So let us begin...
I am not a mathematical person.
I am not going to give you some massive formula and will do my best to keep the math simple because I've spent time trying to understand it too.
The US budget is hugely complex.
But even I know you cannot cut taxes and raise revenue.
I've seen the trickle down economics tried and it has never, let me repeat that, never worked. The rich do not spread the wealth. If that were true, based on the stock market right now, the labor problems should be over now. It's actual name is Supply Side Economics. According to AmericanThinker.com which is a conservative website "Even in the heyday of supply-side economics during the Reagan era (Reagonomics), only 12 members of the 18,000-strong American Economics Association called themselves supply-side economists. Currently in American universities there is no major school of supply-side economics.
Reagan tried it. Taxes were raised six of the eight years.
Bush II tried it and we had a massive recession.
And now any way you want to look at it Romney wants to try it.
He has stated that he will cut taxes by 20 percent across the board. He will make up the difference by cutting loopholes but he will not state which ones. I know he said he will not raise taxes on any person in the debate. He has also signed the Norquist no tax pledge which means he too has made a written oath to a power outside the Constitution should he become president. "Make permanent, across-the-board 20 percent cut in marginal rates" -- from http://www.mittromney.com/issues/tax.
"He will put our Navy on the path to increase its shipbuilding rate from nine per year to approximately fifteen per year, which will include three submarines per year. He will also modernize and replace the aging inventories of the Air Force, Army, and Marines, and selectively strengthen our force structure. And he will fully commit to a robust, multi-layered national ballistic-missile defense system to deter and defend against nuclear attacks on our homeland and our allies.
This will not be a cost-free process. ... with the goal of setting core defense spending—meaning funds devoted to the fundamental military components of personnel, operations and maintenance, procurement, and research and development—at a floor of 4 percent of GDP." (http://www.mittromney.com/issues/national-defense) (this means $4 for every $100 spent)
This according to CNN money, the LA Times and The Center for a New American Security and a number of other sources would raise defense spending which is currently set to hit 3.5 percent of GDP to 2.1 trillion dollars. The only cuts Romney has announced that I've heard is PBS (430 million), Planned Parenthood (75 million dollars).
There are not enough loopholes to close that would fund the tax cut let alone cover the increase the defense spending for an imaginary nuclear threat and to rebuild a navy that doesn't really need up-scaling. The ships of 1916 which Romney points to as how weak our navy has become because of numbers is a silly comparison. In 1916 the ships were 1 use items. In 2012 the ships, vastly superior in every way, are multifunctional and multipurpose. If we put the current navy against the 1916 it would be like sending the 1916 navy our to fight the Spanish Armada. NO CONTEST. What is more it is an increase the generals at the Pentagon have not requested and for Romney who rattles the saber of foreign policy every time he speaks to think he knows what actual warriors need is purely nuts.
There are not enough loopholes to close that would fund the tax cut let alone cover the increase the defense spending for an imaginary nuclear threat and to rebuild a navy that doesn't really need up-scaling. The ships of 1916 which Romney points to as how weak our navy has become because of numbers is a silly comparison. In 1916 the ships were 1 use items. In 2012 the ships, vastly superior in every way, are multifunctional and multipurpose. If we put the current navy against the 1916 it would be like sending the 1916 navy our to fight the Spanish Armada. NO CONTEST. What is more it is an increase the generals at the Pentagon have not requested and for Romney who rattles the saber of foreign policy every time he speaks to think he knows what actual warriors need is purely nuts.
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But I digress...If there are not enough loopholes to close and that includes the charity and mortgage deduction, college deduction, and even the child deduction, then the money must come from somewhere or the deficit must go up. So it means new taxes and since Romney has made it clear that it is the wealthy who are "job creators" that need more money to give us a stronger economy there is only one group to get the money from -- those under the $200,000 mark and the 47%. We also know that according to the debates the tax loop holes by name he intends to close is none although it is clear he believes the capital gains tax which allows him to pay less taxes than most middle class he believes is fair, something he stated on 60 Minutes.
It is Math.
I know, the growing economy will make up the difference according to Romney. The problem is that every reputable economist have announced that Top Down/Supply Side Economics do not work and have never worked. The six studies that Romney/Ryan point to have all been more or less dismissed by every fact checking organization as false including the one made by Ryan in the last debate.
