jackson33 Posted September 17, 2010 Posted September 17, 2010 Yeah... or we could blame the cash reserves on Obama, or on uncertainty about extension of the Bush tax cuts, or on healthcare, or on all of the other irrelevant crap on which people keep blaming the huge stores of cash seen in business right now. Sure... I guess there's always that. [/Quote] iNow, you can't honestly suggest, if you had a viable business to expand or an idea for a business today and had the actual money to place at risk, that you would indeed do just that. "Irrelevant crap" to most people or what's referred to as cost to employ a person, currently simply not determinable, to the best projection annalist available. Private industry employers spent an average of $27.64 per hour worked for employee compensation in June 2010, the U.S. Bureau of Labor Statistics reported today. Wages and salaries averaged $19.53 per hour worked and accounted for 70.6 percent of these costs, while benefits averaged $8.11 and accounted for the remaining 29.4 percent. Total compensation costs for state and local government workers averaged $39.74 per hour worked in June 2010. Total compensation costs for civilian workers, which include private industry and state and local government workers, averaged $29.52 per hour worked in June 2010. (See chart 1.) [/Quote] http://www.bls.gov/news.release/ecec.nr0.htm Aside from that and through your listed possible/probable mandates by Government and lets guess 30 NEW Agencies, there will be extended internal administrative cost, not to mention a Federal Audit of every business Small/Medium/Larger, as of today not even legally possible. Just one example would be reporting and filing 1099 forms for all suppliers, that any business spends more than 600.00/year with. At one time in running a small business and in Texas, I had several operations each with there own checking accounts(s). One year, I happened to miss one interest payment by one of maybe 40 accounts, think about 5.00 interest paid, that cost me hundreds of dollars to clear up and a great deal of time. That was 30+ years ago. If even then, I had been required to REPORT, via a 1099 (official taxing form and enforceable under law), I might have had to report 300, 400 or more suppliers/service or other entities, which could and will be crossed checked for some self serving purpose. Big Brother!!!! What’s their deal? They actually have to do with some reporting requirements passed in the Affordable Care Act. As a pay-for in the bill, the ACA mandated 1099 reporting for all businesses on certain transactions over $600. The idea here is that companies routinely don’t report such purchases, and summarily don’t pay taxes on them. So basically, the amendment from Johanns eliminates this requirement, and allows businesses to freely evade taxes again. The Nelson amendment would exempt small businesses with less than 25 workers from the requirement, and raise the threshold on transactions to $5,000.[/Quote] http://news.firedoglake.com/2010/09/14/inside-the-1099-reporting-requirement-the-first-piece-of-the-health-care-law-under-threat-today/ It's my understanding "Card Check" under another name, if not passed by Congress, is in other Bills where the program can be implemented. Whether true or not, the point is Union/Government Workers already are compensated twice the public sector, that potential raise to the uninformed employee is too great to just decline and alone would drive 50% plus of all small business, out of business, IMO.
iNow Posted September 18, 2010 Posted September 18, 2010 (edited) iNow, you can't honestly suggest, if you had a viable business to expand or an idea for a business today and had the actual money to place at risk, that you would indeed do just that. "Irrelevant crap" to most people or what's referred to as cost to employ a person, currently simply not determinable, to the best projection annalist available. Did you miss my central point there, Jackson? It sure appears that you did. Let me put it forth yet again so it is more accessible to you. Viable businesses are expanding. That's not the group sitting on cash, ergo your point is rather moot. The businesses sitting on cash are those in existence already who are not making capital or human resource investments due to low demand. If demand picks up, levels of cash will decrease as businesses expand to satisfy and fill that demand by purchase of new equipment and additions to payroll. Along similar lines, people looking to start businesses cannot yet themselves be described as "a business sitting on cash" since their business has not begun. They're just people with an idea at the time, not a business, so it's disingenuous of you to include them in your population. The central issue is one of demand. Low demand leads to low investments, lack of expansion, and consequently more available cash. If you disagree with this, then I fear your long years in business have not really accounted for much. This is rather basic stuff I'm putting forth here, and it's not like you need advanced doctorates to grasp it. Again, the businesses who wish to expand, will. Again, the businesses with demand for their product will grow to satisfy that demand, and that growth will be fed using their cash to pay for people and equipment. They are not the ones sitting on cash. There is ALWAYS uncertainty in the market... Investment decisions are ALWAYS inherently risky and potentially volatile. To suggest that it is uncertainty itself which is causing the high stores of cash we are seeing right now strains credulity to the breaking point. It simply does not compute. The numbers are not there to support your assertion. Uncertainty is forever present and the uncertainty in the current market doesn't scale with the claim you are making about huge stores of cash. I stipulate that uncertainty plays a role, but not even close to the magnitude you are suggesting. Lack of demand for products DOES. As for the rest of your comments (like those where you yet again try to conflate the bush tax cuts with healthcare)... they are completely tangential, or as described by another earlier in the thread, completely beside the point. Edited September 18, 2010 by iNow
Pangloss Posted September 18, 2010 Author Posted September 18, 2010 I'm not sure how many jobs are created by extending a tax cut that's already in place. Except, this is not a fair representation of my actual point. I was talking about jobs created by ceasing the cuts. How does raising taxes create jobs?
divagreen Posted September 18, 2010 Posted September 18, 2010 How does raising taxes create jobs? I imagine that the increase in the field of accounting and tax auditing must be consistently exponential.
