I wonder if I made the list?

[SilverNRed]

Thanks for taking the time so I didn't have to.

 

Damn, TPS.  Some things never change.  Tax increases fueled the economy?  That's damn funny.

499884[/snapback]

Oh yeah, what about Buffalo?

 

Oh, wait, nevermind.....

[TPS]

Thanks for taking the time so I didn't have to.

 

Damn, TPS.  Some things never change.  Tax increases fueled the economy?  That's damn funny.

499884[/snapback]

 

Yes, some things never change--you not comprehending my post...

 

Did you miss the part where I said GDP has grown at about the same rate for every president regardless of the policies enacted? Growth under Clinton averaged 3.3%; for Bush it's currently 2.7%, but as I said the more recent hgher growth should bring his average about to the historical 3%.

 

Yes, raise taxes and GDP still grows at 3%; Cut taxes and GDP still grows at 3%--the only difference between the two is the structural budget change.

[Alaska Darin]

Yes, some things never change--you not comprehending my post...

 

Did you miss the part where I said GDP has grown at about the same rate for every president regardless of the policies enacted?  Growth under Clinton averaged 3.3%; for Bush it's currently 2.7%, but as I said the more recent hgher growth should bring his average about to the historical 3%. 

 

Yes, raise taxes and GDP still grows at 3%; Cut taxes and GDP still grows at 3%--the only difference between the two is the structural budget change.

500415[/snapback]

Holy oversimplification, Batman.

[TPS]

Actually Clinton decreased the capital gains taxes, which had a large role in fueling the tech bubble.  If you normalize the capital gains impact from the bubble, the individual share is about 9%. 

Are you saying that dot-com companies would not have been created without the cut in K-gains? The tech bubble needed no fuel. The creation of the internet was one of those significant moments in economic history that helps create and sustain growth for significant periods, not unlike the auto in the 1960s or mass production of consumer goods in the 1920s. Speculative bubbles are fuelel by irrational expectations of continued price increases, not tax cuts.

 

Individual revenues declined, but there's a good chance the economy would not have rebounded as quickly as it did, and we may still be stuck given all the macroeconomic issues I described, above.

i assume you mean the first couple of years under Bush? If so, that's what I said, expansionary fiscal policy--i.e. large deficits, prevented a worse outcome.

 

This change had been advocated for years by supply siders, and they were only able to get the one year window.

If you know of any articles off hand, let me know. Otherwise I'll try and do a search for this debate.

 

BTW, thanks for helping my point again by admitting that the repatriation taxes would drastically go down when the old rates come back.  Would you also be willing to bet that US would collect more repatriated profits' taxes if the rate was reduced to 10% permanently?  Isn't that the real goal of tax policy - to maximize revenue, not maximize tax rates to make people feel better that someone is paying a high tax rate?

Hey, I'm willing to admit when something works--I'm not a complete demagogue..

Yes, if the tax stays at 10% permanently, revenues will decline, but not completely to the previous level. It should be obvious that the significant increase this year represents years of accumulated profits, not just the past year's profits.

 

The reason I brought up Clinton is that he's the best example to use, and it was a hinted reference in the initial post that this economy sucks.  It sucks compared to what?  I could have easily used the comparison to the Carter economy, and would even be more right.  Should we run the GDP growth of Bush's first 5 years w/ GDP growth for first 5 years following any recession?

there you go again, your paranoia, "a hinted reference?" Can't you righties read? You probably won't recall, but I did state that when the economy initially turned on Bush in his first year, it was the natural outcome of the business cycle, and I did not blame him. Once again, I expect that after his 8 years are up, GDP will have averaged about 3%/year. No hinted reference there.

 

Thanks for highlighting a $500 bn deficit, although that level was projected, but never reached, since the economy did better than expected.  Since you like using measures of % of GDP, why didn't you include the tidbit that the deficit as % of GDP is not out of whack with previous post-recesionary times.  In fact it's pretty darn good when put in that context.

i guess we're looking at two different animals: On-budget deficits were over $500 billion in 2003 and 2004, thanks to the SS revenues, the total deficit was $417 bil in 2004 (I'll focus on total instead of on-budget so we're consistent).

 

Ok I'll play your little game. The correct change to look at is from Clinton's last year. There was a budget surplus of $236 billion in 2000. The deficit in 2004 was $412 billion. That's almost a change of $650 billion! And it represents a 6% change as a percent of GDP.

 

The deficit is not out of whack only if you're a republican. Deficits under Reagan averaged 4.2% of GDP, Bush1 averaged 4%; under Carter deficits averaged 2.4%, and 0.8% under Clinton. So yes, BushII's deficits that are currently 3-3.5% of GDP are all right for a republican--those paragons of fiscal responsibility. Or could it be that tax cuts do after all cause deficits?