It is Math.
I know, the growing economy will make up the difference according to Romney. The problem is that every reputable economist have announced that Top Down/Supply Side Economics do not work and have never worked. The six studies that Romney/Ryan point to have all been more or less dismissed by every fact checking organization as false including the one made by Ryan in the last debate.
http://www.politifact.com/truth-o-meter/statements/2012/oct/15/paul-ryan/ryan-says-six-studies-say-math-works-romney-tax-pl/
or
or
It is MATH.
So what of Obama. Yes he has cost us money. He made the statement that we should use the money we save from the Iraq war to pay off debt and put money into jobs, but by his own logic that the Iraq war was on a credit card, we are not saving money, we are just not spending on that part of the card any longer. That too is a problem with the MATH. "The President’s plan uses half the money we’re no longer spending on war to put Americans back to work rebuilding road, bridges, runways and schools here at home and uses the other half to help pay down the debt." (http://www.barackobama.com/issues?source=primary-nav-see-more)
I should also point out that extending the Bush tax cuts is not giving a tax cut if you already have it. He has been very point blank about the intent to end the tax cuts for the wealthy and return them to the levels they were at during the 1990's. "No household making more than $1 million each year should pay a smaller share of their income in taxes than a middle-class family pays". (http://www.barackobama.com/taxes/)
But oddly he has actually reduced the deficit. Okay so it's still over a trillion but last year the deficit was $1.297 trillion and this year the deficit was $1.089 trillion, smaller than last year's deficit. That means we actually went down $200 billion dollars.
According to Reuters reporting from the Treasury Department:
"The September budget surplus of $75 billion, which topped analyst expectations for a surplus of $42 billion, marked only the second month in the fiscal year ended September 30 that the country was in the black.
The year-end budget report comes in the final weeks of the presidential campaign, where the massive budget gap and President Barack Obama's economic policies have dominated the debate.
The Obama administration spent $3.538 trillion in the 2012 fiscal year, 1.7 percent less than last year due to the expiration of stimulus provisions, a stronger economy, the end of military operations in Iraq and the continued draw down in Afghanistan, the Treasury said.
Strong tax collections pushed receipts up to $2.449 trillion in 2012, up 6.4 percent from last year."
(http://www.reuters.com/article/2012/10/12/us-usa-economy-budget-idUSBRE89B17620121012)
Obama has offered up a budget that was stalled in the senate. Paul Ryan has offered a budget that is considered very extreme and Romney says is not his plan although he endorsed it. Only Romney has not actually offered any kind of budget. I'm sorry my Republican friends, but the bare bones plan of Romneynomics which comes from his own site, DO NOT ADD UP.
IT'S MATH not MAGIC.
(Please don't send me some conservative website. I was very careful to get my info from non-partisans news organizations and avoid using biased liberal or conservative sites unless identified and btw the 'liberal media' term being applied to all news organizations except FOX is only used when someone is losing.)
According to Reuters reporting from the Treasury Department:
"The September budget surplus of $75 billion, which topped analyst expectations for a surplus of $42 billion, marked only the second month in the fiscal year ended September 30 that the country was in the black.
The year-end budget report comes in the final weeks of the presidential campaign, where the massive budget gap and President Barack Obama's economic policies have dominated the debate.
The Obama administration spent $3.538 trillion in the 2012 fiscal year, 1.7 percent less than last year due to the expiration of stimulus provisions, a stronger economy, the end of military operations in Iraq and the continued draw down in Afghanistan, the Treasury said.
Strong tax collections pushed receipts up to $2.449 trillion in 2012, up 6.4 percent from last year."
(http://www.reuters.com/article/2012/10/12/us-usa-economy-budget-idUSBRE89B17620121012)
Obama has offered up a budget that was stalled in the senate. Paul Ryan has offered a budget that is considered very extreme and Romney says is not his plan although he endorsed it. Only Romney has not actually offered any kind of budget. I'm sorry my Republican friends, but the bare bones plan of Romneynomics which comes from his own site, DO NOT ADD UP.
IT'S MATH not MAGIC.
