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Message |
    
Kenney
Citizen
Username: Kenney
Post Number: 246
Registered: 11-2003
| | Posted on Tuesday, December 30, 2003 - 5:26 pm: |     |
An easy read written a couple years ago.
How the budget is balanced is what matters most.
Throughout the 1990s, Democrats and Republicans pounded the table on the importance of balancing the budget. Clinton tried to take credit by claiming his tax hike to help payoff the federal debt led to low long term interest rates, inducing a positive investment climate that led to economic growth and more revenues for the federal government. Initially, long-term interest rates did move lower, but after a year of Clintonomics long-term interest rates were higher and the stock market was essentially flat.
Then came the Contract with America, which promised spending constraint. The stock market took off and long-term interest rates headed lower; investors began to believe government would actually try to limit their pork barrel spending ways—and for a couple years they did. As a side note, they did this without starving children or throwing old people into the streets. Long-term interest rates continued to move lower and stocks continued to move higher during this period of fiscal constraint, but unfortunately it didn’t last. After a couple years of doing the right thing on the spending side while failing to pass legislation that would let taxpayers keep more of their money, congress and the president went back to their more comfortable spend-happy ways.
While Congress did constrain spending for a couple years, on the whole it is clear the government balanced the budget the wrong way. When addressing this issue, we need to consider not only Clinton’s tax hike, but also the first president named Bush. As the numbers indicate, personal savings began to head lower after Clinton’s hike. Taxpayers were already stressing their budgets from Bush I’s tax hike and Clinton’s pushed them beyond their limits. At the same time, the federal government began trend away from larger deficits upward toward a surplus. All the while, personal debt began increasing at an unhealthy and historically high rate.
So what do we conclude from all this? Simple, the federal government, which borrows at the lowest possible interest rates in the market, paid off debt by forcing individuals to borrow more at the highest possible interest rates (credit cards, mortgages, personal loans). And since the national debt is every citizen’s debt, the net result was individuals (as a whole) refinanced throughout the 1990s and into 2000 from low interest rates to high interest rates.
Politicians had a field day claiming victory over the national debt, but what they refuse to acknowledge is what an awful mess they made of millions of U.S. citizens finances. This note is not intended to endorse one party over the other, but rather to point out the method in which we pay off the national debt has a profound affect on the personal savings and debt of those individuals who fund the federal government.
The only way we can break this cycle of moving debt back-and-forth between individuals and the federal government is for Congress and the President to dramatically curtail their spending—especially considering our commitment to the retirement of the baby-boom generation in a few years.
The only limit to our realization of tomorrow will be our doubts of today..FDR..
Liberty, when it begins to take root, is a plant of rapid growth...G.W.
Everyone wants a voice in human freedom. There's a fire burning inside of all us...L.W.
Dave Ross is the coolest!!(being banned sucks) |
Dave Ross
Citizen
Username: Dave
Post Number: 6028
Registered: 4-1998
| | Posted on Tuesday, December 30, 2003 - 5:30 pm: | |
quote:The only way we can break this cycle of moving debt back-and-forth between individuals and the federal government is for Congress and the President to dramatically curtail their spending—especially considering our commitment to the retirement of the baby-boom generation in a few years.
Tell that to Bush. He just added the largest entitlement program in 40 years. |
sportsnut
Citizen
Username: Sportsnut
Post Number: 822
Registered: 10-2001
| | Posted on Tuesday, December 30, 2003 - 5:35 pm: | |
Tom, I think the jury's out on whether the Bush cuts are working or whether he's doing the wrong thing. Most times it is nearly impossible to gauge the impact of a sitting president on the economy. Clinton was lucky, he will forever be remembered as presiding over a booming economy which as we now know was built on speculation. Almost no one will remember that the decline started in late 1999 early 2000.
The loss of jobs in this country is not wholly due to a downturn in the economy. I think it is a shift in the type of jobs required. As has been mentioned the economy is shifting to a service type economy, we simply cannot compete with other nations when it comes to manufacturing. Is that Bush's fault? I hardly think so. Nor is it Clinton's. The shift has been gradually accelerating for years now and single president or policy is solely responsible.
