"Ed Huntress" wrote in message
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"Stuart Fields" wrote in message
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"Ed Huntress" wrote in message
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"John R. Carroll" wrote in message
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"Ed Huntress" wrote in message
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"Stuart Fields" wrote in message
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I wonder why this hasn't hit some of the news channels. I know that I
have not seen this before.
http://www.worldnetdaily.com/index.p...w&pageId=88218
If the Republicans hadn't gutted money for the states from the House
version of the stimulus bill, the 10th Amendment issue would die in a
hurry.
Don't be surprised to see those funds restored to the conferenced
version of the bill Ed.
What I don't understand is why the bill doesn't contain payroll tax
abatement provisions. That could be accomplished with the stroke of a
pen and would be as quick a stimulous as you could get. Republicans
would have been hoist on their own petard, and they'd have been falling
all over themselves to get behind the bill.
Oh, you underestimate their creativity. I'm sure they'd find something
to bitch about no matter what was or was not in the bill.
To them, this is about trying to score political points, not about
helping the country to recover. If you listen to Limbaugh, that's
exactly what the hard-core wants: failure.
And I'm thoroughly disgusted with McCain's grandstanding and sleazy
manuevering. He had it right the first time, when he said that his
understanding of economics is not one of his strong points.
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Ed Huntress
Ed: I sure didn't vote for McCain but I do share his apparent lack of
understanding of economics (I did get a big fat A in engineering
economics though) but how does decreasing income (tax breaks) and
increasing spending (in spite of an existing and growing large debt) help
our economy? If this is a workable method shouldn't people who recently
lost their jobs(decreasing income)go buy more with their credit
cards(increased spending)? The only difference that I can see is that
the Government can print more money and control the value of the debt.
That's the question of the hour, Stu. I assume you're not asking for my
opinion on it, which is like dust in the wind, anyway, but rather what the
administration's thinking is on their stimulus program. The most compact
answer I could give, of which it will require your considerable analytical
skills to recognize its full implications, is this:
Debt, at the national scale, is a small problem. An inability to PAY for
that debt, without destructive messing around with the currency, is a very
large problem, especially when you're in a downward-spiraling recession.
The growth rates required to stabilize deficit spending and to reduce it
to zero are actually a lot smaller than most people realize. So the bottom
line, to mainstream economists, is to get the growth rate up. That's the
only thing that will get us out of this mess. And the mess will look less
deep and messy if we *do* get growth going again. It doesn't matter how it
grows. What matters is that it *does* grow. And if we don't get it
growing, and quickly, we can kiss our economic ass goodby. g
That's the theory. Something to keep in mind is that a 1% increase in
growth of the GDP directly increases tax revenues by roughly $50 billion
(at an overall tax rate of 33%, including federal, state, and local).
Likewise, a 1% decline directly increases deficits by a like amount. There
is a compounding effect from growth because you can tax some things at
higher rates when your economy is growing, without slowing down growth,
and also because a growing economy reduces the percentage of debt
represented by a given dollar amount of previously acquired debt, both of
which decrease the debt burden as a percentage of income. It also reduces
the interest rates the Fed has to pay.
And there are many other complications and caveats, which can be argued
six ways to Sunday. They aren't the point: The point is that deficits are
very sensitive to the growth rate of the GDP and to tax rates.
That's what's driving the administrations policies.
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Ed Huntress
Thanks that makes a bunch of things a bit more understandable. It does
bring up a problem that we are having in our valley. The old adage "If you
ain't growing your dying". Has some very negative unintended consequences.
We are using more water now than is being replenished. Yet the city fathers
are actively trying to get more industry into the area as well as more
people. This water problem, I believe, is going to become an increasing
problem as we continue to "Grow". I can see from the discussion provided
by both you and McDuffee how growth has become an economic necessity. We
appear to be caught up in a giant Ponzy scheme.
Stu