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When it comes to economic policy, liberal pundits are failing their liberal base

Paul Krugman's Strange Ireland Prediction

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Since the election, liberals have been hammering much of the right-of-center punditocracy for predicting a Romney victory. The bad forecasts, they argue, represent a rejection of math and science since basic statistical modeling showed a huge likelihood of an Obama win. That accusation is terribly unfair, of course. Models are only as good as their underlying assumptions. And many conservatives and Republicans — including the Romney campaign — thought the composition of voter turnout would be different than it was. Gallup, too.

But election forecasts are a fleeting thing, irrelevant the day after (though errant ones will hurt the reputations of those making them). What’s far more serious is when supposed “thought leaders” and “influencers” — I’m trying to use those terms without irony — consistently fail their audience on matters of true import.

Liberal pundits have a real problem here. Now I’m not talking about old-fashioned, substance-lite stylists such as Maureen Dowd or Gail Collins. But Paul Krugman is a Nobel laureate. He’s supposed to know something. And Krugman surely does. But he’s just playing to his liberal fan base when he writes, as he did the other day, a paen to the high-tax, union-heavy 1950s economy as if it’s a relevant model for 2012 America. Many liberals would love to believe that if only we sharply raised taxes on wealthier Americans and corporations and slashed defense, we could not only leave Social Security, Medicare, and Medicaid as is. Unfortunately for them, the math doesn’t work.

But it’s not just Krugman. During the campaign, President Obama argued that the economic policies of George W. Bush caused the Great Recession and Financial Crisis. Indeed, this was a major theme of the Democratic National Convention. “We can’t go back!” Talk about a teachable moment that was wasted. Understanding what went wrong in the 2000s is critical to avoiding such economic catastrophes in the future. But where were the liberal econ pundits going on MSNBC and myth-busting the idea that Bush’s tax cuts and deficits were to blame?

Or pointing out the role of the Clinton administration in financial deregulation and housing policy?

Or explaining that the Great Recession might have been just a mini-version of the Great Depression, and thus it was overly tight Fed policy that really sunk the economy in 2007-2009, not Bush or the banks.

That last omission is particularly troubling. Many liberal econ writers now accept the theory, most famously advanced by economist bloggers Scott Sumner and David Beckworth, that the Fed should conduct monetary policy by targeting nominal GDP rather than inflation or interest rate levels. (I buy it, too.) But a major part of this theory argues that the Fed blew it in 2008. Here’s Atlanta Fed economist Robert Hetzel:

A moderate recession became a major recession in summer 2008 when the [Federal Open Market Committee] ceased lowering the federal funds rate while the economy deteriorated. The central empirical fact of the 2008-2009 recession is that the severe declines in output that appeared in the [second quarter of 2008 and the first quarter of 2009] … had already been locked in by summer 2008.

But while many liberal econ pundits push the part of the theory that says the Fed should be conducting a sustained bond-buying program to boost growth — or at least communicating that it will sustain demand — they never seem to get around to the bit of the theory which mostly absolves Bush and the banks and nails Ben Bernanke. If you buy one part, you really need to buy the other, even if it is politically inconvenient to talk about the latter part. Is the general public even aware that there are competing theories as to the cause the economic and financial meltdown? Epic fail.

Or how about the issue of whether to tax investment income at a preferential rate — if at all? Mitt Romney was attacked for his low tax rate since his income mostly comes from capital gains. But with the exception of Dylan Matthews of The Washington Post and Slate’s Matthew Yglesias, there was very little push back on the left or mainstream media even though the broad consensus among liberal and conservative economists is that investment income should be taxed more lightly than labor income, and maybe not at all. In other words, Obama’s plan to crank up capital gains and dividend taxes is likely not positive for economic growth at a time when the economy continues to grow below trend. Where’s the outrage? You sure can’t find it on the left.

This country needs a serious debate on economic policy, from taxes to spending to immigration to education. (And I will admit that I disagree with some commonly held center-right positions when it comes to monetary policy, consumption taxes, and the realistic size of government.) It would sure help to have an informed electorate across the political spectrum.

130 thoughts on “When it comes to economic policy, liberal pundits are failing their liberal base

  1. “This country needs a serious debate on economic policy, from taxes to spending to immigration to education.”

    And by what fatuous conceit do you believe that this site is doing a single thing to being that about?

    What a joke…..

      • “And what your solutions Max?”

        That’s a good question. And the sad part there may not be much in the way of answers.

        First, let us acknowledge two things about taxes:

        1) The tax policies enacted by Mr. Bush have done nothing but aggravate income disparity, and caused a greater aggregation of wealth in an increasing smaller percentage of the population. This dynamic was already in place in prior years, however.

        2) The issue isn’t just taxes. Whether it’s this site, or that flaming moron Larry Kudlow, one would think that just fiddling with rates on a few key metrics (income, cap gains, dividends) is all that is needed to provide a golden path to prosperity, and all we need is the right combination (usually lower for all them without figuring out how to cover the inevitable shortfall) and like opening up a safe with millions of dollars in it, our problems are solved if we just do it.

        This is beyond infantile. And it also shows how by focusing on this, that people can get so distracted.

        What passes for “Conservatism” in the United States today, is a credo that states that raising taxes on the top 4% of the population by a piddling amount will wreck the economy.

        It’s already wrecked, thank you, and now that we followed Mr. Hubbard’s advice, why the hell would anyone ask this third rate demagogue for advice again?
        The doctor has already murdered the patients.

        For all their bluster about “values” it seems today’s Conservatives are content to pretend they’re not at home when the bill collector comes knocking at their door.

        We have to raise taxes on upper income earners for a simple reason: our economy has now morphed into a far less equitable proposition since what we enjoyed in the post war years. And they must be kept lower on lower income people because the economy no longer generates the broad based opportunities it once did. That is a fact, and it’s happening right in front of you. This country needs to offer more to former skilled workers than wearing an orange apron in a big box retailer. THIS is your economy, NOW.

        That’s what happens when you lose 30 million manufacturing jobs, and you don’t have anything to replace them with, or just think jobs will appear magically by themselves.

        They don’t.

        So from a policy standpoint, what can we do? I’m not sure. But now that the great “De-financialization” of the economy is at hand, and firms like Bank of America are laying off people in the tens of thousands, those people have to find work too.

        Where will it come from?

        • “We have to raise taxes on upper income earners for a simple reason:”

          So I can make more money! Thank you!!!

          And Jerry Brown. Never would have seen such a gift coming. I specialize in “Tax Jurisdiction Arbitrage.”

          And yes, it’s legal. Only Fools pay high taxes to the creeps in Government. Have a nice day.

        • The 4% tax increase on the rich will raise how much revenue? The deficit is 1.25 trillion, this tax increase will raise 70 billion. How will you pay for the rest of the deficit? The government borrows 45 cents of every dollar it spends. If you are not cutting spending you would have to double all taxes (personal and corporate) to balance the budget. How will the economy react? I guess we are all going find out now aren’t we?

          • “The 4% tax increase on the rich will raise how much revenue? The deficit is 1.25 trillion, this tax increase will raise 70 billion. How will you pay for the rest of the deficit?”

            Sir, AT NO TIME has anyone suggested that this alone was enough to solve our debt situation. Its going to be one of MANY steps, but this is one of the most logical ones, and in fact, redressess SOME of the damage the Bush tax code imposed on us.

            I have no doubt that entitlement reforms, defense spending cuts, stopping some corporate welfare, will all play a role in a solution.

          • You don’t understand. The Feds spend over 3.7 trillion. If this is untouchable you will have to double tax rates on everything and everyone. The deficit is nearly 50% meaning you are collecting only half of the needed revenue. Raising rates on the rich will make you feel better but the problem is so large tax rates have to double for everyone.