If the economy continues to steam along at its current pace people who hold stocks qualifying for long term reduced rates will think about selling once the holding period is reached. If they are smart they'll look to sell to lock in gains and not be burned as they were a couple of years ago. These same people may not have sold if the rates remained high, preferring instead to bequeath the stock to their spouses, descendants etc. At that time there would be a step up in basis to fmv and the descendants would sell an pay tax on a much smaller amount. That is one theory any way.
Do I think the tax cuts were a good idea? Yes, to jump start the economy. It appears that they may have worked. If the economy starts to do better and they want to repeal the cuts - that's fine by me too. However, to increase taxes without cutting spending is just as bad in my book as what Bush is doing now.
Everyone always rants about taxes. Its an easy target - class warfare and all that. What I never hear anyone yipping about is where is all the money going. Oh yea the left will complain about the war, but what about domestic spending when is that going to decrease. Haven't we all been asked to do more with less? |
1-2many
Citizen
Username: Wbg69
Post Number: 816
Registered: 6-2002
| | Posted on Tuesday, December 30, 2003 - 5:46 pm: | |
sportsnut you bring up a nice point:
"As has been mentioned the economy is shifting to a service type economy, we simply cannot compete with other nations when it comes to manufacturing."
but why not? why won't the gov't act to protect jobs in America, to penalize via tariffs or illegality or other means, the exportation of jobs for re-imported goods? and why won't the gov't act to create a meaningful minimum wage? why can't our lowest level workers - who we will always have, and always need - make a living wage?
no matter how you judge the lowest employed - shouldn't those who do an honest day's work earn a living wage, and heave health insurance? I think so.
but sadly, America's Second Harvest reports that something like 30% or 40% percent of its food recipients are working Americans. shouldn't we fix this, by mandating certain minimum standards? |
Tom Reingold the prissy-pants
Citizen
Username: Noglider
Post Number: 1582
Registered: 1-2003
| | Posted on Tuesday, December 30, 2003 - 5:52 pm: | |
sportsnut, you said a heck of a lot I agree with, especially in your first two paragraphs.
What is fmv? Remember, you're a tax accountant, so try not to use jargon.
I have heard plenty of yipping about where the money is going over the years, though it has quieted down recently. There have been plenty of sensationalist stories about families that have relied on welfare for generations. Unfortunately, this is unrepresentative, and entitlements to the poor don't account for as much of the budget as people tend to think. But it makes great headlines, because, as always, anger sells. So people get angry and talk about government waste and the laziness of people blah blah blah. Most welfare recipients prefer to work and are on welfare for short periods.
Sorry for the tangent. We can talk about entitlements in another thread. My point is that plenty of people yip about spending, for better and worse.
Tom Reingold
There is nothing
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mfpark
Citizen
Username: Mfpark
Post Number: 107
Registered: 9-2001
| | Posted on Tuesday, December 30, 2003 - 6:56 pm: | |
Sportsnut:
One of the things that disturbs me about this recovery is that it may be "jobless" for the middle class white collar workers (of which I am one). This is a new one for our class, although blue collar workers have faced it for years.
Recently IBM decided to move about 6,000 jobs overseas to China and India, where they can hire college educated computer consultants for pennies on the dollar compared to American workers. Same with financial services industries where researchers can be hired overseas and work "real time" with American customers thanks to the digital revolution.
Last week I called AOL to discuss a service problem--got into a good discussion on the weather that morning in Bangalore with the service rep, who was there. Last night I called Compaq for a service question and got someone in Manila.
I am not sure how I feel about this, because I am not by nature a protectionist. On the one hand, this is great for stabilizing the economies of underdeveloped nations, and will create more of a middle class (which hopefully will buy American products, contribute to more stable political regimes, etc. etc.). On the other hand, it is terrible for American workers, who in turn drive our local economy.
I am surprised that politcians are not speaking about this more. One would expect the Democrats to latch onto this as happening more quickly on Bush's watch (yes, I know, Clinton did NAFTA, but sitting Presidents always get tagged with the secular good and bad on their watch). One would also expect Republicans try to appeal to the middle class on this issue.
