Rep. Michele Bachmann made me see the light:
I am so proud to be from the state of Minnesota. We’re the workingest state in the country, and the reason why we are, we have more people that are working longer hours, we have people that are working two jobs, we have more women in the workforce than any other state.
I finally get it. All along, I was measuring the state of our economy by traditional measures. You know, unemployment, wage growth, that sort of thing.
Silly me, that is so 1998.
These days, a good economy is one that gives people the option to work two or even three jobs. A good economy is one where people have the ability to work long hours. Thats something to be proud of.
And how do we create that economy? Cut taxes. Slash services. After all, You don’t need a quality education to work at McDonalds and Blockbuster.
I finally understand.
Sorry for the press release, guys. Just wanted to get it out there. Thanks!
Olson: Bachmann’s job comments ‘offensive’
ANOKA — Bob Olson, a DFL candidate in the 6th Congressional District, released the following statement in response to Rep. Michele Bachmann’s comments that Minnesota is the “workingest state” because we have “more people that are working longer hours … that are working two jobs.”
“Mrs. Bachmann may celebrate the fact that more Minnesotans have to work extra hours and take on a second job to make ends meet, but I see it as a cause for alarm.
“Folks don’t take extra hours or extra jobs for fun, congresswoman. They’re trying to survive. If you got out and talked to real folks, not handpicked audiences, you’d realize that health care costs are soaring; that college tuition is beyond the reach of many deserving students; and that gas prices are putting a pinch on many families — resulting in higher prices at the grocery store.
“If you read the St. Cloud Times on Wednesday morning you’d know that Electrolux laid off 190 workers, Stearns Inc. released 20 people and that a small business went under in Sartell. If you read the Star Tribune yesterday you’d know that Minnesota lost 2,300 jobs last month and 23,000 in the last half of 2007.
“I understand that you’re putting lipstick on our pig of an economy because the president you blindly support is running America into the ground, but touting the hardships that too many families from St. Cloud to Woodbury are enduring is absolutely offensive.
“Minnesota would be better served if you became the ‘workingest’ congresswoman in Washington and started seriously addressing the challenges our country faces. The people of our district didn’t send you to Washington to cozy up to the oil companies that are polluting our environment; the corporate titans that outsource our jobs; or the health insurance companies that jack up our premiums. They sent you there to work.”
I just laugh at anyone who thinks giving more government handouts is what makes our economy strong. You’re so high on everyone getting a good education, yet apparently you have never taken an economics class. Which government “services” (aka handouts) create jobs? The only jobs bigger government creates are those for AFSCME members. Increasing the taxes on middle class people and those who creats jobs will do nothing to help the economy. In fact, squeezing those Minnesotans will take money out of the economy. Look at Michigan and California as examples of this problem.
“I just laugh at anyone who thinks giving more government handouts is what makes our economy strong.”
Yep - just look at what handouts to the Vikings, Twinks, Northworst, er, ‘scuse me, “Northwest” Airlines, to mention a few, has done for our economy.
It’s just me, but I just laugh at the government handouts republiCons like to give; it’s kinda like that old joke about a loan at the bank: you can’t get one unless you don’t need one.
Well, I think this is just a delicious quote from Bachman. Each of these measures is a sign that the economy for middle class and working class people is on a downturn. Why are people working longer hours? Because the real income of workers has been stagnant for 30 years. So they have to work more to keep up with inflation. Why are people taking two or more jobs? Same reason. And women in the workforce? That is generally an indication that families can’t get by on just one income anymore, not because they want lots of luxuries, but because the cost of health care, gas, education, food, etc. is rising faster than our incomes.
I mean really, did her staff come up with that talking point? Her real argument should have been that Minnesota has some of the most “productive” workers because of our great system of education. But, I really shouldn’t give them any help. I think they are doing a fine job on their own. (wink, wink,)
PS: they should have just talked to one of these Minnesotans working longer hours and multiple jobs and asked them how great it is to be one of the “workingest” people in the country.
PSS: How does working two jobs and longer hours and fewer stay at home moms jive with the whole family values thing? Its easier for parents to be involved in their kids schools, if they don’t have to work two jobs and longer hours.
While true that the devaluing of the dollar over the years hurts the middle class and poor more than anybody nothing that the Democrats suggest would do anything about it either.
ps: It isn’t PSS, it is PPS.
And I wonder where this country would be today if FDR had not implemented the New Deal during the Depression years to provide relief (welfare) to people that had lost jobs, homes, farms, businesses.
Does Chris or anyone want to stand up and say the ‘giveaway’ jobs provided by the Works Progress Administration and Tennessee Valley Authority did NOT strengthen the U.S. economy during the dark Depression years?
Um … all these economic issues aside …
“Workingest”?
OMG … she like made up like a new word …. like.
Clearly, Bachman has been spending too much time with her nose in W’s dictionary… This statement is much like W’s while stumping in ‘04. At a rally, one woman stood up to say that she as working 3 jobs to make ends meet. W’s response was a “God bless yuh.” and boasted that her plight, along with millions of others was “uniquely American.” I really don’t think that woman was looking for praise. Just an illustration of how out-of-touch W is and how disinterested he is in the working class.
Bachman is revealing the same colors. Having two jobs, working long hours should NOT be a source of pride. It is NOT an indicator of a strong economy. It blows my mind…
I think she caught something from Bush when she gave him the liplock.
VS,
The depression happened mainly due to speculative actions in the stock market. The Central Bank had lowered interest rates so low that people borrowed money to invest. When the market dipped a little those risky margin investments went south and then the banks couldn’t recoup their loans and started to collapse which caused a massive cash shortage and deflation. With deflation the money people were using to pay back loans was worth more than the money they received.
The first reaction by the Fed was to extend further credit to banks to keep them afloat. This was working but was stopped for what ended up being an unfounded fear of inflation. The other reactions was to create trade barriers to protect American workers. That had the opposite affect and caused retaliatory barriers t be put into place by our biggest trading partners who were having their own economic issues. These protectionist policies exacerbated the problem that was already at hand.