 

The other thing that's ignored is the cost of that debt.  Not only is the debt reasonable for post-recession, the interest on it is very low.  I wouldn't expect you to admit that nugget.

 

Gee, you got me again. I didn't realize that "nugget" was related to the supply-side argument that tax cuts reduce deficits....

By the way, how long do you thinkl interest rates will stay low? My guess is until China decides to float its currency....

[TPS]

Holy oversimplification, Batman. 

500426[/snapback]

 

Apparently I have to be simple with you....

 

Any economist, left or right, will tell you the long run growth potential is a function of the gowth in productivity plus the growth in the labor force. For the US, that sum has averaged around 3% since WWII (that is an average; it doesn't imply the same value every year). Given that market economies are subject to business cycles, GDP "cycles" around that trend.

 

Greenspan thought that there was a "shift in the trend gowth of productivity" in the 1990s, which is why he did not put the brakes on when UP fell below 5% in 1997.

[GG]

Are you saying that dot-com companies would not have been created without the cut in K-gains? The tech bubble needed no fuel.  The creation of the internet was one of those significant moments in economic history that helps create and sustain growth for significant periods, not unlike the auto in the 1960s or mass production of consumer goods in the 1920s.  Speculative bubbles are fuelel by irrational expectations of continued price increases, not tax cuts.

 

Try reading for a change. I said that lowering capital gains taxes had a large role in fueling the bubble, not creating it. Of course since you don't believe that lowering taxes changes people's attitudes toward investing & spending, maybe that point is insignificant to you.

 

i assume you mean the first couple of years under Bush?  If so, that's what I said, expansionary fiscal policy--i.e. large deficits, prevented a worse outcome.

 

Revenues declined because over 1% of GDP tax take disappeared overnight (see above), while the budget kept growing as if the capital gains from the bubble would continue.

 

 

If you know of any articles off hand, let me know.  Otherwise I'll try and do a search for this debate.

 

You have a WSJ subscription - it's been their rallying cry ever since Bush put his tax plan on the table in 2002.

 

  Hey, I'm willing to admit when something works--I'm not a complete demagogue..

Yes, if the tax stays at 10% permanently, revenues will decline, but not completely to the previous level.  It should be obvious that the significant increase this year represents years of accumulated profits, not just the past year's profits.

 

Please tell me how revenues will decline from previous levels, when tax revenue from foreign sourced income was virtually zero? There was absolutely no incentive for companies with continuing operations overseas to repatriate the profits back to the States, and be nailed with a 35% tax rate. But if you drop that rate to 10%, you give a lot of incentive to send the cash back home. In my book, 10% of something is better than 35% of nothing.

 

there you go again, your paranoia, "a hinted reference?"  Can't you righties read? You probably won't recall, but I did state that when the economy initially turned on Bush in his first year, it was the natural outcome of the business cycle, and I did not blame him.  Once again, I expect that after his 8 years are up, GDP will have averaged about 3%/year. No hinted reference there.

 

Can't you lefties follow a thread? I was referring to Mickey's hinted reference, which started this whole thing on the economy. Perhaps, it's just me, but tell me to which economy does the left usually compare Bush #2?

 

Ok I'll play your little game.  The correct change to look at is from Clinton's last year.    There was a budget surplus of $236 billion in 2000.  The deficit in 2004 was $412 billion.  That's almost a change of $650 billion! And it represents a 6% change as a percent of GDP.

 

The deficit is not out of whack only if you're a republican.  Deficits under Reagan averaged 4.2% of GDP, Bush1 averaged 4%; under Carter deficits averaged 2.4%, and 0.8% under Clinton.  So yes, BushII's deficits that are currently 3-3.5% of GDP are all right for a republican--those paragons of fiscal responsibility.  Or could it be that tax cuts do after all cause deficits?

 

It goes back to the goals of fiscal policy. Do you want to put in policies which will stimulate private investment and private sector job growth, or be happy to balance the budget to protect the entrenched government programs & existing jobs. There's more to a happy economy than GDP growth.

 

Gee, you got me again. I didn't realize that "nugget" was related to the supply-side argument that tax cuts reduce deficits....

By the way, how long do you thinkl interest rates will stay low?  My guess is until China decides to float its currency....

500473[/snapback]

 

Well, China had to be threatened to allow a 2% fluctiation in the yuan. I wonder what will need to be done for them to ween off their US$ crack habit and fully convert their currency?

