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Thread: Boehner abandons goal of $4 trillion debt-reduction package

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
    "Fly-over" country voted, and The Donald is now POTUS.

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    American,

    Per your post #70, that still adds up to 30.2% foreign investors...12% less than all investments by U.S. Individuals and Institutions. I'd call that significant. Wouldn't you?

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    Quote Originally Posted by Sgt Meowenstein View Post
    Isn't it odd that the GOP is willing to walk away from 4 trillion in cuts? This should be a dream come true for them. But since they're unwilling to agree to any tax hikes whatsoever, they're walking away from the deal of the century. I believe this will come back to bite them in the ass.
    If the American people continue to believe that spending money they don't have is the key to prosperity than they deserve what's obviously in store.. I doubt the American people are that foolish, or naive.
    Last edited by Grant; 07-10-11 at 09:33 PM.

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    Quote Originally Posted by Deuce View Post
    People are still pushing this "Obama budget got zero votes" thing?

    You need to stay away from crappy news sources, all the real news organizations reported the rest of that story. Obama's budget was voted down because a different deal had already been pushed by the time the vote came up, a stronger attempt at cutting the deficit.
    There is no such thing as "Obama's budget".

    Despite having a majority in the House and Senate for two years he did not pass a budget. He has not passed a budget yet in his third year and it appears unlikely he will. This is a man who, it seems, has never passed a budget of any sort in his life, and appears entirely unfamiliar with the concept.
    Last edited by Grant; 07-10-11 at 09:34 PM.

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    Quote Originally Posted by Objective Voice View Post
    Care to rethink your position?
    No, you should seek more than one source.

    Historical context
    Oil prices 1968–2006; peak is 1980, with steep decline over 1980s.

    Prior to the Reagan administration, the United States economy experienced a decade of rising unemployment and inflation, known as stagflation. Political pressure favored stimulus resulting in an expansion of the money supply. President Richard Nixon's wage and price controls were abandoned.[5] The federal oil reserves were created to ease any future short term shocks. President Jimmy Carter started phasing out price controls on petroleum, while he created the Department of Energy. Much of the credit for the resolution of the stagflation is given to two causes: a three year contraction of the money supply by the Federal Reserve Board under Paul Volcker, initiated in the last year of Carter's presidency,[5] and long term easing of supply and pricing in oil during the 1980s oil glut.

    Taxes

    President Reagan lifted remaining domestic petroleum price and allocation controls on January 28, 1981[6] and lowered the oil windfall profits tax in August 1981, helping to end the 1979 energy crisis. He ended the oil windfall profits tax in 1988 during the 1980s oil glut.[citation needed]

    With the Tax Reform Act of 1986, Reagan and Congress sought to broaden the tax base, eliminate many deductions, and reduce rates. In 1983, Democrats Bill Bradley and Dick Gephardt had offered a proposal to clean up/broaden the tax base; in 1984 Reagan had the Treasury Department produce its own plan. The eventual bipartisan 1986 act aimed to be revenue-neutral: while it reduced the top marginal rate, it also partially "cleaned up" the tax base by curbing tax loopholes, preferences, and exceptions, thus raising the effective tax on activities previously specially favored by the code.

    <snip>

    Economic record

    Reagan's policies are widely recognized as bringing about the second longest peacetime economic expansion in U.S. history, surpassed in duration only by the 1990s expansion that began under George H. W. Bush in 1991.[10][11] During the Reagan administration, the American economy went from a GDP growth of -0.3% in 1980 to 4.1% in 1988 (in constant 2005 dollars),[12] which reduced the unemployment rate by 1.6%, from 7.1% in 1980 to 5.5% in 1988, but with peaks of around 9.5% in 1982 and 1983.[13] A net job increase of about 21 million also occurred through mid-1990. Reagan’s administration is the only one not to have raised the minimum wage.[14] The inflation rate, 13.5% in 1980, fell to 4.1% in 1988, which was achieved by applying high interest rates by the Federal Reserve (peaked at 20% in June 1981).[15] The latter caused a brief recession in 1982: unemployment rose to 9.7% and GDP fell by 1.9%.

