Posting Towards Gomorrah

[Penske_Account]

Originally posted by Spanky
What statment did I make that was idiotic?

You guys keep making these attacks but you never back it up.

they are drunk on America-hating koolaid, fed to them by the plantation masters of the DNC. You are an American, and thus, in their stupour, they hate you, which results in these baselessly ignorant attaques.

[Greedy,Greedy,Greedy]

Originally posted by Spanky
Under your example you would be insane not to institute the tax cut. If the difference between having the tax cut and not was one percent growth for ten years vs. five percent growth for ten years. After the tax cut, in ten years time every one in the country would be on average sixty percent richer!!!!. Can you even fathom what that means?

And if you institute a fifty percent tax cut, you can't expect it to pay for itself in ten years. That is a huge tax cut. But if you wait another twenty years, because of the growth you have paid off the debt you created, every body is like three times wealthier and you only have a tax rate of ten percent on a income that is three times what it used to be.

If cutting the tax rate by fifty percent in the US right now would increase our growth rate by 500 percent (1% to 5% is a 500% increase) for the next ten years we would be insane not to do it. Hell at the end of ten years you just go back to the old rate and your new budget would be way in surplus and you would pay off the debt you accumulated in the past ten years in just a couple of years. And everyone would still be sixty percent richer.

Unfortunately, in an advanced economy like ours (and being the world leader) I don't think it is possible for us to achive a 5% growth rate.

The posited growth rate and the income tax cut are both virtually impossible in the real world, but I chose them to show the effect of your statement in a very simple and exagerated manner. And 20 years is almost exactly how much time it takes to turn around in the hypo, even with that extraordinary growth rate.

The reason you wouldn't do it is because the government would be bankrupt; note that interest rates haven't even been factored in there. And, before it went bankrupt, it would take all the available credit - the entire GDP and then some would have to be invested in government debt, leaving none for other investment.

It's a simple illustration. But somewhere you have to assume a bailout from outside forces (e.g., another economy to borrow from) and the existence of security sufficient to support the debt -- and only by assuming these can you ignore the brakes on growth that will be created by the debt, or the wildly inflationary pressures that would result from the need to introduce more money into the system to manage the debt.

[Spanky]

Originally posted by Sidd Finch
No, you convince me that the delta -- the increased growth brought about by tax cuts, that would not have occurred as a result of the economic cycle* -- has been large enough to offset the effect of tax cuts. Or, explain when that will come about. And back it up with something besides gut feel.


*you know, the economic cycle that Rs liked to credit the Clinton expansion to.

When you understand compound interest you understand that revenue now is worth a lot more than increased revenue in the future. If Bush's tax cut increased the GNP by 2% (I keep saying that is open to debate, but Ty and friends already agreed most economists agree that the tax cut brought some increased growth) that is a two percent that will always be there amplifying every future gain that we make - forever.

In a recession we are not growing at all. The revenue discrepency is never going away and no one is getting any better off. If the tax cut can be accredited for the growth, then eventually it will pay for itself by multiplying all future gains.

However, in this case the tax cuts were not all that drastic, and the economy has been growing. So if the growth can be attirbuted to the tax cuts, and you had held government spending in check, if not by now, in at least a couple of years, the tax cut will have paid for itself.

That study we were looking at was looking at bogus statistics. They were saying that the tax cuts failed because we are not pulling in the same percentage of GNP as we were before the tax cuts. But that is an absurd statement, because if you cut the tax rates you are never going to get the same percentage of GNP. They have been permanently lowered. So they are putting up an impossible bar. The question is are you bringing in just as much revenue. My guess is that we are or are close to bringing it in or already have done so. But we are still in deficits because spending keeps climbing.

The fact that spending has been climbing dramatically and the deficit is getting smaller tells me that we are probably bringing in more revenue now than we did in 2000. That is why in that article they used the percentage of GNP and not revenue to make their point.

[Spanky]

Originally posted by Greedy,Greedy,Greedy
The posited growth rate and the income tax cut are both virtually impossible in the real world. And 20 years is almost exactly how much time it takes to turn around.

