Schooling Progs

Chris wrote:  "The government is propping up the economy until the private sector can recover."

The private sector cannot recover until the government gets out of the way.   People talk about returning to the Clinton tax rates.  Fine.  Then, I want to return to spending 32.78 of GDP ($9.88417 trillion) as was the case in FY2000 rather than the 39.9% of GDP ($14.5518 trillion) in FY2010.  The government is consuming to much of the GDP and is crowding out the private sector.  Small, medium, and large businesses alike are stagnating because they do not know what the future will be.  You should review the causes of the 1937 Depression and you will see exactly what is happening.  It happened because of soak the rich taxes, assaults on the rich and corporations, and a capital strike by the rich.  The absolute and predictable result of class warfare, the stifling of innovation and creation, the haranguing of certain groups of people (Jews, bankers, Big Oil, doctors) inevitably leads to a capital strike or, in a way that you may better understand it, Going Galt.  Such a phenomenon really, really, really does exist.  You are conversing with a Galtier.

Keynesianism has never worked.  You should read the Introduction to Keynes' 1936 German edition of General Theory where he admits that his theory is only workable in a centrally-planned, totalitarian economy such as Nazi Germany or the Soviet Union.  Further, after the billions spent between the 1929 crash (and don't kid yourself, Hoover was a huge Prog - increased taxes on the "evil rich" from 25% to 63%, increased federal spending by 52% (88% when adjusted to deflation), and massively invested in infrastructure are just a few examples of his Progressivism) and 1940, unemployment remained high until the War when the draft and war production finally reduced it.

• 1929: 3.2%
• 1930: 8.7%
• 1931: 15.9%
• 1932: 23.6%
• 1933: 24.9%
• 1934: 21.7%
• 1935: 20.1%
• 1936: 16.9%
• 1937: 14.3%
• 1938: 19.0%
• 1939: 17.2%
• 1940: 14.6%

Chris wrote"  "The stimulus is a temporary crutch"

Stimulus is like heroin.  As long as the needle is in the economy's arm injecting artificial stimulus, the economy will levitate.  Once the needle is removed or the dosage is reduced, the economy deflates.  The Keynesian economy is a faerie tale not based in reality.  The government has to take money out of the economy and distribute it.  It is just moving the peas around on the plate.  There isn't a greater number of peas.  The government doesn't grow peas.

When FDR finally realised that class warfare and populist demagoguery was self-defeating, he turned to the captains of industry much to the chagrin and fury of his wife and his advisers like Rex Tugwell, Harry Dexter White, Harold Ickes, Alger Hiss, etc.  As a result, an incredible thing happened years later at the Tehran Conference.  A man in a uniform with a mustache wearing a military uniform was seated at a table with men like President Franklin Delano Roosevelt and Prime Minister Winston Churchill.  He had been imprisoned in and exiled to Siberia seven times.  His name was not his birth name.  He had chosen his new name, which meant  "Man of Steel".  He ruled the largest country in the world with an iron fist.  He hated capitalism.  He believed in a oppressive central government.  He believed in a complete command-and-control economy.  He had killed millions of his own people.  This man stood and proposed the following toast:

"Without American production the Allies could never have won the war. ”

That man was Josef Stalin.   He didn't praise FDR's central planning.  He didn't praise the NIRA.  He didn't praise the AAA.  He didn't praise the WPA.  He didn't praise the CCC.  He praised the AMERICAN PRIVATE SECTOR.

Chris wrote:  "but the problem is that our fiscal situation isn't really temporary."

Correct.  It's structural and, due to entitlements, raising taxes on the "evil rich" alone WILL.NOT.FIX. the problem.  For example, take Social Security.  There were 159.4 workers for each Social Security recipient in 1940.   

There were only 1.75 full-time private-sector workers in the United States last year for each person receiving benefits from Social Security, according to data from the Bureau of Labor Statistics and the Social Security board of trustees.   America is beginning the demographic death spiral that currently has Europe in its death throes.

“I rob banks because that's where the money is.” 

– Willie Sutton

  

Big Government robs the middle class because that's where the money is!