iNow Posted September 18, 2010 Posted September 18, 2010 How does raising taxes create jobs? I'm glad you asked. It's about increased revenue to the government which in turn results in federal spending. Federal spending has consistently and practically without fail been the single biggest stimulator of economies and job growths. Below is an example of how federal spending, not tax cuts, did exactly this from 2001 to 2005. http://www.jobwatch.org/ Changes in tax law since 2001 reduced federal government revenue by $870 billion through September 2005. Supporters of these tax cuts have touted them as great contributors to growth in jobs and pay. But, in reality, private-sector job growth since 2001 has been disappointing, and a closer look at the new jobs created shows that federal spending—not tax cuts—are responsible for the jobs created in the past five years. Did that help? Here's a more recent real-world example from just a few short weeks ago: http://www.reuters.com/assets/print?aid=USTRE67N55X20100824 [Federal Stimulus] raised employment by between 1.4 million and 3.3 million jobs during the second quarter of this year, CBO estimated. Measured another way, CBO said the stimulus increased the number of full-time equivalent jobs by up to 4.8 million, as part-time workers shifted to full-time work or employers offered more overtime work.
jackson33 Posted September 18, 2010 Posted September 18, 2010 iNow; Yesterday and after forming my response to your post, Bernie Marcus founder and CEO for years of Home Depot and a thousand times more qualified to explain Federal Intrusion into small business than myself gave the following interview. If you will take the time to watch or any person interested in how so many of today's major employers actually got started and why the system no longer affords the possibility for new business to do the same, you might understand what my concerns are for your generation and future ones. Tags: Neil, Cavuto, Fox, Business, Faux, News, FBN, HD, Home, Depot, CEO, Bernie, Marcus, founder, chairman, millionaire, billionaire, small, loans, corporations, capitalism, tax, cut, hikes, bank, bailouts, interview, save, country, Barack, Obama, Administration, White, House, Congress, Senate, Democrats, Democratic, Liberal, Progressive, agenda, Republican, Tea, Party, socialism, socialist, truth, fail, failblog, pwn, pwned, owned, Atlanta, GE, Jeffrey, Immelt, CNBC, media, left-wing, far, left, Jewish, Larry, Summers, Tim, Timothy, Geithner, [/Quote] http://videos.wittysparks.com/id/72057662461444939 Where your from, but a Company I was involved with for years, HEB had a little different approach, simply keeping business with in the State...avoiding intervention for some time...Marcus defined the final nail in the coffin as the "Sabanes Oxly Act 2002"....Literally the punishment of the entire to protect from a few. This is not only impractical, no amount of regulation/law is going to prevent dishonesty in business or society, evolving to advanced control for all involved and if this tends to come from an agenda driven Government, can be devastating. The bill was enacted as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of affected companies collapsed, shook public confidence in the nation's securities markets.[/Quote] http://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act I'm glad you asked. It's about increased revenue to the government which in turn results in federal spending. Federal spending has consistently and practically without fail been the single biggest stimulator of economies and job growths. [/Quote] The ultimate "SPIN JOB"; Decreased taxation has always increased revenue, for government Government or cost of products in business. Not only did the 2001-3 cuts define cost for a decade in advance (confidence/stability) it stimulated "Free Market Capitalism" activity, which produced both higher GDP's and Federal Revenue. It was the Federal (Congress) that lead to the Housing/Financial Bubble and the mishandling of that problem, either by way of Paulson and/or Bush, by previous inaction (not including 30 years of regulations) or unadvised preventative actions after the fact. iNow, it's no different than any person's or families budget, a community, town or city, State or the Federal approach. You simply are not going to advance your economical standing by borrowing addition funds, to create an illusion. As for the rest of your comments (like those where you yet again try to conflate the bush tax cuts with healthcare)... they are completely tangential, or as described by another earlier in the thread, completely beside the point. [/Quote] And IMO your trying to ignore the primary factors involved for business 'start ups' or 'growth' of those that would, under different circumstances. If it were strictly a 3% or 5% increase in taxes on a profit, it alone would cause NO PROBLEM. I'd be the first person out there investing what ever I could for a potential gain, at a 3/5% cost in THOSE GAINS. Add in all the other variables and Health Care to the many examples I've offered and risking that dollar of investment, is very likely to produce no return. whatsoever. As Marcus, indicated in the interview sited, what happens in the last days of this Congress, is going to be very important. Right now, in an effort to maintain some control of Congress, they might extend the BUSH TAX CUTS, I'd think for at least two years and for everyone, before the elections near the day they recess, then leaving it up to Obama to ignore, effectually a VETO and return for the final session, with all kinds of trouble making legislation, if in fact they have lost power, back to targeted BTC extensions, just one....
Pangloss Posted September 18, 2010 Author Posted September 18, 2010 It's about increased revenue to the government which in turn results in federal spending. Federal spending has consistently and practically without fail been the single biggest stimulator of economies and job growths. Well first of all the question of whether or not Congress and the President can convince the American people to support another stimulus bill does not appear to be related to whether or not the IRS is receiving more tax revenue. They're just not going to get one, at least not in the near future. And really if it comes down to perception then it seems counter-intuitive to expect the majority in the current political climate to go along with increased taxation coupled with increased government spending. That's actually a tremendous boost to your ideological opposition's argument that you just want to build a collective socialism, in which all (or at least most) revenue is collected and distributed by People Who Know What's Best For You. This does not strike me as a winning formula, politically speaking. The American public is screaming to go in exactly the opposite direction (and the other 7 members of the G8 agree with the American public on this one.) It gets worse. The budget is, what, $1.5 trillion in arears? Repealing the tax cuts -- even all of them -- won't, I'm assuming, collect an additional $1.5 trillion next year (am I wrong?). So if you can't even collect that, then you can't also collect a significant amount of money that could be poured into a new stimulus bill. I mean sure you could ignore the deficit and spend more in arears, but then why tie a repeal to a stimulus in the first place?