    Reagan significantly increased public expenditure, primarily the Department of Defense, which rose (in constant 2000 dollars) from $267.1 billion in 1980 (4.9% of GDP and 22.7% of public expenditure) to $393.1 billion in 1988 (5.8% of GDP and 27.3% of public expenditure); most of those years military spending was about 6% of GDP, exceeding this number in 4 different years. All these numbers had not been seen since the end of U.S. involvement in the Vietnam War in 1973.[16] In 1981, Reagan significantly reduced the maximum tax rate, which affected the highest income earners, and lowered the top marginal tax rate from 70% to 50%; in 1986 he further reduced the rate to 28%.[17] The federal deficit fell from 6% of GDP in 1983 to 3.2% of GDP in 1987.[3] The Federal deficit in Reagan's final budget fell to 2.9% of GDP.[2] The rate of growth in Federal spending fell from 4% under Jimmy Carter to 2.5% under Ronald Reagan.[2] As a short-run strategy to reduce inflation and lower nominal interest rates, the U.S. borrowed both domestically and abroad to cover the Federal budget deficits, raising the national debt from $997 billion to $2.85 trillion.[18] This led to the U.S. moving from the world's largest international creditor to the world's largest debtor nation.[19] Reagan described the new debt as the "greatest disappointment" of his presidency.[20]

    The number of Americans below the poverty level increased from 29.272 million in 1980 to 31.745 million in 1988, which means that, as a percentage of the total population, it remained almost stationary, from 12.95% in 1980 to 13% in 1988.[21] The poverty level for people under the age of 18 increased from 11.543 million in 1980 (18.3% of all child population) to 12.455 (19.5%) in 1988.[22] The share of total income going to the 5% highest-income households grew from 16.5% in 1980 to 18.3% in 1988 and the share of the highest fifth increased from 44.1% to 46.3% in same years. In contrast, the share of total income of the lowest fifth fell from 4.2% in 1980 to 3.8% in 1988 and the second poorest fifth from 10.2% to 9.6%.[23] And during Reagan's first term, homelessness became a visible problem in America's urban centers, leading many to blame Reaganomics.[24] In the closing weeks of his presidency, Reagan told the New York Times that the homeless "make it their own choice for staying out there." [25] Political opponents chided his policies as "Trickle-down economics", due to the significant cuts in the upper tax brackets.[26]

    Tax receipts

    During the Reagan administration, federal receipts grew at an average rate of 8.2% (2.5% attributed to higher Social Security receipts), and federal outlays grew at an annual rate of 7.1%.[27][28] According to a 1996 report of the Joint Economic Committee of the United States Congress, during Reagan's two terms, and through 1993, the top 10% of taxpayers paid an increased share of tax revenue to the Federal government, while the lowest 50% of taxpayers paid a reduced share of the tax revenue.[29]

    According to a United States Department of the Treasury economic study,[30] the major tax bills enacted under Reagan, in the short term, increased total tax revenue and reduced the tax burden on the economy (~-1% of GDP). The Economic Recovery Tax Act of 1981 resulted in a reduced tax burden on the economy (~-3% of GDP) but a decrease in total tax revenues (the largest tax cuts ever enacted).[31] while other tax bills had neutral or, in the case of the Tax Equity and Fiscal Responsibility Act of 1982, a (~+1% of GDP) increase in revenue as a share of GDP. It should be however noted that the study did not examine the longer-term impact of Reagan tax policy, including sunset clauses and "the long-run, fully-phased-in effect of the tax bills".[30] The fact that tax receipts as a percentage of GDP fell following the Economic Recovery Tax Act of 1981 shows a decrease in tax burden as share of GDP. Total tax revenue from income tax receipts increased during this time. The economic growth and increase in GDP outpaced the increase in tax receipt revenue, resulting in a slightly reduced tax burden as a percentage of GDP for the economy.
    Reaganomics - Wikipedia, the free encyclopedia

    No, I do not care to re-think my position. The overall effect of Reagan was to reduce the impact of taxes on the economy, although SOME people (primarily rich people) paid more taxes while at a lower tax rate, since deductions were also eliminated. I think the article you cited is unbalanced. Do you care to re-think your position?

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    Quote Originally Posted by finebead View Post
    No, you should seek more than one source.

    No, I do not care to re-think my position. The overall effect of Reagan was to reduce the impact of taxes on the economy, although SOME people (primarily rich people) paid more taxes while at a lower tax rate, since deductions were also eliminated. I think the article you cited is unbalanced. Do you care to re-think your position?
    No, because the source you used doesn't discount the fact that Reagan did use Keynesian economics to stimulate economic growth. He may have masked an increase government spending (not to mention increased the size of goverment) by using the Defense Department (public-private defense contracts), but he did so by increasing taxes on the middle-class. Moreover, if anybody instituted class-warfare it was he.