The reason you wouldn't do it is because the government would be bankrupt;

What do you mean by bankrupt. You are only banktupt if you run out of credit. In your example, our revenues would be increasing so much every year our bonds would have a stellar rating.

Originally posted by Greedy,Greedy,Greedy note that interest rates haven't even been factored in there.

That is assuming deficits drive up interest rates which is disputed. My economics dissertion (not for a doctorate for my MBA) argued that government deficits do drive up interest rate. That was the thesis. Arthur Laffer thinks the connection is weak to non existent. I don't understand how he discounts crowding out, but he does.

[Spanky]

Originally posted by Greedy,Greedy,Greedy
The posited growth rate and the income tax cut are both virtually impossible in the real world, but I chose them to show the effect of your statement in a very simple and exagerated manner.

But you also exaggerated the tax cut. Fifty percent. Bush's and Reagans tax cuts weren't even close to fifty percent.

[Mmmm, Burger (C.J.)]

Originally posted by Spanky
What question have I not answered?

You've answered them, alright.

[Mmmm, Burger (C.J.)]

Originally posted by Greedy,Greedy,Greedy
So, why we're all worshipping at the altar of growth, let me ask this: do people here think that growth results in inflationary pressures? Are there times when growth should be moderated for any reason?

Growth caused by deficit spending or loose money will create inflationary pressures. Growth from a strong economy does not (or need not).

[ltl/fb]

Originally posted by Mmmm, Burger (C.J.)
You've answered them, alright.

If I ever change my mind and want to have babies, may I have yours?

[Tyrone Slothrop]

Originally posted by Spanky
As long as you have growth, no matter how low your tax rate, eventually the growth will be a bigger factor than the tax rate in determining income.

(a) If you had the revenue you lose, its value would compound as well.

(b) Setting that aside, you'll concede that your "eventually" might not come until everyone living is now dead, right?

[Tyrone Slothrop]

Originally posted by Spanky
When you understand compound interest you understand that revenue now is worth a lot more than increased revenue in the future.

Gadzooks!

[Spanky]

Originally posted by Mmmm, Burger (C.J.)
You've answered them, alright.

What did I answer incorrectly?

[Spanky]

Originally posted by Tyrone Slothrop
(a) If you had the revenue you lose, its value would compound as well.

Yes it would compound. But the entire GNP is compounding every year with revenue benefitting. The Debt doesn't match itself entirely every year. It would have to be one hell of a debt at quite a high interest rate to match the entire GNP compounding.

Originally posted by Tyrone Slothrop
(b) Setting that aside, you'll concede that your "eventually" might not come until everyone living is now dead, right?

At a really low growth rate. Yes.

[Tyrone Slothrop]

Tired of napkins?

Spencer Ackerman:

• For years, the Bush administration has refused to discuss how long the United States will stay in Iraq. More recently, the administration speaks of both a “long war” and just-over-the-horizon troop reductions simultaneously -- although last month General John Abizaid, the U.S. commander for Middle East and Southeast Asia, ruled out a draw down until next year -- with the emphasis shifting depending on the president’s audience and the political moment. On the rare occasions when officials have been pressed, usually in congressional hearings that garner little attention, Bush aides insist there are “no plans” to build permanent bases, a nondenial-denial that focuses attention on unprovable administration intent. But beyond intent is actual construction. That is, the U.S. military has awarded contracts to erect enduring bases at Baghdad, the capital; Balad, in the Sunni center-west; Tallil, in the Shiite center-south; and near Rawah, on the western border with Syria. All this construction is being done not because of any master plan, but in the absence of it. To put it another way, the military has to take steps for a permanent presence in Iraq in order to be responsible -- since no one has instructed commanders about when they will leave.
  
