.  Money sitting in a bank is not the same thing as money sitting under a mattress somewhere.  Savings is what makes true credit possible, the funds are then available for banks to lend to others. Phony credit and unsustainable spending are what got us into this mess in the first place.  The only thing that will get us out of this mess is a functioning market economy brought about by solid economic principles. Inflating another bubble is the equivalent if a junkie taking another "hit", it's not actually going to solve anything when detox/recovery is what's really needed.  

    Support freedom within the Democratic party, support the DFC:http://www.democraticfreedomcaucus.org/dfc-platform/

    by Denverlibertarian on Thu Sep 16, 2010 at 06:59:45 AM PDT

    •  Spending on durable goods vs. paper schemes (3+ / 0-)
      Recommended by:
      Vicky, drewfromct, Brooke In Seattle

      Rampant spending is a problem with it's spending on phoney ponzi investments.

      Spending on infrastructure and education and social services is what we need... and would directly increase jobs.

      A Wall Street "bonus" should not be more than what my house is currently worth.

      by bushondrugs on Thu Sep 16, 2010 at 07:38:40 AM PDT

      [ Parent ]

      •  Savings and production... (1+ / 0-)
        Recommended by:
        bushondrugs

        ...is where the answer lies IMHO.  Infrastructure spending is legitimate if there is a specific, defined need for it.  Just spending money for the sake of spending money, esp. when it involves deficit spending, is poor policy. Build a new lighthouse if it's really needed, not just as way to "stimulate" anything.

        Spending on social services is also legitimate if there is a specific defined need for it, and a specific defined way to pay for it.  Just creating new social programs, which will involve more taxes and grow the budget, is not something to be taken lightly.  For every job the government creates in the public sector, another will NOT be created in the private sector due to the increased tax burden.  Growing government is not the "silver bullet" for our woes.  Ending the wars, getting the budget under control, allowing losses/foreclosure/liquidation to occur, and encouraging entrepreneurship through clearing hurdles to startup is the winning formula.  

        Support freedom within the Democratic party, support the DFC:http://www.democraticfreedomcaucus.org/dfc-platform/

        by Denverlibertarian on Thu Sep 16, 2010 at 04:26:16 PM PDT

        [ Parent ]

  •  Obama saying it? (0+ / 0-)

    They would not listen because it's Obama saying it. They would cut their noses to spite their faces...because he is not one of us.

    The office gave higher marks to the proposal, now embraced by President Obama, to allow small businesses to write off 100 percent of their investment costs

    .

    "When fascism comes to America, it will be wrapped in a flag and carrying a cross." Sinclair Lewis, 1935 --Talk of foresight--

    by tuma on Thu Sep 16, 2010 at 07:01:10 AM PDT

  •  Don't you mean NOT (0+ / 0-)

    Last paragraph of post:

    "In addition to continuing the massive tax breaks for the very wealthy"

    Don't you mean?

    "In addition NOT to continuing the massive tax breaks for the very wealthy"

    "We must become the change we want to see in the world." - Mahatma Gandhi

    by HeartlandLiberal on Thu Sep 16, 2010 at 07:02:20 AM PDT

  •  Marginal propensity to consume (1+ / 0-)
    Recommended by:
    drewfromct

    vs marginal propensity to save.

    economics 101, circa 1972.

    What to do Yannie?.

    "What has happened down here is the wind have changed. Clouds roll in from the north and it started to rain"

    by senilebiker on Thu Sep 16, 2010 at 07:02:34 AM PDT

  •  Great diary Joan (2+ / 0-)
    Recommended by:
    Vicky, kevin k

    This is what the front page does best when it works well and that is destroying the Repub talking points with common sense, data and reasoned facts.

    This helps all of us get educated on the point and take it to our communities and get the word out.

    Thanks

  •  Tax cuts meaningless to economic recovery (0+ / 0-)

    and unpopular, which means Dems will probably embrace them. What a disaster of a party?

    "Senator McCain offered up the oldest Washington stunt in the book - you pass the buck to a commission to study the problem." - Senator Obama, 9-16-2008

    by justmy2 on Thu Sep 16, 2010 at 07:06:13 AM PDT

  •  Didja see CNBC shill Trish Regan on MSNBC (7+ / 0-)

    arguing with Chuck Todd and Savannah Guthrie about the tax cuts this morning?

    Pretty perky Trish kept smilingly insisting that the RICH NEED THEIR TAX CUTS because they will keep spending. Ha.

    Chuck and Savannah tried to smilingly correct her and told her about this study, but she wouldn't acquiesce. She kept insisting that the rich are the only ones spending in this economy. Savannah pointed to another study that shows that tax cuts are the least effective of all the kinds of stimulus, but Trish wouldn't give in.

