Bush Tax Cuts: Kill Supply Side Now?

The purpose of "supply-side economics" (or trickle-down economics, laissez-faire economics, social Darwinism, the Divine Right of Kings, or whatever they are calling it this week) is take money from the poor and middle class and give it to the rich. Everything else you may have been told about it is just brightly colored packaging wrapped around a turd.
 
Random said:
The purpose of "supply-side economics" (or trickle-down economics, laissez-faire economics, social Darwinism, the Divine Right of Kings, or whatever they are calling it this week) is take money from the poor and middle class and give it to the rich. Everything else you may have been told about it is just brightly colored packaging wrapped around a turd.
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No, no, no. It's: Take money that we ALREADY took from the poor and give it BACK to the rich (from whom it must have come originally anyway).
 
shecky said:
Interesting that cutting taxes hasn't led to smaller government, but rather some huge increases. Rauch makes the obvious (at least to me) observation that government won't get smaller unless we feel the sting of it's true cost.

Whaddayall think?
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A Bush veto here or there on the budget would have been nice, perhaps he hasn't been told about the veto yet?
 
I'm not sure why the press and most everyone else is missing the obvious here. If you borrow billions a week and pump it into the economy, even via the military industrial complex, it is bound to boost or shore up the economy. Whatever extra disposable income you give rich people that they in turn invest in the stock market or other savings or capitol markets is not what is affecting the economy to the same extent.

We know government spending is off the scale. We know the tax cuts are a bad idea. But who is noticing the misdirection? There's a constant administration focus of claiming tax cuts boosted the economy? Anyone care to lead this elephant out of the room?
 
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Two good questions.

Which is growing faster in terms of percentage?
 
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Rob Lister said:
I forgot to look this week/month/year.

How's the economy?
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Well, from today's Wall Street Journal, whose business it is to know:
If ever there was a market test of economic policy, the last three years have been it. The stock market has recovered from its implosion in Bill Clinton's last year in office, unemployment is down to 4.7%, and growth has averaged 3.9% in the three years since those tax cuts passed -- well above the post World War II average and more than twice the growth rate in Euroland.
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And:
Between May 2003 and May 2006, asset values in the U.S. have also risen by $13 trillion thanks to the stock and housing market rallies. Just the growth in asset values since 2003 exceeds the entire net worth of all but a handful of nations. Democrats who want the 15% rate on dividends and capital gains to go back up to 39.6% and 20% are saying that a big tax increase won't affect any of this.


As for whether the tax cuts favor "the rich," this deserves longer treatment on another day. For now, suffice it to say that one reason tax revenues are rushing into the Treasury at a record pace is because the rich are paying them. The tax payments of the wealthiest 3% of Americans increased at twice the rate of the tax payments by everyone else from 2001-2004. And those richest 3% now pay nearly as much income taxes as the other 97% combined. While the incomes of the rich have risen, the lower 2003 tax rates are still soaking them for the government's benefit.
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Over the past 40 years, the U.S. has had three great experiments in tax-cutting, and each one has worked even better than advertised: The Kennedy tax cuts of the 1960s, the Reagan cuts of 1981, and now the Bush tax cuts of 2003. The political tragedy is that the first of those two were bipartisan, while the Bush tax cuts have had little Democratic support. Only 15 House Democrats supported their extension this week; there were only three in the Senate.
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You can have your cake and eat it too!

So, the "Starve the beast" idea is officially dead?
 
shecky said:
You can have your cake and eat it too!

So, the "Starve the beast" idea is officially dead?
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Well, since neither the Repubs nor the Dems seem to have the stomach for it, I don't see how it gets revived.

When last seen, the budget surplus (a result of the "peace dividend") was going to be used to "Save Social Security First," in the memorable words of B. Clinton and A. Gore.

Well, the peace dividend is gone, and Social Security is looking shakier than ever, and Congress seems to be more interested in finding out whether Rafael Palmiero and Sammy Sosa and Mark McGuire used steroids than worrying about Social Security.

So, yeah, "starve the beast" is dead.

But that's okay, 'cuz I can retire and get my government pension any time I want now and I don't have to worry about Social Security. Hope y'all are putting the maximum possible contribution into your 401(k)'s and IRA's.
 
shecky said:
Who is the party of big government again?
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I thought I made that clear. They both are. At least big spending.

But one of them has figured out that lower tax rates actually leads to higher government revenues and an improved economy.
 