iNow Posted September 19, 2010 Posted September 19, 2010 (edited) iNow; Yesterday and after forming my response to your post, Bernie Marcus founder and CEO for years of Home Depot and a thousand times more qualified to explain Federal Intrusion into small business than myself gave the following interview. Well, that's fantastic. Thanks for sharing, Jackson, but it's also completely beside the point. My response to you was describing how blaming uncertainty for the huge stores of cash held by businesses right now strains credulity, and how a more evidence based position demonstrates that those cash stores are the result of low demand. The ultimate "SPIN JOB"; Decreased taxation has always increased revenue, for government Government or cost of products in business. Not only did the 2001-3 cuts define cost for a decade in advance (confidence/stability) it stimulated "Free Market Capitalism" activity, which produced both higher GDP's and Federal Revenue. I'm perfectly willing to entertain this assertion, Jackson, but as can be seen clearly by anyone reading this thread, the references I have shared call into question the validity of this point. Yes, decreased taxation will help some, but the numbers I've put forth show clearly and consistently how increased government revenues help more. One must focus on the net impact of the various approaches (tax cuts versus federal spending), and when you do, it becomes immediately apparent that the tax cuts are pretty pathetic and don't live up to the claims being made about them, especially the tax cuts for the richest 1%. Well first of all the question of whether or not Congress and the President can convince the American people to support another stimulus bill does not appear to be related to whether or not the IRS is receiving more tax revenue. They're just not going to get one, at least not in the near future. And really if it comes down to perception then it seems counter-intuitive to expect the majority in the current political climate to go along with increased taxation coupled with increased government spending. Well, I'm not here arguing politics or the ability to pass bills, so that's little more than a red-herring (or, at best, a wholly non-sequitur response to my points). I've been using evidence, reason, and logic to support my points that the tax cuts don't do what they say, and that increased revenues will result in more federal spending which has consistently had a net positive impact on the overall economy. The fact that passing a bill like this is hard has zero to do with my actual argument. I agree with you that that politics of it are hard, because we have a lot stupid uneducated people in the US who can't think rationally or base their positions on evidence. That's actually a tremendous boost to your ideological opposition's argument that you just want to build a collective socialism, in which all (or at least most) revenue is collected and distributed by People Who Know What's Best For You. Except, I'm not talking about any such thing whatsoever. I'm talking about using logic, reason, and evidence to support our decisions. What my "ideological opponents" do or don't do does not change my points, nor their validity... No matter how much they scream about socialism or the left trying to take over or any of the other crap they scream about. My point is that data shows clearly how federal spending has proven a more effective economic stimulator than tax cuts, and I have supported this position with reason and evidence. Let's focus there, okay? This does not strike me as a winning formula, politically speaking. And, I tend to agree with this, but that doesn't mean it's not the best approach. Teaching evolution in schools is sometimes not a winning formula politically speaking either, doesn't mean it's not the best approach. The American public is screaming to go in exactly the opposite direction (and the other 7 members of the G8 agree with the American public on this one.) Yes, just like they did in 1937... In exactly the same way... and when the government acted on those noisy members of the populace screaming from the top of their lungs about issues on which they were ill-informed, we plunged right back into a recession again. The fact that people are screaming is hardly enough. We could do what they say, but they're wrong. In addition to 1937, Japan in the 1990s offers further support of this point, as does the problems in Ireland right now despite their huge calls for austerity. People scream. We should listen to the ones who support their points validly and rationally, not those who yell the loudest. I suppose you may feel otherwise. I guess what I just said is not some absolute truth, but more of a personal guiding philosophy. It gets worse. The budget is, what, $1.5 trillion in arears? Repealing the tax cuts -- even all of them -- won't, I'm assuming, collect an additional $1.5 trillion next year (am I wrong?). So if you can't even collect that, then you can't also collect a significant amount of money that could be poured into a new stimulus bill. I mean sure you could ignore the deficit and spend more in arears, but then why tie a repeal to a stimulus in the first place? Huh? Leaving the tax cuts in place makes the deficit WORSE. What's your point, exactly? You're mixing arguments here somehow, and I'm struggling to follow. We leave the tax cuts in place, the deficit increases more than if we repeal them. Sigh... I need to just walk away. This shouldn't be so hard to explain. It's pretty simple stuff. Edited September 19, 2010 by iNow
Pangloss Posted September 19, 2010 Author Posted September 19, 2010 I agree with you that that politics of it are hard, because we have a lot stupid uneducated people in the US who can't think rationally or base their positions on evidence. That's actually a tremendous boost to your ideological opposition's argument that you just want to build a collective socialism, in which all (or at least most) revenue is collected and distributed by People Who Know What's Best For You. Holy shit... WTF are you talking about? Where did I do that again? You misunderstand. I didn't say it was a logical argument on their part, I said it's how they will likely react. It's a little thing called "politics", and I believe the politics of your suggestion are relevant. And by the way, calling people stupid, uneducated, and unable to think rationally is just another way of saying that you know what's best for them. Of course I don't think you want to build a collective socialism -- I take people's opinions at their word, iNow, even when you don't offer me the same respect, and I'm familiar with your basic position. But I have to say calling them stupid doesn't strike me as a winning strategy in politics any more than it's a winning strategy in forum debate. Yes, just like they did in 1937... In exactly the same way... and when the government acted on those noisy members of the populace screaming from the top of their lungs about issues on which they were ill-informed, we plunged right back into a recession again. Or we plunged back into a recession again because of the New Deal, depending on which of the two schools economists we ask, neo-Keynesians or Chicagoans. It gets worse. The budget is, what, $1.5 trillion in arears? Repealing the tax cuts -- even all of them -- won't, I'm assuming, collect an additional $1.5 trillion next year (am I wrong?). Huh? Leaving the tax cuts in place makes the deficit WORSE. Again you've misunderstood. What I said in the quote above is that ending the tax cuts (your preference) will indeed result in the collection of more revenue, but not (as I understand it) enough to make up for the deficit. Yes? You said earlier that the additional revenue would allow the government to fund another stimulus. But if the new revenue can't pay off the deficit and then some beyond that, and we don't suddenly discover another revenue source that puts us in the black, then logically a new stimulus would incur new debt. Yes? But if you're going to incur new debt, then why wait? So it doesn't really make