Do you really think tax cuts are the answer?

[Burgold]

Do you really think tax cuts are the answer or a really big part of the answer? I don't. The Bush stimulus check/tax refund didn't change the country, 8 years of tax cuts to big business and the wealthy, upper middle class didn't prevent this or create a situation of economic glory, and the corporation friendly giveaways like Energy Bill which was a huge payoff to the Energy companies early in the Bush Administration had no positive impact on the economy, although they did make the energy companies insanely richer.

In this ten year time frame, tax cuts were tried... often. The results are where we are.

So, why do you think tax cuts would be the largest, most important piece in solving this economic puzzle?

[Teller]

"The" answer? No.

A big part of the answer? Yes.

Fundamental conservative philosophy dictates that you put the money back in the hands of the people; that they know better what to do with it than the government does.

Look at it this way, Burg. Say you have $25 in your in wallet, and your a week away from payday. You're only going to buy the absolute essentials, in an effort to stretch that little bit of cash as far as it will go.

But say you have $75 for that same week. Then, all of a sudden, stimulating the beer industry one evening, or even supporting single moms at the local strip club becomes an option.

The simple fact is that the more money you have, the more money you'll spend. And the more we all collectively spend, the faster the economy turns around.

*Disclaimer: I know the sum total of ZERO about economics. Maybe less.*

[DieselPwr44]

Do you really think tax cuts are the answer or a really big part of the answer? I don't. The Bush stimulus check/tax refund didn't change the country, 8 years of tax cuts to big business and the wealthy, upper middle class didn't prevent this or create a situation of economic glory, and the corporation friendly giveaways like Energy Bill which was a huge payoff to the Energy companies early in the Bush Administration had no positive impact on the economy, although they did make the energy companies insanely richer.

In this ten year time frame, tax cuts were tried... often. The results are where we are.

So, why do you think tax cuts would be the largest, most important piece in solving this economic puzzle?

Tax cuts combined with cuts in Federal spending work.

No one has the guts to cut spending though.

If a senator or congressman receive a bill that calls for a 10% increase in funding and they suggest let's only raise it 5%, one side of the aisle goes immediately to the camera to tell everyone how "that guy is gutting program X!!" even though that bill actually increases funding.

How in the hell do you deal with BS like that?

[DaveMason]

Thanks Burgold--I don't think we have ever had a thread on this.

You point out Bush's tax rebate/stimulus thing. You are right--it was not very effective. When the economy is tanking and you get a one-time refund, what are you going to do with it? Most people would just put it away in savings. Why spend all of your money on cheeseburgers and new cars when you're not sure if you'll have a job in two years?

I think the government should reduce tax rates in the long term. Make permanent tax cuts. Convince the average American that things are going to be ok and that they will get to keep more of THEIR money. Don't just hand them 600 bucks and say "whelp, good luck..."

[AsburySkinsFan]

Tax cuts alone...not a chance.

Conservative philosophy says give tax cuts so that people have their money back, but then they change it by saying "give tax cuts to business who will employ people" but the only problem is that they don't employ more people with those tax cuts, they just use them for more investments to make themselves richer while maintaining their workforces and increasing production in their plants or out sourcing jobs. At this point in the game tax cuts will not provide the economic influx needed to turn the corner. We need jobs created and layoffs stopped, tax cuts will do neither.

[Burgold]

"The" answer? No.

Look at it this way, Burg. Say you have $25 in your in wallet, and your a week away from payday. You're only going to buy the absolute essentials, in an effort to stretch that little bit of cash as far as it will go.

But say you have $75 for that same week. Then, all of a sudden, stimulating the beer industry one evening, or even supporting single moms at the local strip club becomes an option.

*Disclaimer: I know the sum total of ZERO about economics. Maybe less.*

Except when fear is added to the equation. Last time, we got that little stimulus tax return, many Americans hid it under the mattress. When the banks got their bailout, they didn't start loaning, they consolidated and effectively hid it under the mattress.

The other thing is that things very quickly become normal. I got used to 4.00 gas pretty quickly and my original outrage and frustration became less each day. Today, sub 2.00 gas no longer seems cheap. Therefore, that money that I save on gas today no longer feels like a savings and is not treated as found money.

