Good piece from the WSJ - what the "silent majority" is thinking

Amazing! After 8 years of failed economic policy, you ascribe all the ills in the economy to an administration that is 5 weeks old, and doesn't even have all of its officials in place yet.

"Pelosi dropped a truly embarrassing stimulus bill on the country."

What exactly is "truly embarrassing" about it? That it increases unemployment benefits, which lead direclty to spending?

"the horrendous budget planning document, which has an unmistakably hostile stance toward growth."

I see you've had at the supply-side Kool-Aid that hedge fund managers should continue to pay a 15% tax rate for investing someone else's capital.

"If Obama or the people around him can't understand the long term consequences of punishing the productive, they don't deserve the trust of the public that put them in power."

There is NO correlation between tax rates and wealth, except that the wealthiest places have the highest taxes. The supply-side drivel is simply wrong. The country grew the fastest when marginal tax rates were 90%.

Are you really telling us that there will be a material difference in outcome if the wealthy pay $39 out of every $100 they make in tax, instead of $36? $30,000 out of every additional $1 million in income?

LMAO.

No one is espousing "equal outcome." What they are espousing is not to favor the wealthy over those merely getting by.

stevejhx, I agree with you completely.

Five weeks into the administration and the right is already dismissing Obama. Unbelievable. The influence of Rupert Murdoch is clearly evident in this article.

Obama has done nothing but reach out to the Republicans since he took office. Unfortunately, he is learning that party line politics run stronger than the greater good.

I'm surprised that the Fox News Media and its clones didn't blame the Obama administration for Sunday night's snow storm.

5 weeks into a Presidency that has made priority number 1 in fixing an economy that took over 5 years to mess up. Remember as recently as August 2008 (when we were 8 months into the recession), former President George W Bush said the "fundamentals of our economy remain strong."

i think that this group of people should not be called the "silent majority" they should be named what they are "loud stupid uninformed minority whose stupid policies and sheep like tendancies caused all the problems that are destroying our country"

I think we need to apologize to Rush Limbaugh.

Just say no the WSJ opinion page. Its not worth anybody's time. They of all people should understand the value of subsidies, leaching as they are off the otherwise quality reporting of the paper.

"I think we need to apologize to Rush Limbaugh."

This seems to be the Republican hobby of late. But seriously, anyone with the silly idea that this train wreck (in progress) is Bush's fault or now, Obama's, is seriously misunderstanding the nature of the problem. It's a tsunami folks. Brace for it and pray.

akallabeth - this problem is directly Bush's, Reagans, Gramm's, Republican policies, and the Republican sheeps fault. Anyone with the silly idea that it is not is a Republican..

akallabeth, on Saturday Rush said it was Bill Clinton's fault.

Never - ever - have I heard such a psychologically primitive diatribe as I did on Saturday listening to Rush. It had it all: splitting, reaction formation, projective identification, black and white thinking, devaluation.

This is the Republican Party?

no the Republican party is going hip hop. Just see Michael Steele's plans. M Shizzy in da house... yo!

stevejhx,

"What they are espousing is not to favor the wealthy over those merely getting by."

The top 1% of income earners pay 40% of the taxes. The bottom 40% of earners do not pay any taxes and in fact get rebate checks. The tax code does not and has not favored the wealthy over those merely getting by. Those merely getting by do not pay any fedreal income taxes. We have a progressive federal income tax system. If you make more money not only do you pay more in taxes you pay at an increasing rate. In your mind exactly how much more "favoring" do productive people need to put up with?

petrfitz,

you are so full of manure that your eyes are brown. You are a true hypocrite. A limosine liberal who boasts about an 8 figure net worth and then decries the very same policies that helped you establish your very self worth and identity. Simple question, are you and your family better or worse off than you were 8 years ago? Is your net worth higher or lower than it was 8 years ago? Are you and your family going to be better or worse off in the next 4 years? Extrapolating the first weeks of the new administration out for the next 4 years will have devastating consequences for all of us.

