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Thread: Democrats resist global pro-market trends

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    Democrats resist global pro-market trends

    [QUOTE]Democrats cannot deny what happened after President Bush and Capitol Hill Republicans slashed maximum capital-gains taxes from 18 to 15-percent in 2003. Rather than dwindle $5.37 billion between 2003 and 2006, as the congressional Joint Tax Committee’s antique, static-analysis model wrongly predicted, revenues actually advanced $53 billion.

    Foreign economic ministers understand these lessons and are lowering taxes as if Franklin Roosevelt never lived and Ronald Reagan never died.

    “Sweden and Russia last year eliminated their estate taxes because they said the tax was economically counterproductive,” economist Stephen Moore wrote in the August 31 Wall Street Journal. “In Germany under Chancellor Angela Merkel, the corporate tax rate has been reduced to less than 30 percent from 39-percent.” Poland recently chopped its business tax from 27-percent to 19.

    Even Hanoi gets it! Thanks to corporate-tax relief, “the business environment will become more and more attractive, resulting in increased investment,” Vietnamese tax chief Nguyen Van Ninh told Moore.

    While America’s corporate tax levitates at 35-percent, seven European Union nations have lowered business levies this year. The EU-average corporate tax is 24.2-percent.

    “Further corporate tax rate cuts are being implemented in Germany, Estonia, Spain, and the United Kingdom, and rate cuts are being discussed in the Czech Republic and France,” observes Cato Institute senior fellow Dan Mitchell. “Even the bloated welfare states of France and Sweden have lower corporate rates and generally better corporate tax systems than America.”

    [/QUOTE]

    [url=http://article.nationalreview.com/?q=N2ZkYTRhNWNjNjViNjJiYjY3ZDFkMDc4YmFiZDM5NTg=#more]more[/url]

  2. #2
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    How many of these countries are nation building like us? Fighting two wars?
    It took you 7 months to find this article?

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    It's really simple - the money the government earns from capital gains tax cuts it either uses to bail out multi billion dollar investment banks or wastes in Iraq.

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    The USA is well overdue for tax reform.

    However, the article does not go into reasons why tax revenues increased and I can assure you it is not because corporate tax was cut.

    Reagan's economic policy of cutting taxes to increase revenue was a failure - the massive jump in US debt during his term stands testament to that.

    The 'good times' the US has been through since the 1980's have been largely illusory - because it is all built on a massive sea of debt - the greatest debt burden in history.

    All the debt has produced is a sequence of asset bubbles that have artificially inflated the amount of tax being collected. These asset bubbles have been classed as 'investment', when in actual fact a great deal of it has been anything but. The housing bubble is a good example - constant flipping of houses chasing profit with no real expenditure on anything of lasting value.

    I think there is a very real chance we are about to go through a long period of deflation - it has hit the housing sector and the stock markets already and government revenues will fall along with everything else when it really hits.

    Those thinking that the US Fed's intervention has stopped the blood-letting in the finance sector and the share markets will be rudely awakened when the three month loans the Fed has lent out to improve liquidity are called in. Helicopter Ben can only drop so much money from his helicopter.

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    [QUOTE=Black Death;2463763]
    Those thinking that the US Fed's intervention has stopped the blood-letting in the finance sector and the share markets will be rudely awakened when the three month loans the Fed has lent out to improve liquidity are called in. Helicopter Ben can only drop so much money from his helicopter.[/QUOTE]

    my take is that the market has corrected itself and will continue to do so - but it's not going to crash. Remember that the falling US Dollar makes alot of great securities bargains on the global market. It's the international markets like China and India that might keep falling.

  6. #6
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    [QUOTE=Black Death;2463763]The USA is well overdue for tax reform.

    However, the article does not go into reasons why tax revenues increased and I can assure you it is not because corporate tax was cut.

    Reagan's economic policy of cutting taxes to increase revenue was a failure - the massive jump in US debt during his term stands testament to that.

    The 'good times' the US has been through since the 1980's have been largely illusory - because it is all built on a massive sea of debt - the greatest debt burden in history.

    All the debt has produced is a sequence of asset bubbles that have artificially inflated the amount of tax being collected. These asset bubbles have been classed as 'investment', when in actual fact a great deal of it has been anything but. The housing bubble is a good example - constant flipping of houses chasing profit with no real expenditure on anything of lasting value.

    I think there is a very real chance we are about to go through a long period of deflation - it has hit the housing sector and the stock markets already and government revenues will fall along with everything else when it really hits.