    But I digress. My intention w/posting the NYTimes opinion peace WAS NOT to rehash Reagonomics or tax policy. Mine was to illustrate the issue before us - whether or not to raise the debt ceiling - has alot of false impressions out there. So, can we bring the topic back around to the thread topic, please?

    From a May 2011 article again from the NYTimes.com:

    “Without significant spending cuts and changes to the way we spend the American people’s money, there will be no debt limit increase,” Mr. Boehner told members of New York’s business and finance community. “And cuts should be greater than the accompanying increase in debt authority the president is given.” Mr. Boehner said those cuts should be in the trillions of dollars, not billions.

    ...

    Mr. Boehner said the reductions should be “actual cuts and program reforms, not broad deficit or debt targets that punt the tough questions to the future. And with the exception of tax hikes — which will destroy jobs — everything is on the table.”
    Well, the Dems and the President are (still) very willing to agree to $4 TRILLION in spending cuts, far and above the $1 TRILLION dollars stated in the GOP Pledge to America. But once proposals to eliminate tax subsidies became part of the equation suddenly all bets were off w/the GOP. Everyone needs to understand this: tax subsidies (credits/deductions) ARE NOT tax hikes! No corporation nor individual's marginal tax rate will be increased. Such changes in the tax code aren't even part of the negotiations! As such, the GOP - including Tea Party members - are going to have to decide on "loyalty to party politics" or "loyalty to country".

    Here's the bare bones of it, ladies and gentlemen...

    Large commercial banks aren't expediting lending especially to small businesses. They've tightened their lending criteria insisting on backing loans with collateral. Small community banks that managed to keep their doors open were suppose to be a lending alternative. Unfortunately, they're being just as stringent as the larger banks. So, we have a credit problem of a different sort on our hands.

    The other side of the economic problem is consumer spending. With fewer people working and incomes flat (not to mention the cost of goods and services increasing), people aren't shopping in large numbers nor buy large ticket items. This affects productivity, manufacturing and transportation. How to break the economic stalemate?

    This linked article from The Economists provides a glimps into how the GOP leadership could have had their cake and ate it, too, that is until negotiations broke down and Cantor and Kyle walked out:

    Next on my reading list is David Brooks' superb column on the Republican Party. About four months ago, John Boehner touted a report put out by Republicans that called for closing the budget gap by enacting 85% spending cuts and 15% revenue increases. That may have seemed impossible at the time due to Democratic opposition, but the current negotiations have swung so far in the Republicans' favour that the deal on the table now involves a ratio of spending cuts to revenue increases that is about that and includes no change to marginal rates. In other words, Republicans are getting most of what they wanted. Over to Mr Brooks:

    If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred million dollars of revenue increases...
    Bottom line is this: The private sector is still either unwilling or unable to inject capital into the economy. If they don't do start providing collateralized loans in larger numbers soon, the government may not have much choice but to raise taxes and enact another stimulus to break this economic gridlock.
    Last edited by Objective Voice; 07-10-11 at 11:36 PM.

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    Quote Originally Posted by Objective Voice View Post
    Well, the Dems and the President are (still) very willing to agree to $4 TRILLION in spending cuts, far and above the $1 TRILLION dollars stated in the GOP Pledge to America. But once proposals to eliminate tax subsidies became part of the equation suddenly all bets were off w/the GOP. Everyone needs to understand this: tax subsidies (credits/deductions) ARE NOT tax hikes! No corporation nor individual's marginal tax rate will be increased. Such changes in the tax code aren't even part of the negotiations! As such, the GOP - including Tea Party members - are going to have to decide on "loyalty to party politics" or "loyalty to country".

    How to break the economic stalemate?
    On this, we pretty much agree. If Boehner and the repubs pass on a 4 trillion spending cut plan because of closing some tax loopholes for big oil and the rich, SHAME ON THEM! Ideology must not trump practicality. The special interests must be threatening to withhold campaign contributions from the repubs, who look like cowards to me. They can try to say white is black, or "we are doing it for jobs" but I think they are lying scumbags on this.

