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$1 Billion for air: Bush, war, budget, tax cuts(35 posts)

$1 Billion for air: Bush, war, budget, tax cutsMe Dot Org
Mar 25, 2003 11:35 AM
The budget addendum submitted by the Bush administration:

$63bn for the war itself (which I understand breaks down to 1 month of actual warfare a additional months of troops in-country.

$53bn will go towards the deployment of troops, $5bn to replenish weapons and $1.5bn in payments to Pakistan and others, and unspecified classified expenses, most likely for the CIA.

$8bn for international aid and relief -
Iraq gets $3.5bn ($2.5bn in a relief fund and much of the rest for oil field repair). The rest goes to Jordan, Israel, Pakistan, Egypt, Afghanistan, the Philippines, Colombia and some eastern European countries.

$4bn for homeland security.

$1 billion to Turkey, for using their air.

First of all, does anybody NOT think the Administration is lowballing the cost of things?

The United States has the greatest gap between rich and poor since the 1920's. Yet the adminsitration proposes HUGE tax cuts that primarily benefit the wealthy, at the same time our deficit will reach $400 billion. The interst on the debt alone will be crushing.

During WWII, the income tax rate on the wealthy was 90%, and yet we still managed to become the economic colossus of the world.

I find the combination of deficits and tax cuts to be incredibly irresponsible, to put it mildly.
Study says $1 trillion already, and much more to come.Silverback
Mar 25, 2003 12:00 PM
One study, from Stanford, says the war has ALREADY cost a trillion dollars if you factor in everything it's affected. The idea that Bush would ask--and Congress would grant--that huge tax cut at a time like this is just unbelieveable. Only explanation I've seen that seems to make a little sense is that when there's no money left, a lot of the programs conservatives have hated for years, from welfare to job training to Social Security and Head Start, will "regrettably" have to be cut in the interest of national "defense." And there are new reports that last few days that say as soon as we're solid in Iraq, they'll start putting on pressure to "democratize" Iran.
Shades of David StockmanMe Dot Org
Mar 25, 2003 12:41 PM
This was something he thought might happen as a result of the deficits of the 80's. We simply couldn't afford to fund certain programs.
Maybe we should just bomb shools & SeniorsAlpedhuez55
Mar 25, 2003 12:57 PM
THat is a load of bull you have posted since you said 9/11 was being used to cut your mothers Social Securtity a few months ago. This is just a knee jerk reaction to try to demonize Republicans using some very bad numbers. You can feel free to post your source though. With all the trouble in the world, I could use a good laugh.

I agree head start could be increased a little more than the current increasde which was just enough to keep up inflation. There are no programs being cut in direct result of the war. And most of what are being referred to as cuts are actually increases less than what the Democrats want. If anything we need to start looking at the budget in real numbers and not with the Fuzzy math that can call something that increases by 9% a 1% cut.

Mike Y.
I'll ask the same questionMe Dot Org
Mar 25, 2003 1:02 PM
At a time when we are running a $400 billion deficit, the gap between rich and poor is widening, do you think it is a good idea to give a tax break that primarily benefits the rich?
I think it's a good idea, & it's my job to think about this (nm)TJeanloz
Mar 25, 2003 1:05 PM
I'll ask the same questionAlpedhuez55
Mar 25, 2003 1:37 PM
Well, the tax break is an effort too stimulate the economy. It will encourage people to spend more or to invest into the stock market again and should lead more jobs.

As for it benefiting the rich, they make mor money. Most of the poor (more than 30% of the population) do not pay income taxes (Though old ed will say Social Security & Medicare are taxes but they are retirement and medical isurance). The cuts will benefit all taxpayers though.

We are also in a time of crisis. Many markets such as travel & tourism were hurt by 9/11. The Tech Market was taken out by Clinton's weapons of Mass Destruction. THe economy needs a boost. Hopefully there will a quick recovery and in a few years the surplus will be back.

I think the tax cuts are a gamble at this time as well. I think Bush should make more budget cuts. There is a lot of fat to be trimmed. He should also crack down on abuses in social security, SSI & welfare. THe tax cut could pay off if the economy starts to turn around. It is a risk but I think taking money away from government and into the taxpayers is always a good thing.

Mike Y.
Clinton shot the tech market?Me Dot Org
Mar 25, 2003 1:49 PM
The tech market shot itself. It was greed and unrealistic expectations. You think AOL/Time Warner was Clinton's fault?

