quote:

ORIGINAL: Marc2b

I really don’t understand why people don’t get it. It really is very simple.
People can make all the snide remarks about "economics 1A" or wildly rant about evil conspiracies of the Illuminati (or whoever) they want. It doesn’t matter. This is reality.

quote:

ORIGINAL: FirmhandKY


Tax Revenues Hit Record High In April

WASHINGTON, May 10, 2007

(AP) Federal revenue collections hit an all-time high in April, contributing to a further improvement in the budget deficit for the year.

Releasing its monthly budget report, the Treasury Department said Thursday that through the first seven months of this budget year, the deficit totals $80.8 billion, significantly below the $184.1 billion imbalance run up during the first seven months of the 2006 budget year.

So far this year, tax revenues total $1.505 trillion, an increase of 11.2 percent over the same period last year. That figure includes $383.6 billion collected in April, the largest monthly tax collection on record.

...

The federal budget was in surplus for four years from 1998 through 2001 as the long economic expansion helped push revenues higher. But the 2001 recession, the cost of fighting a global war on terror and the loss of revenue from President Bush's tax cuts sent the budget back into the red starting in 2002.

The administration's budget sent to Congress in February projects that the deficit will be eliminated by 2012 even if the president achieves his goal of getting his tax cuts made permanent. They are now due to expire in 2010.

Who's laughing at the Laffer curve now?

FirmKY

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Its just all bullshit and looks good to those who are clueless on the economy and how money works

quote:

ORIGINAL: farglebargle

Oh, and just for a data point.

Did you get more than a 5 percent raise this year?

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So basically, because it seems to make sense means that it's correct? Just like how it seems to make sense that the earth moves around the Sun? Or how it seems to make sense that rotting meat produces flies? Or how when someone takes a photo of you, it seems that they have stolen your soul?

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The Laffer Curve has been debated endlessly, with conservatives zeroing on on the tax cuts to explain higher tax revenues. However, such explantions *always* ignore the fact that other economic forces are at play here.

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Any economist will agree that tax cuts are the weakest economic stimulus in the government's arsenal.

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Fortunately, the Laffer Curve was thrown into the dustbin of history some time ago.

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Loose monetary policy is not without cost. The weak dollar is bad for our ego, but it's good for our exports...for now. What happens if the dollar gets weaker? Why should the Chinese buy American debt when European debt pays a higher rate? Meanwhile, the growth rate in the US slowed to a measly 1.3% in the first quarter of 2007. We're on the cusp of a recession--if people stop borrowing money or can't pay their bills, they will stop spending and our economy will collapse.

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Do you see the dilemma here? Real wages are falling due to the lack of meaningful pay increases for American workers. Inflation is up, further depressing real wages and consumption.

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ORIGINAL: Marc2b

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So basically, because it seems to make sense means that it's correct? Just like how it seems to make sense that the earth moves around the Sun? Or how it seems to make sense that rotting meat produces flies? Or how when someone takes a photo of you, it seems that they have stolen your soul?

I assume that you meant to say "the sun moves around the earth," because that is the only way any of this irrelevant nonsense would have a (erroneous) point.

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ORIGINAL: Marc2b
I assume that you meant to say "the sun moves around the earth," because that is the only way any of this irrelevant nonsense would have a (erroneous) point.

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ORIGINAL: selfbnd411
So basically, because it seems to make sense means that it's correct?  Just like how it seems to make sense that the earth moves around the Sun?  Or how it seems to make sense that rotting meat produces flies?  Or how when someone takes a photo of you, it seems that they have stolen your soul?

The Laffer Curve has been debated endlessly, with conservatives zeroing on on the tax cuts to explain higher tax revenues.  However, such explantions *always* ignore the fact that other economic forces are at play here.  The Federal Reserve has held interest rates at historically low levels for almost 6 years now, pumping massive quantities of liquidity into the system.  How do you think we got the housing bubble?  Even now, despite the fact that the Fed is taking a hawkish stance on inflation, M1 and M2 (measures of the money supply) are increasing dramatically.  The global economy is thriving at the moment on a liquidity bubble due to the amount of cash sloshing about.

Any economist will agree that tax cuts are the weakest economic stimulus in the government's arsenal.  The most powerful?  Monetary policy set by the Federal Reserve and other national banks around the world.  Which is exactly what is going on right now.

Fortunately, the Laffer Curve was thrown into the dustbin of history some time ago.

Edit to add:
Loose monetary policy is not without cost.  The weak dollar is bad for our ego, but it's good for our exports...for now.  What happens if the dollar gets weaker?  Why should the Chinese buy American debt when European debt pays a higher rate?  Meanwhile, the growth rate in the US slowed to a measly 1.3% in the first quarter of 2007.  We're on the cusp of a recession--if people stop borrowing money or can't pay their bills, they will stop spending and our economy will collapse.

Do you see the dilemma here?  Real wages are falling due to the lack of meaningful  pay increases for American workers.  Inflation is up, further depressing real wages and consumption.  The Fed ought to cut rates now to juice the economy and prevent a recession from hitting us 6 months from now.  But  if the Fed does cut rates, the dollar will fall.  The Chinese probably won't dump our debt due to the declining dollar because it is not in their interest to destroy our economy.  But their ability to dictate American economic policy grows more powerful every day.

