120 Days Until the Largest Tax Hikes in History

[Dr.Demento]

Holy shit, I was right!

I didn't even realize that Rakurai made a Sim City 4 thread not long ago until just now and I WAS F**KING RIGHT!

 

[Sparta]

You're completely delusional if you think they're not going to let the tax cuts expire accross the board.

Oh take a hike. It's a lie when they and all they're advisors/lobbyists/people pledge and advise them to do something, and ten bucks says you'll think it's the wrong thing to do when they do it.

The alternatives are to CUT SPENDING, and NOT ENACT massive spending such as the wasted trillion dollar stimulus and Obamacare. If that's considered "not an alternative" then WTF does the left want. It's because they are completely opposed to cutting spending that we're in this mess. And the wars are just a drop in the bucket.

A) Health-care reform had to happen and you're right, it's flawed as hell and that's entirely at the feet of everyone in congress and their willingness to play ball with pharmaceutical and insurance lobbies. You deserve something better than mandatory insurance and that shitload of pork, because that's a load of crap.

What you deserve is a public option.

However, it is a step in the right direction and it's better this happens now than in the future when change would've been even more expensive and harder to do.

B) There's no point arguing about the stimulus because there are tons of different schools of thought on economics and all give varying answers. One says that Hoover balancing the budget during the recession led to the Great Depression, another says it was the Federal Reserve that caused it entirely on it's own. One school of thought said that the stimulus won't/didn't work, another says it's not big enough so do another. All I know is that stimulus package we passed in Australia worked, but it's a fair share different than whatever you guys passed, as were our economic conditions at the time.

It's not "bollocks" and it's not a "trick term"

Yes it is. Nothing you can say actually changes the spin on it. It's like "hope and change" and "take america back" and "death tax" or "estate tax", or "pro-life" and "pro-choice". It's a term used to deliberately appeal to someone's emotional or political sensibilities. Just "big government" or "big business" affect the left and right in different ways.

Who signed small business expensing SLASHES into the stimulus in the first place? Obama.

Obama slashed it after the Democrats, a minority of Republicans and the Bush Administration expanded it in 2008 from 125,000 to 250,000 as part of the stimulus. Obama kept the 250,000 maximum deduction for 2009 and the Democrats passed a bill in March this year to extend it to the rest of the year. It'll get slashed if the Democrats can't pass anything stopping it from happening, because that's when the current law expires. And they've been trying to extend it.

That bill was opposed because it is another wasteful, $30 billion dollar bank bailout. Not because they wanted to stop that provision of it. Not to mention the fact that that bill only extended the expensing THROUGH 2010.

Wrong on all accounts, but lets start with the last part.

Under current law, the Code Sec. 179 expensing limit for tax years beginning in 2010 is $250,000, and the maximum expensing amount is reduced (i.e., phased out, but not below zero) by the amount by which the cost of Code Sec. 179 property placed in service exceeds $800,000 (the investment ceiling). For tax years beginning after 2010, these amounts are to revert to $25,000 and $200,000 respectively. The substitute amendment would for tax years beginning in 2010 and 2011 increase the maximum Code Sec. 179 expensing amount to $500,000 and the investment ceiling to $2,000,000.

Without the bill, which the Republicans have denied business owners, they won't be able to expense almost anything. And Obama will get the blame for this.

You cant tack that onto a massive bailout bill opposed by most of the country, and claim they were opposed to the side line item that was attached when the opposition was to the bailout.

Except this bailout wasn't for the big banks, it was for smaller independent backs, not the ones that ****ed up the economy.

There is literally nothing the Democrats or Obama can do to appease people like you. When this was started by Democrats, that's fine. But then they slashed it to save money, it upsets people, understandable. They attempt to fix it, get knocked back by Republicans who are deliberately opposing it to get votes (not because it's not good for the country) and they get the blame for it.

 

[Eejit]

You can word game it all you want- it's raising taxes. Tax rates are rising = tax hike.

I don't think you understand what word games are. Unsurprisingly.

 

[Ridge]

And I'm fine with Obama's contribution, since it saved us from a much worse fate. Not like it matters really, since the US wasn't going to get out of the deficit in this century anyways. Whats a few hundred more years of non-consequential no-need-to-pay-it-off debt when it saves thousands if not millions of people's livelihoods?

