Traitors.

[LV426]

Yes. But the flip side of that is if you want everyone to be wealthier than they also need to be able to save. Save for a down payment on a home. Save for retirement. Without a savings plan the economy may be doing great from all the spending but individuals will always be poor.

Most people don't get paid enough to save today (only half of Americans own stock, and the average amount most Americans have in savings is just $400).

So the problem isn't taxation, the problem is and always has been wages. The wealthy hoard their wealth instead of increasing everyone's wages. If instead of hoarding $400M, you use that $400M to increase everyone's wages, then you're going to end up with more than $400M because all those workers whose wages you just rose are now going to spend those increased wages in the economy, and THAT is how you create wealth...through demand. And the only way to increase demand is to increase wages.

Savings will naturally come after, as they have before.

 

[LV426]

The question becomes one of how do you convince someone that thinks all taxation is theft so the ideal tax rate is zero that they should pay any taxes?

You want to know the dirty answer? It's not one that I think you're gonna like....

YOU MOVE ON FROM THEM.

Anyone of that position is not a serious person, and who is deliberately acting in bad faith for the sole purpose of eliciting a response out of you that they can then seize upon and make themselves victims of.

The same people who think taxation is theft have a victimhood complex. Better to just ignore them altogether because they're not serious people, and they are vastly outnumbered.

 

[Cinnabar]

Not necessarily because we can all agree that 5,000,000 jobs is better than 0 jobs, right?

What have tax cuts given us besides debt? They haven't created a single job. No business hires based on a tax cut...they hire based on demand. And if demand is low because we are in a recession and/or people don't have high enough wages, then a business isn't going to hire anyone. No one hires a worker just because...people are hired to meet demand. The only way to increase demand is to give consumers more to spend. You can accomplish that any number of ways, but slightly improving their after-tax income ain't one of them.

You have to give trickle down voodoo a chance. It's only been over a half a century so be patient.

 

[Poor Richard Saunders]

I don't understand what you mean by anecdotal evidence? The Kansas State of Board Regents raising tuition specifically because of revenue shortfalls isn't anecdotal, it's a thing that actually happened:

Kansas regents and legislature approve 3.6% tuition and fee increase
https://www.kansan.com/news/kansas-...cle_8702d7ac-1889-11e5-a215-7b9ff1522d2d.html

Brownback budget cuts include $56M from KanCare
https://www.khi.org/news/article/brownback-budget-cuts-include-56m-from-medicaid

Both of those things happened in 2014-2015, two years after the tax cuts went into effect and were supposed to pay for themselves with increased spending.

They didn't.

I've never, ever, ever, ever seen tax cuts increasing economic growth. Never. Not once. Not ever. It has never happened in the history of tax cuts. What increases economic growth is increased spending. Tax cuts do not increase spending. They almost universally lead to spending cuts because they are a stealth attack on the institution of democracy and the budget. Tax cuts are essentially the jetliners on 9/11 that Conservatives fly into buildings that are our budgets, and then cry fake tears over the resulting deficit explosion.

Anecdotal evidence is something that actually happened.
For instance is snowed today would be an anecdote but it is not evidence that means it snows every day.
What happened in Kansas is not evidence that the same thing happens every time taxes are cut.

Because you have never seen tax cuts increase economic growth is because you haven't looked at all the data. Tax cuts have almost no effect which means that sometimes you see increases in economic growth and sometimes you see decreases but overall there is no real effect on economic growth. The only real effect that always occurs with tax cuts is that you reduce government revenues. In the case of the US government that doesn't necessarily result in decreases in government spending.

 

[Dutch Uncle]

"The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”

This also assumes the Working Group is correct in their analysis which is much too simplistic compared to analyses by economic studies. They "acknowledge" something that is not necessarily true.

Agreed. IMO, the entire concept of sub-prime mortgages is an excellent example of "the road to Hell is paved with good intentions". It was a flawed concept from the start even if it was the best solution at the time.

Consider the 3/5s compromise. Flawed idea giving weight to the idea that "the seeds of the Civil War were written in the Constitution". What is overlooked is that Congress had over 70 fucking years to find a better solution and didn't. Same for subprime mortgages with roots back to the 70s: https://en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis

Who the fuck really believes it's a good idea to loan money to people who can't afford to pay??? Regardless, Congress had over ten years to fix it, from the mid-90s to 2008 and they didn't. Eventually the house of cards imploded.

https://www.investopedia.com/terms/s/subprime_mortgage.asp

The 2008 housing market crash was due in large part to widespread defaults on subprime mortgages. Many borrowers were given what were known as NINJA loans, an acronym derived from the phrase “no income, no job, and no assets.”