sense to tie new tax revenue to a new stimulus. If you're going to do a new stimulus, then just do it. Which brings us back to the question of how raising taxes can create jobs. I understand that it can create more jobs in federal government, but there are two problems with the theory that they can more fully employ the country in general. #1) Our high unemployment rate isn't because the economy sucks, it's because people are trained for the wrong jobs. The Wall Street Journal showed, as I mentioned earlier, that if people were qualified for the jobs currently available, unemployment would only be 6.6%, fully three points lower than it is today. This suggests that if we're going to retrain them to do something different, why not make it something that's already in demand right now? #2) As far as I can tell, nearly everyone, President Obama included, feels that it's the private sector that needs to start hiring again. The tell-tale of this particular recession is that government jobs HAVEN'T solved the problem. The census workers are a great example -- they put in their three months, and then they lost those jobs, making the problem seem even worse. So unless the plan is to put everyone permanently to work for the government (ye olde socialist nirvana, which we all seem to agree is undesirable), stimulus for temporary job creation is not a useful long-term strategy. Now, unlike some people I know, I won't say that one of the economic schools is right and the other one is wrong. So I won't say that temporary workers drag out a recession/depression and just make things worse and that everything would have recovered better if left to its own devices. I believe in safety nets, and using government to smooth over these rough patches. But I won't support another astoundingly dramatic stimulus with only muddy, indeterminable, highly questionable value. I might support smaller, more pinpointed programs, depending on what their specific goals are and how they're targetted. For example, I support the president's proposal to spend another $50 billion on transportation infrastrature (even though I think Jon Stewart makes an excellent point that that was supposed to be covered by the $900B one).
Mr Skeptic Posted September 19, 2010 Posted September 19, 2010 Again you've misunderstood. What I said in the quote above is that ending the tax cuts (your preference) will indeed result in the collection of more revenue, but not (as I understand it) enough to make up for the deficit. Yes? You said earlier that the additional revenue would allow the government to fund another stimulus. But if the new revenue can't pay off the deficit and then some beyond that, and we don't suddenly discover another revenue source that puts us in the black, then logically a new stimulus would incur new debt. Yes? But if you're going to incur new debt, then why wait? So it doesn't really make sense to tie new tax revenue to a new stimulus. If you're going to do a new stimulus, then just do it. Well, assuming stimulus spending is more of a stimulus than tax cuts (it would be a really dumb stimulus if it wasn't), then coupling a stimulus with expiring tax cuts will stimulate the economy, so even if every additional tax dollar is spent on the stimulus it will still reduce the deficit (the extra revenue coming from the improved economy).
iNow Posted September 19, 2010 Posted September 19, 2010 You misunderstand. I didn't say it was a logical argument on their part, I said it's how they will likely react. It's a little thing called "politics", and I believe the politics of your suggestion are relevant. They are certainly important, and require attention and awareness, but no... not relevant to my argument, nor any argument I've made in this thread. I have to say calling them stupid doesn't strike me as a winning strategy in politics any more than it's a winning strategy in forum debate. It was the expression of a personal opinion, and not related to my actual argument. Thanks for the tip, though. Or we plunged back into a recession again because of the New Deal, depending on which of the two schools economists we ask, neo-Keynesians or Chicagoans. Or we plunged into a recession because we failed to present burnt offerings to purple unicorns. Do you have ANY evidence which might support this counter proposal? Any whatsoever? Again you've misunderstood. What I said in the quote above is that ending the tax cuts (your preference) will indeed result in the collection of more revenue, but not (as I understand it) enough to make up for the deficit. Yes? Yes, I agree with that, just am unsure how it's relevant. You said earlier that the additional revenue would allow the government to fund another stimulus. No, sir. I said no such thing. Not even close. I was not talking about funding a one-time stimulus. No where at no time and at no place have I ever argued such a thing. What I said was that federal spending has a more stimulative effect than tax cuts, as shown repeatedly by history. That spending does not need to come in the form of a single one-time stimulus, so I am yet again unsure of the relevance of your point. You seem to be arguing against a position I never espoused. But if the new revenue can't pay off the deficit and then some beyond that, and we don't suddenly discover another revenue source that puts us in the black, then logically a new stimulus would incur new debt. Yes? Okay, sure. But again... How is that at all relevant to what I've been saying here? But if you're going to incur new debt, then why wait? So it doesn't really make sense to tie new tax revenue to a new stimulus. If you're going to do a new stimulus, then just do it. Okay, but that's never been my point. I'm not arguing for a new stimulus. I'm saying that tax cuts don't work as sold, that federal spending (whether part of a direct stimulus package or not) stimulates the economy in consistent and multiplying ways, and that the deficit is only made higher by keeping the tax cuts in place instead of letting them expire. Please read my posts again if this is unclear to you. Which brings us back to the question of how raising taxes can create jobs. I understand that it can create more jobs in federal government, but... Sigh... Never mind, Pangloss. How is your view of reality so limited? I guess those cement truck drivers and construction workers working on government projects don't count... Nor do the restaurants they eat at while working and the people who own those restaurants... and the delivery truck drivers who bring the food to those restaurants, or the farmers who grow it... Or the feed stores who give the farmers their grains or the gas stations who sell the farmers their diesel... Or the drivers of the fuel trucks who deliver that diesel to the gas stations and the establishments they frequent... Your argument that only government jobs are created when spending is done on government programs is bunk on its face. #1) Our high unemployment rate isn't because the economy sucks, it's because people are trained for the wrong jobs. The Wall Street Journal showed, as I mentioned earlier, that if people were qualified for the jobs currently available, unemployment would only be 6.6%, fully three points lower than it is today. This suggests that if we're going to retrain them to do something different, why not make it something that's already in demand right now? Relevance? #2) As far as I can tell, nearly everyone, President Obama included, feels that it's the private sector that needs to start hiring again. Relevance? So unless the plan is to put everyone permanently to work for the government (ye olde socialist nirvana, which we all seem to agree is undesirable), stimulus for temporary job creation is not a useful long-term strategy. I'll just ask you this one more time... Do you have ANY evidence which might support this point? Any whatsoever? You see... I ask, because I've shared multiple references throughout this thread which clearly demonstrate the contrary. Most of the rest of your post was just a continued misunderstanding of mine, so I'll leave it at that.
