October 29, 2006
The Democrats And Taxes
According to such cartoon characters as Nancy Pelosi and other Democrats, should they manage to get enough of their fellow travellers elected so as to have a majority in the House of Representatives, with Pelosi expected to become Speaker of the House (well, Halloween is almost upon us, so what's a good scare among friends?), one of the first priorities of the Democrats will be to stamp out the Bush tax cuts and roll back our taxes to 1990s levels.
If I were an enemy of the state, I would utterly destroy my hands applauding this ambition. Unfortunately, I am a patriot who loves America, to say nothing of the fact that I am also an American who lives and pays taxes here, so I must convey the blatant fact that I am not a fan of this intended tax increase.
I understand the Democrats' need to tax me into the ground. Well, not exactly understand it, per se, but I realize that the Democrats have a serious problem with their fellow Americans being able to keep some of the money they earn and are fixated on the concept of raising taxes whenever the opportunity presents itself.
Some people are into sky diving, some people collect butterflies, some people are passionate stamp collectors, some people love archery, some tennis, some throwing rocks at passing cars, some surfing porn websites, some collecting sea shells, some climbing trees, others mountains.... Democrats are into raising taxes. It's what they do, just as sucking blood is what mosquitos do, or what leeches do.
It's not their fault, it's simply who they are.
They particularly like to tax those who are successful, like the rich and like large, prosperous corporations, and are very much like Robin Hood -- they take from the rich, and give to the poor. It makes them feel good -- hell, it makes them feel great -- stripping a big company of its investment capital plunges them into ecstasy.
Back in the 1980s, during the Reagan Administration, the greatest President in my lifetime stopped the bloodsucking practice of penalizing American business for its success, allowing it to keep its investment capital in order to put it to work, and lo and behold, despite the Democrats' criticism of what they fondly referred to as Reaganomics, our economy exploded into a dynamo of successful professionals, low unemployment, newly created millionaires and prosperous companies.
This trend continued through the Bush 1 Administration, but then, alas and alack, American voters sent Bill Clinton, a Democrat, off to the White House.
Keeping to the sacred tradition of Democrats, he raised taxes, as usual targeting the rich.
Before the end of his second term (he was actually reelected, go figure!), we were plunged into recession. The unemployment rate soared, businesses struggling to stay afloat transferred record amounts of their production to outsourced labor pools and after Algore, Clinton's Veep, lost the 2000 presidential election to George W. Bush, the newly elected President engendered massive tax cuts.
Naturally the Democrats, dismayed that Americans were being permitted to keep more of their earnings, mounted yet another of their innumerable bumper-sticker friendly campaigns -- "The Republicans have given tax cuts to the rich, screwing the poor as always!"
That was worth, at the very least, a good chuckle, since every American taxpayer was entitled to the cuts. The Democrats somehow managed, once realizing that they really couldn't produce any low income working folks who were being either neglected or recieving the fid, cited poor people on welfare and other premature social security venues who weren't benefiting from the tax cuts, the fact that these people didn't pay any income tax to begin with notwithstanding... they actually forced the government to give something "back" to these noncontributors as well.
Meanwhile, the tax cuts enabled corporate America and smaller business people to use the "surplus" equity to expand existing business and create new enterprises.
The result has been a major rebound in our economy and a serious decrease in the unemployment rate that is still adjusting downward. America is again flourishing!
But let's not be too confident, friends, okay? We still haven't had this year's elections, so we don't actually know where we stand.
We're pretty confident about holding a Republican majority in the Senate, but there has been a lot of negative conjecture regarding the House majority after 7 November. Personally, I believe we'll hold our majority there, as well, though we'll have a few less seats.
Should the Democrats gain a majority in the House Of Representatives, they will raise taxes, and you can bet your bottom dollar, assuming you still have one, that the late 1990s recession will return even more quickly than it went away.
Of course, the Democrats will find a way to blame Bush....
Posted by Seth at October 29, 2006 04:27 PM
And we actually have Democrat in Charlotte that is honest about it. He actually said, "Of course we raise taxes. That's what we're supposed to do: tax and spend." That's almost a direct quote. The next year he's on record as saying, "I make NO apologies for raising taxes."
