Who Are You For?

Republicans “want to hold these middle-class tax cuts hostage until they get an additional tax cut for the wealthiest 2 percent of Americans.” - President Obama

President Obama has it exactly right on the tax cut debate. The question is who are you for?

“We simply can’t afford [the GOP tax cuts for the rich],” [President] Obama said. “It would mean borrowing $700 billion in order to fund these tax cuts for the very wealthiest Americans — $700 billion to give a tax cut worth an average of $100,000 to millionaires and billionaires. And it’s a tax cut economists say would do little to add momentum to our economy.”

He added: “Middle-class families need this relief. These are the Americans who saw their wages and incomes flat-line over the last decade, who’ve seen the costs of everything from health care to college tuition skyrocket and who have been hardest hit by this recession.”

(Emphasis supplied.) The question is, as the President states, who are you for?

Speaking for me only

< Reid: Congress to Vote on "Dream Act" | Who Are They Fighting For? >
  • The Online Magazine with Liberal coverage of crime-related political and injustice news

  • Contribute To TalkLeft

  • Display: Sort:
    The President is right (5.00 / 3) (#1)
    by cawaltz on Thu Sep 16, 2010 at 10:21:51 AM EST
    on this issue. However, it's more than Republicans that he needs to be arguing with. 31 Democrats in the House wish to extend the Bush tax cuts to the wealthy as well.

    It's a darn shame he spent 2 years making sure the GOP got their political stage and coddling their ideology. His fight is that much harder as a result.

    Yep (5.00 / 4) (#4)
    by MO Blue on Thu Sep 16, 2010 at 10:40:50 AM EST
    The question still remains "Who are the Democratic members of Congress for?"

    Guess we will see if the President is capable of twisting the arms of the Blue Dogs or if we revert to the SOP of pragmatism (i.e. capitulation).


    I know (5.00 / 1) (#80)
    by Ga6thDem on Thu Sep 16, 2010 at 02:47:38 PM EST
    it's kind of silly to blame the GOP when it's really the blue dogs that are holding the "tax relief" hostage. If the GOP actually fillibusters them then he will have a point.

    I'm flexible... (5.00 / 1) (#3)
    by kdog on Thu Sep 16, 2010 at 10:33:05 AM EST
    I'll work with the rich on the class war...how about a compromise...we will give you your extension too, provided it all is offset by cuts to drug war funding, occupation funding, or we close some prisons.  Penny for penny.

    If it means a bigger deficit, or cuts to government services that actually serve...no deal.

    Throw (none / 0) (#12)
    by lentinel on Thu Sep 16, 2010 at 11:05:27 AM EST
    in ending the war in Afghanistan @ two billion a week and I'm on board with your plan.

    I call it an occupation... (5.00 / 1) (#15)
    by kdog on Thu Sep 16, 2010 at 11:17:09 AM EST
    it ceased being a war not long after the invasion...I had it in there:)

    It can't hurt to be reasonable and offer a compromise...problem is drug war, foreign occupation, and teeming prisons are issues neither D or R care to address....two pea parties in a status quo pod.


    See my post below (none / 0) (#18)
    by Slado on Thu Sep 16, 2010 at 11:27:40 AM EST
    Tax cuts only work if you cut spending.

    So isn't that exactly what Republicans did in the 2000's?   Cut taxes and increase spending?

    So what is Obama's plan?

    Cut taxes (75% of them anyway) and then spend even more then republicans?

    Should work great.


    Uh the priorities (5.00 / 1) (#36)
    by cawaltz on Thu Sep 16, 2010 at 11:51:22 AM EST
    of the GOP on where they spent is (or should be) different then where the Democrats choose to spend money.

    Money poured into business has a much slower effect then social programs that free up money for the most financially challenged.

    The ripple effect means that for every dollar spent on food stamps, the economy realizes $1.73.

    The GOP was never interested in spending money on the bottom portion. That's why they fought expanding SCHIP. It's why they fight over extensions of unemployment etc, etc.



    You mean the multiplier? (2.00 / 1) (#41)
    by Slado on Thu Sep 16, 2010 at 11:57:15 AM EST
    It doesn't work.

    Nice try.  If it did we should pay 100% of our income in taxes and we'd all be wealthy.


    Uh no (5.00 / 1) (#48)
    by cawaltz on Thu Sep 16, 2010 at 12:10:50 PM EST
    You said you have to cut spending for tax cuts to work.

    I said and continue to say that isn't true.

    Some spending stimulates the economy. The economy benefits from programs that free up money for the bottom tax brackets to spend.

    You then link me to an article on TAX CUTS which is not the same thing as all government spending.

    Nice try though


    Not going to address (none / 0) (#101)
    by Socraticsilence on Fri Sep 17, 2010 at 01:13:09 PM EST
    the "multiplier" effect- that's not what's at issue here- whats being talked about here is how by freeing up the lower-income parts of the population to spend said income on somehting other than staying alive one injects more money into the economy than by giving the same amount to the rich who often simply bank the cash.

    I hear ya bro... (none / 0) (#26)
    by kdog on Thu Sep 16, 2010 at 11:35:28 AM EST
    see my reply below.  The way to start this debate is to figure out how much money the government needs to provide the services we need, and to sh*tcan the services we don't need and don't serve.

    Hey dog bro, (5.00 / 2) (#97)
    by NYShooter on Thu Sep 16, 2010 at 09:11:46 PM EST
    This "cutting spending" issue has been studied & discussed to death. The reason neither party has ever "cut spending" is the realization that the so-called "waste" simply doesn't exist. Yeah, sure, they'll pull out a scientific project with a funny title like, "the sleeping habits of the Sahara Salamander,"  and the Becks & Limbaughs will tout it non-stop, but money-wise, don't amount to a spit in the ocean.

    Most experts I've read say the most obvious place to cut spending, the one place where there really is "wasteful spending," is the military budget. They say a ten-year Trillion dollars could be cut....without an iota of damage being done to our military needs.