Chris wrote:  "I would hope that the govt would reduce military spending"

Well, that's counter-intuitive to your argument.  You want the government to inject capital into the economy.  It does that by military purchasing and not just on weapons systems.  Personally, I'd close 25% of the bases around the world today....as a start, but then again, I am not a liberal worried about having to stimulate the economy, which would take a hit if we removed the paycheques to military families, weapons, planes, and other goods and services procured in the US and sent "Over There, Over There."

And, of course, the unemployment rate would rise sharply because of all of the job losses in both the private and public sectors, which would lead to increased borrowing to pay for more UI, food stamps, Medicaid, etc.

Chris wrote:  "increase taxes"

Why?  The CBO credited the Clinton 1993 tax increase for ONE PER CENT o f the increase in revenues.  On the other hand, the Bush tax cuts INCREASED REVENUES by FIFTEEN PER CENT in 2005 ALONE.

Clinton's 1993 Tax Hikes: Increased revenues by 1%.  Here, here, here.  Bush's Tax Cuts: Increased revenues by 15% in 2005 alone.  Here, here, here, here, here, here, here.

 The Left thinks that the rich in America pay a pittance, but is that true? 
 
On 01.01.13, the top marginal tax rate in the United States will automatically rise to 43.4%.

If you are wealthy and live in a state like New York, your combined, marginal tax rate is about 58%. 

To put that into context, the top combined, marginal tax rate in COMMUNIST China is 45%.

In PROGRESSIVE Canada, the top marginal tax rate is 29%, the capital gains rate is 10%, and the dividend rate is 19%.

The Left thinks the corporations in the United States have it easy (Some do.  I'm looking at you, General Electric and Mr Obama's Chairperson of the Council on Jobs and Competitiveness), but do they?

The United States has the highest combined corporate income tax rate in the world at 39.21%, which will rise to 46.2% in 2013 before any Obamacare taxes or new taxes under Obama.

To put that into perspective, COMMUNIST China's combined corporate income tax rate is 25%.

The average corporate tax rate in the "SOCIALIST" EU is 23.2% and the highest combined corporate income tax rate in the EU is 33.9% in Belgium, which hasn't even had a government in over a year.

In "PROGRESSIVE" Canada, the corporate tax rate is 16.5%.

Furthermore, ONLY the United States taxes the profits of its corporations when made overseas and on which the entities have already paid taxes in the situs of earnings.

According to the OECD, the United States has the most progressive individual tax system in the world.  While it is true that tax rates on the uber-wealthy are certainly higher in some countries, the tax base is much wider.  There isn’t a country in Europe where 47-52% of the working population avoids paying national income tax.

For example, a senior level nurse in a London hospital earns approximately $49,000.  She will pay around $10,500 in income taxes, $6,039 in National Insurance  taxes, a 20% VAT, council taxes, and other assorted taxes…in an area where it is more expensive to live than in Manhattan or San Francisco.  

The wealthy in the United States shoulder a far, far greater “fair share” of the burden than their counterparts elsewhere.

Eventually, Obama must levy his tax increases at lower income levels because that's where the money is and there just aren’t enough millionaires and billionaires to pay for the Federal government that he wants.  Truth be told, there aren’t enough middle class taxpayers to pay for it either.

In 2009, 237,000 taxpayers reported income above $1 million and they paid $178 billion in taxes. A mere 8,274 filers reported income above $10 million, and they paid only $54 billion in taxes.

But 3.92 million reported income above $200,000 in 2009, and they paid $434 billion in taxes. To put it another way, roughly 90% of the tax filers, who would pay more under Mr Obama's plan aren't millionaires, and 99.99% aren't billionaires.

Between 2007 and 2010, the number of those earning:

$200,000 per year declined by 13%

$1 million per year declined by 39%

$10 million per year declined by 55%

The more a government relies on a smaller number of taxpayer, the more it is setting itself up for a cataclysmic event when the market turns.  Nowhere is this more evident than in places like California.

In 2006, for example, according to the Franchise Tax Board, Californians making more than $500,000 a year filed just 1% of all state income tax returns — and paid 47.2% of the taxes.  When the recession hit, the wealthy saw their incomes drop sharply, which resulted in a dramatic drop in tax revenues.