That is quite possibly the stupidest comment I have ever read on the internet.

 

[RakuraiTenjin]

Holy shit, I was right!

I didn't even realize that Rakurai made a Sim City 4 thread not long ago until just now and I WAS F**KING RIGHT!

Okay? The hell does Sim City have to do with this?

Raising taxes lowers revenue, and this is a fairly BASIC concept.

It's called the Laffer Curve

The below quote is as true as it gets. It really is beyond some people to understand the concept:

There are historical precedents other than those cited directly by Laffer. For example, in 1924, Secretary of Treasury Andrew Mellon wrote: "It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower rates." Exercising his understanding that "73% of nothing is nothing", he pushed for the reduction of the top income tax bracket from 73% to an eventual 24% (as well as tax breaks for lower brackets). Personal income-tax receipts rose from US$719 million in 1921 to over $1 billion in 1929, an average increase of 4.2% per year over an 8-year period, which supporters attribute to the rate cut.[9]
http://en.wikipedia.org/wiki/Laffer_curve

 

[Dr.Demento]

Okay? The hell does Sim City have to do with this?

Raising taxes lowers revenue, and this is a fairly BASIC concept.

It's called the Laffer Curve

It's ok man. I wasn't cracking on your theory. You could be on to something, but still an amusing coincidence nevertheless.

 

[Krynn72]

That is quite possibly the stupidest comment I have ever read on the internet.

Yes, it is stupid to believe that saving millions of people's livelihoods is worth acquiring debt that has quite harmless consequences. Better to keep govt. debt low and let the people suffer.

 

[RakuraiTenjin]

Yes, it is stupid to believe that saving millions of people's livelihoods is worth acquiring debt that has quite harmless consequences. Better to keep govt. debt low and let the people suffer.

The debt does not have "quite harmless consequences" and like I said- we'd be better off now after going through a quicker "rougher time" in the immediate aftermath.

The consequences of our massive debt are terrible. The reason you dont seem to notice them is because of the artificially low interest rates we've had for years. Just wait till that well runs completely dry and interest rates skyrocket like they USED to be years and years back.

 

[Krynn72]

Name the terrible consequences of the US govt. sustaining its debt.

 

[RakuraiTenjin]

Skyrocketing interest rates to get any sort of capital
Rapid devaluation of the dollar at China's whim
Replacement of the dollar by a more stable currency as the staple of trade
Greece style government problems without action to correct the problem
Consumer and particularly investment spending (the most important) also negatively reacts to increasing debt as 'power spenders' worry about future economic stability of high debt nations/states.

High debt also means our assetts can be purchased by foreign powers far more easily. Other nations (China particularly) can exert considerably more political control over the US due to the high debt.

Skyrocketing interest rates, as mentioned above, are probably the ones most likely to negatively affect YOU in your lifetime. Are you really, genuinely unaware of this? Good luck with financing ANYTHING in the future. Better start SAVING to pay for things like cars and homes in full because credit is going to be so expensive its ridiculous to use. That grinds business to a halt.

 

[Krynn72]

Its a nightmare situation where people can't spend out of their means! America will be taken over by slanty eyes and rich people wont get richer! OH THE HUMANITY.

You guys are right! We should totally have bankrupted millions of people in order to let me buy things I can't afford! And won't somebody think of our assets?!

 

[RakuraiTenjin]

Its a nightmare situation where people can't spend out of their means! America will be taken over by slanty eyes and rich people wont get richer! OH THE HUMANITY.

You guys are right! We should totally have bankrupted millions of people in order to let me buy things I can't afford! And won't somebody think of our assets?!

*sigh*

I'm not talking about people buying things they can't afford. I'm talking about credit and interest rates in general. Do you understand that businesses use revolving lines of credit for just about everything done production wise? We can't afford for credit to become uber expensive due to our debt.

Right now the crisis was LACK OF available credit- money just wasnt being lent. But the money that is being lent isn't tacked to outrageous interest rates- they're historically low (by intervention that cannot last). That's better than SUPER EXPENSIVE credit, which would cripple the nation and we face that if the debt is not handled.

