The Effect of Changing Top Marginal Tax Rates
by Mike Kimel
The Effect of Changing Top Marginal Tax Rates – an op ed free to a good home
Cross posted at the Presimetrics blog.
I wrote most of what follows in the anticipation of trying to get it accepted as an op ed at a newspaper, but I guess the deal cut the other night means a bit of it needs rewriting…
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On January 1, 2011, the “Bush tax cuts” will expire and individual marginal tax rates, the percentage of income individuals pay in taxes to the federal government, will return to Clinton-era levels. The political consensus seems to be that the tax cuts should be kept for most taxpayers, but there is disagreement about whether to let the highest marginal tax rate expire. That rate applies to the portion of a high-income earner’s revenues that are in excess of some large amount – $250,000 and $1 million have been recently floated as thresholds. But, aside from rhetoric about fairness peddled by both sides in the debate, what difference does it make to the economy whether the top marginal rate goes up or not? A little history can help make it easier to understand what is at stake.
When Ronald Reagan was elected president in 1980, the top marginal tax rate was 70%. By 1988, the top marginal tax rate had been reduced to 28%. More importantly, Reagan changed the longstanding political landscape when it comes to taxation. While the top marginal rate was never below 70% between 1936 and 1980, it has not gone above 39.6% in the years since Reagan left office.
But if Reagan’s philosophy prevailed, it is fair to ask: have his tax policies generated the promised results? Lower taxes were supposed to usher in an era of faster economic growth and increased prosperity. However, while the economy did better under Reagan than it did under the three presidents who preceded him, Reagan-era growth could hardly be called impressive. Real GDP (i.e., GDP adjusted for inflation) grew more slowly under Ronald Reagan than during the eight years presided by JFK and LBJ, and slower even than during any consecutive eight year period in which Franklin Delano Roosevelt was president. FDR, it should be noted, raised the top marginal tax rate four times, from 63% to 94%.
But perhaps it is unfair to compare Reagan to big-government types like Lyndon Johnson or Roosevelt, as they served during very different eras. Focusing instead on more recent periods, real GDP also grew faster under Bill Clinton, who raised taxes, than it did under Ronald Reagan. In fact, from 1981 to the present, the period in which Reagan’s philosophies have reigned triumphant, the correlation between the top marginal tax rate and the annual growth in real GDP has been positive. That is to say, higher top marginal tax rates have been associated with faster, not slower real economic growth. Conversely, lower top marginal tax rates have coincided with less economic growth.
The positive relationship between the top marginal tax rate and the growth in real GDP is very nearly bullet-proof. For instance, it extends all the way back to 1929, the first year for which the government computed GDP data. Additionally, higher marginal tax rates are not only correlated with faster increases in real GDP from one year to the next, but also with increases in real GDP over the subsequent two, three, or four years. This is as true going back to 1929 as it is for the period since Reagan became president. In fact, since the Reagan Revolution took hold, similar relationships have existed between the top marginal rate and several other important variables, like real median income, real private investment, consumer sentiment, the value of the dollar relative to other major currencies, and the S&P 500. Lower tax rates in any given year are associated with slower growth rates for each of these variables, whether those growth rates are measured over periods of one, two, three or four years.
On the flip-side, since 1981, unemployment rates have generally shrunk faster when tax rates were higher than when they were lower. As with the other economic measures, this relationship holds whether one is measuring the change in unemployment over a single year, over two years, over three years or over four years.
None of this means that higher taxes cause better outcomes. Still, it is clear that the supposed negative repercussions from higher taxes simply have not materialized, notwithstanding pronouncements from politicians, pundits and economists. The reason is simple: those who are both willing and able to engage in tax avoidance when subject to a 40% marginal rate are not likely to behave any differently when that rate changes to 50%, or 30% for that matter. But at a slightly higher top marginal rate, the government does get more revenue, and in this way can finance more spending on things that benefit the economy, such as infrastructure, public health, scientific research, education, alleviating poverty and of course, IRS audits. Thus, allowing the top marginal rate to rise from current rates (35%) to the level they were under Bill Clinton (39.6%) is unlikely to harm the economy, and may actually help.
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As always, if anyone wants my spreadsheet, drop me a line at my first name (that would be “mike”) period my last name at gmail.com. If anyone wants the op ed (changed to reflect whatever deal conditions are applicable at the time), ditto.
And finally, one question – why didn’t I read any op eds like this in the newspapers in the last few weeks and months?
Mike
they didn’t want your essay because you were saying what everyone knows is not true. never mind whether it IS true. “everyone knows” that it is not.
that said, the recent compromise re taxes should tell you that sanity has nothing to do with tax policy.
Your assertion that higher tax rates allow the government to spend more on things that benefit the economy is not supported by the data. Through the post-war period, including all of the periods you mention save FDR, government revenues have hovered below 20% of GDP. Also, it asks the reader to ignore the fact that most of the additional expenditures aren’t on durable infrastructure with an identifiable long-term payback, but are instead transfer payments that largely fuel consumption. As a group, we consume more than we produce and fund the difference by borrowing from the rest of the world. This can’t continue forever, and so policies that reduce incentives to produce, save, and invest, and that encourage consumption, should be considered in light of this unpleasant truth. Frankly, I think it’s time to consider taxes that discourage consumption, especially consumption that may be undesirable for other reasons. A modest VAT, such as proposed by Volker, and perhaps some taxes targetted at fossil energy use, could easily close our budget holes. Taxes are always a drag on economic activity; they’re necessary to run the government, of course, and so we accept the reduction, but should try to keep them in line.
Aha,,, the 19% GDP statement. On another post Doug. If I can find it tonite I will add the link. Not such an easy answer.
http://www.angrybearblog.com/2010/11/hausers-law-is-extremely-misleading.html
Not a true assumption to start so an argument can’t be accurate based on it.
I’ll read that, what about the fact that most of the government spending you seem to think has long-term payback appears to simply be consumption? Last year’s stimulus bill comes to mind – while the program was sold with words like “shovel ready”, making it sound like a new WPA, the reality was that much of the money went to plug holes in the unsustainable budgets of states such as California (where I live) and New York, and a lot of the rest went to the “make work pay” tax credit which is a real “chicken in every pot” spending program. Did either of those things build anything of lasting value, like, say, the Golden Gate bridge, the Hoover Dam, the TVA, the interstate highway system, to name just a few of the great projects from the past? I see precious little of this sort of real investment – the focus seems to be on transferring money from a small group of people who pay taxes to a larger group who will hopefully vote for those in power. Yeah, I’m cynical. Part of the problem is that real infrastructure projects take years to get into the pipeline – the benefits won’t flow for years, and the political cycle doesn’t allow enough time for them to work. Projects like the great works undertaken in the 1930s would probably take so long to get through our current legal and regulatory process that the president would be out of office before ground was broken.
