What's really at stake

In VP debate, listen to who is telling the truth about nation's condition

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The two major political parties and the media always try to make presidential elections about the personalities of those running – and to a large extent, we go along with them.

So presidential campaigns become like student-government elections; whom do you like best?

This election is different. It has to be.

This time, we’re being asked whether to keep heading for the cliff or to turn away from it.

This election is not about personalities and parties. It’s about principles, ideas, the laws of economics and the facts surrounding America’s financial state.

In short, we simply cannot continue on the path we’re on.

We already owe more than any country in history, between $16 trillion in already-spent funds and some go to $100 trillion in promised future spending for Social Security, Medicare and Medicaid.

With the United States borrowing 40 cents of every dollar the federal government spends, and Washington printing money to finance that binge, our very currency is at risk. At the least, it reduces our buying power and risks inflation or deflation.

What happens when lenders won’t lend us more? What happens if the currency crashes?

We may not want to imagine that, but we need not do so: The lessons are right there in history for us to look at, across centuries in which world powers spent themselves to decline or ruin. Rome, the Weimar Republic, Britain, Argentina and more killed or seriously wounded themselves with debt.

What makes us think we’d be any different? What makes us think we can suspend the laws of economics, any more than we can the law of gravity?

As it stands now, America’s fiscal house probably can’t be put back together for 15 or 20 years – and that’s assuming we get cracking now. That means a succession of presidents and Congresses united on solving our fiscal problems.

That’s assuming a lot. But we’ve got to at least first take the initial steps of admitting our problem, electing the problem solvers and then accepting the sometimes painful solutions.

If you want to get a taste of how difficult it will all be, just look at Western Europe. Few places on Earth call for more austerity, but the cutbacks in generous pensions and public benefits have inspired protests and riots and more. German Chancellor Angela Merkel was villified as Adolf Hitler recently in Greece for the Eurozone-inspired austerity measures there – even though it’s largely through the industry of German workers and German loans that some other European workers have enjoyed enviable lifestyles.

Is this the future we wish for ourselves and our children?

If not, we need to change course. Now.

Watch the vice presidential debate tonight with an ear for who is telling you the truth about the state of things in America.

Then consider electing candidates who not only will tell you the truth, but will actually do something about it.

Comments (86) Add comment
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Bizkit
35756
Points
Bizkit 10/11/12 - 01:05 pm
3
2
Well a lot like to say Mitt's

Well a lot like to say Mitt's economic plan won't work but a number of articles differ such as: http://times247.com/articles/princeton-economist-romney-s-tax-plan-will-... or
http://politiac.com/Mitt_Romney_Tax_Plan_Can_Boost_US_Economy/
So his plan is dependent on growth and without growth we are where we started anyways.

Bizkit
35756
Points
Bizkit 10/11/12 - 01:10 pm
4
2
It was based on lies.

It was based on lies. Saddam's lies who convinced every country and every politician in America (both Clinton's, Obama, etc all recorded talking about Iraq's WMD and the threat) that he was a threat. Then Cllinton started the mess with an executive order which Congress made into law for regime change in Iraq. Bush was just the big dummy in executing this law at a poor time right after 9/11. He should have put it on the back burner and pushed for regime change later. But at least Bush executed the laws unlike Obama who refuses to execute laws and prefers to execute American citizens without due process.

Angie H
4300
Points
Angie H 10/11/12 - 01:09 pm
4
2
Bizkit....the liberals seem

Bizkit....the liberals seem to see growth as a stagnant thing and that cutting taxes has no other effect but to reduce revenue.

Angie H
4300
Points
Angie H 10/11/12 - 01:10 pm
5
1
Darn that Bush for obeying

Darn that Bush for obeying the law...what was he thinking!

Angie H
4300
Points
Angie H 10/11/12 - 01:15 pm
3
3
Iraq never threatened us!

Iraq never threatened us! Just ask the pilots who were patrolling the No Fly zone that the UN imposed that was agreed upon by Iraq in a cease fire.

burninater
9943
Points
burninater 10/11/12 - 01:33 pm
1
2
Bizkit....the liberals seem

Bizkit....the liberals seem to see growth as a stagnant thing and that cutting taxes has no other effect but to reduce revenue.
--------

Angie, what other effect does it have? Facts please, not snappy rhetoric.