FDRs policies had little or any positive affect on the nations crawl out of the depression. The tripling of the tax burden put in place to pay for the programs were paid mostly by excise taxes on things like alcohol, cigarettes and electricity. Taxes paid mostly by the poor and middle class. The taxes on business’s also increased the costs of goods as basic as food and clothing which also hurt those least able to afford them.
Meanwhile FDR chose to focus spending from these programs not in the poor southern states, where segregationist Democrats would vote for him anyway, but in swing states in the west that would help him win an unprecedented number of terms. The dams of the Tennessee Vally Authority also hurt African Americans in disproportionate numbers. As the land was flooded, 750,000 acres, black sharecroppers were not compensated. Also the Agricultural Adjustment Act which systematically destroyed millions of tons of crops to raise their prices caused thousands of the poorest workers to loose their jobs as it increased the price of their food and clothing.
The New Deal had nothing to do with the recovery of the American economy. The unemployment rate went from from around 10% in 1930 to 17% in 1939 with a peak of 25% in 1933. Not until the war in Europe, to which the U.S provided recourses, and then the U.S. entry in WWII did the rate fall back down below 10%. The rate of recovery before the war was no different than what could have been expected without the New Deal.
FDR was a charismatic and inspirational leader that valued personal power above all else. The New Deal was a sales job of epic proportions that played on the current fear of much of the population. The failure of his attempt to stack the Supreme Court in order to allow his continued creation of unconstitutional policies and entrench his power was one of the few bright spots of the time.
Sweet Jeebus
Did KH just take a swipe at a politician that’s been dead over 60 years?
I want in on this … Herbert Hoover’s Mother wore combat boots!!
Well if they get held up I can usually knock ‘em down. FDR is to many Democrats what Jesus is to Christians. In both cased the stories told by their followers are more fiction than reality.
How was that for trying to dig my way out of the popularity hole I just put myself into?
I doubt very much Michele Bachmann has spoken one word to those “workingest” people. How she has her head so far up her derriere is beyond me.
How did she come up with this statement? Has she held any IN PERSON Economic meetings in the 6th CD, let alone any IN PERSON PUBLIC FORUMS where all are invited? Telephone conferences do not count.
The answer is NO!!!!
Released Comments from Bob Olson……
“”Mrs. Bachmann may celebrate the fact that more Minnesotans have to work extra hours and take on a second job to make ends meet, but I see it as a cause for alarm.
“Folks don’t take extra hours or extra jobs for fun, congresswoman. They’re trying to survive. If you got out and talked to real folks, not handpicked audiences, you’d realize that health care costs are soaring; that college tuition is beyond the reach of many deserving students; and that gas prices are putting a pinch on many families — resulting in higher prices at the grocery store.
“If you read the St. Cloud Times on Wednesday morning you’d know that Electrolux laid off 190 workers, Stearns Inc. released 20 people and that a small business went under in Sartell. If you read the Star Tribune yesterday you’d know that Minnesota lost 2,300 jobs last month and 23,000 in the last half of 2007.
“I understand that you’re putting lipstick on our pig of an economy because the president you blindly support is running America into the ground, but touting the hardships that too many families from St. Cloud to Woodbury are enduring is absolutely offensive. ”
Olson has nailed this one right! Michele Bachmann remains an embarrassment to Minnesota.
Its like someone bragging about lack of obesity in an area struck by famine.
Kathy,
At least Bachmann didn’t vote to take away money from her constituents to send to Washington, D.C. so Jim Oberstar can have $4 billion in bike trails. Walz voted for the largest tax increase in U.S. history. How will that help Minnesotans?
Kathy,
At least Bachmann didn’t vote to take away money from her constituents to send to Washington, D.C. so Jim Oberstar can have $4 billion in bike trails. Walz voted for the largest tax increase in U.S. history. How will that help Minnesotans?
Oooo, watch Chris try to change the subject away from this embarrassment.
Look! The Goodyear Blimp!!!!!
At least Bachmann didn’t vote to take away money from her constituents to send to Washington, D.C. so children could have health care.
At least Bachmann didn’t vote to take away money from her constituents to send to Washington, D.C. so people making minimum wage could have a little bit of a pay raise.
Wow, I thought Illinois had it bad. You guys only get $0.46 back per tax dollar sent to Washington. link
For reference, that’s second to last next to Delaware.
Stats on dollar return are down thanks to Kline not getting any earmarks for the 2nd CD :).
Seriously, the ONLY reason someone HAS to work more than 1 job is that they don’t make enough at their 1st one. I know that their are a few people who want to work 2 jobs, but most people would rather spend time with their families. The simple fact is most families must have 2 wage earners to maintain the lifestyle that they had when they were kids.
Back in the dark ages of the 50’s and 60’s when I was growing up it was very unusual for women to work outside of the home, some did but a fairly low percentage. I don’t have the stats but I would guess it is reversed now. Today it is unusual if a Mom is a “stay at home” full time. For single parents, male or female it is very difficult to raise a family on one income.
Real wages are down, when inflation is factored in most people haven’t had a raise since 1991.
Republican comrades, I have to disagree with you on one point. Investing in education adds value to the economy. With all of the unemployment numbers increasing, the trends break out like this:
w/ no HS diploma: unemployment way up
w/ HS diploma: up
w/ some college: up a bit
w/ college degree: flat - no change
Additionally, the place where America can be competitive is in high-paying, educated jobs. We are not going to win the game for low-paying, outsourcable jobs.
Investing in education is a far, far, far superior investment to paying welfare, raising the minimum wage, or Government attempting to provide jobs (ala FDR).
