Yesterday, President Obama called various leaders of Congress, of both parties, as well as key US financial minds to the White House for a meeting on fiscal responsibility. In what has to be one of the most interesting things I have ever seen, he set up the event like a press conference in which he was standing at the front fielding questions and everyone else was out in the audience. I'm not sure I have ever seen a president do this before...certainly not the last four. It sets the tone for how different our new leader is going to run the show.He took some tough questions and had some very interesting answers..one of which was a promise to reduce the federal deficit by half. He said that the economic crisis “will require us to make difficult decisions" and that he “going through our budget line by line to root out waste and inefficiency,” and “eliminating programs that don’t work.” In addition, he “will stop the fraud and abuse” and “make more tough choices,” he said, “to start living within our means again." All of this said after last week's remarks regarding cuts in Social Security, Medicare and a reformation the tax code. What the? Is he really a Democrat?
But talk isn't enough...which is what most Republicans said who attended the meeting...I think with good cause. As our new President addresses Congress tonight and unveils his budget on Thursday, let's all take an honest look to see if he is going to actually make cuts and raise revenues.
Alright, conservatives, if you see the cuts are you going to give him credit or will you continue to do the "tap into your inner rage and find fault with everything" rag?
15 comments:
DON'T DO IT CONSERVATIVES!!!
(Sorry, just trying to utilize a common theme here.)
Is it raise revenues or raise taxes?
So whether or not what Obama is proposing works or not isn't the issue....what matters is if a few posters on some blog give him credit for making some cuts before any results are in? Besides, I thought conservatives were irrelevant now?
I already "took an honest look" at that "stimulus" bill on here and asked a bunch of questions about the faults I found in it and the discussion (all of a sudden and conveniently) came to a halt. I can only assume that there must have been no waste whatsoever in that bill and that every single one of the items I listed are going to stimulate the economy.
Well, I have the same problem with the waste in it that you do, last. So, that would be my major criticism. My other one would be the fact that it might not create as many jobs as it purports to. What's going to happen then?
I will be very happy if he does stick to what he has said the last few days and trims the fat. Every other Democrat should do the same although I suspect that many won't.
I know I’m just waiting for him to mention anything that actually will help business in this country. How about cutting the corporate tax rate? How about increasing the depreciation allowance that businesses can use? It is at $165,000 now...increase it to $10 million. Quit bailing out corporations (I supported the bank/financial bailout and explained why on this blog because one of those major banks failing wouldn’t just be a simple market correction but that is the only bailout that should happen). That’s where I would start as entrepreneurs are who is going to get us out of this recession, not government programs.
I believe a lot of people in this country under the age of 35 really don’t know what hard times are because their experience as an adult consists of the 90’s and this decade...so the only 2 reference points they have are Great and Less Great. These folks better suck it up as there is nothing that is going to come along tomorrow from Washington DC and restore the value of their house, replenish their 401(k) and take the Dow back to 13k on the way to 15k. Obama may tell you that he "gets it" but he doesn’t "have it". It’s supply and demand – supply exceeded demand and we are in a correction now. Politicians just need to wait it out and quit trying to inflate bubbles that need to pop. The investors, the people who are the real poll on the state of the economy are not investing as they are betting on the economy going further south.
Last week the dow tanked one day (can’t remember which day) and the media claimed Geithner's plan was short on specifics. I think the opposite is true. I think the market tanked because it knew exactly what the muzzed-over specifics will be: The few remaining relatively healthy banks will be forced to buy billions in terrible assets. You see, Geithner uttered the nicey-sounding words "public-private partnerships". When you hear that, the private parties are going to get hammered because the government will always get theirs first. What this means for banks is that the remaining relatively healthy banks will be dragged under by being loaded down with garbage assets. Once that happens, the current administration will declare - guess what! - a bank emergency requiring outright nationalization, as opposed to the half ass nationalization that's going on now.
It's not that investors didn't understand what Geithner's plan will entail. It's that they DO understand. Those who own stock in relatively healthy banks started heading for the hills, knowing that what the "public-private partnership" really means. Kind of like someone who thinks there is such a thing as a "clean" merger or consolidation between 2 companies in the business world (note – there is always 1 winner and 1 loser).
I notice that the market is now listening to politicians way more than they should. Markets are reflections of human nature and they can be lectured into psychological depression. I would humbly suggest to Obama that a simple "We've been through far worse together" is worth a lot more than "worst since the Great Depression", "catastrophe," "crisis," and "impending disaster".
You know, if you spend a million dollars a day every day from the birth of Christ up to today, you would still not reach 780 billion. That’s how mammoth this thing is. Everyones estimate of the stimulus bill's cost is far too low because the $780 billion price tag assumes that every program established in it terminates when the bill's authorization expires. But that isn't how government programs work as you all should know by now. They don't come to an end like tax cuts do, they become a part of next year's baseline budget, which means that if they don't increase by an arbitrary percentage, it's labeled a "cut" by people who think the people listening to them are too stupid to see how that system works.
Well shit the bed!
Did anyone here take an honest look at the budget yet? If so, tell me what you see.
