The Democrats have it wrong

So a logical conclusion would be, as Shiva mentioned previously, to cut expenditure.
To me, that entails cutting welfare programs to the able, who rather spend their day in bed watching soaps.
If, as you say, one must go into the inner cities to see real poverty, one also must keep ones eyes open to see that too many are in poverty because they sit, and wait, and do nothing, while throwing beer cans around their neighborhood, instead of collecting them, or bringing them to the nearest recycle bin.
Been there, done that, and have been asked more often than not when someone will finally come over to "clean up this place".
Guess what? Save the city some money and do it yourself. Show some pride in your neighborhood, clean up your own mess, clean up yourself, rally people to do the same, make the neighborhood a safer place by turning in the criminals, instead of repeating lyrics against snitching.
We spend too much money on feeding what can't even be considered poverty, but is rather self imposed laziness.
Of course, I realize that this doesn't hold true for everyone, but does for a large percentage.
Stop wasting tax dollars, and start using them for where its needed and worthwhile, might be a great first step.
Might be an idea....paying people to clean up their neighborhood...welfare for a job well done.

 

Regulation???? A bank is a business formed to make profit. No other encouragement. Follow the money, where are banks making their profit?

Who is paying the bank interest for excess capital?

The banks use excess captial, and even borrow from the Fed to buy T-Bills. The interest on T-Bills is higher than what the bak pays the Fed, and has no risk.

You expect the government, that needs to borrow $1.6+T to punish the banks for loaning them money?

Regulation in que is a major cause business isn't hiring, isn't growing, isn't borrowing. Laws, Obama care, the financial bill, Executive Order's are thousands of pages of just framework, the 10's of thousands of pages of regulation are still being drawn up.

 

This is actually an excellent example that should be used when addressing a need of the people. We can compare the United States Supplemental Nutrition Assistance Program (food stamps) and Feeding America as both are addressing the same need. Both address hunger in America and one (food stamps) is tax supported while the other (Feeding America) is a privately funded charity.

One of the key differences is in how food actually reaches the individual in need.

Food Stamps, using EBT cards, provides the individual the ability to purchase most foods, including junk foods, at the local market or corner convience store. This is the most expensive way to provide food as it is provided at full retail cost. The US government currently provides "food stamps" to about 45 million people in the US.

Feeding America secures food often directly from growers which might include "blimished" produce which, while as nutritious as unblimished produce, isn't sold in markets. Excess production from major bakeries and other sources as well as markets also contribute large amounts of food to these private food banks. The food banks in the Feeding America network can generally obtain food at only a fraction of the cost when compared to what is available in a market and they focus on nutritional food and don't furnish "junk food" as it is a waste of resources. Feeding American,which is a network of food banks, currently feeds about 31 million Americans.

Feeding America provides food for about 25% of the cost per person when compared to the Supplemental Nutrition Assistance Program and the food they provide is better for the individual than food provided by the US government as it focuses on nutritional value whereas the government does not.

I'm not sure about the specifics of Feeding America but Northwest Harvest, which I personally support annually as one of my favorite charities, doesn't require anything from the individual except for them to show up to receive food. No government bureaucracy to deal with and no "qualifying" is required. Even if a person only needs enough food for this week they can get it without any hassle. To qualify for food stamps can take weeks and in the meantime the individual goes hungry (or more likely is going to the private food bank because they can actually get food there).

 

50% of the people in the past 10 years or so who obtained loans should not have been given those loans! They simply did not appropriately qualify to assume that kind of debt. And the fact that there has been so many foreclosures and delinquent mortgages, etc. is proof that many of these were very risky loan situations!

What you propose above is stupidity! You have learned nothing from the recession! The government and banks are NEVER supposed to force lending! QUALIFIED people and business always could and can today obtain reasonable loans...this has not changed...

 

Tax rates aren't important. Tax revenues are.

The below link has a comparison between tax rates and tax revenue (personal income tax). Decreasing tax rates does not reduced tax revenue enormously.
http://www.heritage.org/budgetchartbook/income-tax-receipts

 

No, it hasn't.

http://www.heritage.org/budgetchartbook/income-tax-receipts

 

Please show the figures and/or a source.

I think it's wrong:

Using 2008 tax data (latest I could find on IRS website easily)

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html

I chose the Individual income tax (not business) of those making $100K or more. The total amount of taxable income was 1,085,707,695,000, or roughly $1 trillion dollars. Now, that's not using Obama's definition of rich, but a tougher version of rich, namely $100k or above (upper middle class), and it's taking ALL of their income.