    The answer, as always, is politics. Try to close factories building useless weapon systems past the Senators being paid off by defense industry lobbyists; Ain't gonna happen.


    He is cutting defense spending (none / 0) (#71)
    by ruffian on Thu Sep 16, 2010 at 01:49:40 PM EST
    or rather cutting the rate of increase, with is a little like cutting taxes by preventing a tax increaase.

    It's called (none / 0) (#82)
    by Ga6thDem on Thu Sep 16, 2010 at 02:49:49 PM EST
    Supply Side Economic Theory and every President since 1980 except Bill Clinton has been an apostle. Check Reagan's spending record if you want another example of high spending.

    A fine test case for the bully pulpit theory (5.00 / 1) (#8)
    by Demi Moaned on Thu Sep 16, 2010 at 10:54:22 AM EST
    A lot of people have been making the case that the power of the bully pulpit has been exaggerated and that the President can't do much to move his Party.

    Well, here's a an excellent test case. The President is leading (at last) and the Party in Congress is dithering. Can he whip them into shape?

    It's a great question, and one (5.00 / 2) (#25)
    by Anne on Thu Sep 16, 2010 at 11:35:26 AM EST
    I would like to ask of all of them.

    Perhaps if he were to cite the latest poverty numbers:

    The poverty rate rose to 14.3% in 2009, the highest since 1994, up from 13.2% in 2008, the Census Bureau reported Thursday. Last year there were a record 43.6 million people in poverty. Meanwhile, real median household income in 2009 was $49,777, not statistically different from the prior year. Real median income fell 1.8% for family households, and rose 1.6% for nonfamily households. Also, the number of people with health insurance fell to 253.6 million in 2009 from 255.1 million in 2008, the first year that the number of people with health insurance has decreased since 1987, when the government started collecting comparable data. The number of uninsured rose to 50.7 million from 46.3 million.

    and do it in a way that effectively turns the latest GOP talking points on their heads, it might resonate, and would, perhaps, highlight the further point that wealth is just not trickling down.

    Insisting that the wealthy get what they want is the equivalent of two people coming to the emergency room: one is bleeding out, and the other has a broken finger.  And there's only one doctor free.  Triage says Bleeding-out guy gets helped, stat.  But, Broken-finger guy says, "you'd better find someone to help me at the same time, or I'm going to make such a fuss Bleeding-out guy will croak before you can save him - so you decide: help us both, or the bleeding guy croaks."  

    This is economic triage (leaving aside for the moment that extending the cuts for the middle class isn't going to do much for the economy, either, but at least it won't inflict any more pain on the middle class than they are experiencing now) - Obama needs to make that clear, and the Democratic leadership needs to start kicking a$$ and taking names to get it done.

    [Knowing how this works, I do shudder to think what sort of "payment" the recalcitrant Dems will extract for their votes, because it's not in Harry Reid's playbook to simply say, "because we said so, and because we can see to it that you never work in this town again."]

    What might help those who really need it most is a payroll tax holiday for those least likely to derive any benefit from extension of the current rates because they already do not pay any tax.

    Without a comprehensive plan that consists of more than the same old-same old of tax cuts, I actually do fear what happens when, as most expect, these tax cuts don't get the economy perking along: the Deficit Commission looms large.  Too large.

    A payroll tax holiday, if applied (none / 0) (#42)
    by coast on Thu Sep 16, 2010 at 11:58:54 AM EST
    in full, would cost about $800 billion.  I think it would be better, but I think it would be hard to implement in a limited fashion as you suggest.  Easier to apply to all.  Beside, all "rich" who pay the tax typically exceed the limit.  So the people getting the most benefit from the holiday would be the middle and lower class.  I would also go ahead with an increase in the capital gains and dividend rates.  This would also impact the "rich" more than the middle and lower class.

    Then again, joblessness could be fixed (5.00 / 1) (#91)
    by DFLer on Thu Sep 16, 2010 at 07:48:09 PM EST
    if workers would only accept lower wages, according to Kevin Hassett, as originally published by Bloomberg news link to Strib (3 pages)
    Good Lord! I wonder if this guy is including himself in the lower wage cut
    The biggest problem with the labor market right now is that wages are too high. As Washington again turns to government spending as a cure for unemployment, some against-the-grain thinking is in order.

    Economics teaches that full employment would be reached if wages adjust downward, to a level that better reflects current circumstances. At lower wages, employers would desire more workers. Labor markets generate persistent unemployment only if wages are sticky, failing to fall as demand declines.

    A number of reasons help explain why wages don't and won't drop, beginning with federal and state minimum-wage laws.

    Second, because union contracts generally cover multiple years, adjusting wages in response to economic circumstances would require a return to the bargaining table, which rarely happens.

    Third, the natural reluctance of workers to accept lower pay is amplified by how their wage helps define their identity. A $60,000-a-year office worker might have an extra-hard time coming to terms with becoming a $40,000-a-year worker.

    Finally, workers and jobs might be mismatched, either geographically or occupationally. Workers might be needed in places they don't want to move to, or can't afford to live.

    There are ample signs that these obstacles to lower wages are helping drive high unemployment today.

    Yes, I would say most of us would have (5.00 / 1) (#92)
    by ruffian on Thu Sep 16, 2010 at 08:15:52 PM EST
    a hard time "coming to terms" with a 33% pay cut.

    It does not seem to occur to him that driving wages downward like he wants will only decrease demand for goods even more. Does he really think prices are going to  decrease by a third as well? Come to think of it, housing has in some areas, so maybe he has a point.


    The problem (none / 0) (#94)
    by Ga6thDem on Thu Sep 16, 2010 at 08:19:02 PM EST
    here is that prices in housing have gone down but that's all and it hasn't gone down enough to justify a huge pay cut. Then you have insurance which has skyrocketed. I know people who are willing to take the pay cut but they also cannot keep their house nor pay their bills so how does that help in the long run other than get them off the unemployment statistics?