    So, they happily just agreed to disagree, and ended the segment.

    It's no fucking wonder that we are in the mess we are in when the damn media keeps spreading lies about how the rich are so much better than the rest of us, and they are the only ones who are going to save us from this money mess.

    Good lord! The rich are the biggest reason we are in the mess we are in.

    But, with media like this, I feel we are lost.

    PS: They don't need Tier 5 unemployment. They need a public works program that hires all comers. I've been out of work for three and a half years. I get no unemployment. It's time to either start paying EVERYONE who is out of work, or start a jobs program.

    "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

    by Brooke In Seattle on Thu Sep 16, 2010 at 07:07:41 AM PDT

    •  The rich ARE the only ones spending (1+ / 0-)
      Recommended by:
      drewfromct

      because they're the only ones with MONEY. And they're not going to spend more just because you give them more - they don't need to. They have all they need.

      If you want more spending, you don't keep giving it to people who already have everything they need - you give it to the people who DON'T, because you KNOW they'll spend it.

      •  Even if the rich (2+ / 0-)
        Recommended by:
        mmacdDE, Brooke In Seattle

        DO spend more, they tend to spend it on high-end, luxury goods and services that employ far fewer people than would be needed to service the needs of a well-paid middle class.

        Give the rich another tax cut, and they'll take another luxury vacation somewhere very far away. Give an unemployed worker a job and they'll spend their pay here at home.

        Tax the rich. Create jobs.

        GREEN WPA

        Al Qeada is a faith-based initiative.

        by drewfromct on Thu Sep 16, 2010 at 08:28:34 AM PDT

        [ Parent ]

  •  tax cuts, sell counter-meme, Katrina + Day 2 (1+ / 0-)
    Recommended by:
    drewfromct

    no police, no EMT assistance, no Federales helping out, people dying, bodies floating in the water.

    You want tax cuts, then get ready for Katrina+Day 2

    80 % of success is just showing up! Plan 9 From Outer Space meet Plan Z From Afghanistan.

    by Churchill on Thu Sep 16, 2010 at 07:11:24 AM PDT

  •  But, that's not ... (0+ / 0-)

    ... what this rep is arguing. It's all about paying tribute to your betters. These are Democrats?

    "Sometimes we forget how we became the majority. We did it by winning some affluent districts," Rep. Gerry Connolly told reporters earlier this month.

  •  Rubin's rule (1+ / 0-)
    Recommended by:
    mmacdDE

    Even Rubin expounded on this during the Clinton years - tax cuts are best used for temporary economic stimulus.  Left in place too long in a slow economy, they only create budget deficits.  There's ample evidence to prove it.

    The wealthy may spend a little more at first, but after a while, its socked away in those offshore investments.

  •  When rich people get money, they keep it (3+ / 0-)

    How do you think they got to be rich?

    The invasion of Iraq was a war crime, a crime against humanity, and a crime against civilization. Prosecute the crime.

    by Positronicus on Thu Sep 16, 2010 at 07:15:53 AM PDT

  •  I've never seen any study (4+ / 0-)

    that shows how the money saved by tax cuts for the wealthy was spent. I've been told it's invested, but invested in what and where? Overseas is my bet.

  •  Typo (0+ / 0-)

    In addition to continuing the massive tax breaks for the very wealthy, what Congress needs to do to address the economy is extend the cuts for the middle class, create a 5th Tier of unemployment benefits for the millions of people whose benefits have run out, and save a quarter of a million existing jobs by extending TANF funding.

    That's how to keep the economy moving.

    Don't you mean "discontinuing"?

    "[W]e shall see the reign of witches pass over . . . and the people, recovering their true spirit, restore their government to its true principles." Jefferson

    by RenMin on Thu Sep 16, 2010 at 07:26:29 AM PDT

  •  Trusting Republican ideas to fix the economy is (3+ / 0-)

    like trusting the guy who dosed you with radium for 10 years to fix your cancer.

    The only way out is taxes.  It's just a question of who is going to pay them.  When the rich don't want to pay their fair share, then it's class warfare.  And Democrats need to start calling it that.

    I also find it eternally amusing that Republicans constantly yearn to return to the 1950's, but never the 1950's tax bracket for the wealthy.

    If government is small enough to drown in a bathtub, then it's too small to clean up the Gulf.

    by electricgrendel on Thu Sep 16, 2010 at 07:35:57 AM PDT

  •  Wow! Moody's and the CBO have finally (2+ / 0-)
    Recommended by:
    Brooke In Seattle, squarewheel

    caught up with what people have known for a long time.   Middle class people spend money on consumer goods that keep the economy going.

