WatchI am sick and tired of propagandist Rush Limbaugh claim, almost on a daily basis, that lower taxes, and he means the rate on the top individual income tax bracket, or marginal tax rate, leads to higher growth. Most right-wing Republicans believe in his lies and never bother to check the facts with the benefit of the hindsight. There is no subject related to the economy in America that has more propaganda than taxes because over time trillions are at stake.
I have known that Limbaugh and other Right-wingers have been lying and finally decided to present the facts in graphical form, as shown below. As you can see, as the top rate has fallen from 90% to 35%, the annual GDP growth rate for the following 8 years has fallen from 5% to 1.5%.
Since the GW Bush tax cuts, all the GDP growth, and lot more, has been bought by $12.5Tr in additional federal govt and household debt. But for the growth due to borrow-and-spend the annual GDP growth in the US since 2001 would have been close to –4% (minus four percent). Can you spell g-r-e-a-t-e-r d-e-p-r-e-s-s-i-o-n? The cost of postponing the greater depression is simply a much worse and longer lasting depression in the future. The time bomb is ticking.
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CBOEtrader says
I thought they were meant to demonize what happens when the free market is taken to an extreme, which is where we are headed these days, and where we were back then.
I'm not convinced that the right wingers are as clueless as we assume they are. Maybe they realize that our economy is currently driven by our own consumption, and maybe they further understand that by continuing on our current trajectory we shoot ourselves in the foot, by killing the middle class and growing the segment of our populace that is essentially slave labor. But this is a price they are willing to pay to make us competitive with india and china in the second half of the 21st century and after.
In other words, doing what some of us think would be best may not be long term strategically in the best interest of our (or rather their) longer term plans to dominate the planet. So let's regard the best interests of our current populace. I can hear it now, "hey, it's no skin off my back."
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Some people are definitely hip Counter culture is someplace you can always learn what they won't dare teach you in "school" or in a world of starch. I've always loved it. They just won't think the way everyone else does. Religion is bullshit of course. When you aren't accepted. Bullshit. When we don't accept them. Hey, I always knew there was something wrong with the starched world. Turned out I was right. I learned a lot of things from people who turn and say are you joking. I'm not living in that world. So get me the fuck out of inclusion. It just may be "them" that aren't included. Hey, someone turn the music up.
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http://dailycaller.com/2012/04/24/snl-alum-on-obama-what-a-fking-asshole-audio/
Not everyone agrees taxes are too low. Besides what will the government do with more of my money? Do the words fraud, waste, mismanagement come to mind?
Whats worse is that taxes are used to bail out the Wall Street Fat Cats. We don't have a revenue problem, we have a SPENDING PROBLEM.
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marcus says
That picture represents a fantasy. It is probably from some Dickens play, and is now used as a misrepresentation of the effects of a free market.
So, based on what metrics would you consider the free market to be extreme "back then." Please also tell me when "back then" was. Also, what does this have to do with child labor laws?
Anyone?
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Vicente says
Big money WANTS those social programs. It wasn't poor inner-city children lobbying for Obamacare, it was BIG pharma and BIG insurance companies. Wrap a handout to your friends up in a candy coating of good intentions and a lot of people buy into the idea.
Vicente says
You are correct, the neocon strategy of growing government and racking up debt didn't work. By the IWOG definition of taxes (which I agree with), Reagan didn't lower taxes. By any definition, he was not what he claimed to be. He, and the rest of the neocons racked up massive debt, while charging rich people less to be a part of the party.
Vicente says
I am assuming you mean the republicans?
The republicans can't explain the problems in our economy. They have been lied to, but most can't grasp the idea that their leadership did exactly the opposite of what they promised.
It is funny how the democrats react to this though. On the one hand, they LOVE pointing out how the republicans grow government and increase government power when it works for their goals--BUT--the democrats also love to say that the republican failure has been a failure of the free market.
Which is it guys? Did the republicans lie to us and rack up monstrous debt for the benefit of their friends? Or are their failings a natural result of the limitations of the free market? THESE TWO THINGS CAN NOT EXIST AT THE SAME TIME.
Democrats are just as brainwashed as repubicans. Get rid of both parties. We are desperate for some competition in government.