Who is this wonder? The king of Mecklenburg county, who the Democrats and blacks continue to vote for in droves: Parks Helms.
Posted by: Ogre at October 29, 2006 06:08 PM
In 2000, he received the Americans for the Arts County Leadership Award during the annual meeting of the National Association of Counties.
We see above that his Helmsmanship in the arts is pronounced -- his art, like that of the rest of the Democrat quagmire, is the art of precision tax increases.
How sad our founding fathers would be if they could see that their legacy has been bastardized by such enemies of the American concept as this.
Posted by: Seth at October 29, 2006 06:22 PM
Excellent post, thanks for the heads up on this one. I'm amazed at the number of dimmy-crats that still think that they have a right to your money, and at the number of relatively ordinary people that consistently vote for them.
Posted by: GM Roper at October 29, 2006 06:32 PM
As long as we have Democrats, we will have a stranger's hand in our pocket.
And you wonder why so many people do the lion's share of their banking offshore...
Posted by: Seth at October 29, 2006 06:53 PM
As usual, your history of recessions sent me off to check. At
the 20th century, I could not find Clinton, nor
his Newt congress: the only recent recessions
listed were Carter 1980/Reagan 81-82/BushI 90-91/
BushII 2001. Of course the National Bureau of Economic Research may be an enemy political org.
If you continue to blame the Clinton admin for all of the Bush admin problems, I will have to blame the Carter fiasco on Nixon/Ford! (just kidding Seth. but if we can get a tax cut for this old retired guy, I will change my definition of Reaganomics from incredible Nat'l
Debt to whatever you stated above)
Posted by: BB-Idaho at October 29, 2006 07:36 PM
The Democrats have the most powerful propaganda machine in the history of the western world on their side -- the media.
Bibliographies almost invariably contain MSM credits.
You will recall that during the Clinton Administration, Bubba was claiming credit for "eliminating the entire deficit" (which he had claimed would take what -- 20+ years on his "plan"?) in the first 3 years of his Presidency? Yes, right, of course. Ahem....
The MSM was exultant!
In the late 1990s, the high tech industry (ies) began to unravel, so to speak, and right behind them were everybody else. We went into recession in or about 1998-1999.
The reality was more than obvious to millions of Americans who were directly effected by it, via such "subtle" indicators as jobs ceasing to exist and stock portfolios abruptly bottoming out.
Funnily enough, it wasn't until the nanosecond Bush was elected that the media suddenly realized we were in recession.
An administration's effect on the economy never manifests itself within that 4 year period -- new policies take a bit of time to make their presence known, so to speak. Clinton's second term reflected the "fruits" of his first.
Dubya had barely taken the oath of office when the Democrats accused him of causing the recession. To say that is absurd is an understatement -- to say that so many believed this is an indictment of the intelligence levels of a whole bunch of people who are actually permitted to enter voting booths.
Posted by: Seth at October 29, 2006 08:40 PM
Being a liberal, I am a very conservative investor: hence while my peers lost their financial shirts on the tech bubble, I plodded on to retirement in 2003 (a Dubya retiree!) I am in agreement with your last statement concerning
the downside of universal sufferage; when my side loses, the voters are idiots!
Apparently, recessions occur from a number of causes, not always related to gov't policies; probably a natural cycle in the Darwinian nature of capitalism. One would like to believe that taxes are simply our way of funding the business of gov't. Up here in God's country, the big argument is sales tax vs property tax and oh, my..
Posted by: BB-Idaho at October 29, 2006 09:09 PM
Please explain to me what recession in the late 1990s you are talking about. Here are the BEA's numbers - the official GDP numbers of the U.S. government:
Economic expansion and growth greatly improved throughout the 1990s. That is an economic fact.
Currently, the economy is inching toward recession. GDP growth came in for the third quarter at 1.6 percent (reported on Friday). It was the slowest growth in 3 years.
