Bye, Bye Tax Cut

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Ornery

Lifer
Oct 9, 1999
20,022
17
81
"Last I looked, the Democrats were proposing that tax cuts be scaled back and that the money be used to pay down debt." - Link?

Would you rather see GW's full cut or see the money SPENT?

 

jjm

Golden Member
Oct 9, 1999
1,505
0
0
Ornery - I think I stated pretty clearly that I'd like to see surpluses used to pay down debt. The best outcome would be for a few targeted tax cuts to be passed in the same bill that requires the remainder of the surplus be used to retire debt.

Quote straight from the DNC Platform:

"Democrats believe we should pay down the debt every year until we can give our children the independence, self-sufficiency, and prosperity that will come from an America that is debt-free."

Link: DNC Platform.

Whether you care to believe this or not is a different question. I could say the same thing about the stated Republican positions too. The FACT is that an official Democratic position is to use surpluses to pay down debt. Just like Jr, they also want to spend some of it on certain programs too, such as prescription drugs and education.
 

etech

Lifer
Oct 9, 1999
10,597
0
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georgebush.com

"Governor Bush will also pay down a record amount of the debt held by the public, which will fall to the lowest level since the Great Depression (as a share of the economy). "

Next issue.

 

jjm

Golden Member
Oct 9, 1999
1,505
0
0
etech - The crux of the argument, as you well should know, is that Jr's plan is less likely to succeed because he wants larger tax cuts now, leaving less money available for immediate debt reduction. The Democrats' position is fundamentally different because it contemplates the largest tax cuts to come after the debt is eliminated. Dubaya wants to start with larger tax cuts now and hope the surpluses continue to be able to retire the debt over a longer time frame. That does not strike me as prudent money management.

Edit: I still ask you the same question, etech, what is the probability of Jr getting his full plan passed and how will he accomplish it?
 

Ornery

Lifer
Oct 9, 1999
20,022
17
81
Yeah etech, get a clue! It would be far more prudent to leave a good chunk of it to Washington Democrats to spend. They'll do the right thing...
 

jjm

Golden Member
Oct 9, 1999
1,505
0
0
Ornery - I thought that Congress and the Executive Branch were controlled by Republicans these days. They would not spend it, would they? Sounds like the perfect opportunity to erase a huge portion of the debt.

I notice that you pressed me to answer your question, and I did - with a link and facts.

Where is your answer to the basic question I asked: If you don't believe my projected outcome, how will the full extent of GWB's tax proposal pass? How will he surmount each of the impediments I outlined?
 

etech

Lifer
Oct 9, 1999
10,597
0
0
jjm, Once again, Jr.(gore) did not win the election. If you persist in getting basic facts wrong, why should anyone attempt to discuss anything with you?
 

Michael

Elite member
Nov 19, 1999
5,435
234
106
jjm - We filed an S-4, so the notes ($150M) are "registered". I'll PM you the Edgar link.

Getting the tax cut passed is a tactical action. He's already working the front end - 1) the promise and 2) the talk about the weak economy. Greenspan is helping him by cutting the rate now. There's about a 6 month delay between a rate cut and capex recovery (a little faster in the mortgage/housing market, I guess about 3 months). I expect fairly bad news in the next quarter or two, lots of factory lay-offs and other "recession" news. Perfect environment for a "pump priming" and the Democrats have the unions to care for and they'll be screaming when the OT vanishes and the lay-offs start.

The Republicans' will shine a huge, bright spotlight on the Democrats who try and block the tax cut. Some will get passed for sure and the rate cut benefit will appear right when the tax cut happens. It'll appear to the man on the street that the tax cuts are what caused the "recession" to end. That'll cause even more pressure for even more cuts.

Bush looks good no matter what. He'll get some, very popular cuts for sure. If the rest are blocked, the Republicans will crucify the Democrats on this in the '02 elections. More Democrat seats are at risk the next election. The Republicans now realize that the public needs more convincing. Times were too good the last election and they didn't make the case for the cuts well enough.

Bush will be able to show that he's a man of his word. Just like his cabinet picks so far.

Michael

edit - again, "W", not Jr. Raygun is fine, it just identified your point of view better, but Jr.'s just wrong.
 

jjm

Golden Member
Oct 9, 1999
1,505
0
0
etech - If you are so personally devoted to GWB, don't bother coming in here. I think he lacks the intelligence to govern properly. You may not agree, but that's your choice. Okay by me.

I realize that you are just using this position as an excuse to avoid answering my questions. Take a tip from Michael. He offers a logical sequence that might occur.