We can debate this new administration's policies around and around. But there is little debate about what they mean for NYC real estate prices. Higher taxes and reduced deductions for mortgage interest are giant steps in the wrong direction. I mean I thought the government was trying to stop home prices from falling further. Look out below.

jake - am I better off than I was 8 years ago? Hmm 8 years ago I didnt have to worry about our country being in 2 needless Wars. I didnt have to worry about th emight of america's miliatry being wasted in Iraq. 8 years ago the tech sector of America was booming and investors were funding entrepeneurs like myself to create new companies and technologies. 8 years ago you could start a company and employ people without worrying about spending all your seed money on health insurance. 8 years ago we were not worrying about a Depression hitting our country and banks melting down. 8 years ago the American dollar ruled the world and my companies could buy goods and services at amazing rates.

Actually my networth was much higher during the clinton years than now. Admittedly my cash netw worth is significantly higher now. But no I am not better off than 8 years ago, nor is America.

and Jake just because someone is wealthy and they dont agree with the disasterous Republican policies doesnt make him a hypocrite. It makes them logical and intelligent.

jake,

you are actually going to extrapolate the last four weeks of economic news for the next four years and blame them on President Obama. How exactly has President Obama been able to destroy the US economy in five weeks? you don't think that we are currently reaping the whirlwind for the horrendous policies of the bush administration? this is just tripe.

high taxes provide the stability and services that are prerequisites for affluence. 'free markets' only exist in places that are absolutely miserable, anarchic, and desperately poor. no one would want to live in any such place. if you really think it "punishes the productive" to ask them to pay 39% instead of 36% of their marginal income in taxes then you don't know the meaning of punishment.

as to the idea that this is the silent majority, hmmm, seems to be a silent majority that doesn't show up in opinion polls since the new president is wildly popular and his economic proposals, including the stimulus and the budget, are supported by a significant majority of the population. meanwhile the republican party and its leaders have effectively herbert hoovered themselves. if by majority you mean tiny sliver of the population, then sure, its the majority.

Jake doesnt support the President during a time of war so that makes him a terrorist. Jake and the Republicans want Obama to fail so he wants America to fail and for the terrorists to win.

at what point do democrats have to stop blaming the last 8 years? Will this time ever come?

too funny. remember when Republicans said 9/11 wasnt bush's fault because "it was only 9 months into his term?" These posts just prove that :

Hypocrite = Republican

yeah it will come--but not after 5 weeks! jeez.

First of all, jake, the implication of your post is that the top 1% of income earners should only pay 1% of taxes. That's just dumb.

Second, you can see the distribution of taxes here:

http://www.ntu.org/main/page.php?PageID=6

This is AGI, not net income.

In 2001, the top 1% of tax payers earned on average $292,913. In 2006 they earned $388,806. That is a 32% increase in income in 5 years.

The same figures for the bottom 50% were $28,528 and $31,987, for a 12% increase in average wages.

So, one group earned $100,000 more a year, the other $3,000 more a year. And you're complaining?

Then, capital gains is taxed at 15%, and is not subject to social security and medicare tax. The wealthy pay that rate; very few poor people pay capital gains.

Then, social security and medicare are capped at a certain income level, which means that, when you add that back in, the poor ALWAYS pay at least 6.5% of their income (before deductions, if any) in tax. The poor are actually subsidizing the social security and medicare of the wealthy.

Then, AMT phases out over a certain level, so marginal tax rates actually FALL as your income rises.

Then, deductions are regressive - they're worth more for the wealthy than for the poor.

Then, the poor pay a greater percentage of their incomes in sales tax than the wealthy do.

So, all in all, we have a very, very regressive tax system. Ask Warren Buffett, who pays a lower total tax rate than his secretary.

petrfitz, i loved in 2004 when cheney went around saying that there could be a terrorist attack if kerry was elected. and all i kept thinking was 'thin ice, my friend. who was president for nearly a year before 9/11? who ignored the memos saying "nation at risk from al qaeda attack" just weeks before the attack? who downgraded the threat of terrorism against the advice of the clinton administration?'

fucking republicans.

Exactly my point petrfitz,

Disagreeing with Republican policies does not make you a hypocrite. I do not believe anyone including me ever said that.

You are a hypocrite and a liar because you engage in exactly the same class war fare you claim to revile.

"yeah a lake front estate near lake mead can be compared to a track house in a blue collar neighborhood near the strip just like a lux manhattan full floor penthouse with river views can be compared to a wood frame single family in South Bronx."

Bloody peasants those blue collar workers aren't they, eh petrfitz? Scrape those families from the South Bronx off your shoe like the pieces of dog sh*t they are, right petrfitz?

