"This spending-leads-to-growth concept is a perennial failure that can actually harm an economy. Its advocates suffer from a crucial error in their understanding of economics: for in fact, consumption is an effect, and not a cause, of economic growth. Stated simply, more spending without the greater output of goods and services that results from increased saving and investment -- and concomitant higher real incomes -- can only lead to higher prices and inflation. Alternatively, if government spending programs engender uncertainty and loss of confidence, while at the same time excluding incentives to invest (such as through tax cuts on profits or capital gains), the demand for money holding can increase dramatically, choking off recovery. The former scenario played out in the U.S. stagflation of the 1970s, while the latter occurred in the U.S. in the 1930s and Japan in the 1990s." — John L. Chapman, research economist for the conservative American Enterprise Institute, arguing why President Obama's economic plan will fail
Ok.. I am going to dare to be not just go along with Obama and just take it.... I want someone...ANYONE.... to tell me where the money is going to come from for the spending bills, stimulus, programs... whatever that comes out every other day. I have asked... no-one can tell me. There are not enough taxpayers in this country to pay for this crap that I am supposed to sit and just go along with. I will ask again...where is the money coming from? And no..."Its Bush's fault" wont work...
OK...I'll go back to being a coward now.. I'll just go back to doing what I was told to do...just shut up and go along with it all.... after all, I am the ONLY person (well, John in Florida too, I guess... oh, and a bunch of people at Foxnews) who thinks this way. Right?
Who is going to pay for all this?
3 comments:
i don't know who's telling you to shut up and go along with it all. as far as i've read...folks on both fringes are unhappy "he's not spending enough!" "we should just be cutting taxes!"
i can only suppose that the assumption is that the position of our source determines whether we think the source is believable, but obama has said that although there is a lot of spending in the budget and the stimulus package (which makes me nervous too...but what's not talked about much is that about 1/3 of the law is cuts in taxes...mainly for families who earn less than 250k per year), that he's also looking for drastic cuts in spending over the next 4 years.
yes, there are 3-4 big cuts he's looking to make. as far as i've read in the actual budget (not filtered through anyone with an agenda) obama's looking to let the tax breaks from 2001-2004/5 expire, which averaged a cost of approx 450bil each year (ex. 2001 i believe was like 350bil, 2003 was about 600 bil...with the top 1% (1 mil per year getting a 30,000 tax break, while average taxpayers got a 289 tax break...top 1% of earners paid a 19.6% tax rate, down from 24.2% in 2000...people like me pay about a 26% tax rate)
just letting the tax cuts expire will add to the amount of revenue. also, there will be about a 100 bil (conservative estimate...some economists say 300 bil...some say 200 bil...no one goes below 100 bil) a year spent since 2003 on the war in iraq. drawing down troop levels there will bring in revenue (whether you agree with us leaving or not) that was previously unavailable. taken from 2003 that figure conservatively is about 500 bil. of course, some of that will go to moving troops in iraq to places like afghanistan, so all of that won't be recovered (plus we likely won't be out by 8/2010, but that's another topic)
there are also cuts in subsidies to farms that earn more than 500,000 in profit (net), which is supposedly several billion dollars
there's also some sort of provision that would increase the corporate tax, which was about 1.5% of gdp in 2002 (tax code loopholes) compared to about 4% in 1965
make of those explanations what you will. i'm not an economist, and from what i've read, i'm sure bill kristol would call me a fool and a liar...and milton freidman (god rest his soul) would call me a communist, but those are the figures i've found. of course, for news i watch the new hour on pbs and read the ecomonist & paul krugman (who's no fan of obama by any stretch of the imagination) so my numbers will probably seem suspect.
however, i think it's important to realize that each side has an axe to grind, and an interest in demonizing the other side. of course, everybody says they hate washington partisan politics, but when someone tries to get something done by not calling the other side idiots and traitors they're called soft.
i like the quote from mr. chapman, and from the address on tues and subsequent statements this week, so would obama...what's consistently been said to criticism like this is that it skips the 1/3 of the law that's about tax cuts, does not address the fact that previous tax cuts that were pocketed instead of re-invested and lack of oversight contributed to the current situation (it's much easier to lay all the blame on the folks who stupidly bought houses with no/horrible credit, but ignore the countrywides of the world who figured out how to make money by packaging those investments into commodities that could be traded just like other investments), what the article by mr. chapman also overlooks is his version of a solution to this specific situation...other than cutting capital gains taxes in addition to the other tax cuts provided. of course, he doesn't mention what should be done if the tax cut money is turned into profit instead of reinvestment, nor does he talk about the fact that cutting those taxes would in effect, be the very spending he seems to abhor. mr. chapman also seems to conveniently ignore his article in 2007 about private equity where he says that the problem is that the tax cuts aren't deep enough, and that raising taxes would be a huge mistake...with no criticism whatsoever of the manipulation of investment practices that exacerbated an already foolish housing speculation bubble.
anyway, here's the articles from chapman that i read:
basis of the quote: http://www.tcsdaily.com/article.aspx?id=022509A
http://www.tcsdaily.com/article.aspx?id=091307B
here's some info i found on the proposed 2010 budget
http://www.whitehouse.gov/omb/assets/fy2010_new_era/Summary_Tables2.pdf
http://www.cdfifund.gov/docs/recovery/New_Era_Department_of_the_Treasury.pdf
http://www.google.com/hostednews/ap/article/ALeqM5jQEhc49-1-1AHpJA5vojLVNkOG9wD96JQGJO0
erik b.