    Those thinking that the US Fed's intervention has stopped the blood-letting in the finance sector and the share markets will be rudely awakened when the three month loans the Fed has lent out to improve liquidity are called in. Helicopter Ben can only drop so much money from his helicopter.[/QUOTE]

    Jump in debt doesn't prove that revenue went up or down. We had a massive military buildup during Reagan’s term along with a huge increase in none discretionary spending. Prior to the tax cuts we had a totally stagnant economy with double digit inflation. The cold war was also brought to an end which created a huge peace dividend which allowed us to grow out of our debt during the Clinton years. People always underestimate what relative world peace means to global growth. If we could end these wars that are going on in Africa and the ME world growth would pick up substantially.

    Blood letting always happens after a period of excesses and we have had one not just by the government but by the public. We may well be going into a world wide depression where war, famine and chaos prevail. We may also be in a short down cycle followed by a huge world wide industrial boom that brings peace, prosperity and millions more people into a middle class life style. The naysayer’s always underestimate the desire of most people to work hard, save, invest, make a better life and succeed at it. The only sure bet is nothing is stagnate.

    There is nothing illusiounary about 100's of millions of people in the US and all over the globe getting into homes, owning cars, putting their children into college and having a good life. The idea that real earnings and progress didin't happen is nonesense, it's happening every day even when you don't see it and are afraid of tomorrow.

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    [QUOTE=bitonti;2463767]my take is that the market has corrected itself and will continue to do so - but it's not going to crash. Remember that the falling US Dollar makes alot of great securities bargains on the global market. It's the international markets like China and India that might keep falling.[/QUOTE]

    You have to remember that those companies that appear to be 'bargains' now are only bargains when you judge it on the basis of the previous bull market. Yes, a lot of stocks have now got great PE's etc and look cheap, but that is based on past profits, not on future ones.

    I think US stockmarkets will go up for a little while - in fact I have been saying the same about the Australian markets - they will go up to around 6000 from their current position around 5600, but will then fall to around 4700.

    I also predicted on these threads somewhere that gold would fall in price, from over $1000 and ounce (this was when every man and his dog was predicting a further massive increase in gold's price - admittedly not on this forum) and that when it went 'below $960 an ounce, it would be game over for it'. It is now, not 20 days later, around $900 an ounce.

    I would not be at all surprised if, not too far into the future, that the Dow fell below 5 figures and never went into 5 figures again for a significant period of time. I am not making that prediction, but it would not suprise me if that is what eventuated - and there are people much more learned than me who are saying that as well.

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    [QUOTE=Black Death;2463786]
    I would not be at all surprised if, not too far into the future, that the Dow fell below 5 figures and never went into 5 figures again for a significant period of time. I am not making that prediction, but it would not suprise me if that is what eventuated - and there are people much more learned than me who are saying that as well.[/QUOTE]

    I generally agree with that scenario but would characterize that as 'further correction' not a crash... as long as the 2500 point loss didn't occur in the course of a week. The market as a whole has been overvalued for a long time.

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    [QUOTE=Winstonbiggs;2463780]Jump in debt doesn't prove that revenue went up or down. We had a massive military buildup during Reagan’s term along with a huge increase in none discretionary spending. Prior to the tax cuts we had a totally stagnant economy with double digit inflation. The cold war was also brought to an end which created a huge peace dividend which allowed us to grow out of our debt during the Clinton years. People always underestimate what relative world peace means to global growth. If we could end these wars that are going on in Africa and the ME world growth would pick up substantially.

    Blood letting always happens after a period of excesses and we have had one not just by the government but by the public. We may well be going into a world wide depression where war, famine and chaos prevail. We may also be in a short down cycle followed by a huge world wide industrial boom that brings peace, prosperity and millions more people into a middle class life style. The naysayer’s always underestimate the desire of most people to work hard, save, invest, make a better life and succeed at it. The only sure bet is nothing is stagnate.

    There is nothing illusiounary about 100's of millions of people in the US and all over the globe getting into homes, owning cars, putting their children into college and having a good life. The idea that real earnings and progress didin't happen is nonesense, it's happening every day even when you don't see it and are afraid of tomorrow.[/QUOTE]

    It is illusory because of the debt situation - most people's wealth in 1st world nations revolves around their houses or stock market investments - both of these are propped up by extraordinairy levels of debt. When this prop is taken away - look out below!

    In real terms, many Americans are worse off than what they were in the 1950's - even if I am only talking about in terms of real wealth, not in terms of other improvements in society like the decrease of racial and gender imbalances etc.

