248 Comments on “The Debt Thing”

1. There’s no concern about checks and balances when it comes to the debt ceiling, though. No money is spent via it that wasn’t already apportioned via the Legislative branch and then signed off on by the Executive. It’s just an old holdover from the days when Congress was directly responsible for every single expenditure.

   Planet Money did a good piece on it and its history. When you realize it’s all about bond issuance and what that means it becomes clear that it’s insane that this exists at all. Many other government agencies handle their spending and operations and make their own regulations (subject to oversight and constitutionality, of course) without this bizzare last step.

2. The bad thing about making snarky comments on a great writer’s website is that he’s probably better at it than you. Recognizing that fact, I’m still compelled to stick my head in the lion’s mouth:

   Since you’re feeling flush, can I borrow a c-note? I’m really short this month.

3. Don:

   “it’s insane that this exists at all.”

   As may be, because it does exist, it must be dealt with in a fashion that doesn’t blow up the world economy.

   Tony Dye:

   Come mow my lawn and we’ll talk.

4. Hoo boy. Hope the Mallet-warmer is plugged in.

5. Now I’m depressed… I could make the same amount to mow your lawn that I do to manage the entire network for this fire department. Argh! I’m apparently in the wrong industry.

6. No problem with eating taxing the rich, but that will still only cover a fraction of the problem.

7. What gets me is the quotes (I cannot find the NYTimes article, but it was up yesterday about Obama exiting the talks) from Republicans that make it perfectly clear that their aim is to not get blamed, rather than fix the country.

   The bigger question, unfortunately, is whether our credit gets downgraded during this mess. If the dollar loses purchasing power, things do not look good.

8. Tully:

   Indeed, it’s only one thing that needs to be done. But it does need to be done, I think.

9. I would say, “Hey, don’t raise it. Let’s see what would really happen.” If, you know, we had a time machine that worked and we could find enough energy in the smoldering ruins to run it and bring us back to this point with a, “Well, that didn’t go as planned,” chagrinned look on our faces.

   To those Congressmen who like to spout, “But there’s plenty of cash to pay our bills,” that’s great. Pass your bill, but put your salaries dead last in line to be paid. A few lines behind the nice people in your cafeteria who have to mop up after the food fights.

10. My biggest issue with what is currently happening, on both sides, is that politicians seem more interested in who is responsible for the mess than in actually cleaning it up. According to the National Debt Clock, the current average personal share of the national debt for each of us is about $46,000. I have three kids. I don’t make a ton of money, but I would be willing to part with a tad more of it if I had any trust in the ability of those in Washington to make sure it goes to paying off that debt. It’s frustrating beyond belief to watch them maneuver in endless games of one-upsmanship rather than solve the (insert favorite curse word here) problem.

    I want my kids to grow up more prosperous than me, and I’m willing to sacrifice something to make that happen.

11. Has there been a federal budget passed in the last three or four years that was not a continuing resolution ? Given the current enmity between the house and senate, I doubt that a new federal budget will be passed before Oct 1.

    That said, the current tax rates are too low. I think that getting rid of the employee portion of social security for two years was extremely stupid. We took a program that was in the green and immediately threw it into the red. I think that that so-called Bush tax cuts in 1992 ? were unwise and did not do anything. I also think that the USA should have a balanced budget constitutional amendment and the president should have the line item veto, just like here in Texas. Our governor wields it like a sword in order to get his way and make his point. However, even if the USA was getting all of that tax money, we would still have excessive deficit spending.

    Do not mistake that the flyover country people are not unhappy about the excess of spending in the USA. They elected the freshmen congressman on the promise of no new taxes. The freshmen congressmen know that they will lose their seats if they raise ANY taxes. This battle will continue and get louder. Much louder. Just wait until 30 days before the next presidential election.

12. In regards to the Republican leadership, I suspect that much of the posturing and playing chicken with the world economy is all to the overriding goal of ensuring that Obama is a one-term president. The world’s economic stability seems to come in a distant second.

    What was the turning point when the legislature (and perhaps society as a whole) moved from mutual back-scratching to continual face-clawing?

13. I’m not worrying. They’ll pass something last second at midnight again. At this point I (and likely a majority of others) have “omg budget Armageddon!” fatigue.
    Which makes the paranoid side of me wonder if all this ceaseless screaming and arm-waving is to make voters more apathetic in the long run.

14. Being a knee-jerk, bleeding-heart liberal, I definitely prefer it when the government is run a little bit to the left of center, although for the most part I’m perfectly happy – okay, reasonably happy – with center and periodically even a little bit to the right of center. But the problem I have is when a very loud, yappy and apparently inflexible group on the way far right of center (or left, as happens occasionally as well) decides they’re going to ignore reason, logic, and anybody who actually knows what they’re doing, and in order to defend their position ties a big rope to themselves, then to the rest of us, and goes jumping off a cliff.

    If that’s a bit too complex of a metaphor, let me put it this way: the Teaparty can yap all they want, but when they attempt to display their technical ignorance by screwing everybody else, I get annoyed.

15. I guess taxing the rich would be fair. Although the top 1% of taxpayers now pay close to 40% of all taxes and over 51% of wage earners pay no tax at all. I just wonder what is the cut off for fair is.

    Economic stimulus and growth is what is needed not more taxes. I don’t mean the kind of stimulus where the government gives businesses it thinks should grow handouts. Spending cuts are going to make things tough for everyone. You don’t go as long as we have and let things get this bad without some really lean times ahead. The sooner we fix this the better. The longer we wait, and I almost feel we have, it’s going to be lot worse.

16. I would like to point out that nobody, not even Ryan in his Roadplanmapguidebooktour, is talking about cutting the actual amount of money the feds spend over the next ten years. They are arguing over whether it will increase by a huge amount or just a really large amount.

17. On other important point that keeps getting missed.

    When Republicans say “no tax increases” what they actually mean is:
    (1) Very rich fund managers should not have to pay the same tax rates as every one else, they should pay a much smaller percentage than most other people
    (2) Very profitable oil corporations should not have to pay the same tax rate as other businesses
    (3) We should protect the right of private jet owners to have a tax break

    How republicans can say “no tax increases” when they really are protecting the above is ludicrous. Saying that the above items will hurt job growth is complete cow poo-poo. Everyone knows this, so why isn’t anyone calling them on it?

18. Scalzi – how comfortable are you that the local Tea Party won’t try to primary and/or run a 3rd party candidate against your local Congressman? Especially if he’s seen as the architect of a “sellout?”

19. Mike@15: Having 80% of the wealth and paying only 40% of the taxes doesn’t sound fair to me…

20. Mike:
    Please let’s not bring out that tired trope again. When the top 1% control 96% (approximately) of the wealth, and the 51% who pay no taxes are mostly the working poor at or under the poverty line, yeah, it does sound disproportionate, but not quite the way you might think. OTOH, the economic growth part I do like. Now to do that without digging an even bigger hole for the aforementioned working poor and embattled middle class.

21. “Bottom 51% don’t pay taxes…”

    But they *do.* Everyone who has money taken out of their paycheck is paying *payroll* taxes, Medicare and Social Security. There are probably closer to 10% of taxpayers who get money back from the government, and they, again, are the poorest of the working poor.

    http://www.theatlantic.com/business/archive/2011/05/51-of-americans-pay-no-federal-income-taxes/238329/

22. Not to try and point out the obvious, but if the Tea Party wants to Ross Perot the guy they elected Speaker of the House, they’re gonna be in for a world of hurt as they either, lose in the primary to the incumbent (more likely) or lose in the general to the Democrat.

    The tea party didn’t beat all that many incumbent Republicans in the last election, it was the freshmen Dems that they steamrolled.

23. @Mike #15

    Except for Social Security tax, and Medicare Tax, and sales tax, and property tax (if they actually earn enough to own a home), and gas tax, and vehicle registration tax (if they earn enough to own a car), and (probably) State income tax, and (maybe) cigarette tax, and (probably) alcohol tax. And if you’re making less than the cutoff for Federal income tax, I expect that all those other taxes hurt a lot more for you than they do for the top 1%. Progressive taxation is a good thing.

24. Both sides are playing politics..but with the last 40 years of data, why don’t you realize that even if we gave them 80% of our paychecks they would be back in short order asking to raise the limit again…they are spending addicts.

25. I think our host has got the argument pretty well set forth, since I’ve been having to listen to my “Representative” (not voted for by me, and he apparently doesn’t think he represents ME in Congress, go figure) telling local “town halls” that the US is essentially broke, we can’t tax the upper 2% that control an increasing amount of the wealth in thie country, yet he’s all for the US defaulting on its debt. Think Greece, Ireland, Portugal and some of the other little countries in Europe having debt problems that have been dragging down out stock portfolios was fun? Wait until this country does it. Gold is sounding better all the time.

    Odd that our friends in the GOP/Tea Party don’t remember that the tax rates during the Eisenhower years, when the US was the dominant world economy, were some of the highest in history. Even during the Reagan years, when Ronnie was telling all of us that “government was the problem” and the Big Elephants were proclaiming that it was “morning again in America” our tax rates were significantly higher. Now we have some of the lowest rates in memory and the economy is in the dumptser. I can tell you that the wealth ain’t exactly “trickling” down to us in the middle class (and yes, while not nearly in the rarified atmosphere of our host’s tax bracket, I’m probably somewhere in the middle of the middle class, what’s left of it anyway); something else is certainly “trickling” down on us, but it isn’t wealth.

26. It’s too bad that the President has adopted the talking-point comparison of household debt to government debt. It’s idiotic. It’s the same word, but other than that they’re two very different things. It’s comparing Apple Computers to Orange Julius.

27. http://www.salon.com/news/opinion/glenn_greenwald/2011/07/07/social_security/index.html

    the thing is Obama is pushing for cuts to social security and medicare.

    (cue apologists)

28. The confusion of federal income tax with “tax” in general is a rhetorical trick that comes up a lot in these contexts. If you’re fairly well-off, federal income tax is probably the kind of tax you worry the most about, and people who don’t pay it seem like lucky duckies. If you’re poor, the situation looks completely different. Other taxes, with effectively flat rates or worse, are all or almost all of what you pay.

    The correct response to people complaining about the large percentage of the tax burden shouldered by the top 1% is something like the finesse Andrei Sahkarov pulled to convince the Soviets to stop worrying so much about SDI. You don’t want top marginal tax rates to get higher? You don’t want such a narrow tax base? Work to flatten out income inequality and eventually we won’t need a narrow tax base. We tax rich people more because that’s where the money is.

29. Ideologues tend to think that compromise means that you are “corrupt”. I have seen political activitsts call anyone any politician that compromises on issues corrupt. If you don’t want compromise, then you have a dictatorship. Whenever you have a democracy you need compromise. It is inevitible that this will come down to the last minute. Neither party can afford to look like they gave up easily. Its similiar to the NFL and NBA labor aggreements. You have months to negotiate and nothing happens until the last minute or until one side caves under pressure.

    It would not surprise me if behind the scenes the republican and democratic leadership already have alot of stuff worked out. They are just keeping it away from the rest of their parties to keep it quiet.

30. Awesome and wonderful one sided opinion piece, thanks

31. You should have kept it as morons John….

32. @Guess #29 – That’s my impression, too. Neither side goes into a high-stakes negotiations giving away their starting position. There’s an element of brinksmanship involved, and I think there will be an agreement at the eleventieth hour.

33. @Mike #15:

    Given that the top 1% would appear to control slightly more than 40% of the wealth according to the most recent data easily available, perhaps they’re not paying enough.

    Consider:

    FICA is only taken from salary and wages, and at a fraction the normal rate for all income in the two highest tax brackets.

    The impact of excise and use taxes was raised before I finished this comment.

    Capital gains taxes are usually more forgiving than income taxes.

    In the states where I’ve been liable for state income tax, the brackets can’t really be described as progressive — they soak everybody. And of course there are sales taxes.

    The federal income tax code is virtually made of Swiss cheese. Most of the credits and exemptions are only realistically usable by those who are at least well-off. Exhibit A: charitable donations… which I support, for reasons implied below. If only they could make the 501(c)(3) requirements less onerous for efforts that intend to help those who really need help, sigh.

    And let’s consider it morally. Who should pay the lion’s share of the taxes: the ones who don’t need to choose between (the consequences of) late-/non-payment and, say, eating well as a matter of course… or the ones who do?

    To answer your question: “fair” unequivocally allows for such a thing as living well-off, while generating enough revenue for a social safety net that makes it practical for everybody to make smart life choices that ultimately allow the opportunity to contribute to society, instead of just living in it.

    Many of the powers that be have been deliberately punching holes in that net for the last forty years so that they can keep a bigger share for themselves. WTF.

    Meanwhile, technology, media, and easy mobility have shattered families and notional tribes — institutions that typically encourage knowledge and smart choices without the need for government intervention — and governments, i.e. the last bastion of that encouragement, are presently eating their own tails.

    Where are we going, and what are we doing in this handbasket?

34. @30 – Err, when people ask someone to give their opinion, is that not what they should do? An *opinion* is inherently one-sided: the side of the person giving it.

35. As may be, because it does exist, it must be dealt with in a fashion that doesn’t blow up the world economy.

    No disagreement. My intention was just to say that there’s no checks and balances concerns here. The debt limit applies to expenditures and debts that were already agreed to by the appropriate branches of government. The sensible thing to do with the debt limit is simply get rid of it entirely. It serves no limiting purpose that isn’t handled by the existing budgetary process. The treasury isn’t going to go issue unnecessary bonds.

    While I am loathe to compare government spending to personal spending, this fight is essentially as if someone chose to have a fight about their budget when the bills come due. The money is spent. If you want to claim this should be a wake-up call that, for some reason, you can’t have during the actual budgeting process, fine. But refusing to do the procedural things necessary to pay your debt till you deal with those issues makes no sense.

    The time to worry about whether you have the money to spend is at the time when you’re spending it. Not when the bill shows up. The fact that we’re talking about our tax rates in conjunction with this procedural hurdle is flat-out nuts.

36. John, just a note here. I think you meant to cross out “ideologue” and write in “moron”. You appear to have done the opposite. It’s the sort of mistake anyone could make, so I don’t hold it against you.

37. So. I probably have debt at the moment at something like 300% of household GDP, I doubt I’m all that unusual. Property near central London is bloody expensive.

    I am managing the payments, it can be hard but I can afford it.

    In 21 years, that debt will be paid off.

    Now, the thing is, is that all that unreasonable a thing for me to have done. No? So why can’t the government be like an individual then?

    If you lived hundreds of years, what’s the problem with taking on debts that last for multiple decades? Most of the current deficit is purely down to unfunded, uncessary tax cuts and short term expenses due to the worst recession in almost a century.

38. Yes, Murdoch has to answer a few questions, but apparently not about Murdoch’s taxes. So why are you bringing him into the discussion, John? Bit of a red herring there.

    I do not hold the Republicans responsible for this brouhaha. The budget should have been submitted and approved before last year’s election, definitely before the new Congress was seated. Who’s responsible for that?

39. A large, nasty part of me hopes the marching moron class of ’10 gets their way. Once the smoke clears, it’s even money on street violence …. against them.
    ( Heh, who says there are no liberal anarchists?) Oh, and the likelihood of another republican majority will be vanishingly slim. On the gripping hand, my paycheck comes from Uncle Sugar…..

40. If the members of the Church of Low Taxes are correct that Low Taxes (pbui) create jobs, and given that our overall tax burden is the lowest it’s been since before WWII, then one of you explain to me why we’re not in the middle of an enormous job boom.

    I mean a job boom for Americans, not for underpaid Third World labor hired by American companies because it’s cheaper.

41. Cassie @ #38:

    Perhaps you were (conveniently?) asleep when the Senate Republicans were filibustering nearly everything, so it was all but impossible to get anything passed despite having a huge majority.

42. As a followup to Kevin @40, if any of you start talking about how we spend too much… please describe where you’d cut. Be specific – there’s no item called Waste, so that’s just a cop-out.

    What specific programs would you cut and how much do you think that will save (i.e. people bleat about cutting PBS as if it’s 5% of the budget when it’s trivially small ($422m in 2010) and cutting that wouldn’t make any material impact on the budget.

43. No no no bigcat, please don’t bring the gripping hand into this. We already have enough trouble with the ’10 morons withough stirring up fear of a Motie invasion around this joint.

44. Rick@42: I’m quoting “There’s no item called Waste” the next time I have to debate my relatives about topics such as this.

45. My point was that government’s answer to not having enough money is always more taxes. This is from the city governments all the way up to the fed. We need to stop this cycle. I am not advocating lowering taxes, although I personally fell that would stimulate more growth than any redistribution the pundits in Washington might feel is appropriate. I just want to see some real movement on cutting spending. I am not sure either party is really willing to do that.

46. Cassie:

    “So why are you bringing him into the discussion, John?”

    Because he’s a fine representative member of the class whose taxes should go up. The thing about NewsCorp’s taxes (and the reporter wildly screwing up his story about them, WHOOPS) was neither here nor there about the comment here — I had forgotten that bit of misinformation when I wrote this this morning, although now that you call it to my attention I can certainly see why you made that particular connection. Sorry about the unintentional inference.

47. Mike @45 – taxes are lower than they have been in generations, we’re in the middle of the worst recession in almost a century, and part of the cause of the recession was a cheap credit splurge which has left most households with debt levels they can’t manage.

    We also have the HIGHEST income disparity between the richest and poorest in generations and companies sitting on record profits that they’re not spending.

    Cutting spending, especially on stuff like infrastructure, at the moment is criminally stupid economically speaking.

48. It’s never a good time to cut spending. Sometimes it has to be done. I don’t think either party really has the cojones to do it in a serious manner.

49. Mike@45: My point was that government’s answer to not having enough money is always more taxes.

    As several people have pointed out in this thread alone, taxes right now are the lowest they’ve been in a long, long time, and were higher during Reagan, and higher still during Eisenhower. And although the US economy during Eisenhower was a steam roller, the “read my lips no new taxes” morons swear up and down that we’re paying too much now.

    So, lets cut the BS talking point that all government wants to do is raise taxes. Because what they have DONE has been to slash them year after year until we’re in the mess we’re in right now.

