Replies to post #219440 on Simply Politics & News (GOV)

[gp100357]

And, just how much would annual revenue be increased if these cuts were repealed?

Any idea at all?

[mick]

if no rich folks then there would not be an america. why did Obama extend it?

he is wheeler dealer.

[ONEBGG]

Common Sense, Facts & Math

Did the Bush tax cuts cause the debt crisis?

Lately I’ve been bothered over how much conservative pundits seem to surrender ground when fiscal liberals argue to raise taxes or attack the 2003 Bush tax cuts as somehow being the cause of the current debt crisis (a ridiculous notion, as I’ll demonstrate).

The opposition generally misunderstands the economic argument, and confuses the facts. As one brilliant leader — Sen. Daniel Patrick Moynihan — once coined: you’re entitled to your own opinions, but you’re not entitled to your own facts.

Thus, the summation:

Let’s say someone makes $50k and the IRS taxes that person 0%. How many dollars in revenue will the IRS take in from that person? $0. Now let’s say that the IRS takes that same person 100%. How many dollars in revenue will the IRS take in from that person? The answer is actually also $0, because nobody would bother working — or at least not bother reporting their earnings as required by law — if another is going to take 100% from them.

What I’ve just demonstrated is that tax rates affect future spending and investment habits.

This also underscores the only two problems with the 2003 Bush tax cuts — first, they were phased in and gradually increased over a period of 10 years, rather than all at once, and second, they were built to sunset after 10 years. This means that businesses were hedging their bets on spending and investment habits because they had no control over who might control politics and taxation years ahead.

And yet despite this hedging and unrealized potential the Bush tax cuts yielded record level tax revenues from the IRS, in part because the tax cuts positively affected spending and investment behavior, the economy grew and the IRS yielded record revenue from that growth (tax revenue from 2003 to 2007 was the biggest four-year increase in U.S. history). This was no surprise to those who had studied the same occurrences — massive tax revenue increases — after tax cuts by Presidents Coolidge, Kennedy and Reagan.

This also demonstrates that there exists a perfect point, albeit difficult to locate, where you can both maximize tax revenue and simultaneously allow individuals and businesses to keep their earnings and flourish (also known as the Laffer Curve).

Thus, liberals who argue that conservative’s only solution is to cut taxes miss the point — you cut or raise taxes only to change behavior and locate that perfect happy medium, not to raise revenue in itself. Revenue is only raised as a result of a growing economy.

Conversely, once your tax rates become too high — and “too high” is relative to the state of the economic — people stop spending and investing, the economy shrinks and your tax revenues are reduced. Worse, about 75% of all businesses in the U.S., including many LLCs and corporations, are taxed under the individual income tax rather than the corporate income tax — which is why the individual income tax rate is so important.

Finally, inflation means that more people (and businesses) creep into those higher tax brackets over time. This is why the Alternative Minimum Tax, which was designed in 1970 for just 155 people, now affects 4.5 million American filers due to its failure to index for inflation. That is a gross distortion of intent.

Liberals also fail to understand that what we have is not a tax revenue problem but a spending problem.

Indeed, were we to tax those making $250,000 at 100% we would still not put a small dent into our national debt — even if you really did yield 100% from them rather than the 0% you’d yield after they hid all their earnings.

http://blog.gregnews.com/2011/07/did-the-bush-tax-cuts-cause-the-debt-crisis/


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Progressiveness Must Die Today,
In Order That We May Be Free Tomorrow!

[ONEBGG]

Democrats Share The Blame

TheCenterLane
January 24th, 2011

January 21 brought us Episode 199 of HBO’s Real Time with Bill Maher. At the end of the program, Bill went through his popular “New Rules” segment. On this occasion, he wound it up with a rant about how the Republicans were exclusively at fault for the financial crisis. Aside from the fact that this claim was historically inaccurate, it was not at all fair to David Stockman (a guest on that night’s show) who had to sit through Maher’s diatribe without an opportunity to point out the errors. (On the other hand, I was fine with watching Stephen Moore twist in the wind as Maher went through that tirade.)

