Saturday, February 06, 2010


Thought of the Day

For Republicans, American power is rooted largely in military might and showing a tough and resolute face to the world. They would rely on tax cuts as the one and only spur to economic growth.

Obama, Biden and the Democrats, on the other hand, believe that American power depends ultimately on the American economy, and that government has an essential role to play in fostering the next generation of growth.

E. J. Dionne, a self confessed liberal telling us what we Republicans think. Let me respond. When the problem part of the world only respects strength (bin Laden's strong horse) we ought to show it and be able to back it up. The result of appeasement is overwhelmingly a bigger, more horrible war. We propose tax cuts to revive our moribund economy because cutting tax rates across the board actually works to revive moribund economies and nothing the Democrats propose works at all.

Of course a strong economy is important to everything we do as a country, here and abroad, but all the government needs to do to "foster" economic growth is get out of the way vis a vis regulation and stealing or devaluing the wealth the economy owns and needs. When the government expands, the remainder of the nations economy suffers. Quit spending, shrink, cut the tax rates--that's the essential role for our government to create jobs now.



"We propose tax cuts to revive our moribund economy because cutting tax rates across the board actually works to revive moribund economies..."

It does? Your lips to God's ears?
Whether cutting taxes revives the economy is at best debatable. What is undeniable is that it cuts revenue. The Bush tax cuts are in part responsible for the current deficits.

"Regulations! Regulations! We don't need no stinkin' regulations!" Of course we don't. Reagan deregulated the S&L industry and look what happened. Meltdown. Fiasco.

In 1999, the veto-proff Republican congress passed the Gramm-Leach-Bliley Act which repealed the part of the Glass Steagal Act of 1933, thereby allowing commercial banks to act like investment banks and look what happened. Mortgage meltdown. Sub prime fiasco.

I agree that having too large a percentage of the population employed by the government is a recipe for disaster. But willy nilly deregulation is also a recipe for disaster.

Whenever I hear, "Let's cut the size of government," my response is: "What specific cuts do you propose?"

Cutting tax rates does not cut revenue. Certainly for Kennedy and Reagan, the tax coffers filled to overflowing. When George Bush Jr. cut tax rates across the board, it was followed by the most tax receipts the US government ever took in. Seems to work every time it's tried. We've already argued about the cause for the banking crisis. Certainly getting rid of Glass Steagal was not bad per se, only when mixed with most banks being forced to make unsafe loans. It did take both things, however. I plead ignorance about S&L, as with many things.
As to specific cuts. A 10% no buyout retirement for everyone, including non military personnel in the Pentagon etc, working for the government, but not a cut in actual military strength. I'd get rid of the Department of Education tomorrow and start a hiring freeze for about 2/3 of the government (excluding our spies and law enforcement) and cut each of the budgets for the bureaucracies with a hiring freeze by 5% per annum for the next three decades. Many of the government services would be let out for a private enterprise contract (like the postal service, for example, and the BLM. Give me a bit more time and I can come up with some real savings.
Of course I'd have to be king to get this done; no president could even hope to do it.

B/f I believe you, I need cites for increased tax revenues following tax cuts.

Here is the primary reason why the size of government. When times are lean, like now, it is counterproductive to cut jobs and put people out of work. When times are fat, no one sees the need to cut the size of government. You are correct that no president could do this. To do so would require a majority like the Democrats just had (only it would have to be a GOP majority b/c the Democrats would never shrink government significantly, if at all) and that majority would be voted out of office at the next election.

Go here, it talks about tax rate cuts and the revenue growth thereafter during the last 90 years: It also mentions the percentage the "rich" pay even after rates are cut, if you're interested. I'm not--requiring some successful citizens not only to pay more but pay more at a higher rate is legalized theft.
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