Any thoughts from MOL? |
Kenney
Citizen
Username: Kenney
Post Number: 247
Registered: 11-2003
| | Posted on Tuesday, December 30, 2003 - 7:08 pm: | |
China lost more manufacturing jobs during the recession/economic decline than any other country. The U.S. wasn't even close to the top.
Productivity gains along with the excesses of the late 90's are 2 reasons.
The only limit to our realization of tomorrow will be our doubts of today..FDR..
Liberty, when it begins to take root, is a plant of rapid growth...G.W.
Everyone wants a voice in human freedom. There's a fire burning inside of all us...L.W.
Dave Ross is the coolest!!(being banned sucks) |
mfpark
Citizen
Username: Mfpark
Post Number: 109
Registered: 9-2001
| | Posted on Tuesday, December 30, 2003 - 7:14 pm: | |
Yes, but that is no solace to US workers who lose jobs to lower paid foreign workers.
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sportsnut
Citizen
Username: Sportsnut
Post Number: 823
Registered: 10-2001
| | Posted on Wednesday, December 31, 2003 - 8:56 am: | |
Sorry fmv = fair market value.
1-2many - what would you have the government do? Subsidize? If so where would the money come from? Also realize that tariffs etc would have a devastating impact on not just our economy but the world economy as well. I'm not really sure that I have an answer for you.
I agree about minimum wages and health care, however the conundrum is that by raising the minimum wage and providing health care for all you will shift more jobs overseas. |
cjc
Citizen
Username: Cjc
Post Number: 613
Registered: 8-2003
| | Posted on Wednesday, December 31, 2003 - 8:59 am: | |
Clinton never had a goal of reducing the deficit. When the republicans talked about tax cuts, he jumped to "Save Social Security First" -- remember that? Anything to avoid allowing the taxpayer to keep more of their own money.
And the NY Times has profiles of the democrat candidates, none of which is strong on any deficit reduction either in proposals or rhetoric.
sportsnut -- how do you square that we can't compete in manufacturing with the stat that the portion of our GDP that comes from manufacturing hasn't really changed markedly (I think about 13-17% range) for quite some time. We just don't need as many people/jobs to do that manufacturing.
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1-2many
Citizen
Username: Wbg69
Post Number: 817
Registered: 6-2002
| | Posted on Wednesday, December 31, 2003 - 9:56 am: | |
sportsnut: the gov't already subsidizes big business in huge ways. but that's not what I'm suggesting.
what I'm suggesting is protection of American jobs - illegalizing exportation of goods and services to be provided IN America, by American companies. the sophisticated law-writers in DC can surely figure out a way to write a fair law that does this.
the other thing is tariffs - the opposite of subsidies. or maybe just taking away existing gov't subsidies for businesses who export labor need.
or other solutions. I'm open. but I think it's incredibly sad to say, as you do, "by raising the minimum wage and providing health care for all you will shift more jobs overseas". why is big biz allowed to do this, with no consequence?
we have all just come to accept the reality of this line. why? I don't think we have to. I think gov't has a job to do here. the bottom line is, is the gov't going to protect the people in power, who run those businesses, or the people without power, who can't do anything themselves to protect labor here? |
Tom Reingold the prissy-pants
Citizen
Username: Noglider
Post Number: 1586
Registered: 1-2003
| | Posted on Wednesday, December 31, 2003 - 10:28 am: | |
sportsnut wrote: I agree about minimum wages and health care, however the conundrum is that by raising the minimum wage and providing health care for all you will shift more jobs overseas.
I think the jobs we are exporting are already paying more than minimum wage, which would mean that raising minimum wage wouldn't export any more jobs. I believe minimum wage earners do the kinds of work that can't be exported, like flipping hamburgers, packing boxes, etc that have to be done on site.
Tom Reingold
There is nothing
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Kenney
Citizen
Username: Kenney
Post Number: 249
Registered: 11-2003
| | Posted on Wednesday, December 31, 2003 - 10:33 am: | |
http://www.washtimes.com/business/20031120-101455-1983r.htm
The only limit to our realization of tomorrow will be our doubts of today..FDR..
Liberty, when it begins to take root, is a plant of rapid growth...G.W.
Everyone wants a voice in human freedom. There's a fire burning inside of all us...L.W.
