What exactly IS the point of a two-month extension of the Payroll tax cut? (Whitehouse, dollars)

[floridasandy]

Originally Posted by MTAtech

News Flash: Keynesian economics is not an ideological position. Keynesian economics is a model of economics that has proven to be dead on even during this economic slump.

For the past three-years the anti-Keynesians, like the Austrians, have been predicting hyperinflation as a result of the Fed tripling the money supply, the Keynesians have said that inflation won't soar in a liquidity trap.
Who was right?

The anti-Keynesians have been saying that government borrowing will crowd out private borrowing and send interest rates soaring. Who was right?

The anti-Keynesians have been recommending austerity as a means for the Europeans to solve their debt crisis. Yet, every country that tried has worsened their economy and deepened their debt crisis. As Keynes would say, 'contractionary policies are never expansionary.'

It would seem that as an economic model Keynesian economics has proven to be correct.

you do realize that the reason that greece (and the other countries in the EU which are in trouble) is due to the fact that there was government overspending in the first place?

it isn't even a matter of keynesianism or not-it is a fact that those debt levels are not sustainable and the government has to make cuts. i am sure that they would keep spending if they could, because no government ever wants to stop spending. who doesn't want to live the high life?

the government made promises it was incapable of keeping and now has to backtrack on some of those promises, and the riots prove that the people are unhappy with this development.


expansionary policies are not infinite either, and at some point the numbers stop working. we have oversaturation of debt around the world, which cannot possibly be fixed by more debt. in the US we have managed to dig ourselves further in debt by TRILLIONS now and we have literally nothing to show for it-no job growth, no new infrastructure, no anything really-just increasing the spending to maintain the debt level and the interest.

instead we have an expansion of food stamps, disability, social services, and 7 useless wars-while crowding out any possibility of new economic growth.

[pghquest]

Originally Posted by MTAtech

If you read the letter it clearly said, "this analysis shows that the overall increase in revenues as a share of gross domestic product (GDP) since 2003 is disproportionately accounted for by increases in corporate income tax revenues."

Which came as a result to a DECREASE in tax rates

Originally Posted by MTAtech

What you need to realize is that the CBO is the servant of members of Congress, which means that if a Congressman asks it to analyze a plan under certain assumptions, it will do just that — no matter how unrealistic the assumptions may be.

The figures posted are FACTS.. not at all assumptions.. They analized the RESULTS of revenue ALREADY RECEIVED.

Originally Posted by MTAtech

The question asked was the narrow range of 2003 to 2006 -- let's not bother with that huge drop in revenue since the first Bush tax-cut.

Wrlong.. the report shows revenues INCREASED. Cant you even read the dam report?

Originally Posted by MTAtech

You also claim the recession caused the large drop. But the recession was only in 2001. Your explanation doesn't explain why revenues dropped in 2002 and 2003. Moreover, as I have previously shown, GDP was rising all through that period and revenues as a p% of GDP fell (see post# 62.)

The tax cuts to stimulate growth wasnt passed until 2003.. For gods sakes you guys should be embarassed for keep repeating your nonsense

Originally Posted by MTAtech

What's perfectly clear is that you have a desired outcome but the facts and evidence do not produce that outcome, so you have to dance furiously to provide dishonest answers.

Bull ****, the report very CLEARLY shows an increase in taxes, not only in growth due to the GDP, but also as a percentage. Why are you lying about what the report says?

[pghquest]

Originally Posted by EinsteinsGhost

I don't think we were in recession in 2002, 2003, 2004 and 2005. Heck, 2006 revenues barely matched a level seen six years earlier... would 2006 also qualify as a recessionary year? Nice. So much for your argument that Bush tax cuts increased revenue.

How? 2001 recession was thru, officially, in Nov 2001. But you just claimed that we were in recession in 2002, 2003, 2004... And to think you're among the folks who complain about the Great Depression not being fixed right away.

My god its like teaching economics to a child.. If revenues drop because of a recession, it would take years to reclaim the losses. You sit here and babble non stop excuses for this under Obama, but now you play stupid when it comes to Bush..

Originally Posted by EinsteinsGhost

That is a major part of Keynesian stimulus. Having said that, growing GDP doesn't guarantee an increase in revenues. A whole lot more goes into play there. That is why revenues in 2000 were 20.6% of the GDP, whereas revenues in 2006 were 18.2% of the GDP.

Wrong again because keynesian theories only work when you have surpluses. When you have deficits it doesnt compute and compltely ignores that stimulating the economy cant take place without removing money from the economy in order to spend it. btw, the very same individual who created the keynesian theories, believed WWII would only last a few months because Europe would run out of money.. Howd that work out? Thats right.. it was completely WRONG!

[EinsteinsGhost]

Originally Posted by pghquest

My god its like teaching economics to a child.. If revenues drop because of a recession, it would take years to reclaim the losses. You sit here and babble non stop excuses for this under Obama, but now you play stupid when it comes to Bush..

Who would have thought that you'd be saying that, considering the whine I've seen from you on the subject since... 2009? Still, a drop in revenue doesn't reflect an increase in revenue... regardless of the reason.

Unless the revenues were higher and keeping up with the growth in population/GDP, it ain't growth. Get it.

Wrong again because keynesian theories only work when you have surpluses because it ignores that stimulating the economy cant take place without removing money from the economy. btw, the very same individual who created the keynesian theories, believed WWII would only last a few months because Europe would run out of money.. Howd that work out? Thats right.. it FAILED!!

Instead of spewing the entire limit of your understanding of Keynesian approach, focus on what you said earlier and my response to it. You said...
"The revenues are a percentage of GDP.. if you want revenues to climb, you GROW THE GDP."