Mike Kimel,
I find it odd that you don’t focus more attention on average effective federal tax rates instead of marginal tax rates. There is historical data available as well as current analysis of various deficit reduction plans which include tax code changes.
The Tax Policy Center blog provided this analysis:
Deficit Plans Cut Marginal Tax Rates, But Raise Average Rates, for High Earners
November 23, 2010
http://taxvox.taxpolicycenter.org/blog/_archives/2010/11/23/4687055.html
CBO produced this detailed report including historical data last year:
Data on the Distribution of Federal Taxes and Household Income
April 2009
http://www.cbo.gov/publications/collections/taxdistribution.cfm
The New York Times got into the act last year producing this piece, complete with graphs and a link to a CBO graph on real after-tax average income, 1979-2007:
How Much Americans Actually Pay in Taxes
April 8, 2009
http://economix.blogs.nytimes.com/2009/04/08/how-much-americans-actually-pay-in-taxes/
We all know that you’re a busy person like many others, but do you just not read this stuff?
The more important issues are the average effective federal tax rates, and the resultant revenue streams derived from such taxes.
Thanks for the link where you pick at Hauser. I didn’t find it very compelling, frankly. The differences appeared to be a negligible 1% or less of GDP. If you look at projections for the budget going out to 2030 and beyond, the problem is way way bigger than that. If nothing’s done, 25% of GDP will be consumed just for Medicare, SS, and interest on the debt, leaving nothing for the rest of the government and still a 5% deficit. And that curve assumed that GDP growth remained on track, i.e. that there was no negative effect on GDP associated with funding all that. Sure, we could jack income tax rates up to try to cover the shortfall while hoping that people will work just as hard (or harder) for less marginal benefit, but it seems unlikely to happen. One thing that you’re missing, and that I suggest you research, is that the top marginal rate is now hitting a much larger number of people than in the past. I wasn’t around in the 50s, but I was in the 70s, and to give you some perspective, the 70% tax rate back then (60% on earned income) hit you at $200k of income. $200k was a lot of money back then, equivalent to perhaps $1.5 million today. And of course, few people willing paid it. That income level was so high that high-earning productive people, who I’ll call the “working rich” (think engineers, doctors, small businesses) didn’t feel the disincentives such a tax rate creates. At least, not until the inflation hit and the words “bracket creep” entered the mainstream. There’s a bit of sleight of hand going on when those arguing for higher marginal tax rates talk about Wall Street billionaries and then drop the hammer on doctors. Bring back the Clinton tax rates with a new bracket that starts at, say, $5 million, and then I’ll know they’re serious. Won’t happen, though, for a very simple reason: there just aren’t enough people in that income group to matter – even taxed at 100%, it won’t bring in the cash that hitting the upper-middle-class with a 5-10% rate bump will.
Doug,
“ Taxes are always a drag on economic activity; they’re necessary to run the government, of course, and so we accept the reduction, but should try to keep them in line.”
Ummm… then why the correlations I noted? I mean, if it was just real GDP its one thing. But real private investment, unemployment, and the S&P 500? If taxes have been a drag on economic activity in the last few decades (say, 8) the effect is well disguised.
Doug,
1% of GDP? 1% of GDP? The post shows its more than 5% of GDP = 1% of GDP? In your world, 1 = 5?
MG,
Oh, come on. This is ridiculous coming from you. You’ve been a reader here for a long time. You know damn well for a long time (two years) I was writing post after post after post about the effect of the average tax burden on the economy. Its a huge piece of the book I co-authored with Michael Kanell. I think that’s not a sign I’m ignoring the issue. And then asking me if I read this stuff – after I’ve been writing about it for years – are you kidding me? Seriously? Is this a joke?
You commented on many of those posts, so you know this. And you know from those posts and the book (if you read it) that the tax burden also fails shows the standard story.
Mike,
There is no mention of average effective federal tax rates in this main post.
If you have read the Tax Policy Center article that I identified, then you know that much of the media and liberals’ discussion about marginal tax rates centered around the various deficit reduction proposals is misleading. Quite misleading in fact.
Now, if you want to focus solely on the expiration of the Bush II era tax cuts, then there should be some consideration of differences in average effective federal tax rates among the Administrations that you have cited. It’s not in this main post.
Similarly, any analysis of the tax package that President Obama put forth in his FY2011 or upcoming FY2012 budget submissions should include an analysis of Treasury’s Green Book tax provisions which are outlined in some detail.
If you want to contest what I have said and say that you were only focusing on the expiration of the Bush II era tax cuts (or extension of all or partial) then there should be some explanation of the fact that the marginal tax rates are not the only tax code provisions that are in consideration. Treasury released a comparison summary showing all changes and related revenues that would occur if all or part of the Bush II era tax cuts were not extended. That approach was adequately comprehensive enough to avoid the standard misleading commentary focusing only on the change in marginal tax rates.
I don’t fully understand the purpose of your limited focus in this main post.
I am of the opinion that any discussion related to the Bush II era tax code changes which focuses solely on marginal tax rates is misleading. The comparison story just doesn’t end there.
MG,
“There is no mention of average effective federal tax rates in this main post. “
Correct. And there is no mention of the national debt either. That doesn’t mean I haven’t written extensively about either topic. Or that I’m ignoring it. I’m getting the point across the way I think is best, not the way you think is best.
Listen, if Bruce Webb writes a post about something that isn’t Social Security, are you really planning to drop him a comment cluing him in on the fact that there is a program called “Social Security?” Or if Linda Beale writes a post on something other than tax law, are you really planning to leave a comment informing her of the existence of this vast body of law dedicated to taxes and asking her why she hasn’t bothered mentioning it?
And that goes outside this blog. I assume that if Glenn Beck goes through a half hour segment without quoting a huckster and shedding crocodile tears, you aren’t feverishly writing to inform him that by citing quacks and crying extensively he can more easily pluck his marks. So why are you insisting, right now, that I repeat about three years worth of posts in a short piece? Especially when you and I both know they support the conclusions of this post.
Either you have alzheimer’s or you think you are mocking me. Either way, I am not playing along.
Bullshit, Kimel. Your main post is wrapping around your lead paragraph. It’s in that paragraph that you imply that the real issue is marginal tax rates. I say that is misleading.
The problem with that line of thinking is that the Bush II era tax cuts weren’t only about marginal tax rates, particularly for upper income earners. Treasury’s data release made that very clear. The Tax Policy Center article makes it very clear that the deficit reduction proposals aren’t only about marginal rates.