          • Again- no one is claiming that raising tax rates by itself tackles the problem, and the President himself acknowledged as much with the deal he cut with Boehner.

            You people just satisfy yourselves with the slogans, don’t you? Ever consider looking at what REALLY goes on, what people REALLY said?

        • “What passes for “Conservatism” in the United States today, is a credo that states that raising taxes on the top 4% of the population by a piddling amount will wreck the economy. ”

          Odd. I was just remarking that what passes for “liberalism” today is a credo that states that raising taxes on the top 4% of the population will cure most of what ails us. That if we just tweak that top marginal tax rate high enough, the gold path to broad prosperity will be in reach. At least you’re smart enough to admit there’s more to it than that from a policy standpoint, but from following the Obama campaign and the Democrats’ rhetoric in general, that’s the message I got.

          By the way, the top income earners paid a higher percent of the tax bill after the Bush “tax cuts for the rich”. He made income taxes more progressive from the standpoint of receipts.

          • “Odd. I was just remarking that what passes for “liberalism” today is a credo that states that raising taxes on the top 4% of the population will cure most of what ails us. That if we just tweak that top marginal tax rate high enough, the gold path to broad prosperity will be in reach.”

            No one- not even Bernie Sanders- has EVER suggested that tax increases alone would cure the deficit. This is the umpteenth time someone has suggested we shouldn’t do it because they claim people think it’s the ONLY solution.

            No serious observer believe that it WON’T take a combination of cuts in spending AND hikes to sew it together.

            Just another dumb slogan, blindly repeated.

          • “No one- not even Bernie Sanders- has EVER suggested that tax increases alone would cure the deficit.”

            Then why was that the most prominent policy Obama talked about? He blamed the tax cuts for everything from the financial crisis to the deficit and credited the Clinton era tax rates for the prosperity of the 90s. That he wants to keep most of the cuts except for the top rate implies that it’s only the top rate that’s the problem, according to Obama. He does talk about a balanced approach, but in practice, that means immediate tax hikes and spending cuts pushed into the out years that later Congresses can undo. Meanwhile, he talks about the need to invest more in green energy, infrastructure, jobs programs, etc. and pushes his giant new entitlement. Any time someone comes up with a plan to reform entitlements, he says they’re pitting disabled children against millionaires and billionaires. Something tells me he’s a lot more serious about this nearly meaningless top marginal rate hike than he is about real substantive spending cuts and entitlement reform. Once he gets that, then what? Nobody knows because he never actually proposed anything.

            “This is the umpteenth time someone has suggested we shouldn’t do it because they claim people think it’s the ONLY solution.”

            I never suggested that because that’s not my belief. I’m only open to tax hikes once Congress shows they’re serious about tackling spending and the entitlement crisis. I’ll know they’re serious if the come back and ask for a tax hike on the middle class because that’s where the real money is. If they talk about just taxing the millionaires and billionaires (a mere subset of those paying the top marginal rates) while lowering middle class tax rates, that tells me they’re not serious about actually raising revenue through taxes.

            “No serious observer believe that it WON’T take a combination of cuts in spending AND hikes to sew it together. ”

            The Simpson-Bowles commission that Obama set up (and subsequently praised, then ignored) suggested lowering marginal tax rates across the board and broadening the tax base by simplifying the tax code. Does that not count?

            “Just another dumb slogan, blindly repeated.”

            What slogan exactly? The wording of my post is awfully similar to yours as you may have noticed.

          • More cognitive dissonance. The President has REPEATEDLY stressed a balance approach, and it’s not him that’s giving the “emphasis” on higher taxes. It’s in response to Grover Norquist, a lobbyist who has Boehner dancing to his tune.

            The compromise the President worked out with Boehner in August of 2011 worked out to 83% in cuts, and 17% in revenue.

            This is one of the most pragmatic Presidents to hold office, and yet people cannot let go of the hatreds and disinformation they drink up.

            As far as Simpson Bowles goes, you’re fooling yourself if you think even the GOP would vote for it.
            Simpson has called Norquist some pretty nasty names on Bloomberg Television, so please don’t think the plan is some sort of legislative lay-up.

            That’s just another piece of political self delusion:

            http://cnsnews.com/news/article/former-sen-alan-simpson-grover-norquist-most-powerful-man-america

            http://www.businessinsider.com/odonnell-simpson-norquist-taxes-video-2011-8

            http://www.mediaite.com/tv/alan-simpson-calls-out-grover-norquist-on-ethanol-subsidy-opposition/

          • “The President has REPEATEDLY stressed a balance approach, and it’s not him that’s giving the “emphasis” on higher taxes. It’s in response to Grover Norquist, a lobbyist who has Boehner dancing to his tune. ”

            I already talked about this. He talks a good pragmatist game of a balanced approach, but when you look at his proposals, the vast majority of spending cuts are at the end of the 10 year budgeting window and he includes as savings such things as the end of the Iraq war which was already scheduled to end anyway. Then he goes around proposing even more spending. An actual pragmatist would have made a good-faith effort to reform entitlements by now instead of fearmongering any good-faith effort that is made. An actual pragmatist would come up with a realistic plan to lower the deficit. An actual pragmatist would have pressed Harry Reid to do his job already and come up with a budget. As a matter of pragmatism, I have to be wary of those wrapping themselves in the cloak of pragmatism but then behaving in the most impractical manner.

            Questions- If he’s just trying to respond to Norquist, why did he repeatedly connect the higher marginal tax rates with the prosperity of the 90s and the lower marginal tax rate with the financial crisis? Can’t he respond to Norquist without making the top marginal tax rates the central policy of his campaign? Why is he letting Norquist distract from the truly meaty issues? If he gets the higher marginal rates, that’s $85 billion a year of revenue, according to the CBO’s static analysis- a type of analysis that tends to overestimate tax revenues. We’d still have over a trillion dollars in deficit along with all the other problems we have. The Republicans in the House passed over 30 bills to deal with the substantive problems and they all stopped dead in the do-nothing Senate.

            “The compromise the President worked out with Boehner in August of 2011 worked out to 83% in cuts, and 17% in revenue. ”

            You mean the compromise Obama blew up? Again, not a pragmatist except when it comes to his own political survival.

            “As far as Simpson Bowles goes, you’re fooling yourself if you think even the GOP would vote for it.”

            Maybe they wouldn’t. I thought it had some good aspects but didn’t go far enough. The point is they still advocated lower marginal rates for all while closing loopholes to make up the difference. Obama never even attempted to push for this. One could argue that’s because he thought it would never pass, but that certainly didn’t stop him from pushing the $450 billion jobs bill that had zero chance of passing.

            “Simpson has called Norquist some pretty nasty names on Bloomberg Television, so please don’t think the plan is some sort of legislative lay-up.”

            He’s right. The ethanol subsidies are beyond idiotic.

          • Who are you kidding with this tripe?

            “Questions- If he’s just trying to respond to Norquist, why did he repeatedly connect the higher marginal tax rates with the prosperity of the 90s and the lower marginal tax rate with the financial crisis?”

            It was to disprove the notion that has been ingrained into Moron America that higher marginal tax rates do not hurt economies, and further still, and I know you’ll want to reach for the Nitro pills, tax policy by itself has little effect on economics, especially when you stack it up against the hundreds of dynamics pushing it and pulling it on any given day.

            “Can’t he respond to Norquist without making the top marginal tax rates the central policy of his campaign?”

            That isn’t Obama’s “central policy,” preventing even a piddling increase IS THE OTHER SIDE’S.

            ” The Republicans in the House passed over 30 bills to deal with the substantive problems and they all stopped dead in the do-nothing Senate.”