Using the Obama definition of rich ($200k and above), we get a paltry
$340,514,046,000. Again, that's taking ALL of their income.

Hmm, we were sold social security as a retirement plan that we paid into. Why should it be need-based?

 

Let's assume billionaires make ten percent of their wealth a year, so we will just assume that billionaire=making at least $1million a year.

Looking at 2008 (which is in the 30 yrs of the rich supposedly not paying), the adjusted gross income of people making $1million a year or more is $54,411,286,000 ($54 billion). Let's tax them at 90%, so that's $48,970,157,000. Still not enough. Our deficit is over $1 trillion a year (20 times the billionaire income). You just don't understand the magnitude of the money involved.

 

The top 20%, or 2.6 million US households are projected to receive personal after tax income of about $4.8trillion in 2011, an average of over $184,000 per household. Their taxes could be raised to eliminate the $1.2Trillion deficit and they would still be left with three fourths of that money, or around $138,000 per household on average. This would still be three times the average income of the bottom 80% of households.

The notion that taxing high income earners to eliminate the deficit would impoverish them is not upheld by income statistics.

 

unrealists' figures were more appropriate (though still not accurate) to describe total tax revenues as opposed to income tax revenues.

But since we are on the subject, take a look at income tax revenues since 2000:

Income tax revenues
2000 10.09%
2001 9.67%
2002 8.06%
2003 7.12%
2004 6.82%
2005 7.34%
2006 7.79%
2007 8.26%
2008 7.93%
2009 6.42%

Source data: CBO.gov, BEA.gov

That is a *major* decrease, 3.67 percentage points of GDP, and a major reason why the deficits are so big today.

To put it in perspective, 3.67 percentage points of a $15 trillion GDP equates to $550 billion less revenues.

 

A $550 billion relative decrease in revenues since 2000 (see post above) seems pretty enormous to me.

 

Where did Obama ever define "rich" that way?

More conservative propaganda, I'm betting

 

Which IRS spreadsheet did you use? The page you linked to does not have the data you cite on it.

 

Let's look at today's numbers.
Taxable income is not personal income, not even close. If you want personal income figures you need to go to the Bureau of Economic Analysis which reports annual personal income at about $13Trillion in the second quarter of 2011.

The Census Bureau reports that the top 20% of households, those with incomes greater than $240,000, received 50% of the national personal income in 2008, or $6.5Trillion projected to 2011 personal income figures.

 

Try this from 2010:

http://www.nytimes.com/2010/09/08/us/politics/08obama.html

It is pretty clear that President Obama was establishing that those with incomes above $200,000 for an individual or $250,000 for couples established that they were the "wealthy" Americans. He didn't draw the line at $1,000,000 or $10,000,000 when he described who the "wealthy" were that shouldn't have the Bush era tax cuts extended. He drew the line at $200,000/$250,000 and that is the criteria he established in defining someone as being wealthy.

Of course income is not reflective of wealth as wealth is the difference between assets and liabilities. Many with incomes far less than $200,000 per year in income have more personal wealth than someone with $10,000,000 in annual income. A person with $50,000 in annual income might own their home outright and have no credit card or other personal debt and might have $250,000 in assets. At the same time someone with $10,000,000 in annual income could very well have $20,000,000 in debt related to their home, credit cards and other personal debt. The person with the $50,000/yr income has accumulated more personal wealth.

 

I found the information on the spreadsheet for 2008 without a problem. Because its a PDF file it cannot be linked directly so it took a few minutes to locate.

 

That is true but personal income is gross income and not taxable income. Only net income is taxed so the $6.5 trillion has no relevancy related to federal tax revenues.

This is similiar to using GDP as a criteria related to taxation. GDP represents production of new goods and services during the year and is unrelated to actual taxation.

 

Corporations will always depend on Asian slave labor for manufacturing so it is propaganda for lowering their taxes to bring those jobs back to the US...

The Federal Government must force the free market to act with higher taxes and tax incentives so they don't continue to sit on trillions of dollars in reserve capital until republican administration.

Their economic freedoms impede growth on two fronts, inability for the government to gain revenue and slow production in the free market. Banks are not spending and are working with corporations to stop economic growth because democrats are in office, in a vibrant economy the banks lend and the corporations spend.

