Replies to This Discussion

Permalink Reply by Tom Sarbeck on November 12, 2012 at 6:44pm

Gallup's Mirror, the GOP (the Party) has not pushed hard for Creationism.

Evangelical xians, who Reagan invited into the GOP and who now control most state GOPs, are pushing hard and creatively. Their most recent legislative efforts are prose art forms.

Blocked by courts from mandating "design" or "the controversy" in science classrooms, their legislation now permits local school boards to add these to their curricula but leaves school districts (the taxpayers) to pay the legal fees when they lose in court.

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Permalink Reply by Tom Sarbeck on November 12, 2012 at 7:14pm

Sarah:

America has not spent into oblivion. Starting with Reagan and continuing with both Bushes, the GOP has borrowed us into oblivion.

Clinton, who joined the GOP in repealing Glass-Stegal (sp?), left a surplus. Bush Two spent that surplus.

Wall Street gambling addicts crashed the economy, leaving a mess for Obama to clean up.

You know who are making out like bandits, but you are so loudly shouting the GOP myth that you hear no one else.

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Permalink Reply by Gallup's Mirror on November 12, 2012 at 10:36pm

"Clinton, who joined the GOP in repealing Glass-Stegal (sp?), left a surplus. Bush Two spent that surplus."

True. However, the Democrats opposed the Gramm-Leach-Bliley Act, a bill written, introduced, and passed by Republicans. Clinton signed the bill into law two months before the end of his Presidency, after it passed the House with a majority sufficient to override a veto.

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Permalink Reply by Suzanne Olson-Hyde on November 13, 2012 at 3:38am

Exactly Tom. When the Wall Street criminals were rubbing their hands together over how much money they made, but then were found out - it put the world into a spin, and dragged so many other countries down with it. And the same thing would have happened again, had Romney become - shudder - president. I feel sorry for Obama, having to deal with so many fronts, that George W. left in his wake, while Romney continues on, making millions, while sending his money to safe tax havens.

So, churches shouldn't be taxed, because it wouldn't be enough to cover the deficit - or as Erin said, either be taxed or shut up.

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Permalink Reply by Erin on November 12, 2012 at 2:43pm

I commented on this issue somewhere, maybe Facebook.. And someone said that church money is donated and so therefore it has already been taxed... But don't people get tax deductions for their donations? I don't really understand the issue but I do think churches should either be taxed or not allowed to make any political statements, let them choose which.

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Permalink Reply by SteveInCO on November 12, 2012 at 11:53pm

In theory churches are not supposed to make political statements, if they wish to keep their tax exemptions (in the USA).  In practice they do so routinely and the IRS has of late refused to enforce that rule.  (And yes, this is the IRS nearly four years after Obama assumed office.)   In fact there is a "civil disobedience" movement amongst pastors, where they go ahead and make political statements and basically dare the IRS to come after their churches.

Ideally, churches would be subject to the same tax rules as everyone else (then, at least they could sound off about politics if they wanted to).  To the extent that they spend the money on actual charitable activities, they could deduct that from their income, just like any other business.

Even if all money that went to churches (regardless of what they spent it on) were to be taxed, as pointed out earlier, this would amount to 71 billion dollars in tax revenue (assuming, of course that imposing such a tax would not alter the size of churches' income from what it is today--by the way the Congressional Budget office always makes the assumption that a change in tax rate will not affect economic activity in any way--I can't really blame them for that because it would be much harder to model otherwise--but I do wish people who trot out their estimates would remember that fact).  When put up against the 1327 billion dollar deficit, though, you can see that although it would certainly help, it would not help a whole lot.

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Permalink Reply by Reg The Fronkey Farmer on November 12, 2012 at 6:28pm

fyi - no comment yet.