I thought it was funny that Rep Walz previewed Bachmann’s “workingest state” comment twice during his half hour on the show (which was right before La Bachmann’s). It must not have been the first place she did that riff, if he was saying something like, “Your next guest would have you believe that it’s a good thing that Minnesota is the workingest state.”
Tim Walz did not vote for the largest Tax increase in History, Chris!! He voted to make sure that the future Budgets are paid for after the Bush Tax Cuts are set to expire in 2012.
You have been listening to too many Ron Carey GOP Talking Points.
Kathy,
That’s a bunch of crap and you know it. In 2012, the taxes will be increased because of Walz’ vote. That includes re-instating the marriage penalty and decreasing the per child tax credit. Thank you Tim for sticking it to middle income people that have benefitted from those tax cuts.
Kathy you have been listening to too many Nancy Pelosi lies.
Speaking of the Speaker, what national problems got solved in this year’s first 100 hours? Hopefully there will still be some for Hillary when she takes office in about 53 weeks…
Michele Bachmann is deserving of every bit of criticism regarding her “workingest” statement. Her comments are making National News!!
I can just picture the LTE’s in the 6th CD papers in the coming days.
CWAZY, CWAZY MICHELLE…
It just paints Minnesota as full of whack jobs.
Whistle while you work - never mind your station in life.
If we had SLAVES - why they’d be happy slaves & whistle on the way to their dawn to dusk jobs!!!!
From many of the posts on this board, you’d swear that when the state tax rate is low, that means people work the most. But no - we are not the lowest, or not even near the lowest in size of Government in MN. No correlation.
So I ask — what should Government do about this?
How well this discussion illustrates the core problem we have. Nutty Bachmann says something dense and Democrats seem to think validates, to a degree, their economic platform. To me it seems like more of a smokescreen to keep people from looking at the fact that they have no solutions. Almost without exception, candidates from either party either refuse or are not able to talk about the real causes and potential solutions for the current economic state. In fact they refuse to even talk realistically about the systemic problems we have put off dealing with for decades.
Candidates can’t talk about the real problems and the fact that our current choices are between painful options now or willful ignorance that leads to disaster. Nobody is going to vote for the candidate that says that the best that can be done is to minimize the pain and take responsibility now. The candidate who pretends to have solutions that keep things from getting worse for the majority of the people will get the majority of the votes.
Neither Bachmann nor Klobuchar can wave a magic wand and make an economic cycle go away.
Tax cuts work within the math of the cycle, give aways work against it. Bachmann wants to keep a lid on taxes, Walz wants to increase them and the dependency class they sustain and grow.
purpleblogdog, I agree 100%,
This is just a cycle like global warming. There’s no reason for everyone to think the economy is in bad shape.
Everyone knows Tim Walz wants to increase everyones taxes. He wants to use my tax money to help people who don’t deserve it, rather than using my tax dollars to kill Muslim extremists. What a DummocRat Liberaloon!
We have to spend our tax resources in Iraq, Afghanistan, and Iran, because I just don’t feel safe anymore. I don’t care whatsoever how much that costs us all.
If my Grandchildren have to pay for the global war on all Muslim extremists, so be it, they will be thanking us for keeping them safe. We Republicans prevented the Muslim extremist invasion of America.
That’s borrowed money wisely spent!
Think of the children!
Ah, it’s the worlds worst satirist come to bring the conversation down to the level of a drunk 8th grader. With supporters like TFRWG it is no wonder the Democrats can’t seem to get anything done despite the incompetence of the current Republicans.
Kerosene Hat,
Thank you for the kind remarks. I agree 100%. :razz:
purplebluedog,
You’re right that tax cuts work to stimulate growth and can help soften recessions. The best thing we can do is escalate the tax cuts and make them permanent. Since that won’t happen, I agree with the tax rebates that are being proposed by the President today. What I don’t agree with is taking that pot of money and targeting it to more unemployment, heating aid, food stamps, etc. like Hillary proposed. Put the money into the people’s hands and let them spend it for whatever they need.
Chris,
I agree 100%. Fair is fair, those of us who are doing very well should get our share of this relief as well as those who are struggling because they are lazy.
I would also agree 100% that lowering taxes is proven to be an effective method of stimulating the economy, as we’ve all seen. Everyone knows Bush’s tax cuts have worked very well for the American people. I’m sure our children will be thanking us.
I’m curious, if there’s no demand, how do tax cuts generate jobs?
Richard,
Are you saying that there is a fundamental lack of demand and even if people had more money they wouldn’t spend it?
If I own and operate a widget manufacturing facility and there’s no demand for my widgets, how would giving me a tax cut prompt me to add jobs? And let’s define this a little further, my widgets were, at one time the most widely recognized best widgets in the world, so there’s no problem with quality. Also, I have kaizened the living hell out of my processes so I am making these widgets as efficiently as possible. Still demand remains flat. Now I get a tax cut. Now what, add 10 people?
No Richard, you buy new equipment to make your widget factory better and event more efficient and modern.
Tim Walz voted to ‘Pay Go,’ not raise taxes.
Is increasing the deficit good for heading off recession?
Now where’s my tax rebate?
I need a new water heater.
Are there any still made in America?
I wouldn’t want any extremist terrorists smuggling into my basement in the cylinder of my new energy hog.
KH: So, what do you propose? I think most would argue that in the year 2008 it would be silly to propose that the same policies enacted to bring us out of the Great Depression (whether you see them as good or bad) are a good idea.
Clearly, this totally criminally negligent system of taxation in place now will not work for long, unless we are all okay with the idea of a few dozen people running the world, while the rest of us toil in the muck. Libertarianism doesn’t seem to be the answer either. Not unless three quarters of the world’s population suddenly vanishes, and we can go back to some kind of anarcho-syndicalism of some kind.
Richard,
Remember, with a tax cut you are not the only one with more money to spend, the consumers of your widgets also have more money. If in this scenario that still does not increase demand for your widget it probably means the market for widgets has completely matured. An example of this might be something like claw hammers.
