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Thread: Obama vows to cut huge deficit in half

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    Re: Obama vows to cut huge deficit in half

    Why would I buy stocks that are likely to continue falling because Obama can't keep his mouth shut?
    (course there are stocks that are worthwhile..thats not the point)

    Seems Obama is trying to fulfill his own fear mongering by causing the economy to go into a depression.

    He needs to walk and talk softly while doing minor things to help very key segments of the economy. Right now he's shouting as loud as he can and trying to apply radical unpopular idealistic changes to an economy on the edge.


    I have no doubt things would be better then they are now if Bush was still President or McCain had been elected.
    Great?!? no..but more stable.
    Stability brings prosperity..

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    Re: Obama vows to cut huge deficit in half

    Quote Originally Posted by Nep188 View Post
    Unless you realize that we're in a cyclic free market economy in which recession WILL hit again. Are we going to artificially pump the economy with $800 billion every time we hit a reccession? That could get a little expensive, dont you think?
    Our mixed economy system that we have been in, in the post war era has not eliminated recessions. No mainstream economists would argue that government stimulus in downturns eliminates recessions in the future.

    What our mixed economy has brought about is a great moderation in economic cycles. That moderation is the goal in a stimulus. In fact, this post war moderation in our economy is referred to as "The Great Moderation" by economists. We have not had an economic depression since The Great Depression. Thats over twice as long as we have ever gone in our history without an economic depression. That is because our mixed economy has moderated the business cycles and thus prevented downturns from being as deep as they otherwise would have been.

    So yes, take the pubic sector out of the economy and you will have economic cycles - booms and busts. However, the busts will be a lot deeper and those deeper busts are far more expensive than having a mixed economy where we have used public sector spending to stimulate the economy during downturns.
    "You're the only person that decides how far you'll go and what you're capable of." - Ben Saunders (Explorer and Endurance Athlete)

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    Re: Obama vows to cut huge deficit in half

    Quote Originally Posted by Nep188 View Post
    Unless you realize that we're in a cyclic free market economy in which recession WILL hit again. Are we going to artificially pump the economy with $800 billion every time we hit a reccession? That could get a little expensive, dont you think?
    Err no, we are in a credit crunch that has resulted in the worst contraction on record. This has nothing to do with a cycle. And yes you need to artificially pump money into the economy to stop the slide because the free market is broken.

    And news flash.. there has always been "stimulus" spending during recessions. Republican's like to cut taxes and spending (great idea btw...) where as Democrats like to increase government spending. Both are stimulus in normal recessions.. but as I stated.. this aint no freaking normal recession.
    PeteEU

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    Re: Obama vows to cut huge deficit in half

    Quote Originally Posted by SouthernDemocrat View Post
    Its well established that tax cuts can stimulate economic growth. However, the amount of economic growth you get out of tax cuts is relative to how much of a burden upon production that current taxation levels represent. For example, if your taxes are 50% of your income, then you may not be as productive as you could be because half your income is taken from you. Thus if your taxation is reduced to 30%, you probably would be more productive.

    However, if your taxation is 30%, and you are quite productive at that level of taxation, then cutting your taxes to 25% will more than likely not result in the same level of productivity increases than going from say 40% to 30% would. If a tax cut only results in you doing something that you would have done otherwise, then your not getting a whole lot of stimulus from the tax cut. However, if a tax cut allows you to do something that taxation was preventing you from doing, then it will stimulate the economy.

    As business investment, personal investment, economic growth, employment growth, median income growth, and virtually every major economic measure was stronger in the 90s than it was following the Bush tax cuts, one would be hard pressed to argue that the level of taxation that we had in the 90s was putting a burden on productivity, consumption, or investment.
    So with your analogy, there is much more bang for the buck if we allow the highest tax payers to keep more of their income and reduce the corporate rate.

    I am curious, how is spending money the Government doesnít have in the trillions of trillions of dollars a better idea than just holding spending where it is at and giving people tax incentives?

    How is Government borrowing trillions more when there is already a $11.5 trillion national debt going to make the economy stronger and provide growth?

    Does Government not confiscate the wealth of those who are productive to re-distribute it? How does this stimulate economic growth?

