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We have a spending problem. And we certainly have a revenue problem. Close the damn tax loopholes for the rich. End the subsidies for companies who don't need it.
Agree. Close the loopholes and we can lower tax rates. Even Bill Clinton says corporate tax rates should be lower.
Right now we have an equity inflation/speculation bubble that will be more problematic than anything. The Fed has made it a point to inflate the equity markers through multiple Quantitative Easings. The Fed did these massive amounts of money printing because it realized quickly that it wanted to avoid a deflationary depression. Instead of letting the deflationary depression run its course, the Fed wanted to try and inflate equity prices to such a degree that it would appear things were improving. Creating inflation is also a means to reduce the value of your nation's debt. The big problem with all of this is the disconnect between what is happening on Main Street, and what has happened on Wall Street. Rising equity prices are leading to rising commodity prices, which means the average American is paying more for goods because their dollars are worth less. This is never a sustainable system for real market growth.
The problem right now is that in those two charts, both lines are moving up from 2003-2006. We brought in more revenue and spent it all that's what it means. Republicans never took that revenue and paid down the debt with it. So get off your dang high horse and stop being so holier than thou and realize there is no reason why on the second chart we should have an upward slope from 2000 onwards. If you want to complain about the last part of the graph, look in the mirror and ask your Republican Congressmen why did you spend all that money that you were bringing in from 2000-2006?
Thanks for posting. Nice to see some data. What is the source?
What is interesting about that graph is the variability. Not that after 2000 the income gets highly variable. We all know why income collapsed after 2008, but why did it fall in 2000? Were they both bubbles and crashes, or was the earlier drop due to tax cuts? The huge increase after 2004 does not impress me, because it was the bogus housing bubble.
Certainly expenses seem to have risen, but with two wars, keynesian spending to prop. up the economy in a recession, and a drop in revenue due to tax cuts and a huge financial crash, is now the time to cut revenues?
I agree that the trend in spending is exponential, starting in 2000. But the wars and budget meltdown will both eventually end, so although the trajectory is bad, it my reverse itself soon.
I think it is overly simplistic to say we have either a revenue or spending problem with all the stuff going on.We probably have both. Folks with political agendas want to pin all this on Obama, which is a joke. The jury is out on him and the current congress. If we look at the historic data over a longer arc, the period since 2000 has been characterized by tax cuts, wars, and laissez faire economics, with volatile and unflattering results generally. Clinton policies are looking much better than Bushes, and if Obama/Congress can go back to the 1990s model, it sure looks better than the Bush era, but the latter is what we are being sold by the TP gang.
I can't speak for the TP, since it is such a loosly organized group. Few that believe in fiscal responsibility have any respect for the Republican Congess of the early 2000s, or of Pres Bush II. The more I learn, the less I respect any of them. They were anything but fiscal conservatives, and I'm honest enough to admit that. However...(ain't there always one?) the spending since Obama took office, with a Democratic controlled house and congress, has exceeded even the lousy example set by the Rs a few years before. I believe they at least came up with a budget, if a poor one, every fiscal year.
That is why many identify with the basic principles of the Tea Party, because BOTH parties LIE about spending. Many Republicans dislike the TP more than Dems, because they are being called out for selling out any semblance of fiscal responsibility. Dems, well, aren't expected to be responsible by their party members, so it's less of an issue.
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What is interesting about that graph is the variability. Not that after 2000 the income gets highly variable. We all know why income collapsed after 2008, but why did it fall in 2000? Were they both bubbles and crashes, or was the earlier drop due to tax cuts? The huge increase after 2004 does not impress me, because it was the bogus housing bubble.
Good question, and I would like to see an answer, without the partisian spin of either party. A portion of the growth, especially in the stock market, in the '90s was due to the dotcom bubble. It was very similar to the housing bubble, and many thinking people were saying it was just foolish that companies with virtually no assets were "worth" more (via stock price) than say major manufacturing concerns. Much like thinking people were saying housing prices were not sensible or sustainable just a few years later. The crash was inevitable, once people, and the market woke up. That led to a drop in the Nasdaq from 5000 to about 2000 in about a year IIRC, I believe in late 2000. I suspect that was a portion of the drop in revenue. It goes without saying that a drop in GDP leads to a drop in tax revenue.
Did tax cuts play a part? Probably. 9/11 also was an unprecidented attack, not just physically, but on our national confidence and outlook. Fear of the future put a major damper on spending and investment.
Can anyone sort out the impacts the various factors had on revenue? Not sure. Can anyone demonstrate that tax cuts lead to growth? Also not sure. I know they left me more spending money in each paycheck.
Last edited by Toyman at Jewel Lake; 07-24-2011 at 12:50 AM..
What is interesting about that graph is the variability. Not that after 2000 the income gets highly variable. We all know why income collapsed after 2008, but why did it fall in 2000? Were they both bubbles and crashes, or was the earlier drop due to tax cuts? The huge increase after 2004 does not impress me, because it was the bogus housing bubble.
That would have been "Dot-Bomb". That was when the dot-com bubble crashed.
Also, the Fed was increasing interest rates every other month....
Thanks for posting. Nice to see some data. What is the source?
What is interesting about that graph is the variability. Not that after 2000 the income gets highly variable. We all know why income collapsed after 2008, but why did it fall in 2000? Were they both bubbles and crashes, or was the earlier drop due to tax cuts? The huge increase after 2004 does not impress me, because it was the bogus housing bubble.
Did you have a memory lost or too young to remembered? By the end of year 2000, NASDAQ lost almost 50% from it's high in March 2000. Many defied gravity stocks such as CSCO, AOL, lost more than 90% of the value from it's high.
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