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Listen. You have good math skills. Think it through. If he cut taxes to zero would 20% of GDP be ok? It's not as simple as just looking at spending. It's the whole package taken together. If you're going to bring in signifigantly less revenue, you can't go on spending at the same rate as when you brought in more revenue.

It's not complex.



Look. I know this has traditionaly been an adverserial realtionship between us. You look foolish questiong my grasp of economics though. It doesn't accomplish anything. It doesn't bother me in the slightest. It's not convincing anyone who sees me post facts that prove your arguments false and policy papers from fiscally conservative groups saying the opposite of what you do. Who's the intended audience for it? No one's under the impression that you understand this better than I do. They may disagree with my conclusions, but find me one poster who's been here more than a month who thinks you have a firm grasp of the subject matter and I'm just confused.

Let it go. You have a layman's grasp of economic policy and that's ok. When you get appointed SecTres I'll be more worried. Also you need to stop saying things like "It's about where the money gets spent" because it's just prima facie not accurate. Again, if the tax rate was zero and there was no revenue it wouldn't matter what the money was being spent on if there was never a way to recover any of it to pay the creditors.

Can we please agree on that? It's both how much is spent and what it's spent on. BOTH. It has to be both. Trying to marginalize either side of that equation is foolhardy. You're attempting to make an absolute argument that the amound of debt is completely irrelevant. Which is ludicrous and everyone knows it. Hell, YOU know it. You're just lookinng for a toehold to havev some way into this argument. Let it go.



Ok, fine. I understand your position. If this is truely your position then, you should be COMPLETELY in favor of Socialized Medicine. The argumets are the same, the buisness models are the same. If you are, all well and good, you're consistent. If you're not you really need to sit down and figure out where you stand.



Read it and get back to me. Your arguing with me about something that you, quite literally, know NOTHING about. Where's the sense in that? This isn't poker, you can'y bluff your way through. If you want to talk about, go read it, read about it, and come back and discuss it. What's the big deal about saying "Gee, never heard of it, I didn't realize there was a new half million dollar entitlement?"




That's a nice abstract argument, but it doesn't relate at all to either what's occuring with the spending in this administration, or really what's happened in Demoratic administrations in the past. To be overly cliche' what you're spouting is, indeed the famous "Party Line" as much so as me saying Republicans hate Blacks.

Take a minute and read the policy papers I linked. Have a drink and really think about if you want to go on record with a position that's contrary to what Brookings, Cato, PNCP, and Heritage ALL say. That deficit spending is out of control.

Two easy solutions, raise taxes, my preferance or cut spending which should be your preferance.

I'm tired of bickering over this. Go read and come back and kick my ***.

Um... No. I'm not impying it at all. I'm stating it as an absolute fact. And the CBO numbers absolutely prove that statement.

How exactly is it "fairly unlikely"? A 16.9% revenue rate is the lowest on the damn chart! The fact that you continue to deny it's true after I've proven it beyond any possiblity of doubt is just more proof of how blinded you are by the rhetoric of the left.

And people try to say I'm brainwashed? Yikkes!

Game. Set. Match. Just say it with me: Clinon had record high taxes. Bush had record low taxes. It's ok. You can do it. Afterall, it's true...





That has to be the funniest bit of this whole thread Smash. Thanks for making my day...

Ok. I see where the confusion may be coming in. When I said "Clinton's tax rates", and "Bush's tax rates", I was talking specifically of the revenue their governments brought in during a set of years that they were in office. I was not talking about individual "tax rates" witnin a single years revenue.

I thought that was obvious given the context of the discussion. There are a lot of different types of taxes and tarrifs that make up the total revenue of the government on any given year (as well as a small amount from interest on loans and sale of bonds). In the context of my statement, it would have made no sense to be talking about just one or even a set of taxes. We were talking about the deficit, which as youpointed out, is a simple subtraction of the outlays from the revenue. My "tax rate" statement was in response to that (as in: "The deficit was primarly caused because Bush lowered taxes rather then increased outlays"). The fact that the increase in his outlays is relatively small in relation to GDP, but his decrease in revenue is *huge* in relation to GDP is pretty strong support for that position.