That incident underscored the obvious need for Bill Maher to invite William Black as a guest on the show in order to clarify this issue. Prior to that episode, Black had written an essay, which appeared on The Big Picture website. Although the theme of that piece was to debunk the “mantra of the Republican Party” that “regulation is a job killer”, Black emphasized that Democrats had a role in “deregulation, desupervision, and de facto decriminalization (the three ‘des’)” which created the “criminogenic environment” precipitating the financial crisis:

The Great Recession was triggered by the collapse of the real estate bubble epidemic of mortgage fraud by lenders that hyper-inflated that bubble. That epidemic could not have happened without the appointment of anti-regulators to key leadership positions. The epidemic of mortgage fraud was centered on loans that the lending industry (behind closed doors) referred to as “liar’s” loans — so any regulatory leader who was not an anti-regulatory ideologue would (as we did in the early 1990s during the first wave of liar’s loans in California) have ordered banks not to make these pervasively fraudulent loans.

* * *

From roughly 1999 to the present, three administrations have displayed hostility to vigorous regulation and have appointed regulatory leaders largely on the basis of their opposition to vigorous regulation. When these administrations occasionally blundered and appointed, or inherited, regulatory leaders that believed in regulating, the administration attacked the regulators. In the financial regulatory sphere, recent examples include Arthur Levitt and William Donaldson (SEC), Brooksley Born (CFTC), and Sheila Bair (FDIC).

Similarly, the bankers used Congress to extort the Financial Accounting Standards Board (FASB) into trashing the accounting rules so that the banks no longer had to recognize their losses. The twin purposes of that bit of successful thuggery were to evade the mandate of the Prompt Corrective Action (PCA) law and to allow banks to pretend that they were solvent and profitable so that they could continue to pay enormous bonuses to their senior officials based on the fictional “income” and “net worth” produced by the scam accounting. (Not recognizing one’s losses increases dollar-for-dollar reported, but fictional, net worth and gross income.)

When members of Congress (mostly Democrats) sought to intimidate us into not taking enforcement actions against the fraudulent S&Ls we blew the whistle.

President Obama’s January 18 opinion piece for The Wall Street Journal prompted a retort from Bill Black. The President announced that he had signed an executive order requiring “a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive”. Obama’s focus on “regulations that stifle job creation” seemed to exemplify what Black had just discussed one day earlier. Accordingly, Bill Black wrote an essay for The Huffington Post on January 19, which began this way:

I get President Obama’s “regulatory review” plan, I really do. His game plan is a straight steal from President Clinton’s strategy after the Republican’s 1994 congressional triumph. Clinton’s strategy was to steal the Republican Party’s play book. I know that Clinton’s strategy was considered brilliant politics (particularly by the Clintonites), but the Republican financial playbook produces recurrent, intensifying fraud epidemics and financial crises. Rubin and Summers were Clinton’s offensive coordinators. They planned and implemented the Republican game plan on finance. Rubin and Summers were good choices for this role because they were, and remain, reflexively anti-regulatory. They led the deregulation and attack on supervision that began to create the criminogenic environment that produced the financial crisis.

Bill Clinton’s role in facilitating the financial crisis would have surely become an issue in the 2008 Presidential election campaign, had Hillary Clinton been the Democratic nominee. Instead, the Democrats got behind a “Trojan horse” candidate, disguised in the trappings of “Change” who, once elected, re-installed the very people who implemented the crucial deregulatory changes which caused the financial crisis. Bill Black provided this explanation:

The zeal, crude threats, and arrogance they displayed in leading the attacks on SEC Chair Levitt and CFTC Chair Born’s efforts to adopt regulations that would have reduced the risks of fraud and financial crises were exceptional. Just one problem — they were wrong and Levitt and Born were right. Rubin and Summers weren’t slightly wrong; they put us on the path to the Great Recession. Obama knows that Clinton’s brilliant political strategy, stealing the Republican play book, was a disaster for the nation, but he has picked politics over substance.

