Republicans shoot down tax on rich

[Cutlass]

Actually the reason there have been few prosecutions is that the activities that destroyed the economy were not actually illegal after decades of deregulation. There was, and mostly still is, no law on the books to charge people with.

[peter grimes]

Cutlass, I refer you to Matt Taibbi's investigations. He's documented plenty of activity that sure appears to violate securities laws:
http://www.rollingstone.com/politics/blogs/taibblog

[BasketCase]

Originally Posted by peter grimes

In sum, I agree with you that you and I won't agree on who got us into this mess

Okay, so you took kind of a roundabout route to typing that. Good enough.

Originally Posted by peter grimes

But that doesn't mean that it's not in the government's, the economy's, or the citizen's interest to investigate what happened and pursue legal action if it's warranted.

There's no legal action to pursue (if there had been any, Obama would have gladly pursued it--the fact that he didn't pursue it proves that the course was unpursuable). The crisis wasn't caused by people breaking the law; it was caused by politics. Legal politics. It was legal for the Democrats to block Bush Jr.'s attempt to prevent the mortgage crisis from happening, for example. All the citizens can do at this point is vote the perpetrators out of office, at which point you and I get back to that same fundamental disagreement: you and I disagree on who to vote out.

Originally Posted by peter grimes

But your stance, unless I'm mistaken, is that there's no point since nobody did anything wrong.

You were not mistaken. For the first half, anyway. Obviously somebody did something wrong, but it was technically legal, and according to U.S. law and Constitution, we can't do anything to punish the perp until November of this year. Which is six months from now. We The People can take action before then--by snipping the government's credit card so it doesn't spend us deeper into the credit hole we're in.

Originally Posted by peter grimes

Do you know what happened when the creditors came knocking on the doors of the Althing? Iceland's political establishment told them to GTFO - that Icelanders were not going to bail out the reckless banking sector, making the creditors whole. And if that meant a bad bond rating then so be it.

Exactly. And the end result of that is, Iceland will find it much harder (or, more likely, impossible) to borrow any more until they agree to pay said creditors what is owed.

No, I don't see that as being in the best interests of the citizens of Iceland. Balancing the books so they don't end up in such a predicament to begin with? That is in the best interest of the citizens. And not just in Iceland.

[FriendlyFire]

Originally Posted by BasketCase

Yup. And at other times, it's the President's fault and Congress' fault at the same time (2008 to 2010 being one such case). No, the Democrats aren't 100% to blame, and the Republicans aren't 0% to blame--but a significant majority of America's current debt was rubber-stamped by Democratic Presidents/Congresses.

Clinton - Democratic President - Republican congress = democrates fault
Bush - Republican President - Democratic congress = democrates fault

[peter grimes]

Originally Posted by BasketCase

Okay, so you took kind of a roundabout route to typing that. Good enough.


There's no legal action to pursue (if there had been any, Obama would have gladly pursued it--the fact that he didn't pursue it proves that the course was unpursuable). The crisis wasn't caused by people breaking the law; it was caused by politics. Legal politics. It was legal for the Democrats to block Bush Jr.'s attempt to prevent the mortgage crisis from happening, for example. All the citizens can do at this point is vote the perpetrators out of office, at which point you and I get back to that same fundamental disagreement: you and I disagree on who to vote out.


You were not mistaken. For the first half, anyway. Obviously somebody did something wrong, but it was technically legal, and according to U.S. law and Constitution, we can't do anything to punish the perp until November of this year. Which is six months from now. We The People can take action before then--by snipping the government's credit card so it doesn't spend us deeper into the credit hole we're in.


Exactly. And the end result of that is, Iceland will find it much harder (or, more likely, impossible) to borrow any more until they agree to pay said creditors what is owed.

No, I don't see that as being in the best interests of the citizens of Iceland. Balancing the books so they don't end up in such a predicament to begin with? That is in the best interest of the citizens. And not just in Iceland.

See, we actually do agree on the broad strokes here

But I'd say that legal action wasn't pursuable for political reasons, not legal ones. Consider the Robosigning settlement. DOJ wanted to get every state on board as fast as possible so that it could be 'put behind us, so we can move forward'. That's great for the banks, but awful for homeowners. Even if you weren't foreclosed on your home's value may have been adversely affected by improper foreclosures.

As for voting people out, I suspect that you and I are in more agreement than first impressions would give. I'd love to see just about every incumbent out on his / her ass. Obviously that's not going to happen. As far as the president's job goes, I'd rather suffer under an Obama than any of the jackals that are being offered from the other side. Ideally it wouldn't be Obama - he's far too much of a failure in the way he's not only continued - but strengthened and formalized - the worst aspects of Bush's assaults on civil liberties. I actually think that stuff is more important than economic concerns.

