RKMBs Forums .::Important::. Politics and Current Events Can someone explain Bushconomics to me

Wall Street extended its record-setting advance Monday, sending the Dow Jones industrial average within a whisper of 12,000 as investors grew more optimistic that corporate profits will remain robust amid a slowing economy.

The Dow closed up 20.09, or 0.17 percent, at 11,980.60. In the final hour of trading, the index reached a record trading high of 11,997.25.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 3.43, or 0.25 percent, to 1,369.05, and the Nasdaq composite index rose 6.55, or 0.28 percent, to 2,363.84.

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Bonds rose, with the yield on the benchmark 10-year Treasury note dipping to 4.78 percent from 4.80 percent Friday. The dollar was mixed against other major currencies, while gold prices rose.

The blue chip index was less than 3 points away from reaching the milestone for the first time, then fell back minutes before the close; it still managed a record high finish, its seventh in two weeks. A deluge of earnings reports, including 12 from Dow component companies slated this week, could make or break the Dow's three-week run at record levels.

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Lower Deficit Sparks Debate Over Tax Cuts' Role
By Lori Montgomery
Washington Post Staff Writer
Tuesday, October 17, 2006; Page D01

With great fanfare, President Bush last week claimed credit for a striking reversal of fortune: New figures show the federal budget deficit shrinking by 40 percent over the past two years, a turnaround the president hopes will strengthen his push for further tax cuts.

Bush hailed the dwindling deficit as a direct result of "pro-growth economic policies," particularly huge tax cuts enacted during his first term. "Tax relief fuels economic growth. And growth -- when the economy grows, more tax revenues come to Washington. And that's what's happened," Bush said.

Economists said Bush was claiming credit where little is due. The economy has grown and tax receipts have risen at historic rates over the past two years, but the Bush tax cuts played a small role in that process, they said, and cost the Treasury more in lost taxes than it gained from the resulting economic stimulus.

"Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that," said Alan D. Viard, a former Bush White House economist now at the nonpartisan American Enterprise Institute. "It's logically possible" that a tax cut could spur sufficient economic growth to pay for itself, Viard said. "But there's no evidence that these tax cuts would come anywhere close to that."

Economists at the nonpartisan Congressional Budget Office and in the Treasury Department have reached the same conclusion. An analysis of Treasury data prepared last month by the Congressional Research Service estimates that economic growth fueled by the cuts is likely to generate revenue worth about 7 percent of the total cost of the cuts, a broad package of rate reductions and tax credits that has returned an estimated $1.1 trillion to taxpayers since 2001.
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the G-man said:
Not only is the deficit shrinking, but the economy is doing pretty well.

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Fri, Nov 3, 2006 5:55pm ESTSend to a friend Print Version
CNN's Harris gushed over new economic figures as "Christmas com[ing] early for congressional Republicans," ignored their downside
Summary: During an interview with White House counselor Dan Bartlett, CNN's Tony Harris touted newly released unemployment figures while ignoring the negative news -- that the job creation rate for the month of October fell well short of expectations.
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the job creation rate for the month of October fell well short of expectations.

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Helped by falling oil prices, America's trade deficit showed a sharp improvement in September, narrowing by the largest amount in more than five years.

In other news, the number of Americans filing new claims for unemployment benefits fell by 20,000 to 308,000 last week.

The rise in U.S. exports for September reflected big gains in sales of commercial aircraft, railway equipment and industrial engines.

In addition to the drop in America's foreign oil bill, imports of telecommunications equipment, computers and autos also fell in September.

Consumer prices, helped by another huge decline in gasoline pump prices, fell for a second straight month in October, providing more relief to Americans battered earlier in the year by soaring energy costs.

The Labor Department reported Thursday that consumer prices dropped by 0.5 percent last month, matching the September decline. It was the first back-to-back drops in the Consumer Price Index since late last year and provided evidence that inflation pressures are beginning to ease.

Meanwhile, industrial production edged up slightly in October even though output at auto factories fell for a second straight month.

The Federal Reserve reported that industrial output rose by 0.2 percent last month following a big 0.6 percent plunge in September. However, auto production was down 3.9 percent last month as automakers continued to struggle to get control of a huge backlog of unsold cars.

In a third report, the number of Americans filing claims for unemployment benefits dipped by 2,000 last week to 308,000, the lowest level in a month, indicating that the labor market remains healthy in spite of the slowing economy.

The second 0.5 percent fall in consumer prices was better than the 0.3 percent dip that many analysts had been expecting. And core inflation, which excludes volatile energy and food prices, was also well-behaved, rising by just 0.1 percent, the smallest gain in eight months.

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the G-man said:
I'm sure the fact that the media is starting to report this good economic news from two months ago only now, after the Democrats retook Congress, is purely coincidental.

