"Analyst: Obama Would Be A Nightmare For Defense Programs, Firms"

On Wed, 23 Apr 2008 09:42:23 -0600, "Glenn Dowdy"
wrote:


"Ed Rasimus" wrote in message
.. .


Carter cut programs in the military aggressively, froze promotions and
military pay/allowances for three of his four years, gave us 22%
inflation and an 18% prime interest rate,

How did a president 'give' us those rates?

Glenn D.

Generally the state of the economy is attributed to the economic
policies of the incumbent president. (Recall Clinton's claim of
leaving a balanced budget and reducing the national debt? Notice the
attribution of the current market decline, AKA recession, to Bush tax
cuts? Recall the Reagan tax cuts followed by increases in federal
revenue followed by a spending orgy by the Congress?)

If you take office with 4% inflation and 6% interest rates and in four
years without a major cultural shock like a 9/11 or significant war
the inflation rate has skyrocketed and interest rates make home owners
instantly "wealthy" but home buyers turn into apartment seekers, you
take the blame.

If your successor cuts taxes and within three years the indicators are
significantly reversed, we can assume a cause/effect relationship.

Ed Rasimus
Fighter Pilot (USAF-Ret)
"When Thunder Rolled"
www.thunderchief.org
www.thundertales.blogspot.com

Ed Rasimus wrote:
On Wed, 23 Apr 2008 09:42:23 -0600, "Glenn Dowdy"
wrote:

"Ed Rasimus" wrote in message
...

Carter cut programs in the military aggressively, froze promotions and
military pay/allowances for three of his four years, gave us 22%
inflation and an 18% prime interest rate,
How did a president 'give' us those rates?

Glenn D.

Generally the state of the economy is attributed to the economic
policies of the incumbent president. (Recall Clinton's claim of
leaving a balanced budget and reducing the national debt? Notice the
attribution of the current market decline, AKA recession, to Bush tax
cuts? Recall the Reagan tax cuts followed by increases in federal
revenue followed by a spending orgy by the Congress?)

If you take office with 4% inflation and 6% interest rates and in four
years without a major cultural shock like a 9/11 or significant war
the inflation rate has skyrocketed and interest rates make home owners
instantly "wealthy" but home buyers turn into apartment seekers, you
take the blame.

If your successor cuts taxes and within three years the indicators are
significantly reversed, we can assume a cause/effect relationship.

Ed Rasimus
Fighter Pilot (USAF-Ret)
"When Thunder Rolled"
www.thunderchief.org
www.thundertales.blogspot.com

Yeah, no oil embargoes or OPEC cartels raising prices at all... No
major revolutions in the oil patch...

D'oh!

Dan

Dan ha scritto:
Recall the Reagan tax cuts followed by increases in federal
revenue followed by a spending orgy by the Congress?)

Someone can explain to me the contradictory justapoxition of "tax cuts"
and "increases in federal revenue" ?

Best regards from Italy,
Dott. Piergiorgio.

On Apr 23, 11:45*pm, "dott.Piergiorgio"
wrote:
Dan ha scritto:

Recall the Reagan tax cuts followed by increases in federal
revenue followed by a spending orgy by the Congress?)

Someone can explain to me the contradictory justapoxition of "tax cuts"
and "increases in federal revenue" ?

When we in the USA talk about tax cuts, we are real talking about
income tax rate cuts.

Our problem is that most people think that all you have to do to
increase governement revenue is increase the income tax rate. This is
true for people is the lower tax rates, but not true for people in
higher tax rate. That is because as income tax rate grow, it effect
how people generate income. The higher the income tax rate, the more
adventagest for people to do things to avoid being taxed on their
income. This reduces the amount of money the government take in. To
make things worst, this effect gets exponentually bigger ( more lost
revenue) as the taxs rates grow higher.

Now at some point, the lost in revenue outstrips the increases revenue
from the higher tax rate, increasing tax rate above that point results
in the government losing money.

Now some people claim that all the government has to do is pulg up
'tax loop holes' to 'fix' the problem, This does not realy work, since
there is two loopholes that can not be filled. One people can deal
taking their profits and let their current investment grow (very bad
for the economy) and secong they can invest their mont were the
government can't get it.

On Thu, 24 Apr 2008 08:45:57 +0200, "dott.Piergiorgio"
wrote:

Dan ha scritto:
Recall the Reagan tax cuts followed by increases in federal
revenue followed by a spending orgy by the Congress?)

Someone can explain to me the contradictory justapoxition of "tax cuts"
and "increases in federal revenue" ?

Best regards from Italy,
Dott. Piergiorgio.

A cut in marginal tax rate can result in increased productivity, new
job creation, a booming economy and consequently higher tax revenue.
When people keep their own money for investment and purchasing power,
they generally employ it in ways which grow the economy.

For details on the concept refer to the work of Arthur Laffer, and the
Laffer Curve:

http://en.wikipedia.org/wiki/Laffer_curve

Ed Rasimus
Fighter Pilot (USAF-Ret)
"When Thunder Rolled"
www.thunderchief.org
www.thundertales.blogspot.com

Someone can explain to me the contradictory justapoxition of "tax cuts"
and "increases in federal revenue" ?

Sure. Federal revenues today are higher than they were in 2000. That's
because Bush cut taxes.

Same thing happened when Reagan cut taxes.

Same thing happened when Kennedy cut taxes.

Lower taxe RATES = more economic activity in areas exposed to taxes.
Works especially well when it comes to capital gains. Nobody has to
pay a capital gains tax; it's entirely optional. At Bush's 15 percent,
people don't mind taking profits and paying the tax on them. At
Obama's 28 percent, the money will mostly stay locked up, and 28
percent of nothing is ... nothing.