I'll just leave you with a common refrain from my facebook posts from 4 years ago:
Kucinich #1!

[peter grimes]

Originally Posted by BasketCase

Exactly. And the end result of that is, Iceland will find it much harder (or, more likely, impossible) to borrow any more until they agree to pay said creditors what is owed.

So I had a little time to look into this, and I must admit I'm not at all certain about how to read the data. But it appears that Iceland doesn't suffer a crushing cost of borrowing, and their GDP, GDP:debt, and GDP (ppp) are all doing quite well:

http://www.tradingeconomics.com/icel...account-to-gdp

In fact, Iceland's economy appears to be stronger than the US's by just about every measure

So why am I wrong to offer Iceland as an alternate model of bank bailouts?

They chose to let the banks fail leaving foreign creditors high and dry. But here we are 3-4 years later and they're doing just fine. Lower unemployment, stronger social safety net, better growth.... I'm having a hard time finding the downside.

[BasketCase]

You will. The figurative collapse merely hasn't reached the ground yet.

I did a little of my own reading up; apparently Iceland got those loans from the IMF, who did the lending in order to prop up confidence in Iceland's currency; they're terrified of the actual crash that's likely coming, so they're willing to throw good money after bad. As any compulsive gambler can tell you, this always ends badly--it's only a matter of when.

As for voting people out, I suspect that you and I are in more agreement than first impressions would give. I'd love to see just about every incumbent out on his / her ass. Obviously that's not going to happen.

Oh, it will. Just not all at the same time.

Originally Posted by FriendlyFire

Clinton - Democratic President - Republican congress = democrates fault
Bush - Republican President - Democratic congress = democrates fault

Yup. Now you've got it. However, take care to add a few lines, such as "Bush + Republican Congress = Republicans' fault". Both parties are responsible to a degree, but where the two parties diverge is that "Democrat President + Democratic Congress" has over the long term been a lot worse for the U.S. than "Republican President + Republican Congress".

Side note: that chart you posted is bogus. It uses percentages to present a false impression.

[Antilogic]

Seems like you are ignoring the incredible damage tax cuts do to the long-term debt.

[peter grimes]

Originally Posted by BasketCase

Side note: that chart you posted is bogus. It uses percentages to present a false impression.

Here's a better one, and it clearly shows how much of came from the Bush Tax cuts.



source:
Center for Budget and Policy Priorities

[Ziggy Stardust]

Well with his name attached to the biggest contributor, Bush was right about one thing. History will judge him.

[BasketCase]

Originally Posted by Antilogic

Seems like you are ignoring the incredible damage tax cuts do to the long-term debt.

They don't.

There's almost no correlation at all between tax cuts and deficits. There are many counterexamples, and not only in the U.S. Know how Clinton upped government revenues? With tax cuts for corporations.

Originally Posted by peter grimes

Here's a better one, and it clearly shows how much of came from the Bush Tax cuts.

That chart is also bogus. It charts the future. It charts what is projected to happen, and I guarantee you the actual deficits ten years from now are not going to match the projections (the real deficits could be HIGHER.....)

Also, your chart doesn't show the actual total debt. America's national debt went up just under five trillion during the eight years of his Presidency. America's national debt went up another five trillion under Obama (FOUR years).

[Arakhor]

And funnily enough, numbers alone don't tell the whole story either. That would be bogus.

[Antilogic]

Originally Posted by BasketCase

They don't.

There's almost no correlation at all between tax cuts and deficits. There are many counterexamples, and not only in the U.S. Know how Clinton upped government revenues? With tax cuts for corporations.

Are you suggesting that the effective tax rate does not correlate at all with tax revenue? So 0%, 10%, 30%, 70%, 100%, no matter what, the revenue is always the [same] fraction of GDP?

Something there doesn't sound right, you might want to post those examples instead of holding back.

[Ziggy Stardust]

Originally Posted by BasketCase

Know how Clinton upped government revenues?

Yeah. He followed Bush Sr. who had realised he needed to increase taxes. And as a result became unpopular. Which he must have known, so I consider that a bold patriotic move.

[Hygro]

Given current conditions, even with the best case Bill Clinton 3rd term scenario, we are unsustainable.