    Here’s a question for the “No taxes” morons: Would you rather have a steamroller economy of the Eisenhower era with Eisenhower taxes, or would you rather continue the shitbox economy with low taxes?

    Because looking at history, history says that the problem is simply that we’re paying way to low of taxes, especially the rich, compared to any other time in comparable history.

    The problem is when you ask a “no taxes” moron that question, they want to invent a non-existent third option: (C) I want to live in a world of no taxes where the governemnt does everything it needs to do through voluntary donations and where such a government fosters a steamroller economy.

    It’s never happened in the history of the planet, yet the “no taxes” morons believe it will come true if you just believe hard enough.

50. Mike: I just want to see some real movement on cutting spending. I am not sure either party is really willing to do that.

    Are you willing? What would be the biggest cut you would make to the budget? One thing. Specific thing. And how much?

51. Seconded!

52. I can’t believe there’s a serious argument about whether the government should meet its financial obligations. Even if you think the country is in too much debt, that doesn’t mean the solution is to stop paying some of your bills.

    If the government goes into default, someone whom the government owes money is going to get screwed. It might be a Social Security recipient, someone who paid FICA all their working life with the expectation that they would get it back in their retirement. It might be some bondholder, who lent money to the government with the expectation they would get interest back.

    How on earth is stiffing people considered “fiscally conservative”? Because, as far as I’m concerned, it’s called “being a deadbeat”.

53. If the government goes into default, someone whom the government owes money is going to get screwed.

    Well indirectly it would be “everyone.” Ezra Klein has a piece up today about the rippling effect of the government failing to make its bond payment.

54. What upsets me about the dogmatic morons is that they are too stupid to realize that the constitution they claim to worship wouldn’t exist without compromise. Every article of that document is a product of compromise between the folks who wanted it one way and those who wanted it a different way. If the founding fathers had the idiotic “My way is the only way so shut up and agree with me” attitude that the morons keep spouting, the constitution wouldn’t exist.

    (The word morons here is not meant to include all republicans, but they know who they are.)

55. From what I can see, the Tea Party wants the federal government to stop spending nearly any revenue on anything, not nothin’, not nohow. As a homeowner, I find this equivalent to deciding not to pay to repair my house, not just repainting the trim, but having the RotoRooter guy come out and unplug the septic line. Very penny wise and pound foolish.

56. Mike and Isabel… Again WHERE would you cut spending? It’s easy and cheap to say “ZOMG CUT SPENDING!!!” but it’s also not really helpful if you cannot or will not be specific. Others have noted that taxes are lower now that they have been in a LONG time..but that’s not my point. You and others like you always bring up the point that we don’t need more revenue we need less spending. However, in my experience, people who put that line out there never define what should be cut or they identify programs that they don’t like but which also are not a significant percentage of the budget. Here’s one place to start: http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html but there are others out there.

    My only rule? You cannot say “Cut the waste” since, as I’ve noted already, there is no line item called Waste.

57. I was listening to the outrage over the idea of a sliding benefit for Medicare. I don’t have a problem with people who have the ability to pay more actually paying more. I’m not sure that it can be considered a cut, frankly; though that is how it is being portrayed. I guess what confuses me is the people who rant over what they like to call entitlements, then get pissy when it is their entitlement that is on the line.

58. there is a subset of people who lay awake at night worrying that someone somewhere is getting money from the government that the recipient doesnt deserve. they will have anecdotal evidence. they may have some specific story. but what they dont have is any sense of perspective. and because they lack perspective, they are willing to sink the whole government in order to stop this white whale.

    captain ahabs chasing the white whale that is the nonexistent welfare queen.

59. BTW, one of my father infamous sayings is “You cannot tax yourself into prosperity”. Our politicians since WWII have promised all kinds of things to everybody. Something will have to give, Medicaid, I am looking at you (fastest growing item in federal budget).

60. http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=43tsp6rd

    Oh I liked that. Problem solved. Tax increases and spending cuts. I hacked about $100bn out of miltiary spending and sorry, but like the Germans, and Brits, I had to raise old age benefits to 68… but it did the trick ;)

61. From the quotes I’m reading, it sounds more and more like Cantor thinks he’s negotiating a Student Council budget, Boehner is getting deeper and deeper out of his depth, and McConnell’s tail is creeping up between his legs. Meanwhile, Congressional Democrats, seeing the Republicans against the ropes, are letting the President throw all the punches, ready claim victory if he wins, and tie the noose if he doesn’t.

62. Oh and I didn’t touch government workers…

    Actually, I suspect that this wouldn’t really work because a lot of DoD spending seems to be a welfare program in and of its own self. But, I’m sure we could figure some of that out.

63. you cannot cut taxes yourself into prosperity either.

    though the Ahabs of the world would like you to think so.

64. Follow this logic: China converts its U.S. paper into tangible resources around the world, as we speak. Even China backs away from loaning more ‘real worth’ to America at this time, not wishing to collapse the American currency, not wishing at this time to collapse the American economy, but able to sustain herself on Asian and world trade now.

    Americans, once upon a time, in their industrial and manufacturing booms, during their Glory days of the Cheap Oil Era, set very high standards even for their working class, their Middle Class, even the upper, Uber-Rich class. In these times they made far too generous commitments, based on the notion that the good times would last forever and only get better, never worse.

    We live in an ‘new” America today, one totally dependent on expensive imported foreign oil, sold to us at world market prices, with an unanticipated oil hungry Asia bidding prices upwards against Americans for every drop of oil on earth. We live in a world where amazing energy advances have been made by our competitors on the world markets, as we wallowed in decadent oil contracts with parasite OPEC and Saudi nations. Denmark, net exporter of electrical energy, Norway, Sweden, approaching net exporter conditions, even Germany, can afford to shut down its Uranium fueled abominations by 2022, and move to Solar, Wind, Wave, Hydro, Tidal, Geothermal, and bio-gassing of humanure. China has developed nuclear electric bullet train networks effectively replacing the American rubber-wheeled gasoline burning model for a system that burns Thorium in LFTR reactors, free of plutonium, and with a waste product safe for humanity after only 300 years storage. (Google Tsinghua University China, pebble bed gas reactors, also China Candu Thorium reactors, see for yourself)
    America, now the odd man out, stuck on expensive and scarce foreign oil, can no longer support all her classes in their former splendor, and stalls on simple notions such as should she pay her bills, flounders and squabbles over sharing down the diminishing resources, recoils from assuming more debt in order to pay even social security, military pay, promised at levels appropriate only in the Boom Times, decades ago!
    Even the Uber-Rich defend their fortunes from the tax-man, from the bottomless pit of social security, military spending, infrastructure building, education the masses. They do not feel they are obliged to share in the weakening American economy.
    Are we witnessing an impasse built into American styled Capitalism? Capitalism, a system where all is well as we ascend, grow, move upwards, ever more making discoveries, building, moving ahead, assuming debt, growing the available Capital, but the smallest reversal in borrowing, slightest slow-down in development, smallest losses in the system, reflect as catastrophic multipliers of the real debt assumed, and tend to erode the system even to the point we see today, where even government fights over who gets paid, in place of fighting over who gets the biggest share of the bounty, as before this crisis? notice too, the corporatists are very quiet, offering no solutions. Have they all abdicated? moved precious Capital, the very blood of the American system, to Asian countries, building cities like Shanghai? In Asia? China? Where even the mighty, All-American, Ford Motor Company has invested $360 millions, U.S. in a Pilot Plant to build transmissions to start with, for all Fords throughout the world? Next, entire power-trains? eventually whole, assembled cars? In a decade or two? Has the flight of capital and technical know-how to the East, to China, hurt the American capitalist system? Bled its very life-blood, American generated Capital, and spent it developing China?

    Does anyone know, how much Asian, Chinese even, shares live in the stock portfolios of the Republicans? The folks who mightily defend capitalism, and would cut social security in the U.S., even cut education of the masses? But no cuts to the Military? Do they own the machinery that creates weaponry? Do they need war to turn a profit? To generate dividend checks? Will they stand firm on free trade with China? Asia? Do they own the Uranium Cartels that forced America to choose astoundingly dangerous Uranium fueled, plutonium creating, dangerous waste producing, reactors over the originally American discovered, LFTR reactors now coming out of China?The safe, reliable, cheap to build, reactors, the ones with waste products that are safe after only 3 hundred years of storage? The reactors that are destined to become the back-bone of the new Pan Eurasian Empire? Interconnected with electric bullet train networks and their associated electric infrastructures, Daisy Chained from continental coast to coast. Capitalism, more healthy for the investor than even for the country? Seem so!

65. “Something will have to give, Medicaid, I am looking at you (fastest growing item in federal budget).”

    Sure Lynn.. Let’s deny the poorest among us medical care so people making $250,000 on up don’t have to pay more in taxes. Nothing wrong with that…

    Look, people, we need to raise revenue and cut spending. Both. But we also need to look at things like why our health care system costs us about double what the EU systems do an gives about the same level of care. Each year the health insurance industry pockets about $450b in profits. That’s money that doesn’t actually deliver any care. How much of t hat comes from government money? Any? If so, should it? IN defense… what do we NEED, vs what’s there to maintain jobs? Can we, while maintaining natiaonal security, get the hell out of Iraw and Afghanistan (wars that have added $3.7 TRILLION to the deficit because the people who waged them refused to pay for them with taxes)? Do we means test SS and Medicare? If so, where do we start?

    The wealthiest among us should probably be paying about what they did under Clinton. That seemed to be very sustainable. IN fact, all of us should probably go back to that level of taxation. No, no one wants to pay more. But we need to quit this fantasy that we can have the services we currently seem to want and not pay for them. That’s a childish outlook. We need to buck up and do the adult responsible thing – look at what we need to spend, look for ways to make that spending more efficient and then pay for the services we want so badly out of our pockets vs the pockets of unborn generations.

66. Wow. Holding what’s left of the economy hostage. Classy. And yet somehow to their base, this makes them heroes.

67. Part of me wants us to default just to show how broken the government is. But then again, I like to get paid on my t-bills.

    I am somewhat amused by the rhetoric about raising rates for the top 2% only affecting billionaires. I’m no millionaire, but I suspect I’m in for a tax increase. Given the state of the budget/economy I’m not adverse to paying a bit more, but I’m not so psyched about being the sucker in this poker game. The really rich have been avoiding taxes and only the slightly rich end up footing the bill.

68. Another point that I rarely see noted is that if we gut human service programs like Medicaid, Medicare, and Social Security that prevent problems from getting worse, we will incur higher costs to deal with emergencies and more severe problems. These costs will get passed on by, for example, higher health insurance costs. Pay now or pay later. We are going to pay one way or the other, and I’d rather we do it in a way that saves money.

69. I’ve been paying 30-40 percent of my income for twenty years, and you want me to pay more in taxes so they can balance the budget? I can barely pay bills as it is. Tax the rich 100 percent of their income and you wont even put a dent in the debt. The problem is a war machine we can’t afford, the war on drugs which is a failure, and entitlement spending we can’t afford and doesn’t work (SS started when the average life expectancy was 60), bailouts from both sides of the political aisle, and the fed that prints money on a whim which decreases the value of the dollar. Rome had similar problems before the fall.

70. As usual the SOCIALIST TOOL John Scalzi is hiding his TRUE AGENDA behind SNARK and his ABSURD OBSESSION with “FISCAL RESPONSIBILITY.” This is a man who endlessly dreams on THE DESTRUCTION of AMERICA. Just look at his books! They masquerade as “novels” but are in fact CODED MESSAGES to his FELLOW LEFT-WING REVOLUTIONARIES!!!

    FUZZY NATION refers to Scalzi’s desire to have the American taxpayer buy him and other “follically challenged men” with wigs! Well, sir, in the America I grew up in, men grew hair through hard work and force of will; but YOU I suppose just naturally expect a “hair handout!”

    OLD MAN’S WAR, is, of course, a manifesto about Scalzi’s desire to provide those on social security with WEAPONS to FORCE THE YOUNG to provide them with PRESCRIPTION PILLS, FIBER-ENRICHED FOOD, and LUXURY BINGO CRUISES! When I was a boy, old people had the good grace to work for a living or drop dead at a more reasonable age, but if Scalzi had his way we would be looking after the geriatric into their nineties! He would gladly let 88-year old slouches stay home and watch TV, when they could be productively getting me my Quarter Pounder Extra Value Meal with a side of Glad To Have Your Business, Sir!

    THE GHOST BRIGADES? That is all we will have left to defend our proud nation, after Scalzi and his ILK succeed in DEFUNDING THE MILITARY utterly to pay for “SCHOOLS” (aka SOCIALIST INDOCTRINATION SITES!!!). His whole site The Whatever is a hedonistic, secular altar to that WHOREGODDESS “SCIENCE” and her dubious suitor “EVOLUTION.” He has even argued for the theory of man-made global warming. Ha ha, what a sap! The only hot air blowing over America comes from His Mouth! If I want better weather, I do not need to give the Federal Government to “Study” the subject… I will just PRAY for better weather, as I have always done! It’s worked so far! You should see how nice it is right now out my window!!

    As for ZOE’S TALE???? More like ZOE LONG, good ol’ America!!!! If Socialist Whiners and Complainers like SCALZI get their way, this country will turn into Canada!

    You laugh at me if you like! You will not be laughing so hard when all the radio plays is RUSH and instead of BASEBALL we have HOCKEY IN THE SUMMER!!

71. Joe@70: You forgot about Agent to the Stars, where Scalzi encourages handing over our foreign policy to the liberal Hollywood elite!

72. Joe Hill @ #70:

    :golf clap: Nicely done. You couldn’t have done a better imitation of certain letters to the editor I’ve seen.

73. Oh well, more of the same; spend, spend, spend, like this is ever going to solve anything. I can’t imagine what giving the government more money is going to solve, but whatever. This is simply a vote buying effort on the Democrats part to get the Republicans to give them cover to raise taxes, typical class warfare; blame the rich if the government didn’t spend enough money on you. For me raising taxes and raising the debt limit are separate issues; if the democrats want to raise the debt limit to service deficit spending and debt than they should be giving the republicans something in return, not the other way around.

    If nothing happens blaming the Republicans is rather silly and naive, they are the minority party in DC, the Senate and the Executive are still held by the democrats. so it is their responsibility to lead and govern, if they can’t do that because they are unwilling to surrender any thing to the republicans; well they had their moment in the sun, something about almost unstoppable majorities in the House and Senate come to mind, and they haven’t learned anything from the 2010 election. 2012 can’t come fast enough, this type of gridlock doesn’t help anyone.

74. Sorry, Paul, but I’m gonna have to give the points to Joe @#70. I mean, you didn’t all-caps anything.

75. Kevin Williams @ #72: Oh, huh. I thought he was doing Zippy the Pinhead.

76. So Paul, firstly, I’m not an American myself but doesn’t the Congress control the budget and last I looked that WAS under the GOP.

    Anyway, basically you’re saying that the democrats should be grateful for the option to raise the debt ceiling to mostly pay the bills for decisions made by republicans when they had the whole government?

77. Does anybody else think that we are getting a little hint of why a two party system is preferable to a multiparty system?

    I get really tired of people saying that asking for higher taxes is “class warfare”, I think making poor people truly suffer by reducing entitlements is surely just as much “class warfare.”

    I do not want grandma thrown out of her medicaid bed. Even if she isn’t my grandma and even if she was a low life jerk all her life. I want everybody to eat and have medical care. Is that socialism? I think it is common decency.

78. Paul @73: Far from being “unwilling to surrender any thing to the republicans”, the Democrats have agreed to massive budget cuts in exchange for raising the debt ceiling. The Christian Science Monitor describes Obama’s offer as follows: “It would reduce the US deficit by at least $4 trillion over 10 to 12 years – by far the biggest bite out of the deficit of all the options. It would include spending cuts, tax increases (which Republicans detest), and cuts in the cost of entitlement programs such as Medicare, Medicaid, and Social Security (which Democrats abhor).” David Brooks has even said that it’s
    “The Mother of All No-Brainers” for the Republicans to take Obama’s deal, describing the deal as “trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.”.

    Maybe you don’t think this is a good deal for the GOP. Maybe you’d like to see the Democrats compromise more. Fair enough. But it’s absolutely false to say that Democrats “are unwilling to surrender any thing to the republicans”. To paraphrase the late Sen. Daniel Patrick Moynihan, you are entitled to your own opinion, but not your own facts.

79. Paul@73: spend, spend, spend, like this is ever going to solve anything. I can’t imagine what giving the government more money is going to solve, but whatever.

    Well, the math is fairly simple: More money coming in from taxes will pay down the debt accumulated by Bush waging two needless wars while cutting taxes on the wealthy. I know that might cause some Tax Ahabs to have a stroke, but that’s how government works: They pay for things by collecting taxes.

    Now if you want to say that the problem is some mystical white whale who tore off your leg, and lets try to starve the beast and bring the entire government to its knees along with the economy and put the country, if not the world, into ruin, well, I would need more proof of this white whale you call “government waste” than that little bandaid you’ve got on your big toe.

    blame the rich if the government didn’t spend enough money on you.

    The other great myth of the no tax Ahabs:

    “Give me your tired, your rich, your huddled masses yearning to breathe free. The wretched rich of your teeming shore. Send these, the millionaiires, tempest-tost to me, I lift my lamp beside the golden door!”

    A door made of GOLD!!!

    Poor picked on millionaires always getting the short end of the stick. I mean, really, who will stand up for the millionaires?!?!?!

80. Joe Hill @ 70: Your spelling is far too good.

81. @69 “I can barely pay bills as it is”

    Given that the 30% tax bracket in 2011 starts at $174,000 for a single person and $212,000 for a married couple filing jointly, I would recommend a course in money management if you’re actually having issues paying bills on that income.

    Source:http://www.taxfoundation.org/publications/show/151.html

82. @69 – also, that “SS started when life expectancy was 60” is, well, bunk. If you survived to retirement age, you could be expected to live into your 70s or 80s. If you made it to your later teenage years – ie, the age where you would start getting taxed and contributing to the system – odds were you would survive until retirement age… and thus live to your 70s or 80s.

