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Old December 1st, 2010, 07:24 PM   #1
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Costly Tax Cuts?



I ran across a very interesting point in the article Tax Extension in a recent National Review issue by Reihan Salam . Mr. Salam notes that President Obama has pledged to allow the tax cuts for the richest two percent of Americans because we cannot, “afford to borrow an additional $700 billion from other countries to make all the Bush tax cuts permanent, even for the wealthiest 2 percent of Americans.”

Reihan points out that Obama is using a ten year window to arrive at that very large figure and that over that same period the middle-income tax cuts will cost $3,000,000,000,000. That's three trillion dollars. I have no idea what that really means even if I'm told how far those dollar bills would reach end to end. However, even with a public school education I am able to understand that $700 billion is less than $3 trillion. $3 trillion is in fact over four times as much money as $700 billion. Accepting these facts as true; that Obama is concerned about lost revenue and is reluctant to borrow (wish he had the same hesitation when it comes to spending) from other countries his choice is puzzling and very expensive.

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Old December 1st, 2010, 07:56 PM   #2
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Not the first time government logic didn't make sense

But in all seriousness, any tax cut or tax hike won't matter unless we actually cut spending too. We MUST do that, especially if we want these potential extensions to actually matter. Inflation is a tax- we need to remember that. Personally, I'm for big spending cuts and tax cuts across the board.

By the way, you wrote $3 trillion is four times as much as $3 billion
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Old December 1st, 2010, 09:04 PM   #3
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Not the first time government logic didn't make sense

There's no logic to it. That was the point.

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Originally Posted by myp View Post
But in all seriousness, any tax cut or tax hike won't matter unless we actually cut spending too.

We MUST do that, especially if we want these potential extensions to actually matter. Inflation is a tax- we need to remember that. Personally, I'm for big spending cuts and tax cuts across the board.
That, quite specifically, is the central problem with the debt/deficit.

Taxes compaound this. When a state is in recession it makes little sense to take even more dollars out of private hands. This leaves less to invest ort to purchase goods and services with. As such it tends to deepen and prolong recessions with deepen and prolong deficits and debts.

Our spending levels have hit the poinbt where cuts alone cannot grow our economy out of the debt and deficit even with static spending. We need deep spending cuts.

We also need to pursue an amendment (statutes are meaningless, Congress raises the statutory debt ceiling willy nilly) that caps peace time spending at x% of GDP. It should permit narrow exceptions but the point would be to put a leach on the beast after we starved it.

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By the way, you wrote $3 trillion is four times as much as $3 billion
yeah, that's me...
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Old December 1st, 2010, 09:43 PM   #4
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We also need to pursue an amendment (statutes are meaningless, Congress raises the statutory debt ceiling willy nilly) that caps peace time spending at x% of GDP. It should permit narrow exceptions but the point would be to put a leach on the beast after we starved it.
Something of that nature would be good. Ironically though, had the Federal government stuck with the Constitution in the first place, they would have had no place to spend all that they spent.

More than change in law and documents, is needed a change in ideology. Until that happens, we will continue to see these run-arounds until the deficits can no longer be paid for.
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Old December 1st, 2010, 09:54 PM   #5
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I hear you. I don't think I'd say we need a change in ideology but that would be me just trying to parse and find the perfect word which kinda defeats the original point.

I'm hopeful with the TP people / but quite cautious as well. There are many amongst them with a strong drive to promote change they believe in. To me they come across as the "last straw" people. I keep meaning to write an article on this but haven't gotten around to it.

By last straw I mean that they sat silently and watched and did little while they saw radical changes all over the place. They've been pushed too far and are now beginning to push back. They are pissed at being called bigots and racists for supporting traditional American social values. They are sick and tired of judges tossing out the decisions of the people made at the ballot box. ETC ETC.

IMO, we'll see rollback in some areas. And, sadly, in some cases that'll go too far as well. When arguments such as, "who the hell are you to tell me I can't" are the best I hear in same sex marriage debates you have to wonder. When judges write into opnions that the Bible contains hate speach you have to wonder.

Zealous militancy on either end is inexcusable. Imo, the cats suing cities in California for having crosses on their city seal did so... now I have a feeling it'll come from the other way.

The problem at heart is the bipartisan nature of stupidity.
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Old December 2nd, 2010, 06:56 AM   #6
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Quote:
Originally Posted by myp View Post
But in all seriousness, any tax cut or tax hike won't matter unless we actually cut spending too. We MUST do that, especially if we want these potential extensions to actually matter. Inflation is a tax- we need to remember that. Personally, I'm for big spending cuts and tax cuts across the board.
We do need both cuts on spending and taxation. We also need to change the way we tax, it is way to complex and over bearing.

The problem with cutting spending is that no one wants to say "okay you can cut the money that goes to me", we need to make spending cuts to every area, bottom line, thats fair, and a large portion of the cuts will circle around mandatory spending.

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We also need to pursue an amendment (statutes are meaningless, Congress raises the statutory debt ceiling willy nilly) that caps peace time spending at x% of GDP. It should permit narrow exceptions but the point would be to put a leach on the beast after we starved it.
I agree with this, another amendment that would help, either in stead of this one or in addition to this one, would be an amendment laying out the what must be done to decrease debt once it has been accumulated, layed out in a timeline. The only problem with amendments, thought they make a big difference, they are hard to get through, but it would be worth the fight.

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More than change in law and documents, is needed a change in ideology. Until that happens, we will continue to see these run-arounds until the deficits can no longer be paid for.
I agree that a change in politicians ideology is needed, and hopefully the TP elects will initiat the change that is needed.
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