Stop hating yourself.

"akallabeth - this problem is directly Bush's, Reagans, Gramm's, Republican policies, and the Republican sheeps fault. Anyone with the silly idea that it is not is a Republican.."

I disagree. I'm not a republican (not really a dem either), but I think both parties contributed mightily to this. Everybody was eating from the table. The corruption is through both. It's naive and kool-aid addiction (right or left) to think otherwise.

jake - you make no sense - i was stating that you cannot value a prime estate property the same as a track home in a middle class community. How is that class warfare? di dyou notice that thread was speaking about home values?

By your logic you would say that a 1950 corvette fully restored is the same value as a 1995 Yugo?

Jake - I am also a self made man who earned my own wealth and employs many of those people you say I hate.

Lying about me does not prove that the Republicans didnt create this mess and that their policies were not a disaster.

Jake - it seems like it is you Republicans who hate yourselves. You wont take credit for what your policies did over the past 8 years. You constantly blame others for your own actions. Your party is filled with a bunch of closeted gays but yet you push legislation to restrict their rights. You claim to love the country but want our president to fail. You claim to believe in democracy but your policies actually build plutocracy. Etc etc etc.

Jake if you dont like what the President and congress are doing then leave the country.

God i love using the stupid Republican rhetoric from the past eight years right back at them.

All of Washington is broken. Congress's approval rating was as low as GWB's yet we have all the same morons in charge. As long as they keep us debating whether it is Bush or Obama's fault they will never be out of a job and never need to think very hard about true change. Even the smartest people I know fall into this trap. Washington needs a major influx of leaders from outside politics. The illusion of change prevents that.

mbz - go vote Green or Liberty Party. That will change the world

steve, are you in favor of a wealth tax? why put the burden of redistribution on those trying to get rich. those already rich (like my bosses) could honestly care less about higher income tax rates. they may even prefer it as it just builds a wider moat between them and the rest. i personally believe obama's wealthy donors would hate a wealth tax and therefore the most realistic option for redistribution will never be on the table for discussion.

petrfitz - parties change frequently throughout history and there is little doubt in my mind that we will have new influential parties in the next 20 years. unfortunately, it will probably take an unprecedented crisis to get us there.

i can already see certain platforms taking shape. how about a party on behalf of those under 40. we are penalized by higher income taxes (vs a wealth tax), by "stimulus" (really just an inter-generational wealth transfer), by entitlement programs, etc. The boomer are big and vocal and no one has stood up to challenge them yet. that will change. i'm sure there will be other interesting platforms as well. right now republicans & democrats represent an identical platform as far as i'm concerned.

"how about a party on behalf of those under 40?" you mean the stay at home and dont vote party? very powerful

jake - you refer to "the wealthy" and "those merely getting by." i think you are mistaking "those merely getting by" for "those living in poverty." half of nyc is merely getting by, living paycheck to paycheck (even when times were good), and they pay plenty of taxes.

mbz,

parties have changed 'frequently' throughout history? not in the history of the united states. there have only been four major parties in the history of the country: the federalists, the democrats, the whigs, and the republicans. no-nothings and progressives made a stir but never achieved power. we have had the same two major parties in this country since 1860. there is 'little doubt' in your mind that this will change in the next 20 years? it didn't change with the long depression, the spanish-american war, world war i, the great depression, world war ii, the cold war, the civil rights movement, the vietnam war, or the collapse of the soviet union. the democratic party even survived secession, the civil war, and reconstruction and eventually remade itself as the champion of african american civil rights. what exactly is going to change the two party system over the next twenty years?

while the two major parties are going to continue, what WILL change, and what does change frequently, is what the parties stand for. the democrats have remade themselves over the past 15 years, just as the republicans did between '64 and '80. after a few more disastrous elections the republicans will be remaking themselves again.

It is ridiculous to blame one party for this mess. Both parties have their share of the blame.

As for Obama's tax policies, people in my income range may not even being paying higher taxes even if the tax rate goes up to 39%. Due to AMT, I'm paying taxes at a higher rate now anyway. And I don't believe that fund managers that pay 15% on carried interest when this is really an end-around of paying higher rates on management fees should continue to get such favoritism. I also think we should bring back the estate tax (modified somewhat to protect people from having to sell the asset in order to pay the tax). I would rather tax the dead than increase further taxes on those working and producing.