    All problems will be solved when (5.00 / 1) (#95)
    by MO Blue on Thu Sep 16, 2010 at 08:23:53 PM EST
    American workers wages are equivalent to those of workers in 3 World countries.

    Believe that is a real goal for some people driving  our policies.


    Mathematically correct, (5.00 / 1) (#98)
    by NYShooter on Thu Sep 16, 2010 at 09:38:39 PM EST
    But practically, of course, it won't happen.

    However, and here's where I agree with Reagan's "Government is the problem" slogan. We knew this was coming. We knew that globalization was inevitable when technology connected information globally.

    But the one quality America has always excelled at is.....innovation. Once global trade, in goods and jobs, became a certainty, why didn't we move to prepare for it? Why didn't we set up institutions and training programs to prepare our workers for this inevitable new environment?

    As always, the answer is politics. The GOP and DINO's saw their opening to crush the middle class.......and seized it.

    The idea that we're importing high paying technology and engineering people from India (and elsewhere) to do the work we haven't prepared our own people to do, is just sickening.


    Well (none / 0) (#93)
    by Ga6thDem on Thu Sep 16, 2010 at 08:16:25 PM EST
    okay. I'll be willing to take less money if the banks we bailed out will let everybody off the hook for their credit card debt and lower their mortgages to agree with the lower salaries but I know this will not happen.

    Couldn't have said it better. (none / 0) (#2)
    by Dr Molly on Thu Sep 16, 2010 at 10:31:10 AM EST
    Those two quoted paragraphs say it all, and are pitch-perfect IMO:

    ~ tax cuts for the rich won't help the economy
    ~ tax cuts for the rich amount to a drop in the bucket anyway
    ~ wages have gone down for the middle class (but not for the rich), they are the ones who need relief
    ~ costs have gone up for the middle class, they are the ones who need relief

    It's really so simple, despite the irrational talking points from the right.

    If the D's would just stick to their guns with this message for crying out loud...

    To me, there is an obvious omission. (5.00 / 5) (#6)
    by oculus on Thu Sep 16, 2010 at 10:52:34 AM EST
    Aren't the lower-than-middle class suffering the most at present and always.  I know they don't pay much or anything in federal income taxes.  But it is hard to read this stuff w/o thinking--what are we--chopped liver?

    Wow (1.00 / 5) (#14)
    by squeaky on Thu Sep 16, 2010 at 11:13:40 AM EST
    Shocking news for me.... I did not know that you are eating cat food... but it is worth skimping on the steak tartar, truffles and champagne, imo, in order to save $$ to buy tickets to the Met.

    Your priorities are in the right place, imo.

    And it seems that Obama's policies have increased poverty levels in the US to an all time high.... it is the latest GOP talking point:

    Now I know there are many of you out there who still feel that Obama is to blame for none of our economic ills. Never mind the fact that the democrats have been in control of congress since January 2007 and Obama has been president since January 2009. That doesn't assuage your feelings about that sorry George W. Bush. And no it doesn't matter that within six to eight months after republicans take control of congress you'll be blaming them for the continued economic malaise we're in.

    The fact is that not since the 1960's war on poverty has there been such an increase in poverty levels. Obama's economic policies have seemingly exasperated what he "intended" to fix. The 2009 Census shows about a 15% increase in poverty rate levels. That's up from a little over 13%.



    From what I read by steve m before (5.00 / 4) (#28)
    by oculus on Thu Sep 16, 2010 at 11:39:57 AM EST
    he GBCW'd Talk Laft, I gathered he did not feel comfortable commenting here anymore because another commenter dredged up personal information about him from his own comments and mocked his expressing liberal sensibilities.  I miss him.  Frequently very witty comments. Always well-informed and well-expressed.  Too bad he left, from my perspective.

    Way out of line (5.00 / 2) (#33)
    by Big Tent Democrat on Thu Sep 16, 2010 at 11:48:07 AM EST
    Take some time off from commenting Squeaky. You are becoming personally offensive.

    OK (none / 0) (#35)
    by squeaky on Thu Sep 16, 2010 at 11:50:55 AM EST

    Thanks (none / 0) (#39)
    by Big Tent Democrat on Thu Sep 16, 2010 at 11:53:49 AM EST
    i don't think (none / 0) (#16)
    by lilburro on Thu Sep 16, 2010 at 11:24:12 AM EST
    oculus was referring to herself

    I know they don't pay much or anything in federal income taxes.

    Really? (1.00 / 1) (#20)
    by squeaky on Thu Sep 16, 2010 at 11:29:54 AM EST
    But it is hard to read this stuff w/o thinking--what are we--chopped liver? [emphasis mine]

    In any case, I do think it is worth skimping in order to live a rich cultural life.


    Evidentially. (5.00 / 2) (#24)
    by oculus on Thu Sep 16, 2010 at 11:33:52 AM EST
    I like your priorities. n/t (none / 0) (#27)
    by lilburro on Thu Sep 16, 2010 at 11:35:29 AM EST
    Thank you. (none / 0) (#19)
    by oculus on Thu Sep 16, 2010 at 11:28:27 AM EST
    Good for you. (5.00 / 2) (#66)
    by coast on Thu Sep 16, 2010 at 01:25:02 PM EST
    For not taking the bait on that one.  Sometimes I just wonder where it comes from.

    Of course, everyone knew what you meant. (none / 0) (#58)
    by Dr Molly on Thu Sep 16, 2010 at 12:49:27 PM EST
    In any case, I appreciate your keeping the lower-than-middle-class in the mix.

    And further to your concern... (none / 0) (#63)
    by Dr Molly on Thu Sep 16, 2010 at 01:16:57 PM EST
    Today's news indicates that the poverty rate has increased. LINK.