Read Erik's response and while kudos are due for it being thoughtful (with some good links and some rational numbers) it doesn't even come close to covering the approx. $1.5 trillion spending identified to date (which is likely to grow if true to normal government form).
And what I really would like Mr. Brown or any other thoughtful liberal to speak to is the broken promises... troop withdrawal promises now being modified, 48 hour public internet analysis of bills - promise broken, promises of financial (and personal) responsibility and attacking wasteful earmarks - financial summit sandwiched between the record breaking stimulus and the new budget with estimated 9,000 earmarks... and without even wasting too much breath on earmarks, SOMEONE PLEASE explain to me this pearl... how in ANY SINGLE WAY does the government funding tattoo removal encourage personal/financial responsibility??? Hmmm? And for the record my wife, a dermatologist, could theoretically profit from this earmark but I'll be damned if we'll take a dollar form the government for such tremendous waste and abuse of taxing hard working folks to cover the wasteful spending and stupidity of others (specifically speaking of unwanted tattoos).
Actually... one last question for any liberals reading this. Take a second, sit, breathe deep and provide me a honest answer to this question. If George Walker Bush had promised internet review of bills for 48 hours and broken his promise, given a date for troop withdrawal and changed it, and preached sermons on financial responsibility between record spending efforts would you feel the exact same way you're feeling watching President Obama break his promises? And would you respect the mainstream press for largely remaining silent? Eagerly will look forward to anyone giving honest heartfelt answers to these questions.
Rome's "way back when" Florida acquaintance,
John
well,
the $200,000 that accounts for.0005% of the total spending in the 410bil from the house is for part of an anti-crime program involving a San Fernando valley hospital and their police dept. the tattoo removal service is to help reduce gang violence against kids who are looking to get out by removing their gang tattoos. the chief of the police dept, judges in the area, and a probation officer who describes himself as a staunch republican all back the spending as worth it for the program.
a conservative "tough on crime" response would be talk of jail time as a cheaper option...keep in mind that i've heard that option before in person and on television. let the market decides they say...do it by the numbers.
numbers taken from a study by manhattan institute (neo-con think tank that supported the likes of buckley and kristol) calculate the cost of jailing one inmate at between 20-50k per year (there's a link below on how much la county spent on jails in 2004/5). this is a conservative estimate accounting only for cost of building/number of cells. take the middle # as 35k per year (they studied 3 western states, i believe) the average sentence for aggravated assault in CA is 2,4, or 6 years. so, the most conservative estimate for putting ONE gang banger in jail (the case law link refers to a case involving a Juan Rojas...check pg 5 for sentencing info) is approx 140k, which is almost as much as the total cost of the earmark. in 2006 there were 26 JUVENILE felony level assaults in the san fernando valley (those are the ones reported, which does not include transit crimes)...let's just say that 1/3 of those crimes are prevented by the program, which is just about 8 (i'll round down even though the chief of police estimates this might prevent dozens of acts of gang related violence)...that would equal a savings of 1.12 mil in the cost of jailing those 8 juveniles based on a mid-range sentence...these numbers based on a conservative cost of jailing an inmate that doesn't include food and clothes.
so the cost of this program amounts to 18% of the total cost of jailing only 8 of 26 juvenile inmates for 4 years each, for a charge of aggravated assault, which represented about only 25% of the total crimes in san fernando valley in 2006...these numbers using data from a conservative source...
also, not for nothing, if i'm to be responsible for explaining .0005% of the 410bil "liberal" spending, can someone explain the pearls that come from the 40% of the "bristling earmarks" that come from republicans?
in addition...letting the tax cuts roll back from 2001 (350bil), 2003 (approx 600bil), & 2005 (approx 400 bil) (only one of the prongs for cutting spending to contribute to the cost of the budget) will end up earning about 1.5 trillion over the next 3 yrs...from letting the tax rates go back to 2000 levels of 24% from 19% in 2003...all from the taxes on the top 1% of earners...again i'm not an economist so my math might be wrong, and i admit i haven't gathered all the numbers from every source.