    As for Reagan, as I have mentioned elsewhere here - it took the United States 200 years to rack up a trillion $'s worth of debt - it took Reagan/Bush1 12 years to quadruple that. With that information, I can assure you that the 'prosperity' of the 80's and the change in the 'moribund economy' was completly illusory - it was all propped up by debt.

    This whole cycle has been repeated over and over in history - great short periods of prosperity made artificially, followed by the famine afterwards.

  10. #10
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    [QUOTE=Black Death;2463795]It is illusory because of the debt situation - most people's wealth in 1st world nations revolves around their houses or stock market investments - both of these are propped up by extraordinairy levels of debt. When this prop is taken away - look out below!

    In real terms, many Americans are worse off than what they were in the 1950's - even if I am only talking about in terms of real wealth, not in terms of other improvements in society like the decrease of racial and gender imbalances etc.

    As for Reagan, as I have mentioned elsewhere here - it took the United States 200 years to rack up a trillion $'s worth of debt - it took Reagan/Bush1 12 years to quadruple that. With that information, I can assure you that the 'prosperity' of the 80's and the change in the 'moribund economy' was completly illusory - it was all propped up by debt.

    This whole cycle has been repeated over and over in history - great short periods of prosperity made artificially, followed by the famine afterwards.[/QUOTE]


    The 50's were great if you were a white and happened to survive WW2 and Korea. For a large portion of this country the 50's were a misery including the dead and wounded in Korea. The 60's cities burned, we had political and economic strife, we were under the real threat of global thermo nuclear war we were in a devastating hot war in VN and a cold war every where else. The 70's were a period of economic stagnation coupled with high inflation. Through all that and through 28 years since, the standard of living has improved, racial strife has dropped, and real economic and social opportunity has been created for millions. 100's of millions in India, China and throughout Asia have gone from abject poverty to the middle class. Throughout this entire period the one constant has been the US economy driving everything. Because the rest of the world is catching up we may not be the engine going forward. That may well be progress as much as some would like to call it our demise.

    I really don't mind the pessimism, but to look at the past as some wonderful time and the present and future as apocalypse is just flat out failure to see what’s really behind us and the possibilities of what could be in front of us.

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    I'm not predicting an apocalypse. I'm predicting that the times in future will not be as good as they are now.

    I already mentioned 'racial and gender imbalances' in my post.

    The problem is that the US economy is driving everything - it's driving everything with debt and when that driver is taken away, it will not only be gonski for the US economy, but for the Chinese and Indian economy as well, plus for virtually every other economy too.

    The figures I've been looking at about debt are really very bad indeed - certainly the worst for many, many decades. The reckoning, when it comes, will certainly be much worse than what we experienced in the early 1990's both in length and depth - and that was bad enough.

    A Hard Rain is Gonna Fall - but it won't be an apocalypse.

  12. #12
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    [QUOTE=Black Death;2463860]I'm not predicting an apocalypse. I'm predicting that the times in future will not be as good as they are now.

    I already mentioned 'racial and gender imbalances' in my post.

    The problem is that the US economy is driving everything - it's driving everything with debt and when that driver is taken away, it will not only be gonski for the US economy, but for the Chinese and Indian economy as well, plus for virtually every other economy too.

    The figures I've been looking at about debt are really very bad indeed - certainly the worst for many, many decades. The reckoning, when it comes, will certainly be much worse than what we experienced in the early 1990's both in length and depth - and that was bad enough.

    A Hard Rain is Gonna Fall - but it won't be an apocalypse.[/QUOTE]


    Certainly if we fear monger and take away incentives for economic growth this country will be headed for dissaster. With an aging population and precommitted welfare for the elderly about to explode the idea that we can tax our way out of this is pretty much insane.

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    [QUOTE=Winstonbiggs;2463882]Certainly if we fear monger and take away incentives for economic growth this country will be headed for dissaster. With an aging population and precommitted welfare for the elderly about to explode the idea that we can tax our way out of this is pretty much insane.[/QUOTE]

    You can't 'tax your way out of it' - I've never made that ridiculous claim. The poo you are currently in, however, is partially down to tax cuts funded by debt.

    I am very much on your wavelength in terms of demographics - one thing you have to understand with demographics in the USA is that with a great bulk of your population about to go into old age, they will be much less likely to be spending money, but rather saving it, and certainly not taking on any more debt for themselves. That is one reason why I think we are in for a long period of deflation in the USA.

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    [QUOTE=Black Death;2463972]That is one reason why I think we are in for a long period of deflation in the USA.[/QUOTE]


    better than stagflation or inflation tho, no?

