Posted on 07/24/2010 5:14:25 PM PDT by Sub-Driver
Treasury Secretary Says Letting Bush Tax Cuts for Rich Expire Will Not Slow Economic Growth
July 24, 2010 6:00 PM
In an exclusive interview on ABC News’ "This Week" to air Sunday, Secretary of the Treasury Timothy Geithner said the White House would push to let the Bush tax cuts expire for individuals making more than $200,000 a year and families making more than $250,000, but keep them for middle and lower income Americans.
“We think that's the responsible thing to do,” Geithner said, “because we need to make sure we can show the world that they're willing as a country now to start to make some progress bringing down our long-term deficits."
ABC News pointed out that Alan Greenspan, former chairman of the Federal Reserve, told Bloomberg News that letting the tax cuts expire -- which the former Fed Chair supports -- would “probably” slow growth, “but I think we have no choice in doing that, because we have to recognize there are no solutions which are optimum. These are choices between bad and worse.”
(Excerpt) Read more at blogs.abcnews.com ...
Fifteen posts before the most obvious solution to gargantuan deficits shows up, thank you!
This is being discussed in the context of what a Lame Duck Congress MIGHT attempt to do after the November elections.
My guess is that the Dhimmies are going to be so demoralized after the ass-whoopin’ that’s coming, that they will vindictively fail to bring any extension to the floor and will just let them all expire to stick it to all of us Tea Party people in flyover country.
Bet me.
NO ..It will kill it...if there were a recovery..which there isnt.
How about REDUCING SPENDING, Timmy?
choices between bad and worse..
... Is that TEA I smell brewing?
Is there anyone who does not believe that nobama and his minions are purposefully attacking the American system? What anti-American trash nobama and his ilk are.
Thanks for making it clear that whatever these rulers say, the opposite is true.
I feel like I'm living an episode of Star Trek where the shields are down and will be for the next two years, plus, the Klingons (not to be confused with bitter clingers) are on board as well.
I can't wait for November to come when we might, just might, get the shields restored somewhat. Getting each and every ratbastard off the ship will encompass the next two years when we finally seat the new Star Fleet Commander.
If that doesn't happen, then Scotty has to follow the directive: Blow the Enterprise to bits. If it ain't America anymore, it's a decoy. Screw their little duck-hunt.
Get rid of federal spending send it back to the states...we send them a dollar we get back 50 cents
In other words, we need to backtrack all the way to 1787, and reject the Constitution.
Slowing, no or negative, growth seems to be an economic priority of the ZerO administration.
Well, I’m not rich — does that mean taxes won’t go up on dividends and capital gains (if any) for me next year?
And Democrats will pick “worse” every time. The only bright side?? Democrats and socialism will get the blame this time, finally; Not Bush, not McCain, not Republicans, not free marketers; voters will blame democrats for this disaster..
In some ways this tragedy was necessary. Not that it was all his fault, but Bush left office giving the popular perception that capitalism and supply side does not work and only mommy government can save us. The democrat myth is Clinton tax increases saved the economy and Bush tax cuts destroyed it.
The reality is that Bush believed in a form of mommy government too. But he was a corporate-socialist, where-as Obama is a socialist-corporatist(different order, both progressives) . So it will take Obama’s show-casing the failure of democrats economics to reverse that damage that was done prior to Obama.
Let him raise taxes. He owns his crappy economy. It's our job to make it hurt democrats!
Who is the 'they' in 'they're' that are going to show the world they are 'willing'?
The rich? Is that who 'they' are? If it is the 'rich', how is taking money under the threat of duress a 'willing' act that is going to show the flippin' world anything?
Just come out and say it Tim - "We are going to take even more of your money to pay for our social experiments. We are going to redistribute the 'wealth'".
I have heard rumors that the Dems are not necessarily all that upset about the Republicans taking over the House. That way, they can blame everything for the next 2 years on Republican obstructionism! They still think Obama can win a second term - heaven help us!
What is truly ironic is that we lose no matter what course of action the politicians take. If they cut taxes, the economy will boom, and tax revenue will increase. The problem with that is they will just spend more, and Republicans are just as guilty of bringing home the pork as Dems are. Government keeps growing.
If taxes are high and the economy stagnates, we get rid of the Democrats, but are stuck with a lousy economic situation. No matter what the politicians do, we are tooled.
In other words, can’t we just tell them all to go home and stay there?
The great Arab historian Ibn Khaldûn (1332-1406) clearly anticipated the Laffer Curve. While most of his political enemies regarded Ronald Reagan as an ignorant fool, Reagan actually majored in economics in college and long remembered Ibn Khaldûn’s wisdom. Supply Side economics was nothing new to him.
It is thus of some interest to quote the full explanation than Ibn Khaldûn gives for his assertion:
It should be known that at the beginning of a dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.
The reason for this is that when the dynasty follows the ways of Islam, it imposes only such taxes as are stipulated by the religious law, such as charity taxes, the land tax, and the poll tax. These have fixed limits that cannot be exceeded.