Before you tout Bush's economic performance you should actually educate yourself on basic facts. Bush cut taxes, but he has increased spending. He has increased annual government spending by about $1 trillion - only about $150 billion of this new spending is for defense. Economic growth, as measured by GDP growth, was far better under Clinton. Clinton left office with a budget surplus. Bush has proceeded to turn the rising surpluses over the last three years under Clinton into record deficits. He has funded his deficits with record accumulation of our national debt - $2.9 trillion in new debt and counting. The sad part is that his includes more than $1.1 trillion in foreign debt.
I have no idea where you get your figures from, but if you actually think that we were in recession in the late 1990s or that fiscal performance has been better under Bush than Clinton, then you are not looking at government figures available at the U.S. Treasury Dept., U.S. Bureau of Economic Analysis, CBO, or OMB.
Posted by: rob at October 30, 2006 02:02 AM
I have to admit to confusion about Idaho.
It is considered a red state, but I often run into articles characterizing it as a state populated heavily by liberals.
Is the voter demographic there in the process of changing, is it close to 50/50 or is it a state where people vote less by party and more by candidate?
Posted by: Seth at October 30, 2006 03:14 AM
I'm always impressed when someone shows me a long list of numbers which they use to refute tangible reality.
Not to get slightly off topic, but I was once in Reno during a heavy blizzard. During the blizzard, the Weather Channel was reporting that in Reno, it was partly cloudy with visibility to 1000 feet.
My former wife had been a weather observer (aerographer's mate) in the Navy. Her "eyeballs only" forecasts were used to brief fighter pilots. We used to watch the weather on TV, then go outside, where she would look up in the sky and deliver a forecast that was invariably 100% accurate and always significantly moreso than the weather folks derived using their scientific formulae.
This came immediately to mind when I read your comment. So did Ross Perot and his pie charts.
The poor soul who has been unemployed for six months while pounding the pavement five days a week has little time for lists of figures or concerning himself with the "big picture". He's too busy dealing with, to repeat the phrase, tangible reality. He needs to feed his family and become solvent again. This is a concept that seems to be totally lost on Democrats.
My point being: The economic factors that have a direct bearing on the American tax payer are
a) source of income,
b) the amount of his/her income the government allows him/her to keep, and
c) cost of living.
While c has been increasing "forever" in large population centers and in more recent years spilling over into suburbs and rural towns as big city people move to them, bringing their metropolitan needs with them, a and b tend to fluctuate depending upon political considerations.
I often watched C-Span during the Clinton years and saw frustration in action as the GOP majority spent more time working around Clinton's "fun with vetoes" policy than they did getting things done so they could move on to other matters. Remember the budget fiasco for 2005-2006 where it finally took a threat by Greenspan to raise interest rates if Clinton didn't stop vetoing every budget that came before him(this while Republicans spent the holidays in DC trying to complete a budget while the Democrats went home to their families)?
Fact: The Clinton Administration inherited a healthy tangible economy. New businesses were being created at a heavy rate, people were working, the stock market was healthy, sales of non-necessity high ticket items were healthy, etc.
Fact: Despite all Clinton's MSM supported blather about "fixing" the economy, and any amount of cooking the books his treasury may have done (we have already seen how far some of those he surrounded himself with were ready to go for him, the law not an issue), he was doing what modern Democrats all seem to do -- blatantly fabricating.
Again, the reality spoke for itself. Joe Shmoe with his family of four didn't have to listen to a bunch of rhetoric or consult a list of figures to know that he and everybody he knew were working, and that several of them were coming over on Sunday to watch the Super Bowl on his new 62" TV.
Fact -- during the 2nd half of Clinton's 2nd term, businesses began to downsize or fold at an alarming rate. That was the start of the recession. Right around that time, I moved from one large city to another, east coast to west, and saw the same actual, tangible, right before my eyes event on both coasts, without needing to consult a list of numbers compiled by or under the auspices of the Clinton Administration.
Naturally, in the true spirit of the Democrats and the MSM, the recession was ignored because Clinton was President, yet Bush barely had time to take the oath of office before the left suddenly acknowledged the recession and blamed it on Bush.
Having looked over your blog, I see that you're a smart guy, so I know you couldn't possibly have bought that whole line like all too many of the idiots out there in La La Land did.