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CBOEtrader says
Maybe extreme is the wrong term. Maybe immature would be better. We're talking before the concept of the 5 day work week, and yes before child labor laws.
I didn't say anything so simple as you repeatedly suggest ("misrepresentation of the effects of a free market"). But given the right circumstances a free markets can become unbalanced, corrupted, and can lead to exploitative slave labor conditions. IF a slave labor market would be good for enough industries, what's to prevent the "free market" from somehow causing slave labor markets from developing ?
Is this really so difficult to comprehend ?
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CBOEtrader says
Why not?
The Republicans deregulated and changed the tax code taking away many of the government induced restrictions on the free market. Along the way they also lied and racked up lots of debt. How are those actions incompatible?
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marcus says
A slave works against his will. What part of that is a free market?
marcus says
My thoughts exactly.
marcus says
Child labor laws were enacted in 1938, for a lot of reasons that had little to do with protecting children.
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tatupu70 says
Rules of the game are suppose to create a fair playing field. This is very different than "restrictions on the free market." You are discussing reguations as if they were salt in a soup again. We do not have reguation on one side, and free market on the other.
Besides the wordplay I disagree with, those actions both happened, and are not mutually exclusive. However, their deregulation (the democrats helped too as you know) was selective. For each deregulation they added many more onerous rules, and created MANY new handouts to their friends. They gave lip-service to the free market ONLY TO GIVE HANDOUTS TO THEIR FRIENDS, while ignoring an actual free market every step of the way. The republicans failing + the republicans giving lip service to the free market does NOT equal "it was a failure of the free market." It was a failure of big government. The failure itself is a matter of perspective. I think the government got exactly the result it wanted-- a further entrenched aristocracy.
Here's a question for you: in regards to MY regulatory requirements for my business, there have been 2 major financial bills since 2001 that have increased my costs MASSIVELY. One was during Bush's term, one came from Obama's. Can you name them?
These bills were both a government power grab. Both allowing the largest companies who have captured our regulatory bodies FAR more easy money, while putting up a massive extra barrier for their new potential competition. This is the way the game is played. You and those voting for the republicans are helping the exact super rich you claim to be limiting.
Big government is the aristocracy.
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CBOEtrader says
I don't believe that's the definition, but I didn't mean it as literally owned labor anyway. I meant cheap labor, and conditions that are brutal for the worker with extremely low potential for advancement, and incomes that aren't enough to support a decent life.
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CBOEtrader says
Some may say that, but they often mean it only in response to obsessive free market talk by the right. I hear it sometimes, but it's meant as a criticism of instances where bottom line profits become higher priority than the public good. It's obvious that markets alone don't protect the environment, or public safety or labor conditions.
CBOEtrader says
Even if this is true, in the real world now, for example this year, we have to choose between democrats and republicans (or we make a protest vote).
Why do you assume that wanting not to elect republicans, or preferring democrats over republicans to be a belief that democrats are anywhere near perfect. They are opposed to each other, but we all know they are not THAT different. You're preaching to the choir, but you're also misinterpreting the point of view of many.
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I know its the norm for political people to accept the definition adjustments which our Orwellian media throw at us, but...
marcus says
...are you kidding?
slave/slāv/Noun: A person who is the legal property of another and is forced to obey them.
Next are you going to say that the economic
"failures" during the period marked by the largest government deficit in our history, where the central government has taken away every shred of our privacy, forcing themselves upon every aspect of our lives where there is a profit to made, was a failure of the "free market?"
Definitions matter, and your news is lying to you.
marcus says
Glendale, CA median home price in 2011 was $477K. 99.9% of the world (probably more) can't afford what you consider a "decent life." Since the beginning of time, life has been a struggle against grinding poverty. Most of the world is still struggling.
Many in Africa or Latin America or Asia, or even in our own backwoods would consider themselves lucky to have some of the jobs that you consider beneath a human to do.
It is unreasonable to think that everyone can have full health coverage, or a 401K, or a 2000 square foot ranch home in glendale.
As long as the employee has full knowledge of what he is being asked to do, full knowledge of his compensation, and the freedom to leave-- there is no issue with allowing someone to do a dirty job.
