02-07-2009, 04:54 PM
The Republican Hogwash Exposed That is Delaying Needed Stimulus
"We trimmed the fat, fried the bacon and milked the sacred cows," said Sen. Ben Nelson, a Democrat, as debate began Friday.
Fat - Wasteful Spending?????
Several senators said the compromise agreement to get 3 Republican votes, axed money for school construction and nearly $90 million for fighting pandemic flu, among other things. A $7 billion item for energy-efficient federal buildings was cut in half. A $55 million item for historic preservation was eliminated entirely, as was $122 million for U.S. Coast guard polar icebreakers and cutters.
The Republicans just don't get economics. ALL SPENDING is stimulative. All the above money that is "waste" and cut from the plan ultimately helps keep or create jobs! Republicans want to go the way of Japan or Hoover leading us again into depression with not enough stimulus in time to turn the tide. Its mostly the same old failed "voodoo economics" policies that Republicans have been stuck in for decades. They will never give up on their philosophies no matter how damaging to the economy they are. What the Republicans have accomplished is a massive shifting of wealth to the most wealty at the expense of the majority of Americans.
Japan had a decade of stagnation because they did tiny stimulus which was too little repeatedly. I am so sick of hearing these Republicans with their economic lies or ignorance - no offense.
See my article "Can We Avoid A Deep Depression? Lessons from 1929-1933 at http://davecfp.com/Invest/Depression.html
The election was about change, not the same old trickle-down tax cuts that don't work. Yes, there's 42 percent tax cuts in this bill. That's not enough for the Republicans. They want it all tax cuts, or most tax cuts. We tried it; it didn't work; it's gotten us where we are today.
To appease a few Republicans the bill has the $1000.00 tax reduction for couples and the AMT fix for middle and upper class. These are untargeted, goes to those that need it or not, but the Republicans insist on more wasteful tax cuts that ignore the real problem - housing foreclosures and now jobs.
Tax cuts are the least effective way of stimulation and are not targeted at the real problems in the economy other than a one time, short term boost to consumer spending while ignoring the real issues. Cut tax rates permanently? When we have some of the lowest tax rates in the world. What a waste and proven failed strategy rather than directing funds at the real issues, not just make Republican fat cats richer.
Sample News Articles
Do not squander America’s stimulus on tax cuts
Financial Times: January 15 2009 Highlights
By Joseph Stiglitz who was awarded the Nobel Prize in economics in 2001. His latest book is The Three Trillion Dollar War, co-authored with Linda Bilmes (2008)
What is clear is that tax cuts will not help much. When Barack Obama, president-elect, last week proposed to use nearly 40 per cent of the stimulus for tax cuts, he was rightly told this would be less effective than, say, spending on infrastructure. It has been surprising, then, to see President George W. Bush’s former economic advisers, including Greg Mankiw, argue that tax cuts are the way forward.
Mr Mankiw cites a recent study by Christina Romer and David Romer, economists at the University of California, Berkeley, who found that each dollar of tax cuts raises GDP by about $3 (€2.30). Such studies, based on past data, may have little to say about the situation the world now faces. Americans confronted with debt, shrinking retirement accounts, houses worth less than mortgages and a tough credit environment will save more of their money than in the past. That was the experience with the February 2008 tax cut, where less than half of it has been spent. It matters who gets the break – if it is lower income Americans, the fraction spent will, on average, be greater than for wealthier Americans.
Tax breaks for business may prove to be a sink-hole as bad as the troubled assets relief programme. Particularly worrisome are rumours that companies will be allowed to set off their losses against profits made in the past five years to get tax rebates – a big gift to those who mismanaged risk, including banks such as Citibank. Some suggest that, having exhausted the more transparent bail-out strategy, banks are seeking less transparent help through the tax code. We learnt the lesson from Tarp: we need to link handouts to changes in behaviour. We should have insisted banks commit to more lending. Now we should insist any tax breaks for business are linked to investment.
Some of the spending in the stimulus serves multiple ends. Increased unemployment benefits have the largest multiplier effects – cash-strapped families spend every cent given – and meet vital social needs. It is imperative to provide health insurance to the unemployed: without that, a single serious incident can push a family into bankruptcy. Helping the unemployed meet house payments reduces foreclosures, addressing one of the underlying causes of the crisis. There are thus triple benefits.