Tax cuts combined with cuts in Federal spending work.

No one has the guts to cut spending though.

How in the hell do you deal with BS like that?

Agreed. If you cut taxes and spending, then it might be beneficial. Government almost never cuts spending. Not Republicans. Not Democrats. So, tax cuts combined with spending increases (the Reagan/Bush model) is what we're left with or holding tax/increasing tax rates as we increase spending... I don't really like it either.

[Thiebear]

Tax cuts are nice as they allow you to have extra money for many months to come.

Getting 1000.00 dollars one time = hoarding because next month it won't be there but the problem will.

But no Tax cuts are not the solution.

The solution is:

Find out what the problem is.

Identify all of the most likely outcomes

Identify the cost of the said outcomes

and try and fix what we can while allowing others to either fix themselves or absorb the hits based on the cost.

We should not spend 5 trillion dollars over 5 years on a 900 billion dollar problem.

That fails in every risk analysis and basic fundamentals in troubleshooting problems i've ever seen.

It also has bugged the crap outta me that there is no real detail. Just, lets spend our way outta this...

The original plan: Lets give the banks and financial institutions 700 billion dollars so they will loosen up on the lending and mortgages and get us back to zero. We gave them 350 billion up front to see how they would do, and they didn't do any of it. Money was being wasted and it fell apart.

Now were going to spend 900 billion in another direction because we want to create jobs.. We've already stated it's not going to work this year, but its better than nothing.

OHHH And that tax cuts got us into this which is a blatant lie. Clinton and Bush and Frank and Gorrelick and such got us into this by dictating people that could not possibly pay for a house got one. Then we had Fannie and Freddie accepting loans based on electric bills, over time as it grew and the arms came in and credit cards were maxed and the economy was coming down anyway it just hit perfect storm.. (thats not tax cuts) thats government interfering in the rules that have worked forever to gain political points.

/rant

and yes i was against the first Bush failed 350billion boondoggle.

[alexey]

A little while ago we had a lively discussion about it here:

http://www.extremeskins.com/showthread.php?t=279304

[Burgold]

OHHH And that tax cuts got us into this which is a blatant lie.

Haven't we heard forever about the Bush tax cuts? Wasn't that a large part of his economic program? Wasn't he the first President to cut taxes while conducting a war? Don't you think the wartime spending and tax cuts had a little to do with it?

We've had eight years of individual and corporate tax cutting. It hasn't stimulated job growth. It hasn't stimulated economic growth. In the end, it never even generated stock market growth.

The tax cuts combined with massive overspending, combined with de-regulation, combined with individual and corporate short term thinking and incredibly self-sighted greed created this mess.

[Redskins Diehard]

What is the question?

[TMK9973]

As opposed to looking at tax cuts as a general plan and does the idea work, can we look at JUST the situation we are in today.

For the 1st time in 20 years - Savings have gone up. People are putting money away because they are scared. So general tax cuts would do very little. People will just put that money away.

Companies are the same thing - Companies are cutting expenses and laying people off, EVEN if they are still making a profit because they are scared about what will happen. They are putting any extra money they have away so they can survive.

TARGETED tax cuts can work (Tax credit for buying a house, for hiring more employees, etc...) but not just blanket tax cuts.

Heard a Republican say something so stupid the other day. Don't remember who, but he said "They want to spend all this money in the hope that it will trickle down to the people who need it..... It doesn't work that way...."

And yet for 20 of the last 28 years they have argued that trickle down economics when it comes to taxes does work!?

[Cooked Crack]

Anyone proposing a tax cut only plan is playing Russian roulette with our economy. I'm much more in favor of spending with some tax cuts. I think the percentage of tax cuts in the bill (close to 40%) needs to be cut down.

[Thiebear]

Haven't we heard forever about the Bush tax cuts? Wasn't that a large part of his economic program? Wasn't he the first President to cut taxes while conducting a war? Don't you think the wartime spending and tax cuts had a little to do with it?

We've had eight years of individual and corporate tax cutting. It hasn't stimulated job growth. It hasn't stimulated economic growth. In the end, it never even generated stock market growth.

The tax cuts combined with massive overspending, combined with de-regulation, combined with individual and corporate short term thinking and incredibly self-sighted greed created this mess.