If that is the case the money available from tax cuts could be used in a number of ways. You could spend it to hire a research engineer to figure out the next innovation in widgets that would allow your consumer base to increase their productivity, comfort or save costs, thereby increasing demand and forcing you to hire more people. You could increase the salaries of your current workers, since your competitor is trying to hire you best people away with their savings, who would then buy other products which would increase demand for other businesses, thereby creating jobs. You could invest it in a company that provides a product or service in a market that is not mature and will see growth, giving them the ability to hire more people. Maybe you retool to use “Green Methods”, increasing demand and jobs in that industry to see if it changes the perception of widgets and grows the market. Just about anything you do with your savings has the potential to create jobs even if there is no way to increase demand for your current widgets.
Almost all products and jobs have life cycles. We don’t need very many beaver hats, steam ships, CRT computer monitors or the people that make them as we used to. Part of an efficient economy, the kind that has the most potential to raise our standard of living, is to make sure that capital flows into emerging markets. The higher the tax burden the slower that happens
But Bachmann is proposing corporate tax cuts. Nothing for consumers. Your very first point, “consumers of your widgets also have more money” gets to the nub of the problem, and points out exactly why supply side economics never works. We are a demand based economy. We can’t do diddlely without a middle class with a goodly amount of discretionary income. I believe it’s called an “aggregate demand”. I firmly believe in letting the market respond to conditions. I also firmly believe in letting to the market respond to a prosperous middle class and not some feudal system where 1% of the population controls 99% of the wealth.
LB,
Anarcho-syndicalism is a fundamentally flawed ideology. It creates distinct lines between “bosses” and “workers” which do not exist. It also calls for labor to be organized, which would mean some type of power structure, and thinks that it would not end up becoming exactly what we have now, only worse.
The truth is there isn’t much that can be done to avoid where we are going economically. Politicians can talk about shifting costs and benefits all they want but we are simply over extended. The economy is far, far to big and complicated to be managed from the top down. Our best chance is to completely rewrite the tax code so politicians and corporations or any other special interest can collude to give themselves benefits at the cost of the general public. Give people a system transparent enough they can understand and trust so we can as a society work together to provide a safety net. Have government focus on prosecuting fraud and all other truly criminal behavior and trust people to do what is in their best interests. It is peoples basic nature to be productive and provide themselves with a good life that is our best hope. If we can’t do that there isn’t much more that can be done. If we as a people can’t be trusted with our own money why should we be trusted to vote ?
Richard,
Keeping more money into the private sector does stimulate economic growth. Sending more money to Washington does not stimulate growth. If you lower the corporate tax rate from 35% to 25%, you allow corporations to keep more money to (1) add jobs, (2) buy equipment, (3) pay dividends, etc. All of those things help the economy.
As for the question of demand, it’s pretty logical that if people and businesses have more money in their pockets that they will spend the money. People and businesses don’t sew up money in matresses anymore.
LB,
You clearly know nothing about our system of taxation. The top 1% of income earners pay 39% of taxes - up from 37% in 2000. The top 25% of income earners pay 86% of taxes - up from 84% in 2000. The top 50% of income earners pay 97% of all income taxes.
What’s criminal is that the people on the left want to take even more.
From the Wall Street Journal - Dec. 17, 2007
http://online.wsj.com/article/SB119786208643933077.html
Taxes and Income
December 17, 2007; Page A20
Every Democrat running for President wants to raise taxes on “the rich,” but they will have to do something miraculous to outtax President Bush. Based on the latest available tax data, no Administration in modern history has done more to pry tax revenue from the wealthy.
Last week the Congressional Budget Office joined the IRS in releasing tax numbers for 2005, and part of the news is that the richest 1% paid about 39% of all income taxes that year. The richest 5% paid a tad less than 60%, and the richest 10% paid 70%. These tax shares are all up substantially since 1990, and even somewhat since 2000. Meanwhile, Americans with an income below the median — half of all households — paid a mere 3% of all income taxes in 2005. The richest 1.3 million tax-filers — those Americans with adjusted gross incomes of more than $365,000 in 2005 — paid more income tax than all of the 66 million American tax filers below the median in income. Ten times more.
For the political left and most of the media, this means only that the rich are getting richer, so of course they’re paying more taxes. And it is true that the top earners have increased their share of total income. Yet, as the nearby table shows, the rich showed more rapid gains in reported income shares in the 1990s than in the first half of this decade. The share of the richest 1% jumped to 20.8% of total income in 2000, from 14% in 1990, but increased only slightly to 21.2% in 2005. This makes it hard to pin their claim of “rising inequality” on the Bush tax cuts, though the income redistributionists are trying. By this measure, the Clinton years were far worse for “inequality.”
Notably, however, the share of taxes paid by the top 1% has kept climbing this decade — to 39.4% in 2005, from 37.4% in 2000. The share paid by the top 5% has increased even more rapidly. In other words, despite the tax reductions of 2001 and 2003, the rich saw their share of taxes paid rise at a faster rate than their share of income. How could this be?
One explanation is that the Bush tax cuts reduced the income tax liability of middle and lower income households by more proportionately than the rich. The average family of four with an income of $40,000 saw its income tax liability fall by about $2,052 a year from the 2001 and 2003 tax cuts.
The IRS statistics also tell a more complicated economic story than the media claim. First, America continues to be a society of upward income mobility. Over the past decade, millions of Americans have joined the once highly exclusive club of six- and seven-figure earners. Some 304,000 Americans earned $1 million or more in annual income in 2005, compared to 110,000 in 1996 and 176,000 in 2000. Because there is no cap on the top income share, this increase in millionaires pushes the top income (and taxes paid) share higher. The number of millionaire households in net worth also increased to nine million in 2006, up from six million in 2001, according to TNS, a global market research firm.
