David Stockman evicerated the Republican Party last week in an OP-ED in the NYT. It was well deserved. The expiring Bush tax cuts will increase taxes for everyone. That is a fact. The lowest rate would go from 10% to 15%. The child credit would go back from $1,000 to $500. The marriage penalty would kick back in. Of course, the biggest impact would be felt by the “rich”. They do pay most of the taxes, so they would get most of the benefit if the tax cuts are extended. This is why Larry Kudlow and the rest of the people on CNBC (they all fall into the rich category) are apopletic about the dire circumstances of letting the tax cuts expire.
I’m certainly not in favor of higher taxes, but here is where the delusion sets in. NO ONE in the Republican party has proposed any method for paying for the extension of these tax cuts. By extending the tax cuts without spending cuts, it would add $3 TRILLION to the National Debt by 2017. This would be stepping on the gas as we approach a turn on a mountain road. I would love to see one Republican stand up and offer to cut military spending by $300 billion per year, to pay for the tax cuts. It ain’t happening.
The Democrats are no better. They have offered to extend the cuts for those making under $200,000. This would ONLY increase the deficit by $2.5 TRILLION by 2017. This is what amounts to compromise in Washington DC.
The National Debt is $13.3 TRILLION today. Based on what these dunderheads are doing in Washington DC this will be $24 TRILLION by 2017. Our GDP today is $14.5 Trillion. If interest rates in 2017 are 5%, we will be paying $1.2 trillion per year in interest. If they are 10%, we will be paying $2.4 trillion per year in interest. The total Revenue of the Federal Government in FY10 is $2.4 Trillion.
Does this sound sustainable? Does it sound delusional? The Keynesian Krugmanites declare full steam ahead. More stimulus. The war mongering Fox News neo-con Republicans say bomb Iran. Both sides are delusional knuckleheads that are destroying our country.
David Stockman Opposes Extending Bush Tax Cuts
David Stockman who served as President Ronald Reagan’s budget director, has for years been known as a deficit hawk.
Still, he was a supply sider long before many of the current crop of Republicans who support the foundational idea that tax cuts always boost the economy were in Congress.
So it’s worth noting that Stockman had a New York Times opinion piece over the weekend in which he seemed to channel liberal economist Paul Krugman in his criticism of those in the party he once served for pushing to extend the Bush tax cuts despite the impact that would have on deficits.
An excerpt:
IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.
More fundamentally, Mr. McConnell’s stand puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy. Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance — vulgar Keynesianism robed in the ideological vestments of the prosperous classes.
Stockman joins former Federal Reserve chair Alan Greenspan in opposing extending the Bush tax cuts. There appears to be a real cleft opening up in the party between old deficit hawks and the latest incarnation of supply siders, represented by actor and former senator Fred Thompson.
Dave says:
I’m a little confused. If extending all the tax cuts for everybody will add 3 trillion to the debt by 2017, but just extending the tax cuts to those who make less than 200K will only add 2.5 trillion, how were the original cuts only for the rich? I’m for a 10% haircut for every government program. Then I’m for tarring and feathering every fucking member of congress and all the cronies that suckle at their tit.
I’m for burying every fucking lawyer up to their necks in sand. I’d bury them completely, but there isn’t enough sand! Where the hell is Robespierre?
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3rd August 2010 at 1:50 pm
Administrator says:
Dave
I think that does show that the rich would get 83% of the benefit of the tax cuts being extended. They also probably pay 83% of the taxes.
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3rd August 2010 at 2:02 pm
Steve Hogan says:
A deficit is nothing but a deferred tax with interest. Even if one assumes a tax policy is revenue neutral, tax cuts without spending cuts mean we’ll be picking up the tab eventually. It’s time to stop pretending that we can kick the can down the road. It’s also well past time for politicians to acknowledge that the state is a parasite that is killing the host. Tax hikes during a depression are beyond retarded.