Maybe you should read this
http://economics.about.com/od/beginnerinterestrates/a/interest_rates.htm

A more extensive definition of the Federal Funds rate is found at Investorwords.com which defines Federal Funds Rate as:

The interest rate that banks charge each other for the use of Federal funds. It changes daily and is a sensitive indicator of general interest rate trends. The Federal funds rate is one of the of two interest rates controlled by the Fed. While the Fed can't directly affect this rate, it effectively controls it in the way it buys and sells Treasuries to banks. This is the rate that reaches individual investors, though the changes usually aren't felt for a period of time.
When you hear that Fed Chairman Greenspan or Fed Chairman Bernanke has "raised interest rates", they're talking about the Federal Funds Rate.
In Canada, the counterpart to the Federal Funds rate is known as the overnight rate. The Bank of England refers to these rates as the base rate or the repo rate.

The Prime Rate is defined as:

The prime rate of interest is a rate of interest that serves as a benchmark for most other loans in a country. The precise definition of prime rate differs from country to country. In the United States, the prime rate is the interest rate banks charge to large corporations for short-term loans.
The prime rate is typically 2-3 percentage points higher than the Federal Funds rate. If the Federal Funds rate is at around 2.5%, then expect the prime rate to be around 5%.
The short rate is related to the prime rate:

The short rate is an abbreviation for 'short term interest rate'; that is, the interest rate charged (usually in some particular market) for short term loans.
Those are the major interest rates you will see discussed in the newspaper. Most of the other interest rates you see will usually refer to a interest-bearing financial asset, such as a bond.

 

[Krynn72]

FYI I'm just being a dick, and egging you on. I have no concept of macroeconomics or what governmental debt really means.

That said, I have a legitimate question. How does the government's debt affect the cost of corporate credit lending? I mean, where does the government come into play when one company lends money to another? Is it merely in the value of the USD?

 

[Ridge]

FYI I'm just being a dick, and egging you on. I have no concept of macroeconomics or what governmental debt really means.

That said, I have a legitimate question. How does the government's debt affect the cost of corporate credit lending? I mean, where does the government come into play when one company lends money to another? Is it merely in the value of the USD?

Its a trickle down effect. Government loans money to banks, which loans the money to smaller banks, which loans the money to businesses and individuals. If the government cannot secure any loans, then nobody else will be able to.

Also, it devalues the dollar, which means it becomes more expensive for Americans to buy anything made in a foreign country (I.E. everything) because it takes more US Dollars to buy it than before.

 

[Ridge]

Ben Franklin once said "When the people find they can vote themselves money, that will herald the end of the republic."

 

[Eejit]

So he was opposed to tax cuts?

 

[Warped]

can we change the thread title to a more accurate number?? it would pretty easy to do

 

[Asknoone]

Do you have any idea how obscenely difficult it is to change a thread title? Do you? Do you know how many lines of forum software code you need to jump through in order to accomplish that?

Jesus Christ, man.

 

[Ridge]

But now it needs to say 117 Days Until....

 

[RakuraiTenjin]

FYI I'm just being a dick, and egging you on. I have no concept of macroeconomics or what governmental debt really means.

That said, I have a legitimate question. How does the government's debt affect the cost of corporate credit lending? I mean, where does the government come into play when one company lends money to another? Is it merely in the value of the USD?

The fed buys and sells treasuries to banks. It can't SAY and make LAW that "the interest rate (fed fund rate) is ____" but it effectively has control over what the interest rate is because it sells federal treasuries to all our megabanks, who then filter that money/credit down through the rest of society as a whole. This filters down and affects investors and the value of the dollar

The prime rate is always higher than the fed fund rate. The prime rate is what banks charge to corporations to borrow money, so they can make their profit (makes no sense to charge the same as what the fed funds rate is or else they dont make money and there is no point operating a bank)

The fed funds rate skyrocketing to pay for the debt, makes the prime rate skyrocket, which makes business grind to a halt in the country because credit is too expensive. Business stops expanding (taking no new loans for new buildings/expanding payroll, etc etc)

It's not that complicated, the skyrocketing debt has severe consequences and the only reason we haven't felt them yet is because interest rates have been kept artificially low by the fed, but that can't go on for much longer at all. If you can manage to qualify for any type of loan (house, car, etc) NOW is the time to take loans out, because you will never in a long time have such cheap credit. I mean FFS you can get a mortgage right now for a new home with a 4.2% interest rate and THATS WITHOUT BUYING IT DOWN. MY rate on my home is 4.5% and I had to spend a couple points (EG: Thousands of dollars) to buy it down to that! And I bought in the start of 2009. The problem right now is that there isnt a LOT of credit being given, but at least the credit that is given is very cheap.

