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MoeGates
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#21 Posted on 26.11.03 2012.21
Reposted on: 26.11.10 2015.24
The economic problem I have is that Bush is sacrificing long-term economic health for short-term benefit to get re-elected. I don't have any illusions that any other politician would do it diferently, but still.

Business cycles are business cycles. And sending out checks to a lot of folks is a really easy way to time an economic boost. And Bush's short-term economic record isn't that bad at all. 6.0% unemployment is high for the last 5 years, but pretty low historically. It wasn't that long ago (under Reagan) that 7% unemployment was though to be the target low-unemployment rate before infationary pressure got too high - thank goodness the last ten years have disavowed even the most nutty of the conservative economists of that idiot idea.

But there is nothing about the Bush administration that is good for long-term economic health - and everyone who can't sum up their economic policy in "tax cuts for the rich = always good in every way" knows it.
DrDirt
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#22 Posted on 27.11.03 2244.18
Reposted on: 27.11.10 2244.38
    Originally posted by MoeGates
    The economic problem I have is that Bush is sacrificing long-term economic health for short-term benefit to get re-elected. I don't have any illusions that any other politician would do it diferently, but still.

    Business cycles are business cycles. And sending out checks to a lot of folks is a really easy way to time an economic boost. And Bush's short-term economic record isn't that bad at all. 6.0% unemployment is high for the last 5 years, but pretty low historically. It wasn't that long ago (under Reagan) that 7% unemployment was though to be the target low-unemployment rate before infationary pressure got too high - thank goodness the last ten years have disavowed even the most nutty of the conservative economists of that idiot idea.

    But there is nothing about the Bush administration that is good for long-term economic health - and everyone who can't sum up their economic policy in "tax cuts for the rich = always good in every way" knows it.


Moe, I agree. "W" isn't doing anything any other pol wouldn't do. I also agree that his policies aren't good in the long-term. I think as you pointed out about the aceptable unemployment levels, things are changing. It seems that IMO the problem is that factors are changing where economics are concerned and our economic advisors (on both sides) are not adapting to a new reality.
OlFuzzyBastard
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#23 Posted on 28.11.03 2213.12
Reposted on: 28.11.10 2213.42
    Originally posted by CRZ
      Originally posted by ThreepMe
      In a sick way, I'm almost hoping that the economy doesn't get better before next November. That way people think it's Bush's fault for all the recession.
    Perhaps instead of hoping for the worst and also thinking the worst of everybody, there is a more productive tack you could take? Seems like almost anything would be better...

      At this point I would rather have a retarded monkey in the Oval Office than Bush. (not that anyone would notice the difference)
    This is outta line...even if you try to wave it away with "whoa, whoa, just a joke, folks" later in the thread because, geez, it ain't even funny so that doesn't really fly.


He's right - that's horribly offensive to monkeys.
DrDirt
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#24 Posted on 30.11.03 0020.52
Reposted on: 30.11.10 0023.21
Just something I noticed tday when we were out Christmas shopping. Last year at this time when we went to the big city to shop (Wichita), there were already deep discounts everywhere from big anchor stores to the mom and pops. This year, while there were discounts, it was not nearly as extreme as last year. And as opposed to last year, people seemed to be buying alot more. Anecdotally, it seems at least the stores and shoppers think the economy is better. What did you all notice if and when you were out?
Corajudo
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#25 Posted on 1.12.03 1052.17
Reposted on: 1.12.10 1054.07
Well, I was thinking about how we have played with the inflation rate specifically by taking those items out that fluctuate quickly or whatever. In therms of the unemplayment rate, I believe we exclude farm jobs due to their seaonality. Those are the kinds of things I am talking about. The data is out there bt not well reported because we want dramatic 30 second reports instead of the facts.

First off, I swear that I'm not picking on DrDirt; he just raises a lot of interesting issues and misconceptions people have about the economy and especially interpreting economic data.

The unemployment does include farming jobs. And, the unemployment rate is available both seasonally adjusted and without the adjustment. The rate most widely reported in the press is the seasonally adjusted rate which allows us to compare between months or quarters on equal footing.

To see how the umemployment rate is calculated in far more detail than you want, go to http://www.bls.gov/cps/cps_htgm.htm. I like it especially because when they mention Census Bureau employees, they refer to them as 'highly trained and experienced.' Nice!