I made a simple llead statement in my first comment: “I find it odd that you don’t focus more attention on average effective federal tax rates instead of marginal tax rates.” And I stand behind that statement for the very reasons that I have outlined in two comments above.
It should be clear by now that discussions which focus solely on marginal rates without consideration of other concurrent tax code changes are misleading.
Stop faking it. And stop whining like a little kid over a simple observation that I made in my first comment.
Bullshit, Kimel. Your main post is wrappied around your lead paragraph. It’s in that paragraph that you imply that the real issue is marginal tax rates. I say that is misleading.
The problem with that line of thinking is that the Bush II era tax cuts weren’t only about marginal tax rates, particularly for upper income earners. Treasury’s data release made that very clear. The Tax Policy Center article makes it very clear that the deficit reduction proposals aren’t only about marginal rates.
I made a simple lead statement in my first comment: “I find it odd that you don’t focus more attention on average effective federal tax rates instead of marginal tax rates.” And I stand behind that statement for the very reasons that I have outlined in two comments above.
It should be clear by now that discussions which focus solely on marginal rates without consideration of other concurrent tax code changes are misleading.
Stop faking it. And stop whining like a little kid over a simple observation that I made in my first comment.
Doug
it is unlikely you will ever realize that you are spouting a party line and not saying anything that can reasonably be said to describe reality.
what government does… and waste is just a normal part of human activity… is intended to make the economy work better, from defending your business from the Rooshians to making sure your future employees and customers live through the inevitable business downturns, you can’t just say that “transfer payments” “fuel consumption” and hurt investment.
moreover, Social Security, is paid for directly by the people who will get the “transfer payment.” they give up some consumption today in order to be able to consume enough when they are too old to work.
or is it your idea that people should not be allowed to save for their retirement, but instead forced to work until they have nothing left to “contibute”?
doug suffers from the insane idea that we work so we can invest. i wonder how much of his budget goes to “consumption”?
Dough
“if nothing is done” Medicare and Social Security will equal 30% of a wage that has more than doubled at the same time. try to think of it as a pile of goodies. today your pile is so big and 15% of it is set aside so you can live for a few years after you retire. tomorrow your pile will be twice as big and you will need to set aside 30% in order to live twice as many years after you retire. but the pile of stuff you have left after you set aside for your old age will still be twice as big as the one you have today.
i tried to make the picture simple. the accurate arithmetic comes out a bit different, but not materially so.
so that leaves “interest on the debt,” “if nothing is done”…. hummm, maybe we should just pay our bills.
btw that’s 30% of wages below the cap. those wages are about 30% of gdp. medicare and ss together will take up about 10% of gdp.
doug needs to get his figures from a more honest store.
well, you won’t get me to defend a “stimulus” that was mostly tax cuts to people who already had more money than they were willing to spend, or knew how to invest.
so if you are saying our government is in the hands of crazies, i’ll agree with you. but when you look at it, the crazy they are selling is the crazy you are buying.
MG
well, you teach me a lesson at least in the futile use of expletives that should have been deleted.
i don’t think it’s Alzheimers, but it reminds me a bit of “The MInd of a Memnonist” (which i may have spelled wrong) about a guy with a photographic memory. If you walked through a room, he could describe exactly what you were wearing (after you left), but if you walked through the room again wearing a different hat, he would have no idea it was the same person.
Now now gentlemen, let’s not resort to dissing each other like street thugs. It’s quite clear what Mike wrote, but the idea that it’s B.S. doesn’t hold water. I’m not going to enter this sand box fight, but I think that instead of attacking the messenger, there should be a constructive dialog that addresses the problems we face today. If the Media-press-reject op-ed comments for what they consider ? ? ?, it’s their right, but for this sort of B & F, it shows that ego is in the way. In other words, if you can’t stand the heat, get out of the kitchen.
cactus,
You are looking at this from a “Macroeconomic” perspective, and there is too much “noise.” or other factors, that determine GDP growth than just the top marginal tax rate.
If you want to determine “The effect of changing marginal tax rates” you need to use Microeconomics. Get a real investment proforma and jigger with the line that says “Federal Taxes” to see how tax rates impact investment returns.
If you don’t have access to that, here is a simple example of the effect of tax rates on investment:
1) At 100% tax rates, the amount of investment would be $0
2) At 90%, a few investments would be made, but not many.
3) At 50%, more investments would provide adequate returns
4) At 25%, even more investment would be made.
I hope this clears up your bewilderment as to why people believe cutting taxes can influence growth.
Hey Mike Thanks for the “facts”. Since Saint Ronnie hoodwinked a nation 30 years ago–because of Carter’s incompetence in dealing with a fractured Democratic Congress–sound familiar? “facts” have not mattered and even people who should know better have repeated GOP talking points as if they had substance. The result is exactly what Reagan wanted–the destruction of the middle class and the wealthy, mostly white, elite getting an increasingly larger piece of the pie. The elite really do not care how big the pie is as long as they keep working toward getting all of it. As best I can tell, the guy who I thought was the best hope for change in 2008, just threw in the towel without a fight. Just as the asserted rationale was to get an extension of unemployment benefits we are sealing the deal where 98% of us will have to beg for our daily survival from the 2%. I guess we deserve it because we had a choice and now the windows to those choices are closing as evidenced by your inability to get the facts before the public in a right wing dominated media.
How come no one is considering the fact that Real GDP is not a good measure for the effects of taxes? GDP numbers are dependent of government spending! And what the changes that happend after Reagan in terms of Trade and Globalization?
I remember the Eighties as very difficult, but I always felt that is was the Reagan years that set up the years of Bush I & Clinton……there is no lagging being taken into consideration in this analysis.
Just did a managerial accounting lecture, with an emphasis on discounted cash flow models for capital budgeting and investment.
Very clearly, higher tax rates make it tougher to get positive results (somewhat mitigated by accelerated depreciation impacts).
Thus the Obama proposal on 100% write-offs for 2011.
This whole area is very complicated at the entity level, an area never visited by macro.
sammy
you won’t invest unless you can see a profit. since the tax is imposed after the profit it is not a factor.
mike is talking about a macroeconomic problem. suggesting he switch to microeconomic analysis is somewhat like suggesting that instead of counting caolories, i examine the biochemistry of ATP. yeah there’s a connection, but the solution is still macro.
what you are suggesting is in fact what the economists call the fallacy of composition.
the actual tax rate is a good deal less than 25% right now.