    That's 43.6 million Americans living below the poverty line. And we are supposed to care about tax cuts for the rich? We're supposed to believe the disingenuous, ahistorical talking points about how the rich will then spend that money on the rest of us with new jobs, increased wages, and great health insurance? Laughable. We are living in the Trickle Down Legacy right now.


    Local public radio recently reported (none / 0) (#76)
    by oculus on Thu Sep 16, 2010 at 02:02:28 PM EST
    it costs twice the federal poverty amount for a senior citizen to exist in San Diego County.  I think that would be about $20,000/year.  Pretty sad.  I suppose we could just ship out those who can't hack it to somewhere with a lower cost of living.  (That was snark.)

    Yes, they are suffering the most. (none / 0) (#10)
    by Dr Molly on Thu Sep 16, 2010 at 10:58:21 AM EST
    I assume they weren't mentioned due to the tax context, which is not as relevant for that bracket.

    Yep. If we still had more welfare infrastructure (none / 0) (#73)
    by ruffian on Thu Sep 16, 2010 at 01:53:11 PM EST
    in place, we could talk about it in those terms.

    And, (5.00 / 2) (#96)
    by NYShooter on Thu Sep 16, 2010 at 08:54:45 PM EST
    We are talking about folks whose lowest income exceeds $1,000,000.

    Also, and this would have to be framed carefully, we are talking about the folks, many of whom headed the banks and businesses whose unbridled greed got us into the mess we're in now.

    And, to add icing to the cake, after they blew up the world, our Government went running to bale them out first. Then they showed their gratitude by hoarding the money while lobbying Congress to deny unemployment insurance to the millions of us shlubs thrown out of work by these bums.


    "wages have gone down for the middle (none / 0) (#5)
    by coast on Thu Sep 16, 2010 at 10:49:20 AM EST
    class (but not for the rich)? Really.  I don't have any analysis to refute the statement other than what I see with my clients.  If my clients are typical of the "rich" population as a whole, then that statement is incorrect.

    "tax cuts for the rich amount to a drop in the bucket anyway".  True except, I think you mean the projected $700 billion cost of extending them is a drop in the bucket.  The projected cost amounts to less than 5% of the project deficit in ten years.


    I think you are talking about (5.00 / 2) (#9)
    by CST on Thu Sep 16, 2010 at 10:56:02 AM EST
    a much smaller time period.

    Wages for the rich rose dramatically during the 2000's.  Wages for the middle class did not.  So even though they might have dropped a bit in the last two years, they are still significantly higher (even adjusted for inflation) as compared to a few years ago.  That's not true for the middle class.

    That "drop in the bucket" of $700 billion wasn't such a "drop in the bucket" when it was the Stimulus package, or unemployment benefits, or any other government attempt to salvage this mess.


    Thanks. You are quicker than I. (none / 0) (#11)
    by Dr Molly on Thu Sep 16, 2010 at 10:59:17 AM EST
    is what you are arguing for? Take that to the people GOP.

    I'm not arguing for anything, just stating a fact. (none / 0) (#13)
    by coast on Thu Sep 16, 2010 at 11:07:05 AM EST
    The GAO projected that the deficit will be about $18 trillion by 2019.  Pols throw $700 billion cost out there to scare people, when the figure isn't really all that much when you look at it in total.

    This is a nice little battle, but the war is JOBS.  And this does nothing to create jobs - and no I'm not arguing that extension of the tax cuts will create jobs, but there isn't any evidence that I know of that shows that raising taxes creates jobs either.


    Don't wast your time (none / 0) (#23)
    by Slado on Thu Sep 16, 2010 at 11:31:44 AM EST
    BTD is focusing on this small political battle in a war the dems have already lost.

    Obama has no plan.  If he stated we couldn't afford any tax cuts then I'd believe him.

    He is hoping the American people are too stupid to understand that we are arguing over a plan to cut taxes and the difference of the plans is the difference between 3.0 trillion and 3.7 trillion.

    One side has no intention of cutting spending but is going to save 700 billion.   One side (if to be believed) wants to cut federal spending and taxes.

    Since the republicans have such a terrible record on cutting spending its a choice between two bad choices but at least the republican argument makes sense in theory.

    Obama is adrift in the wilderness of confusion and his plan makes no sense.  

    Cut some taxes and spend more.  Should work great.


    you talk about money (5.00 / 1) (#32)
    by Dadler on Thu Sep 16, 2010 at 11:46:57 AM EST
    as if it were a living thing, like a giant herd of bison that must return each year for us to survive. it is a THING, with no value whatsoever intrinsically. its value is determine by nothing but simple human thoughts. that is all. you can run up the biggest deficit known to man if you do it in a manner that is genuinely humane and egalitarian and which puts people to work on projects of importance to their nation and their communities.

    but that would require us to put into practice the lessons we were taught as children: share, be nice, help people.

    something happens to us when we become adults. we lost a critical kind of imagination, and we get incredibly cynical and fearful in very insidious ways.


    No one understands this point, (5.00 / 3) (#45)
    by Anne on Thu Sep 16, 2010 at 12:01:45 PM EST
    that the government is never going to run out of money, that as long as banks are still able to cash the government's checks, we don't have a problem.

    If you or I get into a deficit situation, we're in trouble: we don't have the ability, as the government does, to simply create the money we need.

    The government needs to spend more money on the kinds of things that create jobs, because more jobs and more people working is the only way to increase demand and private sector jobs.  The small business tax cuts do nothing to create jobs.  Middle class cuts that aren't putting more money in people's pockets are not going to create jobs or increase demand.

    But they will help some people avoid the pain of higher taxes, which would take more money out of the economy from the pockets of people who don't have much there to begin with.  Oh, but doesn't increasing taxes on the wealthy take money out of the economy, too?  Money they would spend in the local economy instead of sending it to the feds?  But are they, in fact, spending it now?  I think the numbers suggest that they aren't - they're sitting on it.