 

I've been hearing your paranioa about the low dollar and the heavy Asian investment in the grenback. What all the fear-mongerers miss is that given all our issues, there's still no better currency investment. Would you rather stick your long term savings in the Eurozone, with 1% growth, 10% unemployment and continuing instability, or place a bet on the US? The Asians are voting with their wallets for now, and they have a lot more at stake than idle chatter on an internet bulletin board.

[Ghost of BiB]

(shuffles spreadsheets)

 

You are.... 7,739.

[Taro T]

With all the references to the tech bubble, one thing I have always been curious about is how much of the '90's boom was caused by the Y2K scare? Companies spent a ton of money and a lot of people were hired to deal with this "problem". After 1/1/2000, the Y2K issue was no longer an issue, and companies and individuals no longer had to pay for expensive upgrades and/or Y2K experts. I would expect that a fair number of people that had been hired to deal with that problem found themselves expendable after the 1st of the year and that companies that normally expect software / hardware to be used for 3+ years decided that they did not need to perform upgrades for at least that long.

 

I haven't found any good studies about Y2K's effect on the tech bubble. Does anyone know of links to any studies to how much Y2K affected the '90's and present economies? Thanks in advance for any info.

[Alaska Darin]

With all the references to the tech bubble, one thing I have always been curious about is how much of the '90's boom was caused by the Y2K scare?  Companies spent a ton of money and a lot of people were hired to deal with this "problem".  After 1/1/2000, the Y2K issue was no longer an issue, and companies and individuals no longer had to pay for expensive upgrades and/or Y2K experts.  I would expect that a fair number of people that had been hired to deal with that problem found themselves expendable after the 1st of the year and that companies that normally expect software / hardware to be used for 3+ years decided that they did not need to perform upgrades for at least that long.

 

I haven't found any good studies about Y2K's effect on the tech bubble.  Does anyone know of links to any studies to how much Y2K affected the '90's and present economies?  Thanks in advance for any info.

501701[/snapback]

I haven't seen any studies but that certainly played a part. One of the byproducts of Y2K was the tech companies were awash in cash and a fair amount of that money went back into R&D, which directly benefitted consumers and the economy.

 

One thing I read was that during the 1990s, broadband access went from single-digit percentages of US households to nearly 60%. That's a whole lot of infrastructure and equipment, not to mention the online shoppping revolution.

[Crap Throwing Monkey]

With all the references to the tech bubble, one thing I have always been curious about is how much of the '90's boom was caused by the Y2K scare?  Companies spent a ton of money and a lot of people were hired to deal with this "problem".  After 1/1/2000, the Y2K issue was no longer an issue, and companies and individuals no longer had to pay for expensive upgrades and/or Y2K experts.  I would expect that a fair number of people that had been hired to deal with that problem found themselves expendable after the 1st of the year and that companies that normally expect software / hardware to be used for 3+ years decided that they did not need to perform upgrades for at least that long.

 

I haven't found any good studies about Y2K's effect on the tech bubble.  Does anyone know of links to any studies to how much Y2K affected the '90's and present economies?  Thanks in advance for any info.

501701[/snapback]

 

Not as much as one would think. While a TON of money was thrown at Y2K, the nature of that money ($200/hr contracts to COBOL programmers who themselves KNEW they'd never have it so good again), the bubble everyone refers to is the internet/telephone VC/IPO bubble, which really didn't have all that much to do with Y2K. Had it, it probably would have been more sane.

[GG]

Yeah, what the monkey said. It was just stupid money chasing stupid ideas. The Telecom Act of '96 had more to do with it than Y2K.

[TPS]

couple of quick responses--kind of busy today:

Please tell me how revenues will decline from previous levels, when tax revenue from foreign sourced income was virtually zero?  There was absolutely no incentive for companies with continuing operations overseas to repatriate the profits back to the States, and be nailed with a 35% tax rate.  But if you drop that rate to 10%, you give a lot of incentive to send the cash back home.  In my book, 10% of something is better than 35% of nothing.

Revenues next year will be less than this year's (windfall), even if the rate stays the same.

Can't you lefties follow a thread?  I was referring to Mickey's hinted reference, which started this whole thing on the economy.  Perhaps, it's just me, but tell me to which economy does the left usually compare Bush #2?

mickey's reference didn't look "hinted." Looked pretty clear to me, so I thought you were referring to one of my posts.

 

 

I've been hearing your paranioa about the low dollar and the heavy Asian investment in the grenback.  What all the fear-mongerers miss is that given all our issues, there's still no better currency investment.  Would you rather stick your long term savings in the Eurozone, with 1% growth, 10% unemployment and continuing instability, or place a bet on the US?  The Asians are voting with their wallets for now, and they have a lot more at stake than idle chatter on an internet bulletin board.