 

C'mon, say it. It originates from envy, envy of the 'haves, the movers and shakers, aka the productive doers', not by the 'have nots', but by the 'want but don't wanna work for it', the perpetual victims, and this fire of envy is fed by those who gain from keeping the 'have nots' just sated enough to play them.

 

A millionaire is not someone who has a million dollars, they're someone who earns a million dollars every year.

It was adjustments in the capital gains rate that benefited the wealthy. I also question the wisdom of lumping people who make $200,000 a year in with the "middle class".

What has happened before is no real indicator of what will happen next. Circumstances are different, people are more aware of problems, and the political winds are blowing against increases. The fact that Congress has, in the past, spent more when taxes were raised does not mean they will automatically spend more if taxes are raised to reduce deficits.

Sharp and immediate cuts will just lead to future deficits when it destroys the economy. We're in a very precarious situation. Now is not the time to worry about deficits and debt. The time for that was 8 years ago, and the next time to rationally consider it is when the economy has recovered in the future. Not right now when we're narrowly avoiding economic catastrophe. Removing $1 trillion in government spending will have trickle-down effects that could reduce as much as $3 trillion from the GDP, depending on where things get cut. Cuts to social security or medicare, for example, would have dramatic negative consequences on the private sector, and would usher in another round of market "corrections". All that would do is lower tax revenue and increase the deficit again.

There is exactly one way to get out of debt; freeze spending growth at 1% per year, raise taxes, and let the economy grow out of the hole it's in over the next 4-6 years. This is a long term answer (we wouldn't eliminate the deficits until 2018 or so), however, and not politically palatable. It's certainly feasible economically, since we've got more than enough credit to continue to borrow until that time. It's doubtful we have the political will or the discipline to do it, especially with half the Congress insisting on irrational, unjustified, and hasty slashing of the budget, and absolutely no discussion of any increases in taxes on anyone.

Any deficit reduction plan that involves a reduction in government spending from current levels will be self-defeating because it will cause negative feedback in the private sector and reduce tax revenues further. You can't cut your way out of this hole because the entire economy is on government life support right now.

 

Earning $1,000,000/yr is not an indicator of wealth. Wealth is the difference between assets and liabilities. Many individuals that earn a million dollars a year actually have less wealth than someone earning less than $75K/yr.

Adjustments to capital gains tax rates benefited every American that invests for their retirement. I happen to question using income as a measure of wealth as the two aren't actually related. If income was a measurement of wealth then high income earners would never declare bankruptcy but we know that they do.

LOL This is like saying just because the sun always rises in the East that somehow it's going to rise in the West tomorrow. What is that old saying... those that don't learn from history are doomed to repeat it.....

Social Security and Medicare, while facing future shortfalls in funding, are not currently contributing to the deficits. They have raised more revenue in FICA/Payroll taxes than they've spent to date. Yes, they're on the road to financial insolvency but they're not there yet. If we want to help the economy based upon retirees then stop the Federal Reserve from artificially lowering the interest rates so that retirees receive a fair return on investment on their money that is invested in T-Bills.

There are several problem with government spending not the least of which is much of it is unrelated to spending in the United States. How much in wages spent on military personnel in Germany is spent in Germany as opposed to being spent in America? How much of the spending from TARP that bailed out the banks went to foreign investors? How does giving billions of dollars to foreign governments contribute to the US economy?

I don't disagree with the fact that the problems originated over the last ten years. The Bush era tax cuts should have been immediately repealed in 2001 after President Bush decided to invade Afghanistan. Taxes should have been raised in 2003 when Bush then decided to invade Iraq. That deficit spending has left the United States government without the resources to spend today.

Yes, a trillion dollars in spending does create a total of about a three trillion dollars increase in the GDP but only if it's paid for and not borrowed. A trillion dollars in deficit spending costs ten trillion or more in GDP growth if it uses borrowed money.

Actually for anyone that follows the economy it is the national debt that is a primary problem for the US economy. While I would enjoy seeing the math behind the above statement if we look long term let's see what the outcome would be.

Assuming that the national debt only increases to about $20 trillion by 2018, which it would likely do, and assuming that the Federal Reserve stops interferring in the fair market value of money then we could assume an interest rate of about 5%. That would require the US government to collect ONE TRILLION PER YEAR in general revenue taxes just to pay the interest on the national debt. About 1/3rd of that trillion dollars would be paid to foreign governments and investors. That is also equal to over 60% of all general tax revenue collected today. That is a trillion dollars per year that cannot be used for any government programs. That tax debt reduces the GDP growth by over three trillion per year, every year, indefinately. That loss of GDP growth is equal to about 30 million jobs if my calculations are correct.

