Thursday, November 29, 2007

The Republicans for Prez

Last night I watched the CNN/YouTube Republican presidential candidates debate. All of the questions were from YouTube and some of the people/skits were pretty funny. While I still like the standard "old-fashioned" debate format, YouTube definitely livened things up, and it's a good way of getting Americans to hopefully become more interested in and involved with the election.

Before I go on, in the interest of full disclosure, I have to say that I'm on the Mitt Romney campaign. Most of you already know that. I haven't really done much for it; so far I mainly just get the campaign e-mails. But he is the man who I want to be President. I'm going to have to register as a Republican so that I can vote for him in the primary. I'm an independent, but I definitely lean to the right. My brother would say I'm all-out Republican because I watch Fox News and agree with Bill O'Reilly on most matters, but I don't think so. I don't have a problem voting for a Democrat if I think that person is better for the job. (As evidenced by my voting record--I voted for Gore in 2000 and Bush in 2004.) The balance of power doesn't matter all that much to me, I just want the best people in office no matter what their party is.

So, having said all that, here are my awesome insights about each of the Republican candidates so far. I'm putting them in the order that they were announced at last night's debate:

1. Congressman Duncan Hunter. He seems nice and smart enough, but as a candidate he's kind of forgettable because he doesn't really stand out. I don't have that much to say about him. Of the group that is left, I predict he'll withdraw from the race first.

2. Congressman Ron Paul. I think he's pretty great, I really do. My super-liberal brother Ben is even going to register Republican so that he can vote for Ron Paul. He's the most honest candidate and he seems to say exactly what he thinks and doesn't play the political game. I like how he's straightforward and sticks to his guns--he truly believes everything that he says. (In some cases, that's unfortunate, but more on that momentarily!) It's pretty cool that he was an obstetrician before going into politics, helping to bring life/joy/screaming babies into the world.

The big "but" with Ron Paul is that he's wrong about foreign policy. His views would work in an ideal world, but this world is far from ideal. His non-interventionist strategy would only let evil people attack us and others a lot more easily. And they want to get us because they are radical fundamentalists and not just because the U.S. is over in their countries. There are other "buts" about Paul too, but that's the biggest one for me. So even though he has a lot of good ideas and he seems like a great man, I really don't think he could make it work as President.

3. Senator John McCain. I've never been a big McCain fan. I saw him in person once when I was volunteering at Penn's 2001 graduation and he was the speaker. It was pouring out that day and he was smart enough to keep his speech short and sweet since all everyone wanted to do was get out of the rain. Anyway, I like McCain for his military experience. I think he would be good when it comes to that kind of thing. The rest of it, though, I'm not so sure. My biggest problem with John McCain is that I've heard several times that he has a bad temper that he doesn't control very well, he swears like a sailor, and he holds grudges and is openly rude to those who he's ticked off at. I don't want that kind of a person running the country. We need someone even-tempered and good-natured (not another LBJ!).

4. Senator Fred Thompson. I have been stumped as to the popularity of this guy. What is the big deal? I hadn't even heard of him up until a few months ago, and I follow politics regularly. That being said, he was good in the debate. He has a quick wit and good answers. His demeanor is calm and strong. But I still don't know what's so great about him and why he would make a good President. What has he done that is so special?

5. Mayor Rudy Giuliani. He was great as mayor of New York and was amazing in the wake of 9/11. I was a big Rudy fan back then. But the more I've learned about him the less I've come to like him. It's good that he's moderate and therefore might be able to reach out to both sides better, but I don't think he's very well qualified to be the President. To go from being a mayor (yes, even the mayor of NYC) right up to prez is a big leap, isn't it? Plus, I don't trust him. I don't mean to be a Bible thumper, but he cheated on his wife and left his family. I do think it matters what a person does in their private life because it shows what kind of a moral compass that person has, and one's level of personal morality can have a significant impact in politics. I also don't like his new wife Judith, and they have exhibited some downright strange behavior together in the past.

Giuliani and Romney really went after each other in the debate, and Rudy struck first, going after Romney on immigration and accusing him of employing illegal immigrants at his "mansion." He was talking about Romney's house in Belmont, Mass. and was trying to make it seem like Romney is a hypocritical, distant, super-wealthy guy who's disconnected from the general public. First of all, I have seen that house, and though it's big and beautiful, it's not a mansion, it's just a big colonial. Giuliani was exaggerating and I bet he knew it. He kept trying to say that Romney hired illegals to work at his "mansion" (the landscaping company he hired to work on his lawn had some illegals, but that's not Romney's fault or responsibility). So I was glad when Giuliani got booed when he kept trying to go on and on about it. So anyway, it just made me more unhappy with the guy. I'm worried that he's going to win the nomination, and I just can't imagine this man being our President.