And when considering your answer, keep in mind that the massive tax cuts of the past decade were accompanied by record increases in investible capital with corresponding NEGATIVE job growth and DECLINING economic indicators.

Please please PLEASE provide me with the facts that show that cuts in marginal tax rates create job creation and economic growth. That claim is made over and over again, but the claimants never seem to include any quantitative proof. I'd love to see some data.

burninater
9943
Points
burninater 10/11/12 - 01:45 pm
1
2
From your link: " ...the

From your link:

" ...the Laffer curve depends on the assumption that tax revenue is used to provide a public good that is separable in utility and separate from labor supply, which may not be true in practice. The Laffer curve is also too simplistic in that it assumes a single tax rate and a single labor supply. Actual systems of public finance are more complex. There is serious doubt about the relevance of considering a single marginal tax rate. In addition, revenue may well be a multivalued function of tax rate - for instance, an increase in tax rate to a certain percentage may not result in the same revenue as a decrease in tax rate, even if the final tax rate in both situations is the same."

The Laffer curve is a model. It is not data. Models draw conclusions from created assumptions. They then must be compared to what actually occurs -- real-world data -- to see if the model corrections are correct.

The real-world response to the tax cuts of the last decade of 1) DECREASED gov't revenues, and 2) DECREASED employment and economic growth despite INCREASED personal wealth resultant from lower marginal rates, clearly show that the Laffer curve model has not accurateky captured real-world behavior.

So again, I'd love to see the real world proof. Show me the data.

Angie H
4300
Points
Angie H 10/11/12 - 01:50 pm
1
1
Hmmm...real world data that

Hmmm...real world data that shows that tax revenues went up with lower taxes. How could that be?

burninater
9943
Points
burninater 10/11/12 - 01:51 pm
1
3
Angie, I presume that you

Angie, I presume that you didn't read that Forbes article you linked. It uses historical employment growth data from various presidencies to show that job growth after the Bush tax cuts shows that the cuts had no effect on job growth.

http://www.forbes.com/sites/rickungar/2012/07/17/the-truth-about-the-bus...

burninater
9943
Points
burninater 10/11/12 - 01:52 pm
1
2
Hmmm...real world data that

Hmmm...real world data that shows that tax revenues went up with lower taxes. How could that be?
-------
Do you have that data? I'm not sure if you linked the wrong article or not ...

Angie H
4300
Points
Angie H 10/11/12 - 01:52 pm
2
1
It also comes down to

It also comes down to morally....How much of MY money should the government allow me to keep. I wonder why it is considered greedy to want to keep what you earn, but not greedy to want to take it from someone.

Angie H
4300
Points
Angie H 10/11/12 - 01:53 pm
1
1
Angie H
4300
Points
Angie H 10/11/12 - 01:55 pm
2
1
No doubt his spending

No doubt his spending outmatched the increase in revenue, but the revenue DID increase when the taxes were lowered.

Angie H
4300
Points
Angie H 10/11/12 - 01:59 pm
1
1
Just how do higher taxes

Just how do higher taxes stimulate job growth?

burninater
9943
Points
burninater 10/11/12 - 02:02 pm
1
2
Angie, that link still

Angie, that link still doesn't have data showing a positive revenue response to the Bush tax cuts.

"The Bush administration had claimed, based on the concept of the Laffer Curve, that the tax cuts actually paid for the themselves by generating enough extra revenue from additional economic growth to offset the lower taxation rates. However, income tax revenues in dollar terms did not regain their FY 2000 peak until 2006. Through the end of 2008, total federal tax revenues relative to GDP had yet to regain their 2000 peak.

When asked whether the Bush tax cuts had generated more revenue, Laffer stated that he did not know. However, he did say that the tax cuts were "what was right," because after the September 11 attacks and threats of recession, Bush "needed to stimulate the economy and spend for defense." "

It is exceptionally telling that Laffer, the individual that created the model in the first place, could not find empirical validation of the model subsequent to its test in the form of the Bush tax cuts.

justthefacts
25478
Points
justthefacts 10/11/12 - 02:05 pm
3
1
burn

Burn, your linked article is a totally one sided view written with an obvious agenda. It takes the position that tax policy in and of itself is the driver of employment. That's not true. There are a myriad of factors involved. What one will never know is what the job picture would have looked like without the tax cuts. It could have been far worse.

