The Right Way to Do Stimulus

For the average person, the higher taxes do not mean lower after-tax income, because the stimulus will have the immediate effect of raising incomes. And no one is deceived.

Schiller

What's the time frame on immediate? I know for damn sure the change wouldn't be reflected in my take home pay for at least two review cycles (2 years) at a minimum. That's not immediate to me.

I don't think Obama was really in the position to cut taxes all over the place given the state of things he inherited. Nevertheless, he did cut taxes in a number of ways, which others have pointed out.

It may suck, but we needed to raise taxes. You don't get something for nothing. If you really want your taxes cut, it's time to rethink the military.

Monkeyboy wrote:I don't think Obama was really in the position to cut taxes all over the place given the state of things he inherited. Nevertheless, he did cut taxes in a number of ways, which others have pointed out.

It may suck, but we needed to raise taxes. You don't get something for nothing. If you really want your taxes cut, it's time to rethink the military.

Health is still the biggest expenditure. Not that I disagree with military cuts (and I really do mean cuts, not smaller increases).

Social Security and Federal Healthcare are FAR larger discretionary spending accounts; that being said, the military should be at pre-9/11 funding levels by 2015, perhaps slightly higher due to inflation.

Oh, I know those things are big expenses. I just see the military as much more unnecessarily expensive. I would pick health care and SS over the insane amounts the military spends. Compare our military to other countries and it's insane, imho. We don't even track large amounts of money that the military uses.

pac, did you listen to this?

http://www.thisamericanlife.org/radio-a ... efits#play


wanted to know your thoughts.

TenuredVulture wrote:It's interesting that Obama doesn't get tax cutting credit for the temporary stimulus programs like the rebate on sales tax for new car purchases and the homebuying tax credit, yet eliminating similar but more longstanding deductions (like say the mortgage interest tax deduction) would be considered a tax increase. The reality is that from an economic perspective it's all equivalent to government spending.

There are no such things as "temporary tax increases," whereas "temporary tax cuts" are often passed. Short-term breaks like the homebuying credit and cash for clunkers are not really tax cuts, but short-term injections, so there is minimal credit bestowed (and critics are strained to assert the expiration of such programs would be defined an actual tax increase). Where the line is blurred is whether the expiration of medium term tax cuts (eg. Bush) should be deemed a tax increase, since it depends on the frame of reference, and how the permanency of the policy is perceived. On the one hand, there was an expiration date on the cuts. On the other hand, it was crafted as neither a stimulus plan nor a short-term policy; people adjusted their expectations to the new tax.

That said, the mortgage interest tax break is permanent. Eliminating this break would increase taxes on homeowners, so I would say it would be fair to call it a tax increase on homeowners, even when in reality it is simply an end to the favored-status that mortgage-owners have.

CalvinBall wrote:pac, did you listen to this?

http://www.thisamericanlife.org/radio-a ... efits#play

wanted to know your thoughts.

Calvin, listening to it now but it's a long audio piece, but what did they say were some of the causes?

Turns out, two private sector groups have really contributed to the growing disability roles. One is a group of people you'd probably expect, the other is a shock.

BTW, great title: "Trends with Benefits."

lawyers and states and agencies that help get people on disability. basically the state pays these agencies per person they get on disability bc its a federal program unlike welfare. saves the state money.

kruker wrote:The Right Way to Do Stimulus

For the average person, the higher taxes do not mean lower after-tax income, because the stimulus will have the immediate effect of raising incomes. And no one is deceived.

Schiller

What's the time frame on immediate? I know for damn sure the change wouldn't be reflected in my take home pay for at least two review cycles (2 years) at a minimum. That's not immediate to me.

This only makes sense if your economic background tells you that saving and investing does not produce long-term benefits for society. By raising taxes and raising government spending, people wouldn't do the evil thing in a recession: save and invest. This becomes the stimulus, forcing aggregate spending to rise by letting people keep less of their take home pay, then having the government spend it for the greater good. You won't get more income, but whoever the government employs does. And insofar as those government employees keep spending money, you'll eventually be better off. Allegedly. Aggregate income is raised immediately, in theory. Ignored: Waste, misallocation of resources, long-term benefits of investment, etc.

CalvinBall wrote:lawyers and states and agencies that help get people on disability. basically the state pays these agencies per person they get on disability bc its a federal program unlike welfare. saves the state money.

And doctors feeling bad for the undereducated people in their county by stretching the definition of "physically unemployable."

Werthless wrote:

CalvinBall wrote:lawyers and states and agencies that help get people on disability. basically the state pays these agencies per person they get on disability bc its a federal program unlike welfare. saves the state money.

And doctors feeling bad for the undereducated people in their county by stretching the definition of "physically unemployable."

seemed to be more just that one guy. the second half gets more at the causes.

Werthless wrote:

dajafi wrote:

allentown wrote:

Werthless wrote:

pacino wrote:Obama keeps talking about the deficit and debt. After a while, we should gather that what you are saying you are about is what you are about. He's not for 'expanded spending'. If he was, we'd have seen it somewhere along the line. The stimulus was 40% tax cuts for chrissakes.

Were you around for the debate surrounding the American Recovery and Reinvestment Act, the American Jobs Act, fiscal cliff negotiations, etc?

(That you view the stimulus as evidence of Obama's committment to spending restraint is just beautiful.)

Are you just playing ignorant or are you really incapable of seeing the distinction between a short-term stimulus spend in the face of a near depression and new long-term spending programs or even huge medium-term spending programs during times of reasonably low unemployment? I'll guess you are just being partisan. To refresh, spending went up drastically under Bush, including a new prescription drug entitlement. If Republicans/conservatives are so damned concerned that ballooning entitlements are destroying our nation, then why did they use their time in control to give us a big new entitlement? Bush's two wars were a huge decade-long increase in spending. Govenrment employees grew during the Bush administration. Despite the near-depression, government employees have shrunk under Obama and government spending has grown at a small rate. The deficit has declined at the fastest rate in recent memory.