swansont Posted September 19, 2010 Posted September 19, 2010 Which brings us back to the question of how raising taxes can create jobs. I understand that it can create more jobs in federal government, but there are two problems with the theory that they can more fully employ the country in general. As I pointed out a few posts back, compensation for civilian employees comprises only about 7% of the budget (and military pay is about 4.5%). The government buys a lot of products and services. But I won't support another astoundingly dramatic stimulus with only muddy, indeterminable, highly questionable value. I might support smaller, more pinpointed programs, depending on what their specific goals are and how they're targetted. For example, I support the president's proposal to spend another $50 billion on transportation infrastrature (even though I think Jon Stewart makes an excellent point that that was supposed to be covered by the $900B one). We have almost 150,000 structurally deficient bridges, and most of them are in use. http://slacktivist.typepad.com/slacktivist/2010/08/5-bridges.html The stimulus package included $50 billion of transportation infrastructure. That's $333k per bridge, if money is spent all on bridges, which it isn't. That's puny. The Wilson bridge reconstruction cost $2.5 billion. The repairs on the Tappan Zee is estimated at $6.4 billion I'd hate to be a politician who votes against infrastructure improvement when the next bridge collapses, especially of there is a loss of life involved.
lemur Posted September 19, 2010 Posted September 19, 2010 The stimulus package included $50 billion of transportation infrastructure. That's $333k per bridge, if money is spent all on bridges, which it isn't. That's puny. The Wilson bridge reconstruction cost $2.5 billion. The repairs on the Tappan Zee is estimated at $6.4 billion Why doesn't anyone tackle those bridge budgets line by line? Why is it that people can clamour for budget cuts in government but then they assume that costs are fixed for private contractors and businesses?
Pangloss Posted September 19, 2010 Author Posted September 19, 2010 What I said was that federal spending has a more stimulative effect than tax cuts, as shown repeatedly by history. That spending does not need to come in the form of a single one-time stimulus, so I am yet again unsure of the relevance of your point. You seem to be arguing against a position I never espoused. Stimulus, general spending, whatever, the point is that the government is already spending $1.5 trillion more than it will receive in revenue this year, and you're suggesting that it spend more: It's about increased revenue to the government which in turn results in federal spending. As Mr Skeptic points out above, further recovery will generate more revenue, but until that deficit is wiped out we can't increase spending, or at least not without increasing the deficit. Of course this is all just my opinion and you're certainly welcome to disagree. I don't think you're ignorant or uneducated for doing so. Sigh... Never mind, Pangloss. How is your view of reality so limited? Another insult. From a guy who knows full well how I've split my votes between the two parties over the last decade. When's the last time you voted for a Republican, Mr. "Unlimited View of Reality"? Or we plunged back into a recession again because of the New Deal, depending on which of the two schools economists we ask, neo-Keynesians or Chicagoans. Or we plunged into a recession because we failed to present burnt offerings to purple unicorns. Do you have ANY evidence which might support this counter proposal? Any whatsoever? Sure. There's a reason some call it the "Roosevelt Recession", you know. The Austrians have plenty of evidence, just as the Keynesians have their evidence which they believe says the opposite. As you can see from this reasonably objective summary in the Wikipedia article, the Keynesian types say that cuts in spending, and the Austrian types say that it's due to a tightening of the money supply in 1936 & 1937. http://en.wikipedia.org/wiki/Recession_of_1937 The article appears to be well-sourced with evidence for both points of view. Enjoy. I'd hate to be a politician who votes against infrastructure improvement when the next bridge collapses, especially of there is a loss of life involved. For sure. I had no problem with the President's new $50 billion infrastructure bill in theory. I'd just like to know why those repairs weren't covered by the $900 billion stimulus bill, as I thought had been planned. That's the point Jon Stewart raised, at any rate. If we hear nothing further about it, does that mean it was just a political play that didn't reflect an actual need, and that the original $900 billion stimulus bill is still working on those repairs as planned? I have no idea, but it seems like it would be a good thing to know. 1
swansont Posted September 19, 2010 Posted September 19, 2010 Stimulus, general spending, whatever, the point is that the government is already spending $1.5 trillion more than it will receive in revenue this year, and you're suggesting that it spend more: As Mr Skeptic points out above, further recovery will generate more revenue, but until that deficit is wiped out we can't increase spending, or at least not without increasing the deficit. But if you are going to incur debt, now is the time to do it, when debt is cheap. Putting people to work through spending at least has the benefit of removing them from unemployment and gets them paying more in taxes. Each dollar of spending that goes to wages doesn't cost a whole dollar. For sure. I had no problem with the President's new $50 billion infrastructure bill in theory. I'd just like to know why those repairs weren't covered by the $900 billion stimulus bill, as I thought had been planned. That's the point Jon Stewart raised, at any rate. If we hear nothing further about it, does that mean it was just a political play that didn't reflect an actual need, and that the original $900 billion stimulus bill is still working on those repairs as planned? I have no idea, but it seems like it would be a good thing to know. The total amount of work that needs to be done is much larger than what was in the stimulus bill is why; I don't think the stimulus was sold as curing all of the issues. We have been scrimping on maintenance for decades to help fuel the illusion that low taxes is a viable condition. Preventative maintenance not sexy, so nobody cares too much, until there's a catastrophe. (But then it's a crisis, and we temporarily respond well to crises these days — we ask no questions and are even willing to make some sacrifices) I don't think not hearing about it has any more weight than not hearing about it in the past; it's more "out of sight, out of mind."