However, I don't think the cap-and-trade policy and the capping of deductions for charitable contributions and mortgage interest are good ideas at this time.

HR - the Republican party is stuck in 1980. They regurgitate the same failed policies, call for tax cuts to cure all ills and got on the knees and b*** Reagan at every opportunity. This is why they are dangerously close to becoming as irrelevant as they were in the 1930's and 1940's.

Jake, you may want to check your talking points memos because using phrases like limosine liberal, drive-by media and culture war are tip-offs that whatever point you are going to make is full of crap and is more than likely completely fabricated.

i agree waverly. the republicans are in deep, deep trouble. but eventually they will remake themselves. it will take a while--they may really become utterly irrelevant and powerless before they get it together. but eventually they will.

licc, if you don't like the idea of cap and trade, what do you suggest instead? the economic situation is dire but we can't completely ignore global warming because of it.

"HR - the Republican party is stuck in 1980. They regurgitate the same failed policies, call for tax cuts to cure all ills and got on the knees and b*** Reagan at every opportunity. This is why they are dangerously close to becoming as irrelevant as they were in the 1930's and 1940's."

As opposed to the liberals regurgitating their same failed "transfer of wealth" and socialist policy ideas that failed us before?

I don't think being "relevant" is a positive thing right now. Relevant is good when things work, when they are a mess, relevant just means it is becoming your fault.

"LICComment - It is ridiculous to blame one party for this mess. Both parties have their share of the blame." LIC is a known republican who is not willing to accept the outcome of his party's policies over the last 8 years.

NYC10022 - you complete idiot - the Republicans are the ones who support "transfer of wealth policies"

by standing in the way of alternate energy, more efficient cars, and homes do you know how much money gets transfered out of the US into Saudi terrorist hands? These are the policies that you stand for. Money leaving the US to Arab countries for oil is the largest transfer of wealth in history. And your paarty is behind and supports it.

I LOVE the "socialist" label being bandied about. Here is the definition of "socialism": a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

I don't know of anyone who espouses that the community should own the means of production, distribution, or exchange. I think everyone agrees that the community should regulate them.

If what you mean by that is income redistribution, that was a public policy decision made a hundred years ago; the redistribution was the greatest during the height of communism and socialism, after WWII, and under Eisenhower.

The only policy that has "failed" is the unfettered market policy of Hoover and Reagan. Some deregulation and reduction in income tax rates work; some don't. It's not black and white.

sniper,

That was stevejhx's language that I was responding to but I agree with your point. If you don't have an income you shouldn't pay taxes. Hard working New Yorkers pay a very disproportionate share of the federal tax bill (on top of onerous state, local, sales and property taxes) and get very little in return. Blue states send an awful lot of money to red states. Thanks Hilary, Thanks Chuck.

nyc10022,

i didn't realize the united states was at one time dominated by socialist ideas and that those ideas failed. when exactly was this? during the 50s and 60s, when marginal income taxes topped out as high as 90% and the country had spectacular productivity and economic growth? during the 1930s, when, after global capitalism almost collapsed after so-called laissez-faire republicanism it was saved by the socialist ideas that you say 'failed us before'? i'm curious what socialist ideas you are talking about, and when you think they failed us.

thank you steve. people talk about marx without reading capital, scream about socialism without even a basic understanding of the term, and talk about history without knowing the most basic outlines of what has really happened. high taxes are not socialism.

that being said, modern 'democratic socialism' along the western european model is a hybrid between so-called laissez-faire capitalism and socialism. quite frankly, the united states is itself a democratic socialist hybrid. we have socialized public education, limited socialized medicine, socialized retirement, socialized public transport, socialized highways, etc. etc. no affluent society can exist without communal ownership and control of certain aspects of production.

jake, about your last point I agree for the most part. Red states are also the ones that disproportionately download pornography, Utah being at the top of the list. There is much hypocrisy in the Republican talking points.

But the transfers long predate Hillary and Chuck. Remember, small states are hugely overrepresented in Congress - the south therefore has a numeric advantage, further enhanced by the filibuster, introduced to stop racial equality legislation from passing in the 1800's. We have been dragging the south into modernity for hundreds of years now.