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    Quote Originally Posted by Objective Voice View Post
    Moreover, if anybody instituted class-warfare it was he.
    Being as how Ronald Reagan carried 49 of the 50 States in his re-election victory (which included over 60% union members in some polls) on what grounds do you base this claim?

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    Quote Originally Posted by finebead View Post
    On this, we pretty much agree. If Boehner and the repubs pass on a 4 trillion spending cut plan because of closing some tax loopholes for big oil and the rich, SHAME ON THEM! Ideology must not trump practicality. The special interests must be threatening to withhold campaign contributions from the repubs, who look like cowards to me. They can try to say white is black, or "we are doing it for jobs" but I think they are lying scumbags on this.
    Do you have any idea what these "tax loopholes" are?

    There are no tax loopholes. People and corporations follow government guidelines when they pay their taxes and if they don't they are breaking the law and can then be arrested. If they are behaving in a perfectly legal manner then where and what are these "loopholes"?

    That this 'loophole" business is still being trotted out in order to create further class warfare is repellent. There will always be gullible and uninformed members of the public who will believe this foolishness and the dishonest politicians who prey on these people know it..

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    Re: Boehner abandons goal of $4 trillion debt-reduction package

    Quote Originally Posted by Grant View Post
    Being as how Ronald Reagan carried 49 of the 50 States in his re-election victory (which included over 60% union members in some polls) on what grounds do you base this claim?
    From finebead's post #75:

    The number of Americans below the poverty level increased from 29.272 million in 1980 to 31.745 million in 1988, which means that, as a percentage of the total population, it remained almost stationary, from 12.95% in 1980 to 13% in 1988.[21] The poverty level for people under the age of 18 increased from 11.543 million in 1980 (18.3% of all child population) to 12.455 (19.5%) in 1988.[22] The share of total income going to the 5% highest-income households grew from 16.5% in 1980 to 18.3% in 1988 and the share of the highest fifth increased from 44.1% to 46.3% in same years. In contrast, the share of total income of the lowest fifth fell from 4.2% in 1980 to 3.8% in 1988 and the second poorest fifth from 10.2% to 9.6%.[23] And during Reagan's first term, homelessness became a visible problem in America's urban centers, leading many to blame Reaganomics.[24] In the closing weeks of his presidency, Reagan told the New York Times that the homeless "make it their own choice for staying out there." [25] Political opponents chided his policies as "Trickle-down economics", due to the significant cuts in the upper tax brackets.[26]
    Towhich I will add, "The voices of the rich and powerful majority typically drowns out the voice of the impovished minority."

    Getting back to the thread topic, I found this quote by Speaker Boehner interesting when discussing the debt ceiling negotiations from the NYTimes article I linked to earlier:

    “It would send a signal to investors and entrepreneurs everywhere that America still is not serious about dealing with our spending addiction,” Mr. Boehner said. “It would erode confidence in our economy and reduce the certainty for small businesses. And frankly I think it would kill even more American jobs.”
    Questions to ponder:

    1. Would the tax loopholes being discussed affect large corporations or small businesses?

    2. If the raising the debt ceiling is about our ability to pay on our debt as previously appropriated by law, how exactly would raising it have a negative affect on small businesses if the only entities that would be directly affected by the Treasury's inability to obtain needed credit would be the Federal Reserve banks or large corporate investment banks that deal with international trade?

    3. If the the signal we want to sent to global markets is that we have our spending addition" under control, how does Speaker Boehner get to make such a claim when over $4 TRILLION in spending cuts have been offerred as part of negotiations? And if eliminating some high price tag tax deductions (loopholes) would illustrate that as a nation we are generating revenue even on a short-term basis, wouldn't that indicate we're attempting to get our financial house in order?

    Think about what Boehner and congressional GOP members have said:

    - LARGE spending cuts...Pres. Obama and the Dems have compromised on spending cuts of at least $4 TRILLION!!!

    - No tax hikes...only certain tax deductions (i.e., loopholes, i.e., subsidies) would be eliminated, but these don't raise any corporation or individual's marginal tax rate. So, how would eliminating them be considered a "tax hike"?

    - "Investors and entrepreneurs everywhere" would know we're serious about keeping America in the business of foreign trading and investing because the full faith and credit of the U.S. Treasury would be maintained (re, we wouldn't lose our favorable credit rating).

    Think it through, folks...
    Last edited by Objective Voice; 07-11-11 at 02:16 AM.

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