Liberals decry this as proof of a new “gilded age.” But we’d say these gains are a sign that more Americans are joining the ranks of the truly affluent. More than 13 million American households, or about one in 10, had an income of more than $100,000 a year in 2005. This is the kind of upward mobility that a dynamic society should want because it means that incomes aren’t stagnant and opportunity continues to exist.
Keep in mind as well that the IRS only records the income that taxpayers report. Its data don’t include income that the rich hide in tax shelters or otherwise defer. And there is evidence that lower tax rates since 1981 have caused the rich to declare more of what they earn. In 1980, when the top income tax rate was 70%, the richest 1% paid only 19% of all income taxes; now, with a top rate of 35%, they pay more than double that share. With lower rates and fewer tax loopholes after the 1986 reform, there is less incentive to shelter income to avoid tax.
The IRS figures are also misleading because they include income that can make many Americans rich for only a single year. In 2005, for example, taxpayers earned an estimated $600 billion in income from capital gains, which is reported on tax forms as part of adjustable gross income. But that might include the one-time gain from a middle-class senior couple that has lived modestly for decades but suddenly retires and sells the family business or home for $1 million or more. They may be “rich” in Hillary Clinton’s definition of the term, but in fact they are benefiting in one tax year from a lifetime of hard work and thrift.
The amount of capital gains declared on tax forms has doubled since the tax rate was cut to 15% from 20% in 2003, which has also contributed to more Americans being “rich.” Dividend income has also increased by at least 50% since that rate was cut to 15% from nearly 40% in 2003. So part of the income gains of the rich are simply a result of assets that have been converted into taxable income — in part because of lower tax rates.
We hate to break up the media’s egalitarian chorus with these details, but facts are facts. If Democrats really want to soak the rich, they’ll keep tax rates where they are, or, better, lower them some more.
The economy is far, far to big and complicated to be managed from the top down.
Exactly why Keynesian economics works.
Richard,
We don’t “have” and economy really. The economy is what it is and neither supply or demand is king. I addressed your point about what happens if demand for widgets does not increase and the reasons for it.
I agree that corporate tax cuts are not better than tax cuts for the middle class but that raises a question. What do corporations do when their taxes are increased and why would it be that those costs are not passed on to consumers? Why would a reduction in the corporate tax rate also not be passed onto consumers, or realized as stock growth by investors?
This is the exact scenario that you posed with widgets and I guess I’m still not sure what part you are contesting.
Chris,
I agree 100%. We have all heard these explanations of why the Bush tax cuts work so well, and every American has seen the benefits of these tax policies being in place for quite some time. Obviously every American is doing much better than they did before these policies were in place.
If they’re not, they are either lazy or misguided.
The results of our Republican party getting everything they wanted for 6 years has paid off. Those moonbat liberalosers who disagree are just jealous of the complete success of our agenda.
Thank you for enlightening these dimwitted liberals.
Richard,
Keynesian philosophy requires a strong central state that can redistribute wealth as well as “encourage” investment in particular sectors. Because Keynesian ideas require control of the aggregate production it will encourage a more authoritarian system.
In fact Bush’s policies are very Kynesian.
Just in case you missed it, Michelle was only the 3rd “Worst Person in the World!” on Olberman last night. All I can say is “Try Harder Michelle, you can be #1!”. I’d put up a link but I am way to lazy of liberal to go to all that work.
Yes, the percentage of the total income taxes in the U.S. paid by those in the top tax brackets has increased. That is largely because the number of people in that top bracket has increased, and the average income of the person in that top bracket has likewise increased. The gap between the rich and the poor has increased. Taxpayers who made more that $200,000 per year had their incomes increase by an average of 7% between 2002 and 2004, but their income tax rates declined between 9 and 19%.
It makes no sense to claim that lowering the taxes on the wealthy has increased their tax burden. It is counterintuitive, but then what can you expect that referred to those “lucky duckies” who don’t earn enough to pay income tax?
The gap between rich and poor may be increasing, though I question that, but it isn’t because of Bush’s policies. It is the result of decades of fiscal mismanagement and misguided regulations and subsidies. How many people still think tobacco subsidies were a good idea? How many lives and dollars did that cost our economy? Excess spending on defense and space programs along with trade barriers that caused trillions in negative economic impact. If government spending were an economic plus Liberals should be all for increasing the pentagon budget.
The concern between rich and poor is explained well in this article.
http://www.latimes.com/news/custom/scimedemail/la-op-schermer13jan13,0,7104647.story?coll=la-news-scimed
Some people would rather get no growth than allow some to benefit more than others.
“Keeping more money into the private sector does stimulate economic growth. Sending more money to Washington does not stimulate growth. If you lower the corporate tax rate from 35% to 25%, you allow corporations to keep more money to (1) add jobs, (2) buy equipment, (3) pay dividends, etc. All of those things help the economy.”
In a perfect and ethical Business climate, Chris, that happens. But what have many Coorporations done over the years when they have recieved Tax Break after Tax Break?? They have left the US and gone overseas for cheaper labor, bigger profits, more perks for the Top Earning CEOs. Thus resulting in product recalls due to Lead Paint from toys made in China, layoffs, etc.
Chris:
“You clearly know nothing about our system of taxation. The top 1% of income earners pay 39% of taxes - up from 37% in 2000. The top 25% of income earners pay 86% of taxes - up from 84% in 2000. The top 50% of income earners pay 97% of all income taxes.
What’s criminal is that the people on the left want to take even more?”
A damn chimp could figure out the slanted logic in that WSJ article you posted, and in the logic of your above representation of the numbers. You speak about the top 1% as though the number of people and the percentage of total taxes they pay (as a portion of the whole) actually means anything. It doesn’t, sorry. It’s about dollars, my friend. It’s very typical for the WSJ to espouse such crap. What you should be looking at is the ratio of tax burden to income (not sure what the technical term is there). That is, what tax rate people are paying. For example, I make less than $40,000 a year and I pay roughly 30%. I think that’s pretty reasonable, if indeed I got something for it, other than an endless damn war. But that’s just me. As your friendly neighborhood millionaire how much he or she is paying in taxes AS A PERCENTAGE OF INCOME!