    A jobs guarantee program would be a truly transformative thing for Obama to get behind, but he doesn't think that way on the economy; I am fully expecting him to use the Cat Food Commission to help "pay" for these tax cuts - which is just going to make things worse for a lot of people.


    "the government is never going to run out (none / 0) (#50)
    by coast on Thu Sep 16, 2010 at 12:22:41 PM EST
    of money".  If true, then why not a $4 trillion stimulas package?  Why doesn't the gov't just give everyone with a couple hundred thousand to just go blow on some big screen tvs and GM cars?  

    Why do you think some pretty good (5.00 / 1) (#53)
    by Anne on Thu Sep 16, 2010 at 12:34:09 PM EST
    economists were arguing for a bigger - much bigger - stimulus?  And why do you think their position was that it was the absolute wrong time for the government to be worried about deficits?

    And why do you think they are still of that opinion?

    Now, if you are such a fan of cutting spending, where can you do that where it won't have a negative effect on the economy?

    Can't wait to read your response.


    Further to my point, (5.00 / 3) (#60)
    by Anne on Thu Sep 16, 2010 at 01:02:51 PM EST
    some 300 economists have issued the following statement today:

    In the fall of 2008 the U.S. and other major economies were in a free fall in the wake of a global financial crisis. Emergency stimulus policies here and around the world broke the fall, but brought us only part way to full recovery.

    Today there is a grave danger that the still-fragile economic recovery will be undercut by austerity economics. A turn by major governments away from the promotion of growth and jobs and to premature focus on deficit reduction could slow growth and increase unemployment - and could push us back into recession.

    History suggests that a tenuous recovery is no time to practice austerity. In the Great Depression, Franklin Roosevelt's New Deal generated growth and reduced the unemployment rate from 25 percent in 1932 to less than 10 percent in 1937. However, the deficit hawks of that era persuaded President Roosevelt to reverse course prematurely and move toward budget balance. The result was a severe recession that caused the economy to contract sharply and sent the unemployment rate soaring. Only the much larger wartime spending of the early 1940s produced a full recovery.

    Today, the economy is growing only weakly. 7.8 million jobs have been lost in the recession. Consumers, having suffered losses in home values and retirement savings, are tightening their belts. The business sector, uncertain about consumer spending, is reluctant to invest in expansion or job creation, leaving the economy trapped on a path of slow growth or stagnation. Over 20 million American workers are now unemployed, underemployed or simply have given up looking for a job.

    The President and Congress should redouble efforts to create jobs and send aid to the states whose budget crises threaten recovery by forcing them to lay off school teachers, public safety workers, and other essential workers. It also makes sense to invest in public service jobs - and in infrastructure projects for transportation, water, and energy conservation that will make our economy more productive for years to come.

    More details are available at the link, but here is a portion:

    The most important question is this: What will drive economic growth, job creation and prosperity in the years to come? Conservatives argue that we should simply reduce deficits and wait for the next economic boom. But the last boom was built on a bubble, inflated by unsustainable household debt and financial speculation. If we focus merely on cutting spending and raising taxes, the economy could shrink again - or stay stuck in a permanently low level of growth and high levels of unemployment.


    Study after study demonstrates that America has a huge "public investment deficit" in areas vital to our economy. Some estimates suggest a shortfall in public investment of as much as $500 billion a year. As long as we have unacceptably high unemployment, outlays for additional investment can be deficit-financed. But once we achieve a robust recovery, our country should continue to pay for productive public investment, while acting to bring down public deficits. This will require new revenues.

    Your turn, Slado.


    I was merely pointing out that the (none / 0) (#64)
    by coast on Thu Sep 16, 2010 at 01:19:19 PM EST
    comment about printing money was not correct.

    As for my opinion on the stimulas and deficits, I agree during a recession running a deficit is the responsible action to take.  Should it have a been a bigger stimulas?  That is hard to tell since a majority of the stimulas is still unspent (its been awarded but not spent).

    As for cutting spending, you can't do that now but at some time it will have to be done.  Sorry, but on most items I believe the private sector is more efficient (I did't say more compassionate).  


    what the wealthy spend (none / 0) (#56)
    by the capstan on Thu Sep 16, 2010 at 12:42:47 PM EST
    "Oh, but doesn't increasing taxes on the wealthy take money out of the economy, too?  Money they would spend in the local economy instead of sending it to the feds?  But are they, in fact, spending it now?  I think the numbers suggest that they aren't - they're sitting on it."

    Right on!  Just deleted reply email from high school admonishing me for wanting people in the top brackets to pay more tax.  "They are the job creators, not the middle class...."  Right; maybe they'd hire another maid or two.


    I would love to agree with you (none / 0) (#37)
    by Slado on Thu Sep 16, 2010 at 11:52:58 AM EST
     but the world doesn't work that way.

    Dick Cheney was wrong.  Deficits do matter.   At least when they get as big as ours.

    Your world existed.  In Greece.  And it led to riots in the streets.

    My parents taught me you can't have something for nothing.  That is what the federal government is doing to much of.  Making promises to its constituents that the economy can't support.

    Enough is enough and a clear consistent fiscal policy that isn't so reactionary would be welcome.

    I want the economy to grow. I want people to have more but not at the expense of someone else and not if it means we all have less 20, 30 years from now.


    FYI-Greece eliminated their sovereign currency (5.00 / 2) (#90)
    by Joan in VA on Thu Sep 16, 2010 at 05:23:26 PM EST
    in 2002-they are now using the Euro. The US has sovereign control of it's own currency so there's no legitimate comparison between Greece's situation and our own.

    That's how I feel... (none / 0) (#61)
    by kdog on Thu Sep 16, 2010 at 01:10:59 PM EST
    how can debts and deficits not matter?  It flies in the face of everything I've ever been taught.

    Like coast said, if that's true lets all live like Thurston Howell III.  Make my check with 7 zeros out to cash please, cuz I don't have a bank account...Thanks!  And abolish all taxation, since the government can't run out of money.  That was easy....next issue.