Dave Ross is the coolest!!(being banned sucks) |
sportsnut
Citizen
Username: Sportsnut
Post Number: 824
Registered: 10-2001
| | Posted on Wednesday, December 31, 2003 - 11:03 am: | |
Tom - I think its an indirect relationship. Take a large company for example - they have to pay the cleaning staff more money. That leaves less money to pay the programmers or customer support and then those jobs get shifted over seas. |
bobk
Citizen
Username: Bobk
Post Number: 4185
Registered: 5-2001
| | Posted on Wednesday, December 31, 2003 - 12:33 pm: | |
We are going to export jobs a McDonald's?
Most industrial jobs pay above minimum wage, although I am sure there would be some fall out.
To be honest I am getting very scared. I think we are becoming like Argentina with the top one or two percent having all the money and political power. Where is Juan Peron when you really need him? |
1-2many
Citizen
Username: Wbg69
Post Number: 820
Registered: 6-2002
| | Posted on Wednesday, December 31, 2003 - 12:58 pm: | |
bobk, I hope you aren't kidding. if you aren't I totally agree with you.
speaking of Peron, McDonalds goes to great lengths to prevent its workers from organizing. they have even closed restaurants to block organizing.
what makes me particularly angry about this, is the tax breaks McD's gets. it's a total myth that this is just "capitalism" in action - thee are numerous government supports and breaks for the behemoths, such as McD's. Read Eric Schlosser's excellent book, Fast Food Nation, for more detail. it is truly outrageous what's going on. and discouraging that nothing's being done to change this extremely anti-worker system. |
Kenney
Citizen
Username: Kenney
Post Number: 254
Registered: 11-2003
| | Posted on Wednesday, December 31, 2003 - 1:03 pm: | |
Workers of the world unite!! Oh wait, they have in many countries around the world. The poster child--->>France, where 10% unemployment is considered good!!!!!!!!!!!!
The only limit to our realization of tomorrow will be our doubts of today..FDR..
Liberty, when it begins to take root, is a plant of rapid growth...G.W.
Everyone wants a voice in human freedom. There's a fire burning inside of all us...L.W.
Dave Ross is the coolest!!(being banned sucks) |
Tom Reingold the prissy-pants
Citizen
Username: Noglider
Post Number: 1591
Registered: 1-2003
| | Posted on Wednesday, December 31, 2003 - 1:12 pm: | |
Your argument seems specious to me, Kenney. I don't think there is a correlation between unionizing and unemployment. I do hope you're aware of what unions did for workers in this country when they were first formed. I have no doubt things would go back to that state. In fact, things are going back in that direction.
Tom Reingold
There is nothing
|
1-2many
Citizen
Username: Wbg69
Post Number: 822
Registered: 6-2002
| | Posted on Wednesday, December 31, 2003 - 1:20 pm: | |
and tell me, Kenney, do you have info on poverty levels in France? versus poverty levels here?
France seems to have a lot less poverty. and of course, less poverty = less crime. also they have almost no violent crime.
so employment levels do NOT translate to income/quality of life levels.
oh yeah, and doesn't everyone in France have health insurance - even that unemployed 10%? |
Tom Reingold the prissy-pants
Citizen
Username: Noglider
Post Number: 1593
Registered: 1-2003
| | Posted on Wednesday, December 31, 2003 - 1:22 pm: | |
Good points, 1-2many. In that case, being unemployed isn't so bad, if it's frictional unemployment, not some people being constantly unemployed. In other words, if I knew that there's a fair certainty of periods of unemployment for me, which would leave me with reasonable benefits and a reasonable back-to-work time, I would gladly face that possibility.
Tom Reingold
There is nothing
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vor
Citizen
Username: Vor
Post Number: 120
Registered: 9-2003
| | Posted on Wednesday, December 31, 2003 - 1:24 pm: | |
Gladly? |
1-2many
Citizen
Username: Wbg69
Post Number: 823
Registered: 6-2002
| | Posted on Wednesday, December 31, 2003 - 1:25 pm: | |
TomR, straight "employment numbers" seem to be a diversion from a more honest inquiry into, how are the PEOPLE doing.