 

Idle chatter like the following.....

Greenspan's idle chatter

 

For those who don't have a WSJ subscription, a blurb from Mr. Greenspan:

 

"Mr. Greenspan suggested that constraints on financing of the U.S. trade deficit are likely to come from "foreign investors' fears" of holding too large a share of their investment portfolios in U.S. stocks and bonds. He suggested that this change could already be under way. He noted that of the more than $30 trillion in foreign investment tracked by the Bank for International Settlements in the first three months of 2005, 42.5% were in dollars and 39.3% were in euros.

 

The dollar's share was down by 4 percentage points from around three years earlier, while the euro's share was up by 5 percentage points, Mr. Greenspan said."

[Cripes]

With all the references to the tech bubble, one thing I have always been curious about is how much of the '90's boom was caused by the Y2K scare?  Companies spent a ton of money and a lot of people were hired to deal with this "problem".  After 1/1/2000, the Y2K issue was no longer an issue, and companies and individuals no longer had to pay for expensive upgrades and/or Y2K experts.  I would expect that a fair number of people that had been hired to deal with that problem found themselves expendable after the 1st of the year and that companies that normally expect software / hardware to be used for 3+ years decided that they did not need to perform upgrades for at least that long.

 

I haven't found any good studies about Y2K's effect on the tech bubble.  Does anyone know of links to any studies to how much Y2K affected the '90's and present economies?  Thanks in advance for any info.

501701[/snapback]

 

Here's a Fed report that indicates y2k probably didn't have as big an impact as people might think.

 

St. Louis Fed.

[Taro T]

Here's a Fed report that indicates y2k probably didn't have as big an impact as people might think.

 

St. Louis Fed.

502868[/snapback]

Thank you for the link. I downloaded the article. Won't be able to read it tonight or tomorrow, but plan to read it before the weekend.

[GG]

couple of quick responses--kind of busy today:

 

Revenues next year will be less than this year's (windfall), even if the rate stays the same.

 

What is this a Monty Python sketch? How many times do I have to say the same thing?

 

Of course revenues will be lower next year, because this year's receipts are an abberation based on accumulated profits. What you should be comparing is the probable receipts of the foreign income tax in a normalized year if the tax rate is 10% vs 35%. You know that when the rate was 35%, tax receipts were virtually zero. I'm guessing that the receipts would be higher than zero if the rate drops to 10%.

 

It's not really a difficult concept.

 

Idle chatter like the following.....

Greenspan's idle chatter

 

For those who don't have a WSJ subscription, a blurb from Mr. Greenspan:

 

"Mr. Greenspan suggested that constraints on financing of the U.S. trade deficit are likely to come from "foreign investors' fears" of holding too large a share of their investment portfolios in U.S. stocks and bonds. He suggested that this change could already be under way. He noted that of the more than $30 trillion in foreign investment tracked by the Bank for International Settlements in the first three months of 2005, 42.5% were in dollars and 39.3% were in euros.

 

The dollar's share was down by 4 percentage points from around three years earlier, while the euro's share was up by 5 percentage points, Mr. Greenspan said."

502825[/snapback]

 

Well, there YOU go again. Please tell me why you introduced Greenspan's comments to support your thread? Don't you think that I would immediately respond with:

 

“If the capital gains tax were eliminated, that we would presumably, over time, see increased economic growth which would raise revenues for personal and corporate taxes as well as other taxes that we have...[the] major impact [of a capital gains], as best I can judge, is to impeded entrepreneurial activity and capital formation...I argued that the appropriate capital gains tax rate was zero...”

- Federal Reserve Chairman Alan Greenspan in testimony before the Senate Banking Committee on February 25, 1997

 

In testimony before Congress this year, Greenspan has said that "the appropriate capital gains tax rate is zero."

 

Again, talking about the deficit as if it's a creature of its own making, rather than being the difference between revenues & expenses won't work with me. Greenspan's warning about the deficit was as much a caution to reduce spending as increase revenue. If you look at his economic pedigree, my guess is that his message was for the spenders' ears.

 

It's good to see continuation of the Fed dynasty that started with Volcker. The markets reacted positively to Bernanke's testimony, and they're the ones that determine the cost of our deficit. So far, they believe that US bonds are a much better bet, and the outlook isn't likely to change soon.

[Ghost of BiB]

(Shuffles more papers, looks up...)

 

You are 2,183.

 

But that's just today.

[Campy]

Actually Clinton decreased the capital gains taxes, which had a large role in fueling the tech bubble.  If you normalize the capital gains impact from the bubble, the individual share is about 9%. 