6. Governor Mitt Romney. He is brilliant and articulate and accomplished, but he didn't do as well as usual in the debate last night. Some of his past and present positions on issues like abortion, waterboarding, and gays in the military made him stumble a bit.

Romney may not be the most upfront candidate, but he's far from being the most deceptive or malicious. He's just playing the political game and probably had to position himself the way that he did in order to win the governorship in liberal Massachusetts. Electoral politics really is a game, after all.

Now that some of the things he said in the past are coming back to haunt him, maybe he should have had better integrity and said what he really believed, but I have to tell you, I'm a Mormon too and in the past I went back and forth on the constitutional right to abortion issue, finally deciding that it shouldn't be a matter of constitutional rights when it comes to ending a life. So I understand his line of thinking on that because it mirrors my own. I don't think he's saying whatever he can to get elected, but he is walking a fine line, as are all of the candidates on both sides. They're all players of the game and have to be strategic in whatever they say and do. It's one of the things I hate about politics, but unfortunately it's the way it is.

Mitt Romney is a good person and I know that he would make a good President. He would clean up Washington and get it running better and that would have numerous beneficial effects. He's so good at that sort of thing. He did it for the state of Massachusetts, he did it with the Olympics, and he's done it many times in business when he's helped companies that are falling apart get back on track.

And his Mormonism should absolutely not be an issue for voters. It wasn't a factor when he was the governor, and it won't be if he's President either. Sometimes I have to laugh about some of the ignorant assumptions and reservations being made about the LDS Church. Sometimes the intolerance and lack of understanding really anger me. If it keeps him from getting the nomination I am going to be really annoyed.

Last but not least about Romney, for now, is that he would be, like, our handsomest president ever!

7. Governor Mike Huckabee. He's a nice guy, and he's making me nervous because he's been gaining on Romney. I like Huckabee, but I don't "heart" him. He seems to be honest and good, but sometimes his nice-ness comes off as preachy and too sweet for a man running for President. He's not as strong and presidential as some of the other candidates. He doesn't have the accomplishments and successes that Romney has had. But I think I'd take him over Giuliani. A Romney-Huckabee ticket could be good. Then maybe the people who are scared of/hate Mormons will vote for them since Huckabee is a Baptist minister. I don't know if those two together would be strong enough to beat Hillary though (yes, I do believe she will be the Democratic nominee. But more on that another time!). It might take Giuliani or McCain to do that (as the VP candidate, of course!).

8. Congressman Tom Tancredo. He's really into immigration and seems to be good with that, but not much else. What else has he done? I'm not sure. He's kind of similar to Hunter: likable but not very memorable, although he stands out a bit more than Hunter does. He'll probably be the second one to go.

If you've made it this far, I'm very impressed! This is my longest post ever. That happens with politics, it tends to make one either have a lot to say or nothing at all to say. I will write about the Democrats running for President sometime soon, so stay tuned.


Alyson said...

Thank you - I feel much more informed having read your post. You and I seem very similiar on our political beliefs. I'm pretty moderate, but lean to the right. I also have no problem voting for a democrat when I feel they are the best candidate.

Oh, and I also liked your little reference to "I Heart Huckabees"! I actually liked that movie, though I know a lot of reviewers didn't.

Donna said...

Oh good, I'm glad you got something out of it and that I didn't write all of that for nothing! It's nice when your friends feel similarly as you do when it comes to things like politics. It makes things so much easier. Some of my friends/family and I disagree, and boy can we clash when we talk politics! Even though it can be maddening, we have fun debating (most of the time). Looks like you and I won't have that problem!

Mom said...

Donna, I loved your posting on the Republican candidates. I didn't watch the debates and am not as well informed on the candidates as you are. Between you and Ben, I will probably vote for the best candidate when the time comes.

Alyson said...

Donna, do you have a brother named Ben too? Yet another way we're alike!

Ben said...

I wouldn't consider myself "super liberal" anymore than you would consider yourself "all-out Republican." Mostly we have a similar idealogy with some disagreements. I think we both support free markets, liberty, and individual rights. I agree with most of your points but disagree with your conclusions on Paul and Romney (surprise).

I like how you admitted Romney's faults so far, but you give him way to much benefit of the doubt. I wonder how a "good person" could not be flatly against torture and the abandonment of the Geneva Conventions (Guantanamo Bay doubling in size). Also regarding Romney's lack of stability on the issues you say "they're all players of the game and have to be strategic in whatever they say and do. It's one of the things I hate about politics, but unfortunately it's the way it is." Right before that you said about Paul; "He's the most honest candidate and he seems to say exactly what he thinks and doesn't play the political game. I like how he's straightforward and sticks to his guns--he truly believes everything that he says." This seems kinda contradictory to me.