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Wall Street slipped lower Friday, closing out a year that will be remembered for the stock market's great comeback — a year-end rally that pushed the Dow Jones industrials past 12,000 for the first time.

By all accounts, 2006 ended up a very good year for stocks as bullish investors bounced back from a slumping housing market and the Federal Reserve's two-year campaign of interest rate hikes. The markets approached record levels in the spring, pulled back sharply in the summer, but found a clear direction in the fall to send the major indexes to multi-year highs.

Blue chips were the standouts of 2006. The Dow Jones industrial average, the index of 30 of the nation's biggest companies, hit record levels dozens of times since achieving its first close above 12,000 on Oct. 19; it traded as high as 12,529.87 before dipping to its close for the year.

This was the best year for the stock market since 2003, when Wall Street staged a massive recovery from levels sideswiped by a bear market. But 2006 will really be remembered for the market's soaring to heights not seen since the height of the dot-com era — this time, however, Wall Street advanced cautiously, not recklessly.

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the G-man said:
I'm sure the fact that the media is starting to report this good economic news ... only now, after the Democrats retook Congress, is purely coincidental.

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The federal deficit has improved significantly in the first three months of the new budget year, helped by a continued surge in tax revenues.

In its monthly budget report, the Treasury Department said Friday that the deficit from October through December totaled $80.4 billion, the smallest imbalance for the first three months of a budget year since The budget year ends Sept. 30.

Tax collections are running 8.2 percent higher than a year ago while government spending is up by just 0.7 percent from a year ago. Last year's spending totals were boosted by significant payments to help the victims of the Gulf Coast hurricanes.

The Treasury said for December, the government actually ran a surplus of $44.5 billion

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the G-man said:
I'm sure the fact that the media is starting to report this good economic news ... only now, after the Democrats retook Congress, is purely coincidental.

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Raymond Karl Hungus Adler, who never reads a damn thing, said on February 5 2007:
...the surplus we had on Clinton versus the debt we have under Bush and then explain in your oh so wise way how putting the nation into debt is truly worth the token sum given to working families and the huge breaks to the rich.

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when the G-man had already explained:
Cutting taxes often leads to more, not less, revenue for the government.

Coolidge cut tax rates in the 1920s, Kennedy cut marginal tax rates in the 1960s, and Reagan cut them in the 1980s.

Under Coolidge, marginal tax rates were cut from the top rate of 73% to 25%. The economy rewarded this policy by expanding 59% from 1921 to 1929. Revenues received by the federal treasury increased from $719 million in 1921 to more than $1.1 billion 1929. That's a 61% increase (there was zero inflation in this period).

Under Kennedy, marginal tax rates were cut from a top rate of 91% to 70%. In real dollar terms, the economy grew by 42%, an average of 5 percent a year from 1961 to 1965. Tax revenue to the U.S. Treasury increased by 62%. Adjusted for inflation, they rose by one-third.

Under Reagan, marginal tax rates were cut from a top of 70% to 28%. Revenues (from all taxes) to the U.S. Treasury nearly doubled. According to the Budget of the U.S. Government, FY 1997, Office of Management and Budget. Revenues increased from roughly $500 billion in 1980 to $1.1 trillion in 1990.

Furthermore, there is a correlation between the Bush and Clinton tax hikes and a change in the revenue received by the Treasury. Martin Feldstien, professor of economics at Harvard, estimates that the U.S. Treasury would have collected two-thirds more revenue during the first three years of the Clinton presidency had his administration NOT raised taxes.

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The surplus which began in 1998 followed tax cuts in 1997.

In 1997, President Clinton, in response to GOP pressure, lowered the statutory capital gains tax to 20% from 28% in 1997 while expanding Roth IRA accounts.

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the G-man also explained that:

Despite cutting tax rates in May 2003, tax receipts for this two-month period have risen for three consecutive years.

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the G-man later noted:

Despite increased federal spending, thanks to the tax cuts, the deficit is shrinking.

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finally, some time ago, the G-man demonstrated:
These tax cuts haven't exactly benefited "the rich." A third of those higher income-tax revenues came from the highest-earning 1% of households, according to the New York Times.

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Government Study: Tax Cuts Don't Work

Cutting taxes is at the heart of the Taxpayer Bill of Rights (TABOR) and all of its variations. The argument is that less government will result in lower taxes and lower taxes will result in a robust and growing economy. Now, a U.S. Treasury Department study blows that argument out of the water.

On July 25, 2006 the Treasury Department released a study, "A Dynamic Analysis of Permanent Extension of the President's Tax Relief." The Center for Budget Policies and Priorities (CBPP) reported that the study "refutes many of the exaggerated claims about the tax cuts that have been made by the President and other senior Administration officials, the Wall Street Journal editorial page, and various other tax-cut advocates. Contrary to the claim that the tax cuts will have huge impacts on the economy, the Treasury study finds that even under favorable assumptions, making the tax cuts permanent would have a barely perceptible impact on the economy. Under more realistic assumptions, the Treasury study finds that the tax cuts could even hurt the economy."