I called it as being the same approach Keynesian approach works... a government involvement to reverse the trend in shrinking GDP by spending more.

[pghquest]

Originally Posted by EinsteinsGhost

Who would have thought that you'd be saying that, considering the whine I've seen from you on the subject since... 2009? Still, a drop in revenue doesn't reflect an increase in revenue... regardless of the reason.

Revenues INCREASED after the tax cuts were passed. No one can be this stupid..

Originally Posted by EinsteinsGhost

Unless the revenues were higher and keeping up with the growth in population/GDP, it ain't growth. Get it.

Revenues were higher, both as a $ figure, and as a % of GDP

Originally Posted by EinsteinsGhost

Instead of spewing the entire limit of your understanding of Keynesian approach, focus on what you said earlier and my response to it. You said...
"The revenues are a percentage of GDP.. if you want revenues to climb, you GROW THE GDP."

And?

Originally Posted by EinsteinsGhost

I called it as being the same approach Keynesian approach works... a government involvement to reverse the trend in shrinking GDP by spending more.

Wrong. Keynesian only works when you arent taking money out of the economy to fund it. Thats why your plans FAILED. If government pumps $1T into the economy and then has to borrow $1T to FUND it.. the net increase into the economy is ZERO.

If they pump money into the economy using SURPLUS spending, THEN it works.. Clearly you dont think the US is running surpluses, do you?

Where the hell do you think the money came from

[EinsteinsGhost]

Originally Posted by pghquest

Revenues INCREASED after the tax cuts were passed. No one can be this stupid..

1-Nothing is more stupid than denying that the first tax cut was passed in 2001, and the second in 2003. Your mention of CBO projections at the time, requires the understanding.
2- Considering the fanatical idea of starting to count from a period only when it started to show an increase, don't dismiss the fact that it took SIX years of GDP and population growth to finally match revenue. That doesn't say much.
3- But then, while you used CBO's old projections because it made for a convenient argument, you conveniently ignored CBO's conclusion that Bush tax cuts are responsible for about $6.2 Trillion in deficit between 2002 and 2011.

Revenues were higher, both as a $ figure, and as a % of GDP

That would be a lie, if you have facts. I would give you the benefit of doubt and say that you don't. Revenue as a percentage of GDP was 16.1% in 2004, down from 16.2% the year before, and the lowest in 53 years. The country wasn't in a recession in 2004, or was it?

Originally Posted by pghquest

Wrong. Keynesian only works when you arent taking money out of the economy to fund it. Thats why your plans FAILED. If government pumps $1T into the economy and then has to borrow $1T to FUND it.. the net increase into the economy is ZERO.

Perfect example of denial over reality. And part of it also comes from the delusion of understanding what is Keynesian or not. I can try to help you get in touch with the realities, and proper understanding if you have an interest in it. So, how long has it been that the government hasn't borrowed to meet its obligations? Never mind, you were presented with economic analysis that debunks this myth you still maintain, that the plan failed. That can't be merely out of ignorance, it is something worse.

[buzzards27]

The point? It was a negotiated agreement with the full senate and Boner. It wasn't a problem until the teabaggers thought they would play partisan games and told Boner he didn't like the two months. It was meant to push off the fight on the GOP'd poison pill addons until after the holidays.

[waterboy7375]

Social Security Robbery

[MTAtech]

Originally Posted by floridasandy

you do realize that the reason that greece (and the other countries in the EU which are in trouble) is due to the fact that there was government overspending in the first place?

Your narrative that the welfare state and spending is the cause of the European crisis is a popular one -- popular but wrong.

According to Stiglitz:

A large part of Greece's deficit is the result of the global recession, whose impact was felt acutely by many countries who were not responsible for causing it. However, the global crisis did reveal the deep-rooted structural problems of the Greek economy, which had deteriorated further during the last six years under the previous government. Unfortunately, European leaders have compounded Greece's problems. Their statements have sent the interest rates it has to pay soaring, making it all the more difficult for Greece to tame its deficits.

Had it been correct we would see the nations with the largest social programs failing. But we find the opposite, the countries with the most generous welfare states appear to be doing just fine. The Center for Economic and Policy Research stated this:

If we just take the measure of spending relative to GDP, the leaders would be countries like Sweden, France and Denmark, all of which are surviving the crisis reasonably well. None of the crisis countries rate near the top of the list and Spain is an outlier in Europe for having a much lower than average share of government spending in GDP.

A fact checker would have reminded Samuelson that the crisis came about because out of control lending by bankers who somehow could not recognize the huge housing bubbles in the United States and much of Europe that created the largest asset bubble in the history of the world. This is a story of a broken private sector and/or too little government regulation.

The immediate problem facing the euro zone countries is too little demand, the exact opposite of the problem that Samuelson is blaming, which is too much demand and too few resources. (Lesson for reporters: the bloated welfare state story is too much demand chasing too few resources. The problem today is too little demand chasing too many resources, hence the mass unemployment. Remember this one and you are head of 99 percent of your peers.)

But Greece is minor as it's economy to Europe is like Miami to the U.S.

Let's look at bigger economies, like Spain and Italy. Their debts have been falling until the economic downturn:





And if you take government spending as a percentage of GDP from the IMF Fiscal Monitor and plot it against interest rates, you get this:



There’s no relationship between high social spending European nations and interest rates.

[Sunnysee]

1. Proving the legislative branch "feels our pain?"

2. Buying votes for the loser-president?

3. Feel-good Op. for our elected serpents?

4. Insulting the populace in a covert way?

5. The Congress sucking-up to the Senate for a perceived advantage in a soon-to-come issue?