            Squarely in the bullsh&t zone. As with the “Speaker’s” other gambit, where he submitted the repeal of ACA no less than 32 times, knowing bloody well the Senate wouldn’t even consider it, these “30 job growth bills” that pop up on Boehner’s twitter feed every six minutes are worthless pieces of phony legislation.

            Now I know who I’m dealing with here.

          • Correction:

            It was to disprove the notion that has been ingrained into Moron America that higher marginal tax rates hurt economies,

          • “It was to disprove the notion that has been ingrained into Moron America that higher marginal tax rates do not hurt economies, and further still, and I know you’ll want to reach for the Nitro pills, tax policy by itself has little effect on economics, especially when you stack it up against the hundreds of dynamics pushing it and pulling it on any given day.”

            For a guy intent on proving that tax policy has little effect on economics, he spent an awful lot of time going on about the “failed top-down policies that led to the crash” (which he states without a sense of irony as he proposes mostly government-centered solutions).

            Personally, I think it’s fine for government to tax 50% of GDP or even 75% if they give the taxpayers good value for their taxpayer dollar. That’s a might big “if” though. The larger and more diverse the country and the more corrupt the government, the sooner the law of diminishing returns kicks in. Whatever resources the government consumes, if they waste it on garbage that holds little value or negative value, of course that’s bad for the economy. Misallocating resources does in fact have an effect on economies. The government now is spending around $3.5 trillion and I think we’re getting much less than $3.5 trillion in value.

            “That isn’t Obama’s “central policy,” preventing even a piddling increase IS THE OTHER SIDE’S. ”

            That’s the main policy I recall him talking about. Make the rich pay their fair share, ask millionaires and billionaires to pay just a little bit more, and of course, the top-down policies rhetoric. I did hear him talk a bit about more investments in green energy, immigration reform, programs to train workers, protecting entitlements, hiring more teachers, attempting to prevent companies from offshoring, and a few other little things, but I heard him talk about making the rich pay their fair share at least as much as all that other stuff combined.

            “These “30 job growth bills” that pop up on Boehner’s twitter feed every six minutes are worthless pieces of phony legislation.”

            I guess to some, things like budgets and entitlement reform plans are worthless and phony, but to me, those are things that a responsible government should do. Still, even if you disagree with them, it shows they’re focused on substantive matters other than top marginal tax rates. Would you rather them sit around and not propose any solutions? Or are they supposed to somehow work with a guy who refuses to even propose a budget?

            Lastly, I have a long-held assumption that when people lack the ability to defend their ideas, they resort to calling opposing ideas “tripe” and “bullsh&t”. Your “pound the table” tactics coupled with your poor ability to defend your ideas have further cemented my assumption. With that, I am done. Thank you for the conversation (minus the gratuitous condescension) and best of luck in your quest to uncover the mysteries of quantum mechanics.

          • “For a guy intent on proving that tax policy has little effect on economics, he spent an awful lot of time going on about the “failed top-down policies that led to the crash” (which he states without a sense of irony as he proposes mostly government-centered solutions).”

            Sir, I personally never said anything about “failed top-down policies,” and if you’re referring to Obama, perhaps he too should clarify that dealing with the deficit, and matters of economic growth, are two different subjects.

            “Personally, I think it’s fine for government to tax 50% of GDP or even 75% if they give the taxpayers good value for their taxpayer dollar. That’s a might big “if” though. The larger and more diverse the country and the more corrupt the government, the sooner the law of diminishing returns kicks in.”

            I’m not in favor, and neither are what most denizens on these boards who derisively refer to as “liberals,” without even defining what that means, of confiscatory tax policy or a nanny state. We ran up a bill- we have to pay it down, or like someone whose credit has gotten out of control, we’ll never get out from under. This is just practical stuff.

            “Whatever resources the government consumes, if they waste it on garbage that holds little value or negative value, of course that’s bad for the economy. ”

            Stop right there, because now you’re playing the tape again. Americans LIKE Social Security and Medicare and they DO appreciate the need for them. What you consider “wasteful” – and it certainly happens- doesn’t amount to squat in real numbers. People WANT a robust enforcement apparatus at the SEC. I know I do. People want an FDA to protect them and make certain their prescriptions are taken with confidence. They want an FAA to make sure that safety standards aren’t compromised for profits, which WILL happen if you got rid of the FAA.

            Unfortunately, the 21st century has quite a few complex mechanisms, and trotting out the 18th century bromides like ‘The government that governs least, governs best” is every bit as quaint as it is irrelevant. As I have said before: THINGS MUST BE MADE TO WORK, and the mechanism we civilized people use is governance.

            “Misallocating resources does in fact have an effect on economies. The government now is spending around $3.5 trillion and I think we’re getting much less than $3.5 trillion in value.”

            Go put 2 wars on a credit card, eliminate “Paygo” and see what you wind up with. This piece sums it up nicely:

            http://economix.blogs.nytimes.com/2012/06/12/the-fiscal-legacy-of-george-w-bush/?partner=rss&emc=rss

            That’s the main policy I recall him talking about. Make the rich pay their fair share, ask millionaires and billionaires to pay just a little bit more, and of course, the top-down policies rhetoric.” I did hear him talk a bit about more investments in green energy, immigration reform, programs to train workers, protecting entitlements, hiring more teachers, attempting to prevent companies from offshoring, and a few other little things, but I heard him talk about making the rich pay their fair share at least as much as all that other stuff combined.”

            Only because he’s trying to defend against the denuding of social safety nets the plutocracy wants destroyed. In the meantime, we apparently are under the impression their is no waste and fraud whatsoever in our military expenditures. Don’t you find that remarkable?

            “I guess to some, things like budgets and entitlement reform plans are worthless and phony, but to me, those are things that a responsible government should do.”

            Boehner structured the bills to fail. Period.

            “Lastly, I have a long-held assumption that when people lack the ability to defend their ideas, they resort to calling opposing ideas “tripe” and “bullsh&t”. Your “pound the table” tactics coupled with your poor ability to defend your ideas have further cemented my assumption. With that, I am done. Thank you for the conversation (minus the gratuitous condescension) and best of luck in your quest to uncover the mysteries of quantum mechanics.”

            Unfortunately, I do not suffer fools gladly, especially unthinking ones who are incapable of doing little else but regurgitate what comes in their e-mails from “Red State.”

        • “What passes for ‘Conservatism’ in the United States today, is a credo that states that raising taxes on the top 4% of the population by a piddling amount will wreck the economy.”

          And what passes for ‘progressivism’ is willingness to go over the fiscal cliff rather than forgo raising taxes on the top 4% by a piddling amount.

          If the tax raise is so trifling, why are liberals in such a febrile lather to pass it?

          • “And what passes for ‘progressivism’ is willingness to go over the fiscal cliff rather than forgo raising taxes on the top 4% by a piddling amount.”

            It’s a matter of priorities. You’re not going to f&&k me out of what I’ve paid into my working life just to pay for two failed wars- one of which never needed to happen.

        • What utter crap. It’s not the governments place to pick winners and losers and to insure ‘fair’ income distribution.
          Taxes are to raise revenue for the government and nothing more. As liberals the mantra they spout is taxes are the price of civilization and the government spending benefits everyone equally so therefore pay your fair share of your benefits and enough with trying to palm off your share of the burden on someone else.

          • “What utter crap. It’s not the governments place to pick winners and losers and to insure ‘fair’ income distribution.
            Taxes are to raise revenue for the government and nothing more. As liberals the mantra they spout is taxes are the price of civilization and the government spending benefits everyone equally so therefore pay your fair share of your benefits and enough with trying to palm off your share of the burden on someone else.”