Terry
i have known a few politicians in my life. they are congenital liars. moreover, they do not think in terms of cause and effect. they think in terms of votes and contributions. so the only sanity you will see among them is when they agree with you… for the sake of your vote.
used to be the people had a fairly good idea what was good for them and thereby kept the politicians at least marginally in touch with reality. but nowadays the press is very effective and giving the people an alternate reality they can beieve in…. until the chickens come home to roost.
the press, of course, has no intelligence at all. these are folks who value being “in the know,” meaning they can say what the important people are saying and sound clever or at least “in.” and that is the sum total of their happiness.
maybe when things get bad enough the politicians will be forced to say something true just to get our support. but history has shown this can take a long long time when the powerful have adequate means of controlling the people.
you won’t invest unless you can see a profit. since the tax is imposed after the profit it is not a factor.
No, no, no.
The investment must meet a certain required rate of return. For example, you wouldn’t invest $1M to recieve a profit of $1, would you? And (I can’t believe I have to explain this to you) the returns are estimated after tax, because, well, that is what a “return” is. So, if you increase the tax rate, you lower the return, making it less likely on the margin that the investment will be made.
Coberly, Since I posted, I saw where Raw Story posted Keith Olbermann’s take on Obama’s capitulation. I also see where some reporter on Fox News picked up on Obama’s stated willingness to negotiate with hostage takers and what that implies for the War on Terror. Little bits of truth do filter out, but they are overwhelmed by politicians lies and folks who make their livings repeating them.
pluto
and you don’t consider that government spending is of value to the economy. aside from the politics of it, it would make no difference if the government spent nothing and we kept everything we earn, or the government taxed 99% and gave us what we needed, with the 1% for candy.
doesn’t mean i favor the big big government, but i do get tired of folks living in their mothers lap calling her mean names.
and yes, you can fudge in lag times all you want. let me tell you, it wasn’t Reagan that made it possible, it was George Washington.
samy
you don’t have to explain it to me, but you might need to explain it to yourself.
if i invest a hundred dollars and make a return of five dollars after taxes i am more or less happy, unless i think i could have made ten percent after taxes. if the world changes and i can only make 2% after taxes, i am just as likely to invest because that will be “the way things are” and making money by investment whether it’s 2% or 20% or 200% is better than making nothing.
of course you’d rather make 10% than 5% “if only” you didn’t have to pay taxes. but imagine the profit i could make building buildings if there was no gravity. or selling cars if there was no friction.
thing is you don’t understand you live in a world where the government makes possible almost all of the profit you will ever make. nice if you could go back to the stone age and sell your bows and arrows and keep all the money without paying the government. but you can’t.
rusty
same reply as to sammy. it’s tough to make a profit. that’s why businessmen get the big bucks. crying about not being able to make a profit while paying the government for the roads that bring you your customers suggests a certain detachment from reality.
Doug,
You have either saddled up with those who misuse data, or have been misled by them. There is lots of room “below 20%” and ignoring the fact that 21% would be truer than 20%, “hovering” gives the wrong impression.
You have also tacitly made the argument that only durable infrastructure spending is justifiable, without showing why that would be true. If what we are after is a positive net social value from government’s activities, there is no reason to believe that other categories of spending do not fill the bill. Feeding children, clothing soldiers, collecting taxes – each is likely to have a positive net social value, and none involves durable infrastructure spending directly.
Your argument comes off as a sort of hodge-podge of claims that have been made about fiscal policy at various time in various places, each of which is entirely debatable.
Mike,
You may feel you are alone in your views, but thre is this Nobel Prize winner (no, not that one) who sees things you way. From Reuters:
“We need to throw things that we find useful at this problem, the ones that seem worthwhile, and I would like to see more done,” said Diamond, in Stockholm to accept his Nobel prize later this week.
“More on the fiscal side. My favourite one is what was done before — the Federal government aiding the states — because the ability of the states to borrow is not … there.”
But extending tax breaks for top earners made no sense, he said, reiterating previous criticism.
So, there is this old saw among free lance writers – “Sell every piece three times.” Each sale requires a recasting of the same ideas. You could reasonably repackage you essay by noting that the winner of this year’s economics Nobel (who is right now taking an odd path to Senate confirmation for his Fed appointment) takes the above-stated view of fiscal policy. Then go on to show how someone so wise and steeped in economic knowledge could arrive at such views.
Ride Diamond like he was your own pony.
I don’t think we’ve probed whether the political concensus is that the middle class and bottom bracket tax cuts should be preserved. What we’ve probed is that the Democrats wanted to keep the lower bracket tax cuts and only allow the top bracket to revert. The Republican declare that ‘any tax cut is a good tax cut’ but have only put muscle behind cutting taxes for top brackets, dividends, capital gains, and business taxes.
The GOP did not want to allow the top bracket to be decoupled from the lower brackets in this instance.
The whole thing is a shell game. Everyone knew when this bill was originally signed that it couldn’t be justified based on out year analysis. Some in the GOP imagined it would lead to larger economic growth that would pay for itself ten years out – but that theory has been disproven with one data set, IE, the past decade has been the lowest growth decade in at least eight, while the decade that preceeded it (the one where top bracket taxes went up but other taxes stayed more or less the same) had growth well in the top half of the eight-decade average.
So – we had a tax cut which everyone knew was not affordable, passed early in a President’s term because he wanted it and congress agreed to it as long as it also included some of their priorities, IE, the lowest bracket cut, refundable tax credits for various things like children etc; everyone hoped the economy would improve but it never really did – though we did create a bubble economy out of national real estate , something never before accomplished and which we’ll be muddling to repair till after the boomers have all retired and moved to old age homes, with ongoing damage to people’s ability to retire with dignity rippling through various ways – loss of equity, collapse of tax revenue, federal govt unable to meet its obligations due to a planned stress test of tax rates .vs. obligations (the GOP plan since the 1980s).
“Ride Diamond like he was your pony … ” I like that.
In addition, I think the essay has to be a little pithier. I think sometimes we tend to use language of instruction, which isn’t always the most effective in making an argument.
Thanks. I had a pony when I was a kid. All credit for pony allusions is due Brown Star, not me.
Along with a re-write, you can add some video too.
Here’s our prez explaining his hopeless political situation of being burdened with a dem majority on the hill, and he desperately needs to compromise for the good of us little peoples…..
http://www.youtube.com/watch?v=KrTKUEfnegE
BTW, anyone care to speculate how the expiration of tax cuts will fare two years from now in a prez campaign year and the arrrr’s have a majority in the senate? Perhaps with tea party nominee palin adding to the debate?
Doug,
Tax receipt[s] as a part of GDP/GNP is not the whole story and it is not quite helpful to discourse to take that statistic alone.
Maybe 19 to 21% tax receipts on average of GDP is historically correct, but during FDR’s war years expenditures were around 40% of GNP for an economy mobilized and commanded for war. Lots of savers, bonds were bought and lots of things were rationed and lots of inputs were price controlled (forced saving). War profiteers were discouraged if not prosecuted.