We are in uncharted territory in this crisis. But household tax cuts, except for possibly the poorest, should have no place in the stimulus. Nor should business tax breaks, except when closely linked with additional investment. The one tax cut that should be included is a temporary incremental investment tax credit; it provides a big bang for the buck, encouraging companies to invest now when the economy needs the spending. Increased investments in infrastructure, education and technology, relief to states, and help to the unemployed need pride of place.
This is a stimulus that some Republicans will find less attractive than previous give-aways. But Americans voted for change they could believe in. I trust that is what we will get.
Full article at http://www.ft.com/cms/s/0/a78e69a4-e30d-...fd2ac.html
The International Monetary Fund (IMF) warns tax cuts not very effective
Growth more likely via public spending not tax cuts
Financial Times 2/6/09 Highlights
The IMF estimated the "multiplier effect" showing that an increase in government spending is a far more efficient way of increasing GDP than tax cuts.
The IMF made the assessment in a report on the global economy ahead of a meeting of senior officials from the Group of 20 large economies, planned for March 14, which precedes a G20 heads of government meeting in London in April
Full article at http://www.ft.com/cms/s/0/72fb74c8-f3ef-...fd2ac.html
Attached Charts - The truth vs. deception of U.S. tax rates
1) Chart of our low individual tax rates already among the lowest in the world and near historical lows in the middle of a huge budget deficits crisis. As I often have said, I recall my tax days when it was great for clients to have $52,000 or earned income so they would be in the maximum tax bracket for earned income of 50% vs unearned income taxed at up to 70%. And we had some great economic times with these high tax rates.
2) Corporate Taxes at the Bottom - chart shows that while our "stated" 35% highest corporate tax rate is high compared to many countries, with all the tax deductions corporate get the real tax rate is relatively low (now down to about 25%). The Republicans want to lower the corp rate to 25% and keep the deductions for their big corporation supporters. They justify this with the deception that we have such a high 35% corporate tax rate. Going to 25% would probably reduce the real rate to 15% which is outrageous and mostly only enhances big business profits with no assurances it would add one more job - very similar to the funding of banks that won't lend.
"We trimmed the fat, fried the bacon and milked the sacred cows," said Sen. Ben Nelson, a Democrat, as debate began Friday.
Fat - Wasteful Spending?????
Several senators said the compromise agreement to get 3 Republican votes, axed money for school construction and nearly $90 million for fighting pandemic flu, among other things. A $7 billion item for energy-efficient federal buildings was cut in half. A $55 million item for historic preservation was eliminated entirely, as was $122 million for U.S. Coast guard polar icebreakers and cutters.
The Republicans just don't get economics. ALL SPENDING is stimulative. All the above money that is "waste" and cut from the plan ultimately helps keep or create jobs! Republicans want to go the way of Japan or Hoover leading us again into depression with not enough stimulus in time to turn the tide. Its mostly the same old failed "voodoo economics" policies that Republicans have been stuck in for decades. They will never give up on their philosophies no matter how damaging to the economy they are. What the Republicans have accomplished is a massive shifting of wealth to the most wealty at the expense of the majority of Americans.
Japan had a decade of stagnation because they did tiny stimulus which was too little repeatedly. I am so sick of hearing these Republicans with their economic lies or ignorance - no offense.
See my article "Can We Avoid A Deep Depression? Lessons from 1929-1933 at http://davecfp.com/Invest/Depression.html
The election was about change, not the same old trickle-down tax cuts that don't work. Yes, there's 42 percent tax cuts in this bill. That's not enough for the Republicans. They want it all tax cuts, or most tax cuts. We tried it; it didn't work; it's gotten us where we are today.
To appease a few Republicans the bill has the $1000.00 tax reduction for couples and the AMT fix for middle and upper class. These are untargeted, goes to those that need it or not, but the Republicans insist on more wasteful tax cuts that ignore the real problem - housing foreclosures and now jobs.
Tax cuts are the least effective way of stimulation and are not targeted at the real problems in the economy other than a one time, short term boost to consumer spending while ignoring the real issues. Cut tax rates permanently? When we have some of the lowest tax rates in the world. What a waste and proven failed strategy rather than directing funds at the real issues, not just make Republican fat cats richer.