            Actually, yours is the blind flailing that now is used as a substitute for parsing an issue.

            First off, we’ve had a progressive tax structure for decades, and that ain’t gonna change, especially since the election signaled the death of the growing plutocracy in this country.

            By counting the Forbes 400 wealthiest people’s assets, it is a FACT that 400 Americans have more wealth than the bottom 60% of America’s, combined.

            Now starting asking yourself: IS THIS THE COUNTRY YOU WANT?

            In the meantime, in the late 60s, the CEO of GM earned about 70 times what his average employee did. Today, that number is likely to be more 500 times.

            This is what is happening to your country.

            In the meantime, we maintain 1000 military bases around the world. That, buddy, IS “the price of civilization” AND IT COSTS F&&KING MONEY TO RUN IT AND WE PAY FOR IT BY COLLECTING TAXES.

            Grow up. All of you.

            You tell yourselves some single mother is trainwrecking the economy by getting “gifts” while these crooks who support AEI buy off Congress. Know what kind of “gifts” THEY get?

            More than a single mothers.

          • maxie boy says: “First off, we’ve had a progressive tax structure for decades, and that ain’t gonna change“…

            Hmmm, sounds like the definition of insanity…

            especially since the election signaled the death of the growing plutocracy in this country“…

            Plutocracy?!?! Oh for you pinkos that means productive people being paid ‘voluntarily‘ by other private individuals for their goods and services…

            By counting the Forbes 400 wealthiest people’s assets, it is a FACT that 400 Americans have more wealth than the bottom 60% of America’s, combined“…

            Nothing illegal about that… Maybe its time for that alledged ‘bottom 60%‘ to get off their collective asses and acquire the skills necessary so they’ll no longer be a burden to the 400…

            In the meantime, in the late 60s, the CEO of GM earned about 70 times what his average employee did. Today, that number is likely to be more 500 times.

            This is what is happening to your country“…

            Yeah, so what?

            maxie boy if you acquire the skills and contacts you too could be earning 500 times what the proles make…

            In the meantime, we maintain 1000 military bases around the world. That, buddy, IS “the price of civilization” AND IT COSTS F&&KING MONEY TO RUN IT AND WE PAY FOR IT BY COLLECTING TAXES“…

            Not nearly as much money as it costs us taxpayers to pander to the parasites

            In fact just think of how much cheaper the federal government would be if it got out of the following racket: Catalog of Federal Domestic Assistance

        • “We have to raise taxes on upper income earners for a simple reason: our economy has now morphed into a far less equitable proposition since what we enjoyed in the post war years….”

          Nowhere does the Constitution empower the federal government to tax in order to achieve your notion of a more equitable proposition. The solution is to tax only the sum necessary to pay the cost of performing the specified and limited functions of government. Anything more is just legalized thievery.

          • The Constitution doesn’t forbit it either, and your logic is flawed, besides.
            Where does the Constitution mandate a global military presence to maintain Pax Americana?

            I was just reading how much it costs for us to keep ONE active soldier in a war zone like Afghanistan: about a million a year.

            Just let that thought sink in.

          • Max Plank, there’s something about the Constitution that you really need to come to terms with: the 10th Amendment.

            That amendment explicitly says that anything that isn’t specified as a power of the Federal Government is forbidden to it

            Thus your retort only condemns your stance, rather than defend it.

        • It takes you a long time to say “I don’t know” .
          Who invented the English language ? Who regulates its use ?
          Maybe instead of more institutions and expensive charlatans pretending to control the economy and create jobs we should just leave people alone (you know laissez nous faire) and let them spend (or invest) their own money.

          • “It takes you a long time to say “I don’t know” .
            Who invented the English language ? Who regulates its use ?
            Maybe instead of more institutions and expensive charlatans pretending to control the economy and create jobs we should just leave people alone (you know laissez nous faire) and let them spend (or invest) their own money.”

            Except that doesn’t work. I know it’s a romantic notion you people hold, but real societies don’t work that way.

        • maxie boy whines: “What passes for “Conservatism” in the United States today, is a credo that states that raising taxes on the top 4% of the population by a piddling amount will wreck the economy“…

          Why don’t you try a dose of honesty and say you’re either to lazy or stupid to be rich and you want the government to do it for you?

          Why should anyone in the ‘top 4%‘ pay even one more penny in any and all sort of taxes that you pay?

          A Washington Examiner editorial: Examiner Editorial: If top 5% paid 40% of taxes, what is their ‘fair’ share?

          A couple of years ago there was the following documentry on the BBC and whoever put it together must’ve of been think about folks like you: Useful Idiots

    • Ok Maxxie boy,
      AEI is worthless but after you take your medication and feel better about your self try to answer this:
      Who deliberately, and so far successfully, is destroying the very fabric of America?
      Now, THAT needs a serious debate…

      Hint: For starts, try the self appointed Obama’s puppeteers of the FED and Treasury with their ilk and their puppets in the “benevolent” UNIONS (public & private) of America.

      P.S.: Why am I replying to you?
      So you could, maybe, take some time and go research and educate yourself and at the same time stop posting stupid comments.

      • “Ok Maxxie boy,
        AEI is worthless but after you take your medication and feel better about your self try to answer this:
        Who deliberately, and so far successfully, is destroying the very fabric of America?
        Now, THAT needs a serious debate…

        Hint: For starts, try the self appointed Obama’s puppeteers of the FED and Treasury with their ilk and their puppets in the “benevolent” UNIONS (public & private) of America.

        P.S.: Why am I replying to you?
        So you could, maybe, take some time and go research and educate yourself and at the same time stop posting stupid comments.”

        If this is your idea of an INTELLIGENT comment, I suggest you get some quiet time and examine your conscience.

        Idiot.

        • Thanks, for the compliment,
          But since you insist, I’d like to tell you that I thought you had some nutritional brain deficiency; it now seems that… you… are…STUPID!!!

      • “Hint: For starts, try the self appointed Obama’s puppeteers of the FED and Treasury with their ilk and their puppets in the “benevolent” UNIONS (public & private) of America.

        P.S.: Why am I replying to you?
        So you could, maybe, take some time and go research and educate yourself and at the same time stop posting stupid comments.”

        You should be greatful I deign to reply to someone with the intellectual maturity of an eight year old.

        Unions? only 11.8% of Americans belong to one. But you go on about that.

        Talk about puppeteers..

    • A serious debate on economic policy might start with some facts. Like the fact that home equity dropped from $13.5 trillion in 2007 to $6.2 trillion in 2009 according to the NY Fed. http://www.newyorkfed.org/research/staff_reports/sr482.pdf Short of giving money away, there was nothing the Fed could do to counter the impact the missing $7.3 trillion had on household spending and saving. (In fact, nominal GDP targeting — ie ignoring inflation — would mean quantative easing on steroids by the fed, which comes close to giving away money. Here is the other side: http://www.economist.com/blogs/freeexchange/2011/11/case-against-case-nominal-gdp-target.)

      But if your house in Atlanta or Las Vegas is worth half the mortgage on it, do you have right to blame SOMEONE in the Bush years for your dilemma? The answer is hell yes. China stopped its real estate bubble in its tracks by outlawing speculation and raising underwriting standards and downpayment requirements. http://www.latimes.com/business/la-fi-china-real-estate-20121026,0,3545870.story
      The US wouldn’t tolerate a top-down solution like that, but can anyone tell me why the Fed or congress tolerated the interest-only mortgage?

      )

      • Your point is well taken. Greenspan did nothing to stop the bubbles he created in the stock market and housing. Instead of bloviating about “irrational exhuberance” the Fed DOES have the power to raise margin requirements. That would have kept the bubble from inflating to such insane levels.