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CBOEtrader says
People are starving because all those potential customers are broke. It's never a capital problem. It's always a wealth distribution problem. Give everyone in Africa an ounce of gold and no one is starving anymore.
My favorite example of the Great Depression is broke people crawling all over an abandoned coal mine looking for a few pieces of stray coal to heat and cook with. Surrounding them, machinery to mine enough coal in a day to satisfy a small city sat rusting because it wasn't profitable to operate the mine.
We are in a world with unlimited capital. Warren Buffett can literally write checks for $10 billion dollars at a time. The reason Warren Buffett doesn't write a $10 billion dollar check to feed all the starving people of the world is not because it wouldn't work, but because it wouldn't be profitable.
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CBOEtrader says
It only seems that way because government has been corrupted by people so rich, they don't care how much money it takes to get their way. All vestiges of government for the people rest with the Democrats. If you still don't believe this, explain why there's a bill in congress to raise taxes on people making over $1 million; a bill that is supported by over 60% of the country yet being blocked solely by Republicans.
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CBOEtrader says
No I was not kidding. It is possible to be owned as a slave and also willing to work. But I said I didn't mean it literally while I alluded to the actual definition, and then I made my point. So why do you even choose this as a way to make some point ?
CBOEtrader says
Of course not.
CBOEtrader says
I agree. But how low below this is reasonable for semi skilled labor ? And what if it's so low that crime or even living in prison become acceptable options ?
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iwog says
Seems like you saying bad (dem) is better than worse (republican).
We need to find a way to break the Dem/Repub and the central government's monopoly on politics. I am aware this is fantasy moreso than reality.
Contrary to what it may seem, I have no problem with a state instituting a social programs. The competition between other states woud force them to run their programs efficiently, lest their taxbase leave. States have had income taxes for decades before the federal government. Those taxes never grew to anywhere close to our federal tax rate.
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I wonder is it too late to clean up investing in the companies that run prisons ?
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marcus says
A lot of extreme words have been associated with the free market by our propoganda machine. Since the republicans are associated with the free market, these extreme word associations are merely democrat propoganda to keep the red team/blue team game going. So, yes, this sort of thing bothers me when I see it.
Furthermore, definitions have been slaughtered and turned completely around. "Liberal" has always meant LESS government, and a MORE economically free market. "Liberal" has lost its meaning beyond simply being a euphemism for "democrat." Similarly, words like "socialism" and "free market" have lost their meaning. Why? Because republicans want to associate "socialism" with the dems, and thus butcher the term. And vice versa for Dems and the "free market." So, yes, these things bother me when I read someone on a forum following the propoganda.
We are all supposed to be smarter than this.
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marcus says
The reasonable level is somewhere around what the worker wants to be paid and what the employer wants to pay. If we have competition between many smaller companies in an industry, these workers will get a fair price. If we have a few gigantic companies with the government in their pocket, the workers may indeed get screwed.
Foster competition to create prosperity. Big government fascism doesnt allow room for competition.
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CBOEtrader says
Free Markets and Civil Liberties are not necessarily the same thing.
In the last years of Franco, or during Pinochet's regime, there were free markets but little Civil Liberties.
Same thing under President Lee in Korea in the 50s and 60s, and at various times in assorted South American countries.
When slavery was being practiced in North America, there were insurance companies, the buying and selling of stocks and commodities, and all the other trappings of Free Markets.
But only white men of property could vote, and there was indentured servitude as well as slavery.
South Africa was also a free market economy during Apartheid.
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CBOEtrader says
You haven't been paying attention CBOEtrader.
Back when I was Libertarian/Republican, my policy beliefs were fiscally conservative, socially liberal. For a long time, this was perfectly acceptable in "The Big Tent".
These days:
Liberal these days for the common man applies firstly and largely to social policy. If you aren't a rich white man with a stay at home wife who attends church every Sunday and thinks abortion is an abomination you must be a Liberal Marxist Kenyan Muslim Communist.
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CBOEtrader says
Sure they can.
The thing they were pimping was "unfettered" free markets via both tax cuts and deregulation would create paradise. It cannot.
If I promise you my snake oil will cure your cancer, I am lying to you AND the snake oil will not cure anything.