    No, that's not going to work, kdog. (5.00 / 3) (#68)
    by Anne on Thu Sep 16, 2010 at 01:30:19 PM EST
    Think of it this way: because the government has the ability to create money by spending it, it can direct that money in ways that drive the economy upward.  It can fund infrastructure programs and technology programs, for example, that will require that hundreds of thousands of people be hired.  Those people, who are now getting a paycheck where maybe they weren't before, or are making more money than they were before, put that money back into the local economy.  The more money that goes into the local economy, the greater demand for private sector goods and services.  Greater demand means the private sector needs to start hiring - and those people then put that money into the economy.

    The spiral goes up, not down, and as it goes up, revenue coming into the government's hands goes up - which means it doesn't need to create as much new money, so the deficits begin to shrink on several fronts.

    No one is suggesting a Roman orgy of spending on the order you suggest - but targeted spending is the best stimulus.  

    Too bad no one in this administration seems inclined to take that approach.


    hang on... (none / 0) (#70)
    by kdog on Thu Sep 16, 2010 at 01:46:35 PM EST
    They create money by printing it, spending doesn't create money, it requires money (or credit).  Spending wisely can make you money, but not create it...only the printers can do that.

    I understand that it can make sense for government to run up some debts and deficits in hard economic times, but that's gotta be coupled with fiscal responsibility post-rebound and in good times, a fiscal responsibility we never seem to see.  Only time in my life I saw any was during the perfect storm of he internet boom and 99 cent a gallon gas of the late 90's.  Other than that, it's been deficits and bigger deficits, and an ever growing national debt.
    I just don't see how we ever get out of the hole unless we welch on that debt, which surely will have consequences as well.


    The government's very act of (5.00 / 2) (#72)
    by Anne on Thu Sep 16, 2010 at 01:52:47 PM EST
    spending money it doesn't have creates it - does that make more sense?

    You might want to take a gander at the document I linked to; it's only about 10 pages and it's not written in economic gobbledy-gook.


    Not really:) (none / 0) (#74)
    by kdog on Thu Sep 16, 2010 at 01:56:17 PM EST
    if they don't have it, where did it come from?  China?  The Mint?

    I'm more confused:)...I'll check that link when I can give it the proper attention.


    You like the GOP plan though (5.00 / 1) (#34)
    by Big Tent Democrat on Thu Sep 16, 2010 at 11:50:31 AM EST
    Which makes this discussion with you absurd.

    I like the GOP plan (none / 0) (#40)
    by Slado on Thu Sep 16, 2010 at 11:54:54 AM EST
    if that plan means we reduce federal spending on every level and let private citizens keep their own money.

    A plan that works in the state of IN by the way.  

    The problem is in the 2000's they didn't do what they said their going to do.  Instead they cut taxes, started two wars, pass prescription health care on and on and on.   Less money coming in and more money coming out.

    We all agree that didn't work.   So why would we like it better if Obama is proposing it?


    Since it doesn't (none / 0) (#47)
    by Big Tent Democrat on Thu Sep 16, 2010 at 12:06:16 PM EST
    What do you say now?

    What a completely false argument (none / 0) (#17)
    by Slado on Thu Sep 16, 2010 at 11:25:09 AM EST
    How is he going to pay for his tax cuts?  The tax cuts that will cost 3 trillion dollars?  

    Is his argument that we can't afford 700 billion because we can afford 3.0 trillion but we can't afford 3.7 trillion?

    How stupid does he think we are?

    And what happened to the multiplier effect?  I thought the stimulus didn't work because it wasn't big enough?

    Now I'm supposed to believe that tax cuts work if they cost 3 trillion but they don't work if they cost 3.7 trillion?

    Listen to yourselves.  The only argument he is making is that rich people don't deserve tax cuts but everyone else does.  That's it.

    If tax cuts work why stop at 3.0 trillion.  Why not go ahead and do 3.7 trillion?  10 trillion?

    If they don't work don't do it at all.

    There is no other logic to his proposal, economic or otherwise.  Only the most die hard partisan thinks this is going to do any good to fix the economy.  

    Even me, a believer in tax cuts knows they only work if you cut spending.  And we all know he has no intention of doing that.

    Oh please (5.00 / 1) (#22)
    by lilburro on Thu Sep 16, 2010 at 11:30:31 AM EST
    comparing the 3 trillion/3.7 trillion tax cuts and the stimulus based on "size" makes no sense whatsoever.  Why should we throw an extra 700 billion at a select few?

    My point exactly (none / 0) (#30)
    by Slado on Thu Sep 16, 2010 at 11:43:30 AM EST
    Why is Obama advocating for 3.0 trillion worth of cuts and saying 3.7 trillion is wasteful?

    It makes no sense.

    Either you believe tax cuts work or you don't.

    Hard to know what Obama believes.  In Aug '09 he said you shouldn't raise taxes in a recession.   Then he said we couldn't afford Bush's tax cuts.

    Now he has tax cut fever and wants to make sure every one gets them except evil rich people.  Evil rich people who last time I checked spend money like everyone else.

    If you step away from the simple "it's not fair he has more then me" argument for just a second you realize this is not a plan, it a ploy its not going to be good for the economy if federal spending doesn't come down.


    um ok (none / 0) (#38)
    by lilburro on Thu Sep 16, 2010 at 11:53:42 AM EST
    Either you believe tax cuts work or you don't.

    so details just do not matter?  It's ok to throw away 700 billion at a few rich people (who do not spend like everyone else, actually)?  Federal spending must go down but federal revenue can just be thrown away?

    I wish we had more of this attitude when we were working on the stimulus, our economy could be trucking along at a nice little pace by now.


    What is your point? (none / 0) (#43)
    by Slado on Thu Sep 16, 2010 at 11:58:57 AM EST
    As long as the government cuts taxes for anyone who isn't rich it's fine?