Paul's foreign policy is based on admitting that we live in a global economy. That's why he's trying to keep our currency strong through reversing our monetary policy and huge budget deficits. It's also important to repair our relationships with much of the rest of the globe by abandoning our futile nation-building efforts in the Middle East. Assuming that 9/11 showed everyone the danger of radical Islam, how do you explain our foreign funding decisions?

We have sent $1.3 billion a year to Egypt's military and $815 million a year in economic aid, and yet five of the 9/11 hijackers were Egyptian. Egypt is one of the biggest recipients of US foreign aid, and the money allows their leaders to stifle democratic reform of the government and silence or disappear his critics.

15 out of the 19 hijackers on 9/11 were from Saudi Arabia. Saudi Arabia is an absolute monarchy where no belief outside of their learned interpretation of Islam is permitted. Saudi Arabia meddles in Iraq-same thing the administration accuses Iran of. More terrorists come from Saudi Arabia that go against the United States than any other country. And yet we make a deal with Saudi Arabia for $20B in weapons over the next 10 years. (
We are also offering Israel more than $30 billion in military aid over the next 10 years to "counter-act" the funding we give to radical Islam. Fundamentalist relgious nuts should never be underestimated, however the US meddling in foreign affairs has severe consequences that are also dangerous to underplay.

So given the fact that the government is running huge deficits (although Peter says it doesn't matter since we have such a high GDP, which has truth to it), it is really responsible to be giving all that money to interfere where we seem to cause more human suffering and corporate profiteering than good? That money could go to US infrastructure to support our education, border security, and general welfare of the American people.

I really enjoy your blog and this article in particular. Hope I didn't ramble too long but you know how I love such things. Also I couldn't get source URLs to come out correctly, so let me know if you need further documentation.

Donna said...

Actually it's funny, I originally had in parentheses that Ron Paul isn't a player of the game since he is so honest, but I left it out because I was trying to make the post shorter. I thought you might pick up on that! I'll get to the rest of it later but right now I have to take John to a Christmas thing to see Santa.

Peter said...

I do not say that high deficits don't matter, I simply say that the recognized deficits aren't as high as they have been in the past relative to the GDP. I also believe the government should not be running a surplus during a recession, which was the time that Bush enacted his tax cuts, which did help stimulate the economy and turn it around.

Anyways, I can't say that I agree with the profligate spending the republicans have enacted while they controlled Congress & the White House.

What's really scary about the state of our deficits is not the size of the current recognized deficit, the outrageous congressional spending, or the money going to fund the war, but rather the unrecognized debt levels we have incurred through Social Security & Medicare.

The government currently takes all of the excess Social Security taxes above that needed to pay the current social security beneficiaries and spends it on current spending along with the general tax receipts. The government sells treasury notes to the SS administration, where the funds are "invested". It's the same equivalent of spending all of the money in your 401k account and replacing it with a piece of paper that says "I owe you". When you finally get to retirement, nobody will accept the "I Owe You". If we refused to recognize SS receipts as part of the general budget, our deficit would balloon. Recognition of the unfunded obligations of our future SS benefits would cause similar increases in our national debt.

This is probably the one item about the Republican control that disappoints me the most. Even controlling both the executive and legislative branches necessary to push legislation through, they were unwilling to get it done. I'm also disappointed with the Democrats who seemed much more interested in ensuring that no fixes occurred on the Republican watch than in actually solving the problem.

Every year that goes by where no action is taken brings makes the fix that much more costly and painful. Lot's of people, who are overdependant upon SS will come up short if nothing is done. The tax rates necessary to support these obligations in the future should we do nothing will ruin the economy.

As to the candidates, I do not yet know who I will vote for. I like a lot about Romney, but I also am concerned about his instability relative to the issues. I believe that will hurt him in the primary, though likely not in the general since Clinton has the same issues.

I agree with a lot that Ron Paul has to say, but I think that he's too extreme for US politics and would likely lack sufficient support to be successful should he win (which I'd be extremely surprised if he did).

Ben said...

Hi Peter. I was only bringing up the deficit in relation to our current foreign policy. I remember you saying before that the deficit needed to be viewed in relation to how much money the country is making, I'm not sure if you've changed your views over the past couple of years or if I misunderstood your stance. The economy might've grown after Bush's tax cuts, but in the long term I still say they were unwise. Granted you know more about this than me and I tend to oversimplify it. From what I see right now it looks like we are heading back into a recession. I'm not sure how you feel about the housing market but that's a discussion for another time. Working in a mall that caters to "upper class" people I've noticed that there are still people with plenty of money to spend, but so far it seems as if people are holding back, which is going to kill my December bonus.