I am loathe to quote Iwog, but "how does a game of Monopoly end?"
Crony capitalism is a more corrupted form that makes the wheels come off faster, but you're still playing the same game. I am reminded of Alan Greenspan's SHOCKED admission that transparent markets were not basically honest and self-correcting.
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Vicente says
This is true. I am unaware of the talking-head memes. Outside of CNBC with the sound off, I don't watch any MSM news source-- but I do read a ton of articles and studies.
Vicente says
The dems are for gay rights, as everyone should be. (Not to be rude, but this is a very minor issue for me compared to the economy, decisions regarding the war machine, and government created oligopolies.) Any other examples? Or is that about it?
Vicente says
They promised to give us real medicine (free markets), but gave us snakeoil (big government) instead. That doesnt mean real medicine is the problem. The snakeoil is the problem.
Vicente says
Crony capitalism IS NOT A FREE MARKET. The existence of capital, profits, and greed does not equal a free market. Crony capitalism (I also refer to this as fascism) is our biggest problem.
Vicente says
They did the opposite of what they were "pimping".
Vicente says
The republican approach will never work, agreed.
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Vicente says
There is obviously a large religious contingency supporting the republicans. However, this is merely pandering. The overwhleming majority of people who I know that vote republican call themselves "independent", and are very socially liberal.
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thunderlips11 says
You are correct. Different markets will have different levels of freedom. The employment market effects every other market, and should be regulated properly to be as free, fair, and transparent as humanly possible.
Outlawing slavery is a basic first step.
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CBOEtrader says
It is one of our larger CURRENT problems.
My point however, is that if you eliminated all the "crony" elements of capitalism, you still have another problem.
Namely insufficient taxes and regulation. The idea that capitalism "just works" and self-regulates without any policy framework is laughable and yet that's what we are sold on a daily basis. I'm ashamed to say I bought into it for decades myself. One element I hear frequently of crony capitalism is regulatory capture. There are solutions to mitigate this, but instead we hear cries that entire agencies should just be eliminated. And the tax & tariff issue is at the point of criminality.
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CBOEtrader says
"Everyone that I know ...."
Pew Research last I saw said social conservative voters outweigh the other factions. At the elected office level it gets worse, if you are not a social conservative or at least willing to pretend you are, you are rare indeed. If socially liberal Republicans had any remaining force at all, they would have some representation which they do not.
If you are not socially conservative in modern GOP you are at best a RINO who is laughed about as a useful fool in their vestigial moderate wing. They get a spot right next to the Log Cabin Republicans.
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Vicente says
"Everyone I know" is a biased pool. Afterall, I live in Chicago. Lot's of Catholics here, but not exactly the bible belt. I am suprised by the 80% number though
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CBOEtrader says
I removed that later, it seemed a questionably vague web-site poll I pulled from a web search. Self-selecting so I retracted.
Other sources put "social-issues" voters at 40+% of the GOP. People who self-identify as "conservative on all issues" may then have specific things they disagree with. However I'm not sure it's entirely INVALID either. You don't have to agree 100% with the most rigid social-issues voters, to be supporting them if you vote for their candidate in the end anyhow. I used to for instance squirm as a Republican when people asked me about gay marriage, I would come up with an "audience appropriate" vague moderate answer. However the simple fact of the matter was at the time I didn't really support it in any meaningful way.
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CBOEtrader says
Wealth inequity is our biggest problem. Crony capitalism is fueled by rich people having more power to influence than poor people. The larger the gap, the less likely the majority can pool together and defeat a well funded special interest.
You correctly blame Republicans for Citizens United, however I'm not sure you fully appreciate what it means. Here's a screen print of the eight largest Super Pacs in the USA right now.
It might as well be the obituary of the United States.
http://www.opensecrets.org/pacs/superpacs.php
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Funny as heck. The only Super Pac I support:
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CBOEtrader says
I disagree. They DID do what they were pimping. They did cut taxes, they did start the deregulation train. Also made it known from the highest levels, that the best thing remaining cops could do is sit on their hands or "get out of the way".
And then the S&L debacle. And still this didn't change anything. I bought into their theories in those days and made excuses.