He increased spending by 1.5% of the GDP. He decreased revenues (taxes) by 4.4% of the GDP. Where do you think the bulk of the deficit came from? It's really not that hard to figure out. If you spend 100 dollars more this month then last month, but you earned 400 dollars less during the same time period, and your bank account drops by 200 dollars as a result, wouldn't most sane people attribute the "debt" on your account to the 400 less dollars you made? At the very least, they recognize that it had more to do with being 400 bucks in the hole then the increase in spending did.

Why on earth, when we're talking about deficit spending, would I support that with a statement about only one part of the revenue? It should have been obvious that I was talking about all taxes and tarrifs and whatnot since that was the only relevant number.


In this case, it's the totals that matter. When you look at that chart it becomes abundantly clear that Clinton ran a surplus becuse he ran record high taxes. This is a percent of GDP. I don't care what the exact numbers are, and it doesn't matter if we were in a boom economy or not. A boom would presumably be represented by an increase in GDP. If I make 100 dollars and you tax me at 15%, or 200 dollars and you tax at 15%, that is the same "tax rate". If you take 20% out, you've increased the "tax rate". How exactly you take that 20% out is irrelevant. Whether you took it in tarrifs on goods I imported, or taxes on my business profits, or sales taxes on goods I sold, or income taxes on my personal income, or capital gains taxes on my investments really doesn't matter if we're just making a blanket comparison of two years. One way or another, Clinton "taxed" a greater percentage of the entire US economic pie then any president at least since 1962 (probably ever, but I can't be sure of that).

Equally, Bush "taxed" the smallest percentage of the economic pie then anyone else during that same time period. When talking about future economic growth and health, those numbers are really significant. GDP represents everything that the country makes and sells. It represents jobs and prosperity. The higher that percentage "revenue" is, the more of that money is taken out of the GDP in one form or another. That's our jobs, our prosperity, or ability to weather hard economic times.

What Clinton did was take advantage of ean economic boom by responding in a typically short sighted manner. He saw more money being generated, and businesses that could afford to be taxed more, so he taxed more. While business was booming, everything was fine, however, once the boom stopped, the extra profits that businessess needed to manage the higher tax rates just weren't there. Businesses went belly up, markets crashed, and a recession ensued.

Is Bush's current deficit spending a "good thing"? Of course not. However, it may verywell be a "necessary thing" in order to get us out of the recession. By most accounts, it's been working too. The only people I hear talking about unemployment are Democrats trying to use a 2 year old issue for leverage. Sometimes, you have to do things you'd rather not because that's what has to be done, even when it's unpopular. Increasing the national debit by a small amount is likely to be much less harmful even in the long run, then continuing with the economy the way it was in 2001-2002. Is there anyone here who can honestly state that our overall domestic economic status is not better today then it was two years ago?

Edited, Fri May 28 23:55:02 2004 by gbaji

Um... More or less. Yes. Bush's outlays as a percent of GDP are a bit higher then Clinton's on the average, but both are pretty low when compared with historical data.

I can predict what's coming though. I think we can summarize the difference between Conservative and Liberal economic thinking right here:

A Conservative thinks that increased government revenue is "bad", but increased business revenue is "good".

A Liberal thinks the exact opposite.

I could be missing your intent, but it sure sounds like you were implying that Clinton "Bringing in more revenue" was a good thing. Heh. That's exatly why I called it a "tax rate" (on GDP) rather then "revenue". See... Revenue makines people think of their own take home pay, or something equally inapplicable to government finances. I call government revenue a "tax on GDP" because for the most part, that's exactly what it is.