The debt levels we have incurred through Social Security & Medicare still relate to the spending on foreign policy, as the money would be better spent on the things that will help American citizens. As Ron Paul is a doctor he seems to have more knowledge about how the medical system should work. He is against Medicare but realizes that a lot of citizens are depending on it currently. So far in the debates he hasn't had a chance to outline what he would replace all the systems he is opposed to with. That's something I have to do more research on. Also I haven't read much about how he would fix Social Security.

The Republicans are usually about fiscal responsibility, which the Neo-Cons have abandoned. Not to brand anyone as a Neo-Con, but they seem to be Republicans in name only. Also I realize the Democrats have not done anything useful. I'm glad you recognize something needs to be done. For me Paul is the only one who is willing to go against the status quo, but I'm somewhat naive on certain issues. Romney might not get past the primary due to his instability on several critical subjects. It seems Huckabee is getting a large push from the religious folk.

Paul's extremism is necessary to fix a system that nobody seems to be taking responsibility for. It's easy to brand him as "nutty" but you seem to realize that a lot needs to be done, or else we are going to be in bad situation sooner or later. Are you surprised by the amount of support he's gotten so far? Seems he's been doing a lot better than most people could've imagined and he is the only candidate that gives a live viewing of his current donations. Also he doesn't have to invest millions of his own money in his campaign like a certain other candidate. He might not have the political support he needs to get his ideas through, but he has the undying support of many passionate citizens and I don't think that's a bad thing.

Donna said...

Ben, I read both of the articles you posted in your comment. When it comes to foreign aid, I think the government operatives behind it know way more than we do, and they can't let the public know the details for security reasons and other strategic reasons. So even though it may seem like really bad, counter-intuitive decision-making as to the use of our funds (and it's possible that in some cases it is), there's more to it than just the cold hard facts that we see in the news.

Ron Paul's foreign policy plans must include mediation with these countries/groups in the Middle East, right? I'm not usually cynical about these things, but I think that improving relations with some of the groups in the Mid-East isn't going to happen. They're not interested in diplomacy. They just want to attack and/or kill their "enemies" because it's part of their ideology. So any diplomatic efforts would in all likelihood fail. I hope I'm wrong about that, but I don't think I am.

The numbers you gave don't add up. You said five of the hijackers were Egyptian but then that 15 of the 19 were Saudi Arabian. (Not that it matters that much. Just wanted to point that out since you found an error of omission that I made!)

As for Romney. Well, I consider myself a good person and I support the use of torture when it's absolutely necessary. If that makes me a bad person, so be it. It should only be used as a last resort, and then starting at the lowest level and working its way up if need be. It's worked in the past, and the "victims" of it are alive and well. Okay, so that's total conjecture on my part, but I haven't heard otherwise.

Ron Paul doesn't have the millions that Romney has, but are you saying that Romney shouldn't use a lot of his money in his candidacy? Of course he should. It's his and he can do whatever he wants with it. He can't take it with him when he dies anyway. Might as well use it for a presidential run! Romney's name recognition in the country isn't as good as Giuliani and McCain and so he needs to do whatever he can to get it out there. As a result, he's doing really well in the polls in Iowa and New Hampshire.

Like Paul, Romney recognizes many of the faults in the system too. He said in one of the debates that the first thing he wants to do when he gets to Washington is to clean it out, organize it, get it streamlined, etc. to get it running a lot more efficiently. I think he's better equipped to do that than anyone due to his business and other experience.
I'm very impressed with how well Ron Paul is doing with fundraising and support. I didn't think it would happen to the extent that it has. The internet is to Ron Paul what Romney's bank account is to Romney.

And Peter's right about Ron Paul. How would he ever get the majority support needed to enact his policies??

Peter, if you don't vote for Romney, then I will have totally failed as a campaign worker. And you will have to live with the guilt of that forever.

Ben, give it a few more weeks and then the big spenders will probably not disappoint. I'm sure people will be opening their wallets more and more as the 25th approaches. And they might buy the more expensive things too because they'll be panicked or feel guilty about procrastinating. So maybe your bonus won't be too small after all! One can always hope.

And that is the end of my mini-novel.

Peter said...

They do need to be viewed in light of the relative GDP. I believe we were discussing the contention that Bush had built "the largest deficit of all time" into his budgets. While true in absolute terms, it was not true in relative terms. I don't believe that deficit spending is the best policy, any more than I believe that debt spending is the best for us. I do believe there are reasons to go into deficit spending, but that it should be only for temporary and specific reasons. I also believe that tax cuts generally generate more revenue over time, to the extent that they are designed to stimulate investment and growth. The pattern has been proven in my mind.