Sample News Articles
Do not squander America’s stimulus on tax cuts
Financial Times: January 15 2009 Highlights
By Joseph Stiglitz who was awarded the Nobel Prize in economics in 2001. His latest book is The Three Trillion Dollar War, co-authored with Linda Bilmes (2008)
What is clear is that tax cuts will not help much. When Barack Obama, president-elect, last week proposed to use nearly 40 per cent of the stimulus for tax cuts, he was rightly told this would be less effective than, say, spending on infrastructure. It has been surprising, then, to see President George W. Bush’s former economic advisers, including Greg Mankiw, argue that tax cuts are the way forward.
Mr Mankiw cites a recent study by Christina Romer and David Romer, economists at the University of California, Berkeley, who found that each dollar of tax cuts raises GDP by about $3 (€2.30). Such studies, based on past data, may have little to say about the situation the world now faces. Americans confronted with debt, shrinking retirement accounts, houses worth less than mortgages and a tough credit environment will save more of their money than in the past. That was the experience with the February 2008 tax cut, where less than half of it has been spent. It matters who gets the break – if it is lower income Americans, the fraction spent will, on average, be greater than for wealthier Americans.
Tax breaks for business may prove to be a sink-hole as bad as the troubled assets relief programme. Particularly worrisome are rumours that companies will be allowed to set off their losses against profits made in the past five years to get tax rebates – a big gift to those who mismanaged risk, including banks such as Citibank. Some suggest that, having exhausted the more transparent bail-out strategy, banks are seeking less transparent help through the tax code. We learnt the lesson from Tarp: we need to link handouts to changes in behaviour. We should have insisted banks commit to more lending. Now we should insist any tax breaks for business are linked to investment.
Some of the spending in the stimulus serves multiple ends. Increased unemployment benefits have the largest multiplier effects – cash-strapped families spend every cent given – and meet vital social needs. It is imperative to provide health insurance to the unemployed: without that, a single serious incident can push a family into bankruptcy. Helping the unemployed meet house payments reduces foreclosures, addressing one of the underlying causes of the crisis. There are thus triple benefits.
We are in uncharted territory in this crisis. But household tax cuts, except for possibly the poorest, should have no place in the stimulus. Nor should business tax breaks, except when closely linked with additional investment. The one tax cut that should be included is a temporary incremental investment tax credit; it provides a big bang for the buck, encouraging companies to invest now when the economy needs the spending. Increased investments in infrastructure, education and technology, relief to states, and help to the unemployed need pride of place.
This is a stimulus that some Republicans will find less attractive than previous give-aways. But Americans voted for change they could believe in. I trust that is what we will get.
Full article at http://www.ft.com/cms/s/0/a78e69a4-e30d-...fd2ac.html
The International Monetary Fund (IMF) warns tax cuts not very effective
Growth more likely via public spending not tax cuts
Financial Times 2/6/09 Highlights
The IMF estimated the "multiplier effect" showing that an increase in government spending is a far more efficient way of increasing GDP than tax cuts.
The IMF made the assessment in a report on the global economy ahead of a meeting of senior officials from the Group of 20 large economies, planned for March 14, which precedes a G20 heads of government meeting in London in April
Full article at http://www.ft.com/cms/s/0/72fb74c8-f3ef-...fd2ac.html
Attached Charts - The truth vs. deception of U.S. tax rates
1) Chart of our low individual tax rates already among the lowest in the world and near historical lows in the middle of a huge budget deficits crisis. As I often have said, I recall my tax days when it was great for clients to have $52,000 or earned income so they would be in the maximum tax bracket for earned income of 50% vs unearned income taxed at up to 70%. And we had some great economic times with these high tax rates.
2) Corporate Taxes at the Bottom - chart shows that while our "stated" 35% highest corporate tax rate is high compared to many countries, with all the tax deductions corporate get the real tax rate is relatively low (now down to about 25%). The Republicans want to lower the corp rate to 25% and keep the deductions for their big corporation supporters. They justify this with the deception that we have such a high 35% corporate tax rate. Going to 25% would probably reduce the real rate to 15% which is outrageous and mostly only enhances big business profits with no assurances it would add one more job - very similar to the funding of banks that won't lend.