In 1990, the highest individual income tax rate of our major economic trading partners was 51%, while the U.S. was much lower at 33%. It's no wonder that during the 1980s and '90s the U.S. created more than twice as many new jobs as Japan and Western Europe combined.

According to the OECD, over the past two decades the average highest tax rate among the 20 major industrial nations has fallen to about 45%. Yet the highest U.S. tax rate would rise to more than 43.4% no counting the proposed "Alternative Minimum Millionaires' Tax." To make matters worse, if we include the average personal income tax rates of developing countries like India and China, the average tax rate around the world is closer to 30%, according to a new study by KPMG.

"You can't rob a bank on charm and personality.”  

 - Willie Sutton

Not even dictators can govern for long on charm and personality, Presidents' days of getting away with it are even shorter.

Only time will tell how long the middle class will stand for allowing the Great Leviathan to rob them with charm, personality, or anything else.

Check my blog this afternoon and you will find a post that I am working on showing what spending and taxing would look like if we based Federal spending on the Clinton tax rates and the 2000 GDP.  I'll let you know right now that you are never going to say, "Everything would just be groovy, man, if we just returned to the Clinton tax rates....and neither would the public employee unions."

Chris wrote:  "and reinvestment into green infrastructure"

Like Solyndra?  Bankrupt.

Like Beacon Power?  Bankrupt.

Like Evergreen Solar Inc.?  Bankrupt.

Like SpectraWatt?  Bankrupt.

Like Mountain Plaza Inc.?  Bankrupt.

Like Olsen's Crop Service?  Bankrupt.

Like Olsen's Mills Acquisition Co?  Bankrupt.

Like Spain?  Bankrupt and on the verge of societal collapse.

From the article, España admite que la economía verde que vendió a Obama es una ruina (Spain admits that the green economy, which it sold to Obama, is a ruin/mess), in the Spanish newspaper, La Gaceta:

"According to the Spanish government, the policy has been such a failure that electricity prices are skyrocketing and the economy is losing jobs as a result (emphasis added):

The internal report of the Spanish administration admits that the price of electricity has gone up, as well as the debt, due to the extra costs of solar and wind energy. EVEN THE GOVERNMENT NUMBERS INDICATE THAT EACH GREEN JOB CREATED COSTS MORE THAN 2.2 TRADITIONAL JOBS, as was shown in the report of the Juan de Mariana Institute. Besides that, the official document is almost a copy point by point of the one that led to Calzada being denounced [lit. "vetoed"] by the Spanish Embassy in an act in the U.S. Congress.


The presentation recognizes explicitly that “the increase of the electric bill is principally due to the cost of renewable energies.” In fact, the increase in the extra costs of this industry explains more than 120% of the variation in the bill and has prevented the reduction in the costs of conventional electricity production to be reflected on the bills of the citizens.'

The Spanish government spent more than half a million euros for each green job created since 2000 and a cool 1 million euros apiece on each wind-industry job.  It now has 21% unemployment.

It turns out the Spaniards are really just misers.  Actually, we should just start calling Spaniards "Shrubs," "Ws," or "43s," as in George W Bush, because their pathetic farthing-and-shilling “green jobs” subsidy were thinking on a Third World level.  They were playing T-Ball.  When they cheered the election of Barack Obama, little did they know that they were about to witness the BABE RUTH OF GREEN ENERGY STEP UP TO THE PLATE IN THE WORLD SERIES OF THROWING MONEY DOWN THE COLOSSAL DRAIN in action.  The Obama administration’s $38.6 billion “clean technology” programme was supposed to “create or save” 65,000 jobs. Half the money has been spent – $17.2 billion – and we have 3,545 jobs to show for it. That works out to an impressive $4,851,904.09 per “green job.” As Mark Steyn would say:

"World record! Take that, you loser Spaniards! USA! USA!"

Chris, if you and Obama give me any more of this "reinvestment into green infrastructure," this girl is gonna have to spend the rest of her life taking cold showers.  I just don't think that I can take all of the stimulation, global warming, second chakras, and Pachauri enviro, smutty bodice-ripper, shag fest, GaianPussyGalore books, etc.  

The potential of a Green Utopia totally hot and bothers me so.