That they ALSO grew government agencies is a matter of point of view. Some were shrunk, some swelled grotesquely. Deficit spending fits right into the "Starve the Beast" paradigm actually, hastening a collapse that they evidently desire from which they envision arising triumphant.
You may find we agree on more than we disagree, internet forums tend to enhance our arguing tendencies.
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This is the most interesting Argument Clinic I've been to. It's probably costing me a fortune.
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iwog says
This is an argument I could get behind. Communism failed partially due to human nature. This is a similar argument against a pure free market, I suppose.
Two problems though, 1)most of the solutions are hijacked by the rich, resulting in more power for these same people. Seems like its impossible to pass a bill that isnt written by lobbyists 2)the fact that these bills are passed for/by the rich means the wealth inequity gets WORSE.
Now my head hurts
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It sounds like Congressional Budget Office E-trader and Iwog are in agreement at this point: wealth buys political power...which further increases said wealth.
It's like the Monopoly game...except that wealth can actually buy new rules too.
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Hmmm..."CBOEtrader"...
so THAT's what our government employees spend most of their "working" hours doing...
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CBOEtrader says
Precisely.
The ultimate goal in physics is to come up with one unified mathematical model that accurately describes every interaction in the universe. It's sometimes called the theory of everything but it is very elusive. Therefore scientists have come up with models such as relativity and quantum mechanics to describe pieces of the universe. They are incomplete, but accurate for most practical purposes.
Likewise the "science" of economics will offer up different ideologies depending on perspective. A rich person will say "Lower my taxes and I can afford to hire more people." A poor person will say "raise the minimum wage and I can provide more demand." Both are probably correct, but both are isolated parts of the economy.
As far as I'm concerned, concentration of wealth is the theory of everything for economics. The spectrum from pure communism to pure monopoly (one person owning everything) can be used to predict revolutions, feudalism, economic stagnation, frequency of depressions, necessity of debt, and even the trade deficit.
The vector of wealth disparity is an excellent tool to predict interest rates. As people get richer, they fight each other for investment vehicles to store their trust baby money, thereby driving down rates regardless of what the money supply does. I had to force my own brain to accept this since it runs contrary to my feelings about what should be happening now. My new thinking on this subject is why I sold most of my gold and silver.
In the other direction, as consumers get more wealthy, they fight each other for consumer goods and drive up inflation. Interest rates go up because there is more demand for consumer debt and fewer rich people to lend it.
I think this country had the ideal system set up, but we wrecked it due to fear of inflation. We became rich and powerful under a strongly progressive tax system, and we're losing everything under sustained Republican tax cuts.
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iwog says
I've been thinking on this topic lately.
Pure communism is of course a theoretical construct rarely seen in operation. When you see it applied to states (Cuba, USSR), it ends up being ownership by committees not everyone. Practially speaking this ends up being a party elite, who become the wealthy class with the dachas. In a practical sense, it's little different to a worker whether they are ordered around by a board of directors or a committee.
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It's true that the top income earners pay most of the income tax burden.
The problem is that the ultra rich don't earn their money from income. They get it from capital gains. It was Warren Buffett himself that said his class is "winning" the "class war." Buffett often pays a lower tax rate than his secretary.
This loophole clearly needs to be closed. Ultra-high net worth individuals should pay more than 15% capital gains taxes.
Obama tried to do this but of course the (now crazy) Republicans blocked him at every step.
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MarsAttacks! says
Historically this is bullshit, that's why Shrek doesn't provide examples of it actually happening.
What we do know is that tax revenues increased greatly when Clinton raised taxes, and it resulted in a balanced budget by the end of his term. This is reality.
MarsAttacks! says
Every time you repeat this lie, I destroy it and you disappear. Then months later you repeat the lie again, I destroy it and you disappear. When are you going to stop the cycle and actually learns something?
Our "industrial monopoly" lasted about 4 years. I can prove it.
Furthermore our "industrial monopoly" after World War I was FAR GREATER yet resulted in the Great Depression barely 10 years afterwards.
Again you see a Republican arguing with a moderate over what's real and what's fantasy. This is the essence of the Republican party today. They simply don't exist in the real universe.