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Permalink Reply by Obfuskation on November 12, 2012 at 9:05pm

This is my favorite idea so far for balancing the budget.  If nothing else, just for the entertainment value.

http://www.youtube.com/watch?v=v5pBFEKEE50&feature=g-like

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Permalink Reply by Tom Sarbeck on November 13, 2012 at 2:50am

Sarah:

"So let’s think of the US as an average household family."

You use a faulty analogy; a household family, average or not, is not responsible for their community's economic well-being. The US government is responsible for the nation's economic well being.

The free market is not up to the task.

1) In America, the unfree market has always been subsidized by taxpayers. To begin educating yourself, get on the Internet and search on "Yazoo land fraud".

2) The market has given the nation numerous recessions and depressions. People starved to death and the government that since 1787 has used taxes on everyone to subsidize business started during the 1930s taxing workers to provide a seriously limited amount of retirement income. In this matter as in so many others, America ranks well below other modern economies.

And this, the so-called American work ethic isn't up to competing with the Chinese work ethic. A government that has for so long favored employers and opposed employees loses the support of employees. Until FDR, American communists were employees' only allies.

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Permalink Reply by Gallup's Mirror on November 13, 2012 at 9:21am

So let’s think of the US as an average household family. If you were a financial advisor and they came to you and said, “We earn $58,000 a year … but we’re spending around $75,000 a year … and we have $327,000 in credit card debt. Can you tell us how do I get out of debt?” What would you tell them?

I would explain the economy is not an indebted household. Our incomes come from selling things to each other. Our debts are what we owe each other. My spending is your income. Your spending is my income. The economy IS spending. Learn that.

But let's try it your way: we both drastically reduce our spending. Your income shrinks because I spend less. My income shrinks because you spend less. We race to the bottom as we try to underspend each other. Meanwhile our incomes dive and our debts get worse. That's a recession.

That is the United States of America mathematically speaking right now: http://www.barefootinvestor.com/us-debt-crisis-ceiling/

So you ran the numbers, mathematically speaking, and concluded the United States of America is a free book offer from "Australia's most trusted money guy". You may want to check that math again.

If you were in this situation what would you do?

I would end the irresponsible tax cuts and corporate welfare programs from the Bush era. I would pass another American Investment and Recovery Act, except it would be quadruple the size of the original, and spread out over the next four years. That would put Americans back to work, jump-start the economy, end the recession, and start closing the budget gap as taxation revenues were restored and demand on safety net programs decreased.

That, by the way, is what Obama has been trying to do. But ever since the Republicans took control of the House in 2010 they have blocked him from doing it. That's why the recovery has been so slow. The GOP isn't trying to resolve the recession. They're trying to use it: handcuff Obama and then moan he isn't doing enough.   

[T]he simple truth is we’ve NEVER been this far in debt EVER.

Of course we have, Sarah. The national debt was over 120% of the GDP in 1946. It dropped steadily until 1981. Do you know why? Of course you don't. But here's a hint: it wasn't because the federal government was making savage spending cuts during all that time.

If I was 65 years old my entire life savings would not be invested in the stock market. Investing in the stock market is appropriate for anyone looking at least 10 years out.

The question was: what would you do if you were 72 and had lost everything? Investment is risk and some people lose. But since you avoided the question, I'll answer it for you. Before social security, medicare, and other social safety net programs, the destitute elderly were evicted from their homes, had no medical care, went hungry, and sometimes starved to death or died from untreated illnesses. That was the Romney-Ryan economic plan.

Pretending it isn't a very real problem is only going to further the damage.

The only pretense I've seen in this conversation has come from your camp, Sarah. The US is not a household. Public debt and recession are inexorably connected. Investing is not a sure thing. The two political parties do not share equal blame for the nation's debt and economic problems.

Of course the debt is a real problem. We found the solution that ends recessions and lowers the national debt over 70 years ago. It worked, not just for a little while, but for decade after decade. Today, for the political reasons explained above, we're simply not doing it. The Republicans who are pretending we don't know the very real solution is what furthers the damage. 