Fact -- The only thing Bush did that could have had any profound effect upon the hands-on economics of the common man was cut taxes. That was it.
Suddenly businesses are growing while others are being created, unemployment is shrinking well below the margin-for-error percentage points (those reserved for those whose unemployment benefits have expired or who have died or been kidnapped by Martians) and new hires are being reported in 6 digit numbers every month.
This is not a coincidence.
I will not argue with you re government spending, even with expenditures for the GWOT and Katrina, we are overspending, especially in light of the fact that our government is run by conservatives. That can be reigned in, and in fact has become a committment for conservatives in Washington.
The bottom line, however, is that having a Republican Congress and a Republican President at the same time has proven out -- America is working again, which, while meaning very little to Democrats, is a priority for Republicans. A healthy economy begins with jobs.
Posted by: Seth at October 30, 2006 04:52 AM
In comparing the Democrats to Robin Hood, you make a fundamental error - no politician ever taxes to give to the poor. They only say they do, the money almost always ends up in their pockets, their cronies pockets and in the pockets of the hordes of bureaucrats they inevitably hire to do the redistribution smoke and mirrors bit. Tax which is supposed to redistribute wealth does work, but not quite in the way advertised.
We in Britain have been trying it for years and only Maggie Thatcher had the balls to reverse this stupidity. As soon as Blair got in he and his cronies set to work to rob everyone of their wealth and redistribute it to themselves and their cronies.
Continue the good work - keep on flagging up the lie that underpins the mantra that "higher taxes means help to the poor". It doesn't, it just means that the rest of us get poorer and the politicians get richer.
Posted by: The Gray Monk at October 30, 2006 05:46 AM
Gray Monk --
Pardon my error, you're absolutely right. Robin Hood was a poor example, as he did give to the poor. What was I thinking!
Our liberals here, who some time ago purchased the souls of the Democratic party, just love big government, the more the merrier, and each new program they engender does seem to entail a massive beaurocracy. If they collect a dollar to help the poor, ninety cents will be eaten by the overhead they create to deliver the remaining dime to the intended recipients.
San Francisco, the "home office" of American liberalism and the city I lived in from early 1999 to this past January (as I like to say, I finally decided to move back to the U.S.), is a perfect example. That city government has to comprise a significant percentage of the population -- its social services department alone is a monster (SF, social services, go figure, heh).
The end result is that no matter how much tax they collect, there is never enough money to support their ever-expanding payroll and expenditure schedule.
So they issue bonds, and the liberal voting majority invariably goes along with them. Of course, somewhere along the line the bonds come due, and the taxpayer pays the interest.
Had Robin Hood been a Democrat ala today, he could have made off with the crown jewels and the poor would be lucky if they got to divide up a loaf of bread.
Posted by: Seth at October 30, 2006 06:15 AM
Ha ha ha ha ha. What a joke!
Clinton came into office with unemployment at 7.5 percent and he left with it at 4 percent. He inherited a $290 billion budget deficit and left office with a $236 billion budget SURPLUS (the largest in American history).
I can see that you don't actually believe real numbers. Your "facts" are simply false, but if you want to hold on to them that is up to you. Rather than go point by point, I want you to explain the two following numbers:
Unemployment went down every year under Clinton. It has been mixed under Bush.
The National Debt has exploded under Bush - it grew by $1.61 trillion under Clinton (8 years). It has grown by almost $3 trillion under Bush (6 years).
Please educate me on how the government numbers are wrong.
Posted by: rob at October 30, 2006 06:43 AM
Pick a number, any number! According to rob, the ONLY measure of the economy in America is unemployment and the debt. Good thing there's nothing else to worry about, eh?
It's also interesting to note how much news coverage there has been in the past year about the economy -- by most accepted indicators it has been the best in decades. But there's nothing in the news about that, is there?
Posted by: Ogre at October 30, 2006 07:13 AM
Sorry about the publishing delay, I think my spam filter is a fellow Republican, it thought you were a spambot, I had to retrieve your comment from the notification email.
Do I trust gubmint figures? No. They are compiled by departments run by cabinet members who are appointed by administrations, each with its own political agenda -- while I am a conservative Republican, I don't give credibility to "figures" from either side of the aisle.