These mortgages were often issued with no down payment required, and proof of income was not necessary either. A buyer might state that he or she earned $150,000 a year but did not have to provide documentation to substantiate the claim. These borrowers then found themselves underwater in a declining housing market, with their home values lower than the mortgage they owed. Many of these NINJA borrowers defaulted because the interest rates associated with the loans were “teaser rates,” variable rates that started low and ballooned over time, making it very hard to pay down the principal of the mortgage.

 

[Dutch Uncle]

You have to give trickle down voodoo a chance. It's only been over a half a century so be patient.

It doesn't work as stated. There is validity to the Laffer Curve model, but too many people cherry-picked what they wanted from it and forgot the pitfalls. They never did anything about negative consequences.

 

[LV426]

Nice post. Notice the word "triggered". It's like "lit the fuse". Both simply set off a sequence already in existence.

Nope. A sequence requires a trigger to go, and Bush triggered that with having his regulators weaken underwriting standards. But the sequence didn't magically come about before Bush...no, Bush took deliberate actions to set up the sequence you're now trying to blame on ambiguous people.

Wanting 5.5 million more minority homeowners
Tells congress there is nothing wrong with GSEs
Pledging to use federal policy to increase home ownership
Routinely taking credit for the housing market
Forcing GSEs to buy more low income home loans by raising their Housing Goals
Lowering Investment bank’s capital requirements, Net Capital rule
Reversing the Clinton rule that restricted GSEs purchases of subprime loans
Lowering down payment requirements to 0%
Forcing GSEs to spend an additional 440 billion in the secondary markets
Giving away 40,000 free down payments
PREEMPTING ALL STATE LAWS AGAINST PREDATORY LENDING

But the biggest policy was regulators not enforcing lending standards.

There would not have been a housing bubble had Bush not taken all those actions. There was no housing bubble that he inherited. In fact, Clinton took great pains to carefully grow home ownership in this country, and that is evidenced by the low default rates on those loans, pre-Bush.

You don't know what the fuck you're talking about, and it shows.

 

[LV426]

t was a boobytrap waiting to be triggered.

Really? So describe the "booby trap", and I'll tell you how you're wrong.

There was no booby trap before, as the Federal Reserve said:

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf

Do you know what the red words mean when arranged in the order they are above?

 

[Poor Richard Saunders]

Which we did after the Bush Tax Cuts in 2001-2003, and then again this past February after the Russia Tax Cut from 2018. We also saw a massive downturn after the first Reagan tax cuts of the 1980's, and then we saw yet another downturn at the end of the 20th century when we cut Capital Gains Taxes, which prompted the dotcom bubble:

To provide more compelling evidence that the 1997 tax cut affected volatility (and mitigate concerns about omitted correlated variables), we focus on cross-sectional tests which are designed to detect the differential responses in return volatility of stocks with different characteristics. We hypothesize that the effect of a capital gains tax change on stock return volatility should vary depending upon dividend policy and the size of the unrealized capital losses (or gains). Consistent with expectations, we find that non- and lower dividend-paying stocks experienced a larger increase in return volatility than high dividend-paying stocks. We also find that stocks with large unrealized capital losses had a larger increase in return volatility after a capital gains tax rate reduction than stocks with small unrealized capital losses. However, we do not find a similar relation with unrealized capital gains.
https://www.businessinsider.com/heres-why-the-dot-com-bubble-began-and-why-it-popped-2010-12

Tax cuts have never once resulted in increased economic growth. Never. Not once. The result of every modern tax cut going back to at least 1980 is a recession within 2-3 years after.

But more importantly, what you also see from tax cuts are increased deficits...and those manufactured deficits are then used as an excuse to cut spending, which in turn results in economic contraction. I call it fiscal terrorism because Conservatives know that their hatred and attacks on social programs are extremely unpopular, so they sabotage the budget to force through cuts they otherwise wouldn't be able to do because they lack the courage, will, and support.

But we didn't see a downturn after the 2018 tax cuts. We saw an economy that stayed pretty much the same.
There was a Bush tax cut in 2003. When do you think the next recession was after 2003? I'll give you a hint, it wasn't within 3 years.

Your desire to make up your own facts doesn't help your argument. The data shows that tax cuts and tax increases don't really affect GDP growth. The argument that they create growth is false. The argument that they create downturns is also false. They are actually pretty neutral when it comes to GDP. What they do affect is government revenues. Stick to the facts. Your argument will be stronger when you do.

 

[LV426]

Sure, the triggering happened under Bush II but it was just a boobytrap waiting to be triggered.

Then you should be able to accurately and articulately describe what the "booby trap" was, who laid it down, and why?

 

[Dutch Uncle]

Really? So describe the "booby trap", and I'll tell you how you're wrong.