499826[/snapback]

I'm sure there's a lot of really good stuff in that post GG, but I'll be damned if I can figure out what the first paragraph means, much less the rest of it.

 

I'm thankful (and so should the rest of you be) that there are people much smarter than me who 'get' this whole finance thingy.

 

*sighs* Next time the Crimean War comes up, let me know, OK?

[GG]

I'm sure there's a lot of really good stuff in that post GG, but I'll be damned if I can figure out what the first paragraph means, much less the rest of it.

 

I'm thankful (and so should the rest of you be) that there are people much smarter than me who 'get' this whole finance thingy. 

 

*sighs* Next time the Crimean War comes up, let me know, OK?

504270[/snapback]

 

It's the foundation of supply side economics of keeping capital with the people who are better at creating new capital. It flies in the face of a progressive tax policy that penalizes the high income earners.

 

After the economy started bouncing back in Clinton's second term, spurred by Al Gore's invention & Telecom Act of 1996, Clinton listened to Greenspan, Rubin & Dick Morris and cut the capital gains taxes. This helped the speculative buying of stocks, thus fueling the bubble. TPS does not believe that the cut in capital gains was fuel for the fire, I do. TPS said that in 2000, individuals contributed over 10% of the Treasury's revenues, and that number dropped significantly in Bush's term. My point was that the 10% is artificial, since it includes the capital gains taxes from the peak of the bubble.

 

The main point TPS is making against supply side is that the share of personal income tax contribution to the overall Treasury revenues declined in the Bush era. The problem I have with that logic is that supply side is a growth oriented policy, such that while personal income tax revenues will fall, the overall growth in the economy will pick up much more, and the government will have plenty of other sources of revenues (ie corp taxes, excise taxes, gasoline, etc) So, to simply say that supply side doesn't work because personal tax revenues went down misses the point of trying to maximize total revenue.

 

As I said before, sound fiscal policy is the enemy of political policy, and leftist economics usually play to a highly populist bent that's rooted in Robin Hood economics, while the "voodoo" supply-side economics are being proven to work in a real life setting.

 

The ideal situation would be a very simple tax code that's a flat income (20%) or a flat consumption (10%) based. But, you will get a lot more votes by asking Bill Gates pay 40% (which he likely doesn't pay).

 

As to the Crimean War, don't get me started on the Brit/French futility in fighting a pathetic czarist army and losing, and setting the stage for the mess the world is in right now. Talk about a butterfly effect.

[Campy]

It's the foundation of supply side economics of keeping capital with the people who are better at creating new capital.  It flies in the face of a progressive tax policy that penalizes the high income earners. 

 

After the economy started bouncing back in Clinton's second term, spurred by Al Gore's invention & Telecom Act of 1996, Clinton listened to Greenspan, Rubin & Dick Morris and cut the capital gains taxes.  This helped the speculative buying of stocks, thus fueling the bubble.  TPS does not believe that the cut in capital gains was fuel for the fire, I do.  TPS said that in 2000, individuals contributed over 10% of the Treasury's revenues, and that number dropped significantly in Bush's term.  My point was that the 10% is artificial, since it includes the capital gains taxes from the peak of the bubble.

 

The main point TPS is making against supply side is that the share of personal income tax contribution to the overall Treasury revenues declined in the Bush era.  The problem I have with that logic is that supply side is a growth oriented policy, such that while personal income tax revenues will fall, the overall growth in the economy will pick up much more, and the government will have plenty of other sources of revenues (ie corp taxes, excise taxes, gasoline, etc)  So, to simply say that supply side doesn't work because personal tax revenues went down misses the point of trying to maximize total revenue.

 

As I said before, sound fiscal policy is the enemy of political policy, and leftist economics usually play to a highly populist bent that's rooted in Robin Hood economics, while the "voodoo" supply-side economics are being proven to work in a real life setting. 

 

The ideal situation would be a very simple tax code that's a flat income (20%) or a flat consumption (10%) based.  But, you will get a lot more votes by asking Bill Gates pay 40% (which he likely doesn't pay).

I wasn't really expecting a response, but I do follow what you're saying, thanks for dumbing it down. I really like the idea of a flat tax too. Imagine the resources that could be freed up and allocated elsewhere just by simplifying the bloody tax code.

 

As to the Crimean War, don't get me started on the Brit/French futility in fighting a pathetic czarist army and losing, and setting the stage for the mess the world is in right now.  Talk about a butterfly effect.

504339[/snapback]

Now you're talkin' my language!

[stuckincincy]

Talk about a butterfly effect.

504339[/snapback]

 

What does that mean? I've never heard the term, and cabal when it comes to international affairs is not a good idea.