So he was opposed to tax cuts?

There was NO income tax back then. Income tax is a fairly new concept believe it or not. "Tax cuts" back then would have referred to taxes involved in trading/sales tax, etc. Which is what we really should have. A national retail sales tax with a tax code to protect/credit the lowest in society as well. Not an income tax, which is essentially thievery.

He was opposed to ideas such as the bank bailouts or public redistribution of wealth.

 

[Dan]

Maybe the problem is that constant growth is not actually possible. Even the term sustainable growth is a big oxymoron.

 

[RakuraiTenjin]

Maybe the problem is that constant growth is not actually possible. Even the term sustainable growth is a big oxymoron.

Constant growth is possible. Non stop growth in one industry that outpaces supply and demand is unsustainable (Eg the housing crisis)

The problem was there was fake demand created by the lending industry. We can trace that back to actions taken by Congress that forced lending to high risk applicants.. but that's another debate entirely and sure to rile up lots of people here!

 

[Dan]

Constant growth is possible. Non stop growth in one industry that outpaces supply and demand is unsustainable (Eg the housing crisis)

The problem was there was fake demand created by the lending industry. We can trace that back to actions taken by Congress that forced lending to high risk applicants.. but that's another debate entirely and sure to rile up lots of people here!

Constant growth of anything is impossible. There will always be a physical limit. Give me an example of something which can grow forever.

 

[Eejit]

Constant growth of anything is impossible. There will always be a physical limit. Give me an example of something which can grow forever.

The universe. Including the dimension of time. :afro:

 

[Acepilotf14]

The universe. Including the dimension of time. :afro:

At our rate of advancement I wouldn't be surprised if we accidentally destroyed the universe soon

 

[DEATHMASTER]

To think, if it wasn't for all the shortcomings in our society, we could already be eons beyond where we currently are (in terms of technology).

 

[RakuraiTenjin]

Constant growth of anything is impossible. There will always be a physical limit. Give me an example of something which can grow forever.

We're talking about the economy here, not 'physical objects.'

Constant growth means evolving along the way. 'Bubbles' like the real estate market and 'dot com' boom can be avoided. A diversified market ensures non stop growth. Decline in other areas should have simultaneous growth in other areas. Shouldn't be nonstop decline across the board like we have now.

 

[RakuraiTenjin]

Its a trickle down effect. Government loans money to banks, which loans the money to smaller banks.

I was rereading this thread and just wanted to point out a common misconception.

You have the basic concept right of the lending trickle down, but it's VERY important to point out that the Federal Reserve is not the US government nor is it a government agency.

 

[Ridge]

Correct. It is a private organization that loans out imaginary money and demands real money to pay it back

 

[T-6000]

Constant growth of anything is impossible. There will always be a physical limit. Give me an example of something which can grow forever.

Umm, the America's national debt?

*insert Rimshot*

 

[Ridge]

Umm, the America's national debt?

*insert Rimshot*

http://instantrimshot.com/

 

[ríomhaire]

http://instantrimshot.com/

This website gave me a virus warning (avast5)

 

[Nih]

The laffer curve is a joke. Here is a more accurate version:

The top marginal tax rate in the US was at 90% during the fifities, a period of high economic growth. The tax rate has been steeply declining ever since. If Obama reverts Bush's tax cuts the tax rates would still be lower than Reagan-era levels. Plenty of countries have far higher tax rates and their economies are doing just fine. Maybe you should consider the benefits paying higher taxes could have. One of the benefits could include less poor people dying in the gutter.