    The economists and statisticians who formulated SS in the 1930s knew their actuarial data – and were right to within a couple tenths of a percentage point as far as figuring out the numbers involved. Their curve is *still* accurate enough for back-of-the-napkin work – and they did it with slide rules, not digital computers.

83. Dammit. Cookies will be the death of me. I do *not* see spammers.

84. A few random notes sure to piss off everyone.

    1) Has any side really laid out what it wants? President Obama wants to “increase revenue” which means either the world’s largest bake sale or an increase in taxes. Republicans, conservative ones at least, wants the government to not spend money that it doesn’t have. This means cutting funding for popular projects like $1 million to study why people don’t ride bikes to work, $19 million to examine gas emissions from cow flatulence and $100,000 to study how to avoid falling spacecraft. I have an idea. A commission of everyday people totally unconnected to Washington should go through the budget and pull out the stupidest things we’re spending money on and Congress must vote for or against each one by name. The standard should be, “Is this essential?” If not, don’t fund it until we have the checkbook back under control.

    2) There is a huge difference between increasing taxes and closing loopholes. The latter is something that has historically proven to decrease revenue almost every single time. A few years ago, Maryland passed a millionaires tax and brought in less revenue than before the tax was passed. Rich people find ways to not pay tax, that’s why they’re rich. My guess is John Scalzi himself has a pretty good accountant whose job is to make sure he pays his fair share, but not a penny more, unless he chooses to donate on his own. Loopholes on the other hand are mistakes that exist in the tax code, intentional or not. Closing them should upset no one.

    3) There is a huge difference between increasing taxes on rich people and increasing taxes on rich corporations. Democrats tend to blur this distinction, as they do with several other topics as well, often because an educated public isn’t in their best policy interest. Republicans also blur but for different reasons. History shows that businesses with money tend to hire more people and taxes reduce the amount of money they have to spend on things like employees. Of course, businesses also benefit from Washington benefactors, hence GE paying no corporate income tax last year.

    4) Everyone focuses on the 1% of people who pay 40% of the taxes, at least that’s the number commonly thrown around. That barely tells a fraction of the story and may not even be accurate. The top 10 percent of earners, those earning more than $366k a year pay 73% of income tax collected by the federal government. The bottom 40 percent earn more money in tax credits than they owe in taxes. They get a refund. Those are 2006 numbers, but things haven’t changed that much.

    5) The Senate (the body that has to approve any plan after it passes the House) does a great job at voting down any budget submitted by the House but never presents alternatives. 23 Democratic Senators are up for reelection next November. Do you really think they want to align themselves too close with the President at this moment? His only chance at getting anything close to what he wants is to hope the Republicans overplay their hand, which is very likely. Otherwise, we’ll likely have a plan with lots of cuts, but few new taxes. No one in the President’s party has a desire at this moment to their neck out for him.

85. Ooops… #2 should be “The former is something historically proven.”

    That’s why it’s bad to type when a six year old is watching TV in the same room.

86. Prediction: Moody’s and the other rating services will not wait until August 2 (the magical debt default date) to downgrade our US ratings on Treasury Bonds and Notes. They will down grade the ratings well before the end of July, as well they should if they are doing their job. Then we will see the real nashing of teeth and wailing from our political leaders.

    I’m with Scalzi if I understand him aright. The Congress and President will act together to do something to avoid crashing ours and the world economy in early August. I figure the House will be a majority vote of non-Teaparty Reps and Dems, the very definition of a bipartisan action, when the final vote on the compromise legislation is achieved.

    2008 was bad enough (whose fault lays with under-regulation, bad policy legislation, and greed by the financial industry–note two of the elements are government leadership based). I do not think our political leadership will lead us over the cliff edge once the dust has settled. We will tiptoe on the edge a bit it appears.

87. Eric @83

    “Loopholes on the other hand are mistakes that exist in the tax code, intentional or not. Closing them should upset no one.”

    You posted while I was typing item #85. You give the common idea of tax loophole held by the general public. I am a CPA. The US taxcode includes no “loopholes.” What is does include are very carefully worded clauses to grant tax credits, subsidies, and deductions to very small classes of taxpayers. Congress legislated every one of these clauses for a reason (usually to gain political campaign contributions to enable their re-elections). We public citizens call them loopholes since they are all so narrow in their effect.

    Shoot! There was recent talk earlier this summer of eliminating favoriable deductions for the five largest US oil companies to raise revenue. If they named the companies by name doing so would be an unconstitutional bill of attainder; but do not think for a minute that they could not have defined the size of the taxpayers revenues or other attributes in a such a way as to snare just those five biggest oil companies. Some wouuld say doing that is closing a loophole. No, that would just be redefining the scope of targeted oil industry goodies to exclude the biggest players.

    My point. There are no loophole to close in our tax code. There are scads and scads of narrowly defininted tax goodies that have been passed out over the years, any one of which you could legislate out of existence. The usual effect would be a scurrying of lobbyists to pressure the re-enactment of the narrowly defined tax goodie (be it a deduction, a credit, an exclusion, a % limitation–oh, there are so many, many ways to write a narrowly defined tax benefit into the tax laws). Just don’t call them loopholes as if they were some kind of error or mistake. They weren’t. Every one of them was done deliberately. Every one.

    When actual mistakes are made in legislation, you see it fixed in a consent agenda item called usually a “technical corrections” bill. Such billed usually pass with no opposition as legislators know real mistakes in legislation when they see them.

88. Erick,

    At least you gave specifics in your first point. Of course, none of what you did will make any dent in the budget. Oh, I’m sure it makes you and yours feel good… but it’s irrelevant if you want solve the problem. go ahead and eliminate 1000 of the little $1 million dollar items. That’s $1b. Or 1/2080th of the 2010 budget.

    This is *precisely* what’s wrong with the country. People grandstand and pull out studies on cow flatulence and wave them around as if cutting all of that will matter. This distracts everyone from any real solution, but it makes the “gubmint is wasteful” crowd FEEL good. And that’s what’s important, right?

89. Erick @84:

    1. Yes, both sides have laid out what they want. No, a commission of ordinary people wouldn’t work (do we need a second engine for the Joint Strike Fighter? Yes or no. Come on; you’ve got $1.8 trillion more things to get through).

    2. By that logic, taxes would never bring in any money at all.

    3. History shows nothing of the sort.

    4. I’m sure that the top 10% would happy switch places with the bottom 40%, given the advantages you lay out.

    5. The House is constitutionally required to create the budget.

90. Count me as one of the “morons” that think we pay enough taxes.

    But go ahead tax away. In fact why don’t we just CONFISCATE all of the wealth of the top 10% of Americans. (Note the use of all caps). Just take it. Take all of their money, wealth, income,everything, WHATEVER.

    Don’t just close the loophole on the corporate jet. TAKE THE FUCKING JET. It won’t make a damn bit of difference for the debt.

    This is the point we Morons are making. It isn’t about the tax revenue. It’s about the spending.

    You can rape the income earners to pay for ridiculous spending for only so long. The spending is so out of control that raising taxes brings in LESS revenue, because you end up destroying the taxable entity.

91. @David #89

    Erick’s point on taxation not necessarily equaling more revenue stands up in the real world. Look at what is happening in California and Amazon, California is going to loose tax revenue because it is trying to get more money out of Amazon, look at Google, US corporate tax rate is the highest in the world but we don’t get any from Google cause they left the US and won’t return until we lower it by 10% or so I heard. Taxation or excessive taxation creates a disincentive to do things like do business in the US, which ends up hurting tax revenue.

92. Billy@99:

    You can rape the income earners to pay for ridiculous spending for only so long.

    I want you to imagine a rape survivor reading this sentence.

    As many people up-thread have pointed out, tax rates are at a historic low compared to much of the past few decades. But even if they weren’t, I think to compare a small increase in taxes to rape is pretty ridiculous.

93. Seconding the stupidity and inappropriateness of rape analogy. Let’s try not ever using it again in reference to taxes, Billy. Or at the very least, don’t use it here.

    Beyond that, hose yourself down, Billy. Any actual point you’d like to make is lost in the histrionics of your delivery.

94. @CLP 92

    Spending and Debt are at all time highs too, yet no one seems to want to deal with those issues. Government keeps asking for more and more money for obligations we already pay taxes for, yet where is all the money going? We have a spending problem, if I can’t afford to pay my rent cause I spent all my money else where, I am not going to tell my boss that she needs to pay me more, no I am going to change how I spend my money. Same is true for government, we pay taxes, the government is obligated to be responsible with our tax money, if it isn’t whose fault is it the tax payer or the government? But this is the crux of the issue, the voter is the one who is responsible, for keeping the government responsible, elections have consequences, the 2010 election proves this. The American people spoke and voted against the Democrats and voted in these Republican freshman that John mentioned, cause they did not like the kind of governance the Democrats were offering and these freshman offered something different , and here are the consequences and we will see what kind of fruit they will bear.

95. Paul @ #94:

    Are you actually paying attention? Even the Democrats want to cut $4T from spending (over 10 years, IIRC).

    Wharrgarbl.

96. Kevin, they want a tax increase and deficit increase for a spending cut. If it was simple as a spending cut for a deficit increase we wouldn’t be having this conversation it would not be a issue.

97. Whine, whine, whine…. I say anyone, including JS who makes over $200,000 (without any adjustment to income) should pay a flat 45% tax, everyone. Anyone agree with that….? I would imagine that even the host of this blog would change a tune…

98. Paul: Indeed we would, because what’s left of the Dem left would be howling about cutting services for the poor while letting the rich get off without suffering any.

    Kind of like the discussion we’re having now, come to think of it.

    Me, I’d be OK with cutting our contributions to the military-industrial complex and no longer being the world’s policeman, but try getting /that/ passed.

99. (sorry for the second post)

    Damnation, who could have thought that 200-some votes in Florida eleven years ago would get us into this mess?

100. “infinitum”, not “inifitum”.

101. Here is the sad thing Kevin, the poor are not suffering because of the rich, without the rich paying the size of the tax burden that they do, the poor would be worse off than they are now. But that is an entirely different conversation about entitlements and their place in our society. The government receives more than enough money from the tax payers to cover its current entitlement obligations, the problem is not whether or not there is enough money its how it is choosing to spend it, giving them more money does not solve this problem, it enables them to continue to put off the hard decisions of changing how they spend our money.

102. That has fuck-all to do with what I said, Paul.

     I’m sure the poor should be /grateful/ for whatever help the rich are forced to give them, but I just don’t see it that way, and I’m not even a Christian anymore; maybe the upbringing stuck a little better.

     Justify your complaining about getting $3T in spending cuts in exchange for $1T in additional taxes. It’s really a hell of a deal, especially considering we got multiple fucking tax cuts in the middle of multiple fucking wars, which has never happened /anywhere/ /ever/, /and/ our tax burden is a lot lower than it was when your parents or grandparents were your age.

103. Paul@94: I want you to look at this chart and then tell me with a straight face that it’s all the Democrats’ fault that we have a large public debt. Yes, some of it happened during Obama’s watch (during, you’ll note, a massive recession he inherited), but the climb began with Reagan, with a small decline under Clinton. The idea that this is all Obama’s fault is ridiculous. You will also notice that, as a percentage of GDP, the debt is NOT at an all-time high.

     You claim that the government is mismanaging the money. That’s not the problem. The problem is that the American public wants spending (e.g. the war in Iraq, entitlement spending) but doesn’t want to pay for it. Even if you cut every cent of domestic discretionary spending (that includes things like the FBI), you would not balance the budget.

     Also, if you read the quotations I supplied in #78, you’ll see that Obama has offered $4 trillion in deficit reduction, so your characterization of the Democrats as wanting “a tax increase and deficit increase for a spending cut” is just plain wrong.

104. Part of the problem here is a loss of confidence in the ability of politicians to cut spending.

     The Continuing Resolution to fund the remainder of the year did not help things, where proclaimed cuts may have actually increased spending.

     How do you negotiate with a counter-party who you do not believe is capable of acting in good faith?

     You don’t.

105. GOP leadership[]’re trying to be grownups
     What? When? Where?

106. To those who say that taxing the rich will only cover part of the problem – well, yes, of course, which is why Obama talks about a grand *bargain* where each side actually gives a little, rather than giving nothing. That’s the core of the problem – There’s no give, only take. Earlier attempts from Obama to prove this have … proved it. Republicans fought tooth and nail, and blocked a repeal of a tax cut Obama created for corporate jets. They blocked an end to tax breaks for oil companies, who’re making record profits. They categorically refuse to raise any taxes at all, no matter what, ans insist that cuts are the only solution imaginable.

     Current Republican nonsense is that raising the debt limit at all is the “something”. Therefore, anything that the democrats “give” is fair compensation for apparently sitting down and agreeing not to crater the US economy.

107. Paul @91: “Erick’s point on taxation not necessarily equaling more revenue stands up in the real world”

     That was not Erick’s point. Erick’s point was that increasing taxation almost never leads to more revenue. _That_ point does not stand up in the real world.

     “Spending and Debt are at all time highs too,”

     Yeah, that’s not true either. Both spending and deficits during World War II–as a percent of GDP–were higher than they are now.

108. @benwithalink #33: FICA (social security and medicare taxes) are taken at fixed percentages, so the rates don’t change for anybody. Social security stops being taken after $106,800 in wages, but there’s no limit for Medicare. Why don’t we just remove the cap for Social Security tax?

109. Emily@108
     Your question about SS makes sense which points out the absurd hysteria the ReThugs go into every time it is proposed.

     Given the definitions I’m aware of an organization that advocates mass casualties among civilians in order to advance their political objectives is a terrorist organization. I believe that that makes the current Republican Party truly a terrorist organization, especially with their repeated attempts to take the U.S. population hostage for political gain.

110. Calling Republicans terrorists isn’t actually adding anything useful to the discussion. Let’s try to not do that moving forward.

111. Erick@84, another captain Ahab to tell us the story of the white waste/welfare whale who must be hunted down at all costs even if it sinks the economy and the nation.

     your whales are MINNOWS compared to the overall budget. they are not worth sinking the ship to catch. this is the lack of perspective I mentioned earlier. the ‘no tax’ Ahabs have no perspective. Their fear that someone somewhere might be getting government money they dont deserve is so overzealous that when they see a hundred thousand dollar grant towards snail studies, they SCREAM that that is why we are in the trouble we are in.

     no. it isnt. and until you get this you’re just another ahab trying to sink the economy to kill you imaginary white whale.

112. Actually raising taxes a bit will pretty much do it. We don’t even have to do anything to make that happen, just let the budget busting Bush tax cuts expire when their extension is up. The numbers have been run and produced what called the do nothing plan http://www.slate.com/id/2291054/ which restores us to something very much like an even keel if we just leave things alone. Add in some genuine health care reform so that we stop paying more than twice as much for health care per capita and the budget goes into surplus.

113. That’s no solution at all – that involves at least two very bad things:

     1) the government not paying doctors enough for Medicare. Doctors may decide it’s not worth it to accept Medicare patients.

     2) The alternative minimum tax goes unfixed, so the middle class gets hit proportionally harder.

114. 1) the government not paying doctors enough for Medicare. Doctors may decide it’s not worth it to accept Medicare patients.

     2) The alternative minimum tax goes unfixed, so the middle class gets hit proportionally harder.

     It is possible to fix those things without reestablishing all of the Bush tax cuts.

115. I have it on good authority that the wealthiest 5% in fact pay 165% OF THEIR ANNUAL INCOME to THE BIG FAT SOCIALIST UNCLE SAM! Anyone who claims taxes are used to pay for ANYTHING except HOORS and CIGARS for FAT CAT LIBERALS is INZANE! It has been economically proven that you can only dig your way out of government debt by HAVING NO GOVERNMENT AT ALL. My uncle bowls with a CPA and has all this information STRAIT FROM THE HORSES MOUTH. So THERE.

116. So whom do I contact about my hoors and cigars?

117. Joe@115: I think the horse needs to have its teeth looked at.

     Bill
     SubPress

118. GADZOOKS!!!! ZOUNDS!!!

     We’ve been found out.
     Well if you can’t have hoors and seegars, then I don’t want to secretly rule this planet anymore.

     Notify the black helicopters, the UN gooney squad, and the new world order. We’re going back to Planet Ten.

119. Obama stomping off like a crying baby was priceless and says so much about the democratic leadership (is u want to call it that)

120. MotLy @ 119: So, the ceaseless, dentist drill like whine of Cantor is LEADERSHIP? Holding a cocked, loaded weapon at the head of the world is leadership? Stomping their widdle foot, screaming “Do it OUR way, or everyone dies”?.
     The entire world thinks you bastards are crazy.

121. I’m a little surprised that so many in SF community, who read and write lots of stories in which the system is the villain, can look at the U.S. Government and see something that cares about them. It’s not just about taxes. It’s not just about the opportunity cost of wasting trillions of dollars. It’s about wasting trillions of dollars on interest payments that don’t benefit anybody but T-bond buyers. It’s also about the destructive things that the government does with the money, like locking up harmless drug users, giving it to “farmers” who live in New York City, initiating wars overseas that make people hate us…

122. The discourse level here is descending into stupidity, folks. Let’s actually attempt to use brains and not cue cards.

123. One thing that strikes me the most is that the Democrats are, in one very important way, as much to blame as the republicans.

     Both sides have been gerrymandering congressional districts to carve out “safe” seats, or to make sure a state (such as Maryland) are electing “enough” congress-critters of a certain party. The problem is, this has a tendency to get the moderate Republicans out of congress.

     (this happened in Maryland to Connie Morella in the 2000 redistricting)

124. Joe Hill @ 115: Excellent! But please note that “libruls” is spelled with a “u” and some spittle.

125. @Tyler – I don’t really follow your logic, anymore than I’m wasting my money on my mortgage payments, or on the loan repayments for my wife’s MBA, or the loans I have to get my business off the ground.

     I’ll agree that US government debt seems high, but part of that, is a lot of unfunded liabilities from the last couple of decades which are barking mad i.e. unfunded tax cuts and wars etc…

     Social Security, Medical Services, Roads, Rail, Air Traffic Control, Water and Environmental projection services and all that other stuff is EXACTLY what I want to see from governments.