That said, many of New York's problems are of its own making: excessive public employee retirement benefits, excessive Medicade benefits, excessive spending on schools with little to show for it, a legal system (outside the city) that does not even require that judges be lawyers, a taxation scheme that has destroyed upstate.

Lay blame where blame is due.

steve,
i agree with you wholeheartedly about public employee retirement. it's a huge problem. but about medicaid i am agnostic. it's very complicated, and for the most part i like the fact that low-income folks in new york have more or less reasonable access to medical care. that's not the norm in most of the country.

"That said, many of New York's problems are of its own making: excessive public employee retirement benefits, excessive Medicade benefits, excessive spending on schools with little to show for it, a legal system (outside the city) that does not even require that judges be lawyers, a taxation scheme that has destroyed upstate."

Absolutely... 100%. And who do you think did that? Sheldon Silver and his Union boys... You had Bruno for a while and you know who funded Bruno.... the Healthcare Union!

"I LOVE the "socialist" label being bandied about. Here is the definition of "socialism": a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

I don't know of anyone who espouses that the community should own the means of production, distribution, or exchange. I think everyone agrees that the community should regulate them."

What do you think nationalization of the banks is?

We could have taken a VERY different approach to shoring up Citi without taking over a growing share.... basically there are effective guarantees that satisfy capital requirements without actually requiring the capital shift.

Wait, did happyrenter just try to complain about someone ELSE screaming about things they don't understand.

Wow, his hypocrisy never ends.

Dude, we've all seen your tax policy thread.

> high taxes are not socialism.

And yet another strawman argument.

Watch happyrenter show us his might by punching through paper!

nationalization of the banks is NOT an example of socialism, unless you think that the government is looking to get into the banking business. the socialization of finance would mean that the government owned and ran the banks over the long term--that the banks became part of the government. no one is advocating this. instead, people are talking about a short-term scheme to rescue the financial system by recapitalizing the banks and then selling off the assets. i don't think bank nationalization is a panacea, i have mixed feelings about it, but it is not socialism.

nyc10022,
then why don't you tell us what the 'socialist ideas' that have 'failed us in the past' are? when did they fail us? what are you talking about?

"What do you think nationalization of the banks is?"

Capitalism. Take over failed institutions, recapitalize them and sell them.

"We could have taken a VERY different approach to shoring up Citi without taking over a growing share...."

First, like what? And second, that would be nothing but socialism for the shareholders. When an institution fails, it fails.

Regarding Medicaid, I'm 100% for socialized medicine (the only efficient way to allocate resources), but why should Medicaid recipients get coverage for podiatry? I think the average Medicaid recipient costs the state $8,000 - who is paying for that? And even Medicare: 50% of Medicare is spent on 5% of the patients. We can't keep people alive forever.

"nationalization of the banks is NOT an example of socialism, unless you think that the government is looking to get into the banking business. the socialization of finance would mean that the government owned and ran the banks over the long term--that the banks became part of the government. no one is advocating this. instead, people are talking about a short-term scheme to rescue the financial system by recapitalizing the banks and then selling off the assets. i don't think bank nationalization is a panacea, i have mixed feelings about it, but it is not socialism."

Again, there were multiple approaches to shoring up the banks that did not require 36% stake in Citi...

Also, for your next lesson, look up "Bolsheviks". They, too, said they had to take over the banks short term to fix things....

As for FDR's plan "working", even his own treasurer disagreed.

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this Administration we have just as much unemployment as when we started. And an enormous debt to boot."

FDR's Treasury Secretary Henry Morgenthau Jr.

The planned tax increases on the upper income are actually no big deal. A little bit of historic perspective would be useful.

Top marginal income tax rates

1930: 25%
1931: 25%
1932: 63%
1933: 63%
1934: 63%
1835: 63%
1936: 79%
1937: 79%
1938: 79%
1939: 79%
1940: 81%
1941: 81%
1942: 88%
1943: 88%
1944: 94%
1945: 94%

To stevejhx's point about Medicaid, I respectfully disagree. Socialized medicine is not anywhere near being an efficient way to allocate resources. It may provide greater equality of (poor) care, but it is almost guaranteed to create supply/demand imbalances over the short term and massive degradation of care levels over the long term. Unfortunately, price is the only efficient allocator of resources in a pure sense. But for obvious reasons, price-based rationing of medical care is a political non-starter.

