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What Would a Conservative Do?

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MRM:
Quote from: Flummoxed Lummox on September 02, 2010, 11:12:27 AM

Give more tax cuts to multimillionaires. That is the ONLY economic solutions conservatives know.


The biggest flaw for raising taxes on multimillionaires is most own large businesses or companies. All they'll do to make up for raised taxes is pass it on their company by trying to make it back through sale, which means the little man pays for it anyway.

I have to agree with NCVol that there is no quick fix. We as a county lack the discipline to make the necessary changes to properly do anything about it over a long period of time. The best plan would be appoint people in the business industry that have the experience of taking a business or themselves from financial ruin to great success to run the financial side of this country. That will never happen.

I personally think we'll continue down this same road until this house of cards crash in on our heads.

NCVol:
Here's the problem with the "rich people and businesses don't pay taxes" - they can't pass it on with higher prices.  If they could raise prices in a deflationary environment, they'd do it with or without higher taxes on their income.  And the problem with the idea that if you raise taxes on the wealthy, they'll respond by not hiring, etc. is the evidence shows that the biggest tax cuts for the wealthy gave us a decade with virtually NO job growth, and a decline in wages.  The evidence, in other words, works against the whole "tax cuts for the rich" will solve any of our problems.

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The best plan would be appoint people in the business industry that have the experience of taking a business or themselves from financial ruin to great success to run the financial side of this country. That will never happen.

I'm not sure why that will work.  What works for a business, say HP, is offshoring jobs to China.  Fiorina, the GOP candidate for Senate in California, offshored 10s of thousands of jobs as CEO.  What does that experience bring to the U.S. except she knows how to gut the U.S. economy and stimulate the Chinese economy, and apparently believes it's a good thing overall to do.  She did it as CEO, why or how could she object to that as Senator?  Their entire world view is maximizing share price - that's what they exist to do as CEOs.  That might or might not maximize the U.S. economy, but what we know, if it does, it's purely coincidental, a happy accident of fate.  As heads of industry, they're paid like kings NOT TO CARE about ANYTHING but profits. 

And we had Cheney (CEO) and Bush (CEO) and Rubin (CEO) and Paulson (CEO) and John Snow (CEO) .... and we've infiltrated the bureaucracy of every agency with private business employees on loan from industry to "smartly" regulate the industry they left and will soon rejoin.  The Senate is full of former businessmen who got bored with running companies and decided that running the country might be fun.  What possible perspective do we share with a CEO, whose entire social circle is void of working folks.  If they contemplate a problem, whose viewpoint do they come at that problem with?  Shareholders and Wall Street and their CEO buddies at the yacht club and the golf club?  Obama has continued this trend.  GS has all kinds of representatives buried in the bureaucracy.  What has it gotten us. What have these CEO's in government done to improve the U.S. economy? 

Businesses hire to meet demand, and THE problem right now is there is falling demand.  Wages are falling, people are paying off debt, leaving less money to buy stuff with.  Nobody hires to meet non-existent demand, but we have this belief that cutting wages, cutting jobs, increasing productivity but not spending power for the middle class magically creates some demand.  It doesn't.  Until we see rising employment and rising wages, this depression will simply get worse.  

Another point.  I get the idea that we can't "stimulus" our way out of this mess.  But what do we do with 15-25 MILLION under or unemployed while we're waiting for the reset.  You can't pretend that these folks just somehow get by.  They'll be out of their homes, unable to feed themselves, and unable to afford even basic medical care.  So what do we do while we wait for the five years for employment to turn around.

We could balance the Federal budget and remove 1.5 Trillion in spending out of a 14 trillion economy.  The states will reduce spending by another huge amount as they must balance their budgets.  So let's say we take demand down by $2.5 Trillion, roughly 20%.  We know that will increase the number of unemployed and reduce the profits of the businesses that manage to hold on.  

Just curious, how do we feed and house 20 million folks without a job for five years?  I'm not being combative, I just don't understand what the plan is for the inevitable consequences of fiscal austerity in a depression.  

Jeremy Roenick:
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Just curious, how do we feed and house 20 million folks without a job for five years?  I'm not being combative, I just don't understand what the plan is for the inevitable consequences of fiscal austerity in a depression. 


During the first Great Depression, it was programs like the C.C.C.  At least that put more people to work than the 2009 Stimulus bill.  You cannot create jobs out of thin air when the consumer support is not there for it.  That is correct.

Again, we're heading to the "support point" for this economy and population.  It's going to be a bumpy ride down before we can build our way back up, hopefully on fundamentals and not an artificial bubble.

NCVol:
Quote from: Jeremy Roenick on September 02, 2010, 02:08:36 PM



During the first Great Depression, it was programs like the C.C.C.  At least that put more people to work than the 2009 Stimulus bill.  You cannot create jobs out of thin air when the consumer support is not there for it.  That is correct.

Again, we're heading to the "support point" for this economy and population.  It's going to be a bumpy ride down before we can build our way back up, hopefully on fundamentals and not an artificial bubble.


I agree with that.  We gave out a lot of tax cuts, and cash for clunkers credits, and we're giving out a lot of unemployment benefits etc. so people can go out and buy something very cheap at Walmart made in China, made by a Chinese worker, and producing profits that will stay and be reinvested right there.  The New Deal programs paid out wages for infrastructure right here that still are a great benefit to this country. 

But you know what the GOP wants, more tax cuts, to stimulate that same spending on imported goods.  That's where, to me, the disconnect is for the right wing economic philosophy.

Sasquatch:
Quote from: NCVol on September 02, 2010, 02:23:04 PM

But you know what the GOP wants, more tax cuts, to stimulate that same spending on imported goods.  That's where, to me, the disconnect is for the right wing economic philosophy.


I didn't realize that Obama's departing economist was "right-wing"?

Quote from: Sasquatch on September 02, 2010, 11:23:09 AM

Interesting:  :o

WH economist calls for more spending, less taxes

Departing White House economist Christina Romer says the government has the tools for bringing down unemployment, but policymakers need to find the will and wisdom to use them.

http://news.yahoo.com/s/ap/20100901/ap_on_bi_ge/us_obama_economist_1

Can we also get some research on the number of dems who DO NOT want the Bush tax cuts to expire?

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