    Taken directly from the CBO report (5.00 / 1) (#51)
    by cawaltz on Thu Sep 16, 2010 at 12:28:26 PM EST
    The CBO also looked at the stimulative effect of various parts of the stimulus package. It found that purchases of goods and services by the federal government--such as for public works--had the largest bang for the buck, raising GDP by $2.50 for each $1 spent. Transfer payments had a lesser impact, but were still significantly more stimulative than tax cuts.


    Let's quit playing pretend that a rich person who already has the means to purchase products and services at his disposal is going to do the exact same thing as someone who doesn't when he receives a financial windfall. A person who is scraping by is going to spend his money on needs while someone who already makes almost 4 times the median income in this country will more than likely bank it.


    "will more than likely bank it" (none / 0) (#55)
    by coast on Thu Sep 16, 2010 at 12:42:21 PM EST
    So the money just disappears.  Gets stuck under the mattress never to be seen again?  This idea that money saved by the "rich" somehow disappears from the economy and does nothing to generate more economic activity is very short sighted and very wrong.

    Money sitting in the bank (5.00 / 2) (#57)
    by cawaltz on Thu Sep 16, 2010 at 12:48:23 PM EST
    doesn't get sunk into the economy. If you aren't purchasing goods or services then the money does nada for the economy.

    So yes, it's the equivalent of stacking the money under your mattress. This is basic Econ 101 stuff.


    Have you ever heard of a loan? (5.00 / 1) (#59)
    by coast on Thu Sep 16, 2010 at 12:56:57 PM EST
    The bank doesn't print its own money.  To make money it has to lend the money it has on deposit.  To lend more money they have to have more money on deposit, and so on.  So the money that you deposit into your bank isn't sitting in some vault in the back of the bank.  Some local business person has come in and borrowed the money you deposited so that he can go run his store, either buying goods for inventory or paying a cashier.  I think even someone who took Econ 101 can understand the basics of banking.

    You do realize (5.00 / 1) (#67)
    by cawaltz on Thu Sep 16, 2010 at 01:28:51 PM EST
    that the banking system has to pay back money sitting in YOUR bank account so technically it is not loaning YOUR money out right?

    I mean I've never actually gone to the bank and had them say "I'm sorry Miss, we can't give you that money because we lent the money to Mr. Moneybags."

    I understand the banking system just fine.


    "You do realize that the banking system has (none / 0) (#77)
    by coast on Thu Sep 16, 2010 at 02:12:07 PM EST
    to payback money sitting in YOUR bank account"....um then why is there this thing called Federal Depository Insurance?  Ask depositors from IndyMac who lost about $270 million if your statement that the bank "has to pay back your money" is true or not.  If its true then you need to offer your services to them because I bet they have been told by some pretty high priced attorneys that they are SOL.

    Yeah and (none / 0) (#78)
    by cawaltz on Thu Sep 16, 2010 at 02:22:13 PM EST
    remind me again what the limits are on how much the FDIC insures? And share with the class how if you spread the money out among banks that the money is protected? Furthermore, it isn't as if it isn't printed everywhere what the institutional limit is and how to get around it.

    I apologize for being cynical (none / 0) (#81)
    by coast on Thu Sep 16, 2010 at 02:48:33 PM EST
    but you are obviously stedfast in your belief that money, once saved, goes nowhere.  I'm of the belief of something entirely different.  So we will simply have to disagree on this matter and move on.  Have a good day. :)

    They really are lending out YOUR money... (none / 0) (#79)
    by vml68 on Thu Sep 16, 2010 at 02:44:13 PM EST
    the banking system has to pay back money sitting in YOUR bank account so technically it is not loaning YOUR money out right?

    ...and all the other depositors money too.

    I mean I've never actually gone to the bank and had them say "I'm sorry Miss, we can't give you that money because we lent the money to Mr. Moneybags."

    The banks run on a fractional-reserve system i.e. they are required to have a set fraction of their deposits available in cash. They are free to lend out the rest. So when you walk in to the bank to withdraw your money, they will be able to cover it. But if each and every depositor decides they want to withdraw all their cash at the same time you do (a run on the bank), the bank will not be able to accomodate all of you and will most likely suspend withdrawals or close.

    I understand the banking system just fine.

    No offense cawaltz, but you might want to read up a little more on the banking system.


    Been there, done that, move on. :) n/t (none / 0) (#83)
    by coast on Thu Sep 16, 2010 at 02:51:22 PM EST
    And (none / 0) (#85)
    by cawaltz on Thu Sep 16, 2010 at 03:08:47 PM EST
    again as long as you are under the FDIC insured amount you'll still be guaranteed your money. The bank might be out of business but the individual isn't.

    I guess the question I ought to be asking you since all of this is actually besides the point is the bank loan actually part of the GDP?

    I mean since the discussion is actually on the economic impact of parking the money in a bank as being "stimulative"


    No it doesn't print it's own money (none / 0) (#69)
    by cawaltz on Thu Sep 16, 2010 at 01:31:30 PM EST
    However, it does go to the FED to borrow money(right now I believe at 0%).

    The way you're explaining it though you'd figure they are just looting and pillaging people's savings accounts to make loans. It doesn't work that way.


    Yes , it does work that way! (none / 0) (#84)
    by vml68 on Thu Sep 16, 2010 at 02:59:38 PM EST
    The way you're explaining it though you'd figure they are just looting and pillaging people's savings accounts to make loans. It doesn't work that way.

    They are not looting and pillaging people's accounts, they are using the money deposited with them to make loans,etc. That is what a bank does. It is their primary function!
    How do you think banks make a profit? Or pay you interest on your savings account or CD? Whose money do you think they are lending out when they make a loan?


    Well, there is some lending (5.00 / 3) (#89)
    by Anne on Thu Sep 16, 2010 at 04:00:01 PM EST
    going on, but nothing like what was supposed to be happening - hence, not a lot of stimulative effect from the stimulus.