I can't remember the week, but Excite and Volvo were sold in the same week. Excite sold for more than Volvo. It was then I knew the market had gone insane.
Clinton did everything. Everything bad, I mean.OldEdScott
Mar 25, 2003 1:55 PM
It's ALL his fault. Surely to God you have learned that by now.

I don't know what the Right would do without old Bill.
Clinton did everything. Everything bad, I mean.Alpedhuez55
Mar 25, 2003 4:11 PM
Clinton went after Bill Gates/Microsoft which started the tech market down turn. Yes stocks were over-valued. A better analogy may have been Clinton sent the stocks down on a free fall instead of with a parachute. I was working for a dot com when he did this.

As for 9/11. Clinton had at least three chances to take Osama Bin Laden into custody and turned them down. The worst was when they could have taken OBL & 100 loyalists when they were refueling in Quatar on his way to Afganaistan. Madeline Albright was wishing she had a mulligan on that one on Meet the Press last month. Could that have prevented 9/11? It very well could have. It at the very least would have been a huge set back to Al Queida.

Clinton was a disgrace to the office. There are steps he could have taken that could have helped prevent us being at war at this moment. He did not take them. Maybe if he spent more time being President rather than trying to "look Presidential", our country would be a lot better off right now.

Mike Y.
Thanks for making my point! HA HA HA!!! nmOldEdScott
Mar 25, 2003 4:23 PM
I guess you are still in denialAlpedhuez55
Mar 25, 2003 6:39 PM
How you feel I made your point is beyond me. Republicans do not need to demonize Clinton, he does a good job of that himself. His former Secretary of State did it last month. I think you are pretty out of touch on this argument. Clinton made a lot of mistakes oin the economy and even more in foreign policy. You seem to like to defend him almost blindly.

Here is the quote from Albright:

MR. RUSSERT: And we are back.
Secretary Albright, you mentioned al-Qaeda, Osama bin Laden. This is a New Yorker magazine article from the year 2000. Let me just show it to you. "In May of 1996, under pressure from the United States and Saudi Arabia, the Sudanese government asked bin Laden to leave, and he returned to Afghanistan permanently, accompanied by two military transport planes carrying some of his wealth, more than a hundred of his Afghan Arab fighters, his four wives. Between two and three thousand of his loyalists fanned out into Europe and across East Africa. ‘It was like sending Lenin back to Russia,' an American diplomat said. ...‘At least in Sudan we could indirectly monitor some of his activities.'"
Osama also stopped in the country of Qatar to refuel with his planes, and we could have apprehended him then. Was it a mistake to let Osama bin Laden leave Sudan or at least not apprehend him in Qatar on his way to Afghanistan?
MS. ALBRIGHT: Well, as I understand it—and I was ambassador to the U.N. at the time—was that, basically, we felt that he was too intricately involved with some of the activities in Sudan, which was a major issue for us, and that it was better to get him out of there. Obviously, in hindsight, one would wish that some other action had been taken. But for the most part, that was the decision made on the basis of information at that time that he was playing the terrorist game there and that there had, in fact, been terrorist activities. As you know, there was an attempt on President Mubarak's life that came out of that area, and that it was probably better to move him out.
MR. RUSSERT: But why not capture him, apprehend him when he was refueling in Qatar?
MS. ALBRIGHT: I can't answer that question.

http://www.msnbc.com/news/870638.asp
---------------------------
Hindsite is 20/20. That should have been a no brainer.

Mike Y.
You guys kill me. "Clinton, Clinton, Clinton" HA HA HA HA HA!OldEdScott
Mar 25, 2003 7:18 PM
He just drove you crazy because he always beat you like a drum. And if he could run again, he'd beat you again. Get a life, man. You got your president now, and he's doing a bang up job. A GREAT job. Enjoy! Get the Clinton monkey off your back! You've earned a rest!
Too all bad his mistakes keep coming back to haunt us. nmAlpedhuez55
Mar 25, 2003 7:44 PM
Doesn't haunt me. I think it's just you!OldEdScott
Mar 25, 2003 7:54 PM
Like I say, live in the now. You've got yourself a fine, fine president, and life is good. Ain't no Clinton under the bed to scare you any more. Not till 2008, anyway! Yeeee haaaa!
CLINTON'S mistakes? It was Reagan who armed Saddamcory
Mar 26, 2003 9:15 AM
It's amazing to me how sharply some conservatives can focus back to 1992, but how fuzzily they see the events of 1980-92. Jimmy Carter had Iraq on the sh!t list. Reagan removed it and supported Saddam in his war against Iran. And Bush I was president when the U.S. encouraged Iraqis to rise against Saddam in 1991, then crawled out from under them and let him slaughter them by the thousands. Think this could have anything to do with their reluctance to stand against him today?
(Note to self: Stay out of Non-Cycling Discussions. Stay out of Non Cycling Discussions. Stay out of Non . . .)
What's good for General Motors is Good for the CountryMe Dot Org
Mar 25, 2003 9:52 PM
The tech market could not keep expanding exponentially. It was held afloat by Y2k spending. Blaming the fall of the tech market on the Microsoft anti-trust trial? I don't think so. You'd have to show me some proof.