* * *

Obama’s proposal and the accompanying OMB releases do not mention the word or the concept of fraud. Despite an “epidemic” of fraud led by the bank CEOs (which caused the greatest crisis of his life), Obama cannot bring itself to use the “f” word. The administration wants the banks’ senior officers to fund its reelection campaign. I’ve never raised political contributions, but I’m certain that pointing out that a large number of senior bank officers were frauds would make fundraising from them awkward.

Black targeted Obama’s lame gesture toward acknowledgement of some need for regulation, encapsulated in the statement that “(w)here necessary, we won’t shy away from addressing obvious gaps …”:

Huh? The vital task is to find the non-obvious gaps. Why, two years into his presidency, has the administration failed to address “obvious gaps”? The administration does not need Republican approval to fill obvious gaps in regulation. Even when Obama finds “obvious gaps” in regulatory protection he does not promise to act. He will act only “where necessary.” We know that Summers, Rubin, and Geithner rarely believe that financial regulation is “necessary.” Even if Obama decides it is “necessary” to act he only promises to “address” “obvious gaps” — not “end” or “fill” them.

At the conclusion of his Huffington Post essay, Black provided his own list of “obvious gaps” described as the “Dirty Dozen” – “. . . obvious gaps in financial regulation which have persisted and grown during this, Obama’s first two years in office.”

Bill Black is just one of many commentators to annotate the complicity of Democrats in causing the financial crisis. Beyond that, Black has illustrated how President Obama has preserved – and possibly enhanced — the “criminogenic” milieu which could bring about another financial crisis.

The first step toward implementing “bipartisan solutions” to our nation’s ills should involve acknowledging the extent to which the fault for those problems is bipartisan.

http://www.thecenterlane.com/?p=1060

NOTE: There are many active links at the above website.


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Progressiveness Must Die Today,
In Order That We May Be Free Tomorrow!

[ONEBGG]

Fannie & Freddie - Dodd & Frank


Barney Frank and Christopher Dodd deserve blame for Fannie and Freddie

Thursday, October 09, 2008

The Independent, a British newspaper, blames the Democrats for the failure of Fannie Mae and Freddie Mac:

What is the proximate cause of the collapse of confidence in the world's banks? Millions of improvident loans to American housebuyers. Which organisations were on their own responsible for guaranteeing half of this $12 trillion market? Freddie Mac and Fannie Mae, the so-called Government Sponsored Enterprises which last month were formally nationalised to prevent their immediate and catastrophic collapse. Now, who do you think were among the leading figures blocking all the earlier attempts by President Bush — and other Republicans — to bring these lending behemoths under greater regulatory control? Step forward, Barney Frank and Chris Dodd.

In September 2003 the Bush administration launched a measure to bring Fannie Mae and Freddie Mac under stricter regulatory control, after a report by outside investigators established that they were not adequately hedging against risks and that Fannie Mae in particular had scandalously mis-stated its accounts. In 2006, it was revealed that Fannie Mae had overstated its earnings — to which its senior executives' bonuses were linked — by a stunning $9.3billion. Between 1998 and 2003, Fannie Mae's executive chairman, Franklin Raines, picked up over $90m in bonuses and stock options.

Yet Barney Frank and his chums blocked all Bush's attempts to put a rein on Raines. During the House Financial Services Committee hearing following Bush's initiative, Frank declared: "The more people exaggerate a threat of safety and soundness [at Freddie Mac and Fannie Mae], the more people conjure up the possibility of serious financial losses to the Treasury which I do not see. I think we see entities that are fundamentally sound financially." His colleague on the committee, the California Democrat Maxine Walters, said: "There were nearly a dozen hearings where we were trying to fix something that wasn't broke. Mr Chairman, we do not have a crisis at Freddie Mac and particularly at Fannie Mae under the outstanding leadership of Mr Franklin Raines."

When Mr Raines himself was challenged by the Republican Christopher Shays, to the effect that his ratio of capital to assets (that is, mortgages) of 3 per cent was dangerously low, the Fannie Mae boss retorted that "our assets are so riskless, we could have a capital ratio of under 2 per cent".

http://bubblemeter.blogspot.com/2008/10/barney-frank-and-christopher-dodd.html


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Progressiveness Must Die Today,
In Order That We May Be Free Tomorrow!