After the war, some of those bonds were paid off.
What do you call the difference between the almost 20% of GDP taken up as revenues; Taxes or users’ fees and outlays.?
The deficit.
What do you call accumulated deficits? Debt.
Where does the cash for outlays come from to finance the deficit? Borrowing in the form of selling t-bills, t-notes, and special treasuries to federal trust funds (like the SSTF and Medicare who ran surpluses over disbursements).
Each bond or t bill or GAS sold to raise cash so that government taxes are only 20% of GDP are a couple of things.
One they are an obligation, a claim on future taxes. They are also a saving on the part of an individual, corporation or a sovereign wealth who either deferred consumption or stopped an investment to buy in to keeping federal tax receipts at about 20% of GDP.
As a drain on private consumption, or investment borrowing is little different than taxing.
Except borrowing the federal government pays someone interest to not invest or consume so that savers would prefer buying t bills to paying taxes.
That is why every one want tax cuts.
There is plenty of money and savers would rather get a t bill than write a check to the IRS.
Heck, I do not know why anyone should pay taxes, even the poor should just lend the money to the government.
Doug – “If you look at projections for the budget going out to 2030 and beyond, the problem is way way bigger than that. If nothing’s done, 25% of GDP will be consumed just for Medicare, SS, and interest on the debt, leaving nothing for the rest of the government and still a 5% deficit.”
Coberly – “medicare and ss together will take up about 10% of gdp. doug needs to get his figures from a more honest store.”
It appears that Doug may be referencing data extracted from recent CBO long term budget reports. If he is including Medicaid outlays (by the Federal Government only), his figures appear to be in the ballpark.
Coberly doesn’t bother to identify the source for his number, yet he says Doug “needs to get his figures from a more honest store”. Doug appears to be reasonably well informed on budget projections regardless of Coberly’s attempt at discrediting him.
Coberly’s number doesn’t line up with CBO alternate projections for 2035 and beyond. And by his own admission, he doesn’t read the OMB’s Federal budget submissions.
What source data and projections is coberly using to support his claim?
Norman,
If you had read the following analysis from the Tax Policy Center, you would understand why the standard elementary claims about marginal tax rates can be misleading. Moreover, in some cases such claims can be totally wrong as explained by the Tax Policy Center whenever the combination of tax code changes result in net gains of tax revenue.
We’re observing a multi-front battle over fiscal year deficits and national debt reduction. Those who don’t grasp the differences outlined in various proposals with regard to proposed cumulative tax code changes, resulting average effective tax rates, and marginal tax rates are lost in such discussions.
Many people don’t understand that marginal tax rates can be reduced while average effective rates are increased, thereby providing higher volumes of tax revenue. That point is explained quite well by the Tax Policy Center, and the author of the article ran the numbers. If you want to challenge him, knock yourself out.
Deficit Plans Cut Marginal Tax Rates, But Raise Average Rates, for High Earners
November 23, 2010
http://taxvox.taxpolicycenter.org/blog/_archives/2010/11/23/4687055.html
Mike Kimel never said that his draft op-ed was rejected.
Kimel said this: “I wrote most of what follows in the anticipation of trying to get it accepted as an op ed at a newspaper, but I guess the deal cut the other night means a bit of it needs rewriting…”
Mike Kimel never said that his draft op-ed was rejected. That was coberly’s invention.
Kimel said this: “I wrote most of what follows in the anticipation of trying to get it accepted as an op ed at a newspaper, but I guess the deal cut the other night means a bit of it needs rewriting…”
Rusty,
Recent input to GF (cactus being much younger no longer has GF he has wife) from her financial advisor: ‘do not make investment decisions on politics or tax policy’.
My back of the envelop on the advisors’ advice agrees.
It don’t make sense to go Roth on my IRA’s (Iam >60) nor to count on taking the mortgage interest deduction as opposed to renting given not being disposed to pay a bank for the right to cut a lawn and paint the siding.
What coberly said.
rust,
What was the reaction to Obama’s proposed write-off proposal?
Business owners I have spoke to in the past few weeks aren’t jumping for joy over that one, primarily with regard to short window.
MG,
“I find it odd that you don’t focus more attention on average effective federal tax rates instead of marginal tax rates.”
Why?
What is better about analyzing “average effective” compared to analyzing “marginal tax rates” federal tax rates?
I will only read one link after I read your explanation.
Link and no explanation no read.
More than one link I will only read one link, after I read your words.
alto pluto,
“How come no one is considering the fact that Real GDP is not a good measure for the effects of taxes?”
From the post:
“In fact, since the Reagan Revolution took hold, similar relationships have existed between the top marginal rate and several other important variables, like real median income, real private investment, consumer sentiment, the value of the dollar relative to other major currencies, and the S&P 500…. On the flip-side, since 1981, unemployment rates have generally shrunk faster when tax rates were higher than when they were lower.”
“there is no lagging being taken into consideration in this analysis. “
“Lower tax rates in any given year are associated with slower growth rates for each of these variables, whether those growth rates are measured over periods of one, two, three or four years. “
Conclusion: you are making false claims about the post.
kharris,
Thanks for pointing this out.
STR,
What is good for one individual is not necessarily a net positive. Sometimes discouraging that individual from doing what he would otherwise do is a net positive. I’ll have to write a post about this one of these days.
MG
the numbers for percent of “taxable income” are from the Trustees Report. So are the percent of GDP.
If you can find that I misremembered the numbers materially, and that “projected numbers” are accurate to within 10%, I’ll retract my “claim.”
MG
it wasn’t much of an invention. perhaps an inference. but if you want to be shitty about it, i didn’t say it was rejected. i said they didn’t like it.
MG
thank you for your important contribution to this discussion. it really wasn’t much of an invention. more of an inference. another tiny point you can contemplate is that i didn’t say they rejected it, i said they didn’t want it. let me know when you have worked out the significance of this.
MG,
Think.
I do not read tax policy center drivel, they don’t think they sell.
Thanks for the one link, it is not worth following.
You confirmed my suspicion on your lack of energy and inability to support opinion on your own without authoritative direction, which you agree with.
That is what makes Petraeus so smart.
Imagine.
MG,
Oops, I did go to the link.
Got to this unsubstantiated drivel.
“people are more likely to make decisions based on economic fundamentals. people are more likely to make decisions based on economic fundamentals.”
Think!
Next year (this year almost all of my hours worked full time) the first hour I work will be at 31% marginal rate or 33% if the rates expire. I will still work 2000 hours…………….
The drivel meister depend on everyone being uneconomic, toads.