This is "the Incredible 'Bush Economy'" for you.

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I really don’t understand why people don’t get it. It really is very simple.

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DEBT IS BAD ( unless you're the one collecting the Interest. )

Period.

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ORIGINAL: UtopianRanger

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I really don’t understand why people don’t get it. It really is very simple.

No personal offense but, I don't think you get it. lol 

The tax cuts you are speaking to only represent an increase in the nominal value {in monetary terms} you take home. But when you have a deflated dollar that’s lost roughly thirty-five percent of it’s purchasing power, you actually have a significant net tax increase.  

The tax cuts fool you by way of slight of hand. You have to always remember that nominal values are never a true indicator of wealth – Examining your purchasing power is the truest method for accessing an increase /decrease in wealth.  

I have to chuckle every month or so when someone here extrapolates the Dow’s new record highs to mean we have a healthy, boisterous economy.  

In the last seven years under George Bush, not only has the average American become poorer, but any investor who’s positioned themselves solely in Dow stocks over the same period of time has also become poorer.  

Make no mistake about it…… during the Bush tenure; we’ve seen massive inflation / massive expansion of the money supply - So much so…..they’ve stopped publishing the M3 money supply report that tells us how many dollars are in circulation.

quote:


DEBT IS BAD ( unless you're the one collecting the Interest. )

Period.

Not true at all. There’s nothing wrong with debt if you borrow money to accumulate a capital asset. Those capital assets then generate income over and above servicing the debt. Our infrastructure and the greatest industrial revolution the world has ever known were financed from debt.  

The difference between this country borrowing money now vs.then, lies in the fact that then we were borrowing money to finance our infrastructure as means to produce and distribute manufactured goods ; whereas as now we are borrowing money to consume and repay compounding interest that can never be fully paid back.  



HUGE DIFFERENCE.





- R

quote:

ORIGINAL: UtopianRanger

quote:

I really don’t understand why people don’t get it. It really is very simple.

No personal offense but, I don't think you get it. lol 

The tax cuts you are speaking to only represent an increase in the nominal value {in monetary terms} you take home. But when you have a deflated dollar that’s lost roughly thirty-five percent of it’s purchasing power, you actually have a significant net tax increase.  

The tax cuts fool you by way of slight of hand. You have to always remember that nominal values are never a true indicator of wealth – Examining your purchasing power is the truest method for accessing an increase /decrease in wealth.  

I have to chuckle every month or so when someone here extrapolates the Dow’s new record highs to mean we have a healthy, boisterous economy.  

In the last seven years under George Bush, not only has the average American become poorer, but any investor who’s positioned themselves solely in Dow stocks over the same period of time has also become poorer.  

Make no mistake about it…… during the Bush tenure; we’ve seen massive inflation / massive expansion of the money supply - So much so…..they’ve stopped publishing the M3 money supply report that tells us how many dollars are in circulation.

quote:


DEBT IS BAD ( unless you're the one collecting the Interest. )

Period.

Not true at all. There’s nothing wrong with debt if you borrow money to accumulate a capital asset. Those capital assets then generate income over and above servicing the debt. Our infrastructure and the greatest industrial revolution the world has ever known were financed from debt.  

The difference between this country borrowing money now vs.then, lies in the fact that then we were borrowing money to finance our infrastructure as means to produce and distribute manufactured goods ; whereas as now we are borrowing money to consume and repay compounding interest that can never be fully paid back.  



HUGE DIFFERENCE.





- R

quote:


Not true at all. There’s nothing wrong with debt if you borrow money to accumulate a capital asset. Those capital assets then generate income over and above servicing the debt.

quote:

ORIGINAL: Marc2b

I really don’t understand why people don’t get it. It really is very simple.

If you lower taxes, people have more money. If people have more money, they spend more money. The demand for products and services goes up. To meet the increased demand, businesses expand and new businesses are started. More people with jobs equals more tax payers.

Conversely, if you raise taxes people have less money. If people have less money they spend less money. The demand for products and services goes down. Decreased production leads to layoffs and business failures – fewer tax payers.

People can make all the snide remarks about "economics 1A" or wildly rant about evil conspiracies of the Illuminati (or whoever) they want. It doesn’t matter. This is reality.

As to what the government should be spending it’s money on, that’s a whole other debate.

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ORIGINAL: Archer

It's the layering of various embedded taxes that go unseen here Tuomas, Mining company pays X taxes and passes them on in their prices, Manufacturing company adds their taxes to the price, transportation adds theirs and then the various wholesale companies. Studies show about 22 cents per dollar we spend goes to embedded taxes here in the US.

quote:

ORIGINAL: UtopianRanger
Make no mistake about it…… during the Bush tenure; we’ve seen massive inflation / massive expansion of the money supply - So much so…..they’ve stopped publishing the M3 money supply report that tells us how many dollars are in circulation.
- R

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ORIGINAL: farglebargle

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Its just all bullshit and looks good to those who are clueless on the economy and how money works

DEBT IS BAD ( unless you're the one collecting the Interest. )

Period.

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Yes, official inflation rates undervalue real inflation (not to mention that they don't include loss of quality), but 35% inflation in one year?

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The US economy is seriously over valued. That's why so many companies are moving overseas, and the US economy is falling behind: the amount of work the US does not justify how much the US is being paid.