     The real problem at the moment is there’s nowhere for demand to come from. Rich people don’t spend the money on the economy, the banks they have their money in aren’t lending it to stimulate the economy, they’re using it to make more profits by moving fiat money around the system – none of which is building _stuff_ which leads to more economic development for the rest of us.

     Without banks lending to business and with most individuals needing to reduce their average debt levels we’re stuck in a liquidity trap much like Japan was. If you look at the actual data and remove unemployment insurance and other recession factors, now the stimulus has been spent, government spending has actually gone DOWN. It’s madness.

126. But without my cue cards, how will I know who to hate? Terribly confusing.

127. “I’ll agree that US government debt seems high, but part of that, is a lot of unfunded liabilities from the last couple of decades which are barking mad i.e. unfunded tax cuts and wars etc…”

     IN fact, the two wars we’ve been waging have cost $3.7T to date. I believe that none of that was paid for out of current taxes. So, if you a) supported our involvement in both wars, b) supported the Bush tax cuts then c) realize your positions are directly responsible for just under one-third of the current debt. Before any of you “cut spending” people bleat at me about how much government spend, go think about that. You’d have a lot more credibility if you walked your talk.

128. Sadly, I think this discussion is going in the wrong direction. Debt is sustainable as long as the real interest rate is less than the growth rate, What the US needs to fix most of its primary governmental funding issues is to reduce the real unemployment rate to < 5%. reducing unemployment and underemployment would in crease the real growth rate and real interest rates are very low currently (it is actually cheaper for the government to borrow money than to hold on to it as the real interest rate is negative). Cutting government spending is likely to reduce the growth rate, so is not a useful way to get to sustainable debt. The second most important issue is probably reducing the cost of all medical care. This is regardless of cuts to Medicare/Medicaid since that only really shifts costs from the government to the people.

     http://www.levyinstitute.org/pubs/pn_11_02.pdf

     http://modeledbehavior.com/2011/07/10/cheaper-than-cash/

129. Bill:

     Pray tell, how do we keep full employment without resurrecting the Civilian Conservation Corps? In the age of globalization, jobs get offshored if they can be done half-competently because it’s so much cheaper.

130. The problem is both revenue and expense. Seems sensible to target both, i.e. cut spending, raise taxes

     http://factcheck.org/2011/07/fiscal-factcheck/

131. So let me see if I have gotten this down. If the House passes a debt limit increase bill, the Senate passes it, and it goes to Obama’s desk and he vetoes it because it doesn’t have tax increases, it’s the fault of the dogmatic Republican House?

     Gotcha!

132. #111 – Call me Ahab all you want. In this case, you’re absolutely right. Those items I mentioned are spit in the ocean, but they all add up. A million here a million there and soon we’re talking about real money.

     The point is that anything we purchase for home can be generally characterized as essential or luxury. Food and shelter are essential. A Netflix subscription is luxury.

     I’ll concede that a certain level of debt in government isn’t necessarily a bad thing. We are well beyond that level. According to the nonpartisan Congressional Research Service, without a debt ceiling increase the only way the government could move ahead without taking on more debt would be to end all discretionary spending and cut 70 percent of all mandatory spending. That, or create a lot of new taxes that affect everyone.

     That stat says two things to me. First, the debt ceiling needs to be increased because we can’t afford to stop paying all that, and second, the government has spent far too much money that it doesn’t have and the solution can not be allowed to be “spend more.”

133. lil mike:

     Except it’s not going to pass the Senate, is it.

     You aren’t as clever as you think.

134. The elephant in the room here, according to that terrific interactive NYT budget-fixer tool upthread, is our military spending. Sure, entitlements are a bit high – I personally could live with raising the social security benefits age, and with some more rationing of end-of-life medical benefits — but we can save a lot more by cutting guns than butter. You also get a much better multiplier effect – to put it in personal terms, every dollar you spend on home defense to protect your luxury goods, is a dollar you are not spending to grow your business. May I suggest that if we are too stupid and/or arrogant to get along with the rest of the world without outgunning all of it put together, we deserve destitution?
     Hmm, shades of The Last Colony here…

135. Erick @ 132, I won’t call you Ahab, but I will suggest that you don’t have an intuitive feel for large numbers. “A million here a million there and soon we’re talking about real money.” That’s a great quote, but it’s really not true. Sure it’s true for you or me, and even our home town, or employer, or similar sized organization. But you could spend all day cranking those out at the rate of one every 10 seconds and at the end of that day and come up with thousands of those…and you’d still have less than 1% of the US deficit.

136. The top 1% paying 40% and the bottom 51% paying no taxes is not the right comparison. The correct comparison is that the top 1% EARN 95% of the total income in the nation. This being said, it seems to me that they should be carrying 95% of the tax burden.

137. “The bottom 51% paying no taxes” is not only the right comparison, it’s a complete fiction, arising either from ignorance (forgetting that “taxes” and “income tax'” are not synonymous) or malice (doesn’t it just make people’s blood boil to know that half of the population is getting away with freeloading?).

138. The Crafty Trilobite @134; when Britannia ruled the waves, she had a policy that her navy would be capable of beating the navies of the next two most powerful nations put together. Disproportionate military spending may be a hallmark of superpower.

     Personally I think it’s despicable that any one nation could accumulate so much economic and political power that its political mishaps become the potential downfall of the global economy, but that too is probably a hallmark of superpower.

     The Fletcher Plan For Fiscal Stability would see the defense budget cut in half, taxpayer-funded healthcare established, all the little subsidies, exemptions and gratuities in the tax code ferreted out and obliterated, taxes raised on the rich, and Washington burned to the ground. Government would reconvene in a trailer park in Alabama, to be moved to the next state in alphabetical order every ten years. Filibustering would be outlawed, the salary for all elected officials would be equal to the minimum wage, and campaigns would be paid wholly by taxation (with funding divided equally between all parties running) – “campaign donations” would be illegal. Campaigning would be allowed only for two months immediately prior to elections.

     It’s not the budget plan Washington *wants*, but it’s the budget plan Washington *deserves*.

139. A million here a million there and soon we’re talking about real money.

     Actually, we’re not really… Even a billion here a billion there, and we’re still not talking real money for quite a while.

     The GDP is somewhere north of 10 trillion, or a million millions. If you look at all the bits and pieces of the budget, saving a few tens of millions or hundreds of millions on a few bits and pieces makes damn all difference to anything. The military is the elephant in the room.

140. “#111 – Call me Ahab all you want. In this case, you’re absolutely right. Those items I mentioned are spit in the ocean, but they all add up. A million here a million there and soon we’re talking about real money.”

     NO WE’RE NOT. Dammit, Erick, read the replies above you. I pointed out that you could eliminate 1,000 $1M programs and it would be roughly 1/2000th of this year’s budget. There’s no point in talking to you if you’re going to ignore facts. Either deal with facts here or let’s just agree not to bother further. Trading slogans is precisely what’s gotten the country to this state – people want to say cute things vs deal with reality.

141. @138 Fletcher

     I’m there with you on all that except the salary item. Minimum wage is not a reasonably liveable wage for someone supporting a family which would result in either only independantly wealthy individuals running for office (much like today) or raising the minimum high enough that no one is going to want to hire young low-skill workers at that rate. I think a much more reasonable approach would be to peg their wage at the median state income so that it is both liveable and gives them a very strong personal incentive to create broad spectrum wealth (average income would also be viable but could potentially encourage wealth concentration at the top).

     Also burning Washington to the ground is entirely unreasonable – it would produce rediculous amounts of greenhouse gasses. Instead, it should be manually demolished by sledgehammer weilding (formerly unemployed) citizens.

142. @ Kevin Williams

     So your argument is that it will be the Senate that will stop the debt ceiling increase from going forward? So it’s the Senate that will be the body that will instigate this country’s first debt default, in violation of the 14th amendment?

     Gotcha!

     Somehow, I think I am as clever as I think!

143. No, I’m saying that your post was transparently “wharrgarbl it’s all Obama’s fault”, and you weren’t being at all clever about disguising it.

144. lil mike:

     “So it’s the Senate that will be the body that will instigate this country’s first debt default, in violation of the 14th amendment?”

     If the House passes a bill it knows won’t pass the Senate, the blame at this point is highly unlikely to fall on the Senate, for two reasons. One, the president and his allies have been spending the last week painting the House Republicans as obstructionist, and the characterization seems to be taking; Two, the blame for the failure of a political process tends to fall on those who are the most unreasonable, which in this case would be the folks wasting time during a national crisis that has no chance of succeeding, on the theory that if they just wait long enough, the other parties will have no choice but to accede to their unreasonable demands.

     So, no. Your argument isn’t actually as clever as you think.

     Which is not to say the House won’t be wasting its time during a national crisis passing things that have no chance of passing the Senate; Boehner has already signaled that’s what the House intends to do. After which I suspect both the House and the Senate will pass some version of the McConnell “Let’s abdicate our responsibilities so we can’t be blamed for raising the debt limit” bill, which Obama has already signaled he’d accept “as a last resort.”

     As I strongly suspect that the McConnell bill is already a done deal in this respect, I see everything else going on right now as shadow theater for highly partisan constituents.

145. *sigh* Not to Godwin my own post, but I think the Germans (and hell, the Romans) can tell us a few things about entrusting more and more power to one person.

     Nobody pays a goddamn bit of attention to history, because it’s just easier to give one person all the responsibility you’re not willing to take yourself.

146. (sorry for double post again)

     One hopes the Supreme Court will find the McConnell bill unconstitutional if it passes, but by the time they finally get ’round to it the damage may have been done.

147. rick @140: Problem is that you’re disagreeing with what the facts are. To someone who believes that Democrats in power is simply a bad thing and will always lead to higher taxes and debt than under a Republican regime, it is a fact that taxes are higher now than they were before; they don’t need to do a comparison of actual numbers. That would be as silly as saying “I don’t know if winter is colder than summer without looking at actual temperature ranges over time.”

148. http://en.m.wikipedia.org/wiki/File:MarginalIncomeTax.svg

     as this graphic of tax rates over the last hundred years clearly shows, the problem is obviously that taxes are too high.

     (end sarcasm)

     it takes a level of willful ignorance (no I will not look at your facts for fear of what I might see) to be a no-tax Ahab. But there doesnt seem to be a shortage of them.

149. @ #144 John Scalzi

     We seem to be talking about two different things. I’m referring to the actual process of a debt ceiling bill either not clearing Congress or being vetoed by the President. One way or the other, a bill will clear the House. It could falter in the Senate by never being brought up for a vote, be voted down, or pass with some changes and go to conference. So if a bill, any bill, that raises the debt ceiling passes, and the President vetoes it. Who is responsible for the debt ceiling not being raised? The President of course.

     However you seemed to be making the point that theater will determine the blame, not the actual process. As you said, “…the president and his allies have been spending the last week painting the House Republicans as obstructionist, and the characterization seems to be taking.”

     In that I think you are correct. Regardless of the actual process, if there is no debt ceiling bill signed by the President, I think the President, Senate Democrats, with their lickspittle allies in the media, will be able to pin the fault on the House Republicans. They’ve done a pretty good set up for that based on the last two weeks of Sunday morning show interviews. It makes me wonder just how sincere they are in getting a deal. The political advantages of NOT getting a deal are pretty enormous for the Democrats. Meanwhile, if the President signs on to any deal that doesn’t include tax increases, its a political victory for the Republicans. Since no deal with tax increases will get through the House, that makes the President’s choices and opportunity pretty clear. So if the President keeps his nerve, he can reap a lot of political gain by not signing a deal and instigating a fiscal crisis with the Treasury.

     Realizing this still makes me quite the clever lad however.

150. @lil mike:

     When a President vetoes a bill, it is rarely done without comment. If a bill that merely raised the debt ceiling without making any other changes were to pass the House, it would pass the Senate and then be signed into law by the President. This has happened every other single time in US History this matter has come up, so why would the President veto such a bill?

     Because the debt ceiling bill in this case will include absurd, unrelated, and economically disastrous cuts to popular programs and vital services.

     So who’s at fault?

     The people who wrote the bill, rather than voting out something sensible.

     It really is that simple. House Republicans are holding the economy hostage, and no one else is to blame.

151. lil mike:

     “Who is responsible for the debt ceiling not being raised? The President of course.”

     Well, no. If the House passes a bill it knows has no chance of passing the Senate or the President, it is at least equally responsible. You’re fixated on the mechanics of process, not the politics of it. The politics here matter more than you appear to want to admit.

152. Lil Mike: So if a bill, any bill, that raises the debt ceiling passes, and the President vetoes it. Who is responsible for the debt ceiling not being raised? The President of course.

     So, hypothetically speaking, if some bizarro world Senate passes a bill which approves the construction of an unstoppable doomsday device and also pays the military personell their salaries, that bill makes it to the President, who vetoes it because he, well, he just happens to think building an unstoppable doomsday device is a really stupid moronic idea, then the President is to blame for not paying the military people their salaries?

     Because the Senate bundled those two things together into one bill, it’s the President’s fault?

     That’s fricken hilarious bizarro logic.

     In your world, the republican senators get no blame for being obstinate assholes, and the democratic president gets all the blame for anything negative that might get bundled with the bill passed by those republican asshole senators???

     Your morality and your sense of responsibility is nothing but pure tribalism. Republicans good. Democrates Bad.

153. “This is one of those “You made your bed, complete with a dogmatic moron ideologue ready to screw you, now sleep in it” moments. Alas, the rest of us are in the same bed, and we have to watch.”

     Thank you so very much for the mental picture of John Boehner and Eric Cantor in bed together. I must now leave and rinse out my brain with scotch.

154. Mmm, Laphroaig.

155. lil mike@149: “lickspittle allies [of Senate Democrats] in the media” What allies are those? Fox News? CNN, who tries to be Fox Lite? Charles Krauthammer, who just wrote an editorial that claims that defaulting is a good idea? The boogieman of the “liberal media” is just that. National media in this country hasn’t been liberal in decades.

156. @Jedibear

     We’ve actually had a “clean” debt limit vote, back in May. That was originally the President’s position. It died in the House, 318-97. That’s a lot of Democrats voting against it. I wonder why that is?

     Anyway a clean debt bill is no longer the President’s position. He wants a bill that includes tax increases of some sort.

     @Greg

     Really, that’s your argument?

     Any argument that requires an unstoppable doomsday device to makes its point… didn’t make its point.

     Bizarro logic indeed.

     @Origuy

     CNN is Fox lite? Maybe I’m just jaded. I watch MSNBC.

     @ John Scalzi

     I don’t think the “cut, cap, & balance” bill is a no go in the Senate. Frankly it seems rather modest. Cutting 111 billion from the 2012 budget and cap future spending at 19.9% of GDP, and allowing a vote on a balanced budget amendment? Is that really so outrageous? I think that stands a far chance of getting through the Senate.

     Apparently the President thinks so. He’s promised to veto it. That fits in rather nicely with my theory that he has more to gain politically by vetoing a debt ceiling bill than by signing one.
     So yes, the politics do matter.

157. lil mike:

     “I don’t think the ‘cut, cap, & balance’ bill is a no go in the Senate.”

     I suspect you’re going to be unpleasantly surprised, then.

158. Yeah, I like that the Republican response is another slogan.

159. lil mike@156:

     Greg’s argument at 150 used hyperbole, in order to extend the argument to its theoretical limit. So while a doomsday machine becoming a rider on the bill is highly unlikely, it’s less unlikely that a debt bill passing the house could have an “oh yeah, and kill medicaire/social security/something else Obama would obviously not do. Is it then the President being difficult, or rather the House Republicans for pushing a bill that has no chance of getting Obama’s signature?

     That’s the point of rhetoric like hyperbole, to illuminate the full implications of an argument.

160. lil mike, the reason my argument confuses you so much is because you want to cut social security, medicare, and medicaid. You see cuts to those programs as a GOOD thing. So ehrn I changed the narrative to the republicans doing some BAD (i.e. doomsday device), it totally sprung your sproket.

     the point being the president doesnt have line item veto so he can only say yes or no to what the legislative branch sends him. this means that congress must NEGOTIATE with the president if they want something passed. but republicans arent negotiating. what they are doing instead is doing something hoorendously evil (killing social security, medicare, and medicaid) wrapped up in a debt ceiling bill. then when the president threatens to veto the horrendously evil bill, republicans want to be able to claim it was his fault for not signing the bill rather than taking responsibility fir the favt that every bill they send to the president is evil and deserves a veto.

     republicans are notoriously adverse to their own responsibility while trying to demand everyine else be responsible. so I am not surprised.

161. speaking of republicans not taking respknsibility for the actions, Republican politicians seem to actually believe their own bullshit that nothing is ever their fault, and may very well allow the government to default, the econmy to crash into depression. They give every impression that if that happens they will celebrate with GLEE because they truly believe it would be Obamas fault.

     we are playing chicken with complete fucking idiots.

162. Greg… spellcheck is your friend.

163. @Abram

     I think in this case hyperbole obscured the argument to the point that it really had no relevance. If I turn it around and ask, what if President Obama demands that the debt ceiling increase include funding for a doomsday machine? Well, it’s just as ridiculous. We are not facing doomsday device funding. Sure, we can dream…

     Although I agree in a general sense that hyperbole can illuminate the choices, this isn’t one of those occasions. I think the consequences to the country are liable to be brutal if there is no debt ceiling bill, while passing a “cut, cap, & balance” seems beneficial at best and a minor annoyance at worst. Unless you think the “cut, cap, & balance” bill is as bad as or worse than no debt ceiling bill, it’s no doomsday device.

     @Greg

     I think my sprocket is sprung because I don’t recall mentioning anything about wanting “to cut social security, medicare, and medicaid.” Perhaps you can refresh my memory on which post I mentioned that. Nor do I recall “social security, medicare, and medicaid” being mentioned in the House bill. I could have missed that however. It might be in the codicil outlawing happiness and requiring the mass murder of cute puppies. Considering how quickly federal spending has increased in the past few years, I’m surprised that you regard a reduction in the increase as equivalent of a doomsday device. But then, that’s hyperbole for you.

     @John

     I’ll be even more unpleasantly surprised if the Senate doesn’t pass anything.