[ONEBGG]

It is Them against Us!

No Democrat-Controlled Congress Has Balanced Federal Budget in 40 Years; No Republican President Has Balanced Federal Budget in 50 Years

No Congress in which the Democrats controlled both the House and Senate has balanced the federal budget since fiscal 1969--more than 40 years ago.

Monday, March 15, 2010
By Terence P. Jeffrey
CNSNews.com

Many leading Democrats in Washington these days like to point to the fact that the federal budget was balanced for part of the time that President Bill Clinton was in office. What they do not mention is that those balanced budgets occurred only when Republicans controlled both houses of Congress.

In fact, according to the historical data published by the Office of Management and Budget in the Obama White House, no Congress in which the Democrats controlled both the House and Senate has balanced the federal budget since fiscal 1969--more than 40 years ago.

The federal appropriations made for that fiscal year—which began on July 1, 1968 and ended on June 30, 1969--were approved by a Democrat-controlled Congress elected in 1966. They were signed by lame-duck Democratic President Lyndon Johnson, who had decided not to run for reelection in 1968. (Until 1977, the federal fiscal year began on July 1 and ended on June 30. Since 1977, it has begun on Oct. 1 and ended on Sept. 30. Federal fiscal years are numbered by the calendar year in which they end.)

President Eisenhower in 1960 was the last Republican president to preside over a balanced budget. A Democrat-controlled Congress elected in 1958 approved the appropriations for that fiscal year in 1959.

More recently, the federal budget was balanced in fiscal years 1998, 1999, 2000 and 2001. A Republican-controlled Congress approved the appropriations for each one of those years and Democratic President Bill Clinton signed them. In fiscal years 1994 and 1995, when President Clinton governed with a Democrat-controlled Congress, the federal government ran deficits of $203.2 billion and $163.9 billion respectively.

The Republican majority Congress elected in November 1994 presided over two fiscal years with declining deficits—fiscal 1996 and 1997—before it initially balanced the budget in fiscal 1998. In fiscal 1996 and 1997, the deficits were $107.4 billion and $21.9 billion respectively.

In the 2000 election, Republicans retained control of the House but the Senate split 50-50 between Republicans and Democrats. In May 2001, Sen. Jim Jeffords of Vermont switched parties from Republican to Independent and began caucusing with the Democrats, giving the Democrats the effective majority and making then-Sen. Tom Daschle (D.-S.D.) the majority leader.

That split Congress was responsible for the appropriations for fiscal 2002, which put the federal government back into a deficit. After Republicans regained control of the Senate in the November 2002 elections (thus taking control of the budget process for fiscal 2004 which would begin on Oct. 1, 2003), the all-Republican Congress continued running deficits for four fiscal years (2004, 2005, 2006, 2007). During that time, with President George W. Bush in the White House, the Republicans controlled both the legislative and executive branches but failed to balance the budget.

In the November 2006 elections, Democrats won back the majority in both the House and Senate, and in the three fiscal years that have started since then (2008, 2009, 2010), they have run record deficits of $458.6 billion, $1.41 trillion and $1.55 trillion.

The estimated deficit for this fiscal year (2010) of $1.55 trillion is more than three times as large as the $458.6 billion deficit that President George W. Bush presided over with a Democratic Congress in fiscal 2008. In fiscal 2010, of course, Democrats controlled both Houses of Congress as well as the White House.

Since 1960, the federal budget has been balanced in only 6 fiscal years. For two of those fiscal years—1960 and 1969—Democrats controlled Congress. For four—1998, 1999, 2000, 2001—Republicans controlled Congress.WHO BALANCED THE BUDGET?

The chart below lists the fiscal years since 1960, the president who was in office when that fiscal year began, the political party that controlled Congress when that fiscal year began, whether the federal budget was balanced in that fiscal year, and the amount of the federal surplus or deficit in that fiscal year. The figures for federal deficits and surpluses come from the “Historical Tables—Budget of the U.S. Government, Fiscal 2011,” published by the Office of Management and Budget in the Obama White House.