Think.
mike
just to anticipate you a little: a business that can’t succeed without paying taxes or fair wages is probably not a business that we ought to encourage.
is this an absolute? no. but it’s at least as good as the constant whining we hear from rich people about how they just can’t make a living and pay taxes, or a living wage to their workers.
Cactus,
Write about the impact of the observer on the object of the experiement…………
Engineers call it measurement error. It is more sillythan that.
Seems in the US the observer make up the object to suit their observations, propoaganda they wish to sell.
mike
just to anticipate you a little: a business that can’t succeed except without paying taxes or fair wages is probably not a business that we ought to encourage.
is this an absolute? no. but it’s at least as good as the constant whining we hear from rich people about how they just can’t make a living and pay taxes, or a living wage to their workers.
The problem is that one can’t argue with the data. Higher marginal tax rates mean higher economic growth rates. That’s the MIchelson-Morley experiment, except that everyone is trying to ignore the result rather than dealing with it. The Soviet Empire went into the red in the mid-70s, but good communists ignored the facts and made no adjustments. By the 90s, the Soviet Empire was history. The US has been in the red since the Reagan administration, and aside from Bill Clinton, no one has even tried to address the problem. As the USSR learned, you can ignore the facts, but the facts won’t ignore you.
Listen to the big boosters of capitalism today – we can’t afford to let people retire, we can’t create jobs, we can’t raise pay, we can’t rebuild our highways, we can’t give everyone medical care, we can’t blah blah blah. Those are the friends of capitalism. If the strongest backers of an economic system are arguing that it can’t provide the basics, maybe it is time to look at the systems that can.
coberly,
You continue to astonish. It is obvious from your comments that have never even taken a finance class, and have done no research to increase your understanding.. Yet you glibly prattle on and on and on about things you know nothing about, mixed in with a lot of insults. I’m not sure what the diagnosis is, but it’s not a very pleasant combination.
Here are the CBO numbers in response to statements made by Doug and coberly.
Doug – “If you look at projections for the budget going out to 2030 and beyond, the problem is way way bigger than that. If nothing’s done, 25% of GDP will be consumed just for Medicare, SS, and interest on the debt, leaving nothing for the rest of the government and still a 5% deficit.”
The Long Term Budget Outlook
June 2010, CBO
http://www.cbo.gov/doc.cfm?index=11579
CBO – Projected Spending and Revenues Under CBO’s Long-Term Budget Scenarios
Table 1-2.
Extended Baseline Scenario:
Projected Spending – Year 2035
As a percentage of GDP
Primary Spending
Social Security – 6.2%
Medicare – 5.9%
Medicaid, CHIP, and exchange subsidies – 3.8%
Interest spending – 3.9%
TOTAL – 19.8%
Primary deficit – 0.4%
Total deficit – 4.3%
—–
Alternate Fiscal Scenario:
Projected Spending – Year 2035
As a percentage of GDP
Primary Spending
Social Security – 6.2%
Medicare – 7.0%
Medicaid, CHIP, and exchange subsidies – 3.9%
Interest spending – 8.7%
TOTAL – 25.8%
Primary deficit – 7.2%
Total deficit – 15.9%
—–
coberly – “medicare and ss together will take up about 10% of gdp.
CBO – Projected Spending and Revenues Under CBO’s Long-Term Budget Scenarios
Table 1-2.
Extended Baseline Scenario:
Projected Spending – Year 2035
As a percentage of GDP
Social Security – 6.2%
Medicare – 5.9%
TOTAL for SS and Medicare – 12.1%
—–
Alternate Fiscal Scenario:
Projected Spending – Year 2035
As a percentage of GDP
Social Security – 6.2%
Medicare – 7.0%
TOTAL for SS and Medicare – 13.2%
Here are the CBO numbers in response to statements made by Doug and coberly.
Doug – “If you look at projections for the budget going out to 2030 and beyond, the problem is way way bigger than that. If nothing’s done, 25% of GDP will be consumed just for Medicare, SS, and interest on the debt, leaving nothing for the rest of the government and still a 5% deficit.”
The Long Term Budget Outlook
June 2010, CBO
http://www.cbo.gov/doc.cfm?index=11579
CBO – Projected Spending and Revenues Under CBO’s Long-Term Budget Scenarios
Table 1-2.
Extended Baseline Scenario:
Projected Spending – Year 2035
As a percentage of GDP
Primary Spending
Social Security – 6.2%
Medicare – 5.9%
Medicaid, CHIP, and exchange subsidies – 3.8%
Interest spending – 3.9%
TOTAL – 19.8%
Primary deficit – 0.4%
Total deficit – 4.3%
—–
Alternate Fiscal Scenario:
Projected Spending – Year 2035
As a percentage of GDP
Primary Spending
Social Security – 6.2%
Medicare – 7.0%
Medicaid, CHIP, and exchange subsidies – 3.9%
Interest spending – 8.7%
TOTAL – 25.8%
Primary deficit – 7.2%
Total deficit – 15.9%
—–
coberly – “medicare and ss together will take up about 10% of gdp.”
CBO – Projected Spending and Revenues Under CBO’s Long-Term Budget Scenarios
Table 1-2.
Extended Baseline Scenario:
Projected Spending – Year 2035
As a percentage of GDP
Social Security – 6.2%
Medicare – 5.9%
TOTAL for SS and Medicare – 12.1%
—–
Alternate Fiscal Scenario:
Projected Spending – Year 2035
As a percentage of GDP
Social Security – 6.2%
Medicare – 7.0%
TOTAL for SS and Medicare – 13.2%
ilsm,
Howard Gleckman said this: “With low rates, people are more likely to make decisions based on economic fundamentals. When rates are high, they make choices just to save taxes and can make some really stupid decisions.”
ilsm – “What is better about analyzing “average effective” compared to analyzing “marginal tax rates” federal tax rates?”
I provided you with an analysis, regardless of whether you like the source. Try refuting that information.
It’s always better to capture the net revenue results from all tax code changes in any proposal. Focusing on only one tax change parameter makes no sense if there is a package of tax changes being proposed. The issue is the result of the cumulative tax code changes by income tier.
I wonder how you intend to size up the deficit reduction proposals if you don’t understand the net revenue reasons for focusing on average effective tax rates instead of marginal tax rates.
ilsm – “people are more likely to make decisions based on economic fundamentals. people are more likely to make decisions based on economic fundamentals.”