As far as inflation goes, both the inflation rate and the core inflation rate are usually reported. The core inflation rate excludes the highly volatile components of the inflation rate (most notably energy prices), so it tends to avoid any temporary spikes which have little bearing on the overall trend.. In general, most economists feel that the inflation rate (core and otherwise) is overstated by 1-2 percentage points. This is due to shortcomings in the data; namely something called substitution bias which makes it difficult to accurately predict and determine the actual goods bought by households.

I was going to talk about manufacturing because he brought up a good point, but I'll just close by agreeing in that there are huge opportunities out there for well trained and educated workers. Many of these opportunities are made possible by free trade and by moving our resources out of things like manufacturing (which we no longer do competitively). And, Bush's economic policies are not good for long-run economic health (especially the tariffs and other protectionist measures he keeps passing), but that's another post.
DrDirt
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#26 Posted on 1.12.03 1149.14
Reposted on: 1.12.10 1149.53
    Originally posted by Corajudo
    Well, I was thinking about how we have played with the inflation rate specifically by taking those items out that fluctuate quickly or whatever. In therms of the unemplayment rate, I believe we exclude farm jobs due to their seaonality. Those are the kinds of things I am talking about. The data is out there bt not well reported because we want dramatic 30 second reports instead of the facts.

    First off, I swear that I'm not picking on DrDirt; he just raises a lot of interesting issues and misconceptions people have about the economy and especially interpreting economic data.

    The unemployment does include farming jobs. And, the unemployment rate is available both seasonally adjusted and without the adjustment. The rate most widely reported in the press is the seasonally adjusted rate which allows us to compare between months or quarters on equal footing.

    To see how the umemployment rate is calculated in far more detail than you want, go to http://www.bls.gov/cps/cps_htgm.htm. I like it especially because when they mention Census Bureau employees, they refer to them as 'highly trained and experienced.' Nice!

    As far as inflation goes, both the inflation rate and the core inflation rate are usually reported. The core inflation rate excludes the highly volatile components of the inflation rate (most notably energy prices), so it tends to avoid any temporary spikes which have little bearing on the overall trend.. In general, most economists feel that the inflation rate (core and otherwise) is overstated by 1-2 percentage points. This is due to shortcomings in the data; namely something called substitution bias which makes it difficult to accurately predict and determine the actual goods bought by households.

    I was going to talk about manufacturing because he brought up a good point, but I'll just close by agreeing in that there are huge opportunities out there for well trained and educated workers. Many of these opportunities are made possible by free trade and by moving our resources out of things like manufacturing (which we no longer do competitively). And, Bush's economic policies are not good for long-run economic health (especially the tariffs and other protectionist measures he keeps passing), but that's another post.


Corajudo, don't stop as the info is helpful. As I told AWA, I never learned much from people just agreeing with me. I don't see how Bush and the Reps can justify their policies as good in the long-term for our economic health.
StaggerLee
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#27 Posted on 1.12.03 1629.06
Reposted on: 1.12.10 1629.30
Sorry, been away a few days, so I didnt have time to respond. I didnt want to seem as though I thought social spending was bad on a whole, but I think we should do a lot more with the money that we do spend. National security should be a priority these days, and the Military needs an actual pay raise that would make a difference for them, not the little tiny crap they get year in and year out.

I think that for the most part, foriegn aid should be cut in half, for at least a decade, and use that money on education.

The economy is strong, or at least getting stronger now, and I realise that the tax cuts will hurt in the long run.

If there was a simple way to please everybody, I wish somebody would fing it!
Grimis
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#28 Posted on 1.12.03 1856.01
Reposted on: 1.12.10 1857.08
    Originally posted by StaggerLee
    The economy is strong, or at least getting stronger now, and I realise that the tax cuts will hurt in the long run.
How did you come to this conclusion? The economy is st ronger because of two things: 1) the end of the recession; and 2) the tax cuts. Empirical data from over hte years shows that the Laffer Curve is accurate, even going back to the JFK tax cut of 1961.