        Everyone slept through the Bush housing bubble because of the derelict theories of “market efficiency.”

      • Todd Mason, regarding zero interest loans and why Congress “tolerated” them, the answer is obvious: Congress did not ‘tolerate’ these economy-killing policies, they created and saved them.

        Congress directly and indirectly (through Fannie/Freddie “oversight”) supported lowered underwriting standards and “creative” loan packages – including zero interest loans.

        The government created and saved massive moral hazard in the residential real estate market. That market collapsed and took a big chunk of the economy and our nation’s well being with it.

        • “Congress directly and indirectly (through Fannie/Freddie “oversight”) supported lowered underwriting standards and “creative” loan packages – including zero interest loans.

          The government created and saved massive moral hazard in the residential real estate market. That market collapsed and took a big chunk of the economy and our nation’s well being with it.”

          Sir, this is a lie, and there is no such thing as a “Zero Interest” mortgage, even NOW.

          This “Big Lie” of the government creating the housing bubble has been thoroughly debunked. I’m not going to go through it again, but this was discussed on other threads.

          • what the CRA narrative proves beyond a reasonable doubt is that the efforts of AEI in promoting the “the CRA did it narrative” have been, without question, wildly successful.

          • Pity those lying sacks of #### Pinto and Wallison have been hiding from me.

            They know I will butcher them.

      • When the fed stopped inflating the bubble it burst . This happens with every central bank engineered inflation. They all become bubbles as the newly created money is preferentially funneled into one sector. At the end of Clintons term the internet stock bubble crashed. At the end of Bushes term the fed turned down the money creation and voila! a crash.

        Read some Von Mises. Inflationary money creation always causes a boom. But unless the liquidity creation accelerates (new money is created to fuel the boom) the boom will falter and then crash .

        • There is truth in this, and as I said before, trying to legislate the business cycle is only bound to amplify the disasters you were trying to avoid.

          Greenspan (through monetary policy) and Bush (through taxes) tried to “smooth out” the inevitable ups and downs of a normal capitalist economy. Nasim Talen, in his new book, points out that thanks to these policies, a generation of new investors were led to believe they couldn’t lose money. Markets always went up as long as policies kept stoking the fire.

          And of course, we are now living with the results.

  2. The GOP has become the party of “deniers” across a range of issues ranging from climate to budget to polls.

    They’ve entered the realm of confirmation bias – listening only to their beloved right wing echo chamber – no matter what the real world is doing. Instead of fostering their own solutions for things like a balanced budget or health care – they basically oppose and gridlock.

    there was no “replace” after “repeal” – just repeal.

    they blamed Obama for spending when he cannot spent a nickel without approval of Congress. Every penny being spent is approved by Congress – not the President.

    they deserve the brickbats as they spent the last 4 years denying any progress at all on anything they thought would “help” the current President.

    Now we’re going to see if they will spend the next 4 years doing the same thing.

    My bet is that they are now looking ahead two years to see if they can take the Senate rather than anything of any substance for the next two years unless they have no choice.

    they have no choice on the sequester. They have to produce an alternate plan to the one Obama is proposing or else face the public and almost certain retribution by the same minority demographics, two years hence.

    The minorities have awoken and if the GOP also ends up denying that, the 2014 elections could me the final coup-de-grace of the party.

    It will be interesting to see how the GOP deals with own self in the next 2 years. There is a war within the GOP over vision and direction right now.

    • Very true about Obama can not spend a nickel without Congress. They controlled control for 2 years or did you forget? Dem’s have a propensity to overreach. They are in the process of doing again even though most of the country in exit polls supported Romney on policy.

      • “Very true about Obama can not spend a nickel without Congress. They controlled control for 2 years or did you forget?”

        Yeah, here it folks, for the two millionth time, drilled into an empty skull from watching Fix:

        “They had two years and what happened, huh?”
        “Didn’t they have two years?”
        “We gave them two years, do ya believe that?
        “Two frikkin’ years, and whaddya know?”
        “Did I tell ya they had two years? Did you know dat?”
        “Two years and they didn’t solve all of our problems!”

        Sheesh… pull string in his back and he’ll say it again.

        • Only on the spending… the pseudo-budget we are STILL partying like it’s 2009. Continuing resolutions have ensured that the $1.2t deficit of Obama’s inaugural year have perpetuated. Also we forget (or obscure) that ‘as the Secretary shall determine’ has become a softkey mainstay of legislation on ‘health’ and other outlays. I would submit that this and regulatory lawmaking are Unconstitutional abdications of Legislative powers regardless of the Executive benefitting. So indeed, let us pull the string again and recall that Obama’s budget proposals drew not a single vote in the Senate. Ever. Meanwhile, Tim Geither proposes eliminating the debt ceiling, demonstrating his ignorance or arrogance on his alleged field of competence. Probably both.

        • And it will still be true each time it’s said. So do you have a point or a rebuttal?

          Are we allowed to also reiterate that the earth is round? Or does that get under your skin as well?

          • Yeah, here it folks, for the two millionth time, drilled into an empty skull from watching Fix: “They had two years and what happened, huh?” “Didn’t they have two years?” “We gave them two [...]

            “And it will still be true each time it’s said. So do you have a point or a rebuttal?

            Are we allowed to also reiterate that the earth is round? Or does that get under your skin as well?”

            No schmuck, it proves that if someone repeats it often enough, you’ll believe the world is FLAT, and looking at some of the pronouncements of today’s ignorant, unread “Conservatives” that’s not too far off.

            Congress doesn’t operate like 7/11. There were two SESSIONS of Congress the President had to deal with, all with two failed wars, a broken economy, and hemmoraghing job losses. And that was on the day he was inaugurated.

            And the complaint? “Gee, they had two years and they didn’t solve ALL of the nation’s problems with this light agenda on their calendar?”

            But hey, like I told ya. They had two years, man, yeah, they had two whole years, like I said, uh huh.

        • Yes, because it matters. Few Presidents are given unassailable majorities in both Houses. It is a historically exceptional situation.

          Obama didn’t need the opposition, made sure they knew it like the unpleasant jerk he is, and relied on partisan support. Now he owns the results. As long as his SOP doesn’t go beyond distracting, demonizing and demagoguing, he will continue to own them.

      • Yes, I do love the way everything is predicated on ‘climate’. There are persons/institutions denying there is a climate? No? Oh, they deny (or more accurately, question) that the climate is being warmed catastrophically and unprecedentedly. That cow farts and infernal combustions are the cause and an anti-growth global socialism is the cure. Count me in! And snap out. The globe is not warming. She is cooling which history has shown is a far greater obstacle to human activities like eating.

    • Hmmmm, speaking of echo chambers, it seems larry is stuck on the old failed democrat tax and spend till it is all gone philosophy. it is nice to see that he admits the congress controls the purse strings. So the balanced budget during the clinton years is now officially recognized as belonging to the republican party! woohoo

      • re: ” So the balanced budget during the clinton years is now officially recognized as belonging to the republican party! woohoo”

        well, I’d even given the GOP credit for that given what they do now days…

        but Clinton DID have to SIGN the budget… so unlike today…the GOP and the DEMs sat down and compromised on a budget – that DID balance.

        today the GOP is not about a balanced budget.

        the only “balanced” budget they passed was Ryans that did not “balance” until 2030.

        that’s NOT a credible budget when we are ALREADY 16 trillion in debt and by the time Ryan’s budget “balanced”, we’d be 30 trillion in debt.

        that’s the kind of “fiscal conservatism” we see now days from the GOP.

