Re: NASA moon trip video
On Wed, 1 Feb 2006 00:59:04 +0000 (UTC), "Vorlonagent"
<jt@xxxxxxxxxxxx> wrote:
>
>"Josh Hill" <usereplyto@xxxxxxxxx> wrote in message
>news:e9qvt1pmli8u80cfbq5581nisb19b6pubb@xxxxxxxxxx
>
>>>It's Bush's fault for not controlling spending, but his tax cuts did their
>>>job nicely.
>>
>> Isn't that a bit like saying it was a mistake to spend too much but it
>> wasn't a mistake to take a pay cut?
>
>Not when there's a relationship between taxation and economic growth.
>
>The pay cut was good. The economy has revved back up very nicely and gross
>tax receipts are up.
>
>The problem is that Congress under the Republicans has not exercised any
>kind of self-restraint and has been spending the increase as fast as it is
>coming in, thus maintaining the defecit situation created by the tax cut.
>The Abramoff scandal is a symptom of the problem congress has with spending.
>
>Bush isn't helping matters by proposing topheavy budgets and signing them
>into law after Congress has bloated them further.
>
>Nipping Bush's tax cut will raise revenue in the short trem (over next 18
>mos or so), but it also slams the brakes on an economy already beginning to
>falter under high oil prices.
>
>The real answer is to get serious about cutting spending.
It seems to me that there were, from a macroeconomic perspective,
several serious problems with Bush's tax cuts, chief among them the
fact that they were targeted largely at the wealthy, who unlike the
poor and middle class tend to invest rather than spend. Since
investment isn't what we need in an economic downturn when cheap
capital is plentiful, for a given reduction in revenue, Bush's tax
cuts provided significantly less of an economic stimulus than they
would have had they been targeted towards consumption.
This was I suspect compounded by the fact that by constraining Federal
spending, Bush's tax cuts had the effect of pushing costs for the
likes of medical care and the No Child Left Behind Act onto states and
local communities, which, lacking the authority to run a deficit, were
forced to increase taxes themselves. Since state taxes tend to be
regressive, this would have tended to reduce the purchasing power of
the poor and middle class, offsetting to some extent the potential
stimulatory effect of Bush's tax cuts.
And there are I think other economic problems with the tax cuts as
well. For one thing, we're in effect financing the deficit through
international borrowing, and the consensus among economists seems to
be that the deficit has become unsustainable.
I'm not sure why you distinguish between reigning in spending and
increasing taxes, since it seems to me that from a macroeconomic
perspective, they have a similar effect, the main difference being
that spending provides a more effective fiscal stimulus than tax
decreases that aren't specifically directed towards the poor. The
balance between government and private spending should, I think, be
based upon an analysis of our needs and the most efficient way of
meeting them, rather than an ideological obsession with small (or
large) government. Except in unusual circumstances such as a world
war, when our needs increase as they have because of the Iraqi war,
the flood in New Orleans, and the Medicare drug benefit, taxes should
be increased to cover them, with the decision to run a deficit or
surplus based on purely economic considerations.
Also, I think it's dangerous to speak without qualification about
reigning in government spending. That isn't going to happen because we
don't want to eliminate the valid things that government spending
provides -- things like education, R&D, a strong military, Social
Security, and Medicare. The problem as I see it is that legislators
are reluctant to cut the spending that /should/ be cut -- pork like
farm subsidies, bridges to uninhabited islands in Alaskaand,
anti-terrorism money for cornfields, the huge and largely unnecessary
cold war nuclear arsenal, and the like. Since the President and
Congress haven't been willing to cut out pork, the conservative
"starve the beast" reductions in government financing have had the
unfortunate effect of depriving government of the funds it needs for
productive and necessary investments such as energy independence,
reconstruction in Louisiana and Iraq, and comprehensive health care
reform, as well as shifting a burden to states and local communities,
which has the effect of magnifying economic inequality, since poorer
localities and large states (which are underrepresented in Congress)
end up with higher taxes and inferior services, driving business
elsewhere.
--
Josh
"Reade him, therefore; and againe, and againe: And if then you doe not like him,
surely you are in some manifest danger, not to understand him." - Heminge and Condell
.
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