Tax curts don't hurt us; they help us by growing the economy.
MoeGates
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#29 Posted on 1.12.03 2015.20
Reposted on: 1.12.10 2015.39
Yes, I know you can spew the radical supply-side "tax cuts=magic" argument with the best of them. But really, show some "empirical data" that doesn't come from an Ivory-Tower ideological think tank.

Proponents of this theory (my favorite version of which states that we could cut the top tax rate to 2% and have the same tax revenue as now) do what all spin artists do - credit tax cuts for any growth that might have happened a year before the cuts to 5 or 6 years after, and any tax increases for any recession that happened in about the same spread.

The one time they can't find example to justify this theory, you get my my favorite "Laffler Curve Proof." "In 1993 President Clinton raised taxes, and the economy almost went into recession again." In other words, in 1993 President Clinton raised taxes and the economy grew. Although if it were written before this last recession, I'm sure they would have blamed it for that one too. As it was, they had to be satisfied with crediting the growth to Reagan's tax cut 7 years earlier, and the Tax cut that happened two years later.

(edited by MoeGates on 1.12.03 2124)
Grimis
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#30 Posted on 2.12.03 0638.02
Reposted on: 2.12.10 0639.00
    Originally posted by MoeGates
    As it was, they had to be satisfied with crediting the growth to Reagan's tax cut 7 years earlier, and the Tax cut that happened two years later.
Actually the Regan tax cut was in 1981-82. Reagan had actually been forced into raising taxes by an Democratic Congress by 1986. Then Bush 41 raised taxes. Then Clinton raised taxes...
Corajudo
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#31 Posted on 2.12.03 0748.46
Reposted on: 2.12.10 0749.07
Tax cuts don't hurt us; they help us by growing the economy.

Do they? And, if so, over what time frame?

When the government cuts taxes without cutting spending at the same time, then it obviously has to borrow money to fund the tax cut (unless it can cut taxes and continue to run a balanced budget or surplus, which isn't the case here). And, at some point, that money has to be paid back. Which, all else being equal, means a higher tax burden in the future.

Households have two possible reactions. They either realize the implied future tax increases and therefore save their money , so that the tax cuts are saved and therefore have no impact on the economy (which largely happened with Bush 43's tax rebate checks from a couple of years ago). This is called Ricardian Equivalence, if you want to google that term for a more detailed explanation.

Or, households spend the tax cut, which means the government has to cut spending or raise taxes in the future (i.e. when the current pols aren't in office) when the debt becomes due. So, although the economy will grow in the short-run, we're creating an unfunded liability that will have to paid off someday and will work to choke off long-run growth (and given the status of Medicare and Social Security, I'm not sure I'd argue that now is a good time to create more unfunded long-term liabilities, especially since I'd like to retire someday).

The counter to that is that the tax cuts will have such an enormous stimulative effect on the economy that it will grow so much that we'll be able to return to a balanced budget even at the lower tax rates. However, even the numbers from the White House don't project a return to a balanced budget until 2010 (if memory serves), when many of the tax cuts will be phased out.

But, in good long-run economic news, Bush repealed the steel tariff yesterday. So, all is not lost (except those union votes and money Bush would have failed to capture by continuing the steel tariff).
ThreepMe
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#32 Posted on 2.12.03 1333.46
Reposted on: 2.12.10 1344.55
Another economic update...

http://story.news.yahoo.com/ news?tmpl=story&u=/nyt/2 0031202/ts_nyt/manufacturingathighestlevelintwodecades

And to add onto another point in "who's to blame/credit for the economy," discussion...

"Our economy was strong and it is getting stronger," Mr. Bush said. "Productivity is high; business investment is strong; housing construction is strong. The tax relief we passed is working."

In this case, Mr. President is taking credit for the state of the economy.
Grimis
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#33 Posted on 2.12.03 1811.14
Reposted on: 2.12.10 1811.22
    Originally posted by Corajudo
    When the government cuts taxes without cutting spending at the same time, then it obviously has to borrow money to fund the tax cut (unless it can cut taxes and continue to run a balanced budget or surplus, which isn't the case here). And, at some point, that money has to be paid back. Which, all else being equal, means a higher tax burden in the future.
AGreed. Tax cuts obviously should be paired with spending restraint. Unfortunately that has not happened here. And talk abotu a higher tax burden: this prescirption drug boondoggle is another one, with Baby Boomers voting themselves free drugs on the backs of their children and their children's children with no remorse.