The economy is declining, but there are a lot of outside forces acting on it. Rising commodity prices and a correction to artificial bubbles (both credit and housing) are acting to cause some restraint. I don't feel that this is a long term problem as I think the pendulum has swung too far the other way with respect to credit tightening that things will ease in a year or so. Housing will probably take a bit longer to recover, especially in the high bubble areas, but with the moves the treasury and the banks are putting together should help to ease it. I am just concerned it will set a bad precedent. I doubt the economic slowdown will be as bad as some doom & gloomers are predicting, but it very rarely is, so that doesn't say much.

I agree that completely unique mindsets are necessary to fix Washington, but I just feel that Ron Paul is too outside the box to actually win. Even if he were to win, there are just too many politicians concerned with growing their own empires and who are afraid that disrupting the status quo might change that to get the complete support he needs to fix anything.

Romney I believe has a good heart and his past successes lead me to believe he probably would do a decent job. I am concerned about his ability to win, however, and wonder if he is too willing to seek broad consensus and acceptance to drive through the reforms that are needed. The reality is, I'm not sure anyone from "the establishment" will do any different. Unfortunately, until the problems become too immediate to ignore, there are always easy reasons to avoid the ones with difficult solutions, even if addressing them now makes those same solutions far less difficult. Any dramatic reform is going to have to start with a groundswell of public opinion, or it simply won't happen.

Ben said...

Hi Donna. You busted me on the hijacker number thing. I thought at first the extra one was the supposed mastermind of the plan (Khalid Sheikh Mohammed), but I'm not able to back that up now. I was always bad at what the official story actually was. If I can fix it I will let you know, but the point was that the supposed Islamic threat is either more hyped or more ignored than we are led to believe.

The government is suppose to act in our interests. By keeping away vital information they are going to raise suspicion. No doubt the government operative know way more than we do, but who's to say they are acting for good reasons? It leaves the more paranoid prone to wildly speculate about what is going on. Giving them the benefit of the doubt might ease the mind, but seeing as how things have been bungled in the Middle East for many years one can't help but think it's deliberate and profit motivated, which is a very bad thing.

Ron Paul's foreign policy is to let the Middle East handle itself. Sure it would be nice if we could fix things, but if they're not interested in diplomacy we have no right to force it on them. Would the US care about the Middle East if their wasn't some personal incentive? There are many horrible regimes in the world today and the US can't be the world's police.

Romney says he doesn't want to define torture because he doesn't want the terrorists to know what our limits are (paraphrasing). This doesn't make sense to me because the terrorists don't seem to be concerned with the repercussions of their actions. They believe in what they are fighting for with all their soul, which is why it is so hard to break them. My opinion is that we shouldn't condone torture because we're better than that, that's why we are the good guys. Of course things aren't as idealistic as that but for the administration to lie and duck the issue on torture shows a horrible lack of integrity. When has torturing worked in the past? From what I've read torture doesn't yeild any valid information and is only a means of barbaric control.

Romney definitely has the right to donate his money to himself, it's a free market after all. It just makes him look bad in my opinion that he isn't getting more donations from the voters. What is his interest in becoming president? I just don't believe that he's doing it for the good of mankind as a whole and that he is a businessman with many other interests at heart. I'm not going to post dirt about Romney because that isn't the point. I can understand what you see in him and I will be interested to see how he does. The bad thing about the debates is that they only show so much about the candidates. It's too bad the mainstream media doesn't delve deeper into the candidate's viewpoints and policies.

As far as Paul getting his policies through, that's a valid concern on your and Peter's part. He has tried to pass many worthwhile bills that don't seem to get anywhere. I think that Paul is "waking up" a lot of people who are going to demand more accountability. There are a lot of passionate people out there who feel like the country is becoming less of a promising place to actually live and raise their children in. Hopefully the power of the people will make a difference but once again I'm very idealistic.

My job is very interesting in that I get to apply my supposed knowledge of economics to the real world (at least in my mind). I'm very negative by nature, so I appreciate the support. Still, if you saw the sort of numbers that were projected against the business we were actually doing, you'd be skeptical do. Not that we're doing bad, it's just corporate makes the goals higher every years regardless of any external factors.

ben said...

Hi Peter. I've read that last year the shortfall in America was 6% of GDP, which I thought was rather high. It doesn't look like it's just temporary deficit spending the way things are going, as we have been importing more than we export for a while and have shipped many manufacturing jobs overseas (if I'm wrong let me know). The dollar might lose it's place as the international currency, although I'm not sure how broad the consequences might be. The Euro has already eclipsed the dollar by about $.50. The dollar has had trouble every decade since the 70's and has always fought back. However my fear is that America is running too much overseas debt and has no way of regaining that.