        • larry the liberal says: “that’s NOT a credible budget when we are ALREADY 16 trillion in debt and by the time Ryan’s budget “balanced”, we’d be 30 trillion in debt.

          that’s the kind of “fiscal conservatism” we see now days from the GOP“…

          Liar…

          That’s what one might expect from RINOs…

          There are Republicans out there with better ideas as you’ve been shown before on several occassions…

          • “fixing” the deficit with “pro-growth” tax-cutting policies rather than increased taxes is what most Conservatives say they support but the last time they did that under Bush it did not create enough increased revenues to keep us from going into deficit.

            when this same thing happened under Reagan, he backed up and advocated tax increased to cover the gap and insure the budget came out of deficit.

            Ronald Reagan was a true fiscal conservative – perhaps even a RINO if judged today but he was an honest fiscal conservative who was RESPONSIBLE to ensure that the deficit was dealt with.

            Today’s fiscal conservatives blather on and on about various tax policies they hate and how cutting taxes is the only way to increase growth and pay off the deficit.

            Unlike Ronald Reagan they do not seem to care about the deficit and the debt other than as a weapon against the current POTUS.

            The only budget that the House actually presented to the Senate was one in which the budget reached balance in 2030 and did so with only cuts to entitlements and assumed supply-side would generate increased revenues to pay for increased DOD. There was no Plan B if the supply-side premise failed.. to work..

            this is not fiscal conservatism in my view. this is irresponsible. Like Max, I point out that we do have a 16 trillion debt and a structural 1T deficit that needs to be addressed with HONEST tax policies and that we have a commitment to do what it takes to balance the budget.

            All this talk about increased taxes hurting the economy did not stop Reagan nor Clinton from doing what was necessary to get the budget balanced and keep us from going into heavy debt.

            Today -the folks who bill themselves as fiscal conservatives would make Reagan turn over in his grave.

          • Bush it did not create enough increased revenues to keep us from going into deficit“…

            Can you say entitlements?

            Surely even you aren’t confusing Bush with a conservative…

          • re: entitlements

            can you show how entitlements increased during that period to cause the deficit?

            how about DOD and two wars?

          • can you show how entitlements increased during that period to cause the deficit?“…

            Are you reading impaired larry g?

            It was in the link and the link could show you the history of spending…

            how about DOD and two wars?“…

            You’ve already been proven a liar on this several times…

          • Juandos – how much did entitlements increase guy?

            your link for welfare actually shows reductions.

            and nowhere near the 1.5 trillion deficit.

            got any credible links that actually support your claims?

          • your link for welfare actually shows reductions“…

            Liar larry g

            and nowhere near the 1.5 trillion deficit“…

            Repeating the lie won’t make it morph into a fact…

            got any credible links that actually support your claims?“…

            Obviously any more credible information would be wasted on you since you’re obviously language challenged…

          • this is easy Juandos..

            just list the entitlement spending and DOD spending since 2000 and give your reference.

            I’ve done it and I know the answer – and you do too.

            It’s laughable that you accuse others of dishonesty when you do what you do.

            the “lie” is your narrative that entitlements alone blew up the deficit. simply not true.

          • larry g stupidly says: “just list the entitlement spending and DOD spending since 2000 and give your reference“…

            It was at the link larry g but apparently you lack the skills or intelligence to comprehend what was in front of your face…

            I’ve done it and I know the answer – and you do too“…

            Liar…

            Heres all the government data you could hope for…

          • Juandos – if you look at your own links – you’ll see that entitlements alone did not blow up the budget.

          • larry g babbles: “Juandos – if you look at your own links – you’ll see that entitlements alone did not blow up the budget“…

            LMAO!

            Liar…

  3. “…Obama’s plan to crank up capital gains and dividend taxes is likely not positive for economic growth at a time when the economy continues to grow below trend. Where’s the outrage? You sure can’t find it on the left.”

    When building-out an economy based upon government privilege rather than an economy based upon sound economic principles, the blue print ala FDR is to engage in class warfare and tax is the warfare instrument of choice.

    Hence the increase in tax as a disincentive leading to many negative aspects including anemic private capital formation is only an important matter if one has an economy based upon sound economic principles. When one purposely promotes, via politicos through the mechanism of government, an economy based upon government privilege then the tax aspect has no economic relationship as tax merely is depicted in a vacuum of political relationship.

    • “Hence the increase in tax as a disincentive leading to many negative aspects including anemic private capital formation is only an important matter if one has an economy based upon sound economic principles. ”

      Just to prove the bankruptcy of this argument, viz,. “capital formation.”

      At perhaps no other time in the nation’s history have the balance sheets of corporations been so larded up with cash assets. They did it by slashing headcount, stopping wage growth dead in it’s tracks, slashing benefits and dumping more costs on their employees, sharply reducing their debt service and overall debt balances, and the result is that to have someone claiming that “capital formation will be hurt” when

      1) we’re already swimming in it
      2) It hasn’t squat for the economy

      prove that the people who come to this site are merely lip synching an economic tautology that has failed to execute miserably, even when it was fed all that it demanded.

      Unreal. A nation of blinded parrots.

      • You are getting close. Cash hoarding is not capital formation. It is what happens when the government creates insecurity and threatens to drive up the cost of doing business.

        • Earl: Thank you for stating the obvious so succinctly.

          And Max, “At perhaps no other time in the nation’s history have the balance sheets of corporations been so larded up with cash assets. They did it by slashing…”.

          That corporations are curled up in the economic fetal position relative to expansion is obvious and repeating such for the “umpteenth time” is avoiding the real issue as to *why* so many companies – many run by liberals – are choosing no or slow growth policies.

          • Companies aren’t investing because there is no aggregate demand. After decades of leveraging themselves with mortgages and endless balance transfer offers, people have to first work that off, and they may not be so willing to get themselves in a position like that again.

            After 2008, don’t think that people will go back to living on the float.

  4. Are we pretty sure it’s the high tax rates that were driving economic growth in the 1950s rather than the fact that total government spending was about 23% of GDP (versus 40%+ today)?

    • How would high tax rates drive economic growth? For this to be true, the capital allocation distortions that high tax rates cause would have to achieve a more efficient capital allocation than the myriad decisions of the high tax rate payers, i.e. the rich, i.e. those individuals in our society with a demonstrated record of making profitable capital allocation decisions. Not very likely.

      • “How would high tax rates drive economic growth? For this to be true, the capital allocation distortions that high tax rates cause would have to achieve a more efficient capital allocation than the myriad decisions of the high tax rate payers, i.e. the rich, i.e. those individuals in our society with a demonstrated record of making profitable capital allocation decisions. Not very likely.”

        Words fail even me….. Unbelievable.

        • If words fail you why are you typing? SMDH is NOT an argument nor a counter to an argument. You are a curious specimen though not rare; a font of denunciations and accusations, maligning even the possibility of discussion yet you sound, like a trumpet and a poorly mastered one at that.

          • “If words fail you why are you typing? SMDH is NOT an argument nor a counter to an argument. You are a curious specimen though not rare; a font of denunciations and accusations, maligning even the possibility of discussion yet you sound, like a trumpet and a poorly mastered one at that.”

            Excuse me sir, but the point was that merely reasserting a false belief that has failed by all the evidence in front you is REALLY hard to respond to.

            If YOU have anything substantive to say, just indulge me.

  5. Of course the Bush economic policies caused the Great Recession. Read anything by the Austrian economists. The Bust of a Boom-Bust cycle always occurs when investors realize that the thing being bid up (stocks, real estate) really can’t go much higher and start to sell. Once the selling starts, prices fall back to their real values. So the interesting part is always who stoked the Boom with artificially low interest rates, and THAT (creation of the Boom) was most definitely a deliberate effort by Bushie the Lesser and the gang of idiots he assembled to pass him bad advice.

