Board index › Topical Discussion › Politics, Philosophy, and Religion

Borrowing 40 cents of every dollar

Page 2 of 3 [ 44 posts ]  Go to page Previous  1, 2, 3  Next

Previous topic | Next topic

Inuyasha
Veteran
Veteran

User avatar

Joined: 12 Jan 2009
Age: 43
Gender: Male
Posts: 9,745

04 Oct 2012, 6:25 pm

TM wrote:
Inuyasha wrote:
TM wrote:
Inuyasha wrote:
TM wrote:
Inuyasha wrote:
simon_says wrote:
Obama didnt create the debt. We've been creating it for 30 years. When we finally fought our way to surplus Bush launched two wars backed with two tax cuts, passed an unfunded Medicare Part D that will cost $700 billion by 2018 and then oversaw the 2008 collapse, which crushed tax revenues.

Americans will just have to learn that they need to pay for things. It's a lesson all kids need to learn eventually.


Actually at least $6 trillion dollars of the national debt is Obama's, it isn't from the last 30 years...


Well, about 3.2 trillion happened under Obama, but you have to take into account that its very hard to allocate debt to a specific administration in the manner frequently done by pundits and partisan-hacks.

This is due to the budget running into the first period of a new President, in addition to certain programs doing so also. For instance the Bush tax cuts and Medicare part D are Bush programs that are contributing to the deficit under Obama.


Actually, it is about $6 trillion, Obama acquired more debt in 3.5 years than Bush did in 8 years.


I'd love to see those numbers, because the ones I have says it went from about 12 to 15.


http://www.cbsnews.com/8301-503544_162- ... nder-bush/

We were under $11 Trillion Dollars in debt when Bush left office...

We are actually over $16 Trillion in debt now.

The thing you have to bear in mind is that Porkulous was an Obama spending venture.


Yeah, but you have to allocate the Bush tax cuts, Medicare D, the whole cost of both Iraq and Afghanistan plus the first year of Obama's presidency to Bush in order for it to make economic sense.

Since those are Bush policies that continued (and still continue) to add debt to the country.


Actually, it does account for all of that, and to be quite blunt if it hadn't accounted for the Bush tax cuts the deficit would be even larger.

After the Bush Tax Cuts we saw an increase in revenue, I know you may think that's impossible however that's due to a faulty assumption on the part of liberals. The faulty assumption is to assume the size of the economy is a constant, which it is not, the economy can grow and shrink and thus a tax cut that spurs economic growth can cause government to have an increase in revenue.



TM
Veteran
Veteran

User avatar

Joined: 3 Feb 2012
Age: 43
Gender: Male
Posts: 2,122

04 Oct 2012, 6:32 pm

Inuyasha wrote:
Actually, it does account for all of that, and to be quite blunt if it hadn't accounted for the Bush tax cuts the deficit would be even larger.

After the Bush Tax Cuts we saw an increase in revenue, I know you may think that's impossible however that's due to a faulty assumption on the part of liberals. The faulty assumption is to assume the size of the economy is a constant, which it is not, the economy can grow and shrink and thus a tax cut that spurs economic growth can cause government to have an increase in revenue.


Actually, the fact that tax cuts can result in revenue increases is largely accepted in the field of economics as it leads to more free capital, which is then invested, which creates jobs, which then create more income taxes, plus it generates dividends which are subject to taxes, capital gains taxes and so on.

The problem with this discussion is the non-constant size of the economy, because it becomes very hard to argue which stimulus worked and which did not. It's one of the reasons I prefer to stay in micro-economics and stick to behavioral tools for the macro bit.



Inuyasha
Veteran
Veteran

User avatar

Joined: 12 Jan 2009
Age: 43
Gender: Male
Posts: 9,745

04 Oct 2012, 6:35 pm

TM wrote:
Inuyasha wrote:
Actually, it does account for all of that, and to be quite blunt if it hadn't accounted for the Bush tax cuts the deficit would be even larger.