When faced with this fact at the Philadelphia "debate", Obama was
quite honest. It was all about fairness, he said. In other words, no
matter if the revenue goes down!


Blue skies! -- Dan Ford

Claire Chennault and His American Volunteers, 1941-1942
new from HarperCollins www.FlyingTigersBook.com

On Sat, 26 Apr 2008 06:48:00 -0400, Cubdriver usenet AT danford DOT
net wrote:

Sure. Federal revenues today are higher than they were in 2000. That's
because Bush cut taxes.

This is what is technically referred to as a post hoc ergo prompter
hoc fallacy.

Federal tax revenues for 2007 were about $100 billion more than in
2000. Federal tax revenues were about $1,000 billion more in 2000
than they were in 1992.

While there's no doubt that an excessive tax rate will reduce total
revenue, total tax revenue has been increasing pretty steadily for the
past forty years, regardless of whatever tweaks have been made to
marginal tax rates. The exception to that steady increase was in GW
Bush's first term, between 2000 and 2003, when total revenue dropped
about 400 billion dollars.

On Apr 26, 10:20*am, Mark Sieving wrote:
On Sat, 26 Apr 2008 06:48:00 -0400, Cubdriver usenet AT danford DOT

net wrote:
Sure. Federal revenues today are higher than they were in 2000. That's
because Bush cut taxes.

This is what is technically referred to as a post hoc ergo prompter
hoc fallacy.

Federal tax revenues for 2007 were about $100 billion more than in
2000. *Federal tax revenues were about $1,000 billion more in 2000
than they were in 1992.

While there's no doubt that an excessive tax rate will reduce total
revenue, total tax revenue has been increasing pretty steadily for the
past forty years, regardless of whatever tweaks have been made to
marginal tax rates. *The exception to that steady increase was in GW
Bush's first term, between 2000 and 2003, when total revenue dropped
about 400 billion dollars.

The problem comes when people think in terms of the gross economy and
gross taxes/tax rates. The believe created during the Reagan years
that all taxs cuts will cause economic growth that will in turn
increase tax revenue was based a wrong understanding of the Laffer
curve. This combined with some very poor economic education is the
reason for this myth continuation. Not all taxs cuts will increase tax
revenues or grow the economy.

The think we must remember is the economy is made up of hundered of
millions of individuals, each of which operates in what they consider
their own self interest. What we know as the gross national product
(GNP) is the summation if all these individual income. Now while must
people think every body acts the same in the everybody else, the
reality is that everybody acts different, because nobody situation is
the same. Therefore it is impossible to model our economy using gross
method, it can be done only by complex multi dimension models that
take these individual differneces into account.

Now consider that with our progress tax rates system, some of those
individuals, the rich productive ones, are given less incentive to
produce that those which are taxed less becuse of the high tax rates
they are force to pay on income.. The rich therefore start producing
less, or at least producing less of what is taxed ( ie income). This
result of course in decreased government revenue since there is less
to taxs, And since the wealth poeple control such a large percentage
of the GNP, they produce a extremel high proportion of the
governement take revenue. Which means as they produce less, the
governments revenues fall even quicker.

From these points it becomes clear that if the lawmakers want to
increase government revenues, they must reduce the tax rate paid by
the rich and forget making tax cut for the poor.

One more thing, since the rich will be provided with increased
incentive to generate income, they will naturally increase the income
they produce. That inturn will increase the GNP which is the
measurement of the size of the economy most often used. This is why
cutting taxes of the high income people, the 'rich', is responsible
for 'economic growth.'

dott.Piergiorgio wrote:
Dan ha scritto:
Recall the Reagan tax cuts followed by increases in federal
revenue followed by a spending orgy by the Congress?)

Someone can explain to me the contradictory justapoxition of "tax cuts"
and "increases in federal revenue" ?

Best regards from Italy,
Dott. Piergiorgio.

Well, with any change in the tax codes, people with large stakes of
sedentary investments are encouraged to shift them around. basically, a
tax cut on investments acts as a moratorium/amnesty: we'll forgive you
if you pay us. If rates are 50% and you have $1 million in profits, you
might be enticed to sell those assets if you lower the rate to 25% (for
an almost instantaneous gain of 25% on those assets).

Conversely, if rates are low, and you hold a gain, if the government
raises rates, then you are enticed to sell NOW to lock in the lower rate.

Such activities create a bunch of secondary profits (markets, brokers,
managers who manage the "new" money), so it looks, temporarily, that the
economy has grown when all that was done was to pass paper around. The
government take from this new activity is very short term, but the
tax-cutters point to it as proof that lowering taxes generates
additional revenue (failing to mention that the increases are temporary,
at best).

Please to note that the "spending orgy by the congress" was, in fact,
not an increase in spending independent from the tax cuts, but was a
part of them. Note also that Reagan never submitted a budget that was
ever even close to what was passed in Congress - Congressional budgets
were always WAY lower than Reagan wanted. Note also that Reagan gets
credit for the tax cuts (passed by Congress) but no blame for the
spending, which increases were mostly his bloated military boondoggles,
which EVEN the Pentagon stated openly were obscenely more than they
needed or wanted...

Acolytes of St. Ronnie are an interesting breed... Like other religious
fanatics, they ignore the facts to maintain their belief in the
canonical infallibility of their cult leader.

Dan

dott.Piergiorgio wrote:
Dan ha scritto:
Recall the Reagan tax cuts followed by increases in federal
revenue followed by a spending orgy by the Congress?)

Someone can explain to me the contradictory justapoxition of "tax cuts"
and "increases in federal revenue" ?

Best regards from Italy,
Dott. Piergiorgio.

Reagan spent borrowed money.

Andrew Swallow