BPSCG said:
I thought I made that clear. They both are. At least big spending.

But one of them has figured out that lower tax rates actually leads to higher government revenues and an improved economy.
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So if we reduce the tax rate to 0%, government revenues would skyrocket right? Hate to beat this dead horse, but every time I hear someone mindlessly bleating out this old "tax cuts increase revenue" tripe, it sounds like nails on a blackboard. Laffer's twenty year old drunken scrawl on a cocktail napkin show that cutting taxes can increase revenue, not that they will. Cut taxes past a certain point, and the increased activity in the economy will not be enough to counter the reduced rate.
 
skeptigirl said:
I'm not sure why the press and most everyone else is missing the obvious here. If you borrow billions a week and pump it into the economy, even via the military industrial complex, it is bound to boost or shore up the economy. Whatever extra disposable income you give rich people that they in turn invest in the stock market or other savings or capitol markets is not what is affecting the economy to the same extent.
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What has actually been proven is that if you give people who already have more money than they need even more money than they need, they apparently do very selfish things with that money they didn't really need, and although on a macro scale the "economy" may be looking good, for most of us our salaries are getting smaller relative to the economy. In short, tax cuts for the rich, benefit only the rich.
 
skeptigirl said:
I'm not sure why the press and most everyone else is missing the obvious here. If you borrow billions a week and pump it into the economy, even via the military industrial complex, it is bound to boost or shore up the economy. Whatever extra disposable income you give rich people that they in turn invest in the stock market or other savings or capitol markets is not what is affecting the economy to the same extent.

We know government spending is off the scale. We know the tax cuts are a bad idea. But who is noticing the misdirection? There's a constant administration focus of claiming tax cuts boosted the economy? Anyone care to lead this elephant out of the room?
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So, the cure for government spending is to give the government more money? You can't get the elephant out of the door until you cut back his feed and he loses some weight.
 
peptoabysmal said:
So, the cure for government spending is to give the government more money? You can't get the elephant out of the door until you cut back his feed and he loses some weight.
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RTFA

You may indeed need to raise taxes to cut government spending. We are less motivated to cut government spending when we get all the services at discount prices, thanks to deficit spending. When we feel the pain of the true cost of government, motivation to cut the cost increases.

To extend your metaphor, we've never cut back the feed. We just buy it on credit.
 
SlippyToad said:
What has actually been proven is that if you give people who already have more money than they need even more money than they need, they apparently do very selfish things with that money they didn't really need, and although on a macro scale the "economy" may be looking good, for most of us our salaries are getting smaller relative to the economy. In short, tax cuts for the rich, benefit only the rich.
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People doing selfish things is good for the economy. Rich and poor. Tax cuts for the rich don't only benfit the rich, but also the vendors of the stuff they buy, and the people who make that stuff.
 
BPSCG said:
I thought I made that clear. They both are. At least big spending.

But one of them has figured out that lower tax rates actually leads to higher government revenues and an improved economy.
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You are one of those fooled people! Read my post above. Notice the absence in the Wall St Jnl quote of any mention that it's the billions going into the economy via war spending that is affecting the economy?

And you buy the Republican talking point that "they both" are big spenders. No, the Democrats may favor some social safety nets while Republicans may favor less business regulation, but look at the facts, not the talking points propaganda.

Eight years of Clinton got us less spending and a healthier economy. That is based on numbers and facts.

Reagan and both the Bushes have been huge military spenders. There were huge deficits under all three. Maybe Bush Senior had more reason but his son has more than made up for the elder's reasonableness by junior's mind boggling incompetence in managing the spending.

The Republicans throw trillions at the military industrial complex and gripe that too many food stamps are being spent on soda and potato chips. Military spending is purposefully left out of the "big spender" definition. And those talking points, say it over and over and over until reality is defined by the talking point and not the facts.

The current economy is not so rosy when you realize it is built on a house of loans.

Oh ya, and the tax cuts...just another talking point. Tax and spend liberal sound familiar? The Republicans don't have to spread the cuts around. All they have to do is repeat the phrase over and over and over. Then let State taxes take up the slack in domestic spending.
 
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shecky said:
People doing selfish things is good for the economy. Rich and poor. Tax cuts for the rich don't only benfit the rich, but also the vendors of the stuff they buy, and the people who make that stuff.
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And just what do you suppose my neighbor Bill Gates is spending his tax cut on?
 
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