The Ryan budget plan, Part III: More trickle-down

In “The Path to Prosperity,” House Budget Chairman Paul Ryan makes it clear that tax increases will not be part of the solution to the nation’s fiscal problems. He intends to address the problem solely through budget cuts, most of them focused on programs affecting the elderly, the sick and the poor. After all, that’s where the money is in the federal budget, especially when you exempt the Pentagon from spending cuts, as Ryan proposes to do.

“The U.S. government is not running sustained deficits because Americans are taxed too little,” the plan states. “The government is running deficits because it spends too much.”

However, that sentiment doesn’t mean that Ryan intends to leave the tax code untouched. Among other things, he proposes to reduce the number of tax brackets from the current six, which would make the income tax flatter and less progressive. He also intends to lower the top tax bracket on individuals and corporations from the current 35 percent to 25 percent.

Inevitably, such changes would have the effect of lowering taxes on corporations and the wealthy, while shifting more of the burden to working and middle-class Americans. When combined with the payroll tax, which Ryan concedes is a surtax on earned income below $106,000, a large number of working class and middle-class Americans would probably end up paying a significantly higher percentage of their income in federal taxes than their wealthier counterparts.

I say “probably” because as far as I can tell, Ryan hasn’t released specifics of his tax reform proposal to the public. He did, however, provide considerable detail to the Heritage Foundation’s Center for Data Analysis to allow it to project the economic impact of the proposed changes. So let’s see what they have to say.

Overall, Heritage projects, the Ryan budget proposal would produce an outcome that frankly would be nothing short of miraculous, including an increase in economic output of $1.5 trillion over the next ten years. That in turn would help drive down the federal deficit considerably.

But how real is it? Unlike projections by the nonpartisan Congressional Budget Office, the Heritage analysis relies on what is called “dynamic scoring.” In other words, it programs its computer models to assume that tax cuts on the wealthy and corporations produce enormous economic growth.

For example, let’s take a look at what dynamic scoring does to the projected unemployment rate. The CBO projects that the unemployment rate next year will average 8.4 percent. The Heritage Foundation, using dynamic scoring, projects that if the Ryan plan passes, unemployment would plummet next year to 6.4 percent.

By 2015, the CBO projects, unemployment will be down to 5.9 percent. Under the Ryan plan, Heritage projects it will fall to a remarkable 4.0 percent, declining still further to 2.8 percent in 2021.

2.8 percent?

Who believes that? Nobody believes that. In fact, those projections are so embarrassingly absurd that Heritage itself has gone back into its study and removed them. They were there in the version I downloaded yesterday; they are gone from the version available today.

In this case, Heritage can make ridiculous claims for the economic benefits of Ryan’s plan — claims that help account for the supposed deficit reduction — without fear of those claims being tested against reality. Nobody believes that the plan will ever be adopted.

Ten years ago, however, the Heritage Foundation’s Center for Data Analysis ran similar projections for President Bush’s plan to cut taxes, using the same computer model it used to analyze Ryan’s plan.

Heritage claimed that if the Bush tax cuts were approved, the economy would grow so quickly that by 2010, the entire federal debt would effectively be eliminated.

Not only that, “The plan would save the entire Social Security surplus and increase personal savings while the federal government accumulated $1.8 trillion in uncommitted funds from FY 2008 to FY 2011, revenue that could be used to reform the Social Security and Medicare systems and reduce the payroll tax,” Heritage claimed.

Well ….

– Jay Bookman

970 comments Add your comment

stands for decibels

April 6th, 2011
3:36 pm

They were there in the version I downloaded yesterday; they are gone from the version available today.

yeah, Krugthulu did some pimp-slapping a bit earlier today on this as well.

http://krugman.blogs.nytimes.com/2011/04/06/memory-hole-alert/

Joe Cool

April 6th, 2011
3:36 pm

Joe Cool

April 6th, 2011
3:37 pm

okay…2nd..lol

Joe Cool

April 6th, 2011
3:39 pm

“He also intends to lower the top tax bracket on individuals and corporations from the current 35 percent to 25 percent.”

Why not drop it to 15, so we can double up on the trickle down!

Normal

April 6th, 2011
3:41 pm

“I guess a bad plan is better than no plan at all”….G. Custer, just before he saw all those angry Indians… :)

Doggone/GA

April 6th, 2011
3:41 pm

Let’s compare his proposal to a real-world budget: household income. It just makes SO much sense…right?…that if you are in deep debt you go to your bos and say “pay me LESS money”

NOT

WOW

April 6th, 2011
3:44 pm

I’m I allowed back on now?

Libertarian

April 6th, 2011
3:44 pm

I don’t have time to read Ryan’s whole proposal but I agree that I don’t understand how you can lower the top tax rate to 25% and have no cuts to defense but still manage to reduce/eliminate the deficit.