nyc10022,

henry morgenthau was an anti-keynesian who believed in balanced budgets at all times. this quote came in the context of fdr's decision to reduce spending in order to balance the budget in the late 30s. doesn't mean he was right. look at the actual numbers. outside of right-wing ideological circles history has accepted that the new deal largely worked.

anyway, you don't answer the questions people put to you, so it's irrelevant to continue the conversation. when institutions fail, the government has to take them over in one way or another to limit the damage. that's why we have bankruptcy reorganization. no major figures in either party have suggested a socialized financial system.

i would like to see a graph correlation between tax rates and economic performance with recessions mapped over top

i agree anything socialized in America sucks. Like our military it is the worst in the world. If we cant run our military to be the best in the world what makes Americans think that we could have the worlds best health care system?

The U.S. ranks 29th in the world in terms of infant mortality.

Seems to me we have a lot of improving to do!

east_cider,

what are the 'obvious reasons' that price-based rationing is a political non-starter? let's not be euphemistic about it. the reason is that the country will not accept poor people dying of preventable diseases because they can't afford to see a doctor. you are so dismissive of the concern for 'greater equality of care,' but what we are talking about is not equality of care but access to care. an advanced country is not going to tolerate a system that leaves many of its citizens without medical care.

Hardly anyone believes FDR's New Deal policies worked to get us out of the Great Depression. Even Paul Krugman doesn't assert such a claim. WWII is what led us out of the Depression.

i think that 29th is an appropriate place for America. to improve we would have to try hard and maybe even take back some of those huge tax cuts to the wealthiest among us. We shouldnt pick on them. They earn there money through dividends on the hard work that there grandfathers broke their backs on.

USA #29, USA #29, USA #29!!

29th in infant mortality is a good thing topper. children are so unproductive. what do they contribute to society? they just use up resources eating and going to public schools and requiring child care. we should actually try to go up in infant mortality.

imagine how many more bmw's the rich complainers on street easy could buy if children weren't mooching off society.

Since we obviously have quite a few enthusiastic Obama supporters here, I would like to ask an open question regarding the administration's goal of taxing foreign earnings of U.S. companies regardless of whether or not the earnings are repatriated. In my view, this would be a complete blunder that would drive more multinationals to re-incorporate in Bermuda, Luxembourg, the Channel Islands, Anguilla, etc., because that would be the right thing to do for their shareholders (i.e. why volunteer to pay higher tax?).

Fears over this type of blunder and general hostility toward capitalism, investing and success in general are only exacerbating the already large risk premia in the markets. So yes, it's only been five weeks, but in my opinion, the new administration has set off on the wrong course and the markets are seeing it for what it is.

"Hardly anyone believes FDR's New Deal policies worked to get us out of the Great Depression. Even Paul Krugman doesn't assert such a claim. WWII is what led us out of the Depression."

Don't try logic with happyrenter!

licc,

at least read paul krugman correctly before attempting to paraphrase him:

http://krugman.blogs.nytimes.com/2008/11/08/new-deal-economics/

krugman defends roosevelt, points out that the new deal was effective, and argues that it should have been bolder: more spending, more aggressive government involvement in the economy. krugman is right in the mainstream on this: that the new deal worked, and that it should have been more aggressive.

east cider - I am worried that Bermuda or the Channel Islands will become the next super power and take over the world.

We should allow those corporations who funnel earnings that actually happened in the US into phony off shore tax shleters so they can avoid US taxes. Its the American way.

NYC10022 why didnt the Iraq or Afghanistan Wars get us out of this recession?

Wht didnt more tax cuts solve the problem before but are the answer now?

Petr, you have noted many times that you are successful, so I can only assume that you hold some stock positions. Do you honestly want the companies whose stock you own to pay tax on unrepatriated earnings? If so, why?

nyc10022,

so you are getting on the false paul krugman bandwagon as well? why don't you read paul krugman before endorsing a completely statement of his views. krugman is a defender of roosevelt, an advocate of new-deal style economic policies, and an ardent keynesian. get it right.