Angie H
4300
Points
Angie H 10/11/12 - 02:09 pm
2
1
"During the George W. Bush

"Angie, that link still doesn't have data showing a positive revenue response to the Bush tax cuts."

Oh not true.

"During the George W. Bush administration, the federal government spending was increased from $1789 billion to $2983 billion (70%) but the revenues were only increased from $2025 billion to $2524 billion (25%). Individual income tax revenues were increased by 14%, corporate tax revenues by 50%, customs and duties by 40%"

Did you skip over that part?

burninater
9943
Points
burninater 10/11/12 - 02:23 pm
1
1
Just how do higher taxes

Just how do higher taxes stimulate job growth?
-------------
There is a lot of work that needs to be done in the world that doesn't produce short-term ROI, such as: infrastructure, education, law enforcement, research and development, and energy production, just to name a few massive undertakings. All of these things both produce immediate employment, as well as increase the efficiency of the overall economy.

However, because these things don't produce short term return on investment, private capital is hesitant to fund these things. It is no coincidence that as private capital has reached record levels, funding of essential drivers of economic growth such as those I listed have reached record shortfalls. Without sufficient tax dollars available to fund these essential items that only produce a return in the long term, these essential items fall by the wayside. As the essentials that produce a healthy economy decay, so decays the economy.

To some extent, bonds fund these types of projects, but it usually isn't the project itself that produces the return on the bond -- rather, it is the reallocation of tax revenue to pay the return. So that brings us back to the original dilemma: services and goods essential to the health of our economy are often zero to low ROI items. They MUST be funded, but private capital is loath to do so.

To the extent that these types of items are underfunded, the overall economy -- and consequently jobs -- suffers.

burninater
9943
Points
burninater 10/11/12 - 02:28 pm
1
1
JTF, the artice I linked was

JTF, the artice I linked was Angie's link to show the effectiveness of the Bush tax cuts, I just relinked it.

But this is interesting. You say: "It takes the position that tax policy in and of itself is the driver of employment. That's not true."

Pardon me, but isn't that EXACTLY the claim of the mantra that increased taxation of the "job creators" will cost jobs? That's been drilled over and over in our heads, and now you say it isn't true?

Retired Army
17513
Points
Retired Army 10/11/12 - 03:09 pm
1
1
Bizkit 10/11/12 - 07:55 am

The REAL Libyagate, The Republicans should pray to God there will be a cover up!:

http://www.washingtonpost.com/opinions/dana-milbank-letting-us-in-on-a-s...

burninater
9943
Points
burninater 10/11/12 - 03:11 pm
1
1
"During the George W. Bush

"During the George W. Bush administration, the federal government spending was increased from $1789 billion to $2983 billion (70%) but the revenues were only increased from $2025 billion to $2524 billion (25%). Individual income tax revenues were increased by 14%, corporate tax revenues by 50%, customs and duties by 40%"

-------

Angie, if you look at the source for this data, you'll see why Laffer was likely unwilling to say that the tax cuts increased revenue:

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/108xx/doc10871/0...

The revenue increases are shown in Table F-3.

Revenue growth was down in all of the years following the tax cuts until 2006-2008. The timing of this uptick, as we all are unfortunately well aware, is the housing bubble, and the source of this revenue growth was not in fact economic growth, but the spending of artificially valued equity. As soon as the artificial valuation of housing collapsed, revenues collapsed as well. I think Laffer is wise to not view the artificial effects of the housing bubble as proof positive of the Laffer curve model.

justthefacts
25478
Points
justthefacts 10/11/12 - 03:11 pm
1
1
The argument

I can't speak for everyone. The position I think most people take is that tax cuts "contribute" to job growth. Other factors apply as well.

justthefacts
25478
Points
justthefacts 10/11/12 - 03:13 pm
1
1
RA & Polls

RA, miss your daily polling data. Did the Huffington Post stop running them?

burninater
9943
Points
burninater 10/11/12 - 03:37 pm
1
1
JTF, I'm not arguing that it

JTF, I'm not arguing that it doesn't seem completely logical that tax cuts would contribute to job growth. I'm arguing that the evidence seems to show that this is one of those things where our logic doesn't have all the pertinent facts.

