VOLCKER SPIN FREE OVERSEAS: Obama Spending 25% of GDP And Must Be A Massive New Tax to Cover It

NEN ^

[Pacothecat]

SPIN FREE OVERSEAS: Volcker Explains Obama has Raised Spending to 25% of GDP And There Must Be A Massive New Tax to Cover It

http://www.breitbart.tv/volcker-revelation-stiff-new-tax-needed-to-cover-obama-spending-at-25-of-gdp/

Naked Emperor News

[The Duke]

Obama Spending 25% of GDP And Must Be A Massive New Tax to Cover It

Not if the spending is halted.

[COBOL2Java]

It's all good. Once we're all wards of the state, ObaoMao will print all the money he needs. Then, we'll pretend to work, and they'll pretend to pay us.

[anniegetyourgun]

http://www.google.com/hostednews/ap/article/ALeqM5g7ffRdswXTlfgaQS0FCOZmrvbwcAD9FRGHIG3

[updatedscreenname]

0’s plan is to inflate the way out.
Only need the fed and treasury to print money.
It is still a tax, stealing from those that have saved,
it is a reward on those that are in debt.

Spreading it around, don’t ya know.

[kara2008]

[Mad_Tom_Rackham]

BOHICA

[WackySam]

BOHICA

WTKY

[4Speed]

Now wait a Minute, instead of Taxing UP the Government revenues, we could also....maybe,,,possibly CUT GOVERNMENT agencies and dead weight Govt. employees ? ? Huh ? Hello, jelloooooo, yeah, I think that is another option.

Sure. I like it, CUT you know who before they Tax you know who.

[schu]

Volker is correct with his points that there is a serious shortfall in revenue (still about 18% of GDP), and it is because the spending has increased from historical standards (over 25% of GDP) that we have massive government deficits. He believes the only option is a tax since the spending cannot be reduced.

There of course are problems with this:

1. Government will not reduce spending for the revenue stream, they will always find a way to spend more.

2. Taxes seldom generate the income stream desired

We have reached the point of diminishing returns.

1. More debt creates far less economic activity than 40 years ago (.20 on the $ vs .9 on the $$).

2. Government taxes reduce economic activity by a factor of at least 2, raise taxes $1, get $2 less economic activity per C Romer, Obama's economic team).

3. More government spending reduces economic activity and allocates this activity to non productive areas, ie we waste the money. Borrow money to go to the doctor or buy groceries?

We have to take the medicine, the sooner the better. Balance the budget now, or it will be balanced for us later, on terms we will find far less appealing.

schu

[griswold3]

When every additional dollar of production brings a higher tax liability, and every forgone dollar of income “earns” additional government benefits, tax revenue will hit the wall. Every additional
tax will lead to even less revenue. This is why they need to get a hold of your fixed expenses
for services that you need. Or will be forced to need. Like heathcare insurance payments. Next
is your 401K. Then perhaps your mortgage payment (Uncle Sam owns it anyway, right?)

All these are really just taxes which the government can spend immediately and can be ponzied
into more borrowing through intergovernmental IOU’s, just like Social Security.

[sportutegrl]

First he says that no matter what the tax rates are, the revenue derived stays the same, (about 18-19% of gdp). Then he says we need to raise taxes. Cutting spending is off the table, apparently, as is LOWERING THE TAX RATE WHICH RAISES THE GDP so you can collect 19% of a higher GDP.

Oh, and the whole time he is giggling like a schoolgirl. I wish I was a Mord Sith and had him alone for five minutes with my ageal.

[givemELL]

Hauser’s Law: It is impossible to collect more than 19.5% of the GDP in taxes, no matter how the pie is sliced.

http://en.wikipedia.org/wiki/Hauser%27s_Law

With state and local taxes in the tank also for the last couple of years, growing numbers of state insolvencies, public pension fund collapses coming ($3.35T shortfall), reduced April 15th 2010 tax receipts as in 2009, the idea that increased taxes are collectable in any additional amounts is extremely doubtful.

FURTHER DEBT RUNS US FURTHER INTO THE GROUND perhaps beyond the reach of future historians ability to find us. Obama wants to set records. He is setting them.

[pankot]

For those of you too young to remember: Volcker pretty much gave us a recession under Carter. 20% plus prime rates, no jobs, no credit. Yeah, he’s a great asset to Bozo.

[palmer]

Then perhaps your mortgage payment (Uncle Sam owns it anyway, right?)

Yes they do. I was surprised to find out last year that Freddie had bought my mortgage from Citi. The purchase was probably not much more than a way to pump money into Citi and thereby into the stock market. So for now the government has profligate and inflationary ways to extend the Ponzi, but once those run out (inflation becomes ridiculously obvious and the bond vigilantes rise from the grave), they will have to turn around and start sucking blood from stones (we are the stones).

[palmer]

Some people may be too young to remember that Burns (Nixon) and Miller (Carter) were loose money Keynesians who completely trashed the dollar which was rescued by Volker who was only reluctantly appointed by Carter. Recession was absolutely 100% necessary and inevitable to remove the previous malinvestment and other excesses just as it is now (while Bernanke does the opposite).

[palmer]

Here's a bit of history for you to read: http://old.nationalreview.com/nrof_bartlett/bartlett200406140846.asp

[cherry]

you first Volker you weasel!

[cherry]

" Balance the budget now, or it will be balanced for us later, on terms we will find far less appealing.

I beg for someone to tell me what will it be that is "far less appealing"?

[cherry]

I remember Volker being the stand up solid guy for Reagan....

that was then and this is now....

where is the "solidness" now?.....why not just come out and say...CUT THE BUDGET!...but I forgot....we don't have a budget do we....