I DO remember when Clinton retaliated for the African Embassy bombings, a lot of people were complaining that it was a "Wag the Dog" moment to take the heat off impeachment.

If Clinton is at fault for not taking out Bin Laden, I guess it wasn't a real good idea for Reagan give him arms back in the early 80's, huh? Maybe a HIND helicopter would have taken him out, and we would have never heard of him.

I'm not sure what any of this has to do with the economy.
obvious solutionmohair_chair
Mar 25, 2003 12:06 PM
Let's bring back the 90% tax rate on the wealthy. Those people suck, and it's all their fault anyway.

Oh, wait, what does wealthy mean? I may be wealthy and not know it. I need to know if I should bother showing up to work for the rest of my life.
The gap between rich and poor is wideningMe Dot Org
Mar 25, 2003 12:36 PM
does it make sense to give tax breaks that will primarily benefit the wealthy at a time we are running a $400 billion deficit?
Who benefits?TJeanloz
Mar 25, 2003 12:55 PM
It's an interesting question, about who benefits from a tax cut. I would be prepared to argue that while the direct benefit of a tax cut would be to the wealthy, the total benefit is to the economy on the whole. A poor man has never given me, or anybody else, a job.
Sure he does!OldEdScott
Mar 25, 2003 1:24 PM
A poor man gives jobs to policemen, prison guards, social workers, slum landlords, you name it, many, many jobs.
Simple answer:Me Dot Org
Mar 25, 2003 1:35 PM
It takes as many people to manufacture a Chevy as a Cadillac. Translation: You employ more people making 40,000 Chevys than 20,000 Cadillacs. Your margin on each unit is lower, but you still make a lot of money.

We have overcapacity in this country. If you make a tax structure that helps the lower and middle class, we can expand production.

Tax cuts for the wealthy free up capital for investment when money is tight. Interest rates are low right now, tight money is not the problem.
It's hard to offer a tax break to the poorNo_sprint
Mar 25, 2003 1:05 PM
They don't pay any as it is. The top wealthiest people are so vastly outnumbered in this world that I believe they only flip 5% of the total bill. The millions and millions of middle class pay most simply because of the sheer numbers.

Perhaps we should tax more stuff huh? I will site an example of the benefits reaped in doing so. In an oversimplified nutshell, the luxury tax imposed on luxury items such as yachts, in effect forced the rich to hold more their money they might spend on things such as a yacht, they held that money out of the economy. They didn't buy their yachts in the numbers they were prior. Most of the old, small boatbuilders that were located mainly in New England were forced on to hard times and shut down. I believe around 200 were shut down. Furthermore all the collateral industries that support and are part of yachting were hurt as well. Marinas, upholsterists, supplies and goods manufacturers were all hurt.

All in all, and I don't remember the numbers, the tax industry ended up costing millions rather than making millions.
ludicrousmohair_chair
Mar 25, 2003 1:07 PM
Whenever I hear about "the gap between rich and poor" I cringe, because it's a feel good political statement that isn't grounded in economics.

The wealthy aren't wealthy because they took it from the poor. It's not a zero sum game.

Does anyone really believe that the poor will become not poor by taking money from the so-called rich? That's idiotic, and basically Marxist thinking. Realistically, would even a 90% tax rate make the poor any less poor? Seems to me it would only make the rich less rich, but I guess that's what really is important. The gap would be smaller and everyone would then be happy. Right?

If you want to rephrase the issue in terms that make sense, maybe we can talk about it. I'll give you a hint: "wealthy" isn't a useful term.
what is ludicrous?Me Dot Org
Mar 25, 2003 1:45 PM
Spending money for schools so that poor people have the same employment opportunities as wealthy people? Does that make me a Marxist?

Progressive taxation makes me a Marxist? If so, there are very true "capitalist" countries in the world.