The only figures to which I pay attention are those of the marketplace; Corporate reports, stock market trends, indices, futures, etc. Those are accurate information on the economy because they are the economy.
Otherwise, I assess what I see with my own eyes.
According to your profile, you are a professor. This answers many questions re our differences of opinion. It is a case of Theory vs Practice.
While my own profession sometimes entails giving seminars or conducting training classes for clients' security departments, I much prefer working.
Interestingly enough, when I was running a security shift in a casino years ago, one of my "rowdiest" floor officers was a moonlighting college professor, whom I dubbed the Indiana Jones of casino security
Posted by: Seth at October 30, 2006 07:47 AM
Every American could have a $500,000.00 a year job, a mansion and a private jet, and the MSM would still condemn the economy until another Democrat got into the White House, then before the new President even got his hand off the Bible they would be praising the great economy he had created.
Then he would raise taxes to wrest away a larger slice of our new prosperity.
Posted by: Seth at October 30, 2006 07:54 AM
Good post. Charlie Rangal is the only truly honest Democrat. If they gain majority he would chair Ways and Means and Committe on Taxation. He has repeatedly stated that he would repeal the Bush tax cuts and raise taxes across the board. Though they try to campaign as fiscal conservatives they are tax and spend liberals who would destroy this great economy!
Posted by: Ken Taylor at October 30, 2006 09:20 AM
That's what irks me to no end -- they create the problems, our side corrects them and is condemned by them for doing so via disinformation, then they return and restore the problems.
It's like a tragic comedy.
Posted by: Seth at October 30, 2006 09:33 AM
Seth, great post. I will not pretend to know or understand economics, especially not at the federal level. But I do understand my pocketbook and the amount I pay out in taxes. I have been paying less even though I am earning more under Bush versus Clinton. I also perceive the economy to be stronger with more folks employed, therefore there are more tax payers.
I will not argue that Bush or any other Republican has been fiscally frugal these past 6 years, and for that I am very disapointed - but not disappointed enough to vote for certain tax increases on Nov 7th.
There are many other factors holistically efficting my voting decision, but taxes are a large consideration.
Posted by: Old Soldier at October 30, 2006 09:38 AM
Same here. My disposable income rose after the Bush tax cuts, which also allows me to put more into savings.
The tax cuts helped the economy immensely. Any child with reasonable intelligence can see how that works.
Posted by: atheling2 at October 30, 2006 09:46 AM
Old Soldier --
What the Democrats either don't perceive (and they would "lead" the country!) or don't care about, take your pick, is that raising taxes would soon plunge us back into the tragic 1990s economy -- the one they shower with praise because it was their economy.
I see this as comparable to walking into a furniture store to buy a couch and
Seeing a brand new, beautiful sofa that would go perfectly in the living room and costs only $500.00, and an old, ugly, battered, used, stained couch with a $2,000.00 price tag and buying the latter, because they learn that the former owner was a Democrat. :-)
Posted by: Seth at October 30, 2006 09:51 AM
...which tells us quite a bit about the Democrats.
Posted by: Seth at October 30, 2006 09:54 AM
Just as I thought. You have no real understanding or explanation for the government figures.
Wall Street makes its decisions based on the same government stats that you claim are bunk.
You want "tangible" effects. Bush touts his NCLB education plan. It is nothing more than an unfunded mandate by the federal government. Localities must meet certain requirement or risk losing federal funds, but the funds don't cover the requirements. So what happens? We pay higher real estate taxes.
The deficit spending is paid for by borrowing. That money is paid back with interest and it comes out of tax dollars.
Interest rates are increasing - why? For two reasons - inflation is rising and in order to fund our huge deficits and national debt we rely on foreign investors. Those investors are not stupid - they expect a good return. The risk of investment in the U.S. dollar and U.S. debt is going up which means that they require better interest rates. Otherwise they buy Euros or other currencies.
But of course, based on your comments - the federal figures just don't matter. I hope you are not like some Americans who think the government can just print more money and solve its problems.