Howard Gleckman said this: “With low rates, people are more likely to make decisions based on economic fundamentals. When rates are high, they make choices just to save taxes and can make some really stupid decisions.”
coberly – “Mike they didn’t want your essay because you were saying what everyone knows is not true. never mind whether it IS true. “everyone knows” that it is not. that said, the recent compromise re taxes should tell you that sanity has nothing to do with tax policy.“
Mike Kimel never said that the newspaper or magazine didn’t want his op-ed. You just made it up.
coberly – “Mike they didn’t want your essay because you were saying what everyone knows is not true. never mind whether it IS true. “everyone knows” that it is not. that said, the recent compromise re taxes should tell you that sanity has nothing to do with tax policy.”
Mike Kimel never said that the newspaper or magazine didn’t want his op-ed. You just made it up.
And yes, not wanting an op-ed submission is a rejection.
Kaleberg,
What type of economic system are you proposing?
MG
The 2010 Annual Report of the Board of Trustees
page 187
Table VI.F4 OASDI and HI Annual and Summarized Income, Cost, and Balance as a Percentage of GDO, Calendar Years 2010-2085
Intermediate: from 2035 to 2085 the combined cost of OASDI AND HI ranges from 8.04% of GDP to 8.13%, so it is well less than 10% for fifty years and not obviously headed higher.
Since you call my attention to it, I see that you and Doug are talking about something else. I can’t go there with you, because I don’t know anything about it.
i feel a bit like the victim of a bait and switch here. or maybe only my own careless reading.
SS and Medicare mean to me the programs paid for with the payroll tax. I have no way to account for what the rest of the budget does. And MG is not being quite honest, because he throws in “Medicaid Chip, and Exchange Subsidies” which even Doug did not mention. In the end SS and Medicare, broadly defined are projected to be 12 or 13% of GDP… if nothing is done. I don’t know if the “projected debt” includes the cost of SS on the assumption it is not paid for… that would be double counting and i suppose CBO is smarter than that. But at the end of the day when you are talking about Social Security and you include every number you can think of, it makes it hard to think clearly about “what can be done.”
which is: pay for the Social Security we need with a tiny tax increase. pay for the Medicare we need with a similar tax increase.* those are worker’s needs, no reason the workers can’t pay for them. as for all the other programs and the rest of the debt, sure as hell congress needs to get a handle on them, but they don’t belong in a serious discussion about Social Security.
i haven’t calculated the actual increase needed to pay for the part of Medicare outside HI… but assuming CBO numbers are correct, and “nothing is done” the cost of “Medicare” broadly looks roughly equivalent to the cost of SS, the increase in SS can be paid for at one half of one tenth of one percent per year and ends up a great deal less at the end of the day than the increase in wages (actual dollars, not percent) over the same time. the increase in Medicare is about twice as much (it starts from a smaller base), that strikes me as a lot of money… but it’s money that will have to be paid for health care even if there is no Medicare at all. Medicare is the safer, fairer way to pay for it. And, the worker will still have more money after paying the tax than he has today.
On the other hand, the costs could and should be reduced… but that is not the same as cutting Medicare: taking away people’s ability to pay for them under the security of the government program.
so i would humbly suggest that instead of playing gotcha, we… or somebody… think about what we CAN do in a sane and responsible fashion. I don’t hear anything sane coming from the congress or white house.
This is hilarious.
Doug – 2 days ago, 11:05:44 PM – “If you look at projections for the budget going out to 2030 and beyond, the problem is way way bigger than that. If nothing’s done, 25% of GDP will be consumed just for Medicare, SS, and interest on the debt, leaving nothing for the rest of the government and still a 5% deficit.”
MG – Yesterday, 5:43:14 PM – “It appears that Doug may be referencing data extracted from recent CBO long term budget reports. If he is including Medicaid outlays (by the Federal Government only), his figures appear to be in the ballpark.”
coberly – Yesterday, 8:46:34 AM – “Doug it is unlikely you will ever realize that you are spouting a party line and not saying anything that can reasonably be said to describe reality.” [in response to another comment by Doug]
coberly – Yesterday, 8:50:23 AM – “doug suffers from the insane idea that we work so we can invest.” [comment to Rdan]
coberly – 8:57:13 AM – “doug needs to get his figures from a more honest store.”
coberly – Today, 12:32:11 AM – “Since you call my attention to it, I see that you and Doug are talking about something else. I can’t go there with you, because I don’t know anything about it.”
coberly – Today, 12:58:06 AM – “i feel a bit like the victim of a bait and switch here. or maybe only my own careless reading.”
coberly – Today, 12:58:06 AM – “SS and Medicare mean to me the programs paid for with the payroll tax. I have no way to account for what the rest of the budget does.”
coberly – Today, 12:58:06 AM – “And MG is not being quite honest, because he throws in “Medicaid Chip, and Exchange Subsidies” which even Doug did not mention.”
coberly – Today, 12:58:06 AM – “so i would humbly suggest that instead of playing gotcha, we… or somebody… think about what we CAN do in a sane and responsible fashion.”
Another one of coberly’s senseless attacks on a new participant at AB.
I disagree and gave an example, what did you say?
To all the above.
I disagree and gave an example, what did you say?
Is this a question?
“I wonder how you intend to size up the deficit reduction proposals if you don’t understand the net revenue reasons for focusing on average effective tax rates instead of marginal tax rates.”
What has deficit to do with tax rates? Or prejudice toward illogical concern for average taxes?
See history since voodoo economists like from Brookings and Urban center ran the country into the ground.
MG,
Good question, something other than the oligarchic fascism holding this country in its grip?
Jefferson said it: no banks and no empire (a small liberty , empire is standing armys’ reason to exist).
One where the empire pays for itself or goes? Not very democratic but cannot wean the fascists too fast.
One where the ‘general welfare’ is not measured in the Hamptons?
One where the government is interested in “we the People”, not just the people on Wall St?
MG,
Doug was making too much sense.
sammy
no. doug was using, or the victim of, one of the standard ways of presenting a dishonest argument. when the issue is the cost of Social Security, he presents a statistic that conflates the cost of SS with other programs and a deficit that has nothing to do with Social Security.
i carrelessly responded to the bullshit without noting the exact words. giving MG an opening for his mindless gotcha.
what we come back to is that SS and Medicare… as defined by Doug and MG, but not by SSA.. and which includes programs deliberatelly designed to break the bank… are projected to be 12 or 13% of GDP, not the 10% I “claimed”, thinking we were talking about SS and HI.
Doug and MG throw in other programs and a debt that SS has nothing to do with, and claim 25% of GDP.
technically, they are correct. but it is a constructive lie nevertheless.
moreover MG has no interest in solutions to the problems. he is only interested in bludgeoning us into a state of stupid fear and submission to “the inevitable.”
sammy,
Doug was making too much sense. He was probably pulling or recalling data from the 2009 or 2010 CBO Long Term Budget Outlook report.
coberly has no working knowledge of the General Fund budget or Unified budget of the Federal Government. In fact, he has no interest in learning anything about the overall Federal budget process or analysis of such. He has made that clear many times.