Where do you think most federal revenue comes from Smash? If we paid a per-service cost to the government, then you could think of it as a business, and the revenue as an accurate measue of the value of those services. But that's not the way it works. It does work that way with businesses, but not government. A business only makes money if it's goods or services are of value to those recieving it. Their revenues are a direct representation of how valuable their goods and services are to those purchasing them.

Revenue for a government is simply how much money it decided to take up front. After all, you pay X amount of income tax, regardless of how much you get back in services and goods from the government. There is zero correlation to the amount taxed and the value returned. In fact, the whole point of taxation as a primary source of government revenue is so we can provide government services in amounts unequal to what was taken in the first place. It's an assumed part of the whole idea.

So. Taking in more revenue is not a good thing. It does not measure how well your government performed. All it says is that you took X percentage of your economy away from the forces that generate the GDP in the first place. No government programs generate money. They take money and give us services. That's fine, to a point. But the ability of those that are taxed to generate that revenue is based on GDP growth. And GDP growth is based on how much is left over after the taxes. So a high "revenue" as a percentage of GDP is mostly just likely to cause a slowdown of the economy in following years. Um... That's exactly what happened...

hmmm, does this mean I am a troll? /em looks under rock.......thankfully, seems I just am a passer-bye, Thank the Gods for bard speed.

/em flips on TV and sees Hannity hosting a show on CNN...realizes it is all a bad dream and moves on.........

It really is as simple as this Gbaji who claims to be worth 3 million, and a finacial guru claims to make under 200k a year. He lives in San Diego owns a really nice house even by San Diego standards thats 1 million. That leaves 2 million invested, well since he is a guru, that means he is making at least 200,000 a year in intrest/return. So lets see his main income as he has said previously is about 75,000 so um I am not a math guru but 75k plus 200k does equal more then Smash's number of anyone people making more then 200k doesnt it?

In case it wasnt obvious I think Gbaji is an idiot, cept when he agrees with me then I know that I will get 20 or so paragraphs supporting my postion that the oposition isnt likely to try and counter.

Brialla(sp) its ok we were all new once and some of us can't help blindly following what we are told. I remember back in the day when I was the in the military it was, yes sir this and yes sir that.

In case anyone was interested, I advocate the world dictatorship model of government. Phear teh wombat overloards! they are coming soon!

One, there's no way Gbaji makes over, oh 75k. He's unskilled labor in the right place at the right time. 75k is about what an auto worker would have made in the 70's when they were in the same situation.

anyway..


By what criteria do you say that federal revenue as a ratio of total GDP is irrelevant? While I would definately agree that where the taxes are coming from, and what they are being spent on is the most important thing, if everything else stays the same, and one year has a 16% revenue rate and the next year has a 20% revenue rate, I think it's clear that the higher rate will impeed future growth simply because the capital and resources that are used each year to generate the next years GDP are being held up at a higher rate in the government.

Not only is it not clear, the opposite has shown to be the case numerous times. Most of the time, actually. GDP includes government spending, by the way, so even a %100 tax rate wouldn't "hold up" resources to generate next years GDP the next years GDP would just be derived wholely from governemt spending. What criteria do you have to think that taxes relative GDP is of any importnace? What evidence is there that that number alone has any value whatsoever without looking at real GDP and spending?


No, the less percentage there is available to the public. That's a huge and signifigant diffrence. The percentage avialable to the public isn't relevant tho this discussion, only the real amount available to the public. Here's a simple example.

I own a house, and a guy in missippi owns a house. My house is about 10 percent of my net worth. His house is about 60 percent of his net worth. Following the logic of the argument you're making here, his house is more valuable because it's worth more of a percentage of his net worth. Clearly, if his net worth is $100 and mine is $1m, I've got the nicer house. It's value relative to another number isn't relevant. Just like taxes and GDP.



What the exact ratio is there is also irrelevant, it's a mathmatical certainty that if you have a higher ratio of revenue to GDP, you *will* have less avaialable capital to take advantage off business opportunities and whatnot which would otherwise help increase the GDP down the line.