    And, there isn't as much borrowing, either, because why would you need to take out a loan to expand your business if your business is declining - or stagnant?  You wouldn't.  You'd hold tight until you had more demand for your goods and services, and more confidence in the economy to make borrowing a good decision.

    We're stuck, and tax cuts are not going to get things moving as fast or as far as is needed to get the economic spiral going up instead of down.


    You aren't going to convince (none / 0) (#86)
    by cawaltz on Thu Sep 16, 2010 at 03:12:49 PM EST
    me the rich parking their money in a bank has a stimulative effect on the economy.

    I really don't care if the banks can then choose to lend out the money(that must be paid back up to the FDIC limit).


    That's fine. It is not my job to try (none / 0) (#87)
    by vml68 on Thu Sep 16, 2010 at 03:31:12 PM EST
    You aren't going to convince me...

    and convince you of anything. However, if this is a subject you are interested in and want answers to,there is a whole world of information out there.


    Yes, that's my point. I hate rich people. (none / 0) (#49)
    by lilburro on Thu Sep 16, 2010 at 12:13:11 PM EST
    Actually my point is that your idea makes no sense because it involves 0 nuance.  Taxes are not good or bad per se, it's how they are designed.  The point is to go back to Clinton-era rates because they worked.  Whereas throwing away 700 billion is not a decision that will "work" in a way that would make it worth the pricetag.

    No they don't spend like everyone else (none / 0) (#54)
    by cawaltz on Thu Sep 16, 2010 at 12:35:18 PM EST
    Again, taken directly from the CBO report

    The CBO also looked at the stimulative effect of various parts of the stimulus package. It found that purchases of goods and services by the federal government--such as for public works--had the largest bang for the buck, raising GDP by $2.50 for each $1 spent. Transfer payments had a lesser impact, but were still significantly more stimulative than tax cuts. Moreover, tax cuts of the sort favored by Republicans have the least impact. According to the CBO, tax cuts for low-income individuals raise GDP by as much as $1.70 for every $1 of revenue loss, while those for the rich and for corporations raised GDP by at most 50 cents for every $1 of revenue loss.


    Work for what purpose? (none / 0) (#88)
    by ruffian on Thu Sep 16, 2010 at 03:35:20 PM EST
    Tax cuts don't work very well as stimulus, according to many economists. They do work well for giving poeple who need some extra cash right now a little breathing room.

    I don't support tax cuts as a matter of stimulating the economy, but I see the need for help for people who have had no effective pay raises in 10 yrs.


    It's true... (none / 0) (#21)
    by kdog on Thu Sep 16, 2010 at 11:30:22 AM EST
    you can't intelligently debate taxes without debating spending...you gotta get a handle on how much Uncle Sam needs to serve us, and then come up with the fairest bestest way to hit that number.

    The argument for the middle class tax cut (none / 0) (#75)
    by ruffian on Thu Sep 16, 2010 at 01:57:56 PM EST
    is that the middle class needs relief, not that it will be the needed stimulus to the economy. I don't see Obama saying that the tax cuts are part of a stimulus plan.

    Here is a question I can't really reconcile: (none / 0) (#29)
    by coast on Thu Sep 16, 2010 at 11:40:42 AM EST
    Ever since the Bust tax cuts were passed the talking point has always been that they only favored the rich.  Well if that is true, then why is so much effort being spent on extending something that supposedly never benefited middle and lower income tax payers?

    Wow, Good point (none / 0) (#31)
    by Slado on Thu Sep 16, 2010 at 11:46:21 AM EST
    Especially when you consider Obama's cuts cost 3 trillion and Republicans additional cuts cost 700 billion.

    Who was getting that 3 trillion dollars all along?

    By the way Bush's cuts didn't work because Republicans couldn't control their pens and spent like drunken sailors during the housing bubble.

    Cuts only work if you cut spending.   Cut taxes, boost spending and you are left with, well look around.

    Obama's plan is to cut taxes, screw rich people and increase federal spending.   Sign me up!


    I don't think (none / 0) (#46)
    by gyrfalcon on Thu Sep 16, 2010 at 12:04:18 PM EST
    you read/listen to those "talking points" very carefully.

    I support the plan that 31House Dems support (none / 0) (#44)
    by Slado on Thu Sep 16, 2010 at 12:01:29 PM EST
    31 Dems for all tax cuts

    "IF" it includes huge cuts to federal spending.

    I'll make the first cut.

    1) Reduce Military spending by 30%.

    Not unless (5.00 / 2) (#52)
    by cawaltz on Thu Sep 16, 2010 at 12:32:30 PM EST
    it specifically is a 30% cut to the new toys.

    The men and women being sent all over the world to "defend democracy" don't deserve to have their pay frozen or to have to pay to maintain their readiness(health care for themselves and families).


    I liked the new "toys" (none / 0) (#100)
    by efm on Thu Sep 16, 2010 at 10:36:44 PM EST
    I saw what the new toys did for us in Iraq.  Went from Humvees that you could actually stab a knife threw the door to ones that could take an IED blast right in its side and barely scratch the paint.  Also was nice when they came out with the systems that jammed the wireless signals that were used to detonate IEDs when we drove by them.  We went from having pretty much no body armor, to having body armor that would slow down maybe stop a shot from an AK-47, to armor that stopped AK-47 rounds completely.  I know not every one here likes UAVs, but it sure was nice having them scout ahead of the convoys and seeing IEDs before we drove over them.

    Allow me the second... (none / 0) (#62)
    by kdog on Thu Sep 16, 2010 at 01:14:08 PM EST
    DEA...it wasn't nice knowing you, 100% cut.

    As for the tyranny jobs lost..."the world needs ditch diggers too Danny".  You could even put 'em to work selling the dope collecting dust in the evidence locker...more productive than what they do now.


    Unfortunately, some of the stuff in (none / 0) (#65)
    by oculus on Thu Sep 16, 2010 at 01:19:48 PM EST
    the evidence locker does get sold/used.