    Too many people blame the middle class for racking up massive equity debt on their houses, claiming people were using their houses like an ATM and 'not living within their means.'

    Actually (and unfortunately) the middle class was doing what it was supposed to do - keep the US economy going.  Since they weren't getting money through their wages (the real income of the middle and working class has steadily declined since the late '70's) the only place they could turn was to the equity in their houses.

    The rich do spend money - on $5,000 suits, $2000 skirts, stays in very high end hotels.  Put $5K in the hands of the middle class and they are replacing old appliances, trading in their cars for new ones, getting work done on the house, buying back to school clothes for their kids, etc.

    Republicans claim that tax cuts help small businesses and the middle class, but they are hiding the truth.  The money is going to the top 1% of the population while the true small businesses and middle class are being strangled for lack of a decent income.

    Aud, the Deep Minded

    by HylasBrook on Thu Sep 16, 2010 at 07:58:39 AM PDT

  •  DEMAND Side Economics Works (3+ / 0-)
    Recommended by:
    Vicky, drewfromct, Brooke In Seattle

    Its not that complicated. The rich get richer when the middle class buys products. In a day and age where people need quick black/white political concepts, it still dumbfounds me that Democrats are not pointing out the failure of Republican Supply Side Economics and branding their approach as Demand Side Economics. Reagan/Bush Economics vs. Clinton/Gore Economics. Please send your Federal Representatives a quick e-mail pushing them to coin the term Demand Side Economics. Im sure that would help the electorate continue to draw a distinction that Republicans have been trying to blur for years while they serve up another stale plate of their failed economics.

  •  Dems, the election is right there for the taking (1+ / 0-)
    Recommended by:
    Noamjunior

    Remember the Pelicans

    by Irons33 on Thu Sep 16, 2010 at 08:13:27 AM PDT

  •  did 2001 and 2003 tax cuts fuel housing bubble? (1+ / 0-)
    Recommended by:
    Noamjunior

    Has Krugman or any other trustworthy economist discussed the effect that the Bush tax cuts had on the housing bubble? I'm just guessing here, but I figure that the influx of a trillion dollars into the stock market from the tax cuts for the richest, dollars which were not spent but invested, must have had a sizable impact on the bubble. With all of that money pouring into the NYSE, were housing prices, being the hot market at that moment, forced up just so this money had a place to land?

    •  seems more than likely (0+ / 0-)
    •  somewhat different scenario (1+ / 0-)
      Recommended by:
      jjohnjj

      Derivatives, the financial instrument that caused the housing crash, really started to heat up after the bush tax cuts. The rich pouring money into derivatives at EXACTLY the same time as the tax cuts took effect caused banks to spin mortgages into a derivative product- mostly to give rich people a place to invest.
      It was turning people's mortgages into an investment product that caused the crash. NOT people actually defaulting.

  •  NOT ENOUGH to let Bush rich tax cuts expire (0+ / 0-)

    we need to look historically at our economy and return the top tax rates to when the economy was at it's best, in the 50's and 60's top rates approaching 99%

  •  How the rich invest their money: (0+ / 0-)

    After investing in the family business, property holdings or their professional practice, the wealthy put their first million into real estate, bonds, college savings funds and safe stocks.

    They put their second million into risky "growth" stocks.

    They put their third million into high risk venture capital and private equity funds...maybe a hedge fund, too.

    Then they take their Bush tax cut and invest in it wild-eyed instant-money schemes like derivatives, collateralize mortgage debt and credit default swaps.

    The Bush Tax Cut was a windfall for Wall Street, not for America's working economy.

    Politicians who promise LESS government only deliver BAD government.

    by jjohnjj on Thu Sep 16, 2010 at 10:51:03 AM PDT

  •  The official unemployed have gotten too much (0+ / 0-)

    The official unemployed have gotten far more than they deserve. I lost my self-employed job and got nothing. Let's spread it around more.

  •  Does ending tax cuts for the rich... (0+ / 0-)

    ...really generate a significant amount of revenue for the government, or is this more symbolic? Considering the massive size of the US economy, will the infusion of $70 billion over ten years (estimated funds generated from the rich loosing tax cuts) really make a difference?  

    Seems to me that the shrinking middle class is a bigger issue, as this is the biggest source of government revenue.

    Seems to me that if we're really serious about generating revenue we ought to be looking at cutting one of the big three budget items (defense, social security, or Medicaid/Medicare). Considering the potential negative impacts on the American society, cutting defense spending and accepting risk in national security is the only way to do this.

    Belief and seeing are both often wrong - Robert S. McNamara

    by Iggy1962 on Thu Sep 16, 2010 at 05:43:47 PM PDT

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