Thank you, drive through.
Good stuff, Gang Bang.
Empirically, I like Obama. This "new sheriff in town", face on the TV every night thing is entertaining, if not a little "big brotherish." However, I have this fear that he has been placed at the wheel of this massive machine, and he is just saying, " hmmm, I wonder what this button does." To me, the answer will always be, don't touch anything! Just let the machine run itself. If it must blow up, then, it must blow up. It's part of the Capitalism model. Of course, this is American Capitalism, the, bend the rules, over spend credit, work less, get more, entitlement America who knows that in a pinch, their Government will bail them out. So, be nice America, play along. Is it OK to think that maybe, just maybe, this brand new President, with his brand new congressional majority, just might be . . . i don't know . . . making it worse?
800 billion. 300 billion gets put to some use, and 500 billion disappears.
The question is do you have to spend money to make money? Most economists agree that FDR didn't spend enough and that's why the Depression lasted longer than it should have. When defense spending kicked in (1941) then things got better.
Things also got better becasue competing economies were busy being bombed. Our factories got busy again to make parts for the war.
It’s a massive spending increase when what the country desperately needs is a plan for fiscal discipline. Middle-class families are making sacrifices and cutting their expenses these days. It's time for Washington to do the sam...aww hell, who am I kidding with this soapbox rhetoric...sure looks like business as usual up there in DC with the guy who was going to change the way DC works in charge of it all.
Obama has repeatedly said that now is the time for making tough choices but I read the budget and there aren’t too many tough choices in there. It’s a classic tax-and-spend budget. It increases taxes by $1.3 trillion, raises entitlement spending by $700 billion, and hikes discretionary spending by 12 percent. Is it really true that Obama and the democrats have already spent more money than the costs of the entire Iraq war?
Last Tuesday, Obama called on Congress to make fiscal responsibility a priority. Then the very next day the house passed a $410 billion omnibus spending bill, 8 percent above last year's levels, including about 8,000 earmarks. It is one thing to swallow 8,000 earmarks. It is another for the president to stand up in front of the nation and to pretend he's a champion of those who fight earmarks. In his address, he said "The stimulus package I passed has no earmarks" and the next sentence he said was "And the budget next year has no earmarks". I guess he conveniently left out the sentence "The budget I'm going to submit this year has 8,000 of them, including an earmark for the reduction of pig odor in Louisiana" which could be a worthy cause I guess. I'm not sure. I’d list some of the earmarks on here but last time I did that nobody felt like offering up a counter argument so I won’t waste my time. Thank God the Department of Homeland Security is getting new furniture for their office!!!!
The $2 trillion in "budget savings" are a mirage. $1 trillion is "saved" by raising taxes, and $1.5 trillion is "saved" from Iraq spending that was never going to continue at previous levels anyway, according to the military’s own Joint Campaign Plan (Obamas new timetable of withdrawal is in accordance with preexisting Bush-Petraeus-Iraqi understandings). If you eliminate that gimmick, the budget actually increases spending by nearly $500 billion over ten years – and I’m not even counting the $634 billion health care reserve fund.
The new budget is also a triumph of static tax analysis, which assumes that increased taxes have no effect on the amount of money available for taxation. For instance, the hike from 15% to 20% on capital-gains taxes assumes that people will invest and cash out in the same manner they do at 15%. They won’t and never will based on history. The fact of increasing the tax will discourage investors and encourage them to shift money out before the hike. Not only will the extra revenue vanish, but investment levels will drop.
Before the recession, revenues were 18 percent of GDP and spending was 20 percent. After the recession, Obama would maintain revenues at 19 percent of GDP, and spending at 22 percent. In other words, all new tax revenues would finance new spending, rather than deficit reduction. Obama’s deficit is going to exceed GWB’s.
This budget is no friend to investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds. The anti-growth tax-hike proposals make absolutely no sense at all, either for this recession or from the standpoint of expanding our economy’s long-run potential to grow. Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is in complete contradiction to his economic-recovery statements.
Study after study over the past several decades has shown how countries that spend more produce less, while nations that tax less produce more.
Obama has promised to cut the deficit by the end of the first term in half. He does it by pretending that in 2011 there will be a growth in the economy of about 5.5 percent, and in the next year it will be over six. These are Chinese-level numbers and even the Chinese aren't achieving them anymore. Next year he says we will grow at about 3.5 percent. Next year we could still be in negative territory for all we know.
This budget doesn’t help my children.
If anyone feels like responding, you’d better talk about the budget bill itself and not me.
Last, you are a racist scumbag and a sexist pig. You are too blinded by your greed to see reality. As Homer Simpson noted, "you can use facts to prove anything."
... & THIS is Y its a spend and tax-reform budget... jt
[ extract ]
'More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class income slowdown, like high medical costs and slowing educational gains.'
http://www.nytimes.com/2009/02/27/business/economy/27policy.html?scp=11&sq=Obama&st=Search
Joanne, is it the job of Government to stamp out economic inequality and if so, where on this earth have those efforts been successful in the past?