Rational

April 6th, 2011
3:47 pm

So, in your opinion, addressed to anyone that wants to put forth a rational and reasoned answer, would raising taxes on those evil rich people do anything to wipe out the deficit? Or would it just slow its growth? Also, lets remember that those evil rich people that you’re wanting to tax more are probably the very people that you work for. Remembering that makes you wonder a few things like if the government takes more of my boss’s money, is he going to take a cut in his salary, or is he going to expect me to, or possibly fire me? Or, if they raise it too much is he going to just decide that it is more beneficial for him to close his company entirely and leave the country, retire, or work for someone else? So, will raising taxes on the rich actually do anything to help the deficit or the country? Or is it just something that people that are envious of the wealthy like to propose as a way to make themselves feel better?

WOW

April 6th, 2011
3:49 pm

“By 2015, the CBO projects, unemployment will be down to 5.9 percent. ”

CBO Can’t Conceive of Any Way’ Economy Can Continue Past 2037

House Budget Chairman Congressman Paul Ryan (R-Wis.) said President Barack Obama’s budget strategy is to “do nothing, punt, duck, kick the can down the road” while the debt remains on track to eventually hit 800 percent of GDP. Ryan added that the CBO is saying it “can’t conceive of any way” that the economy can continue past 2037 given its current trajectory.

Two conflicting arguments, Jay.

“Heritage can make ridiculous claims for the economic benefits of Ryan’s plan”

How about Obama’s ridiculous claims that he would roll back the Bush Tax Cuts?

Peadawg

April 6th, 2011
3:49 pm

Oh goody!!!!! More Liberal Whine With No Solutions Part III. Love it, Jay! Love it! Are we going to be blessed with a Part IV? Will you keep going on like Scream, Saw, Halloween, and other movies that had too many sequels?

stands for decibels

April 6th, 2011
3:50 pm

from that Heritage report, linked above, and here:

http://origin.heritage.org/Research/Reports/2001/04/The-Economic-Impact-of-President-Bushs-Tax-Relief-Plan

As Chart 1 shows, over 1.6 million more Americans would be working at the end of FY 2011, compared with the CBO baseline forecast. Moreover, the unemployment rate would average just 4.7 percent instead of 4.9 percent from FY 2002 to FY 2011.

[...]

disposable personal income for an average family of four (adjusted for inflation) would increase by $4,544 (see Chart 2).

Doggone/GA

April 6th, 2011
3:50 pm

“those evil rich people”

when you base your conclusions (which are the basis of your questions) on a false assertion…it negates your whole argument and makes your question unanswerable. Wanna try again?

Peadawg

April 6th, 2011
3:51 pm

Let’s compare his proposal to a real-world budget: household income. It just makes SO much sense…right?…that if you are in deep debt you go to your significant other and say “let’s spend MORE money”

NOT

Fixed your typo, Doggone.

Rational

April 6th, 2011
3:52 pm

Libertarian – lowering taxes on those with higher incomes, which includes a large amount of small business owners in this country, typically produces more wealth for them to spread around. Think about it, they are the ones that are likely to buy that house at the lake or the beach, or remodel their house, or hire that neighbor of yours that is unemployed (I know nothing about whether you have neighbors that are unemployed or not, I’m just using that as an example). So, if he hires one or two people that weren’t working before, while his taxes may have gone down, theirs went up. By the same token, if he decides to remodel his house, the architects and contractors that work on it make more money and the cycle continues and expands. I know that is overly simplified but I think it makes sense, please correct me if I’m wrong..

Libertarian

April 6th, 2011
3:52 pm

Rational

Raising taxes on the rich will not help. Because I believe that no matter how much money we send to Washington they will always spend more than we send.

Doggone/GA

April 6th, 2011
3:53 pm

“Fixed your typo, Doggone”

Ultimate fail. Ryan is not proposing to SPEND more money. He is proposing to CUT income.

Keep Up the Good Fight!

April 6th, 2011
3:54 pm

Heritage claimed that if the Bush tax cuts were approved, the economy would grow so quickly that by 2010, the entire federal debt would effectively be eliminated.

Guess that did not work out as well as they hoped…but then again, they can hope that today’ sun means tomorrow we all wake up with yards of moon pies.

Rational

April 6th, 2011
3:54 pm

Ok, remove “evil rich people” (just trying to keep it in context with the way they are typically referred to and portrayed by the people I was addressing the question to) and replace it with “those that earn more.” Make it easier to answer, cause it doesn’t change the question at all.

Granny Godzilla

April 6th, 2011
3:54 pm

TPM is reporting:

“Heritage: Our Wildly Optimistic Budget Analysis May Be a Tad Off”

Ya’ think?

Peadawg

April 6th, 2011
3:55 pm

“He is proposing to CUT income.” – Yup, while CUTTING SPENDING. Unlike Obama who would rather bomb another country. Ultimate fail right back at ya sweety.

Libertarian

April 6th, 2011
3:55 pm

Rational

You don’t have to tell me about small business owners…I am one. And I would love to have my tax rate lowered to 25%. However…all I was saying is that without knowing about other cuts Ryan is proposing, I don’t see how lowering taxes and keeping Defense the same will lower the deficit.