Pangloss Posted September 19, 2010 Author Posted September 19, 2010 But if you are going to incur debt, now is the time to do it, when debt is cheap. You mean the percentage rate? I hadn't thought of that. Does that come from the same Fed-determined figure that determines everyone else's interest? I suppose it does. If memory serves debt is auctioned in the form of T-Bills (?) on some sort of foreign exchange, yes? I guess they offer it at a given interest rate based on whatever the current rate is (though I don't see why they couldn't just "determine" the same rate later). The total amount of work that needs to be done is much larger than what was in the stimulus bill is why Is it? That's what I was wondering, but I haven't seen any articles saying this. They seem to focus more on the politics of the proposal. But maybe I just read the wrong articles. I agree the big bill wasn't meant to solve everything, but I'm pretty sure transportation infrastructure was part of the mix.
swansont Posted September 20, 2010 Posted September 20, 2010 I agree the big bill wasn't meant to solve everything, but I'm pretty sure transportation infrastructure was part of the mix. Yes, $48.1 billion was in there for it. $27.5 billion for highway and bridge construction projects $8 billion for intercity passenger rail projects and rail congestion grants, with priority for high-speed rail $6.9 billion for new equipment for public transportation projects (Federal Transit Administration) $1.5 billion for national surface transportation discretionary grants $1.3 billion for Amtrak $1.1 billion in grants for airport improvements $750 million for the construction of new public rail transportation systems and other fixed guideway systems. $750 million for the maintenance of existing public transportation systems $200 million for FAA upgrades to air traffic control centers and towers, facilities, and equipment $100 million in grants for improvements to domestic shipyards http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009
iNow Posted September 20, 2010 Posted September 20, 2010 (edited) Stimulus, general spending, whatever, the point is that the government is already spending $1.5 trillion more than it will receive in revenue this year, and you're suggesting that it spend more: As Mr Skeptic points out above, further recovery will generate more revenue, but until that deficit is wiped out we can't increase spending, or at least not without increasing the deficit. Of course this is all just my opinion and you're certainly welcome to disagree. I don't think you're ignorant or uneducated for doing so. Oh, sweet jeebus, Pangloss. I am not sure I can make this more plain. Let me put it in bullet point form. I would like it noted that I've supported these positions fully throughout the thread: The Bush tax cuts were scheduled to expire Letting them expire increases revenue to the government; Extending them increases deficits... Significantly... $680 Billion, most of which benefiting only the top 1 tenth of 1 percent of the entire US population Arguments that tax cuts are better for the economy than federal spending are neither supported by evidence nor history nor data... They are bald hollow assertions and little more Federal spending DOES help the economy in many multiplying way, and has regularly proven to improve the overall job situation, even beyond just federal jobs... and does so at a far greater "bang for your buck" "output per dollar spent" level than tax cuts. This argument has been supported by relevant data, references, and historical experience; Assertions to the contrary have NOT been supported, and should be dismissed accordingly Federal spending will take place anyway, regardless of what we do with the bush tax cuts, so we may as well limit the deficit caused by that spending by letting the tax cuts expire and bringing in more revenue to cover those expenditures All of this talk about healthcare, one-time stimulus, highway projects, the politics of bill passage, how the public polls on these issues, uncertainty in the market, and whatever else has been thrown in here is COMPLETELY BESIDE THE POINT. My points are valid in themselves until shown otherwise, and everything else is irrelevant and tangential Sure. There's a reason some call it the "Roosevelt Recession", you know. Yes, the Austrians make unfounded claims like those who support Intelligent Design suggest it's another "opinion" to counter evolution. It is merely an opinion, and one not rooted in facts. You can't simply say, "There's another opinion," then fail to offer why that opinion is valid, and expect your comment to be taken seriously. THIS IS A SCIENCE FORUM! Try backing up your claims. Until you do, I am right to dismiss them as garbage. I have backed up my claims. You have not. You have simply repeated them without describing why they are valid or offering evidence in support. This means your claims are NOT equivalent to mine. Yours are opinions. Mine are rooted in evidence. Again... This is a science forum. You either support your claims, or avoid whining when they're dismissed as completely unfounded. The Austrians have plenty of evidence, just as the Keynesians have their evidence which they believe says the opposite. And, all I've requested you do is to cite which "evidence" supports your position. Simply claiming its existence is NOT enough, Pangloss. You being a moderator for this site, I should NOT have to explain this to you. I frequent science sites because it is expected that people support their claims logically and with evidence. Is it possible that this is not a requirement on SFN? If that's the case, then I really don't know why you have the word "science" in the name. If it IS a requirement, then it's time for you to live up to that requirement and stop repeating unsupported assertions with no evidence and expect them to be taken seriously. As you can see from this reasonably objective summary in the Wikipedia article, the Keynesian types say that cuts in spending, and the Austrian types say that it's due to a tightening of the money supply in 1936 & 1937. http://en.wikipedia.org/wiki/Recession_of_1937 All that article shows is that there are two different opinions on the matter. It does not support your claims, nor is it my job to go on a wild goose chase to find support of YOUR claims by hunting through it's reference section. You either support your claims, retract them, or stop making them, but the burden of proof is yours and the onus is on you to do so... not me. I've supported my claims. I've accepted that onus. Will you do the same? Yes or No? Swansont has already handled your other "points." No need to rehash those, too. http://www.nytimes.com/2009/06/15/opinion/15krugman.html this is the third time in history that a major economy has found itself in a liquidity trap, a situation in which interest-rate cuts, the conventional way to perk up the economy, have reached their limit. When this