As far as Bush's tax cuts go, from what I understand it favors the rich to an unfair degree.
"The first major economic initiative pursued by the president was a massive tax cut for the rich, enacted in June of 2001. Those with incomes over a million got a tax cut of $18,000—more than 30 times larger than the cut received by the average American. The inequities were compounded by a second tax cut, in 2003, this one skewed even more heavily toward the rich. Together these tax cuts, when fully implemented and if made permanent, mean that in 2012 the average reduction for an American in the bottom 20 percent will be a scant $45, while those with incomes of more than $1 million will see their tax bills reduced by an average of $162,000." source:

The housing problem will take a long time to fix. Think of all the people who were banking on selling their house to pay for retirement. You've already stated how bad a shape Social Security is in, so there is even less of a safety net for more and more people. Also many people who depended on the booming housing market are going to be out of jobs in the construction and retail sector. Granted the shift is necessary but it has the potential to have dire short term consequences (and yes I know I'm a doom and gloomer).

Even if Ron Paul can't win, he's affecting the debate and forcing candidates to adopt (to a certain degree) some of his stances to appeal to a certain audience. People have doubted him for a while and he has done surprisingly well. I'm too idealistic, but a Paul victory would signal a shift in the public consciousness to the point where corrupt politicians will be hopefully recognized for what they truly are.

The problems of today haven't reached an absolute tipping point yet, but they have for a number of people and hopefully they can make a difference before it gets way out of hand. I don't trust Romney but am not convinced that he's a bad person at heart. He does have a good business sense which could be very beneficial to the country if applied correctly. Ron Paul has a "groundswell of public opinion," but it might be too little too late. I still have faith that the future will disclose more truth and more people will jump on the bandwagon.

On a less antagonistic note, congratulations on the article in the Wall Street Journal, I'd like to read it some time if I get a chance. Any opinions on Rupert Murdoch's ownership?

Peter said...

I always find it interesting when tax statistics are quoted. They are the most stretched statistics around.

2006 was projected to have a budget deficit of 434 billion dollars forward looking (approxiamtely 3.5% GDP). The democrats blamed the republicans for their failure to restrain spending coupled with the Bush tax cuts hurting the revenue. What actually happened was that strong economic growth fueled a surge in tax revenues that dropped the actual budget deficit to 250billion (approximately 2% of GDP).

Regarding the Income Tax, let's take your figures. You mentioned that someone earning an income of $1,000,000 received an average tax cut of $18,000, which was 30 times the average earner.

Let's take a closer look. At 30 times the average earner, the average earner must have received $600 in tax cuts. In 2006 the median household income was $48,201. I'm going to distort the argument in your favor by assuming that the $48,201 was the AGI, which is after all of the deductions that would actually make the differences more dramatic. By my estimate, the total 2006 tax bill for someone with an AGI of $48,201 would have been $6,447. If your $600 figure is correct, then the savings amounts to approximately 8.5% of the total tax bill.

Now let's look at the $1,000,000 income. Again, let's assume that the $1,000,000 is all AGI. My estimate of the 2006 Tax bill is $340,206. Notice that while the income was approximately 21 times larger, the tax burden is in fact 50 times larger. The tax savings of $18,000 is in fact 5.3% of the total taxes. In fact, before the Bush tax cuts, the actual ratio of taxes would have been lower, with the high income payer only paying 48.3 times more than the median AGI. I'd be happy to show my calculations, and they are easily replicable.

The idea that the Bush tax cuts didn't fuel growth is not borne out, neither is the idea that they are extremely unfair. I always find it interesting that the Democrats play so much on class warfare, but fail to note that high "progressive" taxes simply widen the gap between the rich and the poor. That is because the more they take away from income, the harder it is to save and become wealthy. Whereas those who are already wealthy do not need high incomes to maintain their wealth, as it is self-sustaining.

This is not to say that I don't believe the Bush tax cuts could have been better designed (stimulative effect vs cost). But that is a discussion for another time.

Alyson said...

Wow, your family is very political! That's great!

Donna said...

Yeah, we can't shut up when we get into discussing these kinds of things. Mostly Ben, Peter, and I, but especially Ben and Peter. The others in my family are a little more laid-back. BTW, it is funny that we both have a younger brother named Ben!

ben said...

Thanks for the analysis. Assuming both of our calculations are correct, it seems the tax cuts helped the rich who were already paying too much. I hope your numbers are correct because it would mean I should be getting a huge tax refund after April. As you probably know Ron Paul is against the income tax and wants to disband the IRS. Unfair taxes is the very reason that we formed the USA and import taxes are all that has ever really been legal according to our constitution.