Doggone/GA

April 6th, 2011
3:56 pm

“lowering taxes on those with higher incomes, which includes a large amount of small business owners in this country, typically produces more wealth for them to spread around. ”

We have HAD those lower taxes for going on 12 years now. WHERE are those jobs? Last time I looked they WENT AWAY and we have near record unemployment and are still climbing of the worst recession in 70 years.

Yep, tax cuts for the wealthy worked REALLY WELL…didn’t they?

NOT

Peadawg

April 6th, 2011
3:56 pm

“keeping Defense the same will lower the deficit.” – That’s one thing I wish

Peadawg

April 6th, 2011
3:56 pm

BOTH PARTIES would do.

Hit enter too quick….

jt

April 6th, 2011
3:57 pm

If Paul “Medicare Part D TARP baby”Ryan truly HAS exempted the Pentagon from any cuts,

then he has no credibility. Nor does anyone that supports him or his silly plan.
Furthermore, no where in the plan mentions an “opt out” clause, therefore Paul Ryan is a stinking statist with an unhealthy looking pallor with greasy looking hair.(typical politician.)

There is only ONE Paul who stands for liberty…..and has the record to prove it.

Rational

April 6th, 2011
3:57 pm

Libertarian, that is very true. But even if they continued to spend at today’s level, with the $1.66 trillion deficit they are running each fiscal year currently, taxing the people in the top bracket at 100% would only cut the deficit to $1.2 trillion (roughly), and all the people being taxed at 100% would either pay themselves less or quit working (at least in this country) all together.

Doggone/GA

April 6th, 2011
3:58 pm

“He is proposing to CUT income.” – Yup, while CUTTING SPENDING”

If you are ALREADY in deep debt, cutting spending AND cutting income is a zero/zero sum game. You don’t be increasing your debt, but neither will you be able to pay it off any faster.

Bosch

April 6th, 2011
4:01 pm

“taxing the people in the top bracket at 100% would only cut the deficit to $1.2 trillion (roughly), and all the people being taxed at 100% would either pay themselves less or quit working (at least in this country) all together.”

This, by someone calling themselves “Rational?”

Keep Up the Good Fight!

April 6th, 2011
4:01 pm

Doggone — especially when some of the spending cuts are really only transfers of spending to the states,

Rational

April 6th, 2011
4:01 pm

Libertarian, I completely agree. I’m not a small business owner YET, but I’m hoping to be one in the next 10 years or so. I fully intend to be disgustingly wealthy and retire early so that I can enjoy my money with my wife all over the world. But I digress, Ryan’s plan needs more information/details. I think it is a good start, and I also think that defense spending needs to be cut, but it needs more information.

Doggone – I believe if you look back at the details about what caused the recession we’re currently in, tax cuts had absolutely nothing to do with it. It was risky mortgage lending and inflated housing prices. But not the tax cuts, so your argument kinda doesn’t work that well.

stands for decibels

April 6th, 2011
4:03 pm

I believe if you look back at the details about what caused the recession we’re currently in, tax cuts had absolutely nothing to do with it. It was risky mortgage lending and inflated housing prices.

heh.

Bosch

April 6th, 2011
4:03 pm

” tax cuts had absolutely nothing to do with it. It was risky mortgage lending and inflated housing prices. But not the tax cuts, so your argument kinda doesn’t work that well.”

This, by someone calling themselves “Rational?”

WOW #3

April 6th, 2011
4:03 pm

Hey, look it’s Jimmy Carter!

Obama says little short-term help for gas prices
Obama pushes clean energy, says he can do little to affect gas prices in the short term

Pitching the promise of energy independence, President Barack Obama cautioned Wednesday that it’s going to be tough to transition from America’s oil-dependent economy and acknowledged there’s little he can do to lower gas prices over the short term.

“I’m just going to be honest with you. There’s not much we can do next week or two weeks from now,” the president told workers at a wind turbine plant. It’s a theme Obama’s struck before as he tries to show voters he’s attuned to a top economic concern with gas prices pushing toward $4 a gallon.

Source: Yahoo

Redneck Convert (R---and proud of it)

April 6th, 2011
4:03 pm

Well, I beleive in miracles like turning water into wine. But I was born at night, just not last night.

All I got to say about this Ryan plan is if I was old, sick, and poor, I’d be doing some limbering-up exercises so I could grab my ankles with both hands. And I’d be hoping for a real big jump in Vaseline stock ’cause that would indicate lots of sales.

And if I was selling yachts, Mercedes, Rolls Royce, and huge houses, I’d be getting a jump on looking for alot of things to buy when the money starts rolling in. Prices are bound to go up later, what with all that money going to rich people.