There was no booby trap before, as the Federal Reserve said:

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf

Do you know what the red words mean when arranged in the order they are above?

Scroll up to the entire idea of loaning money to people who can't afford to pay. I.E. Subprime Mortgages.

 

[LV426]

This also assumes the Working Group is correct in their analysis which is much too simplistic compared to analyses by economic studies. They "acknowledge" something that is not necessarily true.

Flash, do you know what a Presidential Working Group is?

Also, here's the Federal Reserve saying the exact same thing:

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf

None of you seem prepared to answer to any of this. Obviously, because you can't. You have Bush's own Working Group AND the Federal Reserve Board of governors telling you the same thing, and for some reason you don't want to accept either? That's because of your ego, nothing more.

You NEED there to be blame to socialize otherwise your bOThSiDeRiSm no longer makes sense, which means you cannot posture. So you'll do everything you can to not accept the facts as they are presented to you, because doing so would throw all the hard work you've done on this persona into question.

 

[LV426]

You have to give trickle down voodoo a chance. It's only been over a half a century so be patient.

LMAO!

They think trickle down works because they've been brainwashed into it.

Trickle down is the single biggest policy disaster this country has ever had.

 

[Poor Richard Saunders]

Well, I guess it depends on how long after the tax cut you're looking, because going back at least 20 years this century, recessions have almost always followed tax cuts. The reason is because, as I said before, tax cuts increase deficits which results in spending cuts, and when you pull spending out of the economy, and aren't replacing it with any new spending, the inevitable result is an economic contraction. That's why we entered a recession in February this year.

Also, since 1980, every time taxes have been cut, the personal savings rate decreases while the Household Debt rate increases. This is universal. What this means is that "putting more money in the pockets of workers" usually results in the workers going into debt. We saw it happen throughout the 2000's as borrowers had easy access to credit, which -combined with an increase to after-tax income- was being used as the replacement for higher wages. How'd that work out for everyone?

View attachment 18346

Recessions follow every tax increase and every year where the tax is not changing. It all depends on how long you look after the year that it happened. Do you see how ridiculous your argument is? You are not making a valid argument. You are simply pretending that everything bad is caused by what you don't like. That isn't valid science.

The chart you posted includes periods of time where we had tax increases. I don't see any sudden reversal in savings vs debt after those tax increases. Why would that be? Probably because there are lots of other factors you are ignoring. One of which is household income. Another is the fact that you would probably see the minimum wage adjusted for inflation closely following the savings line. There are many reasons for the loss of savings but the reduction in savings is what you claimed would be good for the economy because it increases spending. The increase in borrowing also increases spending. Are you now arguing that people should save more and reduce spending? Have you really examined your argument to see if it holds up?

 

[LV426]

Anecdotal evidence is something that actually happened.

Ummm...no...anecdotes are filtered through a prism of bias and are not the same thing as empirical evidence, which is what I think you're getting at, right?

Empirical evidence is something you and everyone else can see with your own two eyes, like the Board of Regents saying they are raising tuition because of revenue shortfalls.

An anecdote is you saying you observed something yourself, and you're relaying what you observed to me directly. Anecdotes are not empirical. Anecdotes are almost always filtered through a prism of bias. I never accept anecdotes in a debate because there's no way to prove them, and they're almost always made in bad faith.

What happened in Kansas is not evidence that the same thing happens every time taxes are cut.

The entire reason taxes are cut is to starve revenue to force through cuts to spending programs. It's what Lee Atwater said 50 years ago, and the principle hasn't changed. Also, the Board of Regents said SPECIFICALLY that they had to raise tuition because of revenue shortfalls.

What caused revenue shortfalls? You know the answer...

Because you have never seen tax cuts increase economic growth is because you haven't looked at all the data.

Oh, then by all means, show me the data where a tax cut created economic growth, and didn't result in a recession a couple years later. Because that's the 40-year history of this dogma.

After Reagan cut taxes, the economy went from stagflation into full-blown recession within two years.

After Bush the Dumber cut taxes, the economy went from middling post-dotcom to full-blown recession within three years.

After Trump cut taxes, the economy went from Obama's recovery to full-blown recession within two years.

How many times do we have to go through this before we start recognizing the same pattern?

How many times does the Left have to be right about this before we get taken seriously?

How many recessions do we need to go through before it sinks in that tax cuts are causing them?

Tax cuts have almost no effect which means that sometimes you see increases in economic growth and sometimes you see decreases but overall there is no real effect on economic growth

.

No. No, no, no. They have a definite effect and that effect is the hoarding of wealth and the removal of revenues from the economy, and the effect of spending cuts to bridge manufactured deficits that appear. Those spending cuts almost always end up resulting in economic contraction because you're pulling government spending out of the economy and not replacing it with any new spending.