on the campaign trail obama did promise that he would bring the troops home in 16 months. current levels estimate that there are approx 140k troops in iraq...the 16 month timetable is one of 3 scenarios that was discussed between obama, robert gates (conservative), and adm. mullen (chairman of the joint chiefs since 2007)...of the three timetables 16, 19, & 23, obama was convinced by data and arguments from experts that his original position was not best for the troops or the effort there. the promise was broken when obama was convinced by better arguments from experts (some of them conservative)
there's no excuse for breaking a promise, but i'd rather have a leader smart enough to change their position in the face of better evidence than one who would remain pig-headedly convinced of their rightness...even in the face of evidence to the contrary, and even if the result is 19 months for combat troop withdrawal instead of 16.
i dislike earmarks as much as anyone else...so i'm not going to defend the upwards of 9000 "earmarks" in the spending...of course some estimates coming from capitol hill have said that obama's stance on earmarks could cause a reduction of up to 43% in next years budget...not for nothing, dems AND repubs use earmarks as evidence that they should be re-elected in their districts...i suppose some independents who loved ron paul would be disappointed to learn that although he went around the country during his campaign talking against pork, he took about 400mil in pork for his district in 2007, while running for repub nod...spread out over his 12 years in the house that's about 4.8 bil in pork...from someone who doesn't like pork, but the argument that it's ok because someone else is doing it shouldn't count...so i won't. i'll just say that, yes, obama broke his promise to rid washington of earmarks, because he hasn't done it in first budget (and not in the first 100 days), and according to estimates he'll be off the mark by about 57%in 2010...there's no defense for breaking a promise, but i guess that a 43% reduction in earmarks in a system that has been employing earmarks since alexander hamilton is just as bad as instituting an unfunded federal education mandate to states that were already shocked by debt...or letting an entire city flounder because you put a unqualified friend in charge of serious govt business while promising compassionate conservativism 6 years back (my one and only gw reference, which i can only hope won't invalidate all of my other arguments)
so, my last answer would depend on what you call mainstream press. fox news beats most other news outlets in viewership during primetime hours (in some ratings doubles channels like cnn, and kills msnbc night after night) as far as i know there are as many "conservative" papers as "liberal" papers, and there's no point in discussing the numbers for conservative vs. liberal radio (air america was so pitiful it was shut down?)
i completely reject the notion that the mainstream press has remained silent about all the broken promises...1. that assumes that the mainstream press is "liberal", and since "conservative" outlets equal or surpass "liberal" outlets in print, tv, and radio, and programs like hannity (even i tune in sometimes) dwarf rachel maddow (which i don't watch) in viewership...2.let's just say that how you feel about what's being reported can be explained in some ways by who you wanted to win an election...
anyone who's "in the tank" for obama and refuses to criticize, would fly directly in the face of what obama actually respects, which is vigorous debate and dissent between well-informed people that will eventually lead to some sort of agreement that reflects the best of both sides. that he has wanted, and actively sought this cannot be questioned. the fact that this has not been the pervailing attitude in DC over the last decade or so cannot be questioned.
ask jerome...i've said this before. i honestly believe that liberal outlets don't spend their time criticizing liberals because then liberals would stop watching liberal programs, which means that they'd lose advertising, and get shut down. conservative outlets don't spend their time criticizing conservatives because conservatives would stop watching conservative programs, which means they'd lose advertising, and get shut down. in the same way there was plenty of honest critical criticism of gw, and plenty of yes-men, and plenty of blowhards who just hated him, there's plenty of all three of obama. that's my honest answer, and since there are plenty of things about obama's policies that i don't agree with i don't feel i have to defend the words of his yes-men. i do this in the same way that i don't think that jerome or john be asked to explain why fox news didn't spend a lot of time criticizing former president bush (i watch a fair amount of fox news, so there's not much use arguing that there was a good amount of gw criticism)...i expect the same from olbermann that i expect from hannity. i expect the same from david brooks that i expect from garafolo...pandering to their base, because that's how they make their money. i would no more blame obama for not being criticized by rachel maddow than i would blame gw for not being criticized by ann coulter. you wanted an honest answer from a "liberal"? well, as i've said before, i don't consider myself a liberal, but i think you deserve an answer.
i don't know much about the 48 hr internet policy so i can't really talk about that ;)
erik (that's all i have to say about this issue...i'm going to watch bsg on the dvr now)
http://www.manhattan-institute.org/html/cr_8.htm
http://caselaw.lp.findlaw.com/data2/circs/5th/0650584cr0p.pdf
http://stats.doj.ca.gov/cjsc_stats/prof06/19/10.htm
http://news.yahoo.com/s/mcclatchy/20090222/pl_mcclatchy/3173485
http://online.wsj.com/article/SB118636043871288806.html?mod=opinion_main_review_and_outlooks
http://mediamatters.org/items/200902260026 (liberal source)
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