                   Control of Congress   Budget Balanced?      Deficit/Surplus 
   
 President Dwight Eisnehower (Left office Jan. 20, 1961) 
 1960                Democrat                    YES                   $301 million    
 1961                Democrat                    No                      --$3.3 billion 
   
 President John F. Kennedy (Assassinated Nov. 22, 1963) 
 1962                Democrat                    No                      --$7.1 billion 
 1963                Democrat                    No                      --$4.8 billion 
 1964                Democrat                    No                      --$5.9 billion 
   
 President Lyndon B. Johnson (Left office Jan. 20, 1969) 
 1965                Democrat                    No                       --$1.4 billion 
 1966                Democrat                    No                       --$3.7 billion    
 1967                Democrat                    No                       --$8.6 billion 
 1968                Democrat                    No                       --$25.2 billion 
 1969                Democrat                   YES                        $3.2 billion 
   
 President Richard M. Nixon (Resigned Aug. 9, 1974) 
 1970                Democrat                    No                       --$2.8 billion 
 1971                Democrat                    No                       --$23.0 billion 
 1972                Democrat                    No                       --$23.4 billion 
 1973                Democrat                    No                       --$14.9 billion 
 1974                Democrat                    No                       --$6.1 billion 
 1975                Democrat                    No                       --$53.2 billion 
   
 President Gerald Ford (Left office Jan. 20, 1977) 
 1976                Democrat                    No                        --$73.7 billion 
 1977                Democrat                    No                        --$53.7 billion  
   
 President Jimmy Carter (Left office Jan. 20, 1981) 
 1978                Democrat                    No                        --$59.1 billion 
 1979                Democrat                    No                        --$40.7 billion 
 1980                Democrat                    No                        --$73.8 billion 
 1981                Democrat                    No                        --$78.9 billion 
               
 President Ronald W. Reagan (Left office Jan. 20, 1989) 
 1982                Split                             No                       --$127.9 billion 
 1983                Split                             No                       --$207.8 billion 
 1984                Split                             No                       --$185.3 billion 
 1985                Split                             No                       --$212.3 billion 
 1986                Split                             No                       --$221.2 billion 
 1987                Split                             No                       --$149.7 billion 
 1988                Democrat                    No                      --$155.1 billion 
 1989                Democrat                    No                      --$152.6 billion            
   
 President George H.W. Bush (Left office Jan. 20, 1993) 
 1990                Democrat                   No                         --$221.0 billion 
 1991                Democrat                   No                         --$269.2 billion 
 1992                Democrat                   No                         --$290.3 billion 
 1993                Democrat                   No                         --$255.0 billion 
   
 President William J. Clinton (Left office Jan. 20, 2001) 
 1994                Democrat                   No                          --$203.2 billion 
 1995                Democrat                   No                          --$163.9 billion 
 1996                Republican                No                          --$107.4 billion 
 1997                Republican                No                         --$21.9 billion 
 1998                Republican                YES                         $69.2 billion                         
 1999                Republican                YES                         $125.6 billion           
 2000                Republican                YES                          $236.2 billion 
 2001                Republican                YES                          $128.2 billion 
   
 President George W. Bush (Left office Jan. 20, 2009) 
 2002                Split                             No                          --$157.8 billion 
 2003                Split                             No                          --$377.6 billion 
 2004                Republican                 No                         --$412.7 billion 
 2005                Republican                 No                         --$318.3 billion 
 2006                Republican                 No                         --$248.2 billion 
 2007                Democrat                    No                         --$160.7 billion 
 2008                Democrat                    No                         --$458.6 billion 
 2009                Democrat                    No                          --$1.41 trillion 
   
 President Barack Obama 
 2010                Democrat                    No                         --$1.55 trillion

http://www.cnsnews.com/node/62793


************
Progressiveness Must Die Today,
In Order That We May Be Free Tomorrow!