I have a friend who is a very well known musician, who actually laughs when I mention taxes. He says “what taxes?” He actually has to go find ways to get rid of his money, because his tax attorney keeps making it so he pays hardly anything at all.
As if that is not enough to piss you off, ask why the social security system is supposedly in shambles. Funny how nobody ever mentions that those who make above $90K don’t have to pay into it. Oh, I get it, it’s supposed to be a program for the poor, financed by the poor, right?
Tax code my ass! It’s highway robbery, and everyone here knows it.
Kathy,
You are making two important mistakes in your thinking. One is that government as a whole is more ethical than business. This has never in the history of humanity been the case. Political leaders may not get rich from their salary but they sure do when they sit on boards of corporations, become lobbyists, or consultants based primarily on their influence on changing tax and spending policies.
Two is that the jobs moved overseas were the ones we wanted to keep in the long term. Most of those jobs would have moved overseas whether or not a U.S. company moved them or not. The protectionist argument that naturally follows you last statement, with the idea of protecting American jobs, would simply increase consumer prices hurting the poor and middle class while providing no new jobs. All while weakening the competitiveness of American companies.
If you want to comment affectively on macroeconomic policy you would be better off not using anecdotal arguments.
KH: That article is very interesting. I’ve heard much about this new angle on behavioral economics on MPR recently. I think this paragraph explains the biggest duality in both American society and American politics:
“Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000? Assume for the moment that prices of goods and services will stay the same.
Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have. How irrational is that?”
Our tax code totally favors those who want as much as they can get, even if it is at the expense of the vast majority of the population. And it necessarily works to the detriment of those who would rather have the $100,000. I certainly fall into that crowd. I could care less how much anyone else has, as long as I have enough to live a full life, free of debt up to the eyeballs for basic goods.
In defense of the “protectionist” methodology, I must say one part of the argument is usually left out when the free traders jump in. That is, there is more to the dollar than the product it is exchanged for. Poverty is the ONLY reason the impoverished don’t care where their goods are made and who they are made by, under what circumstances. It has to be about more than the cheapest price. It has to be about jobs, quality, safety, and affordability. This is the essential problem of weak-state economic practices: that working conditions, safety protections, and price control go out the window. No strong state system will be perfect, but clearly better for the majority of people than what we are doing now.
LB
The same natural, hard wired reaction people have that have them answer they would rather earn more than others even if in real dollars they would ear less is the same thing that causes us to be concerned about the gap between rich and poor rather than simply providing a safety net for everybody. Rather than care about the differences between peoples incomes and punish those at the top we should figure out a way of ensuring everybody is provided the basics they need. The term “basic goods” is one we should be working to come to an agreement on.
I’m not sure how you come to the conclusion that our current tax code favors those who desire to have higher incomes so will ask for clarification on that point. The tax code shouldn’t favor anybody because if it does it will be used to reward people for their political support, not for economic efficiency.
Poverty is not the only reason a person would not be concerned about the cost of goods. If that were true those with middle or high incomes would only buy products from, “good sources’ however that would be defined. Of course, they don’t. The lower a person’s income the fewer choices they have and the more we restrict their choices through regulation the worse off they will be.
The reason protectionism/isolationism looks appealing is that as Americans we have held huge percentage of the worlds wealth for a long time and don’t want to share. Even the poorest among us have more wealth than a majority of the worlds population simply by having emergency rooms police departments and large amounts of safe water. Unless we plan on working to keep the majority of the world impoverished forever our position on the planet will have to change. Not allowing people in other countries to compete for our jobs is immoral and in the long run will be bad for our country while creating nothing but animosity abroad. Plus there is nothing we can do about them producing what we produce and selling it to the same countries we are selling it to. In the end equalization between countries will happen and that will bring equalization of conditions more quickly than the “We can force them to do it because we are the United States” method. The only way we can or deserve to stay ahead in the world is with the innovation that comes from open market.
The fact is we have very strong state control of our economy even if it isn’t controlled in the way you prefer and is the cause of the problems we have not the solution. Strong state control will always be primarily influenced by a fewer, more powerful group of people than could possible influence an open market. Hell, not even half the population votes and when they do it matters less to what happens than how they spend their money. Try this exercise: find one thing with economic impact you can do that is not regulated, as either consumer or producer. As far as I can tell there are exactly zero.
p.s. this is a great presentation of how to look at information that is somewhat related to what we were talking about. http://www.ted.com/index.php/talks/view/id/92
kathy,
Your thinking is wrong because corporations have not, in fact, received tax breaks. The corporate income tax in America is still 35% and that is the highest rate in the industrialized world.
KH,
I think you understand economics pretty well. But I highly object to your characterization that the Bush Administration promotes Keynesian economic philosophies. See below.
Richard,
Keynesian economics has failed over and over again. The most recent era of Keynesian economics was the late 1970s under the Carter administration. Remember the double digit unemployment, interest and inflation rates? Remember stagflation? If you want to go back to the Carter years, be my guest but please leave me the hell out of that.
LB,
The WSJ article is not slanted. What you have failed to grasp is that lower income Americans don’t pay income taxes. Most low income families actually get money back from the earned income tax credit. I agree with taking lower income Americans off the income tax roles. The problem becomes when fewer Americans are paying income taxes that they feel like they can go and demand even more from those paying taxes and that is wrong.
P.S. LB,
The war is less than 5% of our nation’s budget. So if you think you’re paying too much in taxes, it isn’t because of the war.