Posted by: rob at October 30, 2006 10:09 AM
Some conservatives are starting to worry about the Nat'l debt now. Understanding your personal view of credit, was wondering about your thoughts?
Posted by: BB-Idaho at October 30, 2006 10:41 AM
As I pointed out to you at Liberal Lies... I worked on Wall Street for a few years in the 1980s, and understand well the government figures -- I had to in order to do my job.
My point, once again, is that I watch what the market is doing. What's bullish, what's bearish, open interest, what companies I'm interested in are expanding into or multiplying their interests in, the indices (those traded in the futures markets), the Dow.... The performance of the marketplace comes before the govt figures, it determines the basis for the data the govt collects. What they do with it afterwards is another story.
This is not to mean that I ignore things like interest rates set by the fed -- I ignore their statistical data. I think you know what I'm talking about and are just busting my chops, but that's fine -- I do the same thing from time to time.
You mention NCLB -- the very fact that there is a need for such a program is an indictment of the school system.
The state of our liberal run public education system, the one that keeps demanding more and more money while performing more and more poorly -- unctuous liberalism at its finest, playing politics at the expense of our nation's children as they fall farther and farther behind children in other countries.
There's no way that can be lain at the feet of the GOP, unless it is to criticize them for allowing education to fall into the clutches of the left.
I would be glad to get into that another time, but I have a ton of work (the kind that pays the bills) to do to FedEx out tomorrow, and scores of cello bags to fill with candy for the monsters and hobgoblins who will be here tomorrow.
Posted by: Seth at October 30, 2006 11:15 AM
Mixed review here.
Yes, the Democrats to want to raise government spending, and increase taxes to the extent the populace will let them. Indeed, as subsequent events demonstrated, the main reason for tax and spending stasis (relatively speaking) from 1995-2000 was "divided government" - Republicans controlled Congress; Democrat in the white House, plus the unexpected tax revenues from the "dot-com" bubble.
I remain unconvinced that it was the Bush tax cuts that has enabled the economy to recover; rather I put most credit on the Federal Reserve's interest rate policy that maintained liquidity (avoiding the errors of the 1930's).
I do give the Republican Congress some credit for not overdoing it on tax cuts and thereby precipitating an inflationary spiral. And it is true that almost all the Democratic alternatives have been ill-conceived and ill-timed.
That said, we do face a brewing tax vs, spending crisis, related in large part to the impending acceleration in FICA and Medicare payments as the boomers reach retirement age plus the ticking AMT bomb that threatens to hit the middle class.
For this I do have to blame the Republicans, since they have been in control of Congress and the White House, and have not had the courage to deal with this matter. Rather they have continued to leave entitlements uncut (and indeed expanded them) in their cynical version of "starve the beast".
This is where the Republicans missed the boat after 9/11; rather than proceed with business as usual, they should have used this opportunity (in a legitimate appeal to national security) to take control of entitlement spending obligations, initiate a redirection of defense spending (taking major whacks out of the pork system in the process), and introduce long-term reform of the tax code. They did none of these.
So no matter who wins in 2006 or 2008 and beyond, we will have serious adjustments to taxes and spending to deal with in the not so far-off future. I have little confidence that either party is up to the task, but rather anticipate that the energy will be directed at making someone else "pay for the bill". And unfortunately, it remains unclear how much longer foreign nations will be that someone else.
Thus, for 2006 it is valid to prefer the Republicans since, in the words of the classic eulogy, "his brother (i.e. the Democratic party) is worse". However, this is not exactly a ringing endorsement for the future.
Posted by: civil truth at October 30, 2006 11:26 AM
Agreeing with several commenters here that the gubmint is not being as conservative with its spending as I would like it to be, I have to agree with Rob on that one point.
As long as we keep up the ambitious spending and financing it by selling more T-bills, bonds and notes, the national debt is only going to get worse. In order to maintain the balance necessary to keep the tax cuts working for the economy, this needs to stop.
As he points out, rightly, we have to be competitive to sell our treasury securities, and that means offering interest rates that will keep up with our competitors.
And the American taxpayer is the source of the interest we pay those investors.