Doug never responded to coberly.
We’ve probably lost another new participant at Angry Bear. Doug would have been a good participant as he appears to be well read.
ilsm – “What has deficit to do with tax rates? Or prejudice toward illogical concern for average taxes?”
You really don’t get it. Remarkable. Why are you participating on an econ blog?
MG
i wish we could lose an old participant at Angry Bear who has no judgement, no ability to analyze whatsoever. Any quote that seems to support … not so much his opinion as his need to feel superior to others is brought in without any concern for relevance whatsoever. He is not above rearranging posts and quoting out of context in order to score bogus points, because for him its all a game of i-win – you lose. any effort to actually understand, much less solve, the problem is not his concern.
if Doug’s feelings are hurt, he is too thin skinned for political discourse. IN any case, the figures he offered re the future cost of SS and other things and the interest on the debt were the kind of conflation that the bad guys regularly use to confuse and mislead people. of course it helps if they want to be mislead.
meanwhile, Social Security can be fixed with an increase in the payroll tax that is two percent on the worker and two percent on the employer, and this icrease can be phased in over seventy years while wages are more than doubling.
Medical care is an expense that people will have to pay whether there is Medicare or not. If wages rise as expected it will not be a burden. IF wages don’t rise, it will still be a question of a new car or the medical care that might save your life. How are you going to pay for it wihout Medicare.
And the deficit, and the interest on the debt is going to be there whether or not there is Social Security… because Social Security has nothing to do with the debt or deficits.
So you all can keep scaring yourselves stupid with big numbers, but there is a solution if you want one.
MG
I a still waiting for your important friends to take the “trigger” plan that you invented to the President and explain it to him.
MG
thank you for your clarification. It is an important contribution to understanding Mike’s thesis and why you are not hearing anything similar in the popular press.
coberly – “if Doug’s feelings are hurt, he is too thin skinned for political discourse. IN any case, the figures he offered re the future cost of SS and other things and the interest on the debt were the kind of conflation that the bad guys regularly use to confuse and mislead people. of course it helps if they want to be mislead.”
Doug was discussing the entire Federal spending and revenue process and its relationship to GDP. This is exactly what CBO does in its long term budget outlook reports. Doug never focused solely on only one mandatory spending program in his comments. The senseless attack that you launched on Doug in an effort to discredit him wasn’t based on his subject, which you finally recognized and admitted.
You’re apparently clueless on the big picture of overall Federal spending and revenues. You’re too lazy to learn anything beyond your one drum beat subject focusing on only two Social Security programs. You wreck comment thread after comment thread with your repeated useless banter.
This isn’t a Social Security blog. You just think it is.
coberly – “MG i wish we could lose an old participant at Angry Bear who has no judgement, no ability to analyze whatsoever. Any quote that seems to support … not so much his opinion as his need to feel superior to others is brought in without any concern for relevance whatsoever. He is not above rearranging posts and quoting out of context in order to score bogus points, because for him its all a game of i-win – you lose. any effort to actually understand, much less solve, the problem is not his concern.”
You’re the biggest liar I have seen participate at Angry Bear. You don’t know enough to engage in most economic discussions on the blog. You’re too lazy to read up on the subject matter under discussion. You’re like the old dog who couldn’t learn a new trick. So, you trot out your limited one subject matter lines and repeat them until most people walk away from the blog discussions out of disgust. And then you beat on your chest and say that you’re right. It’s downright laughable, as evidenced in your commentary on this thread.
You should have left Doug alone. You were no match for him, his data sources, or his opinions. Telling lies about him and his data sources was a mistake. You haven’t the decency or the character to apologize to him on this thread. Standard conduct from you.
This is an economics blog. Subjects well beyond one or two government programs will be discussed here the vast majority of the time. And no one cares if you don’t like that.
coberly – “MG i wish we could lose an old participant at Angry Bear who has no judgement, no ability to analyze whatsoever. Any quote that seems to support … not so much his opinion as his need to feel superior to others is brought in without any concern for relevance whatsoever. He is not above rearranging posts and quoting out of context in order to score bogus points, because for him its all a game of i-win – you lose. any effort to actually understand, much less solve, the problem is not his concern.”
You’re the biggest liar I have seen participate at Angry Bear. You don’t know enough to engage in most economic discussions on the blog. You’re too lazy to read up on the subject matter under discussion. You’re like the old dog who couldn’t learn a new trick. So, you trot out your limited one subject matter lines and repeat them until most people walk away from the blog discussions out of disgust. And then you beat on your chest and say that you’re right. It’s downright laughable, as evidenced in your commentary on this thread.
You should have left Doug alone. You were no match for him, his data sources, or his opinions. Telling lies about him and his data sources was a mistake. You haven’t the decency or the character to apologize to him on this thread. Standard conduct for you.
This is an economics blog. Subjects well beyond one or two government programs will be discussed here the vast majority of the time. Thank heavens for that fact. That the blog’s far broader focus doesn’t fit your one drum agenda is your loss, not that of the blog, its readers, or its comment thread participants.
coberly,
I didn’t invent the trigger as the U.S. Government has been using budget and program triggers for decades.
The NW plan is DOA in my opinion. Recommended far too late.
coberly – “And the deficit, and the interest on the debt is going to be there whether or not there is Social Security… because Social Security has nothing to do with the debt or deficits.”
That’s a laugh. Your ignorance of fiscal year Federal deficits and the U.S. national debt is something to behold.
MG
not recommended too late. just shut out by the folks who already knew the answer they wanted.
but i thought since you were claiming credit for it a few weeks ago, and telling us about your important friends that you would have discussed it with them.
MG
to this old dog you are looking more and more like a fireplug.
coberly,
I simply stated that a program trigger should be considered. And I posted the link to the comment thread where that lengthy exchange occurred this past summer.
You’re fooling yourself if you think that the NW plan wasn’t recommended too late based on the evidence of what has unfolded during the past year.
The problem in this country isn’t capitalism. The problem is capitalists who know no bounds to their personal greed. Capitalism is only the private ownership of prop[erty and the means of production. There is nothing inherent to that form of economic process that precludes controls on the behavior of the people who take part in that system and on the actions of their corporations. Free market capitalism is an excuse for all manner of disreputable business behavior. That those people and their corporate structures can pay for their choice of government doesn’t make the behavior of that government reasonable nor truly democratic. Fair and balanced capitalism with limits placed on the activities of its participants is no different from a society of laws which limit the behavior of its citizens.