I think that is, increasingly, a different question from, how is the economy doing. |
Tom Reingold the prissy-pants
Citizen
Username: Noglider
Post Number: 1594
Registered: 1-2003
| | Posted on Wednesday, December 31, 2003 - 2:01 pm: | |
OK, that was a poor choice of a word. I would willingly and reluctantly accept unemployment. Actually, that's the way it is already, to a degree. I was unemployed for four weeks this year. I happened to collect both a severance and unemployment pay. And I got a new job quickly, which means I was very lucky. I really could have done much worse. That was my first unemployment since about 1984, so I have little to complain about. I wish others were as lucky.
1-2many, I agree that the numbers don't show us enough. I am also dismayed at how people tout the growth numbers and take them to mean everyone should be happy.
Tom Reingold
There is nothing
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Kenney
Citizen
Username: Kenney
Post Number: 255
Registered: 11-2003
| | Posted on Wednesday, December 31, 2003 - 2:19 pm: | |
FYI, http://apnews.myway.com/article/20031231/D7VPESOO0.html
The only limit to our realization of tomorrow will be our doubts of today..FDR..
Liberty, when it begins to take root, is a plant of rapid growth...G.W.
Everyone wants a voice in human freedom. There's a fire burning inside of all us...L.W.
Dave Ross is the coolest!!(being banned sucks) |
1-2many
Citizen
Username: Wbg69
Post Number: 825
Registered: 6-2002
| | Posted on Wednesday, December 31, 2003 - 2:47 pm: | |
I am pleased there are less new claims for unemployment this week. I hope the long-term unemployed are also decreasing in number, and that all the employed are actually making a living wage.
which leads us to: now, on to increasing the minimum wage - which, btw, affects more than minimum wage jobs, it sets a new floor and trickles up.
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Kenney
Citizen
Username: Kenney
Post Number: 258
Registered: 11-2003
| | Posted on Wednesday, December 31, 2003 - 2:59 pm: | |
http://www.findarticles.com/cf_dls/m4PRN/2001_July_21/76673124/p1/article.jhtml
The only limit to our realization of tomorrow will be our doubts of today..FDR..
Liberty, when it begins to take root, is a plant of rapid growth...G.W.
Everyone wants a voice in human freedom. There's a fire burning inside of all us...L.W.
Dave Ross is the coolest!!(being banned sucks) |
Tom Reingold the prissy-pants
Citizen
Username: Noglider
Post Number: 1599
Registered: 1-2003
| | Posted on Wednesday, December 31, 2003 - 3:15 pm: | |
Kenney, do you also feel that the minimum wage destroys jobs?
I understand the basic theory of supply and demand, and I follow the rationale of how a price floor creates shortages. But things are not as pure as that. The theory behind minimum wage is that increases people's value.
Tom Reingold
There is nothing
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Kenney
Citizen
Username: Kenney
Post Number: 259
Registered: 11-2003
| | Posted on Wednesday, December 31, 2003 - 3:27 pm: | |
Most of the work I have read on this issue indicates raising the minimum wage does lead to job loss.
This doesn't mean we shouldn't have a minimum wage, however.
The only limit to our realization of tomorrow will be our doubts of today..FDR..
Liberty, when it begins to take root, is a plant of rapid growth...G.W.
Everyone wants a voice in human freedom. There's a fire burning inside of all us...L.W.
Dave Ross is the coolest!!(being banned sucks) |
1-2many
Citizen
Username: Wbg69
Post Number: 826
Registered: 6-2002
| | Posted on Wednesday, December 31, 2003 - 3:55 pm: | |
Kenney: I don't really think you can trust your source.
I read your article, and in fact read a few articles on that site, epionline.com (aka minimumwage.com, minimumwage.org, livingwage.com, livingwage.org - interesting how they have monopolized these domain names. They thus command basic internet searches for information on either of these two phrases, to their site first – where they claim to be independent, and non-partisan.)
my response?
Interesting.
EPI claims to be independent, and a supporter of non-partisan research.
Yet every one of their stories look pretty right wing, describing how increasing the minimum wage, and mandating a living wage, actually lead to greater UNemployment. The message, clearly: be grateful for your (dead-end) job – or you'll end up without one.
So who is EPI? Are they really independent, as they claim?