For example, it used to be the logical fact that air and fire had inherent tendencies to move up, while water and earth inherently moved down. This was logical for centuries, deduced by the great Aristotle, and everybody could see it to be perfectly logical. Until they developed a theory of gravity, and suddenly the logic fell apart.

Another analogy: it used to be that everyone -- including doctors -- knew that stress and diet caused ulcers. And no matter how much people took anger management and changed their diets, they'd still often die. Until someone figured out that actually, it's an infection treatable with antibiotics, and the logic of the previous explanation fell apart.

What these cases have in common is that new evidence was discovered that showed the logical flaw in what the greatest minds of generations -- people far smarter than you or me -- held to be obviously true.

Similarly, our current economic stagnation, combined with record levels of private capital made available as the result of tax cuts, are evidence that there is something awry in the logic that tax cuts inherently contribute to job growth.

faithson
5531
Points
faithson 10/11/12 - 03:33 pm
1
1
economic reality...

DEMAND !!! the money was flowing and credit was immorally easy to get during the housing bubble. Demand was very high. We NOW live in an economy where the demand is has leveled off and does not look like it will EVER reach the heights of the bubble. I would like to hear how a 20% tax cut is going to increase DEMAND, THE BASIC instrument of economics that creates the jobs that are needed. Now if, as many good republicans suggest, that flippin' burgers for minimum wage are the jobs this country needs, so be it, but what this country needs are REAL jobs, jobs that the corporatism see as a liability to their bottom line.

justthefacts
25478
Points
justthefacts 10/11/12 - 03:41 pm
0
1
Burn

This is hard to do in this format, but, again, how can you prove that tax cuts don't contribute to job growth?
faithson, when people have more money, they spend more.

justthefacts
25478
Points
justthefacts 10/11/12 - 03:51 pm
1
0
The things you learn on here.

Burn, looked it up. Ulcers are caused by many things. Infection is only one of the possible causes. You are right that stress doesn't cause ulcers. It does however make them worse.

burninater
9943
Points
burninater 10/11/12 - 05:21 pm
1
0
Thanks for the ulcer

Thanks for the ulcer clarification, JTF -- I found the breakdown:

Peptic ulcers were formerly thought to be caused by stress, coffee consumption, or spicy foods. Now it is clear that about 60% of peptic ulcers are caused by a bacterial infection that can usually be cured. Another 20% are caused by nonsteroidal antiinflammatory drugs (NSAIDs) such as aspirin and ibuprofen (Advil, Nuprin, etc.), and another 20% have miscellaneous causes such as cigarettes or no clear cause.

http://www.medicinenet.com/script/main/art.asp?articlekey=43451

"This is hard to do in this format, but, again, how can you prove that tax cuts don't contribute to job growth?"
-------
I need to narrow what I'm saying a bit here -- I don't mean to argue that tax cuts can never contribute to job growth, as I can imagine scenarios where taxes are so onerous that they stifle the economy and job growth.

I'm also not saying that the Laffer curve has no merit, as it may in specific circumstances. The problem is when the Laffer curve is applied across the board to all cuts on marginal income, as even before testing it with real data, it isn't designed to model all tax cuts of this type.

In my mind, but it may not have been clear, I've been talking specifically about the Bush tax cuts, as those have been the main issue of the day, the revenue discussion with Angie, the ongoing dialogue about wealth envy, etc.

For the Bush tax cuts, the argument in support is that the entities with the most capital "create" jobs. By increasing their available capital with tax cuts, they can create more jobs. With this in mind, I'd look at two things: 1) did the cut result in more capital in the hands of the "job creators", and 2) did this increase produce an increase in the rate of job creation? When considering the period from the first tax cut until now, the answer to the first question is yes, but the answer to the second is no.

A follow-up to this question would be that perhaps jobs were created, but external factors produced a net loss. To me, this is addressed by the difference in rates of change between growth of personal capital, and job creation. If what was occurring was that personal capital was turning into jobs, but then external factors were producing net losses, then you would see negative, or declining, rates in BOTH the growth of capital AND the rate of job growth. But that isn't the case. We are instead seeing increased rates of private capital growth, with declines in job growth. This decoupling of the rate trends suggests that the two things are weakly related, if at all.

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