Wow, happyrenter just referenced an article with actual data in it. I'm so proud of you!
Finally, actually trying supporting an argument with something other than his resume...

east_cider,

i think the thing that will really help keep businesses in america is if we get rid of all medical care for the poor. lepers in the streets are a huge lure to multinationals. and everyone wants to raise their children in a country where millions of unvaccinated people spread disease. that's just the ticket. no taxes, no medical care. we can't lose!

nyc, the Morgantheau quote needs to be understood from a historical perspective: all economists except supply-siders understand that what went wrong with the New Deal is that it wasn't large enough, not that it was too large. What didn't work was the balanced budget that FDR tried, as HR says.

First, east_c, you must have never lived in an industrialized country other than the US, as they ALL have socialized medicine. To the last. Only the US doesn't. We spend twice per capita on health care, and have one of the highest infant mortality rates in the world, and shorter life spans than almost all other industrialized country. Our "pay for play" system encourages doctors to perform unnecessary procedures because they get paid for every procedure they perform. Emergency room health care is very expensive, and for the most part unnecessary. Health care is at the core of what is wrong with the car industry.

"Unfortunately, price is the only efficient allocator of resources in a pure sense."

That is entirely untrue. It doesn't take into account public goods (parks, for instance), or externalities (pollution, for instance). There are many ways to allocate resources - in health care, waiting time, for example, is a way to allocate resources.

But even if price were the only efficient allocator of resources, price is not an issue in health care because of insurance: you pay a fixed fee and expect to get unlimited services for it, and the services are unrelated to what you are paying. It is highly, highly inefficient.

I think you have proved your lack of knowledge about economics.

east cider - yes I do. I only invest in socially conscious stocks. I try to avoid any funds or stocks that utilize offshore tax shelters. I do not invest in any oil or defense stocks.

Why - because I have morals. I dont cheat in life and dont invest in others who do.

actual data--i assume you are referring to the data proving that you are wrong about the new deal? that data?

Krugman is all those things, and even he does not claim that FDR's New Deal policies brought us out of the Depression. Exactly as I said earlier.

happy renter, I'm not really sure what point you are trying to make? Did I ever say that there should not be a safety net for the poor?

"I would like to ask an open question regarding the administration's goal of taxing foreign earnings of U.S. companies regardless of whether or not the earnings are repatriated."

You seem not to know what is actually happening. Companies establish themselves in tax havens and use transfer pricing and dividend policies to avoid paying taxes in the countries where they actually do business.

If I, a natural person American citizen, live abroad, I still have to pay US income tax above a certain income level. Taxation is by citizenship, not by physical location. If you are a US corporation you pay US taxes; your foreign taxes are deductible from your US taxes as an expense.

If I'm a company that produces goods in China and sells them in the US through a Cayman Islands subsidiary, where am I making my money? In the Cayman Islands?

If IBM does a big consulting gig in the UK, and applies the earnings to the capital base in a UK subsidiary, should they pay US taxes on that income?

Lets also not forget that we're tops in spending in education, and have absolutely crappy results.

steve back in the day you used to be able to set yourself up as an "International Business Concern" and avoid paying US taxes on the first $75K. I used to own a development house in another country and my employees who got sent over would do this - on their own without our consent. But it was legal at the time.

There is actually a lot of truth to the notion that it took World War II to get us out of the depression.

Deficit spending during the Great Depression was actually pretty modest averaging only about 4% of GDP.

By 1944, deficit spending had ballooned to an alltime record 30% of GDP.

As I see it, Obama is largely trying to jumpstart the economy without a world war. The deficit this year should be around 12.5%. That's appropriately big. In addition, unlike the Great Depression where money supply contracted at double-digit rates, year-over-year M2 is now up 10%.

By the end of World War II we had, indeed, accumulated a huge debt. But we grew out of it (relative to GDP) during the fifties.

I think we've learned a lot from past mistakes and are on the right path.

NYC10022 - you can thank the Republicans Leave the Children Behind policy on that. Also we are at a disadvantage in education. Half our population has extremely low IQ's and intelligence levels. We call them Republicans.

crossing my fingers on that one...

Topper you seem to forget that we are at War with a signifcant population of the World. If you Republicans had your way we would probably have wars in 2 or 3 more countries.

"The U.S. ranks 29th in the world in terms of infant mortality.

Seems to me we have a lot of improving to do!"

I can't tell you how many people I've had to correct on this. The US ranks so low on this metric because it is far more aggressive in trying to save premature babies. It's frankly a stupid stat that too many people use to denigrate our health care system. It needs a lot of fixing, sure, but let's be a little more honest about the stats.