Libertarian

April 6th, 2011
4:03 pm

Doggone

The jobs went away because of the housing market bubble bust. You can argue all day long about who’s fault that is. Jobs also went away because of outsourcing. Companies outsource because of 1. the highest corporate tax rate in the world and 2. Unions 3. insane labor laws like FMLA 4. American workers unwillingness to do certain jobs 5. Americans wanting to buy cheap crap from Wal-Mart instead of paying more for American made goods…taxing the “rich” less did not eliminate jobs.

Rational

April 6th, 2011
4:04 pm

Bosch – obviously that was a bit of an exaggeration because I have to hope and believe that the government would never be so irrational as to think that a 100% tax bracket would be a good thing, but the numbers back me up. I can’t remember the exact figure, but taxing the people that are in the 35% tax bracket now at 100% would only increase government by a little over $400 billion. And I don’t think anyone would argue that if you take people’s incentive to work away from them that they will quit working.

Doggone/GA

April 6th, 2011
4:04 pm

“especially when some of the spending cuts are really only transfers of spending to the states”

Yes, that too. I always come to these discussions from the point of view that – ultimately – no matter how you sugarcoat it, it’s the retail buyer who pays the taxes in the end. So moving a tax from one place to another is not “cutting” anything, because – AS a retail consumer – I still have to pay my share of it. It just goes into a different pocket.

Paul Ryan Monster

April 6th, 2011
4:04 pm

Gobble gobble.

Moderate Line

April 6th, 2011
4:05 pm

You have to be a “believer”. My biggest problem with both parties is they are not honest with the voters. The Republicans typically cut taxes without cutting spending and the Democrats create programs without increasing taxes which is why we have these deficits. The biggest problem is medicare which will become bigger and bigger if no one does anything about it.
Consider an average-wage two-earner couple together earning $89,000 a year. Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes during their careers. But they can expect to receive medical services – including prescriptions and hospital care – worth $355,000, or about three times what they put in.

The same hypothetical couple retiring in 2011 will have paid $614,000 in Social Security taxes, and can expect to collect $555,000 in benefits. They will have paid about 10 percent more into the system than they are likely to get back.

A single woman who retired in 1980, after earning average wages throughout her career, could expect to receive medical care worth about $74,800 over the rest of her lifetime. A comparable woman retiring in 2010 can expect services worth $181,000. Those numbers are in 2010 dollars, adjusted for inflation so they can be compared directly.

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/02/AR2011010203213.html

Rational

April 6th, 2011
4:06 pm

Bosch – you really want to argue that the Bush era tax cuts put us into the recession?

TaxPayer

April 6th, 2011
4:06 pm

Are those guys at the Heritage Foundation the same ones using their computer analyses to tell us that global warming is not a problem. Well, the Heritage Foundation is just another tentacle of the Koch empire so how could one expect anything else from them.

Doggone/GA

April 6th, 2011
4:06 pm

“tax cuts had absolutely nothing to do with it”

And I didn’t say they did. I’m addressing the argument that tax cuts at the upper levels create jobs. If that were true, the economic meltdown would not have cause FEWER jobs, because “lower taxes create jobs”

They don’t

Bosch

April 6th, 2011
4:07 pm

“Bosch – you really want to argue that the Bush era tax cuts put us into the recession?”

Assume much?

Harry Callahan

April 6th, 2011
4:07 pm

“In “The Path to Prosperity,” House Budget Chairman Paul Ryan makes it clear that tax increases will not be part of the solution to the nation’s fiscal problems.”

Maybe the Democrats shouldn’t have extended the Bush tax cuts if they really wanted tax increases.

Jay

April 6th, 2011
4:09 pm

Amvet, be the change you want to see. “Cretins” gets us nowhere, your own emotional satisfaction aside.

Rational

April 6th, 2011
4:10 pm

If the economy were stable right now, I fully believe that the jobs would be there. So many people rely, or have relied in the past decade or two, on the construction and housing market for their jobs. If the housing market is almost completely gone, where do those people work? Lower taxes alone might not create all the jobs we need created, but raising the taxes would go along way towards destroying the gains we have begun making recently.

jm

April 6th, 2011
4:10 pm

Jay, all economists agree that higher taxes lead to lower economic growth, and lower taxes lead to higher economic growth. Also summed up in the Debt to GDP ratio.

Apparently liberals haven’t gotten the memo.

Doggone/GA

April 6th, 2011
4:11 pm

“And I don’t think anyone would argue that if you take people’s incentive to work away from them that they will quit working”

Did they quit working in the ’50’s when the highest tax bracket was (I think this is correct) 90%?

The saying “a rising tide raises all boats” is correct. The problem is, that the tide is not IN THE BOATS, and we have been busy over the last 30 years or so putting more and more water in the biggest boats and that has LOWERED the tide for everyone BUT those in the biggest boats.

Tides come from the bottom up, not the top down.

Rational

April 6th, 2011
4:11 pm

Bosch – no, just responding to your criticism of my earlier comment.