  There is a strategic fog surrounding every aspect of the Iraq War. No one knows, in late 2006, whether the mission is to establish democracy, prevent civil war, or forestall or facilitate Iraq’s disintegration. The duration of an unclear mission is necessarily unclear, which forces commanders to prepare for all contingencies. While the Bush administration publicly denies any plan to occupy Iraq forever, its own strategic confusion is increasingly forcing the military to prepare for precisely such an indefinite, open-ended occupation in very concrete ways. The press, for its part, has treated such development as a paranoid left-wing conspiracy theory rather than documented fact, thereby preventing the public from gaining a fuller understanding of what the United States is actually doing in Iraq. And many in the Army are starting to fear the consequences of what the Pentagon is doing: entrenching a quagmire and facilitating a powerful incentive for Defense Department hawks to launch further wars around the Middle East.

Discuss.

[Tyrone Slothrop]

Noted plagiarist Stephen Ambrose:

• [Nixon's] basic message never changed. It was that a Democratic victory would lead to socialism at home and surrender to Communism abroad.... His exaggerations on the campaign trail cost him dearly.... His politics were the politics of division.... [H]e never really believed that the Democrats were leading the United States to socialism and surrender...

linky

[bilmore]

Discuss.

Okay.

For years, the Bush administration has refused to discuss how long the United States will stay in Iraq.

For years, the Bush administration has specifically - explicitly - stated that it would be improper and, well, dumb, to set some specific time for withdrawal. Bush has made the point repeatedly, since before the invasion, that this would be a long, slogging battle, and its end-point was not definable by time, but rather by result. That desired result, which I think has remained unchanged in spite of obtuse poli-cries to the contrary, is a stable Iraqi government, able to control not through raw power but through societal accord. (Attainable? Don't know, but that's another subject.) So, Bush said it would be long and hard, and Ackerman's complaint now seems to be that Bush never told us it would be long and hard. And, no, I'm not watching a Johnny Holmes movie as I type this.

Bush aides insist there are “no plans” to build permanent bases, a nondenial-denial that focuses attention on unprovable administration intent. But beyond intent is actual construction. That is, the U.S. military has awarded contracts to erect enduring bases at Baghdad, the capital; Balad, in the Sunni center-west; Tallil, in the Shiite center-south; and near Rawah, on the western border with Syria. All this construction is being done not because of any master plan, but in the absence of it. To put it another way, the military has to take steps for a permanent presence in Iraq in order to be responsible -- since no one has instructed commanders about when they will leave.

It was my understanding that these are bases to be turned over to the Iraqi army when that becomes feasible. Is Ackerman crying "Empire!", or "quagmire!", or just "waste!"? I can't tell.

There is a strategic fog surrounding every aspect of the Iraq War. No one knows, in late 2006, whether the mission is to establish democracy, prevent civil war, or forestall or facilitate Iraq’s disintegration. The duration of an unclear mission is necessarily unclear, which forces commanders to prepare for all contingencies. While the Bush administration publicly denies any plan to occupy Iraq forever, its own strategic confusion is increasingly forcing the military to prepare for precisely such an indefinite, open-ended occupation in very concrete ways. The press, for its part, has treated such development as a paranoid left-wing conspiracy theory rather than documented fact, thereby preventing the public from gaining a fuller understanding of what the United States is actually doing in Iraq. And many in the Army are starting to fear the consequences of what the Pentagon is doing: entrenching a quagmire and facilitating a powerful incentive for Defense Department hawks to launch further wars around the Middle East.

The mission, I think, remains as it was, described above. The duration remains as it was, described above. Bush said "long and hard", and, surprise, it's long and hard. And, yes, the rabidly right-wing MSM has, at every juncture, coddled and protected Bush. It's disgusting.

What I think is really disturbing the military is the lack of success with the plan at this point, and the seeming lack of nimble evolution of strategy and tactics. It's a tiring, wasting, costly process, and small numbers of determined fanatics can disrupt any society. We need to move into more tactics that don't depend so much on temporarily taking territory and killing the extant Islamicists and work more towards the training and turnover that doesn't allow for the CNN-like propaganda that the Iraqis are occupied. In addition, Bush has given short shrift to the serious effort within our country to impede this process for a combination of political gain and raw BDS. We're not, contrary to CW, taking the entire fight overseas; we're acting as though that's the case, while allowing the enemy to fight over here on a different front, with willing backers. Aside from a few instances, I think Bush has remained far too naive and complacent about the motives of The Loyal Opposition.