Michael - Yours is the first post that takes the same set of facts and presents a logical alternate outcome. Nice job.

I won't repeat all the stuff I wrote, but I will point out that I still think the outcome you present is far less likley. And I especially contend that Greenspan's move this week was designed to cut off Jr's plan at the knees. It will give Democrats adequate cover to fight without fear of retribution. For whatever they are worth, the polls still show that the majority of Americans agree with some targeted cuts, but would prefer to see faster debt reduction ahead of large tax cuts.

Edit: As I said before, I consider GWB to be inferior to his father in every way. Hence, the term "Jr." I am not using any derisive names. I think I am using a term that summarizes my point succintly without being nasty. Should I use the term "dolt" instead?

The elder Bush was a man I respected. He was a good manager, attentive to detail, who did a brilliant job with the Gulf conflict. In many ways, I admire him and his accomplishments more than I do Raygun. He was also a statesman in every good sense of that word. Jr has an opportunity to earn that respect too, but from what I have seen thus far, it looks like a long shot.
 

Ornery

Lifer
Oct 9, 1999
20,022
17
81
Last I looked, the Democrats were proposing that tax cuts be scaled back and that the money be used to pay down debt.
  • "Democrats believe we should pay down the debt every year until we can give our children the independence, self-sufficiency, and prosperity that will come from an America that is debt-free."
In other words, nothing has changed since that last time you looked, which was apparently during the campaign. Bottom line is, they haven't changed their position.

The tax break is due to the people that paid the tax in the first place. That's the goal. That's the promise. Anybody that stands in the way of that deserves to get partisanship. It's the right thing to do. Pay down the debt by lopping away at our bloated government agencies. There's a compromise for ya. GW gets the full tax cut and the Dems get to pay the debt down quicker. We all get a leaner, more efficient government bureaucracy in the bargain. What could be more fair?
 

Michael

Elite member
Nov 19, 1999
5,435
234
106
jjm - You're making a big mistake about Greenspan. Clinton kept him on, but he is a Republican. It is much, much more likely that he's helping Bush out.

You also do not seem to understand that only a very small segment of the population would clue into your arguments. The cuts will not come from economic theory, it will be tactical politics.

The "targeted" cuts will be very popular, and they will be Republican cuts. If Bush can't get them all right away, he'll get the rest after '02.

Michael
 

etech

Lifer
Oct 9, 1999
10,597
0
0
jjm, I am not "personally devoted" to Pres. Elect Bush. But if you are so blinded by your partinship to the democrats that you can not even get the man's name correct and persist in your funny little name-calling, I ask again, why should anyone try to correct you in your other misconceptions. You have shown that you are not open to correction.
 

mazdarx7

Junior Member
Dec 18, 2000
21
0
0
Reading some of these posts, show that there is a lot of knowledge in the acronyms and technical end of the economical/financial talk. There was even one post that stated a guy who felt he was raising two families, his own and the one he's never met somewhere else. Some time and now is as good as any, this perspective of separation of the population has to stop and the harsh reality that we all are so highly dependent upon the successes of one another have to be recognized. There has to be some level of parity among the masses for society where there is a good degree of success to have a high standard of living for all it's citizens. I'm sure that the other family and even myself at times, walk into one of these stores and realizes that with every purchase we make, we happen to be raising not only our own families, but the ones we have never met. I'm a democrat and contrary to the republican sentiment, I don't espouse "communism". What I am saying, is that for any of us to be successful, our neighbor has to be successful. Our world offers a wealth of technology and advancement that each and every one of us should experience equally in our life times.

The voters who switched because of the tax cut, shame on you. If anything, over the past 8 years we should have learned that each of us has to put all of ourseleves and pitch in together to make something work. Reagan and Bush admins eventually brought us to change to Clinton. I started my career in the Reagan Administration, this followed by brief unstable work periods where I kept moving from company to company that were sinking ships and eventually there were no more sinking ships to get onto. I went back to school, played a role politically by getting rid of Daddy Bush and now I've enjoyed a stable job with the same company thru the Clinton Administrations. I don't mind paying taxes, as long as I have the job to pay them. Under the Republicans, we'll go back into this tailspin of despair that will eventually paralyze us economically. That's what the Tax cut mentality does. It doesn't "grow" anything, it's a policy of "strangling off" funding and the money supply to our government. Honestly, when you have no money in the bank, do you go do things ?, the same holds true with our government and these surpluses. These surpluses have had positive effects on our government and economy. I agree that there will be abuses to certain publicly funded programs, but really, by and large, those receiving aren't getting the greatest life anyway. I wouldn't trade a welfare life for the working life I have for anything and I don't think anyone else here would either. There is no quick fix for getting rich if you work everyday. Sorry, it's the same grind, where sacrifices have to be made. Remember your economics courses. Those models don't change and neither do the principles/theories of competition, substitute goods, prices, supply and demand and so on.