The Treasury study decisively refutes the President's claim that "The economic growth fueled by tax relief has helped send our tax revenues soaring." Under the study's more favorable scenario, the modest economic impact of the tax cuts would offset less than 10 percent of the cost of making the tax cuts permanent.
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Congressional Budget Office data show that the tax cuts have been the single largest contributor to the reemergence of substantial budget deficits in recent years.  Legislation enacted since 2001 has added about $2.3 trillion to deficits between 2001 and 2006, with half of this deterioration in the budget due to the tax cuts (about a third was due to increases in security spending, and about a sixth to increases in domestic spending).  Yet the President and some Congressional leaders decline to acknowledge the tax cuts’ role in the nation’s budget problems, falling back instead on the discredited nostrum that tax cuts “pay for themselves.”
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Captain Sammitch said:
If we'd just cut all those expensive social programs we'd balance the budget in no time!

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Yeah & then we could rise to the greatness of all those other countries that don't have social programs.

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Matter-eater Man said:
Center on Budget & Policy

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The Center’s Mission
The Center on Budget and Policy Priorities is one of the nation’s premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.

The Center conducts research and analysis to inform public debates over proposed budget and tax policies and to help ensure that the needs of low-income families and individuals are considered in these debates.  We also develop policy options to alleviate poverty, particularly among working families.

In addition, the Center examines the short- and long-term impacts that proposed policies would have on the health of the economy and on the soundness of federal and state budgets.  Among the issues we explore are whether federal and state governments are fiscally sound and have sufficient revenue to address critical priorities, both for low-income populations and for the nation as a whole.

Over the past two decades, the Center has gained a reputation for producing materials that are balanced, authoritative, accessible to non-specialists, and responsive to issues currently before the country.  Our materials are used by policymakers and non-profit organizations across the political spectrum, as well as by journalists from a variety of media outlets.

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Matter-eater Man said:

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Captain Sammitch said:
If we'd just cut all those expensive social programs we'd balance the budget in no time!

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Yeah & then we could rise to the greatness of all those other countries that don't have social programs.

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Captain Sammitch said:

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Matter-eater Man said:

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Captain Sammitch said:
If we'd just cut all those expensive social programs we'd balance the budget in no time!

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Yeah & then we could rise to the greatness of all those other countries that don't have social programs.

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Actually, yeah. It'd be educational - what will become of us when everyone has to wipe their own ass? The answer? Natural selection. kthxbye!

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Sorry but to clarify, are you against all social programs beyond the "wipe your own ass" one? I'm assuming you can wipe your own ass so you don't need the program but what about basic ones that benefit everyone?

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Matter-eater Man said:

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Captain Sammitch said:

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Matter-eater Man said:

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Captain Sammitch said:
If we'd just cut all those expensive social programs we'd balance the budget in no time!

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Yeah & then we could rise to the greatness of all those other countries that don't have social programs.

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Actually, yeah. It'd be educational - what will become of us when everyone has to wipe their own ass? The answer? Natural selection. kthxbye!

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Sorry but to clarify, are you against all social programs beyond the "wipe your own ass" one? I'm assuming you can wipe your own ass so you don't need the program but what about basic ones that benefit everyone?

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Well, if we're gonna complain about tax increases and how politicians lie about them (as if to imply they don't lie about everything) and we want to cut back on spending to balance the budget, some programs have to go. Which ones? Everyone who answers is gonna want to keep the ones they benefit from, because socialism is a beautiful system if you're a lazy fuck who loves freebies.

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Matter-eater Man said:
Why do you make the assumption that everyone is like you? I know plenty of people like myself, who support good programs that help people other than themselves.

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Captain Sammitch said:

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Matter-eater Man said:
Why do you make the assumption that everyone is like you? I know plenty of people like myself, who support good programs that help people other than themselves.

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Why do you make the assumption that everything I say is supposed to mean exactly what it reads like?

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Matter-eater Man said:

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Captain Sammitch said:

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And we keep mentioning programs without dropping any specific names. Why don't you tell me what programs you feel are so essential to people? And why giving people stuff is in every case the same as helping people?

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I think I asked you for some clarification first on which programs you would cut but on my end I'm thinking of programs like the old Head Start program & WIC.

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The Dow powered to a close above 13,000 for the first time and the broader market rose to its highest level in more than six years Wednesday, buoyed by a steady parade of strong profit reports and reassuring news on the economy.

The Dow Jones industrial average rose 135.95 points, or 1.05 percent, to end at 13,089.89. The Standard & Poor's 500 Index advanced 15.01 points, or 1.01 percent, to close at 1,495.42. The Nasdaq Composite Index gained 23.35 points, or 0.92 percent, to finish at 2,547.89.