TPS

This has come full circle. Of course tax cuts are expansionary. Go back 10 years ago and read what I wrote--it's classic Keynesian theory. Tax cuts lead to deficits which are inherently expansionary. Or go back and take a look at some of my examples from last year. IF you cut tax rates, deficits increase because tax revenues fall in the years you cut rates, but after that, revenues of course increase if GDP is growing. Maybe it's too simple. assume gdp grows 3%/year E.g. Year 1 Gdp = 10,000 tax rate =21% --> revenues = 2,100 Year 2 cut taxes to 20% Gdp=10,300 tax revenues = 2,060 deficit grows by 40 from decrease in revenues (much higher from Bush's spending :-) Year 3 Gdp = 10,609 revenues = 2121.8 Roughly 5% tax cut takes two years of 3% gdp growth to gain back revenues. Bigger the tax cut, longer it takes to regain revenues, assuming gdp stays at long term growth rate of 3% (if I assumed the tax rate went down to 19% in year 3 much like Bush's phased in tax cuts, revenues would be 2016, again lower than year 1 and year 2). For every year of the Bush tax cuts, the percentage of individual income taxes as a share of gdp fell. Oh boy, they've finally gone up the last two years. Could that also be related to the stock market rise? Since you brought up Clinton (not me), he raised the top tax rate in 1993 and the share of individual income taxes as a % of gdp increased that same year, and ensuing years (even before the cap gains cut). Bush cuts tax rates and the % share decreases; Clinton raised rates and the share increases. Which one raises revenues, a tax cut or a tax increase? Please explain.

Yes, and I thought you finally agree that tax cuts cause deficits? If you eliminate the social security surplus, the impact of Bush's tax cuts and spending increases are more obvious: 2000 an on-budget surplus of +$86 bil 2001 a deficit of -$32 bil (from 911 and a slowing economy that began in 2000). 2002 a deficit of -$317 bil (First bush tax cut phased in) 2003 a deficit of -$538 bil (another phase of tax cuts) 2004 a deficit of -$568 bil (I believe the last part of the tax cut occured this year?) 2005 a deficit of -$494 bil 2006 a deficit of -$434 bil. That's a total of $2.7 trillion in deficits over his first 6 years. Payroll taxes (SS surplus) have averaged about +$160 bil a year over this period (from +$163 in 2001 to +$185 in 2006), so the overall budget numbers they report, make it look much better. Huh?!? Maybe you should qualify that with non-defense spending side? Yes, great strategy: cut taxes (mainly for your most important constituents) and deficit spend to finance the invasion and attempted rebuilding of Iraq; throw a bone to the not-quite-rich ATM crowd; increase defense spending again and let the ATM phase back in to partially pay for it; then let whoever comes next deal with the mess you've created. Sounds like the same scenario Bush1 faced, only the threat was communism instead of terrorism.

The catcalls to raise taxes usually come after the Republicans' "tax cut, borrow, and spend" policies lead to severe fiscal imbalances. Bush1 was pushed from both sides of the aisle to raise taxes after the Reagan borrowing binge. And now Bush2 is being pushed toward fiscal discipline after his own profligate ways. Of course, from what little I've read about his budget, he's "raising taxes" on the "not rich enough to influence policy" group by letting the ATM slide back to its previous level.

To a certain extent in the short run, redistribution from those with low marginal propensities to consume to those with high MPCs will increase consumption, and therefore GDP (so it's possible to do this if your goal is consumption-led growth, but not recommended). I think the evidence is pretty clear, despite what government has done over the past 50 years, real GDP growth has averaged about 3%. The actions government has taken tend to redistribute from one group to another, with very little impact on the real growth rate.

don't you know that spending is ok as long as it's for military and homeland security? Doesn't matter how much is wasted. On a serious note, and with respect to the tax debate thread, one needs to look at government as a redistribution mechanism. Over the past 6 years the federal tax burden on the wealthy has declined significantly in favor of borrowing, and expenditures have shifted from non-military to military. People seem to ignore the fact that many people (via private business or corporations) become wealthy through government contracts. And, as I've mentioned many a time here, when government auditors can't trace $1 trillion in defense spending, something is seriously wrong... Besides, it's more fun to focus on saying the bottom quintile pays no federal taxes while the top quintile pays 80% of all taxes--duh! When the top 1/5 have 50% of all income (and the bottom gets less than 4%)--of course they pay most of the taxes.

Target Iran This is a good but long piece on the Administration's next ME target. I imagine once all the ducks are in a row, they'll create a spark.

For what it's worth, some detail not found in a drudge link. venezuela

Where would he get such a cockamamie idea? We've never intervened in Latin America before.

Next you're going to tell us that "organic" doesn't mean it's, well...organic, yes? (where's the sarcasm button?) Ps. Welcome back.

I found the first part very funny. All of a sudden he's found the religion of balanced budgets and oil conservation. I laughed out loud when he said that sh-- with a straight face. The rest basically confirmed he may be the worst president in history. I loved the typical political BS: balance the budget; without tax increases; but, at least a half dozen new spending programs...

There is a difference: if we're going to try and police the world's affairs, then we ought take a greater interest in the world's affairs, don't you think?

Yes, I forgot, we do have DC Monkey Jumper.

I certainly didn't expect the standard, "but the other guy's worse" argument here...

A country that begins with U....hmmm...??

Democrats are now the party of fiscal responsibility? cutin' pork

Almost makes ya' miss ICE....

Does that mean he becomes part of "the club" and no longer goes after fraud and abuse? If the SEC would've done its job, Spitzer wouldn't need to do half of what he did. Government regulatory agencies have been hijacked by the industries themselves.

Gotta love the logic... Three day work week

Reagan is only #17?!? Damn liberal media....

Pelosi=Halliburton

I don't think it's being a smart aleck; you're basing it on experience. As I said, I "believe" he will be different--doesn't make it so.

No politician is perfect, but I believe he will change things from "business as usual"--which is using government to enrich yourself and your cronies. He's the one democrat I voted for. spitzer Someone must've found this just for me...

Not to rain on your parade, but someone was way ahead of the curve here... Dr. K

Came across this interesting article, while not about peak oil, it's certainly related to the situation the US has created for itself by our oil-centric energy policies and dependence on foreign sources. While it doesn't state this, it highlights the fact that our dependence on foriegn oil is a more serious issue than peak oil. changing oil markets "Russia has found the Achilles' heel of the US colossus. In concert with its oil-producing partners and the rising powerhouse economies of the East, Russia is altering the foundations of the current US-led liberal global oil-market order, insidiously working to undermine its US-centric nature and slanting it toward serving first and foremost the energy-security needs and the geopolitical aspirations of the rising East. "

Aha! The underwriting on the wall is clear now--they are behind the futures activity....