Zusmann

April 6th, 2011
4:12 pm

Is there anyone here — Republican, Democrat, liberal, conservative, moderate, Libertarian, Green Party, Tea Party — that honestly believes the money allocated for defense is spent so perfectly and efficiently that the defense budget should be exempt from budget cuts?

jm

April 6th, 2011
4:12 pm

Doggone 4:11 – in the 50’s the only reasonable place to do business was the US. Not so anymore. Traveled outside your home, or the US lately?

Moderate Line

April 6th, 2011
4:13 pm

I am going to give credit to Ryan. At least he is being honest about the current state of affairs. He is showing a budget which does exactly what the Republicans want. 1) He is not raising taxes and he is not cutting defense. Whether you agree with the plan or not where is the Democratic plan? Other than eventually ridding ourselves of Bush tax cuts what do we have? How are they going to rid ourselves of the deficit?

Harry Callahan

April 6th, 2011
4:14 pm

Liberals are SOOOOOOOOOOO easily duped. Democrats extend the Bush tax cuts all by themselves, then feign outrage that Republicans (gasp!) aren’t planning to raise taxes. And their voters buy it…unbelievable!!!!

jm

April 6th, 2011
4:14 pm

Zusmann – the Ryan plan cuts defense spending versus Obama’s plan by $1 Trillion over 10 years. What was that?

Doggone/GA

April 6th, 2011
4:14 pm

“Lower taxes alone might not create all the jobs we need created, but raising the taxes would go along way towards destroying the gains we have begun making recently.”

Not neccessarily. The money would not just disappear. It would be spent back into the economy by the government. Keep this in mind: government will step in when the private sector fails to

If the private sector was creating jobs, government wouldn’t have to. The private sector is sitting on record profits right now, and NOT creating jobs. They won’t, government will have to.

Jimmy62

April 6th, 2011
4:14 pm

Ryan’s plan kinda sucks, but it’s better than the Democrats plan, which consists of… nothing?

Rational

April 6th, 2011
4:14 pm

Doggone – to be honest, I wasn’t around in the 50s, and neither were my parents, so I’m going to have to take your word for it. I’m just not seeing how lowering taxes on people making – just to throw a number out there – $30,000 a year will help spur job growth. I’m not saying it shouldn’t be done, I just don’t see how it helps job growth. What jobs are they creating?

Del

April 6th, 2011
4:14 pm

Diverting attention from the party of irresponsibility won’t change anything because the fact is Democrats can’t even agree among themselves what to counteroffer the Republican leadership, so as to prevent a government shutdown. Demagoguery by saying that the elderly, sick and poor will suffer under Ryan’s budget plan won’t work because it’s pure bunk. Jay isn’t faring too well on these Ryan attacks.

jconservative

April 6th, 2011
4:14 pm

Ryan is dead wrong when he leaves Defense out of the equation. Defense is the first thing that needs to be righted. The entitlements are not so critical that they will fail tomorrow. Defense is critical today.

We need to re-examine the role of the US in the world. Is the US to always be the World’s Nanny? Or is it time for the US to allow other countries to take responsibility for their own welfare? Has the world become so dependent on US Welfare that it no longer even pretends to take care of itself?

We need to change “Welfare to the World” as we know it. It needs to end. Today!

If the Arab League wants to protect fellow Muslims in Libya, let the Arab League send in planes, tanks and troops. If Europe wants to expand its welfare state to Libya, let them do it. But leave the US out of it.

We are spending over $2 Billion a week in Afghanistan. Trying to build a nation for people who have not had a nation in 5000 years and apparently would prefer not to have one today. But the Welfare King known as the US insist that we be allowed to create a nation for them.

Gimme a break!

jm

April 6th, 2011
4:15 pm

Moderate Line – the Dem plan, at best, is status quo. So much for the party of change.

Keep Up the Good Fight!

April 6th, 2011
4:15 pm

The numbers stand in stark contrast to analysis from the independent Congressional Budget Office, the gold standard used by both parties to determine the costs of legislation, which shows an increase in the deficit’s share of the economy in the plan’s first decade thanks to its massive tax cuts and then much tougher financial burdens for seniors in future decades as their health care benefits dwindle.

“CBO is what they use on the budget side — as a matter of procedure, any numbers from the Heritage Foundation or anybody else are essentially worthless,” Bruce Bartlett, a former Treasury official under President George H.W. Bush, said in an interview. “You can assert whatever you want to assert, but you can always find some half-baked tax think tank that will make up any number you feel like.”

“The idea he’d go to Heritage for that kind of support indicates he didn’t like what the CBO was going to tell him,” Stan Collender, a former budget aide for both the House and Senate, told TPM. “This is the same guy who said his budget has no gimmicks in it turning to the rosiest scenario he could get.”

Dean Baker, co-director of the Center for Economic and Policy Research, pointed to the projections in the Ryan plan that unemployment would decline by 2% in 2012 as fishy even on their own terms.

“I think they just misprogrammed it,” he told TPM. “Note that the unemployment rate falls by 2.1 percentage points relative to the baseline in 2012 even though they only created an extra 900,000 jobs. That doesn’t make any sense.”