Second, people are taxed on the first $90,000 for Social Security. They receive benefits in the future based on their income and what they have paid into Social Security over the years. Why should someone be taxed at over $90,000 unless Social Security is going to turn around and pay them the extra benefits down the road? Social Security isn’t broken because people aren’t paying enough into the system. It’s broken because Social Security is a ponzi scheme which depends on having more people paying into the system than collecting the money. When the baby boomers retire, there won’t be enough people paying in to keep the system solvent.
As for your famous musician friend, I just hope he’s not a liberal. It would be pretty hypocritical to advocate for raising everyone else’s taxes while taking advantage of the tax code to get out of paying his own fair share. The problem with the tax system is the tax code, which is designed by special interest groups not to ensure sufficient tax revenues and sound economic policies.
In fact Bush’s policies are very Kynesian.
This represents a grotesque misunderstanding of either Keynesian economics or Bush economics or economics in general. JMK performed as a result of aggregate demand or total demand. He looking at the whole big world stage when he developed the Grand Theory. On a small business to business scale, free market capitalism works fabulous. Joe’s hardware vs Stan’s hardware. They have to compete and prosper so they can’t undercut the other on prices so far that they run big losses in order to put the other out of business. They compete for a few percentages. Over the course of time, were you to chart this, it would show at various times one doing better then the other but they both benefit from the competition. What a fabulous system. On a macro economic level though this system breaks down. The natural result is a very small percentage of the population controlling a very large percentage of the wealth. The vast majority of people living in servitude and poverty. JMK thought a strong and prosperous middle class could provide the engine for profits and maintain a more equal distribution of wealth. To this end, and this is very elementary, government stays out of business as much as possible. When the economy starts underperforming, government can step in by running a deficit but, and this is the important part, targeting tax breaks for the middle class. When the most of us have a little more money in our pockets, we spend it. This increase demand for products and the economy fires up again. Bush’s tax cut for the wealthy did nothing to grow jobs. Remember the “jobless recovery”. Now we’re edging toward recession again barely out of the last one. Median family incomes still haven’t recovered. But the wealthy, that top 1% has done great. 23,000 jobs gone from the state in the last 6 months and Republicans have been in charge for the last 8 years. Coincidence? I don’t think so.
What should Government do about it?
Balance the budget, de-militerize the economy, and let business get back to the business of doing business. Oh yeah, massize tax increases on the wealthiest 1%. But that’s just for the fun of it.
Sorry, massive, not massize. I have no idea what massize is but it ought to be a word.
I agree that massize ought to be a word.
The fact that both Chris and Richard thought my opinion of Bush being somewhat Kynesian is abhorrent makes me think more than ever that I may be on to something.
I only thought of that because of the fact that Bush’s tax cuts provided a larger cut in taxes to the middle class than the upper class as a percent of their income. True, not as a straight dollar amount but even so it created and more progressive income tax rate than was in place before the cuts. Bush also spent, and continues to spend billions more through the federal government than were spent before he took office. Most of which is paid out through “middle class” jobs even if those jobs are in defense, security or other programs I am not a fan of. It is not so easy to say that the tax cuts did not grow jobs however. It is quite possible that job losses could have been much greater without the cuts. For an economy the size of ours, intertwined withe the rest of the world, 10 years is to short a time frame to make a valid judgment.
While an open market will result in a large variation between the wealthiest and the poorest it also provides the most total wealth to be had. A system controlled by a central government will result in even a smaller percentage of wealthy with a working class that is even worse off. That is our current system. One in which business is motivated to manipulate the power of a strong central government to their advantage and politicians are motivated to coddle special interests for theirs. The only way to stop the problems both Chris and Richard are most concerned with is to eliminate the ability of government to favor one group or business over another.
I still await somebody who claims that we are not over regulated, a bigger issue to me than the tax rate, to tell me of one economic action a person can take that is not subject to government oversight.
Off topic but noteworthy. I saw an amazing band tonight at First Ave called “A Night in the Box”. Any group that can rock out with a mandolin, violin and or banjo is cool in my book.
KH,
A Keynesian economist would never agree with lowering tax rates, increasing personal exemptions, eliminating the marriage penalty, increasing child tax credits and phasing out the estate tax. Most of those ideas come out of supply siders like Milton Friedman, who was a student of John Maynard Keynes. Interestingly, Friedman won a Nobel Prize in economics while Keynes did not.
I agree with you that regulation is also a drain on the economy. Tax rates and regulation go hand in hand. Recall the Carter years where not only were we highly regulated, we had high taxes and stagflation.
Richard,
I have an idea, let’s pass a law allowing the government to raise the tax rates to 70% for anyone named Richard.
http://www.bluestemprairie.com/
Go to Blue Stem Prairie for a good read on what Minnesota’s other freshmen congressmen are saying about the economy. Includes excerpts from the Congressional Record.
The fact that both Chris and Richard thought my opinion of Bush being somewhat Kynesian is abhorrent makes me think more than ever that I may be on to something.
No, it just means you’re so wrong, even an eight year old like Chris, can figure it out.
I only thought of that because of the fact that Bush’s tax cuts provided a larger cut in taxes to the middle class than the upper class as a percent of their income.
The key element to the Keynesian model is “targetted” tax cuts middle class and some slight, very temporary deficit spending by the government. The wealthy don’t need any help nor do they add any real energy to the economy
The outline of our theory can be expressed as follows. When employment increases, aggregate real income is increased. The psychology of the community is such that when aggregate real income is increased aggregate consumption is increased, but not by so much as income. Hence employers would make a loss if the whole of the increased employment were to be devoted to satisfying the increased demand for immediate consumption. Thus, to justify any given amount of employment there must be an amount of current investment sufficient to absorb the excess of total output over what the community chooses to consume when employment is at the given level. For unless there is this amount of investment, the receipts of the entrepreneurs will be less than is required to induce them to offer the given amount of employment. It follows, therefore, that, given what we shall call the community’s propensity to consume, the equilibrium level of employment, i.e. the level at which there is no inducement to employers as a whole either to expand or to contract employment, will depend on the amount of current investment. The amount of current investment will depend, in turn, on what we shall call the inducement to invest; and the inducement to invest will [p.28] be found to depend on the relation between the schedule of the marginal efficiency of capital and the complex of rates of interest on loans of various maturities and risks.