happens, unconventional measures are the only way to fight recession. Yet such unconventional measures make the conventionally minded uncomfortable, and they keep pushing for a return to normalcy. In previous liquidity-trap episodes, policy makers gave in to these pressures far too soon, plunging the economy back into crisis. And if the critics have their way, we’ll do the same thing this time. The first example of policy in a liquidity trap comes from the 1930s. The U.S. economy grew rapidly from 1933 to 1937, helped along by New Deal policies. America, however, remained well short of full employment. Yet policy makers stopped worrying about depression and started worrying about inflation. The Federal Reserve tightened monetary policy, while F.D.R. tried to balance the federal budget. Sure enough, the economy slumped again, and full recovery had to wait for World War II. The second example is Japan in the 1990s. After slumping early in the decade, Japan experienced a partial recovery, with the economy growing almost 3 percent in 1996. Policy makers responded by shifting their focus to the budget deficit, raising taxes and cutting spending. Japan proceeded to slide back into recession. And here we go again. http://www.nytimes.com/2010/09/10/opinion/10krugman.html?partner=rssnyt&emc=rss A decade ago, Japan was a byword for failed economic policies: years after its real estate bubble burst, it was still suffering from chronic deflation and slow growth. Then America had its own bubble, bust and crisis. And these days, Japan’s record doesn’t look that bad to an American eye. Why not? For all its flaws, Japanese policy limited and contained the damage from a financial bust. And the question in America now is whether we’ll do the same — or whether we will take a hard right turn into economic disaster. In the 1990s, Japan conducted a dress rehearsal for the crisis that struck much of the world in 2008. Runaway banks fueled a bubble in land prices; when the bubble burst, these banks were severely weakened, as were the balance sheets of everyone who had borrowed in the belief that land prices would stay high. The result was protracted economic weakness. And the policy response was too little, too late. The Bank of Japan cut interest rates and took other steps to pump up spending, but it was always behind the curve and persistent deflation took hold. The government propped up employment with public works programs, but its efforts were never focused enough to start a self-sustaining recovery. Banks were kept afloat, but were slow to face up to bad debts and resume lending. The result of inadequate policy was an economy that remains depressed to this day. Edited September 20, 2010 by iNow
Pangloss Posted September 20, 2010 Author Posted September 20, 2010 Yes, $48.1 billion was in there for it. $27.5 billion for highway and bridge construction projects $8 billion for intercity passenger rail projects and rail congestion grants, with priority for high-speed rail $6.9 billion for new equipment for public transportation projects (Federal Transit Administration) $1.5 billion for national surface transportation discretionary grants $1.3 billion for Amtrak $1.1 billion in grants for airport improvements $750 million for the construction of new public rail transportation systems and other fixed guideway systems. $750 million for the maintenance of existing public transportation systems $200 million for FAA upgrades to air traffic control centers and towers, facilities, and equipment $100 million in grants for improvements to domestic shipyards http://en.wikipedia....ent_Act_of_2009 Whew, all that money. But yeah it sounds like a lot when you look at it cold, but I seem to recall the discussion a couple of years ago projecting a need in excess of $100 billion. It's a big country with a lot of cars and airplanes; way it goes. Thanks. Yes, the Austrians make unfounded claims like those who support Intelligent Design suggest it's another "opinion" to counter evolution. The Chicago School has managed to wrack up an impressive 23 Nobel Prizes in Economics. (source) The truth is that both Austrians and Keynesians are valid scientists with valid theories. This is not evolution vs creationism, it's one kind of evolution against another. In this case the two kinds of "evolution" they support are two interpretations of a mixed economy -- one leaning toward socialism (but not socialism), the other leaning towards pure capitalism (but not pure capitalism). But they both support the underlying premise of a mixed economy, because Austrianism can't work without government intervention at some level, and Keynesianism can't work without strong, independent corporations pulling most of the economic weight. Very much like two interpretations of evolutionary theory. I have no idea if there ARE two interpretations of evolutionary theory, but I could offer perhaps an alternate metaphor: The rift in physics between Many-worlds and Copenhagen. That's probably a better analogy. Less insulting, too. 1
iNow Posted September 20, 2010 Posted September 20, 2010 I'll just note that you have yet again failed to support your claims and assertions with evidence, apparently content to suggest that said evidence exists without ever putting it forth. Yes, the Austrians make unfounded claims like those who support Intelligent Design suggest it's another "opinion" to counter evolution. The Chicago School has managed to wrack up an impressive 23 Nobel Prizes in Economics. (source) And I'll just note here that the Austrian school [math]\ne[/math] the Chicago school of economics, and leave it at that. http://en.wikipedia.org/wiki/Austrian_School Methodology is the one area where Austrian economists differ most significantly from other schools of economic thought. Mainstream schools such as the neoclassical economists, the Chicago school of economics, the Keynesians and New Keynesians, adopt "empirical" mathematical and statistical methods, and focus on induction to construct and test theories—while Austrian economists reject this approach in favor of deduction and logically deduced inferences.
iNow Posted September 20, 2010 Posted September 20, 2010 #1) Our high unemployment rate isn't because the economy sucks, it's because people are trained for the wrong jobs. The Wall Street Journal showed, as I mentioned earlier, that if people were qualified for the jobs currently available, unemployment would only be 6.6%, fully three points lower than it is today. This suggests that if we're going to retrain them to do something different, why not make it something that's already in demand right now? As I mentioned earlier, this point is completely irrelevant to any argument I've made or put forth in this thread, so it's somewhat strange that you presented it in response to my posts. However, you do have another thread discussing it specifically (thanks for the link), and I've responded to this particular claim here. Have a gander, and enjoy.