After the Bush Tax Cuts we saw an increase in revenue, I know you may think that's impossible however that's due to a faulty assumption on the part of liberals. The faulty assumption is to assume the size of the economy is a constant, which it is not, the economy can grow and shrink and thus a tax cut that spurs economic growth can cause government to have an increase in revenue.


Actually, the fact that tax cuts can result in revenue increases is largely accepted in the field of economics as it leads to more free capital, which is then invested, which creates jobs, which then create more income taxes, plus it generates dividends which are subject to taxes, capital gains taxes and so on.

The problem with this discussion is the non-constant size of the economy, because it becomes very hard to argue which stimulus worked and which did not. It's one of the reasons I prefer to stay in micro-economics and stick to behavioral tools for the macro bit.


So you admit then that the Bush tax cuts probably didn't add to the deficit.



TM
Veteran
Veteran

User avatar

Joined: 3 Feb 2012
Age: 43
Gender: Male
Posts: 2,122

04 Oct 2012, 6:48 pm

Inuyasha wrote:
TM wrote:
Inuyasha wrote:
Actually, it does account for all of that, and to be quite blunt if it hadn't accounted for the Bush tax cuts the deficit would be even larger.

After the Bush Tax Cuts we saw an increase in revenue, I know you may think that's impossible however that's due to a faulty assumption on the part of liberals. The faulty assumption is to assume the size of the economy is a constant, which it is not, the economy can grow and shrink and thus a tax cut that spurs economic growth can cause government to have an increase in revenue.


Actually, the fact that tax cuts can result in revenue increases is largely accepted in the field of economics as it leads to more free capital, which is then invested, which creates jobs, which then create more income taxes, plus it generates dividends which are subject to taxes, capital gains taxes and so on.

The problem with this discussion is the non-constant size of the economy, because it becomes very hard to argue which stimulus worked and which did not. It's one of the reasons I prefer to stay in micro-economics and stick to behavioral tools for the macro bit.


So you admit then that the Bush tax cuts probably didn't add to the deficit.


Not at all, I merely agree that tax cuts can spur economic growth. I elect to let greater minds than mine debate whether or not the Bush tax cuts pay for themselves. However, while there was a revenue increase from 2004 - 2008, there has been a drop thereafter. and the taxcuts paying for themselves have been disputed by amongst others the congressional budget office, CBPP and several others.



xenon13
Veteran
Veteran

User avatar

Joined: 13 Dec 2008
Age: 50
Gender: Male
Posts: 3,638

04 Oct 2012, 7:38 pm

Money is created out of thin air so this is meaningless.



enrico_dandolo
Veteran
Veteran

User avatar

Joined: 20 Nov 2011
Age: 36
Gender: Female
Posts: 866

04 Oct 2012, 9:31 pm

xenon13 wrote:
Money is created out of thin air so this is meaningless.

Fine. You can give yours to me, it's really no problem.



Inuyasha
Veteran
Veteran

User avatar

Joined: 12 Jan 2009
Age: 43
Gender: Male
Posts: 9,745

04 Oct 2012, 10:54 pm

TM wrote:
Inuyasha wrote:
TM wrote:
Inuyasha wrote:
Actually, it does account for all of that, and to be quite blunt if it hadn't accounted for the Bush tax cuts the deficit would be even larger.

After the Bush Tax Cuts we saw an increase in revenue, I know you may think that's impossible however that's due to a faulty assumption on the part of liberals. The faulty assumption is to assume the size of the economy is a constant, which it is not, the economy can grow and shrink and thus a tax cut that spurs economic growth can cause government to have an increase in revenue.


Actually, the fact that tax cuts can result in revenue increases is largely accepted in the field of economics as it leads to more free capital, which is then invested, which creates jobs, which then create more income taxes, plus it generates dividends which are subject to taxes, capital gains taxes and so on.