164. lil mike, the republicans proposed the Ryan Plan to kill medicare in April. The republican cut, cap, and balance plan will have similar effects. the nitwits who think that the problem is some nebulous and ill defined issue simply called ‘waste’ are only deluding themselves. the target is medicare, medicaid, and social security.

     check the link in 148. taxes are the lowest they have been in a century. we cant afford that.

165. oh and just for perspective, the Ryan plan keeps federal outlays to 20% of GDP. cut cap and trade cuts it even further to 18%. Obama had proposed a plan that put outlays at, HORRORS, 23% of gdp.

     despite the no-tax ahab desire to scream about ‘runaway spending’ and socialism and other nonsense, it woukdnt be that huge of a cost to keep medicare medicais and social security around. many say the whole thing could be paid for just by letting the Bush tax cuts expire. taxes are the lowest they have been in nearly a hundred years.

     cue screaming hoards.

     of course the problem has nothing to do with what percent of the GDP will keep important programs afloat. the problem is republican politicians willing to sink the nation so as to blame it on Obama. and said republican politicians supported by the peanut gallery of Ayn Rand acolytes who think we are this close to objectivist rapture, tea party iidiots who have been stocking up ammunition, and of course racists who dont know why they just dont like Obama but are clear they dont.

166. On spending: The real key is spending. Spending at 25% of GDP during peacetime is 25-30% higher than the norm. To pay for it we will need massive tax increases that will bump us into European-style slow growth and high unemployment. Slower growth and fewer jobs reduces individual opportunity, wealth creation and upward mobility. Some might think that’s okay, philosophically I don’t.

     On taxation: Confiscating 100% of the income of those making over $250k would not even cover the 2011 deficit… let alone put a penny towards the 14 trillion dollar accumulated deficit. Where else will you get the money? Corporations aren’t really taxed, they just collect taxes. If there’s a dollar tax on a barrel of oil or a box of triscuits the corporations just raise the prices. YOU pay corporate taxes, not the corporations. Corporate taxes are regressive to boot, if you make $10 dollars a year or $10 million you’ll pay the same mark-up the oil or the triscuits

     On politics: As for plans, I’m not thrilled with Republicans, but at least they have one. The Democrat controlled House and Senate failed their constitutional obligation of a 2010 budget. The Democrat controlled Senate has failed to produce a 2011 budget, as well. All the Senate did was vote down President Obama’s proposed 2011 budget 97-0. Yes, 97-0. How serious does that make the president and his Senate colleagues? When asked to testify on Obama’s last proposal the head of the Congressional Budget Office responded ‘we don’t score speeches’… i.e. there is no plan.

     I won’t attempt to criticize the Democrat plan because it doesn’t exist. The Democrats have not submitted any actual budget or debt reduction plan for debate or analysis. They simply float vague numbers and leaks. Their cynical approach may work as short term politics, but it is hardly what they were elected for. I may not like a significant amount of the Republican plan, but they have one. Until the Democrats put a real plan with real numbers on the table those of you supporting them are defending… vapor.

167. Tom: corporations arent taxed

     thats about the only thing you said that reflects reality. with oil companies making billions in profit, do you approve of raising their taxes then?

     no?

     gee why am I not surprised…

168. Greg:

     My point is that a tax on oil profits will just get passed on to the consumer in the form of higher gas prices. The question is do YOU want to pay higher taxes on oil companies, because you’re who will. The oil companies will just collect them and send them to Uncle Sam… and wind up with the exact same profit.

     If the tax on a pack of cigarettes goes up 30 cents does the tobacco company make 30 cents less per pack? No, the price smokers pay goes up 30 cents and the tobacco company pockets the same profit. The same applies to movies, oil, lipstick and tires. And the ironic thing is it hits the poor the hardest, because they pay the same price increase as the millionaire down the street. Thinking progressives should want to abolish corporate taxes completely. ESPECIALLY when it comes to oil… I don’t see a lot of poor folks in Priuses, mostly older gas guzzlers. So my question to you would be why do you want to balance the budget on the backs of the poor? Surprise me…

169. @Greg
     You said that I wanted to cut Social Security, Medicare, and Medicaid. Could you please provide the post where I said that? Or is this more hyperbole again?
     The Ryan Plan kills Medicare? There’s that hyperbole again. Can you make any statements that are rooted in reality?

     As I recall, President Obama also made a speech in April. Based on your standards, I guess I could say it was Obama’s speech to kill Medicare. First, Obamacare has a cap on Medicare spending that is supposed to be applied starting in 2014. Based on his April speech, the President wants to lower the cap even more. Now, where are the cuts coming from? Not sure since the Independent Payment Advisory Board will get to decide those, but I have a few guesses. So no matter what, by your hyperbolic standards, Medicare gets killed.

     You say that “many say” Medicare, Medicaid, & Social Security could be paid for with the expiration of the Bush tax cuts? Frankly, I would like to meet one, with the figures to back that up. I’ve really never heard that before. And properly they should be called the Obama tax cuts. The Bush tax cuts expired at the end of 2010. A Democratic House, Senate, and President enacted the new Obama tax cuts. If only Obama would stop giving tax cuts to the rich! Well they expire at the end of 2012 unless the President renews them again for his fat cat buddies. So I assume starting in 2013 a new age of paid for entitlement programs will begin.

     As for the GDP, you don’t think 23% of GDP is a lot? It was 20.9% of GDP in 1944, when the entire country was mobilized for the war effort. What exactly are we getting for that? The post war average has been what, 19%?

     Don’t think I don’t see what you’re doing. Obviously you are a Republican troll. By trying to shift the conversation from the debt ceiling to the percentage of federal spending of the GDP, you are trying to subtly make the case that federal spending is reaching an unprecedented increase as a percentage of the economy. I’m on to you Rush!

     Again I will say, if Obama vetoes a debt ceiling bill, which he has promised to do if it resembles the House plan, who will be sinking the nation again?

170. Tom@168: “Thinking progressives should want to abolish corporate taxes completely. ESPECIALLY when it comes to oil…”

     no corporate taxes at all and you say thats a very progressive approach to things. forget the debt ceiling problem. the bigger problem is you’re trapped in upside down bizarro world.

     mike: its a simple question, really. given that the tax rate is near tje lowest its been in a century, how, exactly do explain that it cant be raised?

171. Can you make any statements that are rooted in reality?

     A plan which changes a system from effective universal coverage to a fixed Voucher which is unlikely to buy anything on an open market *doesn’t* effectively kill it?

     The worst thing about this is the elephant in the room is the US needs a Universal Single Payer healthcare system like all the other comparable industrial economies have.

     Again: when there is no prospect for consumer demand led growth – WHERE DOES THE DEMAND COME FROM? If not from government, then where?

     Tax cuts are not magic, and when banks no longer lend or can lend to over extended individuals, and the lowest paid are already NOT paying taxes – tax cuts put more money in the hands of people who basically can’t spend enough to make a difference.

     On top of that, the US infrastructure is appalling. Believe me. Go to Britain, Germany, France and take a drive on their highway systems and then come back to, say, Seattle and take a nice drive on the 5 or the 90, or go to California and use the 101 or the 405 – drive across one of the hundreds of bridges which were reaching the end of their lives in the late 80s and are still in use.

     This debate is insane. The US is starting to feel like a country in decline and it seems to me that part of that is because a certain faction can’t actually see the cracks appearing all because they’re worried about paying some more tax during a massive recession.

     It’s just like the climate change debate: tornadoes in MA, record highs across the entire country, massive flooding, record cold… but the climate isn’t changing… nope.

172. Daveon @171: I feel compelled to point out that all right-thinking people call it “101”, not “the 101”.

     Tom @168: Actually they don’t pocket the same profit, because prices affect demand. People may choose not to buy a thing, or buy it less often, if it is more expensive because of the tax. This is Econ 101.

173. @mythango – ah yeah, that’s a combination of the British System, The M4, The M1, THE BLOODY M25 and so on… and the Washington version of The Five, The 90 etc… THE BLOODY 520…

174. @Daveon

     I’m not sure you understand what a voucher is. The Ryan plan is based on a health insurance exchange, just like the current Medicare Part D Prescription drug plan and the soon-to-be-rolled out Obamacare exchanges. I’ve not heard of Obamacare being referred to as a voucher plan, nor have I heard of Medicare’s drug plan referred to as a voucher plan.

     So, if you are saying that the health insurance exchanges under the Ryan plan will effectively kill Medicare, then than the Medicare Part D and Obamacare exchanges effectively do… something, it’s on the tip of my tongue…

175. come on, lil mike, whats it take to get you to answer one little straight forward question? or do you ignore anything that doesnt fit your talking points?

     lowest tax rate in almost a century. why must any tax increase be opposed?

     (granted there are plenty of POLITICAL reasons the repubs oppose it. I am looking for a legitimate reason.)

176. cnn has an article about the Republican stupidity that is cut, crap, and whatever.

     http://m.cnn.com/primary/_TnxXoi-iDD7EwGYU

     it cuts nonmilitary discretionary spending by 70%. it guts medicare and medicaid worse than the ryan plan did.

     and it has an interesting bias built into it. to balance the budget, cuts cin spending can be approved by a 50% majority. but increases in tax rates (which would also balance a budget) require two-thirds support.

     this is the bullshit these idiots are wasting our time with, playing chicken with the economy, likely hoping to destroy it, in hopes to blame it on Obama.

177. mythago #172

     Of course the price increase due to increased taxes will likely result in lower consumption. That’s why corporations don’t like anything, including new/higher taxes, that force price increases. That in no way changes the fact that corporate taxes are just passed on to the consumer.

     I commend you for acknowledging tax increases affect behavior. That puts you ahead of most of those writing tax law in Washington.

178. @Greg

     You ask a good question, which is, what does it take to get you to answer one simple question? I’ve asked you twice, oops, make this three times that you said that I wanted to cut Social Security, Medicare, and Medicaid. Could you please provide the post where I said that?

     How long oh lord, should I wait for an answer?

     And I wonder, what I’ve said that’s a “talking point?”

     With you however, your talking point is obvious: “..lowest tax rate in almost a century.”

     Don’t think I didn’t catch the irony of you accusing me of ignoring anything that wasn’t a talking point, and then immediately launch into one of your own!

     Yes I was amused.

     Not surprisingly, I couldn’t find anything to support that. The President did say recently, “We actually now have the lowest tax rates since the 1950s. Our tax rates are lower now than they were under Ronald Reagan. They’re lower than they were under George Bush — senior or George Bush, junior.”

     So you didn’t even get your talking points right. For the future, may I recommend just going to TPM or Think Progress and copy/paste. It saves the fumbling of getting your own points wrong. The top tax rate is 35% currently, and it’s been lower. It was 28% in 1988. That was a century ago right?

     Feel free to scroll through here: http://www.taxfoundation.org/publications/show/151.html

     …for the top marginal rates for the last 50 years, or 100 years; whatever.

     However federal tax receipts are the lowest in 50 years, but that has to do with the recession (or perhaps you call this recovery summer part 2), not with tax rates. This has been a particularly brutal recession so there is a lot less income to skim off the top. If only President Obama had been able to get his stimulus bill through back in 2009… oh wait…

     As for the question part of your talking point, “why must any tax increase be opposed?”

     I don’t oppose all tax increases, although I guess you feel there is no basis to oppose “any” tax increase. I opposed the AMT tax fixes and I opposed Obama extending the Bush tax cuts. My opinion is that if people vote for an administration that favors tax increases, they should get tax increases, good and hard.

     But when the Democrats had control of the House, Senate, and the Presidency, the only tax increase they actually voted for was the almost 500 billion tax increase that came with the Obamacare bill.

     When they could have been done with the Bush tax cuts; they renewed the Bush tax cuts on steroids. The only reason they are pushing for tax increases now is because they think they can push the Republicans into voting with the Democrats on tax increases, thereby removing taxes as in issue in 2012. So yes, President Obama would veto a debt ceiling bill (which is what we were originally talking about) and wreck the fiscal status of the United States, in order to win a political point.

     As far as a legitimate reason to not raise taxes, it’ seems pretty obvious to me. The economy is extremely weak thanks to the sweet ministrations of the Stimulus bill. Taxes are an extra drag on an already weakened economy. Of course what does that matter when it comes to getting even with your class enemies?

179. lil mike, I posted the link in #148. But in case you’re numerically challenged, here is is again:

     http://en.m.wikipedia.org/wiki/File:MarginalIncomeTax.svg

     So, I am well aware that today’s rate isn’t the lowest in the last hundred years, but other than a brief dip in 1990, you have to go back to 1930, and then 1910, to see it lower than it is today, so we have one of the lowest rates in the last hundred years. And if you integrate that curve and divide by 100 years, we are way, way, way below the average rate for the last hundred years.

     So, spare me the history lesson, I’m the guy who posted it.

     Speaking of history, I actually asked the tax question way back in #49: taxes right now are the lowest they’ve been in a long, long time … Here’s a question for the “No taxes” morons: Would you rather have a steamroller economy of the Eisenhower era with Eisenhower taxes, or would you rather continue the shitbox economy with low taxes?

     Also, you answer was so much spin on it, so much dodge, perry, and spin, that I couldn’t make heads nor tails of it.

     WHY CANT WE INCREASE TAXES WHEN WE HAVE ONE OF THE LOWEST RATES IN TEH LAST HUNDRED YEARS????

     The recession?

     Bullshit. Look at that chart. We HIKED taxes during the great depression. from 30% to 60%+. If we hadn’t, we’d probably have fractured into a number of separate nations as America collapsed beyond repair.

     And to quote wikipedia on that little factoid: The common view among mainstream economists is that Roosevelt’s New Deal policies either caused or accelerated the recovery

     So, by all means, tell me that you have special insight into economic policy and that Roosevelt made the recession worse. Make it abundantly clear just how far out there you are.

     you said that I wanted to cut Social Security, Medicare, and Medicaid. Could you please provide the post where I said that?

     Oh god, do I seriously have to explain basic math to you? You support the Ryan plan, you support the cut, crap, and bullshit bill now? Then the only viable outcome of that is to gut Social security, Medicare, and medicaid. See link at #176 for that. If you say you support these bills but somehow all those cuts it demands will magically come out of some nonspecific thing called “government waste” then you’re so far down the republican talking point nonsense that there’s no hope for you.

     You support those bills, you support gutting those programs. That’s the effects they create. That you can’t come out and admit that gutting those programs is the effect of your support is not my problem.

180. [Deleted because Greg needs to take some VERY DEEP BREATHS before he continues and perhaps consider the wisdom using up an entire month’s allotment of F-bombs in a single post.

     Greg: It’s been apparent for some time you have a hard time knowing where the line is between passionate and being abusive to other commenters. Learn it, please. I’m getting tired of having to rein you in, and one day if you keep this up I’m going to put you into the moderation queue.

     If you want to try to repost the actual point of your comment, you may. But remember you’re on thin ice with me at the moment, so resist the urge to explode at the people at whom you’re writing, or you’re going to find out how annoyed I can get — JS]

181. Scalzi @ 122: “The discourse level here is descending into stupidity, folks.”

     Descended into? Looks to me like it started there. As usually happens with this topic.

     I have a set of Rules, oriented toward my job but generally applicable too. Rule 15 is Nothing is ever as simple as it seems. The budget//debt/debt ceiling issue is a perfect example.

     Is the current tax burden low? If you don’t pay taxes, yes. If you can pay your current tax bill with room to spare, yes. If you run a business with a 5% profit margin and somebody talks about a net 8% rise in your taxes … well, not so much.

     Do tax rate increases produce tax revenue increases? Sometimes. Do tax rate increases produce as much new revenue as was predicted? Hardly ever.

     Do tax rate cuts produce additional revenue? Sometimes. Do tax rate cuts produce as much new revenue as was predicted? Maybe. I don’t know. I’ve not seen any useful analyses of that. My guess is “probably not, but it comes closer than the tax increases do.”

     Do too few people control too much of the wealth? Probably. What can be done about that? Nothing. If you jack up their taxes, they’ll move their wealth elsewhere. If you try to use the government to ‘redistribute’ that wealth ‘fairly’, then the government will control it — no more positive an outcome than the current situation.

     Are tea-partiers being extremist to demand “no new taxes, no way, no how, no chance!”? Not from their point of view. Or maybe I should say from our point of view, since on this topic I am one. For my entire adult life I’ve seen politicians asking for tax increases to close the deficit, and promising spending cuts to go with it. Then they get the tax increases — and don’t pass the promised spending cuts, and in a couple of years the same thing happens again. I (and, I think, most tea-partiers) simply don’t trust the government to keep its word anymore. New tax revenue will be spent on new programs, not on deficit reduction. Thus has it ever been, thus will it ever be.

     Is a deal that cuts “$4 trillion over 10 years” going to get us out of the current debt hole? Er, that would be a no. $4 trillion over 10 years means $400 billion per year, average. We’re adding between three and four times that much to the debt every year. Even with those ‘cuts’ we’d still be adding a trillion a year to the debt, an unsustainable amount.

     “What would you cut?” Me personally, I’d cut anything and everything that isn’t directly authorized in Article 1 Section 8. Would that cause an economic disaster? Probably. Then again, if making the federal government live within its assigned limits would cause an economic collapse … isn’t that in itself evidence that the federal government is too big and too powerful?

     In the end, does any of this arguing really matter? Nah, probably not. Forty percent of last year’s budget was borrowed money. We won’t balance that with tax increases. We won’t balance that with nibble-around-the-edges spending cuts. Unless we actually do pass draconian cuts, covering half or more of all federal spending — the federal government faces financial disaster.

     So why bother raising the debt ceiling? The collapse is coming soon anyway. Let it come now, get it over with, and then we can shoot the ones who caused it all and start rebuilding.

     (On second thought, maybe not on the ‘shooting’ part. We do that, there won’t be anyone left to rebuild.)

182. lil mike, your link points to taxfoundation.org, an organization started by exxon mobil and general motors. its board of directors include people associated with exxon mobile, general motors, microsoft, and koch brothers industried. they hav recieved money from koch brothers industries and exxon mobil.

     Your ‘proof’ is a link to corporate paid propaganda that uses a nonprofit entity to do act as their mouthpiece and sockpuppet.

     most people would realize the ultimate source of that information is sufficiently invested in reaching a particular outcome that the information cannot be trusted and would find other sources more willing to follow the evidence to whatever conclusion it leads.