By 2021, unemployment would hit 2.8% under their projection, well below the 5% – 6% range that the Federal Reserve considers the maximum desirable rate achievable without dangerous inflation.

The Heritage analysis bases its numbers on a “dynamic” model that it says takes into account the explosive growth unleashed by tax cuts. As a number of commentators have noted, it’s the same approach that led them to conclude the Bush tax cuts would reduce the deficit and create millions of new jobs — instead they exploded the deficit and unemployment worsened, eventually skyrocketing.

But the model they use, which they attribute to analyst IHS Global Insight, appears to be out there even according to its creators. Nigel Gault, the chief economist for Global Insight told the National Journal’s Tim Fernholz that he has no idea how Heritage came up with their conclusions.
_____________

From TPM article.

jt

April 6th, 2011
4:15 pm

I guess AmVet is still having problems with his new found Neo-conness.

Bookman seems to be coping well with being a neo-con.

Harry Callahan

April 6th, 2011
4:15 pm

“Is there anyone here — Republican, Democrat, liberal, conservative, moderate, Libertarian, Green Party, Tea Party — that honestly believes the money allocated for defense is spent so perfectly and efficiently that the defense budget should be exempt from budget cuts?”

I don’t see how you can cut it when you’re involved in three wars (two of which Obama vowed to get us out of, the other he vowed not to enter into) but maybe I’m missing something.

Doggone/GA

April 6th, 2011
4:15 pm

“all economists agree ”

All? Care to provide any proof of that?

jm

April 6th, 2011
4:16 pm

jconservative – Ryan slashes military spending dude.

Bosch

April 6th, 2011
4:16 pm

“So many people rely, or have relied in the past decade or two, on the construction and housing market for their jobs. If the housing market is almost completely gone, where do those people work? Lower taxes alone might not create all the jobs we need created, but raising the taxes would go along way towards destroying the gains we have begun making recently.”

Now, that’s a little more rational. :-)

I would argue that there is no one single magic bullet. As with most complex issues such as our economy, it is going to take some of everything.

As far as jobs, I’d say that just as many people who relied on “housing” for their income — the same amount if not more also relied on products that weren’t real or tangible, such as some of the magical voodoo Wall Street products that was basically like the game hot potato — the ones with the potatoes made tons of cash and the taxpayer was left without one and had to pay the price for this.

jm

April 6th, 2011
4:16 pm

Doggone 4:15 – go read an Econ 101 textbook.

Harry Callahan

April 6th, 2011
4:16 pm

” I’m just not seeing how lowering taxes on people making – just to throw a number out there – $30,000 a year will help spur job growth.”

People making $30K don’t pay federal income taxes. How would you go about lowering their taxes?

Jay

April 6th, 2011
4:17 pm

No, jm, they do not.

And economic growth is not the be-all and end-all of human ambition and responsibility.

Keep Up the Good Fight!

April 6th, 2011
4:17 pm

Off-Topic: It appears that Prosser has lost the race for Wis Sup Ct in an election that he was the hands down favorite only a few weeks ago….

The backlash to the basklash is in progress.

Harry Callahan

April 6th, 2011
4:17 pm

“Doggone 4:15 – go read an Econ 101 textbook.”

Economics is pretty deep. It’s for “Jeopardy” people. Doggone is more of a “Wheel of Fortune” person.

Harry Callahan

April 6th, 2011
4:18 pm

“And economic growth is not the be-all and end-all of human ambition and responsibility.”

If you want to maintain social spending at current levels, it better be.

Bosch

April 6th, 2011
4:19 pm

“What jobs are they creating?”

Oooooooo, Doggone, can I answer that? Because it’s something you and I agree on…..they create jobs by buying stuff. Demand.

jm

April 6th, 2011
4:19 pm

Jay 4:17 – what the laffer’s and stiglitz’s disagree about is how much tax revenue is produced by lower tax rates. That is legitimately up for debate, although, as you have pointed out and I have agreed with, lower taxes do not produce higher tax revenue (in our current tax range).

That said, LOWER TAXES PRODUCE HIGHER GROWTH. Of course, one does have to assume the government doesn’t spend itself into oblivion, such as it is doing now….

Doggone/GA

April 6th, 2011
4:19 pm

“in the 50’s the only reasonable place to do business was the US. Not so anymore”

No argument there…but keep this in mind also: by exporting jobs, yes, we have hurt our buying base here…but we have also helped increase the buying base overseas. It won’t take long for THOSE workers to want to make enough money to buy the things they and others are making. That means better wages. And as their living standards get better they will beging to want better benefits and job security.

What goes around comes around. It might be sooner than anyone realizes before businesses start seeing that it’s cheaper to produce their goods as close to their buying base as possible, which means jobs coming BACK here. I’ve already heard a report or two on the news about businesses questioning whether they really ARE saving much money by shipping raw materials overseas only to have re-import them as finished goods.

Harry Callahan

April 6th, 2011
4:20 pm

Has AmVet been a bad boy???

tick…tick…tick

Dave R.

