12-03-2003 11:56									#151
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Wasn't 1980 a recession year?

edit: no it started in 1981

Last edited by DuncanK on 12-03-2003 at 12:04

	12-03-2003 11:59									#152
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The income tax also increased, and there wasn't much raising of taxes there. Furthermore, in 1990 the tax rates as a percentage of income were substantially lower than in 1980 (and where do you think most of the money comes from?).

The deficit of the 80s was caused by the spending increases (though it was well worth it).

	12-03-2003 12:18									#153
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quote: Originally posted by Imran Siddiqui The income tax also increased, and there wasn't much raising of taxes there. Furthermore, in 1990 the tax rates as a percentage of income were substantially lower than in 1980 (and where do you think most of the money comes from?). The deficit of the 80s was caused by the spending increases (though it was well worth it).

Well it was both, but I knew that there were spending increases I just didn't realize that they were so big. Two things really helped the eocnomy more than either tax cuts or spending increases. One was cheap gas, and the other was high consumer spending rate.

What is of concern is what people do with their money when they recieve a tax cut. In the 80s they did spend a lot of it and it did stimulate the economy a bit, but they also put a lot of it in the stock market. That is evident by the high stock prices.

So what will people do with the proceeds from the Bush tax cut? I think that the majority of the people who will recieve the biggest tax cuts will be baby boomers, and they will save their money (maybe not in the stock market though). They have lost a lot of wealth lately and they will want to save as much as they can for their retirement. Studies show that people in their 50s save a lot more money than younger people.

So these tax cuts wont stimulate the economy and create more tax revenue. That is really going to hurt because the demographic changes coming up are going to create even bigger deficits.

	12-03-2003 12:26									#154
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If they save, then that money will be invested, and will help down the line.

However, Baby Boomers defy historical age trends anyway. There is no telling if they will save like previous 50ish people did. Baby Boomers have proven to be highly materialistic.

Hell, my father is over 50, and he just bought a new HDTV and DVD player .

	12-03-2003 12:34									#155
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quote: Originally posted by Imran Siddiqui If they save, then that money will be invested, and will help down the line.

I assume you mean when they sell their stocks. They will sell their stocks when they retire (or pass it to their children), but they aren't going to invest in business they are going to spend it on their retirement. And what this is going to cause is a loss in wealth do to falling stock prices. That's going to have a dampening effect on spending and make things worse.

quote: Originally posted by Imran Siddiqui However, Baby Boomers defy historical age trends anyway. There is no telling if they will save like previous 50ish people did. Baby Boomers have proven to be highly materialistic. Hell, my father is over 50, and he just bought a new HDTV and DVD player .

Yeah, they do tend to spend a lot historically, but they have lost money in the stock market and we already see that that is having a bad effect on spending. Stocks will probably keep falling in value over the next couple decades and this could be a serious problem.

	12-03-2003 12:39									#156
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btw, you can get all the stats on government revenue and outlays at the CBO web site. Very nice.

	12-03-2003 12:42									#157
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Spending only doubled (not trippled), so did tax revenue.

	12-03-2003 12:52									#158
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hehe, GDP about doubled too. I would say that the spending increases and the tax cuts had an equal contribution to the budget deficits of the 80s.

	12-03-2003 12:57									#159
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Seeing as tax revenues doubled in the 1980s, I fail to see how tax cuts had an equal contribution to the budget deficit, seeing as the tax cuts reduced revenues by less than half in the first years of the cuts.

Since revenues increased more than the cuts took out in the early 80s, its hard to say the cuts led to the huge deficits.

	12-03-2003 13:05									#160
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It's simple.

Eliminate stupid democratic programs and we would have plenty of money for tax cuts.

But the problem is the democratic programs are here to stay. The republicans can't get rid of programs enacted before their term. So they are forced to deal with it.

But I still feel the goverment can be trimmed down to save money. Bush hasn't done a good job with that. I understand the need for the homeland security division. But other areas can be cut, and that hasn't happened.

So if Bush would eliminate waste of the federal goverment, then I say cut the hell out of taxes.

	12-03-2003 13:05									#161
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quote: Originally posted by Imran Siddiqui Seeing as tax revenues doubled in the 1980s, I fail to see how tax cuts had an equal contribution to the budget deficit, seeing as the tax cuts reduced revenues by less than half in the first years of the cuts. Since revenues increased more than the cuts took out in the early 80s, its hard to say the cuts led to the huge deficits.

You are assuming that tax cuts were the only contributor to economic growth and tax revenue. Many things contributed including the spending increases.

	12-03-2003 13:14									#162
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We are looking at increased tax revenue, but what we should be looking at is the taxes that weren't collected due to the tax cuts.
I would like to see a comparison of actual revenues lost due to tax cuts and spending increases.

	12-03-2003 13:16									#163
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I wish they'd revise McCain's old idea of an across the board 10% cut to all government spending except social security. Every body gets hit with the axe. If my experience in the military is any indication there is alot of waste and ineffiecency in the government which can be cut out.

I've also noticed that recession or boom the government just keeps on hiring new workers but they never seem to fire any workers. That means there has to be a sizable amount of dead wood in the system. These folks need to get the axe as well then maybe we'll be able to get a handle on the deficit.