     I provided a link to CNN and wikipedia. you provided a link to a Koch Brothers industries paid sockpuppet.

     And you ask me to show where you spoke in ‘talking points’??? indeed…

183. Lil Mike: I’m not sure I follow. The Ryan plan specifically calls out replacing the current Medicare system with a fixed value voucher granted to seniors annually which they can use to buy insurance on Open Exchanges – exchanges /= vouchers.

     Replacing a system which effectively gives care for any amount for a system which forces individuals to buy insurance from a capped amount (a voucher) is killing the original system. While I don’t like the Affordable Healthcare Act (shall we be grown ups and use the real names eh?) please represent what it does versus the Ryan Budget Plan correctly.

     Oh, and one more time: in the current system where does the demand come from?

     Finally: making an argument that you can’t increase corporate taxes because they’ll pass them onto the consumers is not helping.

     Tell me what will consumers, the public and others do if Oil Companies publicly went on record saying they were passing the increased tax on to the price at the pump? You think they’d risk that kind of PR? I seriously doubt it.

184. we cant raise individual tax rates either because individuals wiould simply pass that increase on to their employer by asking for raises.

     ya know, when it comes down to it, the government shouldnt tax anyone at all.

185. Is it just me, or is Tom @ #166 and #168 is essentially saying this:

     We/you plebeians should be grateful that oil companies and other corporations pay so little iin taxes. I mean, they’re already doing everything can to charge you just as little as they possibly can (while still maintaining they’re ever increasing rate of profit, of course). Why, if they have to actually pay taxes, they’ll have no choice but to pass that on to you. And they don’t want that, oh. no. What they really want is to just give stuff away (plus their everr increasing profit margins, of course). Besides, don’t you know that the oil companies and other corporations are your betters? How dare we even question their generosity and magnanimity (and ever increasing quarterly profit reports)?

     I mean, we raise taxes so they raise prices and… nothing? No consequences on the corporations part for that? Doesn’t that seem like a fast track to regulation to anyone else?

     Also, isn’t Tom confusing taxing a product and taxing the producer with his cigarette tax analogy?

     Or is it just me?

186. the ‘government should not tax anyone at all’ argument is the tax version of the Libertarian Logic that says ‘the government should get out of the business of issuing marriage licenses’. both are equal in their level of logical rigor too.

     doc, what you’re picking up is the fairly clear carrier frequency that is Radio Free Ayn Rand transmitting from beyond the grave. Her broadcast is coming through pretty loudly embedded in some of the posts above.

     and yeah the whole Objectivist thing is really little more than ‘corporations are better than you plebs. be nice to them or they will pick up and leave you.’
     metaphorically Ayn Rand tells the tale of the hard working ants and the lazy grasshopper, where the ants are Koch Brother Industries and the lazy grasshoppers are anyone making less than a million a year.

187. Doc #185:

     Throwing up straw-men to knock down just shows you have no substantive counter-argument. Where did I so much as imply corporations are good… or bad? They’re just corporations, largely made up of good people, because most Americans are. They exist to make a profit, nothing inherently wrong with that.

     Taxes are a cost to them. Costs get passed on to consumers. When an entire industry, or all corporations, are taxed they can pass much of it on because their competition will also have to. If they ‘eat’ part of the cost that is how much less they’ll have to potentially expand and/or hire which is where new jobs come from. The government largly does nothing because they KNOW the taxes they impose on corporations are paid by us. Any time politicians can raise money and not be blamed they will. It’s intentional, always has been. Way easier than directly raising your taxes and they get bonus points for railing against the evil corporations at the same time. They figure the gullible consumers won’t think about it, you’re perspective proves they’re often right. You’re cheering the the government sticking it to… you. God is an Iron, indeed.

188. Tom, you don’t actually have an argument to counter. Just a couple of just-so stories, the moral of which appears to be “roll over and take it”.

     lilmike @ #178 said:

     My opinion is that if people vote for an administration that favors tax increases, they should get tax increases, good and hard.

     This bugged me but I couldn’t figure out how to express what it was. Then it came to me: this is Fiscal Policy as Revenge Fantasy. Nice.

     It occurs to me that when Ben Franklin wrote “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety”, he wasn’t suggesting anyone’s liberty or safety be taken away as punishment. He was saying, “Look, I understand your concerns, but I don’t think you’ve really thought this all the way through.”

189. They exist to make a profit, nothing inherently wrong with that.

     Well, no… not at a crude level. But Adam Smith and others since have had a lot to say on the subject of not letting corporations screw with markets and individuals.

     Anyway, the core issue remains – there is a limit to how much of tax induced costs a PROFITABLE company can and is allowed to pass on to the individuals.

     They’ve dealt with this in lots of industries. The banking sector in the UK springs to mind. When asked to justify the cost of ATM withdrawals outside of network or get hit with regulation, the banks “suddenly” realized that the net actual cost of ATM transactions was effectively zero so they dropped the costs. When the mobile phone companies were asked to show why roaming charges cost them as much as they did, roaming charges dropped.

     Just because companies can make lots of profits, it doesn’t mean they should be allowed to because we’re too afraid of them to do something about it. Especially if the companies are effectively acting as a cartel.

190. Taxes are a cost to them.

     Only on profits… worth remembering that.

191. Then again, if making the federal government live within its assigned limits would cause an economic collapse … isn’t that in itself evidence that the federal government is too big and too powerful?

     Wolfwalker@#181: To me, it’s evidence that ideology (whether of the left or the right) can make people astoundingly callous. I guess people who think and talk in abstractions and collective nouns never have to think too much about human beings.

192. craig, that too parallels the gay marriage debate where right wingers show more concern for an artificial entity called the ‘state’ and dont give a damn about real human beings.

     of all the things for people to want to protect, corporations are literally inhuman, compared to the real people who will suffer when medicare is gutted and they get thrown under the bus, all because some are more concerned that exxon mobil will get its feelings hurt.

     it is an interesting prioritization to be sure.

193. Greg @179

     Sorry if you think I’m confused about what you said about marginal tax rates, but on post #175 you said, “lowest tax rate in almost a century. why must any tax increase be opposed?” That was the post I was responding to. However you seem to be confused as to what you believe about it now. “I am well aware that today’s rate isn’t the lowest in the last hundred years, but other than a brief dip in 1990, you have to go back to 1930, and then 1910, to see it lower than it is today, so we have one of the lowest rates in the last hundred years.”

     So does that mean the current tax rate is or isn’t the lowest in 100 years? It looks like both.

     As for raising taxes during an economic downturn, I can’t argue that we raised taxes during the Depression. Considering unemployment was at 15% through 1940 it seems it was a smashing success. Interestingly, if you again refer to the marginal tax rates chart, the marginal tax rates shot up between 1935 and 1936 and what happened to the economy? We had a recession inside a depression in 1937. Coincidence?

     You seem to be arguing that high tax rates are good for economic growth. I only had one semester of Macro-economics, but I don’t recall that particular theory. Please enlighten me.
     If we duplicate the “success” of the great depression, we’ll continue our sluggish growth and higher unemployment for several more years! As far as I can tell, Roosevelt’s most successful economic policy was World War II, but I don’t see that as a likely policy alternative for this President and Congress.

     Now as for you finally answering my question, you said that I wanted to cut Social Security, Medicare, and Medicaid. Could you please provide the post where I said that?
     You still didn’t provide an answer. In fact, your answer raised another question: What post did I say I supported the Ryan plan? So… wrong answer.

     Again.

     Greg@180

     Sorry I missed the hate screed. If you really need to get it off your chest, you can post it in the comments on my site. <–shameless plug!

     Greg @182

     I don’t know who funded the site, but I didn’t link to any opinion pieces, or even analysis; just the raw data of the marginal tax rates. So unless you can make a compelling case that the data is incorrect, it doesn’t matter to me that the scary Koches have you recoiling in terror like Dracula from a cross.

     But I admit, as sources go, it’s no Wikipedia!

     Daveon@ 183

     I guess now I’m not sure I follow. You equate exchanges with vouchers. As I said, that’s exactly how the the “Affordable Care Act” will be selling insurance, and how Medicare Part D operates now. I’ve never heard either of those plans described as voucher plans. Since Greg likes Wikipedia as a source, it’s definition is, “A voucher is a bond which is worth a certain monetary value and which may be spent only for specific reasons or on specific goods.” That really doesn’t describe Ryan’s Plan, the Affordable Care Act, or Medicare Part D.
     By your definition, the amount that my company pays for my health insurance is a voucher.

     Doc Rocketscience@188

     “Then it came to me: this is Fiscal Policy as Revenge Fantasy. Nice.”

     So my support of certain tax increases is really a fiscal version of Death Wish? Interesting. I’ll have to explore it further.

     I guess I should oppose all tax increases to reclaim my moral center.

194. Doc #188

     That’s one of my favorite Ben Franklin quotes. Every time a new law (restriction) is passed we are safer (sometimes) and less free. Every time a dollar is taken from you in taxes it gives the government the freedom to spend that dollar (actually $1.40 in the current administration) and takes away the freedom of spending it as you desired. Do we need government, taxes and laws? Absolutely. Should we try limit governments power and watch it constantly? Absolutely. Now for another of my favorite quotes:

     ‘Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master’. George Washington

     Daveon #189 & 190

     Your ATM anecdote regards regulation, not taxes. I have no problem with reasonable clear-cut regulation. It’s one of the reasons we need government. However, regulation also imposes costs and frequently increases prices. Like most things government does, it bears watching and can do as much harm as good.

     Regarding taxes on corporations: no matter how you do it, it is a cost and will be passed on and/or create a drag on growth and job creation. The other really irritating thing is it creates the opportunity for politicians to grant ‘favors’, i.e. tax loopholes, credits and exceptions. Whirlpool made $619 million in profit on $18 billion in sales last year, at the corporate tax rate of 35% they paid… zero taxes, due to ‘green’ tax credits that Obama has proposed to extend. General Electric made $14.2 billion in profits worldwide and $5.1 billion in profits in the U.S. last year and paid… zero taxes. The CEO of GE, Immelt, was ‘punished’ by Obama by being named head of the Obama Council on Jobs and Competitiveness ( GE has CUT 34,000 jobs since Immelt took over). Corporate handouts in Washington is most assuredly not limited to one party. Of course to get those breaks corporations have to hire lobbyists and fund-raise. We ALL love those. I’m not advocating eliminating taxes on corporations ,but do think people need to recognize they are a hidden tax on all of us. I’d love to eliminate all loopholes and have a lower across the board tax rate that would actually be revenue neutral, but probably increase tax receipts by eliminating distortions and uncertainty caused by the current byzantine corrupt tax code.

195. Lil Mike – sorry but what you’re saying is 180 degrees from the facts available which rather limits the options for discourse doesn’t it?

196. Tom – if we’re afraid to tax corporations gouging the population then we’ve entered a really weird place that I, personally, wouldn’t want to live in.

     Sorry. I just don’t recognize the world you’re describing there.

197. BTW, Lil Mike – your definition of voucher EXACTLY describes Ryans plan for Medicare. Unless we can agree that that is a voucher and what we have now isn’t this conversation really isn’t going anywhere.

     Anyway, it’s moot. The Ryan plan itself and most of the US healthcare debate is based on the daft fallacy that healthcare costs are always going to be out of control. Which, as a non-USian living here amuses me no end.

198. And Tom goes for the point… swiiiiiiiiing and a miss. Also, interesting that corporations are made up of mostly good Americans (certainly true), but the “Government” is out to take away your freedom, being made up of mostly bad non-Americans, I guess.

     Also too, when did Washington say that exactly? No one seems to know. The earliest reference to it is 1902, a century after he died. You know what that usually means, don’t you?

199. Tom @194: By that logic, it’s wrong for the government to tax me, because if I have less money to spend, that will be a drag on corporate profits.

     More seriously, you seem to be treating all ‘corporate taxation’ as a single thing that must, no exceptions, be ‘passed on’ to consumers. Setting aside the assumption that all corporations exist to sell consumer goods or services, you appear to be assuming that the only taxes corporations pay are sales or ‘sin’ taxes – cigarettes get taxed at a quarter a pack, so all cigarette manufacturers must raise prices by a quarter a pack. That is not the case with a tax on corporate profits – which, of course, is not levied if a corporation can reshuffle its profits to lower them, or if it wasn’t profitable at all in a particular year. You also seem to assume that job creation is tied directly to how much tax a corporation pays, which again makes little sense.

     A corporation is a particular business structure used primarily to shield its owners from personal liability. I’m again unsure as to why you think that such an organization should be shielded from taxes, even when it uses tax-funded services and infrastructure.

200. http://en.m.wikipedia.org/wiki/File:MarginalIncomeTax.svg

     a booming economy in the 50’s during the highest tax rate in the century. a shit box economy in 2010 during one of the lowest tax rates in a century. when the great depression hit government raised taxes fromm 30% to 60% and economists generally agree that the New Deal sped up the recovery.

     the right winger wailing that raising taxes will collapse the economy really only works if one ignores a hundred years of history

201. I’m less concerned about corporations passing along to me increased marginal tax rates than I am about corporations passing along to me increasingly bloated executive salaries and lobbying costs dedicated to bringing back the Triangle Shirtwaist Factory days for the rest of us.

202. Alan Grayson as always cuts through the smoke and mirror and FUD of the right.

     http://m.youtube.com/#/watch?desktop_uri=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Ffeature%3Dplayer_embedded%26v%3Dt4Su9Qj6pjY&feature=player_embedded&v=t4Su9Qj6pjY&gl=US

     as for corporate taxes should exist at all debate, all that is is a sympton of the disease that believes private enterprise and private individuals acting in their own selfish interest will magically come to the best, most efficient, and most generous solution. how many times do we have to teach basic game theory like the tragedy of the commons and the prisoners dillemma to right wingers? the basis of their philosophy is fantasy and has been disproved. and yet they keep bringing it up in different flavors.

     and all of it, every last bit of it, is nothing but an attempt to provide cover for people who want to behave in the most selfish way possible. If we all avlct in completely selfish ways, their fairy tale tells them, then it will all ultimately end up better than it is now.

203. mythago #199

     Yes, increasing personal taxes is a drag on corporate profit and job creation. That’s why there is a bipartisan consensus against it with our ailing economy.

     I specifically said, ‘Regarding taxes on corporations: no matter how you do it, it is a cost and will be passed on and/or create a drag on growth and job creation.’ and went on to discuss examples of taxes on PROFITS that were dodged. Hard to be more clear.

     I made clear that increased expenses of any kind, taxes being ONE of them, affects corporate behavior and consumer prices. Since this thread is about the government’s effect on the economy I felt focusing on taxes, rather than the price of tin, rent or labor was in order. I’m happy to digress if you wish. Te new ‘Gang of six’ plan is to lower corporate taxes and close loopholes to stimulate job growth. Even three liberal Democrat Senators can see the obvious.

     Since I also said ‘I’m not advocating eliminating taxes on corporations’ I have no idea where your ‘sheild them from taxes’ came from.

     Doc #198

     I said I favor both corporate regulation and carefully watching our government as well. It’s called being consistent. Any human institution that becomes too large and powerful has the potential for great evil… even when populated by largely well-meaning individuals. Checks and balances, light of day, etc.

     And now for my favorite Ben Franklin quote: ‘In wine there is wisdom, in beer there is freedom, in water there is bacteria.’

     A good weekend to all.

204. Greg @200: a booming economy in the 50′s during the highest tax rate in the century. a shit box economy in 2010 during one of the lowest tax rates in a century.

     In the 1950s, the US economy benefited enormously from being basically the only fully-functional industrial power in the world. Everybody else was still rebuilding from WW2. The US economy also benefited from a boom in mechanization, a boom in available workers (to wit: all those ex-military guys), a boom in consumption …

     Like I said, remember Rule 15: Nothing is ever as simple as it seems. (Remember Tunnel 17, too, but that’s something completely different.)

     when the great depression hit government raised taxes fromm 30% to 60% and economists generally agree that the New Deal sped up the recovery.

     Maybe twenty years ago they did. Today there’s a significant number of economists who believe that the conventional wisdom about the 1930s is bass-ackwards, and they’ve got some moderately impressive arguments. A lot of the “New Deal” was little more than FDR doubling down on policies started under his predecessor Hoover. One can argue that the New Deal had little effect, or one can argue that it actually slowed down the recovery, but it’s getting harder to argue that it actually sped things up. And even FDR’s most adamant defenders generally agree that it was really the gargantuan industrial effort of World War II that ended the Depression — something that FDR’s economic policies had little or nothing to do with.

205. OK, but how much of that new thought from your economists is motivated by justifying the current political climate?

     It’s like anthropogenic climate change: you’ve got a consensus, but then you’ve also got a bunch of shrill assholes who are paid very well indeed to muddy the waters to make sure that energy companies continue to make large profits.

     Maybe I’m off base, but then again you can’t out-cynic reality.

206. Someone will have to check my work, because this number seems high, even for me:

     I went through the table of tax rates over the last hundred years here:
     http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_federal_income_tax

     I put it in a spreadsheet, then expanded the “ranges” (such as 1971-1976) into individual years (i.e. 6 years), and then added up all the tax rates and divided by the total number of years in the list (I counted 99).

     I ended up with the average marginal tax rate for the last hundred years being 59.1%. Not maximum, but average. The maximum is +90%, and that occurred for fifteen years.

     WW2 started out around 80% and ended at 94%. At this point, we’ve been waging a two-front war for about a decade, and Obama opened up new fronts in Yemen and Libya, so, I’m struggling to find even one legitimate reason NOT to raise taxes. Or at least let all Bush tax cuts expire (god forbid).

     Wolf@204

     I believe most economists will say that some of FDR’s programs made things worse. The NRA (National Recovery Administration) was declared unconstitutional some time after.