    Obama, who “considers himself a Marxist”, applied all of the classic Keynesian ideas known NOT to work and has made a bad situtation worse, much as FDR made Hoover’s mess a disaster. The only question in Obama’s case is whether he fully understood that he was destroying the US economy and is causing that destruction for truly evil purposes.

    But it’s more likely that Obama simply trusts the Keynesians.

    • I’d say Obama, like Bush before him followed advice he received since neither of them are trained economists and they both had trained economists giving them advice.

      Personalizing the policies of a POTUS administration to the POTUS himself is dummkopf stuff

      • So NO ONE is in charge, essentially? That may be the case but ‘personalizing’ is about all we have in our armory that can assign blame/credit and halt the destructive while formulating the productive. That may be squaresville but why let the brahmins AS A CLASS off the hook? It’s quite a comfortable hook as it is; no guillotines or even jail cells, to date.

        • just saying that few if any POTUS are trained economists and that they usually have advisers and they usually follow their advice.

          To that end – the POTUS and advisers usually seek out economists that bend towards their views.

    • I go back and forth on the evil/stupid question on Obama but tend toward the stupid- he just seems to lack a lot of basic knowledge and always freezes in a crisis. But to say that low interest rates stoked the boom is not really telling the full story- the boom started in 1998 and mortgage rates were about 7%- they rose throughout 2000 and fell again and by mid 2002 were still in the 7% range- right where they were in 1993. 2003 was the high water mark of the boom, at least as far as I was concerned ( I an an appraiser). Rates were still fluctuating in 03-04. By the time prices flatlined in 2006 it was still flirting with the upper 6%’s. Today it’s the mid 3%’s. The real problem was the gov’t guaranteeing loans to anyone- there were millions of these loans with no proof of income and no way to prove income without the threat of being shut down. It was terrifying to the appraisers- we were being warned in our continuing ed classes to stay away from these loans, that they would lead to trouble, and I personally asked all my clients not to send me any. You could see this stupidity causing a crash a mile away. That’s not to say there isn’t plenty of blame to spread around to all players in the mortgage debacle, but the threats to the lenders and brokers by HUD/FNMA et al was real.

      • ” The real problem was the gov’t guaranteeing loans to anyone- there were millions of these loans with no proof of income and no way to prove income without the threat of being shut down.”

        ultimately however, the govt was not holding that much of the bad paper, right?

        They guaranteed what was in the pipeline but at the end it was bought by the big wall street banks who got holding it when the crash came.

        Ultimately the govt did bail them out but it was the banks and the folks they sold the paper to that got ruined (and the govt did ultimately bail some of them out).

        • Why do you think the govmnt bailed out the banks?
          Perchance it was because it was responsible for the banks having to try to make lemonade out of those lemons.

      • Uh, skippy. If you’re an appraiser, you wouldn’t neccessarily know what kind of loan you were doing the appraisal for.

        Your job was to comp properties, and that’s it, regardless of who the borrower was.
        In addition, this comment: “The real problem was the gov’t guaranteeing loans to anyone- there were millions of these loans with no proof of income and no way to prove income without the threat of being shut down.”

        The “government” had absolutely nothing do with giving hard money loans to anyone, and we’ve had “No-Doc” loans for decades before the 00′s, so aside from you not knowing what kind of loan you were appraising for since it was none of your business, I don’t think you were an appraiser.

        BTW, Fannie and Freddie loan origination peaked in 2003 and began a precipitous decline at the end of that year, which continued for some time afterwards- all of the volume replaced by Non-Agency lenders.

      • It wasn’t the rates it was the availability of money, the ability to get a mortgage that caused the housing boom.
        Due to regulatory changes such as the CRA banks were under great pressure to loan money to the undeserving. Since Freddie and Fannie would buy such paper, and since Wall St. could syndicate and sell all but most utter dreck, there was no risk to making such loans . They were sold at once.
        But once the flow of new money to the banks slowed the funding for the mortgages wasn’t as easy to come by. This caused the demand for houses to contract and the prices stopped rising. That was the signal for everyone to try to sell and lock in their quick profits. But that never works.

        Look at the Internet crash at the end of Clintons term. Same nonsense except that greenspan used the Y2K scare to re-inflate .

        • “Due to regulatory changes such as the CRA banks were under great pressure to loan money to the undeserving. Since Freddie and Fannie would buy such paper, and since Wall St. could syndicate and sell all but most utter dreck, there was no risk to making such loans . They were sold at once”

          Loyal readers of this forum must now be shocked themselves as to how far this bullsh&t narrative has been embedded into the American mind.

          CRA? Will ONE of you read a book?

  6. Forget public debate – that’s for people who seek legitimacy in truth, acknowledge common rules and standards, and can cooperate in good faith with opponents. There are too few of such people on the left, so all attempts to engage the left in a public debate are stillborn.

    We are in a propaganda age, where political parties plug talking points into various communication channels aimed directly at constituents. There is no common forum where men of good will from the entire political spectrum can meet to discuss the issues of the day. It does not exist. And even if it did, most Americans are too ignorant to follow the discussion.

    Next, there is no accurate, authoritative record of recent and current events. No one is held to account for lying, defaming, spinning or deceiving. What happened a minute ago never happened, especially if it’s politically harmful to a liberal. So forget about compiling, vetting and preserving an authoritative record to which we are all held to account: It doesn’t exist.

    Finally and in view of the above, we as a polity will never be able to rely on sound economics to make fiscal or monetary policy. We will never debate in good faith on what happened economically in the past, how we should react to economic conditions in present, or how we should organize the economy in the future. There is no forum for such a debate, and there are insufficient participants on the left who would participate or validate or abide by the results. Even if there were, most Americans would not understand the results. And even if they could, there is no record to memorialize the results and apply them going forward.

    • re: ” What happened a minute ago never happened, ”

      know what you mean:

      Mr. Reagan – “I was out of the loop” on Iran-contra
      Mr. Bush I – ” Read my lips, no new taxes”
      Mr. Clinto – ” I did not have sex with that woman”
      Mr. Bush 2 – “we have to invade because of WMDs
      and SCOTUS – torturing people without
      charges in secret prisons is none of your
      business”

      Mr. Reagan, Bush1 and Mr. Clinton all raised taxes in an effort to keep the budget from going into deficit even after they had initially cut them but too much. No economic “theory”, just common sense when it came to
      paying for your spending.

      Congress ultimately is the one that has to approve spending that may or may not be what POTUS wanted.

      Mr. Obama has not spent a penny that was not approved by Congress and in the current budget with deficit – the list of spending that Congress approved specific to him is the smallest amount of all the prior POTUS. The rest of it was largely already in the budget from 2000-2008 voted on by previous congresses.

      I too think it’s important to keep the facts of history for ALL of the POTUS for ALL of what they did and did not do.

      • “I too think it’s important to keep the facts of history for ALL of the POTUS for ALL of what they did and did not do.”

        Well, then we definitely shouldn’t be learning our history from you. One of Clinton’s first acts as President was to raise taxes after he had suckered the public with campaign promises of a middle-class tax cut. So how did he ” …initially cut them but too much?”

        • “Mr. Obama has not spent a penny that was not approved by Congress and in the current budget with deficit – the list of spending that Congress approved specific to him is the smallest amount of all the prior POTUS.”

          Larry the liberal liar once again spewing his Moveon.org talking points that have been thoroughly debunked here multiple times for his benefit.

        • re: ” One of Clinton’s first acts as President was to raise taxes after he had suckered the public with campaign promises of a middle-class tax cut. So how did he ” …initially cut them but too much?”

          But Clinton DID sign the Republican-produced budget and he DID balance the budget – UNLIKE the current crop of GOP idiots who pass tax cuts and refuse to pay for increased spending.

