US Economic Stimulus

[akuma587]

mrstickball said:

akuma587 said:

Changing consumer culture is not the government's job.  Not to mention you are thinking way too highly of the American people if you think they will magically change their ways if you just throw money at them.   And if you are just concerned with cutting down debt, shouldn't the government just hold onto the money?

So if 'throwing money their way' won't change things, then why are we preparing to spend another $800 billion in a bailout?

The last thing we need is more tax cuts. Our government is running deeper and deeper into the red.  Sure, everybody likes tax cuts, but what about when you need to raise taxes?  That's not exactly something everybody wants to get behind. 

Of course no one likes raising taxes. Problem is, we already have brutal taxes as-is. If taxes are lowered, and need to be raised again, it'd be at least better to have the positive effect of lower taxes for as long as possible.

Supply side economics has run its course, and it ran things pretty poorly while it was in the driver's seat.  As soon as Reagan entered offices, deficits started to soar like nobody's business.  It took a Democrat to run a surplus.  Our corporations in the financial sector just single-handedly ran our economy into the ground.  Why should we be running to cut corporate tax rates again?  I guess if you want to give executives even higher bonuses that is a good strategy.

You assume 2 things:

1) The benefit of tax cuts is immediate. It does take time for the cuts to see effects.

2) Regan's budget issues rose and fell on the tax cuts. As mentioned, military spending increased strongly to force the USSR to crash.

Why should we cut our corporate tax rates? Probably because it'd encourage more businesses to be established in the US. Whine about bonuses all you want, but if there is more money to go around, there will be more competitiveness among businesses, as they have more money for R&D, benefits, and other things. You assume that when a company is profitable, it only goes to the CEOs. It does not. Here is a good link from House.gov concerning the effect Reagan's tax cut had on decreasing the tax burden on both lower and middle class families.

You know what the funniest thing is.  That people making over $200,000 voted more for Obama than they did for McCain!  And he ran on a campaign of raising their taxes!  Are you suggesting that we should give the rich something they didn't vote for?  That's anti-democratic!  I won't stand for it!

Those that made over $200,000 voted for Obama in the same skewing the rest of the country did. Also, if you didn't know, America is not a democracy. It's a federal republic ;)

 

 

1) As I already said, government spending has a higher multiplier effect than tax cuts do.  Its not just "throwing money", its spending money.  That money is spent one time and can be spent again.  1 + .5 + any further spending of that dollar or so = 1.5+.  Just giving people a tax cut does not spend that dollar automatically.  That dollar can either be saved or go directly to the economy, but it is hit or miss.  We will say something like 0 + .6 + any further spending of that dollar = .6+.  The more times a dollar is spent, the greater an effect it has on the economy.  Its not rocket science.

2) Brutal taxes?  Please.  Compare our tax rates to most other countries across the globe.

3) Reagan was facing a completely different economic issue.  He was facing stagflation.  Supply side economics is a great tool for stagflation.  We are flacing a liquidity trap (deflation and a lack of aggregate demand).  Spending is the best tool to get your way out of a liquidity trap.  You are assuming that tax cuts solve any economic problem equally as effectively.  That is quite an assumption.  And if tax cuts are supposed to have these long term effects, why did the Bush tax cuts help so little?  Sure our economy did OK the last several years, but it was far from spectacular.

4) I didn't say we lived in a democracy, but something can still be anti-democratic in a republic.  You are assuming that rich people want tax cuts.  A lot of rich people and executives of large corporations have gone on record saying that they think the U.S. tax system is totally out of wack and that it is laughable that they pay so little.  Obviously they aren't that strongly opposed to raising taxes or they wouldn't have voted for Obama.  Give them what they asked for.

Tax cuts are not the solution to every economic problem, which is why I find it so ludicrous that everytime there is an economic problem, the first thing out of most Republicans mouth is "tax cut."  Its a Pavlovian response that shows a severe misunderstanding of how the economy works, and a larger hypocrisy about their attitude towards fiscal responsibility in general. 

Its obscene that Republicans are now claiming to be fiscally responsible now when they have been about as fiscally irresponsible as a party has ever been in history in the past few years.  Its like getting sent to time out because you acted so badly and then telling everyone that they are being foolish for doing what you JUST did to get put in timeout.  Its hypocrisy at its finest.  Its very easy to be fiscally responsible when you aren't in charge of where the money is spent.  And as Republicans have proved for the past few years when they held control of Capitol Hill that it is pretty easy to be fiscally irresponsible even if you "stand" for "fiscal responsibility."