Pangloss Posted September 20, 2010 Author Posted September 20, 2010 I'll just note that you have yet again failed to support your claims and assertions with evidence, apparently content to suggest that said evidence exists without ever putting it forth. Incorrect. Evidence was offered in post #64. And I'll just note here that the Austrian school [math]\ne[/math] the Chicago school of economics, and leave it at that. http://en.wikipedia.org/wiki/Austrian_School Obfuscation. The underlying principle of the Austrian school of economics originates at the University of Chicago school's of economics. Therefore a statement about the number of Nobel Prizes their alumni have won is a direct refutation to your direct statement that they're like creationists. 1
iNow Posted September 20, 2010 Posted September 20, 2010 Incorrect. Evidence was offered in post #64. Out of the 10 or 12 comments I've asked you support in this thread, which part specifically in your link supports them all? http://en.wikipedia.org/wiki/Recession_of_1937 The underlying principle of the Austrian school of economics originates at the University of Chicago school's of economics. Therefore a statement about the number of Nobel Prizes their alumni have won is a direct refutation to your direct statement that they're like creationists. Except, I shared a source which clearly demonstrated that Austrian economics is separate and distinct from the Chicago school. Repeating an invalid assertion without offering new information doesn't suddenly make it more valid or true, Pangloss.
Pangloss Posted September 20, 2010 Author Posted September 20, 2010 Except, I shared a source which clearly demonstrated that Austrian economics is separate and distinct from the Chicago school. Repeating an invalid assertion without offering new information doesn't suddenly make it more valid or true, Pangloss. You shifted the goalpost in order to avoid the fact that you declared an entire group, which includes 23 Nobel Prize winners, to be without scientific merit and no better than creationists. Your problem, not mine. Out of the 10 or 12 comments I've asked you support in this thread, which part specifically in your link supports them all? There are not "10 or 12" comments that you've asked me to support in this thread. There was, if memory serves, only one, and I responded to it. And I won't have a discussion with you on any basis except clarification while you continue to work in the domain of insults and logical fallacies. If you would like to have a respectful conversation, let me know. If you're just going to keep behaving badly, I have better things to do. 1
iNow Posted September 20, 2010 Posted September 20, 2010 You shifted the goalpost in order to avoid the fact that you declared an entire group, which includes 23 Nobel Prize winners, to be without scientific merit and no better than creationists. Your problem, not mine. Except, the goal posts have been perfectly stationary. I'm truly sorry if you think I'm being a jerk for pointing out a fact, but as I demonstrated, they are different groups, and the Austrian school of economics [math]\ne[/math] the Chicago school of economics. The "23 noble prize winners" (speaking logical fallacies, that would be an appeal to authority right there) were of the CHICAGO school, NOT the Austrian school. They are different, despite some overlap, and your point was false. Your other points are also not based on evidence... Or, at least, you've failed thus far to provide evidence, and that's why I'm pushing you like this. I simply want you to support your arguments with evidence and citations which are relevant to your points. This is not too much to ask, no matter how many times you tell me I'm being disrespectful or "behaving badly." There are not "10 or 12" comments that you've asked me to support in this thread. There was, if memory serves, only one, and I responded to it. And I won't have a discussion with you on any basis except clarification I'm sure we'd get along better if you would simply support your claims when asked. However, you're right... There were not 10 or 12 assertions you've failed to support. I'm man enough to admit that error, and apologize for the exaggeration. I was including unaddressed questions, and the number is only 7. Here are my requests again, brought together into one post, since you've ignored them thus far or forgotten (in case "memory wasn't serving you"): 1. But Krugman, in talking about $680 billion, is promoting the expiration of ALL the tax cuts. Please share the precise quote which led you to this conclusion that "Krugman is promoting the expiration of ALL tax cuts." I'm not getting that from his articles. Clearly you're seeing something I'm not. 2. Or we plunged back into a recession again because of the New Deal, depending on which of the two schools economists we ask, neo-Keynesians or Chicagoans. Do you have ANY evidence which might support this counter proposal? Any whatsoever? 3. What I said in the quote above is that ending the tax cuts (your preference) will indeed result in the collection of more revenue, but not (as I understand it) enough to make up for the deficit. How is this relevant? 4. if the new revenue can't pay off the deficit and then some beyond that, and we don't suddenly discover another revenue source that puts us in the black, then logically a new stimulus would incur new debt. How is this relevant? 5. #1) Our high unemployment rate isn't because the economy sucks, it's because people are trained for the wrong jobs. The Wall Street Journal showed, as I mentioned earlier, that if people were qualified for the jobs currently available, unemployment would only be 6.6%, fully three points lower than it is today. This suggests that if we're going to retrain them to do something different, why not make it something that's already in demand right now? How is this relevant? 6. #2) As far as I can tell, nearly everyone, President Obama included, feels that it's the private sector that needs to start hiring again. How is this relevant? 7. unless the plan is to put everyone permanently to work for the government (ye olde socialist nirvana, which we all seem to agree is undesirable), stimulus for temporary job creation is not a useful long-term strategy. I'll just ask you this one more time... Do you have ANY evidence which might support this point? Any whatsoever? You see... I ask, because I've shared multiple references throughout this thread which clearly demonstrate the contrary. Now, I know you think you've provided evidence in support of point 2 above, but as I've already called to your attention, the link you shared simply demonstrates that another view exists, not what data informs that view. I'm asking you for data. What data is there that the Keynesian view of the 1937 recession is mistaken? Then, maybe you can also address the other 6 and we can move forward. 1
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