April 6th, 2011
4:22 pm

“Heritage claimed that if the Bush tax cuts were approved, the economy would grow so quickly that by 2010, the entire federal debt would effectively be eliminated. ”

Little did Heritage know that they were dealing with a bunch of spend-craxed looney-tunes in the form of Congress.

Rational

April 6th, 2011
4:22 pm

I don’t agree that the taxpayer should have had to pay for the mistakes of those on Wall Street. Or in Detroit. If people wanted to buy a GM, then GM wouldn’t of had to be bailed out by the government. Same goes with Chrysler. But, I was generally just using housing as an example. I am one of those people that relies on housing for their income (which could be a reason I have so much time to spend on here some days), but have managed to scrape by for the last three years. I haven’t gotten a raise, so I’ve been taking side jobs when I can find them, and living on what feels like less even though it isn’t. It is just a matter of living within my means.

If the government can’t do this at the levels we are currently being taxed at, does anyone at all believe they’ll be able to do do it if we raise the taxes? They’ll spend more, like they always do. Lets go back to the Andrew Jackson model for balancing the government budget. If you can’t make ends meet with the revenue you’re bringing in – have a yard sale to bring in more revenue. Don’t go to the people who are already paying you and say “well, see I can’t seem to not spend more than you give me, so you’re going to have to give me more.”

WOW #4

April 6th, 2011
4:23 pm

“From TPM article.”

I love it when left wingers post left wing columns and expect people to believe it.

“The backlash to the basklash is in progress.”

Cool, WI will go bankrupt and companies will come south! WOO HOO!!!!! THE SOUTH WILL RISE!

OFF TOPIC #2

To think, this ambulance chaser could have been VP. Stay classy, Democrats!

‘I’d kill myself first!’ John Edwards ’suicidal’ over facing jail, claim pals

Read more: http://www.dailymail.co.uk/news/article-1374070/John-Edwards-suicidal-facing-jail-claim-pals.html#ixzz1ImCXaFan

Get Real

April 6th, 2011
4:23 pm

The Jay Bookman Column

More Liberal Bull$hit Spin

jm

April 6th, 2011
4:23 pm

Jay, and
“And economic growth is not the be-all and end-all of human ambition and responsibility.”

On one level I agree. On another, I say, go ask Mr. Caveman whether he prefers our world or his…. easy answer.

Doggone/GA

April 6th, 2011
4:24 pm

“I’m just not seeing how lowering taxes on people making – just to throw a number out there – $30,000 a year will help spur job growth. I’m not saying it shouldn’t be done, I just don’t see how it helps job growth. What jobs are they creating?”

Go from this basis: that the lower on the economic scale you are, the more of your money you actually spend. The higher you are, the less you have to spend. So if you lower taxes on those below, say $100,000 (inflation you know) by $100 and (just to throw out a number) you therfore give a million people an extra $100 – you are increasing the economy by 100 million dollars.

If you give 400 rich people a tax cut of $100,000 and they actually DO spend it…you are increasiing the economy by 4 million dollars. Which do YOU think has a bigger effect?

Companies don’t hire people they don’t need. Increase their customers through the door and you will give them a reason to hire more, which helps to increase the customers coming through their doors. So which would YOU prefer to see? A million people with more to spend, or 400?

Left wing management

April 6th, 2011
4:25 pm

Paul Ryan: “The U.S. government is not running sustained deficits because Americans are taxed too little ”

Classic right wing trope. Positing a mythical entity of a nation (”Americans”) while simultaneously repressing the notion of society. As though “Americans” forms a single, coherent group, with working class people and Wall St hedge fund managers all lumped in together, who collectively are ‘taxed too much’.

Doggone/GA

April 6th, 2011
4:26 pm

“go read an Econ 101 textbook”

why, so I can be one of the so-called “experts” that got us INTO this mess? No thanks.

Del

April 6th, 2011
4:26 pm

Keep, I don’t know how you can call the election at this point as it’s still to close. You can be certain that there will be a recount either way and I’ll bet voter fraud will be rampant.

Doggone/GA

April 6th, 2011
4:27 pm

“That said, LOWER TAXES PRODUCE HIGHER GROWTH”

We have a recent economic crash to counter that argument

Bosch

April 6th, 2011
4:28 pm

Rational,

“If the government can’t do this at the levels we are currently being taxed at, does anyone at all believe they’ll be able to do do it if we raise the taxes?

To me, it really comes down to this, we are going to have to do both, but as to how much, well, that’s the blurred line now isn’t it?

As to the bailouts, in theory, I think it’s rational to just say, let these businesses fail, I certainly was in that camp at first. As I thought more about it though, the amount of people you are talking about who would lose their job — that takes alot of demand and spending power out of the economy and those people would get unemployment, food stamps, etc. to survive, so you have to look at the cost of both and see which is the better solution.