      • You would be on firmer ground if you (or Obama) gave actually the impression of being worried by deficits, and being serious about addressing them. Class warfare and defense cuts will not get us there, but they are politically useful to one party.

        • Oh, the “class warfare” meme.

          Tell me- based on what’s happened to the American middle class in the past 12 years, tell me who is making war on whom?

          I see only one winner so far- and that, hopefully is about to change.

          The only thing necessary for Socialism to succeed is for Capitalism to fail- and it is failing miserably now.

          • If you are working age and cant get a job you aren’t likely to be middle class. If you have retired with your life saving and CDs pay less than 2% you aren’t likely to be middle class. If all the coal fired electric plants in the country shut down by 2014, and natural gas production using fracturing is regulated away then energy costs will likely double and the costs of transporting food, manufactured goods, indeed everything will rise substantially. This means that unless your income rises you will be unable to maintain your current lifestyle, no more middle class for you.

          • “If you are working age and cant get a job you aren’t likely to be middle class.”

            You must live in a cave.

    • “There is no forum for such a debate, and there are insufficient participants on the left who would participate or validate or abide by the results.”

      Oh, get off it, dude. “Insufficient participants” on the “Left?”

      WTF does that even MEAN? You take the AEI, whose scribblers LIVE in denial, and you accuse “Duh left” of being dishonest?

      You think REAL economists like Danny Branchflower, Joseph Stiglitz or Jeffrey Sachs don’t measure up to your so-called “standards” of economic literacy?

      Who do you worship? Mike Huckabee? Kudlow? Cavuto?

      Jesus, what nonsense!

      • re: two years.

        what did Congress pass in the way of spending in that two years vs what did Congress pass in the way of spending the prior 6 years?

        I think you’ll find that the largest increases in the budget came from the prior 6 years which included two wars, doubling the DOD budget and the biggest entitlement since Medicare – the heavily subsidized part D prescription drug law.

        What Obama got approved by Congress was primarily stimulus which did increase the debt but did not add permanently to the deficit like the prior 6 years increases did.

        Here’s what a prior GOP President did :

        ” The president faces a weak economy and a split Congress, with some Republicans furious over the president’s endorsement of a plan to cut budget deficits with a combination of a tax increase and budget cuts.

        “He is adamant that we are wrong on the tax increase,” wrote the president after meeting with one leading House Republican. “He is in fact unreasonable.”

        The year was 1982, the president was Ronald Reagan and the congressman was Jack Kemp.”

  7. Until Congress can actually pass a budget, there can be no real targets set for lowering the deficit. Raising taxes could, in the long run, help lower it. But when has the govt. spent less than they take in. Their idea of cutting spending is simply to cut the scheduled increase in half instead of cutting any increase or lowering spending. The people will not stand for the measures necessary to balance the budget quickly. Too many “gimmes” taken away.
    Tax increases will hurt everyone, especially the lower income earners, since prices will rise accordingly to pay for those increases. Real cuts to the budget, not the so called cuts we hear about from our esteemed public servants (sarc), are not going to happen untill it all comes crashing down, and other people’s money is no longer there to take.

  8. Three stages of liberal denial:
    1. We do not have a deficit problem.
    2. Yes we have, but the other side is to blame.
    3. They are also stingy bastards for harping on deficits.

    • Right, it’s dose “libba-wools.” Like the $10 trillion in the hole we started with was a problem created by them.

      The hits just keep on comin’.

      • Those ten trillion were the work of decades.

        What matters is the relation of debt to gdp or revenue. That is why ten trillion is to twenty trillion like a kick in the nads is to an axe between the eyes. We could survive ten trillion, and if Bush had been allowed to reform Social Security in 2005, we would have been in a much better place.

        And while no party is blameless, for the entire time it took to amass the first ten trillion, concern about the size of government was the domain of conservatives alone. It still is.

        Do you seriously believe that if Obama still had his supermajorities in both houses, we would be spending less?

        Or that you would excoriate them for failing to do so?

        • “The claim that “Obama’s four deficits are the four largest in U.S. history” ignores the fact that Obama inherited most of his first deficit when he was inaugurated on Jan. 20, 2009.

          As we have written many times before, the nonpartisan Congressional Budget Office projected the fiscal year 2009 deficit at $1.2 trillion two weeks before Obama took office. That fiscal year started Oct. 1, 2008. Due to some additional spending under Obama, the deficit increased to $1.4 trillion for fiscal year 2009. At the end of the fiscal year, the CBO largely blamed the 2009 deficit on the recession, specifically a sharp decline in tax revenues and an increase in spending in response to the economic crisis — first by Bush and later by Obama.

          Deficits have remained high under Obama, but have come down from that $1.4 trillion peak. The deficits in fiscal years 2010 and 2011 were both $1.3 trillion. And in an Oct. 5 CBO report that it dubbed “2012 Deficit: Smaller, But Still Big,” it estimates the just-concluded 2012 fiscal year ran a deficit of about $1.1 trillion. It would be accurate to say that Obama was president during three of the four largest deficit years in American history, but he bears only a small measure of responsibility for the largest.”

          http://factcheck.org/2012/10/the-facts-according-to-obama-and-romney-ads/

          In fact, spending, the deficit AND taxes are lower today than when Obama took office. That, in the teeth of the worst economic calamity of a lifetime

          http://www.theatlantic.com/business/archive/2012/05/federal-spending-taxes-and-deficits-are-lower-today-than-when-obama-took-office/257256/

          • the important fact to consider is what exactly did Obama add to the deficit that Congress approved beyond the stimulus?

            name the increased spending that Obama advocated for and Congress approved that added to the deficit.

            Most of the deficit – came from increased spending approved prior to 2009.. and it just carried forward because cuts were never agreed to.

            the DOD budget more than doubled from 2000 to 2009.

            entitlements went up also but for the most part not NEW entitlements proposed by POTUS and approved by Congress. Demographics and unemployed received entitlements per the laws already approved prior to this administration.

            so the question is – what increased spending besides the stimulus did this POTUS gain approval of from the Congress?

  9. Ok so now we have at least on Liberal admitting that a tax rate increase on the rich does not close the deficit by an appreciable amount, could one please explain the next steps in some detail?

    • It is amazing how many “Conservatives” think that a 4.9% tax hike alone is all “Duh Liberals” believe will solve the deficit.

      Everyone is brainwashed by the same sources, with the same message drilled into their heads.

      Sick.

      • Everyone is brainwashed by the same sources, with the same message drilled into their heads“…

        Obviously that’s a lie…

        Sick“…

        Well the 1st step in fix your problem is admitting you have one….

        Bravo maxie boy

        • Sir, are you blind? There was a compromise reached in 2011. Boehner welched on the deal, and we got ourselves downgraded (not that I give a crap what S&P thinks) so there’s your “Lib proposal” for you.

          • Wrong. BOehner and reid agreed to 800 billion in new taxes, Obama agreed initially as well. But Obama then changed his mind and demanded another 400 billion. (see “the price of Politics” by Woodward)

      • Well, class warfare is all I hear from your favored Party. So what is the plan? Stimulate growth by creating more government agencies? Ok, that was a joke. Or is it?

  10. Many are not aware or refuse to acknowledge that following 9/11 federal tax receipts continued to fall. The bush tax cut package in the spring of 2003 preceded a tax receipt rise by about 3 months. Cause and effect? Alas such is the nature of economic arguments…we will never know for sure. We do know however that in the past decreases in the long term capital gains rate has resulted in increased revenue. Should we take a chance on policies that may widen future deficits? I say no because we have a president who has track record; who doubles down on everything in the interest of “fairness” and who holds the veto pen.

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