     One can argue that the New Deal had little effect, or one can argue that it actually slowed down the recovery,

     The two graphs here:

     http://en.wikipedia.org/wiki/New_deal#Origins

     One showing GDP and one showing unemployment from 1910-1960 with the years of the great depression highlighted, seem to support the point that people can argue anything, but the fact was the economy improved during the new deal.

     it was really the gargantuan industrial effort of World War II that ended the Depression

     But that simply means that it was government stimulus and a whole lot of it, that ended the depression. But rather than being money for unemployment lines, soup kitchens, and job-creating programs like the conservation corps, that the government sinking 42% of America’s GDP into building stuff that got blown up and had no other function, turned the econmy into a steam roller that was the 50’s.

     It always gives me a chuckle how people can say “it wasn’t FDR’s government intervention that stopped the depression, it was WW2” without a single shred of irony in their voice.

     What was WW2 but a massive government stimulus program?

     The only difference between the Conservation Corps and the Military is that Republicans love military spending and hate everything else.

207. Kevin @ 205: then again, you can’t out-cynic reality.

     Nope. Gaea’s got a perverted sense of humor. And she drinks.

     But I can try.

     OK, but how much of that new thought from your economists is motivated by justifying the current political climate?

     Does it matter? If they’ve got evidence on their side, why should we care about their motives?

     Greg @ 206: but the fact was the economy improved during the new deal.

     Facts are slippery things. For example: that ‘real GDP’ chart: how exactly is real GDP being defined? Does it include government make-work like the CCC? I’ve never been happy about including government spending in Gross Domestic Product, because most government spending doesn’t actually produce anything.

     The only difference between the Conservation Corps and the Military is that Republicans love military spending and hate everything else.

     [snork] Well, there was one other difference. Rather a sizable one, if you think about it. World War II produced enormous technological advances in a variety of fields. After the war, those new technologies fed new ideas, new companies, new products and services. For example, before the war most passenger aircraft were twin-engine jobs like the DC-3, and flying was something only the filthy rich could afford. Within five years after the war there was a worldwide air travel network, using long-range four-engine aircraft based on WW2 bomber and transport designs. Before the war, state-of-the-art in aircraft engines was 1000hp piston engines, and jets were a curiosity. After it, piston engines were obsolete and jets were the future. In 1938 radar was a thing on a lab bench and state-of-the-art in radio meant civilian-band AM. After the war, FM was The Next Big Thing and radar was ubiquitous on ships and aircraft. The desperate need to treat battlefield casualties led to widespread use of blood plasma, antibiotics, new surgical techniques, and more. And so on and so forth. Metallurgy, mass production methods, heavy construction equipment … I’m sure I could come up with plenty more examples, with a bit of research. You really think that prewar methods and materials would have let Henry Kaiser build a Liberty ship in fifty days?

     Point is, defense and especially defense research spending are perhaps the only kind of government spending that actually does stimulate economic growth, because the things that are discovered thereby can be used for the civilian market.

208. *snort*

     You used “economists” and “evidence” in the same sentence, practically. That field is largely still a black art.

209. wolf: “Point is, defense and especially defense research spending are perhaps the only kind of government spending that actually does stimulate economic growth”

     (snork)

     bias much?

     If the government had the support of the american people to spend 42% of its GDP on b1 bombers, york anti aircraft batteries, kitty hawk aircraft carriers, and f14 tomcats, you’re telling me that would not stimulate the economy because its all out dated technology?

     whats hilarious is just how different right wingers hold defense spending compared to non defense spending.

210. Point is, defense and especially defense research spending are perhaps the only kind of government spending that actually does stimulate economic growth, because the things that are discovered thereby can be used for the civilian market

     Actually, it’s almost exactly the reverse. Military products don’t have long life spans in the market. They get made and sent to the military but then don’t get used up, or resold that frequently. As a result, they don’t have knock-on effects in the economy as most consumer products do (ie cars, which get sold as new and then likely multiple times as used). Military spending is actually less effective at spurring economic growth than other kinds.

211. Tom @203: While we agree that taxes affect behavior, you seem to be making a rather unwarranted assumption that it is taxation that is causing the recession, and further, that if we reduce or eliminate taxation (particularly on corporations) that will undo the recession. That’s an ideological argument, not a factual one. Taxation is not a but-for cause of the recession. How many times do people have to point out that we are not laboring under an enormous tax burden?

     It’s a bit like saying that my habit of buying a cup of coffee every morning is a drag on my ability to buy a Tesla. While on a micro level, this is true – if I’m spending money on coffee, I can’t spend it on saving for a Tesla – you’re in essence arguing that if only Peets stopped charging me for my coffee every morning, I could afford the darn car. Which is silly; even if I were scrimping and saving for that car, the cup of coffee is such a negligible cost that it makes no difference, and let’s face it, I’d probably blow the money on books anyway.

     You also appear unaware that taxes actually go somewhere, rather than disappearing into a black hole, never to be seen from again. Taxes are revenue. They pay for all that infrastructure corporations would otherwise have to fund themselves.

212. Kevin: True enough, it is. But even the Dark Arts have rules.

     Greg:amusing rhetoric, but I don’t see any, y’know, actual logical argument in there. Can’t you do any better?

     Silbey: Military products don’t have long life spans in the market.

     Military products, no. That’s true enough. It’d be hard to convert a Viper or a Warthog to civilian use. Though there are exceptions — for example, all those war-surplus C-47s that became bush-country passenger and cargo haulers, or ex-Navy PBYs that flew for forty years providing light air service to islands that are too small to hold an airstrip. The most famous oceanographic-research vessel of the last half century, Jacques-Yves Cousteau’s Calypso, started life as a naval minesweeper.

     Military and military-related technology is a different story, though. Before you try to dispute that, keep in mind that the very tool you’re using to do so is the result of military research. The direct ancestor of the Internet, ARPANet, was a Defense Department project to develop a computer network that could survive loss of multiple nodes due to a nuclear attack on the United States.

213. You also appear unaware that taxes actually go somewhere, rather than disappearing into a black hole, never to be seen from again.

     An awful lot of people seem to be under that delusion.

214. Kudos to Daveon for recognizing that if we can’t even agree on the most basic definitions, we can’t really continue the discussion. I lot of internet wags would blunder on, regardless.

     You get Mike points for that.

215. Military and military-related technology is a different story, though. Before you try to dispute that, keep in mind that the very tool you’re using to do so is the result of military research. The direct ancestor of the Internet, ARPANet, was a Defense Department project to develop a computer network that could survive loss of multiple nodes due to a nuclear attack on the United States.
     

     Do military technologies lead to civilian applications? Sure, in some cases (you’ve cited one). But so do civilian technologies, and they tend to lead to more innovative than do military ones because, shockingly, they’re already aimed at consumers. Military technologies are not, and thus many have no civilian application at all.

     In short, military spending creates less economic growth than does the equivalent spending in the civilian world.

216. wolfwalker:

     The point is that two economists can very easily draw opposite conclusions from the same data, and therefore you can’t discount political motivations.

217. Kevin: The point is that two economists can very easily draw opposite conclusions from the same data,

     Is it the same data, though? Some say that if government pays one guy to dig a hole and another guy to fill it in, that’s two jobs created and a net plus for GDP. Others say that those two jobs have no real meaning because they didn’t actually produce anything. Who’s right?

     Silbey: you’re mixing two different ideas here. Do you see what they are?

     You wrote: Do military technologies lead to civilian applications? Sure, in some cases (you’ve cited one). But so do civilian technologies,

     While I think you’re limiting your thoughts a little too much on the applicability of military technology to civilian applications, I’ll agree with this anyway.

     You also wrote: In short, military spending creates less economic growth than does the equivalent spending in the civilian world.

     But this says that <igovernment spending on the civilian world is more likely than military spending to lead to useful civilian products and services, and that’s an entirely different claim. How does government spending on food for the poor, or on price supports, or on direct payment for medical care for the elderly, help drive development and innovation in the private sector? What new technology ever came from paying the salary of a middle-level bureaucrat?

218. wolfwalker @217: How does government spending on meals for Navy officers, or on PX discounts, or direct payment for medical care for veterans help drive development and innovation in the public sector?

219. But this says that government spending on the civilian world is more likely than military spending to lead to useful civilian products and services, and that’s an entirely different claim. How does government spending on food for the poor, or on price supports, or on direct payment for medical care for the elderly, help drive development and innovation in the private sector? What new technology ever came from paying the salary of a middle-level bureaucrat?

     Uh, mythago has already pointed out one obvious flaw in your point (why is the salary of a mid-level naval officer creating any more innovation than a bureaucrat?), but I’ll point out another. The government spends an enormous amount on civilian R&D and innovation research in general. Just off the top of my head, I can think of the NIH, the NEH, the Department of Energy, the National Science Foundation, NASA, the Department of Transportation, and so on. All of those spend money on innovation and it is money mostly targeted at the civilian world, not at creating a better depleted uranium penetrating rod for the anti-tank round of the M1 Abrams. A fair amount of military innovation is actively not good for civilian innovation (fighter jet engines, for example, are optimized for almost exactly the opposite use case as civilian jets)

     Does military innovation frequently have civilian applications? Sure, but the idea that it’s a major (or efficient) driver of economic growth is foolish.

220. wolf@207: amusing rhetoric, but I don’t see any, y’know, actual logical argument in there. Can’t you do any better?

     Oh. Sorry. Allow me to be more clear:

     wolf@212: Point is, defense and especially defense research spending are perhaps the only kind of government spending that actually does stimulate economic growth [citation needed]

     If you’re looking for a logical argument, then you have to start with agreed upon premises. If you start with a premise that is also your conclusion, that’s called “circular logic”. If you start with a premise that is disputed, that’s an “unproven premise”.

     When you do both, and then mock your opponent for not providing a “logical argument”, well, that’s just an odd rhetorical approach in my opinion.

     Most economists agree that FDR’s New Deal helped the economy during the depression. Most will also agree that some of his programs made things worse. But overall, most say that it was a net positive effect.

     Almost all economists and historians, and pretty much any source you can find on the subject, unanimously agree that the New Deal didn’t end the depression but that it took the massive outlay of government spending behind WW2 to really get the economy back on its feet.

     It was a massive, government paid stimulus program, which was in turn paid for by hiking tax rates even higher than they were durign the depression. They were 60% durign the depression, and 80% during WW2.

     You attempted to downplay the role of government stimulus effect of WW2 spending and attempt to say that the only thing that actually improved the economy was “defense research spending”. I have to say, of all the stuff I’ve ever read about the Great Depression and WW2, that’s the first time I’ve heard anyone ever say such a thing. And I tried to make that point by listing a bunch of ancient, retired military technology (hint, we don’t fly F14’s much anymore, the Kitty Hawk is an oil burning aircraft carrier, and the B1 bomber has been superseeded by the B2 and then the F117, etc.) and asking you if you were actually trying to say that if the US spent 42% of its GDP on building all those out-dated military systems, that it wouldn’t put a bump in the economy? It wouldn’t cause companies to hire people for their factories to build all that equipment? It wouldn’t put shipworkers in shipyards to assemble those vessels? It wouldn’t get contractors work in some engineering companies to pull up the designs and rebuild them with todays materials and factory automation? No bump whatsoever???

     THat was my question to you.

     But since you seem to be focused on whether or not I make a proper logical argument, before you will bother to give a reply, allow me to just say this to that:

     you first.

     Circular logic based on unproven premises do not an argument make.

     The problem is you started with a conclusion you wanted to reach and didn’t have anything to back it up other than that’s what you wanted to be true. And you wanted that conclusion to be true for one very personal reason: the idea that WW2 ended the Great Depression because it was one massive government stimulus is not the lesson you want history to teach us.

     But it is exactly the lesson it teaches us. FDR’s programs helped make the economy better during the depression, the only problem was he didn’t do enough. But WW2 did. The lesson you want to try to extract is that FDR’s programs somehow made the economy worse, and WW2 made the economy better but somehow, as if by magic, not becaue the government was spendiing 42% of the GDP on its budget, much of which was buying military hardware.

     And the thing is, and this is really the thing, even if you are right that it was the super high tech research spurred on by the military, that is still government stimulus. So, you’re saying that govenment stimulus of WW2 made the econmy recover, its’ just one particular stripe of it that really made the difference. Which is an… interesting… position to be arguing from while arguing against government stimulus today.

221. Alan Grayson says between a third and half of republicans in congress wil vote against any raising of the debt ceiling no matter what is in the bill.

     clearly they want the economy to crash and blame Obama for it.

     google.’why Boehner cries Alan Grayson’.

222. Mythago: “How does government spending on meals for Navy officers, or on PX discounts, or direct payment for medical care for veterans help drive development and innovation in the public sector?”

     A fair point. It doesn’t, any more than spending on those things for civilians does.

     Silbey: yes, the government spends a great deal on civilian research, both directly and indirectly. But how much of direct use is produced by all that spending? I have no figures to work with, but based on general impressions, I suspect that the civilian side produces a lot less than the military side does.

     Greg, your argument continues to make no sense. You’re attacking me over things I never said or meant, then demanding I defend positions I never took. Case in point:

     You attempted to downplay the role of government stimulus effect of WW2 spending and attempt to say that the only thing that actually improved the economy was “defense research spending”.

     No, I didn’t. I think that what improved the American economy after 1938 was military spending, and in large part it was the initial building program for the Two-Ocean Navy that FDR wanted. Perhaps you weren’t aware that every major-warship class that saw service in the War was designed in the late thirties, and most of the new capital ships that we commissioned during the War were already building when the Japanese turned Pearl Harbor into a funeral pyre.

     As far as I can tell, all the New Deal programs amounted to little more than treading water. They may have prevented the Depression from getting any worse, but they certainly don’t seem to have done anything toward making things better.

     As for your demands for ‘citations’ — forget it. I’m not a parrot, mindlessly repeating things I read elsewhere. I think about things. As a result, I often reach conclusions on my own that involve aggregating facts from many different sources, including some that I read or heard so long ago that I don’t even remember where I read/heard them. Under those circumstances, providing ‘citations’ is impossible.

     As for your basic premise: if you can really, honestly equate the current regime’s random flinging-about of multiple billions with a war to defend the United States and the free world against forces that sought to crush it — against two of the most barbaric and genuinely evil regimes of recent history … “well, that’s just an odd rhetorical approach in my opinion.”

     Remember Rule 15.

223. Silbey: yes, the government spends a great deal on civilian research, both directly and indirectly. But how much of direct use is produced by all that spending? I have no figures to work with, but based on general impressions, I suspect that the civilian side produces a lot less than the military side does.

     And, yes, it’s imaginary evidence for the win!

224. He’s not a parrot, silbey. He thinks about things. Citations? He reaches conclusions based on things he read so long ago that he cant even remember where it came from. You cant expect someone like that to have objective *evidence*.

225. @wolfwalker 222

     Perhaps you weren’t aware that every major-warship class that saw service in the War was designed in the late thirties, and most of the new capital ships that we commissioned during the War were already building when the Japanese turned Pearl Harbor into a funeral pyre.

     No. There were several battleships and carriers, not to mention destroyers and cruisers, that dated from as far back as 1910 who served in the war – The battleship USS Texas was launched in 1912, and most of our cruisers were built from 1930 to 1939. It’s certainly true that they were many ships designed and laid down in the thirties (but throughout that decade, not just “late”), but a great many capital ships were also built fom 1942 and onward – most of the Essex-class and all of the Midway-class, just for example. This is trivial knowledge, very easy to check.

226. Eric @ 225:

     Not to mention all the pre-war aircraft carriers. None of the Essex class entered service until late ’42, so we had the Lexingtons that were built in the mid-late ’20s and Ranger built in the early ’30s. The Yorktowns were indeed completed in the late ’30s, but laid down and designed in the early ’30s, and Wasp was the same, being a cut-down Yorktown-derived design.

227. as wolf has explained already WW2 was a war to defend the US and the free world against forces that sought to crush it, two of the most barbaric and genuinely evil regimes.

     and that is why WW2 pulled the US out of the depression.

     It doesnt matter when this carrier was built or that bomber was manufactured or who was hired at the factory to build those things.

     what matters is America was kiling Nazis, and because we were killing Nazis the economy got better.

228. Kevin @225

     And one of those Yortkown-class ships went on to become the most decorated warship in US history; +2 internets to anyone who knows the name off the top of their heads :-)

     @227

     Nazis, huh? Judging by the rhetoric from some quarters, one might get the impression that it was Eastasia, and always has been :-/

229. Enterprise, naturlich. The only Yorktown to survive the war, though unfortunately scrapped in the ’50s.

230. Kevin @229

     Yup. There was a brief period in late ’42 where Enterprise was the only US carrier operational in the Pacific theater, and was seriously damaged at the time. That ship was badass.

231. Eric: true enough, there were old warship classes, the old battleships and the treaty cruisers, that were of that vintage. Shows what happens when I write in a hurry – I make mistakes.

     However.

     The entire Essex class of aircraft carriers resulted from FDR’s late-1930s building programs.

     Every fast battleship that saw service in the war – that’s the North Carolina, South Dakota, and Iowa classes – was a result of FDR’s late-1930s building programs.

     The two battlecruisers (or Large Cruisers if you prefer) (that’s Alaska and Guam for you Navy geeks) that saw service in the war were authorized under the 1940 Two-Ocean Navy Act.

     IIRC, all of the new cruisers (CA, CL, and CLAA) that saw service in the war were either designed or built as part of FDR’s late-1930s building programs. Likewise the Fletcher class of destroyers and the Salmon, Sargo, and Gato classes of fleet submarines.

     Now, if we’ve disposed of the issue of who can recite the Navy List and related data better … I have an entirely different question to pose. You all seem to believe you understand the causes and cures of the Great Depression far better than poor li’l ol’ iggerant me, so maybe you can enlighten me on this subject:

     The Depression of 1929-40 was the result of a unique confluence of economic, social, political, and natural factors. The Depression of 2008-15 is the result of a significantly different, but equally unique confluence of economic, social, political, and natural factors. Given the demonstrable differences between the two, why do you believe that this depression can be cured the same way that one was?

232. Now, if we’ve disposed of the issue of who can recite the Navy List and related data better

     Actually, I think people in earlier posts disposed of who was getting things correct quite nicely.

     The Depression of 1929-40 was the result of a unique confluence of economic, social, political, and natural factors. The Depression of 2008-15 is the result of a significantly different, but equally unique confluence of economic, social, political, and natural factors. Given the demonstrable differences between the two, why do you believe that this depression can be cured the same way that one was?