My point about bringing up the tax cuts is not that it didn't help the economy (in the very short term), but, like you mentioned, it could've been done better. The tax cuts have worked so far due to a combination of surging productivity, low commodity prices and cheap imports that have kept inflation and interest rates low. Taxes have been falling and, thanks to low interest rates, debt has been cheap. As a result, the American consumer has kept spending. However the recovery is financed by borrowing, mostly from abroad, and the bills may be about to come in. Productivity is slowing, the price of oil is soaring and other commodity prices are also climbing.

The wealthy will bank or invest virtually all of their gain. Those who have just a tiny fraction of such wealth tend to spend a much larger proportion of whatever gains they get from lower taxes. The more taxes are progressive the greater the immediate impact on the economy. The Bush tax cut does the opposite. The new low 15 percent tax rate on dividends and capital gains from stocks will lead to new tax shelters for the super-rich; such as creating paper corporations to pay out income as dividends at less than half of the top income tax rate of 35 percent.

A tax cut that results in a budget deficit is not a tax cut for the Federal government. The Federal government can just get the Federal Reserve to print money to purchase the bonds needed to fund the deficit. This results in the value of the dollar dropping and prices rising. This is the Bush economic plan so Bush didn't lower taxes at all. Bush just switched the taxation to a form that most people won't recognize as a tax. This is a stealth tax known as inflation. It hits everyone holding dollars and dollar debts. It hits the poor hardest because they don't have the resources or knowledge to hedge against this. They just end up paying more for food, energy, insurance, health care and most everything. The cost of living for the rich is small relative to their wealth so they don't feel the impact of higher prices. The wealthy with good financial advisors know what is going on and can hedge against the value of the dollar dropping.

I've seen Bush's tax cuts compared to Ronald Reagan's supply side economics. "Reagan promised the nation that if we lowered tax rates on the wealthy, the economy would grow so much the federal budget would be balanced within a short time. In 1982 (the year I was born :-)), the first full year after the tax cuts were enacted, the economy actually shrank 2.2%, the worst performance since the Great Depression. And the effect on the federal budget was catastrophic.

Jimmy Carter's last budget deficit was $77 billion. Reagan's first deficit was $128 billion. His second deficit exploded to $208 billion. By the time the "Reagan Revolution" was over, George H.W. Bush was running an annual deficit of $290 billion per year.

Yearly deficits, of course, add up to national debt. When Reagan took office, the national debt stood at $994 billion. When Bush left office, it had reached $4.3 trillion. The national debt had taken 200 years to reach $1 trillion. Reagan's Supply Side experiment quadrupled it in the next 12 years.

When Bill Clinton took office he intentionally reversed the Supply Side formula, raising taxes on the wealthy and reducing them on the lowest wage earners. Between 1992 and 2000, the U.S. economy produced the longest sustained economic expansion in U.S. history. It created more than 18 million new jobs, the highest level of job creation ever recorded. Inflation fell to 2.5% per year compared to the 4.7% average over the prior 12 years.

Real interest rates fell by over 40% producing the greatest housing boom ever. Overall economic growth averaged 4.0% per year compared to 2.8% average growth over the 12 years of the Reagan/Bush administrations. Most impressively, Clinton reversed the mammoth deficits of the Supply Side years, turning them into surpluses. He used these surpluses to begin paying down the national debt.

By virtually every meaningful measure-employment, growth, inflation, interest rates, investment, deficits and debt-the economy performed better once the Supply Side experiment was terminated and replaced with a more honest economic policy where we actually pay our bills as we go.

This might all be ancient history if the spectre of Supply Side economics had not reared its ugly head again once Bush II took office. In selling his $1.6 trillion tax cut-half of which went to the wealthiest 1% of Americans-Bush promised in 2001 that it would produce 800,000 new jobs. In fact, the economy has lost 2.7 million jobs since Bush took office, again, the worst economic performance since the Great Depression.

The effects of Bush's tax cut on the deficit and debt are exactly what we would expect having seen Reagan's results-only worse. Bush inherited from Clinton a fiscal surplus of $127 billion. In his first year he turned that into a deficit of $158 billion. In this, his second year, he will run a deficit of over $400 billion-a swing to the worse of over $600 billion in only two years.

The long term effects of these policies are profoundly damaging. When Bush took office, the government's ten year surplus was forecast to total $5.6 trillion. This was critical to building fiscal soundness as the Baby Boomers begin to retire. Now, the ten year forecast projects a cumulative deficit of $1.1 trillion, a net loss of $6.7 trillion in only two years. With the exception of World Wars, this is the greatest, most rapid destruction of public wealth in the history of the world.