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship- Alexander Fraser Tytler
MoeGates
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#34 Posted on 2.12.03 1945.35
Reposted on: 2.12.10 1945.50
    Originally posted by Grimis
      Originally posted by MoeGates
      As it was, they had to be satisfied with crediting the growth to Reagan's tax cut 7 years earlier, and the Tax cut that happened two years later.
    Actually the Regan tax cut was in 1981-82. Reagan had actually been forced into raising taxes by an Democratic Congress by 1986. Then Bush 41 raised taxes. Then Clinton raised taxes...


And then the economy grew at unprecidented rates!

Even I must be reading too much GOP propaganda, as I obviously thought every tax bill signed by Reagan was a tax cut. I love how when a GOP President raises taxes he is "forced to" by the Democrats.

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship- Alexander Fraser Tytler

Wow. How could this guy have forseen the immediate collapse of our Democracy (yes, yes...Constitutional Republic) and rise of an American Dictatorship as soon as we discovered social programs 70 years ago (if not more)? Uncanny.



(edited by MoeGates on 2.12.03 2053)
Corajudo
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#35 Posted on 3.12.03 0809.30
Reposted on: 3.12.10 0814.24
And talk abotu a higher tax burden: this prescirption drug boondoggle is another one, with Baby Boomers voting themselves free drugs on the backs of their children and their children's children with no remorse.

Because creating even more unfunded liabilities will help solve the Social Security and Medicare mess. In fact, the Treasury estimates that, before the prescription drug benefit, the U.S. government's unfunded liabilities have a present value of approximately $44 trillion (which includes our approximately $6.8 trillion in reported debt); the majority of that was Medicare. (Here's the actual Treasury study: http://www.fms.treas.gov/fr/ It also breaks down tax burden by income level and has a bunch of other interesting data). An interesting note--the report was prepared by the General Accounting Office and they chastise the government for a failure to provide enough transparency that would allow them to do as thorough of a job as they can (i.e. Enron accounting).

And, the following is the Executive Summary of a NCPA report (entire report at http://www.ncpa.org/pub/ st/st263/): (NOTE: they come up with an estimate of $49.6 trillion in unfunded liabilities because they do not limit the scope to 75 years; they perform the present value analysis in perpetuity)

Social Security and Medicare have made future promises far in excess of tax revenues that will be collected at current tax rates. The difference between what has been promised to current and future generations and what will be collected from taxes dedicated to fund these programs is an "unfunded liability."

How large are the federal government’s unfunded obligations? That depends on how we measure them.

If we confine our horizon to the next 75 years, as government actuaries have traditionally done, the unfunded liability is about $18 trillion in today’s dollars — more than six times as much as the federal government’s outstanding bonds.

If we focus only on people who are already participating in the system (either as beneficiaries or as taxpayers), the government’s net debt is more than $24 trillion — more than twice our current gross domestic product (GDP).

If we consider only benefits that have been accrued so far (i.e., if we ended the program tomorrow and only paid benefits people have already earned), the debt is about $30 trillion — about three times the size of our GDP.

If we look indefinitely into the future — and include not only people who are participating today, but all future generations who will pay taxes and draw benefits — the U.S. government’s Social Security and Medicare unfunded obligations are equal to almost $50 trillion in today’s dollars.

What does it mean to say that we have $50 trillion in unfunded obligations? It means that in order to ensure the government will keep all its promises, we need to have $50 trillion on hand right now, invested at a rate of return of about 6 percent. The failure to have these funds on hand and invested today means that the overall obligation will become larger and grow through time. It also means that the programs are severely underfunded at today’s tax rates. To close the funding gap, we will have to endure either substantial tax increases or significant benefit cuts in future years.


Also, my understanding is that there is no means testing in the prescription drug program. So, Bill Gates would qualify. Well, so long as it's 'free,' and the government has the capacity to pay its liabilities in the 'future,' (i.e. when the current generation in power is dead and gone) what do we care?

Edited to break up the bolded section; and:

To further put things in perspective, U.S. GDP (TOTAL) was just over $10 trillion in 2002.



(edited by Corajudo on 3.12.03 0814)
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