Does the state of the union address unsettle any Canadians

[Shady]

for... all? Well, say hello to the 42 GOP members of the Senate who pledged to block all bills unless Obama extended the cuts for... all marginal rates. More/most specifically, see 42 GOP members of the Senate blocking unemployment benefits for millions of Americans until Obama agreed to extend the tax cuts for... all marginal rates.

So what you're saying is that President Obama signed their complete extension.

[dre]

Unless tax rates are either extremely high or extremely low they dont have much impact on the economy, and people in general think they have way more effect than they do. Its really just a shell game because businesses and corporations pass their taxes onto the consumer anyways.

Todays bizzare "low tax religion" is simply the result of a generation (Generation Useless) that was educated in a school system that allocates more resources to teaching students to bake muffins than it does teaching them about our economic and monetary system. The only thing this philosophy has yielded is mountains of public debt. Theyve never met a tax cut they didnt like, but they arent able to agree on any spending cuts, so the debt grows.

It has simply been a decision to finance government by printing and borrowing money instead of collecting it from taxpayers, and its been a real disaster because politicians can now embark on huge unfunded mandates, without the political pain of asking the tax payer to pony up.

Republicans used to believe that prosperity depended upon the regular balancing of accounts—in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance—vulgar Keynesianism robed in the ideological vestments of the prosperous classes," Stockman writes in a lengthy analysis of the current economic condition published Sunday in The New York Times. "This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy. More specifically, the new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one.

THats not an occupy protester talking thats David Stockman... Ronald Reagans budget director and one of the fathers of supply side economics. And hes right...

The "low taxers" are really just money printers.

Edited January 26, 2012 by dre

[waldo]

So what you're saying is that President Obama signed their complete extension.

you're quick! Are you as quick in stating Obama should have held firm, not extended the Bush tax cuts for the richest Americans... and consequently, per the GOP Senate members bill blocking pledge, not have benefits for the unemployed go out? Is that your summary quickness, hey?

[Shady]

The "low taxers" are really just money printers.

I disagree. It's not about tax rates, it's about spending rates. Spending that's increased at historic levels. You could raise the top income rate to 70%, and there'd still be a huge deficit. Spending is simply out of control.

[Shady]

you're quick! Are you as quick in stating Obama should have held firm, not extended the Bush tax cuts for the richest Americans... and consequently, per the GOP Senate members bill blocking pledge, not have benefits for the unemployed go out? Is that your summary quickness, hey?

That's probably what he should have done. It's what Clinton did when he was president. He refused to cave, and the government shut down. Republicans blinked, and they both came to a deal. Obama's just not a very good negotiator. Not to mention he could have tackled the Bush tax cut issue in the first year or so of his Presidency, when he had huge margins in the house and senate and a very high approval rating.

Hell, he could of made it his very first priority, passing a bill that would end the Bush tax cuts on the top rate after 2011. But he didn't. He focused on his disasterous health care bill instead, and blew two years of what could have been a productive presidency.

[capricorn]

It's not about tax rates, it's about spending rates. Spending that's increased at historic levels. You could raise the top income rate to 70%, and there'd still be a huge deficit. Spending is simply out of control.

I agree.

Obama's message around taxes is one of "fairness" say Obama's camp and supporters. Well, if Obama is looking for fairness, he would ask all Americans to share the pain by accepting cuts to entitlements. Instead, through his tax policy proposals, he is singling out one particular group who will be made to pay in order to please the masses. This is one blatant example of the divisiveness he's been accused of.

[dre]

I disagree. It's not about tax rates, it's about spending rates. Spending that's increased at historic levels. You could raise the top income rate to 70%, and there'd still be a huge deficit. Spending is simply out of control.

That changes nothing, and you cant ignore one side of a balance sheet. Youll vote for tax increases, but youll also keep voting for the parties doing all the spending. That makes you a money printer. And theres a whole generation of people like you voting for spending and tax cuts at the same time, and THAT is why theres public debt.

Youre exactly who David Stockman is talking about.

[bush_cheney2004]

.... Instead, through his tax policy proposals, he is singling out one particular group who will be made to pay in order to please the masses. This is one blatant example of the divisiveness he's been accused of.

Yes, and to call his bluff, the Republicans have proposed means testing Social Security, something the Democrats will never support because it is the holiest entitlement for political power (votes).

[Shady]

Youre exactly who David Stockman is talking about.

No, I think you're who David Stockman is talking about.

We can have a broader discussion on taxes, but raising tax rates isn't the answer. Not if you don't close all of the deductions in the tax code. Take the corporate tax rate of 35%. Many corporations pay a lot less than that. GE paid zero in corporate taxes. Not because the tax rate isn't high enough, but because of all the deductions.

And raising taxes without reforming entitlements is absurd. Because down the line, you're just gonna have to raise taxes again, and again, and again. Republicans have already been down this road twice. Once in the 1980s, and once in the 1990s. They gave in to tax increases for promised spending cuts. But those democrat promised spending cuts never happen. So now, you want them to fall for the same trick for a third time? Nice try. I wanna see real entitlement reform, and real spending cuts FIRST, before any taxes are raised.

What's that saying again? Fool me once, shame on you. Fool me twice, shame on me?

[Shady]

Yes, and to call his bluff, the Republicans have proposed means testing Social Security, something the Democrats will never support because it is the holiest entitlement for political power (votes).

Exactly. You'd think means testing Social Security and Medicare so that affluent people don't get the same benefits as middle class and lower class individuals would be something Democrats would be gung-ho about. But you're exactly right. For political reasons, they want none of it.

[dre]

he is singling out one particular group who will be made to pay in order to please the masses.