I expressed my disapproval, in a reply to the earlier comment by Grey Monk, of the City of San Francisco's ever-readiness to sell bonds to keep up with their mega-spending and the fact that the taxpayers don't seem to mind the fact that they will be shouldering the interest payments when those bonds come due. They do it here in North Carolina, as well, though not to the extent SF does.
This is usually a liberal thing, but the current crop of wasting money and selling federal financial instruments to cover it is as much the fault of Republican politicians as it is Dems.
The Bush Administration and Congress have to get their spending under control, it's as simple as that. If executives in the private sector spent their companies' revenues like that, they would be out the door forthwith. This is one reason why I decided, not long ago, that we would be infinitely better off with congessional term limits -- too many years on the Hill seems to make these folks lose touch with reality and think tax money is actually grown on a plantation. If it was their money, they would be the tightwads we need them to become with ours.
Hell, if I were elected King of America for a week, one of my first edicts would be doing away with career politicians altogether. Two terms in one office or another, then back to the private sector to reap what they've sown.
Posted by: Seth at October 30, 2006 11:47 AM
Seth, I am not just busting your chops. I really don't understand how you read economic data, but it is clear you have no faith in government figures.
So - according to you - when Wall Street considers GDP data, unemployment, interest rates, etc. the Street is just plain wrong. You may want to contact all the brokerage houses and inform them.
Since you don't believe in the government figures, I will go back to my first question about your belief that we were in a recession in the late 1990s. How did you determine that? What is this phantom recession based on?
While you are at it, what is your definition of recession? To most of the world it is two successive quarters of a declining GDP. I am curious to know how you define it.
Posted by: rob at October 30, 2006 11:51 AM
Civil Truth --
Sorry for the delay in my reply, but between the technical problem, dealing with prep for and catering to the trick-or-treaters coming to my door (I wasn't doing the cheap-shit thing like tossing a single piece of candy into their bags, I actually made up bags of assorted things to give them -- kids don't get to be kids for very long in the present quagmire of life, so I was doing my part to help them enjoy one of their little escapes, as it were. It's been quite some time, but I remember, distantly, my own trick-or-treats during better times) and working on the pre-requisite details of a couple of work projects that couldn't be back-burnered, I was kind of delayed.
I agree that the Republican majority has screwed up re spending adjustments -- they could have done so damn much, but instead joined the Democrats in playing politics and in pork barrel spending to further their own careers (via votes).
I had, my bad, neglected to figure the baby boomer retirements into my reasoning, especially since I've posted on that quarter before, not as a main subject, but as a subject of reference.
So much pork needs to be eliminated just to embrace that necessity -- especially in the entitlement sphere. We cannot deny these retirees, because they, like us, have been paying into the Social Security system -- they are entitled to get something back for it.
What a mess!
In my opinion, the only way we will ever curtail spending by the government will be to impose term limits -- a concept I was totally opposed to up until fairly recently.
It seems that career politicians, once they've served enough terms to be absorbed by "the machine", seem to lose touch with reality and come to believe that the funds available to them are grown on plantations.
A two term maximum, bringing in "fresh meat" from the private sector, would keep our members of Congress within the memory range of what the voters want, and keep them frugal, for the most part -- they could serve their two terms, then vacate for others who will serve with the reality of Americans' wishes fresh in their minds.
Where I differ with you is on the effect of the tax cuts on the economy. When I worked on Wall Street a couple of decades ago, I was afforded an in-your-face view of the effect of tax rates on investment.
When Bush cut taxes, he released massive equity that people and institutions were restraining for the simple reason that they didn't want to share any overt amount of their prospective hard-earned profits with the government. Why take risks when you'll only have to share any positive results with "partners" who aren't even contributing to the bottom line?
When firms and investors were informed that they could keep significantly more of their profits, they began releasing risk capital that would otherwise have remained in relatively risk free, non-employment generating financial instruments.
Based on this reality of finance, I give the lion's share of credit for our economic recovery to the tax cuts.
On your final point, I can only agree with every iota of my very being -- as I've stated before, it is a sad state of affairs when we have to view the subject of our votes as the lesser of two evils rather than a positive force...
Posted by: Seth at November 1, 2006 10:10 AM