From Chapter 3 of the General Theory
It starts with demand for goods. If that spark doesn’t fire, investment doesn’t matter.
Bush also spent, and continues to spend billions more through the federal government than were spent before he took office. Most of which is paid out through “middle class” jobs even if those jobs are in defense, security or other programs
Military spending provides a small sector of the economy with some increases but it’s analogous to taking your money, putting in a coffee can, and burying it in the back yard. For example, if the government spends money building a military transport plane, that plane does it’s job but makes no money. If the government spends it’s money and builds a 747 passenger plane, that plane makes money. That plane transports businessmen and women from place to place and commerce ensues. Our economy has fallen victom to exactly what Eisenhower was warning us about in his farewell speech.
Military spending at current levels is simply no longer sustainable.
I still await somebody who claims that we are not over regulated
We aren’t. There I said it.
Off topic but noteworthy. I saw an amazing band tonight at First Ave called “A Night in the Box”. Any group that can rock out with a mandolin, violin and or banjo is cool in my book.
Sounds like a variant of the Flecktones. Currently my favorite music is from a group no longer together but back in the day, they were monsters, Hubert Von Goisern and Das Alpinekats. Straight up 4/4 Austrian folk music played by a ridiculous rock band. Afro-cuban rhythm section and yodeling. Nothing could be better.
Bob Olson just issued another sttement to Bachmann’s office to apologize for her recent statements. Apparently Bachmann is doing some Image Damage Control over this for tripping over her overly large tongue.
All the while, Bush and Bachmann have been telling peeople how great the Economy is and that Minnesota is basically recession proof!!! Now I am reading about an Economy Stimulus Package!! What is it?? The Economy is actually tanking and this is the GOP’s way of saying so???
Richard,
When Jimmy Carter (aka Mr. Stagflation was President), the top rates were 70% and the top 1% paid only 19% of all income taxes. Today the top 1% pay 39% of all income taxes. I know how envious you are of the rich and how you want to soak them even more, so if you want to soak the rich, cut rates even more.
kathy,
I’ve noticed a pattern from you. Any time a Democrat sends a press release out of their campaign or congressional offices, you take it as the gospel truth. Don’t you ever read a newspaper or watch news on television to see there is more to the story than a press release?
The top 1% control 80% of the wealth in this country. Your stats point exactly to the problem since the criminal Reagan was president the gap between rich and poor has grown enormously. Carter has won a Nobel prize though, so he and Al Gore must be heros of yours. We are heading back to a feudal society where the rulers will demand servitude and poverty of the ruled.
I have to retract or amend or correct or whatever my previous post. Didn’t get it quite right.
In the United States, wealth is highly concentrated in a relatively few hands. As of 2001, the top 1% of households (the upper class) owned 33.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 51%, which means that just 20% of the people owned a remarkable 84%, leaving only 16% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth, the top 1% of households had an even greater share: 39.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2004).
From another source
The wealthiest one percent of households now controls about 38 percent of the national wealth, while the bottom 80 percent control only 17 percent.
So let’s couch this arguement in terms of assets.
The huge stock market gains achieved during the past decade were similarly concentrated among the richest households. Nearly 35 percent of the gains went to the wealthiest one percent of households over the past 10 years. Only 2.8 percent of the total went to middle-income households.
I’m going to go out on a limb here and say the wealthiest 1 percent are grossly underpaying into a system that has allowed them to make obscene profits.
“the wealthiest 1 percent are grossly underpaying into a system that has allowed them to make obscene profits.”
Grossly underpaying….. obscene profits….. those are some serious claims.
You cite interesting statistics. Ones that should surprise nobody. Some accumulate wealth at faster rates than others, and end up with a bigger slice of the pie. But think about this: If you have more of the pie because you, through your efforts, helped make that very pie larger, shouldn’t you be rewarded?
My experience is that when someone ends up with $100 million, that along the way they more than likely created jobs for others, added to school and local tax bases, and were philanthropic. Lets not paint these people as purely evil. There are exceptions to the rule as with any argument, of course.
What we should be careful of isn’t where the wealth resides, but rather if we have a system that has mobility for people to move from the bottom 20% to to the top 1%. It isn’t easy to do, nor should it be, but if you have the talent to create serious wealth, you should able to.
That is the name of the game — preserving class mobility. Not create class equality.
Richard,
You mentioned Carter’s Nobel prize. His administration was the criminal one, Richard. Apparently you’ve forgotten about 21% interest rates, double digit inflation and double digit unemployment rates. Apparently you’ve forgotten about stagflation. And, perhaps worst, you’ve forgotten that it was Carter’s administration that did nothing to prevent the radical Shi’ites from taking over Iran. Prior to the Ayatollah, the prevailing religion in Iran was not Shi’ite Islam but Zoroastrianism. Prior to the Ayatollah, there was no Hezbollah, which killed more Americans than any terrorist until 9/11.
P.S. Richard,
You mentioned the stock market gains of the last decade. If we allowed Americans to put more of their money into the markets and less of their money into the ponzi scheme called Social Security, maybe more people would be sharing in the wealth you so decry. Take a look at your Social Security statement sometime and see how much you’ve paid into the system. Compare that to what the markets have done over a lifetime and you will see why government control of wealth and assets is such a rip off.
Richard,
You gave your opinion that we are not over regulated but failed to give an example of one economic action that is not currently regulated.
As for Keynesian ideas the core problem I see is that it pretends that there needs to be a “spark” or that demand is the driver. For anything to mover there needs to be both supply and demand. One is not greater than the other. It is that belief that leads, I think, to the other disagreements.
The idea that we are over regulated is ridiculous. Remov