When American factories move across the border into Mexico, labor costs drop, profits increase, and jobs are lost. It's not a zero sum game, but it's close.
what is ludicrous?mohair_chair
Mar 25, 2003 1:56 PM
When companies move across the border to Mexico, jobs may be lost here, but jobs are gained in Mexico. I believe Mexicans as whole are much poorer than Americans, so by your own thinking, this can only be a good thing. Right?

The so called "gap" between rich and poor (which I say is of no real value or importance) is just as evident among nations of the world. In fact, on a grander scale, the northern hemisphere is far wealthier than the southern hemisphere.

Making Mexicans wealthier can only be a good thing, since they will buy more products from the USA. Ah, but they are probably not the poor you were thinking of. I'm sure you were only thinking of the wealthier poor living in the USA.
what is ludicrous?Me Dot Org
Mar 25, 2003 10:28 PM
The so called "gap" between rich and poor (which I say is of no real value or importance) is just as evident among nations of the world.

Here's a sample of bottom fifth vs. top fifth earnings in the industrialized world:

In Japan, the top 5th makes 4.3 times as much as the bottom fifth.
In Belgium, the top 5th makes 4.6 times as much as the bottom fifth.
In Germany, the top 5th makes 5.8 times as much as the bottom fifth.
In Canada and France, the top 5th makes 7.1 times as much as the bottom fifth.
In the United Kingdom, the top 5th makes 9.6 times more than the bottom 5th.

In United States, the top 5th makes 11 times as much as the bottom fifth.

Why do you say "so-called gap"? There's a gap, isn't there?

Not that I don't doubt the totally altruistic motivations of CEOs that close plants in the U.S. so that they can help poor Mexican workers. I'm sure they plowed their stock options back into health care programs for their Mexican workers. I'm sure most of them took pay cuts in sympathy for the workers they laid off. However, I'm not sure if you lost your job because your company moved your factory to Mexico, you would consider yourself the "wealthy poor". But let me give you another example:

In the 1990's there was a .30 correlation that if a CEO announced layoffs, company stock would go UP. Since most CEOs had stock options and incentives tied to stock performance, do you think it's possible a CEO layed off people to enrich his portfolio? NAH, if the 90's taught us anything, it's that CEOs never act out of greed and are always ethical...I WOULD call that a zero sum game: cutting people your company needs for short term economic gain. And I worked for companies where that happened.
gap will always widenDougSloan
Mar 26, 2003 7:21 AM
Say someone making $20,000 and another making $2,000,000 each make 10% more. The first guy is at $22,000, and the second at $2,200,000. The gap widened by $198,000, right? You can make the numbers say or imply anything you want. They either both grew at the same rate, or the "rich" gap widened by $198,000.

Doug
Because you don't understand the economics behind it...TJeanloz
Mar 25, 2003 12:52 PM
There's a giant smokescreen being erected by the Democratic party. The issue is the correlation between tax cuts and tax receipts -- Democrats make what they see as the obvious link, that lower tax rates will result in lower tax receipts. In fact, over the history of the Federal income tax, every tax cut, except one, has yielded higher tax receipts. If we use historical evidence, the question really should be, how can we expect to pay for this war without cutting taxes?

And on the flipside, increases in taxes have sometimes been disasterous -- notably the 1932 Tax Act that extended the Great Depression by nearly 10 years.

Furthermore, you apparently don't have a good grasp of the fiscal system: "our deficit will reach $400 billion. The interst on the debt alone will be crushing." Actually, the interest on the debt works out to about $60 per person per year -- but it's really much lower than that for the average person because of the progressive tax structure.
Because you don't understand the economics behind it...Me Dot Org
Mar 25, 2003 1:26 PM
I think you might look to the inequality of wealth in the 1920s, margin buying and specultation as contributing to the depression more that the tax policy of 1932. The tax structure of the 30's was largely carried over into the 40's and 50's.

One thing that happened in the 20s was that industrial capacity outstripped the ability of consumers to buy. In other words, labor wasn't getting enough money to buy the products they were producing.

The Unites States has enjoyed the healthiest economic times when the difference between rich and poor is compressed, not expanded. Those times have happened when the tax structure was more progressive than it is now.

The $400 billion dollar deficit is for one year. It does represent our entire deficit, nor the interest payments on it. $400 billion for a line item is nothing to sneeze at, not even for the U.S. And as you point out, you've merely calculated the interest payments, not what it costs to pay it off.

The cost of money is what business looks at before taking on borrowing in order to grow. Interest rates are low. You can borrow money, but it doesn't make much sense if we have overcapacity, and people aren't naking enough money to buy what you sell.