Given historical growth rates of 2.5%, we have to pay raise revenue by 9% of GDP for many years before our deficits are sustainable. This means pulling in right now an additional $1.26 trillion in revenues. We can cut that number to about $560 billion if we cut our entire defense department. But remember, that amount would have to grow with our economy. Basically our country is headed for a major default sometime in the next 50 years. We don't have a choice. We have to raise taxes, cut spending, and make our resources more efficient.


That said, we should stimulate the economy back to proper long run growth levels. This means another major round of stimulus, which won't affect our debt problem much at all.


This is of course ignoring a worldwide environmental catastrophe that economic growth may (soon, even) cause.

[peter grimes]

Originally Posted by Hygro

That said, we should stimulate the economy back to proper long run growth levels. This means another major round of stimulus, which won't affect our debt problem much at all.

long-term growth is unrealistic, and a physical impossibility.

If the US economy were to grow a 2-3% per year, we'd see a factor of 10 increase in 100 years.
[source: http://physics.ucsd.edu/do-the-math/...scale-energy/]

Where's all that stuff going to come from?

10x the energy
10x the raw materials
10x the people (??)
10x the waste (?)

Constant growth is a model for catastrophe. A hard reset. Transition to a steady state economy is the only (as far as I understand) viable long-term economic model.

[peter grimes]

Originally Posted by BasketCase

That chart is also bogus. It charts the future.

2008, 2009, 2010 are not the future. This chart was compiled in 2010. The chart is not 'bogus'.

A less inflammatory term might be 'misleading', but that's not even appropriate here. It's only misleading in the sense that, given no change to the future, this is what's projected to happen. Obviously things will change. But the chart is saying that if nothing changes then this is what things may look like.

It's exactly the same thing Social Security vandals do when they say things like 'Social Security is going to consume 100% of the federal budget by the 2050' - or whatever percentage by whatever date is the flavor of the week. They assume no change to the status quo, which is of course unrealistic. But it does serve to show that something must be done.

In this case, I think you should back up your claims that there's next to no correlation between tax cuts and deficits. That's a mighty big claim, and we're not going to let you off the hook

Extraordinary claims require extraordinary evidence.

[Cutlass]

Originally Posted by peter grimes

long-term growth is unrealistic, and a physical impossibility.

If the US economy were to grow a 2-3% per year, we'd see a factor of 10 increase in 100 years.
[source: http://physics.ucsd.edu/do-the-math/...scale-energy/]

Where's all that stuff going to come from?

10x the energy
10x the raw materials
10x the people (??)
10x the waste (?)

Constant growth is a model for catastrophe. A hard reset. Transition to a steady state economy is the only (as far as I understand) viable long-term economic model.

People have been saying that we are going to run out of resources for 200 years, yet most resources cost less in real terms than ever....

[Leoreth]

Sounds like we're in a Laffer curve debate again. Which is funny because people stopped using the Laffer curve argument the last time we started actually discussing the Laffer curve.

[peter grimes]

Originally Posted by Cutlass

People have been saying that we are going to run out of resources for 200 years, yet most resources cost less in real terms than ever....

So are you claiming that economic growth can continue forever?

I don't know what the Laffer Curve is, but I'm loathe to look it up since it was received with such derision either earlier in this thread or somewhere else very recently.

I'm getting most of my impressions on all of this stuff from the DoTheMath blog.

Specifically, his post on Galactic Scale Energy:

Originally Posted by TomMurphy

Since the beginning of the Industrial Revolution, we have seen an impressive and sustained growth in the scale of energy consumption by human civilization. Plotting data from the Energy Information Agency on U.S. energy use since 1650 (1635-1945, 1949-2009, including wood, biomass, fossil fuels, hydro, nuclear, etc.) shows a remarkably steady growth trajectory, characterized by an annual growth rate of 2.9% (see figure). It is important to understand the future trajectory of energy growth because governments and organizations everywhere make assumptions based on the expectation that the growth trend will continue as it has for centuries—and a look at the figure suggests that this is a perfectly reasonable assumption.

[snip]

This post provides a striking example of the impossibility of continued growth at current rates—even within familiar timescales.

[snip - the real meat of the article]

Let me restate that important point. No matter what the technology, a sustained 2.3% energy growth rate would require us to produce as much energy as the entire sun within 1400 years.

[snip]

...continued energy growth will likely be unnecessary if the human population stabilizes. At least the 2.9% energy growth rate we have experienced should ease off as the world saturates with people. But let’s not overlook the key point: continued growth in energy use becomes physically impossible within conceivable timeframes.

I suggest you read the entire post, and the one linked at the end of his article. This is what forms my opinion that sustained economic growth is a long-term impossibility.