 

[RakuraiTenjin]

The laffer curve is a joke. Here is a more accurate version:

The top marginal tax rate in the US was at 90% during the fifities, a period of high economic growth. The tax rate has been steeply declining ever since. If Obama reverts Bush's tax cuts the tax rates would still be lower than Reagan-era levels. Plenty of countries have far higher tax rates and their economies are doing just fine. Maybe you should consider the benefits paying higher taxes could have. One of the benefits could include less poor people dying in the gutter.

There were a huge number of available tax credits, deductions, and loopholes back then that made the 'basic effective tax rate' more like what it is today rather than the high 90's. That was also an era of one car per family, one phone per family, tiny box homes and a MASSIVE housing boom following WWII.

Not to mention, there was nothing in your post to dispute the Laffer curve. When income taxes are raised passed a sustainable point, incoming government revenue falls.


http://www.economist.com/blogs/freeexchange/2007/04/are_the_rich_really_different

"But in fact, the tax rates of the 1950's didn't necessarily reduce CEO consumption; it just reduced their reported taxable income. The high income tax rates in the 1950's were paired with a corporate tax system that allowed companies much more generous deductions for things like business lunches, business-travel-with-spouse, and so forth. Right now you pay Rick Wagoner a squillion dollars, and he entertains important people on his own dime; in 1955, you paid him less, but he expensed all his entertaining to the company. Descriptions of 1960's expense account procedures for even entry-level management are enough to make this journalist rather faint with envy.

This difference also explains some of the difference between American executives and those in Europe; among my American friends in international finance, European expense accounts are the subject of something close to awe. This is not to say that the tax code is the only explanation; almost no phenomenon has a single cause, and I have no doubt that there has been an actual, as well as an apparent, increase in CEO compensation. But I greatly doubt that it is anywhere near as large as the taxable income figures seem to make out. Leaving founder-owners like Larry Ellison and Bill Gates aside, it's hard for me to detect massive lifestyle differences between F. Ross Johnson (the CEO of RJR Nabisco described in Barbarians at the Gates) and the current CEO of Kraft Foods (which bought Nabisco). The difference is, the current CEO gets his in cash and stock."

 

[Krynn72]

You do know that the Laffer curve is widely discredited right? Even economists in George Bush's administration said it was inaccurate and that tax cuts don't generally increase tax revenue. In fact, like a rational person might expect, they reduce revenue.

Mankiw: "[M]ost economists" agree "supply-sider" claims are not "credible." In a May 2006 Wall Street Journal op-ed, N. Gregory Mankiw, Harvard University economics professor and former chairman of President Bush's Council of Economic Advisers, wrote: "Some supply-siders like to claim that the distortionary effect of taxes is so large that increasing tax rates reduces tax revenue. Like most economists, I don't find that conclusion credible for most tax hikes, and I doubt [then-Treasury Secretary Hank] Paulson does either." Further, in a 2005 paper, Mankiw writes: "Most economists ... believe that taxes influence national income but doubt that the growth effects are large enough to make tax cuts self-financing."

As director of the Congressional Budget Office in 2005, Douglas Holtz-Eakin, who later became senior policy adviser on Sen. John McCain's presidential campaign, released a study of a 10-percent federal income tax cut, which concluded that "the budgetary impact of the economic changes was estimated to offset between 1 percent and 22 percent of the revenue loss from the tax cut over the first five years and add as much as 5 percent to that loss or offset as much as 32 percent of it over the second five years." In other words, during the first five years of a 10-percent tax cut, the resulting economic impact on the budget would offset at most 22 percent of the federal revenues lost and during the second five years would offset at most 32 percent of the revenues lost.

http://mediamatters.org/research/201004120057

 

[RakuraiTenjin]

Funny how it just happened to work in the Reagan administration then??? Income tax rates were too high under Carter- Reagan's administration pushed income taxes lower, and revenue INCREASED.

The Laffer Curve is not 'dismissed' the "problem" with it (which is a media problem, not a problem with the theory) and why people claim its untrue is because if income tax rates are already very low to begin with and lowered then it CAN decrease revenue. You'd be on the leftmost side moving further left (lower revenue) of the graph I posted rather than moving from the right side of the peak revenue more towards it, etc

The Laffer Curve doesnt say lowering taxes will always increase revenue- like I said and am restating- if taxes are already low enough (to the left of the peak revenue on the graph) and you lower them further then you are moving further left on the graph which is downwards in revenue. That's why its called a curve.