Werthless is more than capable of defending himself, but I'll point out that he's generally as or more critical of Bush's spending than Obama's.

What's interesting to me is whether the Republicans, when they get back in, will be demonstrably more fiscally responsible than they were under GWB. To be sure, that's the lowest possible bar. But the only Republican president in the last thirty years, arguably much longer, who wasn't a budget-busting spendthrift was Bush 41. And he's not exactly a role model for Republicans in terms of policy or politics. Raising taxes is anathema; exploding the debt and launching dumb, tragic wars is fine.

What he said.

Also, one problem with countercyclical fiscal policy is dialing back with the spending when the economy recovers. A second problem is whether or not it works. Here's one exampleof the ongoing debate.

Very nice, except you address virtually nothing. Spending under Obama has increased slowly. Discretionary spending is smallest % of GDP in memory. Government employees down. Deficit dropping rapidly. Deficit in large measure due to below average revenue as fraction of GDP. Major entitlement expansion was under Bush. Move to severe deficit was under Bush and Republicans.

Dajafi covered it. I hated the results of the Bush admin, and refused to vote for McCain in 2008 as protest of the spending and foreign policy. That doesn't change the reality of the Obama admin and the different approaches to recessions that the current republican house and the Obama admin have taken.

What am I ignoring? I may be misinterpreting your post.

Werthless wrote:Dajafi covered it. I hated the results of the Bush admin, and refused to vote for McCain in 2008 as protest of the spending and foreign policy. That doesn't change the reality of the Obama admin and the different approaches to recessions that the current republican house and the Obama admin have taken.

What am I ignoring? I may be misinterpreting your post.

Please shed further light on "the reality" of "the different approach to recessions" that "the current republican house" has taken. We're already pretty familiar with the evil schemes of the communist alien who has taken the presidency hostage.

dajafi wrote:What's interesting to me is whether the Republicans, when they get back in, will be demonstrably more fiscally responsible than they were under GWB. To be sure, that's the lowest possible bar. But the only Republican president in the last thirty years, arguably much longer, who wasn't a budget-busting spendthrift was Bush 41.

I have this dim perception - a memory, be it accurate or not - that Democrats and Republicans once stuck much closer to script. In other words, you'd never see a Democrat cutting welfare or signing NAFTA before Clinton, and you'd never see a Republican so hell-bent on wasteful spending as Bush the Younger (not to be confused with the magnificent Pliny the Younger).

If that was ever true, it changed under Clinton. His administration was savvy in a political sense, and decided to move with popular sentiment instead of clinging to leftwing dogma on NAFTA and welfare reform. I still get shivers (in a goodway) recalling Algore debating NAFTA on Larry King Jr with Ross Perot.

And I think the Bushies (or the Roves, or collective Bushbrains) decided to pander to soccer moms -- mush-head "independents" with NCLB, and then pander some more, to seniors, with the prescription plan. It was all about buying votes with my tax dollars. And it was a complete betrayal of fiscal responsibility. Clinton, at least, did the right thing in leaving dogma behind.

FWIW, I won't agree that Reagan was a "budget-busting spendthrift." Spending certainly rose dramatically under Reagan, but that was the bargain he had to strike with Democrats in order to carry out his agenda of tax cuts and defense buildup. Not good, but in that era the GDP outpaced spending growth. We'd all love to return to mere "Reagan deficits."

The GOP is now at a critical point. I do think most are ready to return to fiscal conservatism; but they will never again win a national election as long as they remain bigoted dinosaurs on social issues. Their key dilemma is that they risk losing a big chunk of the social-conservative base if they stop giving opposition lip service to abortion, gay marriage, immigration.

It seems to me that "fiscal conservative, social liberal" is a winning formula. And it's kind of up for grabs. Libertarians are in the fight, but they need a figurehead less kooky than Ron and Rand Paul.

Only the most politically astute would know much about state legislators outside of their home state, so you probably never heard of this guy, but California Assemblymember Henry T. Perea is a guy to watch. He's only 35, he's the chair of the Insurance Committee (Democrat, of course), and full of social skills. California is a mess, financially, and decades of domination by Democrats have dug a deep hole. He embraces the social issues of his party, but he's a fiscal conservative. I recently spent a couple of days with him in business meetings and was fascinated to watch him work the room with Republicans, fellow Dems, and the very ambitious elected insurance commissioner.

Can fiscal conservatives gather momentum in California? Well, being an Hispanic Democrat gives him a chance.



http://www.asmdc.org/members/a31/

there was popular sentiment FOR NAFTA?

so, Menendez did nothing in the Dominican Republic. just a FYI for anyone who didn't see anything after the initial accusations.

drsmooth wrote:

Werthless wrote:Dajafi covered it. I hated the results of the Bush admin, and refused to vote for McCain in 2008 as protest of the spending and foreign policy. That doesn't change the reality of the Obama admin and the different approaches to recessions that the current republican house and the Obama admin have taken.

What am I ignoring? I may be misinterpreting your post.

Please shed further light on "the reality" of "the different approach to recessions" that "the current republican house" has taken. We're already pretty familiar with the evil schemes of the communist alien who has taken the presidency hostage.

You don't think the Republicans house disagrees with the Obama administration on the economy??

pacino wrote:so, Menendez did nothing in the Dominican Republic. just a FYI for anyone who didn't see anything after the initial accusations.

This is totally false. just an FYI for anyone who gets their political news from pacino summaries on BSG.