	12-03-2003 13:21									#164
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I didn't think the military was that inefficient when I was in.

	12-03-2003 13:26									#165
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quote: I've also noticed that recession or boom the government just keeps on hiring new workers but they never seem to fire any workers. That means there has to be a sizable amount of dead wood in the system. These folks need to get the axe as well then maybe we'll be able to get a handle on the deficit.

I can't remember if it was the US or Canada, but I recently saw a report which said that civil servants and other government employees have consistently been at the highest risk for layoffs and downsizing for the last ten years (as compared to workers in other industries).

	12-03-2003 13:32									#166
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It probably is Canada . It is nigh on impossible to fire a US federal worker.

	12-03-2003 13:33									#167
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The article pointed out specifically that that was the general impression, but that the times had changed over the last decade...

	12-03-2003 13:34									#168
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I wish I could remember the source. It was a major news organisation of some kind...

	12-03-2003 13:43									#169
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In any case I don't think the U.S. and France will ever be close again. The nations are just too different. I suppose it is a cultural thing.

So I don't think America will ever be able to repair the damage with France.

Russia never liked us anyways, so that's no loss. Germany could be a loss as well. But they will come back in a few years. They are warmongers at heart .

	12-03-2003 13:47									#170
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Frogger: That sounds interesting. I wish it were true. My g/f works at the Department of Labor, Employee Benefits Service Administration (where I wish to be working this summer), and they have some incompetant workers there that they would just love to fire.

Though I guess the Department of Labor would be setting a bad example if they fired anyone... though they'd know what kind of supplemental insurance they could give the guy .

	12-03-2003 13:51									#171
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Imran: every office setting is populated by incompetents. The fact is that 25% of them end up doing 75% of the work. The other 75% putz around and cover their asses.

Business tends to be just as inefficient as government, from my (admittedly limited) experience in both settings...

	12-03-2003 13:55									#172
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From what I've seen (as limited as it is), government inefficiency is far greater than business inefficiency. This is not to say that inefficient workers don't exist in the business setting, they are just easier to get rid of.

	12-03-2003 14:05									#173
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quote: Originally posted by Dissident Germany could be a loss as well. But they will come back in a few years. They are warmongers at heart .

Not anymore, don't be fooled by the Civ3 settings. War is as popular here as AIDS and smallpox.

	12-03-2003 15:47									#174
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Yeah, the Germans may forget how crappy things were in East Germany under the Commies because the regime crumbled and was neatly folded into the West German economy.

They will not forget getting their a$$es kicked in WW2, even though we were really polite and helpful in the way we handed their a$$es back in the aftermath.

I've not studied the Franco-Prussian War much, but a similar effect seems to have persisted over the French in the aftermath of that dis-a$$-ter.

	12-03-2003 18:40									#175
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Whatever you say. You seem to be an expert.

	12-03-2003 20:46									#176
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quote: Originally posted by Imran Siddiqui From what I've seen (as limited as it is), government inefficiency is far greater than business inefficiency. This is not to say that inefficient workers don't exist in the business setting, they are just easier to get rid of.

Sure government has some lazy workers (and so do businesses), but government opperations are actually quite efficient and already understaffed. It seems inefficient because when you have to get service you have to wait in line. The lines aren't there because of inefficiency they are there because of understaffing.

Two points on government spending. One, a good chunk of it is transfer payments. Two, it should increase at about the same rate as GDP. Wage go up (hopefully), inflation, and more people just require more services. In the 80s spending increased at about the same rate as GDP, just a little faster.

	12-03-2003 20:58									#177
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quote: Originally posted by Oerdin I wish they'd revise McCain's old idea of an across the board 10% cut to all government spending except social security.

I don't agree. Why can't we take each opperation and cut according to need? With the across the board cut you are surely not going to get the spending right, except by coincident.

quote: Originally posted by Oerdin I've also noticed that recession or boom the government just keeps on hiring new workers but they never seem to fire any workers. That means there has to be a sizable amount of dead wood in the system. These folks need to get the axe as well then maybe we'll be able to get a handle on the deficit.

Firing workers is harder for government, but that is a good thing. Government is not suppose to run like a business. The business cycle forces businesses to fire workers during a temporary down turn in revenues. When revenues increase again the business needs to rehire and train them. Some of them have gone on to other things and never return. Why should we force government to go through this expensive cycle. Also, government departments, unlike business, actually have more work to do during a recession. The quality of their work would be seriously undermined if their funding were cuts just because of a recession.

	12-03-2003 21:00									#178
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and don't forget that cutting spending during a recession makes the recession worse.

	12-03-2003 21:38									#179
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I always thought it would be good for governments to hire people in a recession, and then lay them off and cut spending when times are good. That way you get budget surpluses, more efficient operation, and anti-cyclic activity to balance the economy.

	12-03-2003 22:11									#180
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quote: Originally posted by Dissident It's simple. Eliminate stupid democratic programs and we would have plenty of money for tax cuts. But the problem is the democratic programs are here to stay. The republicans can't get rid of programs enacted before their term. So they are forced to deal with it.

You mean like farm subsidies? Or Corporate welfare?

Oh wait...the Republicans like those...they are their chief champions!



Come on, you know better.