Monday, December 13, 2010

Credit Where It's Due

Score one for the President.  More Clintonesque decisions like these during the next 23 months and he'll win re-election.  The economy is going to start coming back now too because of this.  After 2 years of stimulus failure, the reality finally sinks in - private citizens are what make the economy grow, not Washington.

Just watch out for inflation - I'm convinced it's the biggest threat we'll face the next 2-5 years  The price of a tall boy at Pinkie's is currently $2.50.  We will use this to track the inflation rate in the coming months and years.  Sorry but you just can't trust CPI (it is, after all, calculated by the government).  "PBRI" will be a far more accurate measure.


Barstool69 said...
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Barstool69 said...

I see an increased deficit and no spending cuts. I see deficit spending and a payroll tax cut that won't pay for itself and be a temporary and weak stimulus at best. I think the estate tax exemption is too high to discourage dynastic wealth (which is the actual purpose of the estate tax). Finally, I see a tax regime which gives NO CERTAINTY to american taxpayers and businesses.

Can't believe I'm saying this, but the House Dems are actually doing the right thing in trying to block this bill.

Patrick said...

If they block the bill, the top rate goes back up to 40%. Which simply gives the government more money to waste (and trust me, it will find a way to waste it).

Dynastic wealth is better than government wealth. Hate on rich, preppy Country Day elites at Savannah Golf Club all you want, but they sure as hell know how to invest money better than Harry Reid does. Especially since it's actually their money.

No need to worry about spending cuts. The bond markets will force that to happen.

Barstool69 said...

I'd just like a better version passed. Can we do this in 2011? The estate tax brings in such a small amount to the government I think it's social goals may be worth it.

Every time we have this discussion you say the beast will be starved with tax cuts and they will be forced to cut spending. I'm still anxiously waiting.

Patrick said...

The spending cuts will come because the deficits we're running are simply unsustainable.

I used to be like you, Barstool - hoping Congress would someday cut spending, reform SS and Medicare, etc. I was a big supporter of Bush's efforts to privatize SS.

But then I realized, it's better just to let these programs go bankrupt. Voters claim to like these entitlements, but the fact is, they simply aren't willing to pay for them. Fine by me. If it takes a Greece or UK-like austerity program, all the better. This way we will be able to eliminate or at least drastically reduce programs we've always talked about cutting due not to conservative ideology, but to economic necessity.

Chris said...

Ok, great. You two "read books," and "use thesauruses/thesaurii," and you "pay attention to the news."

I give Obama credit for an outstanding job of political positioning. All he's doing by extending the tax cuts is NOT making the economic situation worse. I expect a continuation of the status quo in terms of unemployment and uncertainty. 18 months from now, he can say, "Hey guys...uhhhhhhh...wedidyourtaxcuts...and uhhhhh...theydidn'twork. But..uhhhh...wereachedacrosstheaisle."

He'll get credit for extending the tax cuts, he's already getting credit for "reaching across the aisle" by not raising the top rates to 40% (wow, thanks), and people will view this as clinton-eque triangulation, which it is not.

"Hey, I was going to shoot you in the head, but now I'm not going to do that. I'm so willing to compromise."

Barstool69 said...

I just don't know if there is the political will to do it Patrick (see not giving Kingston the Approps chair and instead giving it to "the king of pork"). I think the 2008 tax bills were passed with the same idea of starving the beast. And it never happened. Time and time again, Americans are not being asked to sacrifice for anything.

Patrick said...

Here's the flaw in your argument:

You are obviously alert to the fact that it's really hard to cut spending. But then, in the same breath, you say we ought to be giving more money to the government (or "sacrifice", whatever that means). Yeah, I'm sure that will really help us get spending under control.

Tax receipts as a percentage of gross domestic product are HIGHER today than during most of the post-war period. This demonstrates, for the umpteenth time, we don't have a revenue problem, we have a spending problem.

The "political will" will come about when the bond market forces Congress to either cut spending or face double-digit interest rates and inflation. At some point, creditors are simply unwilling to finance our debt. We haven't reached that point yet, but we will. Just like Greece and Ireland did. And when we do, spending will finally be cut. Because it will have to be.

Barstool69 said...

I never suggested giving more money to the government. I just said Americans are continuously getting tax cuts and increased benefits and spending (War on Terror) without being asked to pay for it in any way.

I understand what you're saying and I'm sure you're correct. It's just a really shitty way to govern.