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    [QUOTE=bitonti;2464057]better than stagflation or inflation tho, no?[/QUOTE]

    Let me put it this way, a significant period of deflation in the USA that readily comes to mind was in the 1930's, and started just before the turn of that decade......

    ....in other words, the illusion is sometimes better than the reality, and the illusion of prosperity is about to crunch into the hard and bitter wall of reality.

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    [QUOTE=Black Death;2464103]Let me put it this way, a significant period of deflation in the USA that readily comes to mind was in the 1930's, and started just before the turn of that decade......

    ....in other words, the illusion is sometimes better than the reality, and the illusion of prosperity is about to crunch into the hard and bitter wall of reality.[/QUOTE]

    yeah but isn't that just a natural progression??? whats the problem?


    "In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again."

    [IMG]http://www.iue.edu/blogs/barry/wp-content/uploads/2007/02/sellerschance.jpg[/IMG]

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    [QUOTE=bitonti;2464115]yeah but isn't that just a natural progression??? whats the problem?


    "In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again."

    [IMG]http://www.iue.edu/blogs/barry/wp-content/uploads/2007/02/sellerschance.jpg[/IMG][/QUOTE]

    The problem is the hard times that are coming for many.....talk of a moribund economy during the Carter years is spot on. It was moribund because it followed a great period of debt-fuelled expansion and which was capped of by the explosion of the early-mid 70's economy which then led to the moribundity.

    We are in for a moribund world economy - it is cycular, and to right itself in this cycle some pain has to be on the way. You have to remember the levels of debt now are that much more exponential then at almost any other time in world history.....the correction to come has to be sharp and it has to be savage. Trees don't grow to the moon. Any moves to forestall what is to come is but delaying the inevitable and increasing the likelyhood that it will be even worse when it actually arrives.

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    .....shyte. Totally missed the sarcasm. Apologies.

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    [QUOTE=Black Death;2463763]The USA is well overdue for tax reform.

    However, the article does not go into reasons why tax revenues increased and I can assure you it is not because corporate tax was cut.

    Reagan's economic policy of cutting taxes to increase revenue was a failure - the massive jump in US debt during his term stands testament to that.

    [/QUOTE]



    So how do you account for the fact that from:

    --1940-1980 gov receipts increased by an avg of 12.7 billion/yr

    --after Reagan's tax cuts kicked in they increased by 75.4 billion/yr for 20 years until 2000 when the clinton recession caused a 3 yr drop in revenue

    --after Bush's tax cuts revenues rose by 171.9 billion/yr during which the budget deficit dropped from 412.7 billion/yr to 162 billion/yr.

  20. #20
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    [QUOTE=asuusa;2464623]So how do you account for the fact that from:

    --1940-1980 gov receipts increased by an avg of 12.7 billion/yr

    --after Reagan's tax cuts kicked in they increased by 75.4 billion/yr for 20 years until 2000 when the clinton recession caused a 3 yr drop in revenue

    --after Bush's tax cuts revenues rose by 171.9 billion/yr during which the budget deficit dropped from 412.7 billion/yr to 162 billion/yr.[/QUOTE]

    The fact of the matter is government reciepts only dropped during the reign of Bush 1 and Bush 2 during the post-WW 2 period - admittedly in Bush2's time that drop in revenues is partially explained by some of the actions taken during Clinton's time.

    Government revenues may well have increased, but debt has expanded exponentially as well. The close to $10 trillion in Federal debt you now have is in a large way due to cuts in tax - as I have said here elsewhere, cutting taxes is great, provided it is not funded by debt.

    When Clinton handed over the budget it was well into surplus - it was back into deficit within the first year of Bush2's Presidency. Clinton did nothing to substantially reduce your Federal debt, however.

    Your government is spending more than it is earning - that is the nub of the issue. About 20% of your budget is just made up of paying interest on your debt - that is what happens when you run massive deficit after massive deficit year on year. In other words only focusing on government revenues only tells part of the story - focusing on GDP's contribution to increased tax revenues and then understanding that a great deal of GDP is now influenced by debt expenditure is the true way to look at the current scenario. If you go back over every previous recession of the last 40 years you can see where debt has led to the bubble and where the contraction of the money supply caused by that debt has led to the bubble's explosion that led into the recession. It's just that now the levels of debt are that much higher than at any time in living memory.

    I am interested in keeping America the world's last remaining superpower - the super in the word superpower is based on the USA's economic pre-eminence, not on military might. If the US loses its economic superiority it loses its world leadership role as well.

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