Thanks pl, you get a cookie.
Thanks 4 the cookie, i'm not answering the question, because we've had this discussion ad infinitum, it's a good question / discussion.
it's not the job of government to create a caste system and non-level (to the point of no return or non stop boom & bust,) playing field.
so in my opinion, it's the job of government to serve the public and their needs, that would mean the democratic majority or greatest agreed, concensual overlap of needs.
Either you get rid of government altogether -- which is aok fine by me -- or the government, with majority public backing, fixes man-made official CREATED problems (yes, i very much include in that, fixed system cartel monopoly on taxpayer funds fuelling casino wealth-generation and capitalism problems, not free markets, fixed markets.) the gov is the biggest employer in the nation and the only job spreader in town right now because it has the multi-billion $ taxpayer underwritten annual budgets in an otherwise shit economy, where consumers are not spending and private businesses are tanking. Their budgets are a sure thing. No government should privatise success and nationalise failure. When it reaches that critical and criminal point, you fix the fundamental economic problems. Which is what the people want this government to do right now. Whether they (the gov) fails or succeeds, is another issue.
Again in my opinion, i think government is overwhelmingly corrupt and on more occasions -- useless rather than useful. So, actually, i would not give government so much power or centralisation of power and i would just make them take care of functional public needs and services, to make the country run as efficiently as possible. That's not the case in the US, nor has it ever been the case, so my answer as above. you get a muffin. jt.
joanne, the cookie was for me, dammit!
the gov is the biggest employer in the nation and the only job spreader in town right now because it has the multi-billion $ taxpayer underwritten annual budgets in an otherwise shit economy
For the record, that bit about the gov being the only job spreader in town is not right. My company, for instance, is hiring like mad right now. Both here in the US and overseas. Why? Because we have positioned ourselves advantageously, and we have not over-extended our positions. We have made business decisions - such as outsourcing jobs overseas that are of the sort that Americans tend to not want to do, or at least not at a globally competitive rate - that may not be popular but from a pure business perspective simply make sense. Also, as has happened around the globe, most recently and notably in the former Soviet Union, we are using this as an opportunity to buy-up businesses that have failed or are on the brink. The bottom line is that a good business model works. A bad business model, like, oh, I don't know, the Big 3, will fail when times get tough.
You mention fundamental economic problems...well, I would argue that trying to keep somebody in a house that they could not afford in the first place is a fundamental economic problem. Keeping somebody who is underqualified and overpaid employed is a fundamental economic problem. I don't see Obama stepping up to the plate and having the seeds to mention that.
You mention fundamental economic problems...well, I would argue that trying to keep somebody in a house that they could not afford in the first place is a fundamental economic problem. Keeping somebody who is underqualified and overpaid employed is a fundamental economic problem.
Absolutely pl, absolutely. But it happened for a decade, or at least thinking late 90s - 2007 (minus the internet bubble year) nobody wanted to stop or change it, because it was the party that was making everyone money or opportunities to make it. companies and individuals who truly lived or operated within their means and with a gameplan were few and far between at an time when living in debt, selling it or creating business that soley dealt in it became the Dream. j
The gov may be the biggest employer in the nation and the only job spreader in town right now but not for the reason you say. It is that way because plenty of folks on one particular side of the aisle in government want it that way.
Bill Clinton said it best: Every 10-15 years or so, because of new exploration, new development, and new technology, an economy must create a new class of jobs. A new sector if you will. Old jobs become obsolete, and we have an ever changing demand for labor. As adjustments are made, there will be pain. That’s the nature of change. There’s nothing we can do about it except learn to embrace it and prepare to adapt. If I’m a typewriter manufacturer, can I bitch because everyone is using computers these days? Right now, commoditized skills like manufacturing brooms, furniture, kids toys, etc, all that is going to lower skilled work forces that work in less regulated environments (like China). In the end, American consumers receive the same goods cheaper. But it forces us to constantly upgrade our own labor and service skills periodically. It’s not the way of Bush nor the way of Clinton nor the way of Obama. It’s the way of capitalism.
Speaking of the big 3 automakers, GM is basically a retirement home/health care facility with a auto plant as a side job. GM has a policy of 30 years there and you can retire and they were SHOCKED when lots of people were retiring at 48 and drew on the pension and free health care for another 30 years.
The Big Three won’t compete effectively until they lower their labor costs and produce better management. GM and Toyota sold roughly the same number of vehicles over the last year, but Toyota turned a $1.7 billion profit while GM lost around $9 billion. That doesn’t happen by accident. Until these automakers and their unions resolve the structural problems that creates this kind of unprofitability, they are a terrible credit risk and a lousy investment.
Total compensation per hour for the big-three carmakers is about $73/hour. Toyota’s (Detroit South) is around $48/hour. The entire manufacturing sector of the U.S. averages around $31.59 an hour. I don’t care how much money Congress throws at GM...with that kind of oversized comp-package they are not gonna be competitive. It’s throwin’ bad money after a bad cause.
The newly proposed cap-and-trade policy just may put put them out of their misery.
interesting & noted. jt.
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