This is not the case with the current economy. Raising taxes at this rate WILL drive down revenue. The peak revenue is not set in stone to a tax rate percentage, and varies given the circumstances of the day. We're in the beginnings of a depression and raising tax rates will move revenue further to the right side of the peak on the graph which is DOWN.

I hope that's not too hard for everyone to follow but it seems like a fairly basic concept to me.


edit: I wish this was the most popular thread as well rather than koran burning or other crap because that type of thing doesnt matter and effects peoples FEELINGS. This is the type of thing people need to be following in politics, not whos banging who or what flag/book is being burned next!

 

[Sparta]

Another thing worth pointing out is that the original Laffer Curve was drawn on the back of a napkin by Arthur Laffer in an attempt to convince Dick Cheney to introduce supply-side economics to Ronald Reagan and his administration, after Laffer had been laughed out of the economic world.

This was because Laffer had been booted from his job advising the Nixon administration on tax cuts which he predicted would help see the economy boom. When it was revealed he made that prediction using only 4 variables out of the usual thousands used by other economists, Laffer got the boot for being a terribly lazy and stupid economist.

Here he is laughing at Peter Schiff as he (correctly) predicts the economic collapse of 2008.

http://www.youtube.com/watch?v=IU6PamCQ6zw

The problem with the Laffer curve is that it assumes the U.S. is already on the right side of the curve, at 36% for those earning over 250,000. There is nothing to suggest that that is actually the case, at all, and all of the previously implemented tax cuts that have been based on supply-side economic theories haven't actually worked. When the recommend tax cuts occurred under Reagan in 81 and 82, he spent the rest of the administration raising taxes in order to get themselves out of the hole they dug themselves into. On top of that, the Bush tax cuts only generated 4.1 million jobs in the same amount of time the Clinton administration generated 21 million jobs while raising taxes.

There's a reason this kind of economics is regarded as "voodoo economics".

 

[RakuraiTenjin]

The reason that increased revenue didn't solve the economic problems the government was having under Reagan was because they could not get Congress to stop spending so wildly. You can increase revenue all you want and it does no good if spending outpaces the revenue increase. That's also a situation we're facing today with the current Congress. One can only hope the guaranteed regime change coming in November actually halts the wild spending rather than just changing the name of the party that's doing it.

The economic situation of today I'd say puts us on the right side of the graph. Just check this article out and see what the major investors are contemplating based on today's situation

http://www.cnbc.com/id/39097299

For 25 years, legendary Wall Street strategist Byron Wien, now with The Blackstone Group, has held summer meetings with high net worth individuals to get their outlook on the global economy and investing. This year’s group, totaling fifty individuals and including more than 10 billionaires, was decidedly pessimistic on the U.S. economy, investment opportunities and the Obama administration.

“They saw the United States in a long-term slow growth environment with the near-term risk of recession quite real,” said Wien, in a commentary to Blackstone clients. “The Obama administration was viewed as hostile to business and that discouraged both hiring and investment. Companies and entrepreneurs were reluctant to add workers because they didn’t know what their healthcare costs or taxes were going to be.”

The strategist, whose “Ten Surprises” predictions for the New Year became required reading on Wall Street when he was at Morgan Stanley, declined to name the participants in this year’s two so-called benchmark lunches. However, the gatherings, which typically take place out on the eastern end of Long Island, have included in the past such investing legends as George Soros, Julian Roberson, and James Chanos, according to an account of one such lunch in 2007 by The Financial Times.

“The economic pessimism expressed by the wealthy is completely understandable,” said Jim Iuorio, a trader with TJM Institutional Services. “From the start of the campaign that led up to the ‘08 election, the wealthy have been depicted as villains by the Democratic party. Even though the political tide seems to be turning, real change is months or years away.”

Stocks are off their August lows this month and many traders, including Iuorio, attribute some of those gains to this changing political tide. Still, President Obama re-emphasized in a press conference today that extending the Bush-era tax cuts for the wealthy was not in his stimulus plans.