So in short, enjoy the prosperity you have and stop worrying about whether someone else has a penny more than you. I have a K6 III+ 600 that I built and I certainly don't hold a grudge against those shoppers @ CompUSA walking out with Athlons. P3's and Durons this holiday season, when I was building this one, even though there are those that feel I am justified for jealousy. Share the planet, because the day you go out of this life, you'll leave with as much as anyone else anyway. Those that you feel obligated to set up to be more comfortable will have to deal with their problems sooner or later anyways.
 

jjm

Golden Member
Oct 9, 1999
1,505
0
0
etech - I'm not going to change my mind. And I don't think you will either. I offered my view and asked others to look at the same set of circumstances and defend alternative outcomes. I didn't ask anyone to try to change my mind or yours. I don't care if you like or dislike Democrats, Clinton, me or anyone else. That makes no difference to any of these predictions. The sport is in finding a logical sequence that will get to a conclusion. If you feel personally offended by that, just drop out. All you seem to fixate on is whether or not I like the guy. Who cares?
 

etech

Lifer
Oct 9, 1999
10,597
0
0
jjm, you are having trouble with basic facts, that is why I do not see any reason to debate the larger issues with you. If you cannot even get a man's name correct, why would I expect any of your other scenarios to have any validity?

For your reading pleasure, not too many others seem to agree with your scenarios either.

Kudlow

dismal scientists
 

jjm

Golden Member
Oct 9, 1999
1,505
0
0
Michael - I sent you a PM about your bond.

I agree that most of the public will not look at the details. And that is the shame, isn't it? They will swallow sound bites and accept them at face value. For example, "It's your money" is a catchy sound bite, but it says nothing about the economic justification for tax cuts. It simply whips up the emotional self-righteousness within people. As you suggest, that's politics, and it works.

But I still think that if Greenspan was really going to support Jr, he had the opportunity over the past two weeks to publicly change his prior position. Even after Jr appealed to him directly, Greenspan said nothing. Greenspan was the first person in DC that GWB paid a formal visit. The sybolism is pretty important.

After the meeting, one of GWB's first comments to the press was something along the lines of "the Fed Chairman and I have our differences." (Not a direct quote.) That doesn't sound like Greenspan was lining up behind Dubaya, does it?

Anyway, I gotta go. I'll try to check back on this thread again on Monday.
 

jjm

Golden Member
Oct 9, 1999
1,505
0
0
etech - I just saw your post as I was logging out. You do realize that the second article you cited almost completely supports the position I am taking, right? The writer is even encouraging GWB to compromise now to push some targeted tax cuts through sooner rather than later. Thanks!

etech's link

Sorry to run. I will try to get back to you later.
 

etech

Lifer
Oct 9, 1999
10,597
0
0
Yes it was a nice article.

Today we have a $237 billion budget surplus, with a recent $800 billion increase in the 10-year surplus projections by the Clinton Administration. It becomes increasingly difficult to argue in this context that tax cuts are nutty with a rapidly slowing economy. Hopefully, we get somewhat smaller tax cuts more weighted to the near term and the middle class. But right now, the onus is on Mr. Greenspan to show politicians and the public why tax cuts are unneeded and that he is still alert at the helm.
 

glenn1

Lifer
Sep 6, 2000
25,383
1,013
126
jjm, while i disagree with both the premise and outcome of what you propose, i do salute you for being willing to identify yourself and your beliefs clearly, while you are outlining your ideas. Kudos to you.

One thing I am curious about? is your intent to discuss the likelihood of certain tax and fiscal policies being implemented, or the suitability and desirability of various competing ideas on the policies? I can and will address the first issue in this post, if you wish to discuss the second, I?d be more than happy to engage you in a discussion on that particular topic. But on the question you asked, I would tend to agree with you, that Mr. Bush seems to be facing rather long odds in getting his tax plans implemented.

mazdarx7 : "The voters who switched because of the tax cut, shame on you. If anything, over the past 8 years we should have learned that each of us has to put all of ourseleves and pitch in together to make something work."