Well, they designate as their contact person Mike Burita. Burita was, at least as of July 2003, communications director of the so-called Center for Consumer Freedom (the “CCF”). (They utilize the URL consumerfreedom.com.) The CCF describes itself as: "… a nonprofit coalition supported by restaurants, food companies, and consumers working together to promote personal responsibility and protect consumer choices. Unlike the anti-consumer activists we monitor and keep in check…
[they go on to argue:] The growing fraternity of "food cops," health care enforcers, militant activists, meddling bureaucrats, and violent radicals who think they know "what's best for you" are pushing against our basic freedoms. We're here to push back.”"
CCF’s contact info is a PO Box only, in Washington DC. Mr. Burita’s telephone number is given as (202) 463-7112, ext. 120. Over at EPI, his telephone number is (202) 463-7650 - possibly on the same phone "tree".
Well, guess what? In fact, the Center for (supposedly) CONSUMER Freedom’s major funders are Coca-Cola, Cargill, Tyson Foods, and Monsanto. The Center has been described this way: “One of the most vicious corporate front groups in America is the so-called Center for Consumer Freedom, which specializes in attacking the organic movement and public interest groups opposed to genetic engineering and industrial agriculture.” http://www.organicconsumers.org/organic/anti_organic_consumer_group.cfm
So, this is Burita’s background. But perhaps he’s had a change of heart. Perhaps within the last six months, he’s decided to become TRULY independent, not wholly-dependent-on-Big-Corporations-but-claiming-to-be-independent as the CCF is.
But then again, maybe not. EPI’s address, given on its webpage: 1775 Pennsylvania Ave., NW, Suite 1200, Washington DC 20006.
CCF’s address, NOT given on its webpage, but provided on the first page of a Google search: 1775 Pennsylvania Ave., NW, Suite 1200, Washington DC 20006.
Coincidence? Nope. I think it's safe to conclude that EPI cannot possibly be “independent” as it claims, and share office space AND PERSONNEL with CCF, a corporate-sponsored advocacy group.
similarly, any conclusions espoused by EPI have to be seen against this corporate-advocacy background - NOT conclusions of an independent research group. |
Kenney
Citizen
Username: Kenney
Post Number: 260
Registered: 11-2003
| | Posted on Wednesday, December 31, 2003 - 4:08 pm: | |
Here's what you were supposed to get from the link, 1-2many:
In testimony before the House Financial Services Committee on Wednesday, Federal Reserve Chairman Alan Greenspan said the minimum wage "destroys jobs" and that he favors abolishing the 1938 Depression-era law.
"(T)he reason I object to the minimum wage is I think it destroys jobs. And I think the evidence on that, in my judgment, is overwhelming," the Fed Chairman said.
I didn't read anything else related to minimum wage from that site. My comment to Tom was based on numerous studies(pro and con) on the issue that have crossed my desk.
All credible studies indicate job loss, but vary on how much.
To repeat, this alone does not mean minimum wage is a bad thing.
The only limit to our realization of tomorrow will be our doubts of today..FDR..
Liberty, when it begins to take root, is a plant of rapid growth...G.W.
Everyone wants a voice in human freedom. There's a fire burning inside of all us...L.W.
Dave Ross is the coolest!!(being banned sucks) |
1-2many
Citizen
Username: Wbg69
Post Number: 827
Registered: 6-2002
| | Posted on Wednesday, December 31, 2003 - 4:34 pm: | |
yeah, I saw that one, too. haven't been able to research it, though I suspect there's more there.
and, as you may be saying, even though dropping the minimum wage may create more jobs, it would only do so by paying people even less than what already is not a living wage. hardly an improvement.
as to EPE: I still find it particularly insidious that this clearly biased group has monopolized webpage names, so that internet searches lead to EPI, which holds itself out as independent, which it definitely is not.
by the way, where are my props for discrediting this anti-minimum wage group?  |
1-2many
Citizen
Username: Wbg69
Post Number: 829
Registered: 6-2002
| | Posted on Wednesday, December 31, 2003 - 5:01 pm: | |
OK, Kenney - a question.
to what extent (if any) is the recent recession - which we're still coming out of - the fault of Mr. Greenspan/the Fed, who intentially raised rates in early 2000 for the stated purpose of slowing down the economy? |
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