Ahh so now you hint at it in the last sentence Good of you to come around from your Headlines: Tax cuts caused this in 41 threads to a D3page article on

The tax cuts combined with massive overspending, combined with de-regulation, combined with individual and corporate short term thinking and incredibly self-sighted greed created this mess.

Now, if you take away de-regulation do you think were still losing housing at the same rate? as it takes away the short term indiv and self sighted greed ..

Now, If you take away the massive overspending do you think it would make a difference on the rest?

Now if you take away the tax cuts does it make a difference to the rest?

The deregulation and fannie/freddie to (ME) seem to be the lynch pin in the grenade.

The rest make it incredibly difficult to FIX it, but we'd still be fixing it if we had 2 trillion lying around with nothing to do.

[Burgold]

Oh, I never would try to make someone think that the problem originated from one source, but I wanted to focus on the tax cut part of the problem... because we have a huge thread going on the spending side.

However, the major way these problems have been addressed recently have been through tax cuts. Eight years of tax cuts to both individuals and businesses. Was it an effective strategy? Did it work and are we happy where we are?

I agree that the origin is multivariate. The solution will probably need to be as well, but I suspect tax cutting is not a huge part of the answer.

[jnhay]

"The" answer? No.

A big part of the answer? Yes.

Fundamental conservative philosophy dictates that you put the money back in the hands of the people; that they know better what to do with it than the government does.

Look at it this way, Burg. Say you have $25 in your in wallet, and your a week away from payday. You're only going to buy the absolute essentials, in an effort to stretch that little bit of cash as far as it will go.

But say you have $75 for that same week. Then, all of a sudden, stimulating the beer industry one evening, or even supporting single moms at the local strip club becomes an option.

The simple fact is that the more money you have, the more money you'll spend. And the more we all collectively spend, the faster the economy turns around.

*Disclaimer: I know the sum total of ZERO about economics. Maybe less.*

The more money you have, the more money you save though. When the government spends, that money is actually getting circulated. I think the argument needs to be "Is the spending going to the right places."

[TimmySmith]

The current state of the economy certainly has little to do with tax cuts. I believe it is mostly a result of the relaxed rules of lending. Tax cuts enable goods to be sold cheaper, and keeps more of your money in your pocket. They need to be coupled with tighter rein on credit.

[D'KanSkinFan]

Tax cuts alone...not a chance.

Conservative philosophy says give tax cuts so that people have their money back, but then they change it by saying "give tax cuts to business who will employ people" but the only problem is that they don't employ more people with those tax cuts, they just use them for more investments to make themselves richer while maintaining their workforces and increasing production in their plants or out sourcing jobs. At this point in the game tax cuts will not provide the economic influx needed to turn the corner. We need jobs created and layoffs stopped, tax cuts will do neither.

Your philosophy is flawed here ASF~ I reference the growth of WalMart and their buy America program after the last ression. Granted, people they employed did not get rich~ but they had employment, had health insurance and weren't on welfare and food stamps and unemployment numbers dropped. These same people that received tax cut from WalMart employment purchased with their employer with their decrease in taxes and the "small business" at WalMart hired more employees within the community they set their stores up in with their decrease in small business tax. Unfortunately, with a growing retail industry comes the law suits and corporate greed~ but the philosophy of Sam Walton created this "small retail" industry to grow~

http://walmartstores.com/AboutUs/297.aspx

So you support spending on the government pork that takes care of the "rich"? This type of thinking is what has changed the customer service philosophy of WalMart that Sam Walton founded and believed in to the day he passed.

Take care of your customer and offer them the best customer service and the customer will take care of you.

I don't think our customer service in the Congress is taking care of us, do you "really" believe they are? I don't.

[War Paint]

Tax cuts work. The government has to cut pork spending though for it to work. When people have more money to spend, they will spend it. However, the one time tax rebate does not work. People save that money.

I seriously do not understand why people want the government to have so much power.

[alexey]

Tax cuts work. The government has to cut pork spending though for it to work.

How does government pork spending prevent tax cuts from working?

[jnhay]

Tax cuts work. The government has to cut pork spending though for it to work. When people have more money to spend, they will spend it. However, the one time tax rebate does not work. People save that money.