Bush wants people to believe these losses are due to a recession he inherited from Bill Clinton. But the economy has grown for seven of the last eight quarters Bush has been in office, hardly a recessionary environment. In truth, the losses owe to a reckless economic philosophy, the failings of which have been conclusively, and now repeatedly, demonstrated."

info liberally borrowed from:

Most of the info I've stated has come from other sources because I don't have the specifics memorized (yet). Hopefully you don't mind that I didn't post all the sources and didn't cite quotations correctly but I lost track at a certain point and as you know I'm very lazy. I admit I'm a plagiarist but hopefully I've condensed it into a somewhat plausible argument. Thanks for taking the time to read it.

Graphs for reference:

Peter said...

Wow Ben, That's a lot of info. Unfortunately most of it is a bit twisted.

The unfortunate misconception is that economic impact is immediate upon the change of tax policy. Thus Bush Jr was blamed for the recession that occurred as he took office, even though economists date the start of the recession in the last few months of Clinton's white house. Similarly Clinton was given credit for the economic boom that was due to both productivity gainss (which significantly benefited from supply side investment), taming inflation (a huge Reagan platform plank and effort that started with Volcker and was continued under Greenspan), and increased availability of credit (via innovations on wall street that allowed investors to participate in markets previously limited to banks that had more limited capacity).

Most policy results in significantly lagged effects. Reagan's policies set the stage that Clinton benefited from. You are correct in that most of the wealthy reinvest their extra income - not spend it. That money is then invested in businesses, either directly through private equity or indirectly through banks and other institutions, who then use that money to create jobs. Those jobs in turn provide more opportunity for the economy and spur more spending. This, unfortunately, really does take years to flow through the economy. From a personal example, my company created a new product line. That created 9 new jobs to start. We've grown to 34 jobs, and we are just getting started. The division has yet to turn profitable and wont' for another few years. During that time we will continue to expand, albeit more slowly. Once we start growing profitable, we will be able to expand more as well as return some money to be used in other projects. This process takes years to accomplish in a business cycle, which is why the impact of policy is so lagged.

That said, there are some very valid concerns to the current Republican regime. Namely the expansion of unnecessary spending during the time of recession. I'm not referring to the war, though I believe that we have wasted billions there through corruption and failing to follow the original plans laid out. (I also notice you failed to mention the impact of the first gulf war on the Bush Sr. deficits when you were citing his statistics.) This increased spending (prescription drugs, pork) significantly drove up our deficits, the growth in the national debt, and have contributed to the weakening dollar. I also think that some of the dollar weakening may have been a deliberate attempt to counter the current account issue, as a cheaper dollar results in more exports.

I do agree with your point relative to immediate impact. More "progressive" tax cuts result in shorter term and more immediate impacts to the consumption, which increases the appearance of health. That does benefit the economy as long as the businesses beleive that it is sustainable and then make more investments as a result. I simply believe that longer term investment has a greater impact over time, and Bush's tax cuts had a more immediate impact on that.

It looks like most of your statistical quotes are years old. Looking at the BLS non-Farm payroll statistics from the following link

you can see that Bush inherited office with over 132.4 million people employed. The trough occurred in August 03 at 129.8 million (the 2.7 million drop quoted), but has since risen significantly to 138.1 million as of August this year.

The unfortunate thing is that so many things impact the economy that it is impossible to attribute the full impact of all things. I tend to keep things a bit more simple. Policies that stimulate growth behavior (i.e. investment) I believe lead to long term positive growth.

For another counter, look at countries that have espoused "progressive" tax policies coupled with policies that are aimed at benefit the "lower classes" in the name of equality. Those countries (France, Germany, Italy & several other European countries) have insanely high tax rates, anemic economic growth, and sub-par health care and benefits. Business is significantly restrained from growing due to the labor laws and the unemployment rate is significantly higher than here. The only reason it is not even worse is that the US has long been a significant source of innovation and investment, which has allowed Europe & Canada to benefit from many productivity gains developed here. Take away that source of R&D, and then what? That is certainly not a model I wish to espouse.

Anyways Ben, I don't want to keep Donna's post going on forever. I'd be happy to continue to discuss this over Christmas or via Email.

Donna said...

I don't care if you guys keep going on. It's kind of entertaining to read the back-and-forth and see who will give up on the other first. Looks like Peter's gonna cave, Ben, so you've got your chance to have the last word if you want it. I wish I had something to contribute, but in-depth discussions of economics and taxes are not my thing, though I have a lot of admiration for people like you who get it.