The problem with this discussion is the non-constant size of the economy, because it becomes very hard to argue which stimulus worked and which did not. It's one of the reasons I prefer to stay in micro-economics and stick to behavioral tools for the macro bit.


So you admit then that the Bush tax cuts probably didn't add to the deficit.


Not at all, I merely agree that tax cuts can spur economic growth. I elect to let greater minds than mine debate whether or not the Bush tax cuts pay for themselves. However, while there was a revenue increase from 2004 - 2008, there has been a drop thereafter. and the taxcuts paying for themselves have been disputed by amongst others the congressional budget office, CBPP and several others.


The tax cuts were paying for themselves into the Community Reinvestment Act (Democrat created legislation) Bubble popped.



Aspie_Chav
Veteran
Veteran

User avatar

Joined: 6 Feb 2006
Age: 53
Gender: Male
Posts: 2,931
Location: Croydon

05 Oct 2012, 2:00 pm

TM wrote:
Aspie_Chav wrote:
ruveyn wrote:
Borrowing for the purpose of time displacement is not necessarily bad. But if one borrows one should be able to repay.
ruveyn


Time displacement? Does that mean borrow money and let people in a different time( the future) pay for it. Lets hope that they are happy enough to pay for my social security in old age also.


Time displacement is essentially what borrowing is, shifting resources in time to better enable your preferred consumption pattern. For instance, if I have $10 and I only really need 5, and you have $10 but need 15, I can lend you my leftover 5 now, in exchange for $5+interest at a later time. Interest rates being a form of "exchange rate" for different time periods.

As Visagrunt alludes to, long-term assets such as infrastructure that have a lifetime which allows them to be beneficial to multiple generations can and should be amortized over the lifetime of the asset.

The danger is in borrowing for immediate consumption, of things that rapidly lose their value or even have little value. Think of it as the difference between taking a mortgage to buy a house as opposed to paying for a 2 week vacation in Hawaii on your Visa card.


Would that be like buying a better car on Hire Purchase( or better still hire contract), in the intent to receive immediate benefits of better fuel economy, and less repair cost. Opposed to waiting, and saving up enough money to buy the better car while driving an old car that costs more to run in the meantime.


Image Not reliable or that fuel efficient. The expenses could make saving up for a better car take longer.

Image Rent or buy a newer car and receive all the money saving benefits now.



TM
Veteran
Veteran

User avatar

Joined: 3 Feb 2012
Age: 43
Gender: Male
Posts: 2,122

05 Oct 2012, 2:26 pm

Aspie_Chav wrote:
TM wrote:
Aspie_Chav wrote:
ruveyn wrote:
Borrowing for the purpose of time displacement is not necessarily bad. But if one borrows one should be able to repay.
ruveyn


Time displacement? Does that mean borrow money and let people in a different time( the future) pay for it. Lets hope that they are happy enough to pay for my social security in old age also.


Time displacement is essentially what borrowing is, shifting resources in time to better enable your preferred consumption pattern. For instance, if I have $10 and I only really need 5, and you have $10 but need 15, I can lend you my leftover 5 now, in exchange for $5+interest at a later time. Interest rates being a form of "exchange rate" for different time periods.

As Visagrunt alludes to, long-term assets such as infrastructure that have a lifetime which allows them to be beneficial to multiple generations can and should be amortized over the lifetime of the asset.

The danger is in borrowing for immediate consumption, of things that rapidly lose their value or even have little value. Think of it as the difference between taking a mortgage to buy a house as opposed to paying for a 2 week vacation in Hawaii on your Visa card.


Would that be like buying a better car on Hire Purchase( or better still hire contract), in the intent to receive immediate benefits of better fuel economy, and less repair cost. Opposed to waiting, and saving up enough money to buy the better car while driving an old car that costs more to run in the meantime.



Do you mean the concept of amortization, shifting resources in time or borrowing for immediate consumption?