There is only one solution out of this mess: massive, across-the-board spending cuts. All programs take a hit, starting with the bloated Pentagon budget. Stop the wars, bring the troops home, and mind our own business for once. There wouldn’t be a need to turn our country into a police state. The entire Homeland Security Department needs to be abolished forthwith, including the TSA thugs that feel me up prior to every flight.
While we’re at it, end the Fed and return to honest money and a banking system not run by crooks disguised as bankers.
On Day 2, look at dusting off our Constitution and re-acquainting ourselves with the Bill of Rights. We might even discover once again why America was the freest, most prosperous country the world has ever known.
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3rd August 2010 at 3:52 pm
Administrator says:
Steve
The DHS will be kicking down your door tonight. You will be a branded a domestic terrorist for condoning spending cuts.
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3rd August 2010 at 4:00 pm
EricK says:
They may pay 83% of the taxes but they also take something north of 70% of all compensation and own north of 80% of all the wealth in the country. Taxes need to be paid by those who have benefited the most. How can you tax a man who recieves far less? We/the world do/does not need oligarchs. I’m not saying tax one man so you can give to another. I’m saying at least tax the rich and apply it to the national debt. The rich may pay most of the taxes but according to Buffet, his secretary pays more taxes in terms of % then he does. WTF is this bullshit?
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3rd August 2010 at 4:01 pm
Whippet says:
Jim- you are not speaking as a Libertarian here at all. We Libertarians do not need to justify “tax cuts”. We just need to make as many of them as possible, and trim the size of government with the surgical precision of a 36″ bar chain saw. When you talk about “paying” for “tax cuts”, you sound like a Progressive. IT’S OUR DAMN MONEY!
Watch your rhetoric, brother. It is tough, as the Libtardfascists control almost the entire glossary of terms. You have a gift, you reach thousands of people, and these details are important.
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3rd August 2010 at 4:13 pm
Hans Gruber says:
Any cuts would negatively impact special interests and send voters to the foes of incumbents; Congress won’t make cuts until they have to; which means a currency crisis and/or sovereign default.
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3rd August 2010 at 6:42 pm
Dave says:
EricK…I know this may be a little out of context, “Taxes need to be paid by those who have benefited the most.” What benefits do those who have earned the most receive, that you or I don’t? Are the roads less potholed for them? Do our soldiers die better for them? Were you not given the opportunity to acquire wealth? If I have to pay 25 cents to shit in a pay toilet, should a wealthy man pay more? Why, because he can afford to, or because he shits diamonds? Sorry, I don’t understand this class warfare concept.
Today in a local newspaper was an article penned by a local lawyer who lamented that some very rich people(Steinbrenner, et.al) deliberately died in 2010 in order to cheat the government out of estate taxes. I don’t get it.
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3rd August 2010 at 7:44 pm
LLPOH says:
EricK – I really get sick of the tax the rich bullshit. Everyone needs to pay their own fucking way. The “rich” pay way more out than the benefits they received. People now generally include as “rich” anyone earning more than $200k. Everyone needs to pay for what they get.
Didn’t get rich? Tough shit. Work harder/longer/smarter. Invest your money properly. Educate yourself. Choose a better line of work. Put your nuts on the line, put your life savings and home at risk, like many “rich” have, and risk it all in order to try to make a better future for yourself. But that is too hard. It is so much better and easier if it is just taken from the “rich”.
And the idea that the taxes on the “rich” should be used to pay down debt is asinine. What planet do you come from. It is all general revenue. And they fucking politicians will spend it.
As far as Buffet goes, what he pays would be based on his salary, which last I heard was $100k. He to my knowledge has never sold a single share of his company. His wealth has nothing to do with his income. And I guaran – damn – tee you that the taxes his companies pay would be in the multi-billions (company/state/payroll/ss/etc.). You obviously have no fucking idea about running a company or the tax system. So next I suppose you want to tax people based on their wealth too, in addition to their income? You are an idiot.
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3rd August 2010 at 7:56 pm
Financial Samurai says:
All about raising taxes on EVERYBODY, not just the rich, AND spending Mo Monay on ourselves! It is the American way!
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3rd August 2010 at 10:25 pm