An economy with a wide disparity between rich and poor does not warrant a 'trickle down' tax cut.

And keep in mind, I'm not talking about increasing taxes, as your comments suggest, but merely maintaining the status quo.
"Margin buying and speculation"TJeanloz
Mar 25, 2003 1:59 PM
This ties to my biggest pet peeve, in that people in this country seem to believe that the economy and the stock market are one and the same. Buying on margin doesn't cause a drop in GDP. The stock market crash in 1929 was not a cause, but rather an indicator of, the economic condition that followed. I don't really know how to address any of your points, because I can't make any sense out of them.

"One thing that happened in the 20s was that industrial capacity outstripped the ability of consumers to buy. In other words, labor wasn't getting enough money to buy the products they were producing. "

Um, so the country was making too much stuff, due to increased industrial capacity, and this oversupply made things too expensive? More supply generally makes prices lower...

Because you don't understand the economics behind it...
I think you might look to the inequality of wealth in the 1920s, margin buying and specultation as contributing to the depression more that the tax policy of 1932. The tax structure of the 30's was largely carried over into the 40's and 50's.

One thing that happened in the 20s was that industrial capacity outstripped the ability of consumers to buy. In other words, labor wasn't getting enough money to buy the products they were producing.

The Unites States has enjoyed the healthiest economic times when the difference between rich and poor is compressed, not expanded. Those times have happened when the tax structure was more progressive than it is now.

"The $400 billion dollar deficit is for one year. It does represent our entire deficit, nor the interest payments on it. $400 billion for a line item is nothing to sneeze at, not even for the U.S. And as you point out, you've merely calculated the interest payments, not what it costs to pay it off."

The use of the word "nor" really confuses me, because there isn't a preceding negative statement. And the interest cost is the appropriate measure of the cost of the debt, because it doesn't ever really need to be paid back. If you're desparate to amortize the principle over 50 years, knock yourself out, but it won't really have an impact.

I also don't understand your overcapacity argument, and I'm not sure you understand it either. You argue that we have an overcapacity situation, and yet should strive to increase capacity.

And if corporate finance were so simple as looking at the cost of money, I would be out of a job. But you did a nice job of oversimplifying it anyways.

And, as a last question, what is wrong with income disparity? Assuming that the poorest are able to earn enough to live on, why does it matter what the richest make? It's not a zero sum game.
C'mon now, TJean, tell the WHOLE story.OldEdScott
Mar 25, 2003 1:34 PM
Obviously, cutting taxes, when they are at a certain high level that discourages investment, production etc etc, will increase revenues. BUT. Please admit this BUT: There's a point in the taxation curve at which lowering taxes WILL simply lower revenues. (Obviously. To take it to adsurdity, reducing taxes to zero cannot increase revenues).

The God's honest truth is, neither you no I nor Paul Volcker nor Keynes nor old Milt Friedman nor any economist at Harvard nor no-sprint or mohair_chair knows where that point is.
Of course,TJeanloz
Mar 25, 2003 1:42 PM
The above is, of course, true. The question is whether or not we are at that point.
My bet is that lower taxes = lower revenueContinental
Mar 25, 2003 2:43 PM
Much of any stimulation from a tax cut will be ex-U. S. In the U.S. production can be increased without much hiring or capital investment. It's amazing how few people it takes to run a factory now. Application of technology in manufacturing is even more dramatic than the smart bombs you see. There's no comparison to Kennedy cut in early 60's or Reagan in early 80's.

One problem with current financing of Fed and State Gov is that narrow segments of economy pay a disproportionate amount of taxes. Last year GDP was flat, but tax revenues dropped 10%. If we increase taxes on high income, while larger and larger segments pay no income tax, this instability in Gov revenue will get worse.

After spending time in Brazil and Argentina, I'm convinced the problems with our "poor" are not problems of material wealth. Families making equivalent of $20,000 in Argentina or Brazil are poor by our standards, but firmly in middle class there. They are well-educated, productive, and committed to their families. The problems with our "poor" are social problems, not economic problems.
Deja vuJon Billheimer
Mar 25, 2003 4:14 PM
Regardless of the structural tax issues, the fact is we cannot afford both guns and butter. Economist Eliot Janeway pointed this out during and following Vietnam. His analysis that the enormous cost of the war would produce the combination of inflation, high interest rates and recession were born out in the '70s. Ditto now if the Bush administration continues on with its plans for continued military adventurism, deficits and tax cuts. The piper eventually gets paid. I can't get over the fact that it's so-called conservatives who are supporting this fiscal lunacy.