Of course it's not a "mathimatical certainty". It's only a mathimatical certainty if you're talking about IDENTICAL GDP NUMBERS. Which is, of course, ludicrous. Also, once again, government spending increases the GDP. The capital doesn't get taken into the government and vanish.


It doesn't matter where it is particularly. If it's capital gains taxes, then you've just reduced the money that the individual selling some stock could have used to shift into a new investment. If it's inome taxes, you've reduced the disposale income availble (which will clearly reduce future GDP). Same thing with business taxes, and tarrifs. The money has to come from somewhere, and any source will result in a hit to future GDP.

Again, there is simply no evidence that the number you're talking about "hits" future GDP ***AT ALL***. All of the EVIDENCE says either the OPPOSITE is true, or that it's simply not relevant.



You say it's an irrelevant figure. I think it's one of the most important ones. It's a good broad way to see how much the government is taking out of the economy. If the government is taking too much, it will stunt growth.

One, that's certainly arguable. Socualism has never been shown to be an uviable economic system. Never, not once. Finlad's taxes relative to GDP number approaches 50 and they're GDP has done just fine. They have a higher standard of living than we do along with a robust economy and healthcare fo all their citezens and so on. Having a high version of this number has never effected a countries future GDP detrimentally. Every time this theory your espousing has actually been tested, it fails to hold up.

You're also GROSSLY oversimplifying it. Which is why the one tiny portion of the lower taxes argument you're making doesn't make any sense because you're not talking about real GDP or the actual amount of capital available to "be put back into the economy". That's the importnat number to your argument. You mistakenly think it's tied to this other number somkmehow, when of course, it isn't.


I don't see how this is confusing. GRowth is the result of capital used to build new products worht more then the cost of the expenditure (investment). If you take some of the starting capital away, then you *must* reduce growth, in approximately the same rate.

Wrong in so many ways I can't comprehend it. Empirically wrong in that growth during the Clinton years dramatically outpaces growth during the Bush years. A situation which fits identically into the argument you're attempting to make, but with the opposite results. Wrong in a theorhetical sense, because for about the nine thousandth time, GOVERNMENT SPENDING COUNTS.

The only way your argument EVER makes sense is if the government collects taxes and they vanish into thin air. That's the only way you could "take away" capital. You're confusing WHO spends the money with IF it ever gets spent.


Clinton should have been adjusting tax rates to account for the boom of the late 90s. Instead, he just "let it ride", and hoped the economy would take care of itself. He should have seen the rising revenue to GDP rate as a danger sign of an impending crash. The cost of Clinton's surplus was all the businesses that collapsed, and all the people who lost their jobs. How about we ask them if paying off a tiny amount of the national debt was worth it for them?

Fist of all, there's ZERO EVIDENCE that any of that is even vaguely close to true. You know what dnager sign Clinton headed? A $7,000,000,000,000 debt handed to him by Bush Sr. which everyone agrees is by far the largest drain on the economy. How much capital is taken out of GDP to service intrest on the debt? If we pay down that debt, we can collect less taxes to provide for the same amount of government spending.

The debt is the huge break on GDP, not taxes. The ONLY WAY TO EVER PAY DOWN THE DEBT OR STOP IT'S GROWTH IS TO HAVE MORE REVENUE THAN YOU SPEND.

Which was what Clinton was trying to do. The only time a President is acting responsibly fiscally is when the revenue number is higher than the spending number. How you accomplish that is where we differ. Well, where we SHOULD differ, anyway.

It's my oppinion that the way to adress the debt, which again, is by far the largest factor taking capital out of the system by anyeone's reckoning, is to have the tax number be higher and the spending number remain constant. What I would want to see is two numbers that looked like 25/20.