If you want to get revenue you have to go where the money is. Low income households control about 2% of GDP. Obama targets high income households for the exact same reason telemarkers and charity call center workers do... because those people can absorb cost with little or no pain.

But youre right... the tax cuts for the middle class should be allowed to expire as well, not just the ones for the upper class. But like I said the public has bought into this low tax religion and politicians are terrified to raise taxes even if its necessary, and they bought all the nonsense about raising taxes in the middle of a recession as well. Problem is that none of its true...

Reagan signed his 1982 tax increase into law in September 1982, even though the early 1980s recession didn’t end until November 1982. Following that tax increase, as former Reagan economic official Bruce Bartlett has pointed out, gross domestic product “grew 4.5 percent in 1983 and 7.2 percent in 1984 – an exceptionally strong performance. The stock market had one of its best years ever in 1983…The unemployment rate fell from 10.6 percent in December 1982 to 8.1 percent by December 1983 and 7.1 percent in December 1984.”

According to the Treasury Department, “Reagan’s tax increases now would bring in about $300 billion a year, if the increases were measured against today’s economy.”

And thats why Generation Useless is in this boat. The exact same people whining about taxes and crying for tax cuts, head to the polls each year and keep electing the same bunch of big spending politicians and parties. And political ideologs on the left and right expect all the spending cuts to come from gutting everyone elses pet programs and not their own.

Turns out stupid things happen to stupid people.

[dre]

No, I think you're who David Stockman is talking about.

We can have a broader discussion on taxes, but raising tax rates isn't the answer. Not if you don't close all of the deductions in the tax code. Take the corporate tax rate of 35%. Many corporations pay a lot less than that. GE paid zero in corporate taxes. Not because the tax rate isn't high enough, but because of all the deductions.

And raising taxes without reforming entitlements is absurd. Because down the line, you're just gonna have to raise taxes again, and again, and again. Republicans have already been down this road twice. Once in the 1980s, and once in the 1990s. They gave in to tax increases for promised spending cuts. But those democrat promised spending cuts never happen. So now, you want them to fall for the same trick for a third time? Nice try. I wanna see real entitlement reform, and real spending cuts FIRST, before any taxes are raised.

What's that saying again? Fool me once, shame on you. Fool me twice, shame on me?

No, I think you're who David Stockman is talking about.

Then you simply didnt read what he said.

I wanna see real entitlement reform, and real spending cuts FIRST, before any taxes are raised.

Right. You want to print money and finance the government with debt. Dont worry... thats exactly whats going to happen.

And the funny thing is your mindset guarantees there wont be big spending cuts, because the only way the public will put pressure on politicians to cut spending, is if they are really the ones the bear the burden of spending through taxation. If taxes were adjusted so that the taxpayers were actually paying for government programs they would realize it sucks paying for all that stuff, and they would start voting down spending.

And then you sit there and wonder why the democrat and republican politicians responsible for all this spending have a 80%+ encumbancy rate. And the answer is pretty simple... why would a population enjoying the lowest tax rates in modern history concern themselves with spending?

[Shady]

If you want to get revenue you have to go where the money is.

No, you actually create an environment where the economy grows. Revenues would significantly increase if we had the 8 million people who were working before the recession back working again. But the real money isn't in the 1%. If you really wanna increase tax revenue to the federal government, it's in the middle class. Raising the middle class tax rate to where it was before Bush would gain you the most money by a huge margin.

But youre right... the tax cuts for the middle class should be allowed to expire as well, not just the ones for the upper class.

Well, I can agree with you there. But again, in terms of tax rates. Raising rates doesn't mean anything without closing loopholes and deductions. If you just left rates where they are, and closed all of the deductions and loopholes, you get a big increase in revenue.

[LonJowett]

Raising the middle class tax rate to where it was before Bush would gain you the most money by a huge margin.

But they've already been hit to the point of extinction.

But weren't you the fellow who spewed lies about Obama's charitable donations and then scurried away when caught?

[capricorn]

Raising rates doesn't mean anything without closing loopholes and deductions. If you just left rates where they are, and closed all of the deductions and loopholes, you get a big increase in revenue.

In general, politicians are incapable or unwilling to consider the impact of their policies in the bigger picture. If they did they wouldn't compartmentalize their policies along special interest group lines in their hunt for votes. I'm listening to a talk show from Florida, WBOB 600, where the host mentioned a book called "Economics in one lesson" by Henry Hazlitt. Out of curiosity, I looked it up. Here is a book review from Amazon.

At the heart of Hazlitt's book is the principle that true economics must consider the general effect over the long term of any policy it enacts. It is from the solid foundation of this principle that Hazlitt attacks all modern economic fallacies which, he argues, all have at their heart the problem of looking only at the effects of a policy on one special group in the short term. And Hazlitt reminds us that what would be foolish for household finances is all the more foolish for a nation since it the same foolishness magnified a million times over. Along with his use of common sense and plain logic, Hazlitt effectively uses statistics to prove his points (mercifully he limits his use of statistics, unlike many modern writers who use almost nothing but).

If Keynes is the alchemist wizard who has masterfully entranced his economist minions through a combination of academic sophistry and elitist intimidation, Hazlitt is the plain speaking sage who breaks the spell by speaking words that ring true with every person's experience of the real world and the economic forces at work within. This is not only a great place to begin one's study of economics but it is something that politicians and voters alike should have to re-read every election year before they cast their ballots. If we had been doing that up until now, we would not be in the economic disaster we currently are.

http://www.amazon.ca/Economics-One-Lesson-Shortest-Understand/dp/0517548232

This book is now on my summer reading list.

[Moonlight Graham]

LOL at Canadians who watch the entire State of the Union. What CPAC wasn't exciting enough for you?

LOL at anyone who can watch the whole thing. More than a hour of blah blah, I drifted off less than 30 mins in.