I seriously do not understand why people want the government to have so much power.

It's ultimately our money isn't it? Also, the power isn't permanent is it?

How does government pork spending prevent tax cuts from working?

I'm not sure, but maybe people's expectations of irresponsible spending lead them to save more money? I don't think a lot of people think that way though, but it's probably bad for the deficit.

[Burgold]

Tax cuts work.

Did they over the last eight years?

The government has to cut pork spending though for it to work.

Do you imagine this will happen under the Dems if it never happened under the repubs or is this an academic argument?

When people have more money to spend, they will spend it. However, the one time tax rebate does not work. People save that money.

I don't think so. If you give me a raise. The first time I see that bigger check, I feel richer. By the third check that ammount of money becomes the norm. When people feel comfortable and confident they will spend. Otherwise, they don't.

I seriously do not understand why people want the government to have so much power.

Because the financials and other corporations left to their own devices have proved greedy, short sighted, unscrupulous bums who'll wreck the future to make a few bucks now. Balance is needed. Too much government is bad. Too much lassiez faire is bad as well.

[daveakl]

You keep harping on tax cuts working or not over the last 8 years, but you can't look at them in a vacuum.

Did they over the last eight years?

It depends on what you are asking here. Saying tax cuts didn’t work because look at the economy now and not taking into account any other factors that led to this mess complicates the issue. One could argue that we didn’t cut taxes enough and spent to much thus spending is the problem and not tax cuts.

Do imagine this will happen under the Dems if it never happened under the repubs or is this an academic argument?

I doubt it will, and I doubt it will under the repubs. We need to clean house to be honest. And while we are at it get rid of a ton of entitlement programs (SS, medicare, Medicaid, welfare)

I don't think so. If you give me a raise. The first time I see that bigger check, I feel richer. By the third check that ammount of money becomes the norm. WHhen people feel comfortable and confident they will spend. Otherwise, they don't.

I think that’s the point. When the larger amount of money feels like the norm you feel more comfortable spending a little more each paycheck. When it’s a one time thing you feel it may not happen again so you keep it.

[Barney B]

Tax cuts don't work. They haven't worked in practice, and they don't work in theory (or at least they don't work given present tax rates).

But please don't take my word for it. Listen to conservative economists who've actually crunched the numbers:

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/14/AR2006051400806.html

...N. Gregory Mankiw of Harvard, a proponent of tax cuts who chaired the Council of Economic Advisers in the Bush White House. Mankiw is a top-notch economist hired by Bush and Cheney to advise them. And last year he published a paper on how far tax cuts pay for themselves, reporting enthusiastically that this self-financing effect is "surprisingly large."

How large, exactly? Mankiw reckons that over the long run (the long run being generous to his argument), cuts on capital taxes generate enough extra growth to pay for half of the lost revenue...

...they should at least have listened to Douglas Holtz-Eakin, another conservative economist who worked in the Bush White House and who went on to run the Congressional Budget Office.

In a study published under Holtz-Eakin's direction last December, the CBO estimated the extent to which a 10 percent reduction in personal taxes might pay for itself. The conclusions confirm that the free-lunch mantra is just plain wrong. On the most optimistic assumptions it could muster, the CBO found that tax cuts would stimulate enough economic growth to replace 22 percent of lost revenue in the first five years and 32 percent in the second five. On pessimistic assumptions, the growth effects of tax cuts did nothing to offset revenue loss...

Any national politician who is unaware of these studies (or who pretends to be) deserves to be held accountable by the voters, wouldn't you say?

[chipwhich]

I prefer tax and spend and unbalanced budgets and pork line items. I mean why cut taxes, balance budgets, manage spending. It's not the american way. Bring on the debt.

[Thiebear]

]Because the financials and other corporations left to their own devices have proved greedy, short sighted, unscrupulous bums who'll wreck the future to make a few bucks now. Balance is needed. Too much government is bad. Too much lassiez faire is bad as well. [/color]

Actually they were just following the example of their Parent. Fannie and Freddie who were being run by the government and following their orders.

Did you expect Bank of America to keep to the 720 with 10% down when Fannie and Freddie were going with no credit score and a grilled cheese sandwich?