War is a horrible waste of life and money. Neo-cons may push for wars, but that is hardly the realm of old-school conservatism.

The stat I keep seeing is that we spend a ton more than anyone else and have similar results...

steve - you have a lot of experience on the accounting side on this issue, do you not? Do you think such taxation would cause companies to stop doing business in the U.S. because of higher tax burdens? Do you think the effect would be positive or negative?

licc, you wrote of paul krugman:

Hardly anyone believes FDR's New Deal policies worked to get us out of the Great Depression. Even Paul Krugman doesn't assert such a claim.

in fact, krugman says the opposite: that the new deal policies did work, and that they would have worked better had they been bolder. i basically agree with him. to try to pain krugman as an enemy of the new deal is absurd. if by 'hardly anyone' you mean 'nearly everyone' then you have it about right.

"Pelosi dropped a truly embarrassing stimulus bill on the country."

I agree. Investing $100 billion in infrastructure, which every economist agrees creates good paying jobs, is indeed truly embarassing! Where are the tax cuts for the rich?

Seriously, is this place a real estate forum or a right wing blog?

"that is hardly the realm of old-school conservatism" - you mean like Reagan? Reagan never resorted to War or funding covert operations that were conducting illegal and unsanctioned wars. You know the kind of wars that equipped and trained bin laden. No Reagan never did any of that. Reagan was too busy ripping the solar panels off the White House and ending the quest for alternative energy.

nyc10022:
we do spend much more on healthcare than anyone else, and our results are quite poor. all those other countries that spend far less and get pretty good results have what we would call socialized medicine.

"Topper you seem to forget that we are at War with a signifcant population of the World. If you Republicans had your way we would probably have wars in 2 or 3 more countries."

Please, petrfitz. I am anything but a Republican. That was hurtful!

Yes, we are at war. The dollar cost relative to GDP, though, is not at all comparable to the dollar cost of World War II.

happyrenter,

A major reason that we spend so much money on healthcare isn't so much that we don't have a single-payer system, but rather that Americans have an obsession with new technology, especially when it's not necessary. The bills for all that new equipment are not cheap. While I would probably favor single-payer, it would come at the cost of a fair amount of innovation in healthcare.

"Lets also not forget that we're tops in spending in education, and have absolutely crappy results."

And let's remember that those states who are doing such a poor job in education (Bobby Jindal, please stand up), you have received huge amounts of tax revenue from the generous blue states. Yet, these red states keep bitching about tax cuts. Where do they think their bread is getting buttered?

Steve and Petrfitz - solid points.

HR - "krugman is a defender of roosevelt, an advocate of new-deal style economic policies, and an ardent keynesian." You couldn't be more accurate. I am not sure that Rush has told his flock what to say next on this topic. We'll find out tomorrow when the new talking points are written out on construction paper with crayons for all to "learn".

we spend a lot on healthcare because all the cronies of the Republicans steal the givernments and citizens money. This is the same ilk that infects our defense companies.

bjw,

there are a lot of reasons why healthcare costs in this country are so high, and i certainly don't think single payer is a panacea. i am merely pointing out that all the countries that pay about half what we do and get good results have socialized medicine.

Peter, if you equate Reagan and old-school conservatism, I think you are showing your stripes as being part of the under 40 crowd! (which is not such a bad thing, I guess...but there was a lot of good American and Austrian political and monetary thinking that came before!)

bjw,

I find it hard to believe that Europe and Canada are not aggressive in seeking to save premature babies.

If I'm wrong, though, pls. provide me with an appropriate reference.

Thanks.

Actually, the biggest reason we spend so much on healthcare is the SEIU....

go unions!

east cider - so you are saying the politics that are most relevant to today's world are the ones practiced over 40 years ago?

"A major reason that we spend so much money on healthcare isn't so much that we don't have a single-payer system, but rather that Americans have an obsession with new technology, especially when it's not necessary. The bills for all that new equipment are not cheap. While I would probably favor single-payer, it would come at the cost of a fair amount of innovation in healthcare."

the big ticket items are the obesity epidemic (adult diabetes is the biggest source of increases) and the last few months of the old while trying to avoid the inevitable knowing that there's no hope. applying measures of when the $ spent make sense would be an improvement here (like amount spent per increases on the lifespan).