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Permalink Reply by SteveInCO on November 13, 2012 at 11:41pm

You are quite correct to be angry at corporate welfare.

But this is *exactly* what the stimulus plans passed to date have been--and yes that was before the Republicans did their best to put a stop to the bullshit.  Several hundred thousand dollars spent for each job claimed to have been created.  That money wasn't given to people, it was given to...  anyone?  anyone?  Corporations!  Oh sure, the subsidies were given to "green" companies (instead of the sorts of companies that get welfare from the republicans).  Corporate welfare is corporate welfare, and it doesn't make a damn bit of difference who's getting it.  In many cases the companies go belly up after having half a billion dollars given to them; wow that's half a billion dollars to create *no*--actually *negative* jobs.

I do think some Republicans' fixating on the tax rate as the cause of the slowdown, and fixating on keeping the rate from rising, misses a very important factor.  And so do attempts to stimulate the economy by spending tons of money we don't have.

The real reason jobs are not being created is because businesses have no idea what the business environment is going to be like six months or a year down the road.  If I hire someone, how many extra costs (many associated with "Obamacare") am I going to find myself having to pay, over and above his or her salary?  How many costs will be added in the future with little or no warning?  Why should I hire someone when I don't have any idea whatsoever how much it will cost to do so--particularly if it is going to cost me more and more money to lay them off?

Some companies are cutting employee hours now, to cut the number of hours an employee works below 30... because for purposes of these regulations, 30 is now "full time."  Changing it was supposed to help employees, but it sure looks like it's hurting them.

But let's get back to taxes.

For all the screaming and hollering that we in the US are undertaxed next to all of those welfare states in Europe... well have a look at this:

http://taxfoundation.org/article/capital-gains-rate-country-2011-oecd

You will notice that by the time you combine capital gains and corporate income tax the percentage rate is over 50% in the US and it's already higher than many of the countries people here want us to emulate.  If the welfare states of western europe are a model, we should be trying to cut corporate taxes, not raise them!  Or look at table II here: http://accf.org/news/publication/an-international-comparison-of-cap...; you will see corporations here pay 35% capital gains and that's higher than Sweden, Canada, France, the UK... the only glaring exception is Germany.

Maybe those folks over in Europe have figured something out:  Maybe they know to keep the rates relatively low on entities that produce wealth.  Of course if you believe you can create wealth by simply borrowing money and passing it out as corporate welfare, this point will be lost on you.

A society cannot get prosperous by simply passing money around, more and more furiously..  Actual goods and services must be produced.  And that is being impeded by an explosion of regulation on both production and on hiring of employees, and by one of the most hostile-to-businesses tax codes in the developed world.  Which demagogues are screaming needs to be made worse.

It is a fact that the three biggest economic booms of the last century, the 20s, the 60s and the 80s, all began when taxes were cut--furthermore what was cut the most were the top rates.  (John F. Kennedy understood this, why can't anyone in his party today?) It is important. however, to cut them intelligently; cut the taxes that impede the flow of investment capital to corporations, and cut the taxes on the rewards for making correct economic decision.  If you don't do this, or worse you don't do this AND you also remove the consequences of failure for making bad economic decisions (e.g., free federal insurance for savings deposits in the late 80s S&L debacle, or have a quasi-government entity buy up crappy mortgages the instant they are created), you will find yourself bailing out a lot of really crappily run companies.

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Permalink Reply by Tom Sarbeck on November 14, 2012 at 12:06am

SteveInCO:

"The real reason jobs are not being created is because businesses have no idea what the business environment is going to be like six months or a year down the road."

Nonsense! When consumers have money and spend it, business owners have all the information they need to make hiring decisions.

You appear to believe in the fiction that a trickle-down economy works.

It doesn't; it uses money taken from taxpayers to make rich folks richer. They hire when sales income increases; until then they put their money where they pay as few taxes as possible.

You use too many words to make a case you don't defend.

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