Another example in the cutting spending mantra is that to do so, most of what that means, is cutting federal jobs. That’s people who won’t be working, therefore, none of their money will go into the economy, except what they get for a while on unemployment (which will be less). In our consumption based economy, less demand (due to lowered money going into the economy) is not a good thing.

But I’m no economist, nor do I play one on TV.

jm

April 6th, 2011
4:30 pm

Doggone 4:27 – there are not two versions of the universe in which to test “high tax bush era” versus “low tax bush era” Doggone. That said, economic theory has been validated to show lower tax, lower government spending economies thrive better than the inverse.

I’ll be eagerly awaiting your claim that its just a theory. Just like natural selection is a theory.

Rational

April 6th, 2011
4:31 pm

Doggone – you actually make sense, but I still don’t think that lowering the higher brackets is a bad thing. But, lets say those million people with that extra $100 put it into the bank and leave it. I know that we’re both just being hypothetical but how much extra buying power does that $100 really give someone? Are they going to go out and buy that new vacation home? Or that mansion in Buckhead? Or are they going to be more likely to save it or buy an extra meal or two at a decent restaurant?

Harry – I was just using $30,000 as an example. I could have said anything $45,000, $100,000 – whatever, but I used $30,000 to get my point across.

Bosch

April 6th, 2011
4:31 pm

“economic theory has been validated to show lower tax, lower government spending economies thrive better than the inverse. ”

So, jm, in which universe did that happen?

Harry Callahan

April 6th, 2011
4:32 pm

““all economists agree ”

“All? Care to provide any proof of that?”

Sure…as soon as you provide proof that ALL climatologists agree…

Dave R.

April 6th, 2011
4:32 pm

“Keep, I don’t know how you can call the election at this point as it’s still to close. You can be certain that there will be a recount either way and I’ll bet voter fraud will be rampant.”

Shhhhh, Del! We all know that the “machine” will come up with some more dead people’s votes. . .

It’s the only way they can win close elections.

Tundra Dude

April 6th, 2011
4:32 pm

The Ryan budget plan, Part III: More trickle-down

What uDDer nonsense! What is Heritage, …a Disneyland for conservatives…??

This is the garbage you get when a good corporate toady seeks “analysis” from a corporate-sponsored “think” tank.

Even former Republican staffers are critical of this plan:

The Magical Economy, Brought to You by Paul Ryan and the Heritage Foundation

Jake Berliner

(snipped)
In the long term, Ryan offers no strategy to make America more competitive, increase employment, or make people’s lives better. Rather, he offers reduced benefits, namely to the elderly, the poor, and the handicapped, and cuts taxes for the wealthy.

Taken together, it’s clear that the GOP isn’t focused on the real problems facing the country.
At a time when Americans want more jobs and more growth, the GOP strategy – if you believe the analyses of George W. Bush’s Federal Reserve Chair, a McCain economic adviser, and Goldman Sachs – is to create less.

And, if you believe the analysis of Bush’s Council of Economic Advisers Chair, their deficit reduction strategy is deeply flawed, too. Unless, of course, you believe the Heritage Foundation’s analysis that Paul Ryan’s budget is made of magic.

AmVet

April 6th, 2011
4:32 pm

The only question is, who is Korman playing?

Ronnie? Georgie? Ryan?

http://www.youtube.com/watch?v=SoM-ZC7uNnc

Doggone/GA

April 6th, 2011
4:33 pm

“said, economic theory has been validated to show lower tax, lower government spending economies thrive better than the inverse. ”

Care to provide any proof of that? See, I won’t take just YOUR word for it. And I wouldn’t argue that in a normal economy that could very well be true, but these are NOT normal economic times and what works when things are humming along just fine, won’t work whe the tires are flat and the engine dead.

Harry Callahan

April 6th, 2011
4:33 pm

“It’s the only way they can win close elections.”

Even if they steal this election, the issue will go to federal court, maybe even the Supreme Court. Libs are grasping at straws…

Keep Up the Good Fight!

April 6th, 2011
4:33 pm

voter fraud rampant? Do show us where in the past 10 years voter fraud has been rampant….where are the thousands of convictions? Here’s a hint….check the DOJ cases

You may not understand how someone can “call the election.” However the counties know how to count their votes (without numbering each) and they were tallied….here’s your link. http://www.jsonline.com/news/statepolitics/119308059.html

As for recount…I am sure there will be and without the whining and the false allegations made in Minn.

Bosch

April 6th, 2011
4:34 pm

” Or are they going to be more likely to save it or buy an extra meal or two at a decent restaurant?”

I’ve always thought that wage stagnation and the amount of debt that people are in is one of the major big bad factors of our economy.

Chances are, they are going to take that $100 and pay a credit card bill with it. In my opinion, most people have been supplementing their stagnant income with credit cards and the rooster has come home to roost.

Libertarian

April 6th, 2011
4:34 pm

jconservative-could not agree more with your 4:14.

We’ve got jm saying the Ryan plan slashes defense but Jay says “the pentagon is exempt”—which is it?