GGPViper
Veteran
Veteran

User avatar

Joined: 23 Sep 2009
Gender: Male
Posts: 5,880

05 Oct 2012, 2:45 pm

Is there even any solid proof that fiscal stimulus (tax cuts and expenditure increases) works at all in the US? My mileage might vary.



Inuyasha
Veteran
Veteran

User avatar

Joined: 12 Jan 2009
Age: 43
Gender: Male
Posts: 9,745

05 Oct 2012, 8:10 pm

GGPViper wrote:
Is there even any solid proof that fiscal stimulus (tax cuts and expenditure increases) works at all in the US? My mileage might vary.



There is proof that tax cuts in combination with simplifying the tax code, and simplifying regulation does spur economic growth.

Upping government spending on the otherhand generally does not improve the economy unless we're looking at wartime expenditures. One of the few things that government spending will actually help GDP is actually military spending believe it or not (particularly when it is updating to newer military hardware).



ruveyn
Veteran
Veteran

User avatar

Joined: 21 Sep 2008
Age: 89
Gender: Male
Posts: 31,502
Location: New Jersey

05 Oct 2012, 8:32 pm

Inuyasha wrote:
GGPViper wrote:
Is there even any solid proof that fiscal stimulus (tax cuts and expenditure increases) works at all in the US? My mileage might vary.



There is proof that tax cuts in combination with simplifying the tax code, and simplifying regulation does spur economic growth.

Upping government spending on the otherhand generally does not improve the economy unless we're looking at wartime expenditures. One of the few things that government spending will actually help GDP is actually military spending believe it or not (particularly when it is updating to newer military hardware).


In short, war is good for business.

ruveyn



KinetiK
Raven
Raven

User avatar

Joined: 7 Jul 2011
Age: 35
Gender: Male
Posts: 120

05 Oct 2012, 9:34 pm

TM wrote:
Inuyasha wrote:
TM wrote:
Inuyasha wrote:
Actually, it does account for all of that, and to be quite blunt if it hadn't accounted for the Bush tax cuts the deficit would be even larger.

After the Bush Tax Cuts we saw an increase in revenue, I know you may think that's impossible however that's due to a faulty assumption on the part of liberals. The faulty assumption is to assume the size of the economy is a constant, which it is not, the economy can grow and shrink and thus a tax cut that spurs economic growth can cause government to have an increase in revenue.


Actually, the fact that tax cuts can result in revenue increases is largely accepted in the field of economics as it leads to more free capital, which is then invested, which creates jobs, which then create more income taxes, plus it generates dividends which are subject to taxes, capital gains taxes and so on.

The problem with this discussion is the non-constant size of the economy, because it becomes very hard to argue which stimulus worked and which did not. It's one of the reasons I prefer to stay in micro-economics and stick to behavioral tools for the macro bit.


So you admit then that the Bush tax cuts probably didn't add to the deficit.


Not at all, I merely agree that tax cuts can spur economic growth. I elect to let greater minds than mine debate whether or not the Bush tax cuts pay for themselves. However, while there was a revenue increase from 2004 - 2008, there has been a drop thereafter. and the taxcuts paying for themselves have been disputed by amongst others the congressional budget office, CBPP and several others.


I think it's highly unlikely that the Bush tax cuts paid for themselves, whether you analyze them using economic models or common sense. It's true that government taxation can crowd out potential private investment, but it's not in anything close to a 1 to 1 ratio. For every dollar cut in taxes, some of that dollar is saved. Rich people tend to save more, and the Bush tax cuts overwhelmingly favored the rich. It's trickle-down economics, which has been proven not to work, and is a perversion of the real grassroots, free-market economics that people like Friedman advocated.

More generally I do advocate tax cuts as I am libertarian-leaning, but it needs to be across all income levels across the poverty line. And of course it needs to coincide with an equal or greater decrease in spending. I think it's unlikely that the American government will be fiscally responsible within the near future without a balanced budget amendment. As others have pointed out, people still have confidence in the dollar. When we're leveraging Greek or Japanese level Debt:GDP ratios maybe, just maybe DC politicians will care. Until then, the deficit does not really matter to them and is just a political talking point.