HOW DARE YOU say such a thing. :| I and every other properly registered voter have every right to vote for whomever we please, for whatever reason we so choose. Shame on you for even daring question any voters' intentions, or even suggesting that the reasons for any persons' vote should be EVER called into question. Stating your disagreements with the positions of another voter is acceptable, saying they should be ashamed of them is another thing entirely.
 

glenn1

Lifer
Sep 6, 2000
25,383
1,013
126
jjm... on another note, if you would care to continue the discussion on the second point i raised, on the propriety of tax and fiscal policy vice monetary policy, i'll welcome that discussion with you. I think it would be quite a good and stimulating exchange.

Just so that my background and biases are known, i have a finance background as well, with political views generally conservative, with a strong streak of Libertarian leanings as well.

Okay, just let me know if you're up for that particular topic. Off to brush some readings from Friedrick Hayek, to prepare for the discussion
 

Orbius

Golden Member
Oct 13, 1999
1,037
0
0
How in this economic climate can anyone possibly justify the tax cuts that Bush is proposing? Typical Republican BS, come out with soundbites about giving back, and the people deserve it and stimulating the economy. When in reality these tax cuts benefit the wealthy and rich disproportianely. This may have been passed during the booming stock market of the mid 90's, but now it seems like typical Republican priviledge and disdain for the people who truly make this country work.
Trust me the Democrats will do whatever is necessary to stop these ludicrous tax-cuts. Why don't you people wake up to the reality of the details rather than biting on the soundbites, giving the rich tax cuts when tens if not hundreds of thousands of people are losing their jobs is akin to saying 'Let them eat cake'.
 

Michael

Elite member
Nov 19, 1999
5,435
234
106
In reference to "soundbites", it is just about impossible for everyone to be an expert on every single issue before the governnment. Education and experience wildly varies amoungst the voting public. Unless you want to limit voting based on passing some sort of screening exam, you are going to have to live with "soundbites".

Note, the arguments pro and con are reduced to easily understood soundbites, so it is not just one side that will be doing it.

Orbius - Tax cuts during a boom that is threatening to overheat even more is not sound policy. It is better to cut taxes during downturns.

mazdarx7 - I aslo started my career during Reagan's second term (even though I started in Canada). If anything, it was the not working together during Clinton's two terms that made the difference. Neither Democrat nor Republican key issues were based with the exception of welfare reform. As evidenced by Clinton's executive orders in the waining days of his Presidency, someitems were "passed" via regulation, and over regulation is the #1 complaint of businesses. I bet they would vote for regulation being scaled back over tax cuts.

The point about tax cuts for businesses was raised earlier. During periods of growth, businesses get a tax cut from two primary areas (already built into the system). They spend money on capex for expansion, and accelerated depreciation reduces taxes. Their stock price rises and employees cash in appreciated options which also gives them a tax break. With R&D credits and all the other targeted programs, I see little need to reduce the business tax rate at this time. This is especially true when you consider that businesses have the money and resources to maximize and benefits the tax code now gives them.

Michael

 

etech

Lifer
Oct 9, 1999
10,597
0
0
Oribus
Will Fed's Rescue of Stock Market Stick?

"After the Fed's move, a major tax cut such as Bush has promised offers the biggest potential benefit for the economy and stocks."

"A tax cut would bring more people into the labor force and make the after-tax returns on investment more attractive, says Kasriel."





 

Orbius

Golden Member
Oct 13, 1999
1,037
0
0
Uhmmm etech how does giving the rich back a ton of cash and middle class people a grand or so help the overall picture? The rich will shove it in the bank, the middle class will spend some of it, but what good is that if they get laid off as tens of thousands of people are currently experiencing.
If you're going to propose a tax cut fine, but don't masquerade it as some 'help the people' measure when its clear its designed to benefit the rich most.
 

etech

Lifer
Oct 9, 1999
10,597
0
0
Bush Aide Wants Fast Work From Congress on Tax Cut

Lindsey said the interest rate cut of last week would help the typical credit card borrower by about $2 a month, where Bush's tax cut for a family earning $40,000 would save $1,600 year, or $32 a week.

Bush tax page
Tax Relief for Families of Four
A family of four making $35,000 will receive a $1,500 tax cut, a 100 percent reduction.
A family of four making $50,000 will receive a $2,000 tax cut, a 50 percent reduction.
A family of four making $75,000 will receive a $2,500 tax cut, a 25 percent reduction.

Tax Relief for Single Parents
A single mother with one child making $22,000 will receive a $1,000 tax cut, a 100 percent reduction.
A single mother with two children making $32,000 will receive a $1,500 tax cut, a 95 percent reduction.

Show me where the rich are getting even a 25% tax cut that the lower income people are.
 
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