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shouldn't the "DUH" moment be realizing that you can't spend more and get more tax revenue during a recession...?
Oh crap - you gave it away. It was interesting to watch just how long Obama and crew were going to flounder around before they finally figured that out.
Oh crap - you gave it away. It was interesting to watch just how long Obama and crew were going to flounder around before they finally figured that out.
Makes as much sense (or more) than the idea that if you cut taxes you will increase revenue.
Because Obama's tax cuts are targetted at the people that are actually most likely to pump that money back into the economy rather than sit on it - AND it's combined with additional government money to stimulate activity - so it's approaching the problem from BOTH sides.
Folks on the Right like to point to Reagan's tax cuts as an example of successful stimulus of the economy, but the fact is Reagan not only lowered taxes, he also increased government spending (largely in his case, with the much needed military build-up) - and this two-pronged approach worked pretty well (though clearly at the cost of an increased deficit) - and as such is really not that different from Obama's approach.
Because Obama's tax cuts are targetted at the people that are actually most likely to pump that money back into the economy rather than sit on it - AND it's combined with additional government money to stimulate activity - so it's approaching the problem from BOTH sides.
That kind of shortsighted ideology and political policy explains why more and more people continue to lose their jobs.
"Once again, we have a situation where the vast majority of companies are beating bottom-line estimates but doing it through continued cost reductions," said David Rosenberg, chief economist and strategist at Gluskin Sheff in Toronto. "This is as much of a faith-based rally as you're going to see. The extent of the cost reductions are impressive, but it's not a bottomless pit -- the problem is that the day you get rid of all of your employees, you're not in business anymore."
ANALYSIS-The case of the missing revenue (http://money.cnn.com/news/newsfeeds/articles/reuters/MTFH78235_2009-07-24_21-35-19_N24633107.htm - broken link)
Companies are preserving earnings by shedding employees. Good plan!
That kind of shortsighted ideology and political policy explains why more and more people continue to lose their jobs.
"Once again, we have a situation where the vast majority of companies are beating bottom-line estimates but doing it through continued cost reductions," said David Rosenberg, chief economist and strategist at Gluskin Sheff in Toronto. "This is as much of a faith-based rally as you're going to see. The extent of the cost reductions are impressive, but it's not a bottomless pit -- the problem is that the day you get rid of all of your employees, you're not in business anymore."
ANALYSIS-The case of the missing revenue (http://money.cnn.com/news/newsfeeds/articles/reuters/MTFH78235_2009-07-24_21-35-19_N24633107.htm - broken link)
Companies are preserving earnings by shedding employees. Good plan!
First off, isn't that PRIVATE ENTERPRISE in action - companies doing what they need to do to insure they are profitable - the thing you are always cheering?
Secondly, aren't you always saying the government needs to be cut - what do you think government cuts mean? They mean government employees losing their jobs - and you are cheering that on????
The fact is - yes, companies are doing better financially because they've cut costs (including labor), but that massive wave of layoffs is easing now - with generally each month having less layoffs than the one previously (June was an exception). From a high of over 700,000 in January, layoffs are down dramatically - and may be a just over 1/2 that in July (we'll know later this week), so the bloodletting is coming to a close - and you know what? Companies are projecting improved financial performance WITHOUT additional layoffs.
First off, isn't that PRIVATE ENTERPRISE in action - companies doing what they need to do to insure they are profitable - the thing you are always cheering?
Yes, which is why Obama needs to target a better group with his tax cuts. Unfortunately, he's not.
Quote:
Secondly, aren't you always saying the government needs to be cut - what do you think government cuts mean? They mean government employees losing their jobs - and you are cheering that on????
Government jobs lost through spending cuts will not even come close to matching the 3.5+ million jobs lost to cost control attempts in the private sector.
Quote:
The fact is - yes, companies are doing better financially because they've cut costs (including labor), but that massive wave of layoffs is easing now - with generally each month having less layoffs than the one previously (June was an exception). From a high of over 700,000 in January, layoffs are down dramatically - and may be a just over 1/2 that in July (we'll know later this week), so the bloodletting is coming to a close - and you know what? Companies are projecting improved financial performance WITHOUT additional layoffs.
Because Obama's tax cuts are targetted at the people that are actually most likely to pump that money back into the economy rather than sit on it - AND it's combined with additional government money to stimulate activity - so it's approaching the problem from BOTH sides.
It is a reduction in the tax rate, not a cut. Not very good at stimulating anything, in fact I hardly notice the $40 dollar every other week.
I am not pumping money back into the system because I want to... its cause I have to... after I am done with the "have to's" its back to status quo... a lot of people who tend to pump money back into the system are learning "don't be an idiot"... meaning spend on what you need, not on what you want... The last three months are unusual because there has been a lot of movement and activity but its a part of necessity than desire... I would take a hard look at indicators when things die down... meaning october-december activity... if the recession is truly ending, that would be the best time to look at indicators...
Makes as much sense (or more) than the idea that if you cut taxes you will increase revenue.
Ken
But the 500K jobs lost per month may put a dent on that revenue projection.
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