(Please don't send me some conservative website. I was very careful to get my info from non-partisans news organizations and avoid using biased liberal or conservative sites unless identified and btw the 'liberal media' term being applied to all news organizations except FOX is only used when someone is losing.)
You absolutely can cut tax RATES and increase tax REVENUE. We could not disagree more on this issue. This school of tax policy absolutely ignores the human factor of the economy by using a static model. The principle is most frequently seen in frequent store sales, companies lower the prices of merchandise to increase the volume and make more money. Otherwise a failing company would simply double the prices of their goods to double their revenue. The same is absolutely true of the economy. There is a "butter zone" of tax revenues. An area that still encourages growth, but does not inhibit it.
ReplyDeleteCurrently the issue is two fold. An annual deficit of over one trillion dollars cannot stand. You could tax every millionaire at a rate 100% (obviously prohibitive but allowed under the static model you use) and still not cover the deficit. the ONLY ways to pay for a deficit of this magnitude is to either drain the middle class or print more money. Either way the result would be a devastated economy. Current spending is too high and is above the tax capacity of the country, and must be cut. Yes, that means making difficult choices, but it has to happen.
So the true debate is over current tax rates. You would maintain they are too low, and I that they are too high. I support across the board tax rate cuts in conjunction with closing many loopholes that corporations currently use to get out of paying taxes. The result would be taking a slightly smaller percentage of a much larger pot. Lower tax rates mean more potential revenue gains for individuals, causing them to invest more money, make more money, and pay more tax revenues at a lower rate. Of course in conjunction with drastically reducing spending. You wouldn't run a household budget like this, why would you run your government this way? /Rant
As for your "centrist" sources...
ReplyDeletePolitifact has an obvious liberal bias, and has been caught twice in the last year confirming that statements made by Romney are accurate, and then rating them "mostly false"
The Atlantic is a mostly centrist slightly left leaning organization. However, the author of the article you sited (Matthew O'Brien) is a former writer for the VERY left wing "New Republic"
The third article from Bloomberg (and admittedly mostly centrist organization) was written by Josh Barrow, formerly of the Manhattan Institute for Policy Research, which is a very conservative think tank. I agree with his article. That is to say the Romney Plan will not alone fix the deficit problem. The article simply points out that at our current levels of spending the only recourse is to tax the crap out of the middle class. This is why spending at our current levels is not sustainable, regardless of who is in office. I guarantee the phrase "less spending, smaller government" has ever passed Obama's lips.
I really did try to avoid any left wing group such as MSNBC or Mother Jones and any right wing like FOX or the Wall Street Journal (sorry but Wall Street I know you've used as a resource but it's editorial page and political pages are conservative, while the rest of the paper tends to be actually more liberal. An interesting study from a political science professor at UCLA actually had two surprises in his study. The info above comes from that study. He found the Drudge Report, often considers conservative to actually be more centrist in balance and PBS long thought to be liberal to be more conservative, in its leanings. Nothing to do with above just an interesting side light about Media Bias)
DeleteI will give you the Atlantic author did work for the New Republic which according to wiki is Democratic leaning although the source also says that they tend to lean toward the Clinton Democrats who are often considered more conservative. The Atlantic does not have that reputation. They don't say it is a left extreme, but I didn't use New Republic as a source anyway.
Politifact is regularly attacked by both right and left for their research which means they are probably pretty good at trying to avoid bias. I've read the "six" studies and it is very fair in its assessment in that they are not studies any more than my blog is. If you don't like Politifact how about FactCheck.org? http://www.factcheck.org/2012/08/romneys-impossible-tax-promise/
I also agree that simply raising taxes or in Romney's cast cutting taxes will not take care of the deficit. Romney's 5 point plan as it appears on his website does not tell what he intends to cut in the loopholes or spending and in every interview he has steadfastly refused to answer this question. It does say he wants to raise the budget to the military.
I am not saying that Obama is offering anything that detailed either, although today he released some booklet on his plan, but I have not read it so I cannot comment. The Tax Policy Center who developed the study that says the math does not work is a well-known bipartisan group that until it came out with its analysis had been praised by Conservatives including by Romney in the early part of his run for the nomination when attacking Rick Perry's plan.
Glad you are involved and paying attention. I love having a civil discussion.