A massive reduction in the consumer debt load, a workforce without the right skills for the jobs of tomorrow, and too high labor costs relative to other countries “are not problems that are likely to be solved any time soon,” wrote Wien of the attitude of the people at the lunches, which took place in two groups on successive Fridays last month. “Only a few investors thought the Standard & Poor’s could reach 1200 next year.”

So what are the billionaires buying if this environment continues? Wien said “vacant office building,” “farmland” and “Africa” were some of the ideas thrown out. Not too many things for the regular investor.

“Billionaires have little in common with the retail investor in terms of investment options,” said Stephen Weiss of Short Hills Capital. “They don’t rely on mutual funds or stock/bond picking for return unless it is very concentrated. Their investments are generally more strategic and negotiated in businesses or other assets such as commercial real estate.”

To be sure, the folks at Wien’s lunches certainly have the most money at stake, but that hasn’t meant they were always correct. As The Financial Times chronicled in August 2007, only George Soros and one other big investor believed the economy was headed into a recession or a bear market. Now, we know those two men, not the consensus, were correct.

The scary part this time is that it seems from reading Wien’s commentary that there were not many dissenters.

“The lunches were over about three-fifteen,” wrote Wien to end the piece. “I didn’t get the feeling anyone there was rushing out to place an order before the close based on what was said.”

 

[Sparta]

The reason that increased revenue didn't solve the economic problems the government was having under Reagan was because they could not get Congress to stop spending so wildly. You can increase revenue all you want and it does no good if spending outpaces the revenue increase. That's also a situation we're facing today with the current Congress. One can only hope the guaranteed regime change coming in November actually halts the wild spending rather than just changing the name of the party that's doing it.

There's a huge possibility that kind won't actually halt the recession, but will actually lead to a depression instead, given that Hoover and Roosevelt trying to balance the budget during a recession only made matters worse, while Sweden (the first country to recover from the Great Depression) engaged in heavy deficit spending and actually spent it's way out of the Great Depression, while balancing the budget and cutting spending only prolonged the Depression for the U.S.

Ironically, what finally got the U.S. out of the Depression was World War 2 and the huge amount of deficit spending that went into manufacturing tanks, ships, planes and weapons. By the end of 1945, the debt owed by the U.S. was the equivalent of 30 trillion dollars today, spent in just under 5 years.

Listening to supply-side economic theory, you'd think that the U.S. would've completely totally collapsed over the next decade, but instead, from the 50's to the mid to late 60's the U.S. saw the greatest economic boom of any country on the planet, all while they were charging the top tax bracket upwards of 88%.

The economic outcome of the U.S. after WW2 is basically the best proof of Keynesian ecomonic theory, ever.

 

[RakuraiTenjin]

There's a huge possibility that kind won't actually halt the recession, but will actually lead to a depression instead, given that Hoover and Roosevelt trying to balance the budget during a recession only made matters worse, while Sweden (the first country to recover from the Great Depression) engaged in heavy deficit spending and actually spent it's way out of the Great Depression, while balancing the budget and cutting spending only prolonged the Depression for the U.S.

Ironically, what finally got the U.S. out of the Depression was World War 2 and the huge amount of deficit spending that went into manufacturing tanks, ships, planes and weapons. By the end of 1945, the debt owed by the U.S. was the equivalent of 30 trillion dollars today, spent in just under 5 years.

Listening to supply-side economic theory, you'd think that the U.S. would've completely totally collapsed over the next decade, but instead, from the 50's to the mid to late 60's the U.S. saw the greatest economic boom of any country on the planet, all while they were charging the top tax bracket upwards of 88%.

The economic outcome of the U.S. after WW2 is basically the best proof of Keynesian ecomonic theory, ever.

Too many variables - the housing and baby boom of the 50's. The manufacturing capability (which we do not have now!) was able to shift to consumer goods- which SHOT UP in demand because of MILLIONS of returning soldiers with money to spend and a variety of new things, appliances, homes, cars, and businesses to buy/invest in.

How great would the boom have been with even a marginally lower tax rate? I predict far, far greater with more tech advances.