When the dynasty follows the ways of group feeling and (political) superiority, it necessarily has at first a desert attitude, as has been mentioned before. The desert attitude requires kindness, reverence, humility, respect for the property of other people, and disinclination to appropriate it, except in rare instances. Therefore, the individual imposts and assessments, which together constitute the tax revenue, are low. When tax assessments and imposts upon the subjects are low, the latter have the energy and desire to do things. Cultural enterprises grow and increase, because the low taxes bring satisfaction. When cultural enterprises grow, the number of individual imposts and asssessments mounts. In consequence, the tax revenue, which is the sum total of (the individual assassments), increases.
When the dynasty continues in power and their rulers follow each other in succession, they become sophisticated. The Bedouin attitude and simplicity lose their significance, and the Bedouin qualities of moderation and restraint disappear. Royal authority with its tyranny and sedentary culture that stimulates sophistication, make their appearance. The people of the dynasty then acquire qualities of character related to cleverness. Their customs and needs become more varied because of the prosperity and luxury in which they are immersed. As a result, the individual imposts and assessments upon the subjects, agricultural labourers, farmers, and all the other taxpayers, increase. Every individual impost and assessment is greatly increased, in order to obtain a higher tax revenue. Customs duties are placed upon articles of commerce and (levied) at the city gates. Then, gradual increases in the amounts of the assessments succeed each other regularly, in correspondence with the gradual increase in the luxury customs and many needs of the dynasty and the spending required in connection with them. Eventually, the taxes will weigh heavily upon the subjects and overburden them. Heavy taxes become an obligation and tradition, because the increases took place gradually, and no one knows specifically who increases them or levied them. They lie upon the subjects like an obligation and tradition.
The assessments increase beyond the limits of equity. The result is that the interest of the subjects in cultural enterprises disappears, since when they compare expenditures and taxes with their income and gain and see the little profit they make, they lose all hope. Therefore, many of them refrain from all cultural activity. The result is that the total tax revenue goes down, as individual assessments go down. Often, when the decrease is noticed, the amounts of individual imposts are increased. This is considered a means of compensating for the decrease. Finally, individual imposts and assessments reach their limit. It would be no avail to increase them further. The costs of all cultural enterprise are now too high, the taxes are too heavy, and the profits anticipated fail to materialize. Finally, civilization is destroyed, because the incentive for cultural activity is gone. It is the dynasty that suffers from the situation, because it profits from cultural activity.
If one understands this, he will realize that the strongest incentive for cultural activity is to lower as much as possible the amounts of individual imposts levied upon persons capable of undertaking cultural enterprises. In this manner, such persons will be psychologically disposed to undertake them, because they can be confident of making a profit from them. [’Abd-ar-Rah.mân Abû Zayd ibn Khaldûn, The Muqaddimah, An Introduction to History, Franz Rosenthal translation, abridged and edited by N.J. Dawood, Bollingen Series, Princeton University Press, 1967, pp.230-231]
While Ibn Khaldûn was writing about the cycle of dynastic governments with which he was familiar in Mediaeval North Africa and Spain, the same dynamic applies to democracies, where politicians seek to obtain votes by bestowing benefits from the public purse. Indeed, the motive to abandon productive “cultural” activities will be stronger in a democracy, since it quickly becomes apparent that profit can be obtained more easily from political activity than from economic production, when economic activity itself is burdened with increasing taxes, mandates, and regulations. This dynamic is explored by modern Public Choice economics. Thus, the productive are despised (as the greedy and grasping) and burdened, while the unproductive are celebrated (as noble victims or disinterested public or cultural servants) and supported.
It is especially noteworthy that Ibn Khaldûn identified the period of low taxes as one in which the “ways of group feeling” predominate. These days, collectivist ideologies of “group feeling,” like communitarianism, support the idea that the productive have a duty to support the unproductive, promoting a regime of high taxes and high vilification against the productive themselves. But, as noted elsewhere, a welfare regime of the rent-seeking and unproductive promotes a kind of malignant individualism that is impossible under laissez-faire capitalism. The political benefits bestowed on the unproductive are rights which require no agreement or good will from others, and which can be demanded without civility or consideration. Ibn Khaldûn’s wisdom thus is conformable with this greater insight, that true community attends low taxes and respect for the property of others, not the high taxes and confiscations of a regime of parasites, whether dynastic or democratic.
http://www.friesian.com/sayslaw.htm#note-0
“Let him raise taxes. He owns his crappy economy. It’s our job to make it hurt democrats!”
Rid the system of them as well.
GW apparently believed, like his father, that supply-side economics is ‘voodoo economics’. He kept the ‘mixed’ economy status quo going.
You knew however just exactly what you were getting with him. He knew his limitations.
The former.
“Will Not Slow Economic Growth “
It will speed it up in fact .. just in REVERSE!
Can’t these people be removed in any way for gross incompetence? The whole lot of them?
I know that this is all deliberate, it has to be, NO ONE can be that stupid and be elevated to such positions. It just can’t happen.
But still lets give them the benefit of the doubt and say that they are just so far over their heads that they need a step ladder to see the bottom of the hole they have dug.
Our treasury secretary is an economic moron. And a crook, to boot. Vote conservative. And praise the Lord.
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