Aspie_Chav
Veteran
Veteran

User avatar

Joined: 6 Feb 2006
Age: 53
Gender: Male
Posts: 2,931
Location: Croydon

06 Oct 2012, 4:09 am

TM wrote:
Aspie_Chav wrote:
TM wrote:
Aspie_Chav wrote:
ruveyn wrote:
Borrowing for the purpose of time displacement is not necessarily bad. But if one borrows one should be able to repay.
ruveyn


Time displacement? Does that mean borrow money and let people in a different time( the future) pay for it. Lets hope that they are happy enough to pay for my social security in old age also.


Time displacement is essentially what borrowing is, shifting resources in time to better enable your preferred consumption pattern. For instance, if I have $10 and I only really need 5, and you have $10 but need 15, I can lend you my leftover 5 now, in exchange for $5+interest at a later time. Interest rates being a form of "exchange rate" for different time periods.

As Visagrunt alludes to, long-term assets such as infrastructure that have a lifetime which allows them to be beneficial to multiple generations can and should be amortized over the lifetime of the asset.

The danger is in borrowing for immediate consumption, of things that rapidly lose their value or even have little value. Think of it as the difference between taking a mortgage to buy a house as opposed to paying for a 2 week vacation in Hawaii on your Visa card.


Would that be like buying a better car on Hire Purchase( or better still hire contract), in the intent to receive immediate benefits of better fuel economy, and less repair cost. Opposed to waiting, and saving up enough money to buy the better car while driving an old car that costs more to run in the meantime.



Do you mean the concept of amortization, shifting resources in time or borrowing for immediate consumption?


Not sure... I mean borrowing for the intention of saving money. Not borrowing the the joy of owning a new car. This was Bushes intention when he made tax cuts.



Aspie_Chav
Veteran
Veteran

User avatar

Joined: 6 Feb 2006
Age: 53
Gender: Male
Posts: 2,931
Location: Croydon

06 Oct 2012, 4:27 am

KinetiK wrote:
I think it's highly unlikely that the Bush tax cuts paid for themselves, whether you analyze them using economic models or common sense. It's true that government taxation can crowd out potential private investment, but it's not in anything close to a 1 to 1 ratio. For every dollar cut in taxes, some of that dollar is saved. Rich people tend to save more, and the Bush tax cuts overwhelmingly favored the rich.


Image

You said that rich people saved more. What do they do with the money? Do they horde it under the couch? Or do they invest it. When they invest the money. That invested money give business an ability to borrow money to grow their business. What I don't believe in in interference from State. Taking one hand and giving with another is interference. Not only interference has unintended consequences, it always has administration costs, which gets added in form of tax.



simon_says
Veteran
Veteran

User avatar

Joined: 20 Jan 2011
Gender: Male
Posts: 3,075

06 Oct 2012, 7:27 am

Aspie_Chav wrote:
KinetiK wrote:
I think it's highly unlikely that the Bush tax cuts paid for themselves, whether you analyze them using economic models or common sense. It's true that government taxation can crowd out potential private investment, but it's not in anything close to a 1 to 1 ratio. For every dollar cut in taxes, some of that dollar is saved. Rich people tend to save more, and the Bush tax cuts overwhelmingly favored the rich.


Image

You said that rich people saved more. What do they do with the money? Do they horde it under the couch? Or do they invest it. When they invest the money. That invested money give business an ability to borrow money to grow their business. What I don't believe in in interference from State. Taking one hand and giving with another is interference. Not only interference has unintended consequences, it always has administration costs, which gets added in form of tax.


They invest it globally quite often, with the profits ending up in overseas tax havens. As as been highlighted recently. The wealthy elite of Mexico or Africa havent done their people any favors and that's the kind of society that many wealthy in the west would like to see.

Even Ronald Reagan's own budget director says that the GOP has become an anti-tax cult. Adults pay for things.