We also know that after tax cuts, the personal savings rate declines and the household debt rate increases. Why would that happen, if a tax cut has no effect on anything?

The only real effect that always occurs with tax cuts is that you reduce government revenues. In the case of the US government that doesn't necessarily result in decreases in government spending.

It results in freezes, which is the same thing. Like Pell Grants, which were frozen for at least four years during the 00's as everyone's debt loads were increasing.

 

[LV426]

The 2008 housing market crash was due in large part to widespread defaults on subprime mortgages. Many borrowers were given what were known as NINJA loans, an acronym derived from the phrase “no income, no job, and no assets.”

These mortgages were often issued with no down payment required, and proof of income was not necessary either. A buyer might state that he or she earned $150,000 a year but did not have to provide documentation to substantiate the claim. These borrowers then found themselves underwater in a declining housing market, with their home values lower than the mortgage they owed. Many of these NINJA borrowers defaulted because the interest rates associated with the loans were “teaser rates,” variable rates that started low and ballooned over time, making it very hard to pay down the principal of the mortgage.

I am so glad you brought this up because it is another example of how Bush created this problem.

NINJA loans wouldn't have been allowed pre-2003...but they appeared in 2003+ for a very specific reason...and yes, it has to do with Bush:

“Rapid growth in subprime lending over the past decade has led to rising concerns about abusive practices by subprime lenders. By early 2004, those concerns prompted Georgia and more than 30 other states to pass laws designed to eliminate abusive or predatory lending practices by the financial services firms, including those with federal charters, operating within their boundaries. In 2003, the OCC concluded that federal law preempts the provisions of the Georgia Fair Lending Act (GFLA) that would otherwise affect national banks’ real estate lending. In early 2004, the OCC adopted a final rule providing that state laws that regulate the terms of credit are preempted. “
https://www.occ.gov/publications/pu...onomics-working-papers/2008-2000/wp2004-4.pdf

Now why in the world would Bush want to invoke a 140-year OCC rule in 2003-4? To protect predatory lending. And what kind of predatory lending? NINJA LOANS, bitch.

So it was Bush, again, who wiped out state protections against predatory lending in order to juice a housing market in time for his re-election because, let's not forget that 2001-2002 were not great years for the economy. Bush juicing the housing market in 2003/4 was good for the economy, because housing is usually good for the economy.

 

[LV426]

But we didn't see a downturn after the 2018 tax cuts.

Are you kidding? Manufacturing was in a recession for all of 2019:

U.S. manufacturing was in a mild recession during 2019, a sore spot for the economy
https://www.washingtonpost.com/busi...mild-recession-during-2019-sore-spot-economy/

Remember when they all said the tax cut would bring manufacturing back? Then the economy entered a recession in February, 2 years after the tax cut, that was promised to "increase business investment", of this year, before the COVID lockdowns:

It's official: Recession began in February, ending longest U.S. expansion ever
https://www.cbsnews.com/news/united-states-recession-started-february/

 

[LV426]

There was a Bush tax cut in 2003. When do you think the next recession was after 2003? I'll give you a hint, it wasn't within 3 years.

Yes it was because 2006 was when all the foreclosures and defaults started on all those garbage subprimes whose standards were eased beginning in 2004:

Your desire to make up your own facts doesn't help your argument.

I haven't made up anything here. Everything I've said is factual and is supported by the data, and I cite it all. What you haven't done is provide a counter-argument, using data, that supports your argument.

 

[LV426]

The argument that they create downturns is also false.

So you should be able to prove that, then. Your position is not the inherent one. You have to defend it.

They are actually pretty neutral when it comes to GDP.

No they're not. We know because we saw it happen nationally in the 00's, then again in Kansas in the 10's, and now in 2020.

What they do affect is government revenues.

Yes, that is correct, but they do affect GDP too. If they didn't, they wouldn't be policy.

 

[LV426]

Scroll up to the entire idea of loaning money to people who can't afford to pay. I.E. Subprime Mortgages.

Yeah, and it was Bush the Dumber who did that by having his regulators ease enforcement of lending standards, by wiping out state protections against predatory lending, and by reversing Clinton's 2000 HUD rule that prevented GSE's from buying risky loans.

Subprime loans in and of themselves are not a problem...the problem is when those subprimes are given to folks who have no ability to repay them because the lending standards have been reduced by the Executive Branch.

Prior to the 2004 wave of subprimes, the default rate on subprime loans going back to 1993 was steady and consistent. Then it shot up in 2006. Those weren't the pre-2004 loans that were defaulting.