It SHOULD be your oppinion that the way to adress the debt is to have BOTH spending and taxes go down. What you SHOULD want to see is numbers that looked like 16/15.

This where your argument comes apart, because you're essentially ignoring the second number. The ratio between the two numbers is why even republicans, even the Heritage guys, have a problem with the current administration's policy.

Everyone has the same problem with it. Not just people on my side of the discussion. Everyone. If the ratio between those two numbers stays where it is today, the economy collapes eventually. There's no other outcome.

THERE MUST BE A BUDGET SURPLUSS USED TO PAY DOWN THE DEBT AT SOME POINT NO MATTER WHAT.

Otherwise, the amount of taxes we collect is fored to go up asymptotically untill we approach a situation where 100% of the revenue coming in goes to service the debt.

THAT is what will cripple the GDP long term.



Speaking of unemployment. Why do you keep switching the issue around? So what if we've got fewer jobs today then we had 4 years ago? We have more then we had 2 years ago. That tells us that sometime between 4 years ago and today, we had a recession that increased the unemployment rate, but that we've been in recovery from it for the last 2 years. In other words, Bush turned a recession around in less then two years. How is that a bad reflection of his economic policies?

Because he caused it in the first place. Again, if I burn your house down and then rebuild you a smaller house worth less, It's not a positive outcome.


We can argue all day over whether Clinton is at fault for the crash in 2001, and resulting recession. However, we can state with absolute certainty that Bush turned that recession around in record time.

We can? Untill we reach economic numbers that meet where we were before the downturn noting's been turned around. It's great that the numbers are going up. It's not great that they're still far, far below where they were when Bush took office.

Too little, too late.


I just don't see that as a negative thing. Unless you can come up with any way that a president who takes office in Jan of 2001, and begins to make economic policy starting at that point, but must wait until Jan 2002 to begin to see those changes take effect can possibly be at fault for a receission that clearly started in mid 2001. The crash was in full swing a good half year before a single policy change he enacted took effect. Heck, depending on what you are looiking at, there's some evidence that the economy was starting to crash in 2000 *before* he even took office!

There's no evidence Clinton had anything to do with it. There's a bunch of theories with data only selected that meets the theories. No one who seriously looks at the issue tries to blame Clinton with a straight face.

Look, there's the far more likely theory that other factors caused the downturn and that it had little to do with either man. Regardless, Bush should have taken action to create jobs DIRECTLY THROUGH GOVERNMENT SPENDING if that was his goal to fix the unemployment problem.

He didn't, he chose to let the private sector spend the money in any way they chose, and they chose to invest a good deal of it elsewhere and to continue to cut jobs to increase profits for shareholders.

Great, profits help the GDP, but re-allocating income from uneployed people to investors isn't a long term goal I'm in favor of.

Your oippinion my differ.


Oh. The supply side theory you are talking about is an "ideal". I don't think anyone other then theorists think you can run an economy without making adjustments to taxes and spending along the way. They key concept is that by taxing less (interestingly enough, they are *also* talking about total revenue in relation to GDP when theyt say "taxing less", but whatever...), you spur on GDP growth of the correct sectors, thus allowing you to collect the same "total" amount of revenue while keeping that amount lower in relation to GDP (again! Why do you think it's irrelevant?).

Thanks for regurgitating what I just taught you. You're still missing the point, though. You have to SPEND LESS for the increased total amount of revenue caused by the growth in GDP to be of any value.



There is *nothing* about that relationship that has anything to do with spending.

/em Holds his sides laughing. There isn't??

Source me please, I need to see this theory that ignores government spending and says that you can spend wildly so long as you cut revenue.



