Koyaanisqatsi

...as I am about people trying to find work." Our "president," as heard by me on ABC at four a.m. this morning (in a soundbite).

He's not so concerned about the deficit that he has created (or the deeper deficit that his tax cuts will create) as much as he is concerned about people finding work....



Which idiot amongst the right-wing would like to defend this stupidity? Anyone? I've given you a loophole, you know. Anyone?

RED DAVE

This is a perfect example of double-speak.

RED DAVE

ex-idaho

John Breaux summed it perfectly last week. When addressing the Senate Breaux said the Bush tax cuts operate on the simple premise that we hope they do what we want with the windfall that the 1%'ers will recieve. We hope they won't pocket the cash or give to executives as bonuses and salary increases or put it aside for future projects but that they will increase production and rehire laid off workers to do it.

There is just one problem. There is no demand for any of the products that would be produced so there is no need to rehire those workers. If there was a demand for the products then they would not have been laid off in the first place.

The big tax cut will go the same place as the airline bailouts. It will go into the pockets of the executives as bonuses for cutting labor expenditures and maintianing market share. These cuts will zero jobs and will only increase the deficeit by about 30%. When its all said and done we will be looking at a deficit for this year at about $600 billion dollars.

dcwolf

Tom Daschle said that economists have concluded that Bush's tax cut would create 600,000 jobs. He also said that their prediction for his plan is that it would create over a million. Of course, Bush says his plan would create over a million.

I think it will go the same way it did in the 80's. The economy will remain stagnant for a year, then just in time for the election people will start finding work again.

Future generations will be in debt way over their head, social programs will continue to suffer...

ex-idaho

Tom Daschle may be the most spineless politician in history. Yesterday he would not commit to a position on the repeal of the 1st Bush tax cut. He said that he has not come to a decision regarding that issue.

Koyaanisqatsi

Has there ever been a time in US history where cutting taxes that will only significantly benefit the top 5% during a serious rece-depression has actually resulted in either more jobs or a revitalization of the economy for any pundits to turn to for support of this?

Seriously. I'm not an economist, but even I know that rich people are rich because they keep their money, so how does any of this correlate to a real life example?

ex-idaho

The short answer, no. There has never been an instance in US or even world history were large scale "supply side" tax cuts have resulted in job creation or economic recovery.

Many on the right will claim that the boom of hte 90's was the result of Reagan/Bush era tax policy. If this is truly the case then we are looking at 8 to 12 years of high unemployment before the rebound. This also does not take into account the recession of the Bush I administration. Was that recession the Reagan recession?

AtomSmasher

It does take at least 4 years for large scale investments to return and 8 to 12 years to become profittable. By decreasing the cost of investment, the economy will benefit in the long term. People act like a market cycle is a weekend. Over simplifications like "cutting taxes for the rich his rich cronies!" or, conversely, "strangling businesses that create jobs!" are really just props for political agendas when the issue is very much more complicated. Political mantras are easy digestion for voting blocks, real economics is not. If a company decides to build, for example, a new hotel or factory, they'll do it when federal interest rates are low or demand is very high. Federal interest rates are low but investment is still not high because of a 4 year decline in demand. The current presidential tax plan involves tax cuts across the board, for both companies and tax payers of all incomes. It targets both supply and demand side economics which will increase short term and, more importantly, long term growth and demand. When companies and, especially, financial establishments begin to mobilize their financial reserves because of increased confidence in returns, you will notice an immediate, but mild, boost the national economy and an associated decrease in unemployment. But what really matters, is that in 10 years, when those investments have payed their debtors and profitted their investors you will see a massive growth in corporate and personal income.

ex-idaho

Atomsmasher there are very few economist that would agree with you. Most economist and even the Congressional budget office has stated that the proposed tax cuts will do little to nothing to create jobs.

You said yourself that business will invest when interest rates are low and demand is there. Interest rates are not going to get any lower. In fact if we see deflation of the dollar the rates will go up signifigantly. Demand will not rise until people get jobs and they feel confident that they will not be laid off again anytime soon. And since jobs won't be created until there demand I don't see that confidence coming back anytime soon.

I don't want to pay anymore taxes than I have to but I am not in favor of this tax cut. I make above the national average but will only see about $250 less in my federal taxes. The way it stands now I will end up paying more than that in increases sales and gas taxes in my state because of the shift from the federal cuts. In the long run I will end up paying more and most likely so will you.

dcwolf

Just to play devil's advocate, and to back up what I said...
http://www.cato.org/pubs/pas/pa-261.html
"Employment. From 1981 through 1989 the U.S. economy produced 17 million new jobs, or roughly 2 million new jobs each year."


From 1983 to 1989 - "During the economic expansion alone, the economy grew by a robust annual rate of 3.8 percent."

It took a year for the economy to come around.
"Unemployment Rate. When Reagan took office in 1981, the unemployment rate was 7.6 percent. In the recession of 1981-82, that rate peaked at 9.7 percent, but it fell continuously for the next seven years."