    Explain to me how Government, dipping a bucket in the economic well so-to-speak and pouring the water into a different well increasing the economic pie thus stimulating growth?


    Quote Originally Posted by SouthernDemocrat View Post
    In the long term private sector growth has a greater multiplier effect. However, if the private sector is contracting, then increases in public sector spending can certainly moderate economic contraction and shorten a recession because it introduces economic activity into the economy that would have not otherwise existed in the short term, and it increases the velocity of money in the economy.

    Once the pumped is primed again so to speak, government spending should moderate and growth in the private sector should take over.
    So tell me how spending trillions of dollars and borrowing us further into debt is a better idea than allowing businesses to keep more of their dollars to re-invest?

    In addition, tell me how the public sector gets itís revenue and what taxes will be levied to pay for the over $2 trillion in deficit spending we have passed. Is this not going to further burden the private sector?

    Again, it all begs the question, why is it better to create a monstrous expansion of the Federal bureaucracy and the budget deficit than it is to provide sound tax policy to re-stimulate the economy?

    Can you provide any credible proof where a Government actually spent the wealth of the nation and improved the economic well being of itís citizens?

    The bottom line is this; the entire premise of this debate about stimulus is false. The ONLY purpose that is served by a gross over expansion of Government is to increase the POWER of that Government thus reducing the freedoms and choices of itís citizens.

    This is not Econ 101 SouthernMan, but rather this is Marxism 101; a desperate grab at political power unseen since the new deal on the back of fear mongering the American people into thinking that this is necessary.
    Last edited by Truth Detector; 02-23-09 at 06:48 PM.

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    Re: Obama vows to cut huge deficit in half

    Quote Originally Posted by Truth Detector View Post
    Fascinating argument when considering that we are talking about a Government that just passed legislation that creates another $2 trillion in deficits and no discussion about paying for it.

    Tell me Maximus, where in history has Government ever debated how to pay for a war before entering into one? We call that putting the cart before the horse. War spending is not something you plan for or budget for.

    Carry on.
    I am against stimulous packages the state canot afford, therefor I think...
    1. States should run surpluses
    2. States should create state funds
    3. States can draw from state funds in time of crisis.

    As for the solution to THIS crisis.
    1. Pay back debts
    2. Run fiscally sound governments
    3. Regulate lending and financial markets, actually, regulate capitalism.
    4. Reorganize the state
    5. Reform politics
    6. Reform economics
    Europe is illegally occupied by the US

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    Re: Obama vows to cut huge deficit in half

    Quote Originally Posted by WillRockwell View Post
    Considering the Bush administration planned for the Iraq war long before it began, it would have been prudent to figure out how it would be paid for. Oh, they said Iraq's oil would pay for it. How did that work out?
    Its very strange that there was no plan to pay for Iraq, even though the money used for Iraq obviously had to be taken from deficits.

    And then the people who never questioned the Iraq funding all of the sudden starts complaining about the stimulus spending, which is spent in the US.. Geez, ironic and sad actually.
    Europe is illegally occupied by the US

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    Re: Obama vows to cut huge deficit in half

    Quote Originally Posted by Truth Detector View Post
    So with your analogy, there is much more bang for the buck if we allow the highest tax payers to keep more of their income and reduce the corporate rate.

    I am curious, how is spending money the Government doesnít have in the trillions of trillions of dollars a better idea than just holding spending where it is at and giving people tax incentives?

    How is Government borrowing trillions more when there is already a $11.5 trillion national debt going to make the economy stronger and provide growth?

    Does Government not confiscate the wealth of those who are productive to re-distribute it? How does this stimulate economic growth?

    Explain to me how Government, dipping a bucket in the economic well so-to-speak and pouring the water into a different well increasing the economic pie thus stimulating growth?




    So tell me how spending trillions of dollars and borrowing us further into debt is a better idea than allowing businesses to keep more of their dollars to re-invest?

    In addition, tell me how the public sector gets itís revenue and what taxes will be levied to pay for the over $2 trillion in deficit spending we have passed. Is this not going to further burden the private sector?

    Again, it all begs the question, why is it better to create a monstrous expansion of the Federal bureaucracy and the budget deficit than it is to provide sound tax policy to re-stimulate the economy?