Can we afford to sacrifice 30 million jobs in the future? If we think we have a problem with 18 million being unemployed today what about almost doubling that in the future?

 

But how do we promote job growth, where do the jobs come from? Seems we are not only bleeding jobs, we are lacking behind in everything else.

Just look at the song so many have sung for so many years..."we went into Iraq for oil".
So now, after sacrificing not only countless lives, and trillions of dollars we should have spent elsewhere, the Chinese are buying up oil leases, while we sit idly by and let it happen. Where is all that oil that we went there for?
China is sucking us dry, while polluting, enslaving and building up its military force. Yet the greenies and the liberals and conservatives alike are cheering all the way to the soup kitchens.
How stupid are we really? Are we our own worst enemy, or what is going on?

 

Promoting jobs is actually very simple. Eliminate the "non-value added" costs of production. The single most expensive "non-value added" costs are the taxes and related admistrative costs which, when calculated through the entire supply chain in bringing are product to the market, represent 20% or more of the cost of the product. This is a huge cost that reduces US competitiveness in the international markets and is the reason why manufacturing jobs are leaving America. A 20% reduction in the cost of US exports would result in a substantial and immediate competitive edge for the United States and instead of exporting jobs we would be exporting products.

This has been pointed out repeatedly on different threads on Political Forum.

Perhaps this refers to the Gulf War which was often cited as being for oil but that never made any sense. The US could have bought all of the "Kuwaiti" oil from Iraq that it wanted to buy. That was not the reason we really became involved in the Gulf War nor was it some noble action on our part. Why would we go to the aid of the royal families of either Kuwait or Saudi Arabia when both were and are tryannical regimes which oppose everything the United States endorses?

The facts are much more simple and logical. Former President George GW Bush involved the US in the Gulf War exclusively because the royal families of both Kuwait and Saudi Arabia were former business associates and friends of the president. I know it sounds silly on the surface but it is the only logical explanation. It wasn't about oil but instead about the president bailing out personal friends that just happen to run tyrannical regimes.

As for the more recent invasion of Iraq by President G W Bush there are a few facts that we know. We know that there was never an al Qaeday threat from Iraq until after the US invasion. We know that there wasn't any actual evidence of WMD's even though there were a lot of unsupported opinions that Iraq had WMD's. What we also know is that President Bush addressed his cabinet within weeks of taking office, long before the attacks of 9/11, seeking an excuse to invade Iraq. It wasn't about oil but instead was probably related to Saddam's planning of an assassination attempt on the President's father.

I know this sounds like a petty reason for a war that cost hundreds of thousands of lives but then I believe that former President Bush was a very petty person.

China isn't "sucking us dry" but instead American is forcing our wealth down the throats of the Chinese because of our idiotic tax policies. We impose a huge cost on US produced goods though taxation that China is not imposing on Chinese companies. We have a tax policy that favors overseas manufacturing so Americans buy products made overseas because they're less expensive.

If we want to be competitive then we need to end our current tax system which is based upon incomes and convert to a consumption tax (with prebates) that eliminates the non-value added costs to US produced goods while at the same time imposing the identical consumption tax on imported goods. It would level the playing field which is something that doesn't exist right now.

So yes, we're our own worst enemy because we support a tax system that places US produced goods at a disadvangate in the global markets and provides an unequal playing field when imported v domestic produced goods are sold in America.

 

I was just reading today that the new Apple CEO was a manufacturing specialist, and one of the first things he did when coming to Apple, was to move all manufacturing off-shore to Asia.

Now I don't personally have any issue with this Apple strategy...but...to answer your questions above, if we were to carefully analyze why Apple, and thousands others, use off-shore labor and materials, you will find the root answers to your questions. In order to change the situation, assuming it can be changed, will require paradigm shifts in thinking from government, industry and People. If we are unwilling, or incapable of making whatever shifts in thinking are necessary in order to produce more products on US soil, then we know we must go to Option B. In very short order, like <30 days, a committee could investigate why Apple and others make these decisions, and provide a summary of what, if anything, we can do differently to manufacture more at home. There is huge demand in the world and all the US needs to do is be able to compete for this demand...