The increase in total revenue is based on the assumption (as I stated above) that the bigger the amount of the pie you allow to remain in the hands of the "public", the greaer your GDP growth over time will be. Obviously, you want to ideally keep spending down to allow for that initial reduced revenue. But a deficit doesn't hurt this model any more then any other. It's money that's owed either way. Honestly, I'd rather we borrow 100B while reducing taxes, then borrow 100B while keeping them the same.
Obviously, if you can reduce that revenue rate without borrowing money that would be ideal, in exactly the same way that if you could buy a car without having to take out a loan, that would be better, but taking out that loan has no effect on the value of the car in 3 years (bad example I know since cars are a bad investment, but you get the point I hope).

Taking out a loan has an effect on the value of the car RELATIVE TO HOW MUCH YOU PAID FOR IT.

There is INTREST on the debt, you know. That's the whole problem.

This unimportnat debt intrest came to $318,148,529,151.51 in 2003. 318 BILLION. That's ~25% of revenue.

So what you're advoating with your Car theory would go as follows:

If you make $100,000 a year, it's no big deal if you buy a car where the INTREST ONLY WITHOUT PRINCIPLE PAYMENTS AT ALL is $25,000 a year.

Sound like a good idea?



But the act of running a deficit in no way affects the basic Supply Side economic model. The expected growth of GDP will occur whether we owe money on the debt or not. They're just not connected in any direct way.

You don't understand it.

I hate to burden you with that particular albatross again, but you don't.

Running a deficit effects ANY economic model. It HAS to. If it didn't, ANY ECONOMIC MODEL WOULD COLLAPSE BECAUSE THE COUNTRY WOULD SIMPLY GO BANKRUPT AT SOME POINT.

Get it? If you run a defectit FOREVER, you go bankrupt. That's the way it works.

Supply side theory says that by lowering taxes and keeping spending the same, GDP goes up and causes a SURPLUS.

NO ONE ADVOCATES CUTTING TAXE AND INCREASING SPENDING.

No one, but you. You're an economic theory island, my freind. Let's call it the Irresponsible Gbaji Theory. I summurize in abstract as follows:

Cutting taxes is always good, in a absolute sense, as spending is irrelevant and deficts don't matter at all. An ideal solution would be to just stop collecting taxes alltogther and just borrow money to run the government. This will be good for GDP growth long term.

Which would be arguing against Supply Side theory and in favor of IGT (Irresponsible Gbaji Theory)


Here's your whole problem. You have vauge understanding of one small portion of economic theory, and really only sort of at that, as it pertains to GDP growth.

Now if GDP growth existed in a vaccum, we could just eliminate taxes alltogether, spend as much as we wanted and there would be no consequences to the aconomy down the road. It doesn't, though.

If you ask a supply side theorist or practician how to spur growth they will answer:

Cut taxes.

If you ask them how we deal with the national debt they will answer:

Cut spending.

You ignore that second question for whatever bizarre reason.

Quite a bit incongruent there but this one strikes me as the most glaring.

Smash: Can't you make a reply without blatant insults in every post? I respect your opinions even though they are different than mine. As this post continues to grow I'd like to read both sides without the constant bicker. Regardless of what you think you're not better than any other of us on this site. It seems that you are really arrogant and try to make yourself the great one. I truly don't think too many people of your "pocket size" have over 8,000 posts on a RPG topic site and plays Final Fantasy. I'm asking you quite nicely to make an arguement without calling people idiots, that doesn't make you sound any more mature or "cool."

Thank you.

Always have to have the last word..typical liberal. I don't know how anyone can stand your posts, insults in everyone. You should really learn to discuss in a educational and polite way. Calling people idiots loses others' respect whether you care or not. Your opponent is not always your enemy. I have many liberal friends and we have great times with each other. Neither you or I will ever win a political debate no matter how hard you try because people will alway have different opinions. Its just downright aweful that you insult because of this.

Because you have such an interest in politics I would really hope you'd learn some manners before posting. You're almost as bad as the new people on FFXI. As an adult you should try to be more understanding and either point out why you disagree without the flames. I leave you with this last post because I don't want to argue anymore. You can flame me all you want or you can try to change a little, the choice is yours.

Thank you for reading.