    Can you provide any credible proof where a Government actually spent the wealth of the nation and improved the economic well being of itís citizens?

    The bottom line is this; the entire premise of this debate about stimulus is false. The ONLY purpose that is served by a gross over expansion of Government is to increase the POWER of that Government thus reducing the freedoms and choices of itís citizens.

    This is not Econ 101 SouthernMan, but rather this is Marxism 101; a desperate grab at political power unseen since the new deal on the back of fear mongering the American people into thinking that this is necessary.

    This is a fruitless debate with you as obviously you don't even get the concept of Velocity of Money in an economy. Tax cuts right now would largely be saved, thus not increasing the velocity of money in the economy, thus having little to no multiplier in terms of growth in the short term.

    Businesses are not going to make investments until consumption comes back around. Thats the point of a stimulus, to prime the pump on economic activity and increase consumption.

    The fact is, the economy has fared far better historically under Democrats than under Republicans. In fact, there is no comparison.

    The numbers don't lie, check them yourself:

    The numbers don't lie: Democrats are better for the economy than Republicans. - By Michael Kinsley - Slate Magazine
    Last edited by SouthernDemocrat; 02-23-09 at 06:56 PM.
    "You're the only person that decides how far you'll go and what you're capable of." - Ben Saunders (Explorer and Endurance Athlete)

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    Re: Obama vows to cut huge deficit in half

    Quote Originally Posted by SouthernDemocrat View Post
    Economics 101:

    Increase spending in a recession and take on debt to stimulate the economy, then reduce spending during periods of economic growth, and reduce debt service as a percentage of Federal Outlays.
    Thats wrong.. Its suppose to be save during good times, spend during bad times(the money you saved during good times)..

    The US has done.. Spend during good times(by taking on debt), spend during bad times(to get further into debt). Thats just skewed.
    Europe is illegally occupied by the US

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    Re: Obama vows to cut huge deficit in half

    Quote Originally Posted by PeteEU View Post
    Err no, we are in a credit crunch that has resulted in the worst contraction on record. This has nothing to do with a cycle. And yes you need to artificially pump money into the economy to stop the slide because the free market is broken.
    This is a false assertion, it is no worse than the 80's contraction.

    This isn't about artificially pumping money into anything; this is allowing a vast expansion of Government and it's intrusion into every aspect of our lives without the means to pay for it even being debated.

    Quote Originally Posted by PeteEU View Post
    And news flash.. there has always been "stimulus" spending during recessions. Republican's like to cut taxes and spending (great idea btw...) where as Democrats like to increase government spending. Both are stimulus in normal recessions.. but as I stated.. this aint no freaking normal recession.
    There are no facts to support the assertion that expanding Government spending is a good thing.

    There is a vast difference between tax cuts; allowing businesses and people to keep more of what they earn so the market can decide what goods and services to produce, and having Government expand and decide who the winners in the market should be.

    We call it giving up freedoms and socialist central planning that has NEVER worked or improved the conditions of a nations citizens.

    Europe is undergoing much more turmoil than we here in America and will further erode under the burden of it's Socialist largess and vast tentacle of Government regulations of it's industries.

    Airbus cannot function as an ongoing entity without vast sums of tax payer money being pumped into it due to the false economy of it's pricing structure in an effort to impact Boeings grip on the airline industry.

    Nothing good can come of Euro-socialism; and the attempt to implement it here should be recognized for what it is, a Liberal attempt to create a dependent class of citizens for purely political power.

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    Re: Obama vows to cut huge deficit in half

    Quote Originally Posted by Edify_Always_In_All_Ways View Post
    Actually, the money for internet access will probably bring higher future returns than just about anything else in the bailout bill. I'd say that being able to use the internet *is* a necessity if we're to keep up with places like Japan and Europe.
    Hah, keep up with Europe AND Japan. You are not even keeping up with Europe, and we are not keeping up with Japan(and South Korea), not to mention that China is getting ahead and now soon have faster wireless broadband covering the country than we have wired broadband..

    We are in decline in many ways.. We DO need to spend on internet, its IMPORTANT yes, to build infrastructure. Thats one of the few parts of the stimulous package I do agree with.
    Europe is illegally occupied by the US

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