Don't b.s. me, bro

Filed under: economics deficit

Raising Taxes Will NOT Help the Deficit

Tax revenues are mainly a function of GDP, and almost independent of tax rates (with conditions, e.g., existing rates are not uber-low). If somebody has evidence that proves that statement wrong, I’d like to see it.

So assuming that premise is factual why do people who should know better, like David Stockman, continue to confuse the public about this issue? I.e, since higher tax rates WILL hurt economic growth, how is it a good idea to raise tax rates in order to achieve the goal of lowering deficits by increasing government revenue? How can that possibly work?

You must grow the economy to increase government revenues and therefore help with deficits. Raising taxes will NOT grow the economy. The way to grow the economy is to CUT tax rates.

Again, if somebody has evidence to the contrary, I’d like to see it. I’m open to discussion on this point, but the reading I’ve done points to this conclusion.

We need to understand what are, and what are not, the relevant factors in a complicated system like this, so that we change the right ones and make it better instead of worse. This is rule #2 of problem solving, right after defining the problem itself.

9 Aug 11

Filed under: economics debt ceiling deficit

Under Debt Ceiling Deal, Debt to Rise $12 Trillion and 95% of Network Stories Leave That Out

talkstraight:

If you’ve been watching the news media react to the debt ceiling deal you might thing some drastic spending cuts were signed into law. After all, ABC made it sound like Congress took a “machete” to the budget and NBC’s “Today” wondered if those spending cuts could harm the economy.

What has been completely missing from much of the network reporting was an admission that the deal “doesn’t cut federal spending at all,” according to a Cato scholar. The national debt is still projected to go up $12 trillion in 10 years under the plan.

That’s right. Not one bit of cuts. Chris Edwards, Cato Institute’s director of tax policy studies, explained that despite some media outlets view that the cuts were “sharp” and “severe” (He cited The Washington Post), the cuts aren’t what Washington politicians and media made it sound like. They are really cuts to projected growth of spending and debt, something Investor’s Business Daily exposed on July 22 in a front-page article.

Business & Media Institute looked at transcripts for 43 stories, interviews and news briefs mentioning the debt ceiling deal on network morning and evening shows Aug. 1 and 2. Only 2 of them admitted the debt will rise anyway. On ABC’s “World News,” Diane Sawyer put the spending cuts in perspective by admitting that federal spending won’t get any lower as a result of this deal - in fact it will grow.

More at the link

8 Aug 11

Filed under: economics deficit debt celing

U.S. Public Debt as a Percentage of GDP

Is this the Tea Party’s fault, too?

(via The Market is Crashing Tonight, What Should You Do? 6 Definitive Steps for Your Money | Points and Figures)

7 Aug 11

Filed under: economics debt ceiling deficit

Axelrod: 'This is essentially a tea party downgrade'

And that is a steaming pile of crap.

Just because the Tea Party can do math, don’t hold it against them.

2 Nov 10

Filed under: economy tax cuts deficit

A Visual History of U.S. Government Deficits - Megan McArdle - Business - The Atlantic

If the Bush tax cuts of 2002-3 caused a decrease in tax revenue, why does the green line go up from 2003 through 2007? Sure looks like an upward sloping line to me!

Then it falls during 2007, signaling the start of the recession. You know, when economies shrink, by definition. Huh.

So you know, to this moron, it sure looks like tax revenues go UP with tax cuts, and go DOWN with a shrinking economy.

Which shows, yet again, that tax cuts are good and a shrinking economy is bad. For everybody, including government.

So when politicians and other professional sophists use that “tax cuts for the rich” line? Yeah, they’re full of shit.

For some strange reason, this concept is hard for people in government to grasp. So let’s explain it here succinctly, again: tax cuts usually stimulate investment which creates jobs and grows the economy, and this economic growth not only makes up for the decrease in expected tax revenue from the lower rates, it actually causes an increase in tax revenue because of the size of the economic growth.

It really isn’t that hard a concept to grasp. Yet politicians and class-warfare zealots throw that line out there all the time: “tax cuts for the rich”.

You’d almost think they were, like, thick-headed or anti-capitalist or something. Or, you know, liars.

But we know they are brilliant, and not socialist, and not liars, because they tell us so.

YeahRightWhatever.