     Uh, would you care to establish your presumptions? I count a number of unsupported assumptions in your paragraph.

233. If it pleases you to think so, silbey, then feel free. Truth is, I wrote in a hurry and I made a few mistakes as a result. That’s all. So what?

     Are you seriously suggesting that the depression of 2008 had the same causes as that of 1929?

234. Truth is, I wrote in a hurry and I made a few mistakes as a result. That’s all So what?

     As the author of the mistakes, it’s quite rich of you to get snotty in the reply (“Now, if we’ve disposed of the issue of who can recite the Navy List and related data better”). I didn’t have a rolled up newspaper at hand, so…

     Are you seriously suggesting that the depression of 2008 had the same causes as that of 1929

     I’m suggesting that you need to demonstrate your assertions, not simply assert them.

235. > defense and especially defense research spending are the only government spending that actually stimulates ecinomic growth.

     still waiting to hear from what alternate reality you got this little nugget from.

     I am just wondering, if this is true then wouldnt that mean that building a public highway, which would require employees, somehow magically(*) does not not stimulate the econmy? building projects like thr hoover dam doesnt stimulate the economy? but building tanks magically(*) does? even more so if you research into how to build new tanks.

     (*) I can only assume this is Republican and right wing magic. like the house of slytherin practices and specializes in certain kinds of magic, apparently right wingers practice a special kind of past and future divination whereby they can see the causes of things without requiring any objective evidence.

236. Wolfwalker @231

     Now, if we’ve disposed of the issue of who can recite the Navy List and related data better

     The issue was not “who can recite the Navy List and related data better”, the issue was that you made two historical claims @222 that were plainly false. Further, when corrected you got your hackles up and attempted to redefine your inital premise. This does not bode well for you credibility.

     Are you seriously suggesting that the depression of 2008 had the same causes as that of 1929?

     I’m not suggesting it; I’m saying it outright.

     In the 1920’s, drastically slashed tax rates and massive deregulation rolled back all the progressive reforms championed by Theodore Roosevelt and widened the gap between rich and poor until unsustainable financial shell games crashed the markets. As FDR tried to lead the nation through recovery he championed legislation which tightly regulated banks and other financial institutions (most notably the Glass-Steagal Act and the Commodity Exchange Act) with the aim of preventing another Black Tuesday. He also, to his regret, agreed to Republican demands for spending cuts during the recovery, thereby causing to the Recession of 1937.

     Decades later during the Reagan Administration the 1920s mantra of low taxes and deregulation was brought to the fore again, at a cost of increased unemployment, increased financial inequality, tripling the national debt and culminating in the Crash of 1987 (initially dismissed by Reagan and his allies as “a minor correction in the market”) which would likely have brought on another Depression had the Reagan Administration not bailed out the banks at a cost that was claimed at around two hundred billion but grew to over a trillion.

     In 2000 two key pieces of legislation were passed; the so-called Financial Services Modernization Act sponsored by Republicans Phil Gramm, Jim Leach and Thomas Bliley and the Commodity Futures Modernization Act championed by Lawrence Summers and Alan Greenspan were presented to Congress with the express aim of achieving the financial sector’s long-held dream of repealing Glass-Steagal and the Commodity Exchange Act. The Republican majorities passed both easily and Clinton signed them into law, only to later admit that he was wrong not to veto them. At this point it was obvious to many people, including myself, that we were screwed. I expected a financial implosion within twelve years, and I was wrong; things started visibly shaking within six years and fell apart in eight.

237. Everything you say is true, Eric. But is it the whole truth? That’s my Rule 15, remember: Nothing is ever as simple as it seems. You saw this crash coming in 2000, which is impressive. But I saw it coming long before that, when I looked at private-debt figures and realized that far too much of the ‘prosperity’ of the 1980s and 1990s was illusory, built on borrowed money. I didn’t know exactly what form the crash would take, but I was sure a crash would come eventually.

     You’ve summarized some of the causes of the Crash of 2008 very well. You’ve left out others, such as the speculative bubble in real estate, the whole mortgage catastrophe and the accompanying bubble in mortgage-backed securities. However, that’s not where I was headed. This is:

     The causes of the crash are not the same as the causes of the depression. America has had market crashes before and recovered from them — both before the Great Depression, and before the current one. In fact, before 1929 stock-market crashes and business panics were a regular feature of the American economy — small ones every few years, and a big one every thirty years or so. But in each case, recovery followed within a couple of years. What made the Great Depression different, that it lasted eleven years and required the massive economic effort of WW2 to pull out of it? Amity Shlaes makes a good case that it was government policy: as she (or perhaps a reviewer of her book) put it, Hoover’s policies turned a recession into a depression, and Roosevelt’s policies made it Great.

     The length of the Great Depression was also partly (a small part, but still a part) a result of natural factors. The giant Plains drought and the ensuing Dust Bowl is the big one.

     And there was the fact that Franklin Roosevelt was probably the finest politician to ever live in the White House. He preferred policies that would build his power base among the voters even if they damaged the businesses that would drive any economic recovery, and he knew how to do that and make it work.

     Now, why has the current downturn turned into a depression, and why is it likely to last at least another three years? I think it involves four basic factors: the real estate/mortgage-backed securities disaster, which exceeds anything the world financial system has ever seen; the globalized economy, which makes it easy to simply move a lot of jobs and wealth out of the United States; the fact that for most people, the real economy in the US has been stagnant for at least the last decade, forcing them to run up enormous debt burdens; and last but not least, the fact that the US government is run by political pygmies when 1930s America was run by a political giant. None of these factors existed in the 1930s. The America of the 1930s could afford to spend public money like water for a few years and then pay it off later, and FDR was enough of a master politician – and a leader! – to sell that policy to Congress and the public. We don’t have any of that. The America of 2011 is tapped out, and the current political power structure is too stupid to see that.

     Different times, different factors, different Depressions. I don’t see any reason to believe that what worked then will work again now. Do you?

238. Wolfwaker @237

     Everything you say is true, Eric. But is it the whole truth?

     What an odd question. It was a three paragraph sketch; of course it doesn’t represent these events in their entirety. However, it is accurate enough and, more importantly, specific enough, to be a useful account of these events. There are a great many details that could be added to flesh out the account, but none that would change the thesis.

     That’s my Rule 15, remember: Nothing is ever as simple as it seems.

     Except of course for things which are as simple as they seem. For example, it seems simple that financial malfeasance brought on by deregulation and erosion of taxation brought on the problems of 1929, 1987, and 2008, and this is in fact true.

     You saw this crash coming in 2000, which is impressive.

     No. No, it REALLY ISN’T, and this point cannot be stressed enough. All I did was notice things that were blindly obvious to anyone who had ever cracked open a history book and/or stayed awake in history class. The 2008 financial collapse was the inevitable result of deliberately undermining the very policies that were enacted to prevent such an event, and there was simply no way to not see that.

     But I saw it coming long before that, when I looked at private-debt figures and realized that far too much of the ‘prosperity’ of the 1980s and 1990s was illusory, built on borrowed money.

     Hold that thought; we’re going to come back to it later…

     You’ve summarized some of the causes of the Crash of 2008 very well. You’ve left out others, such as the speculative bubble in real estate, the whole mortgage catastrophe and the accompanying bubble in mortgage-backed securities.

     No, I haven’t left those out at all; they were implicit in the repeal of Glass-Steagal and the enactment of the Commodity Futures Modernization Act. The real estate/mortgage/securities clusterfrak was the very direct and deliberate result of repealing the measures that were specifically enacted to prevent such things. They were the avalanche; the destructive financial policies were the cause. I would have named them specifically but I thought them so self-evident as to be unnecessary.

     However, that’s not where I was headed.

     It really should have been, because this –

     The causes of the crash are not the same as the causes of the depression.

     – is a very foolish statement. It treats the crash and the depression as events which are isolated from each other, which is fine if one wishes to indulge in rhetorical gamesmanship, but not if one wishes to face reality.

     America has had market crashes before and recovered from them — both before the Great Depression, and before the current one.

     And?

     In fact, before 1929 stock-market crashes and business panics were a regular feature of the American economy — small ones every few years, and a big one every thirty years or so.

     The historical fact of boom-and-bust cycles does not indicate that such things are desirable or must simply be accepted. Quite the opposite in fact. It was a bug, not a feature.

     But in each case, recovery followed within a couple of years.

     For certain values of “recovery”, yes. The wealthy regained their wealth and the majority who lived in grinding poverty continued to live in grinding poverty. An important feature of the financial landscape in the nineteenth and early twentieth centuries is that the middle class as we know it simply did not exist until a few generations ago. It exists largely due to FDR’s economic policies. In the economic climate of the nineteenth and early twentieth century which is so dearly beloved of contemporary conservatives we did not have workplace safety laws, or a guaranteed minimum wage, or child labor laws. Even the all-but-dead right to form labor unions was won by the blood of honest, hard-working people who were beaten, terrorized and gunned down by mercenary forces employed by corporations.

     Amity Shlaes makes a good case that it was government policy: as she (or perhaps a reviewer of her book) put it, Hoover’s policies turned a recession into a depression, and Roosevelt’s policies made it Great.

     I’m familiar with Amity Shlaes and her work and no, she really really does not make a good case. Shlaes confuses domestic economic growth with the Dow Jones average and flat out lies about the unemployment figures of the Thirties. Corporatist hackery makes for great propaganda for Wall Street, but not for insightful historical or economic analysis.

     The length of the Great Depression was also partly (a small part, but still a part) a result of natural factors. The giant Plains drought and the ensuing Dust Bowl is the big one.

     The drought did indeed make things worse. Since a robust economy not crippled by conservative economic dogma could have responded much more effectively to this crisis, citing it does not exactly buttress your case.

     And there was the fact that Franklin Roosevelt was probably the finest politician to ever live in the White House.

     Indeed?

     He preferred policies that would build his power base among the voters even if they damaged the businesses that would drive any economic recovery, and he knew how to do that and make it work.

     As our host would say; yeah, no. FDR did far more to save capitalism than any of the robber barons who gleefully ran the economy into the ground and then railed against the man who tried to fix their mess. FDR was in fact viewed with suspicion by many working-class Americans due to his ties to big business, and with open disdain by business leaders who expressed admiration for the fascist policies of Mussolini and Hitler. Those same business leaders planned a fascist takeover of the US that was thwarted when exposed by retired Major-General Smedley Butler of The Marines, a registered Republican who had been approached to join the conspiracy on the basis of his criticism of FDR.

     Now, why has the current downturn turned into a depression, and why is it likely to last at least another three years? I think it involves four basic factors:

     Will these be four basic generalizations that pretend to be disconnected from destructive economic policies enacted on a behalf of a conservative agenda?

     the real estate/mortgage-backed securities disaster, which exceeds anything the world financial system has ever seen;

     Which was caused by an aggressive and criminal program of deregulation that was designed to benefit the super-rich at the expense of everyone else.

     the globalized economy, which makes it easy to simply move a lot of jobs and wealth out of the United States;

     You don’t say? I wonder who pushed for that, and what their reasons were…

     the fact that for most people, the real economy in the US has been stagnant for at least the last decade, forcing them to run up enormous debt burdens

     Yes, indeed. Massive tax cuts for the wealthy did not produce the massive economic growth and employment that we were promised, which was of course not a surprise since they never have. As to the debt burdens, Bush II championed that as “The Ownership Society” and enabled it through massive deregulation of the banking and finance sectors.

     and last but not least, the fact that the US government is run by political pygmies when 1930s America was run by a political giant.

     This, at least, is distressingly accurate. Obama campaigned like the second coming of FDR and I. along with tens of millions of other Americans, voted for him for that reason. His tenure in office so far more closely resembles Reagan than FDR.

     None of these factors existed in the 1930s.

     Superficially true, but only superficially and quite irrelevant. Again, the key factors here are cutting taxes for the rich and deregulating business. Those factors wrecked the economy in the past, and again in the more recent past. That the wreck would play out in somewhat different ways in different eras is unsurprising and does not proffer a meaningful distinction.

     Now, let’s go back to that statement of yours I marked far above – “But I saw it coming long before that, when I looked at private-debt figures and realized that far too much of the ‘prosperity’ of the 1980s and 1990s was illusory, built on borrowed money” – Oh, yes; this was the beginning of the end. In the early Eighties the Savings and Loan Associations were deregulated as part of a more widespread deregulation campaign championed by the Reagan Administration. The Crash of 1987 did not lead to depression due to government intervention (about which those who had previously been vocal critics were tellingly silent) but the subsequent recession under Bush I was still more than sufficiently unpleasant.

     Clinton tightened some regulations and raised the marginal rates on the wealthy, leading to genuine economic growth, a shrinking deficit, and a budget surplus. He also unfortunately did cheerleading work for NAFTA which began the corporate globalism that, as you yourself noted “makes it easy to simply move a lot of jobs and wealth out of the United States”.

     The banking and commodities deregulation legislation in 2000 were only the beginning of a tidal wave of such policy under Bush II. Up until a few years ago I worked for one of the nation’s largest banks, and we were constantly encouraged to write letters to our representatives and senators to plead for even greater deregulation on the financial industry’s behalf. I did not do so; even early in Bush II’s time in office it was clear what outcomes were being sown and what they would reap. When the implosion of 2008 happened I greeted it with dread…. but not a trace of surprise.

     Different times, different factors, different Depressions.

     Yes, no, and not at all, for all the reasons detailed above.

     I don’t see any reason to believe that what worked then will work again now. Do you?

     YES! If the things that were done then were actually done now instead of having been declared “off the table” in advance of any negotiations as a horrifically misguided gesture of “bipartisanship”, they would work. Acceding to the “More Tax Cuts! More Deregulation!” magical thinking that created this debacle in the first place is demonstrably guaranteed to fail. The fact that previously proven policies are not being enacted is not an indictment of those policies, it is an indictment of the political class that refuses to allow them to be enacted.

239. Amity Shlaes makes a good case that it was government policy: as she (or perhaps a reviewer of her book) put it, Hoover’s policies turned a recession into a depression, and Roosevelt’s policies made it Great.

     Yeah, no.

     http://www.slate.com/id/2169744/pagenum/all

     Rauchway, unlike Shlaes, is actually a historian.

240. Well, Eric, you seem to have some good points to make, but the language in which you couch them makes it clear that you aren’t a reliable source. Excuse me if I decide to spend my time doing more productive things than arguing with a fanatic liberal. FDR wanted to save capitalism? Please!

241. Very schoolyard, wolfwalker. :golf clap:

242. Wolfwalker @240

     Well, Eric, you seem to have some good points to make,

     It seems that way because I do.

     but the language in which you couch them makes it clear that you aren’t a reliable source.

     “The language in which I couch them”? No. Either engage the points or don’t. If you actually have anything substantive to offer, clutching your pearls over my “language” is a very poor excuse.

     FDR wanted to save capitalism? Please!

     What? You think he was setting the stage for communism? Did he throw the White House doors open and cry, “Arise, ye soldiers of the unwashed proletariat! Seize the captains of industry and slay them, and clap their women and children in chains!” No. Nor did he say or do anything that implied anything even vaguely like that even if you squinted at it just right after a drinking binge. He took a broken and mangled economy and guided it to a recovery over the venomous objections of the very people who wrecked it in the first place. Yeah; that sounds like someone who wanted the engines of capitalism to be rebuilt and able to serve America, and it would take some pretty intense hallucinogens combined with paranoid schizophrenia to make it look otherwise.

     Excuse me if I decide to spend my time doing more productive things than arguing with a fanatic liberal.

     Says the guy who considers Amity Shlaes credible. Enjoy your smug sociopathy, Wolfwalker; you won’t be missed.

243. but the language in which you couch them makes it clear that you aren’t a reliable source.

     I can’t help but read that any other way than “I got my butt whupped by someone who obviously knows more than me and can expose every bit of smoke and mirror I use to distract, best be claiming victory and vamoose before I get eaten for dinner”

     But that’s just me.

244. It’s not just you.

245. What thoroughly bemuses me is the stone-headed insistence on disconnecting causes and effects. “No, it’s not the tax cuts and deregulation that are relevant to the problem; it’s the things they resulted in that you should be focusing on! And since the results were marginally different in an earlier era, there’s no way that you can say they’re related!” Yikes. I swear, if this were a murder investigation he would be demanding that I focus on the bullet that killed the victim while ignoring the man seen fleeing the scene carrying a gun, since they are different things that couldn’t be connected. The mind; it fucking well boggles.

246. And another thing: If FDR had wanted to throw over the capitalistic system and bring some variant of communism up in its place he could have made a reasonable go of it with very little effort. At his inauguration the nation was filled with millions upon millions of desperate hungry people who knew goddam well that they had been callously fucked over by the wealthy elites and were telling each other that communism was worth a shot right now. If FDR had advocated communism, or at least an aggressive socialism, he would have had a tremendous groundswell of popular support. No telling if he would have succeeded in pushing it through but the attempt would have been spectacular, for good or ill.

     But he didn’t do that. He didn’t even try, or even suggest it. Because that wasn’t what the fuck he wanted to do. FDR wanted capitalism, he just wanted it harnessed in such a way that it couldn’t keep eating itself and wouldn’t maintain a permanent widespread underclass that would have sufficient desire and sufficient numbers to to attempt to destroy the system in favor of something like communism. He was a pragmatist, at least a bit of an idealist, and a patriot who wanted America to be strong and healthy. And he saw neither communism or the corporate feudalism that was being pushed then (as it is now) as being good for America. And the economic stability, economic growth, and widespread middle-class that resulted from his policies thoroughly vindicates his views, just as the destruction of those same things by those who’ve longed despised his achievements indicts the modern conservative movement.

247. Greg @ 243 Definitely not just you.

248. Eric@245, not just disconnecting cause and effect, but specifically ruling out all cases where stimulus was shown to work in history, and then attempting to model whatever is left as if it is the true description ofall reality.

     the ‘lets ignore the millions of jobs that WW2 created and instead pretend that people unemployed for years would be unaffected by sudden long term employment. No, it is clear that what ended the depression was Ronald Reagan who had started formulating his trickle down economics plan, and just *thinking* about lowering taxes made the economy pick up”……