Spending vs. Tax Cuts
One of the constants throughout conversations on how to improve the economy is the spending vs. tax cuts debate. I think this guy makes some really interesting and valid points about the whole tax cut idea. I just don’t see people taking whatever little chunk of tax break money they get back and spending it right now. Chances are really good that they’re going to save it.
The current banking system is a perfect example. We done some stuff to help out banks in trouble giving them a ton of money to get the credit market started again, but they’re still not loaning out money. I’m definitely not a big fan of our government spending a bunch of money when we have a ridiculous amount of debt and deficit like we have, but people have to buy things to bolster companies, which will in turn cause those companies to hire people, which will improve the buying power of the general public and things spiral up.
That’s a problem I’ve always had with trickle down economics. There’s a basic assumption that if you give a company a tax break they’re going to hire more workers. From what I’ve seen the last year plus, I think they’re more inclined to either sock the money away or give their executives a fat bonus. I think companies are only going to increase investment in their companies when people start buying their products again. Example: American auto companies are going to keep cutting workers until people start buying their cars again. No amount of tax break is going to change that trend.
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I’ve been reading along for a while now. I just wanted to drop you a comment to say keep up the good work.
I think the bigger argument is who should be managing your money: You or Your Government? That’s the difference here. Do you trust the government to spend wisely (and you can reference your previous post on the crazy things included in the stimulus bill and the crazy amount of debt already) or do you think people should be allowed to figure out what to do with their money?
If I told you that you had earned $10,000 and you could choose between you deciding what to do with that money or your neighbor deciding, which would you choose? Why?
Saving is not exactly a concern to most Americans. Look up stats on debt versus savings and you’ll find that the average person walking around isn’t looking to keep their money. Just look at what most people do with their tax returns.
To me it is about choice and I think we should be able to have one.
I hear you what you’re saying, but here’s the problem you have with that argument. Yeah, I think could make better decisions with my money than most people do. I’ve always been a pretty reasoned guy when it comes to spending my money. I don’t have faith in the general public to have a reasoned approach to it. People are knee jerk with their money and spend it when they don’t and then when they realize they are down to their last penny they’re going to save whatever they can no matter what.
What I see as the biggest chink in the armor of you’re argument is the situation we’re in now is a good show that people are self-interested and will do whatever they can to make money for themselves, but won’t step back and realize that their actions will have ramifications on the greater economic system. If we could trust people to have a more measured approach to their economic activities we wouldn’t be in the current situation we’re in now. Banks figured out incredibly confusing ways to make an insane amount of money and didn’t really care about the macro level negatives, because they were quickly passing on the risk to others when they sold of assets that they couldn’t really be sure of the quality of.
Is having the government handle the best possible solution you could think of? Probably not, but at least with the government I have the opportunity to take them to account for what they do. I have absolutely no way to control on the CEO of Lehman Brothers or any of the other financial firms, but they screwed up my economy big time because they were greedy whores. If I write them a letter or call them b/c I don’t like what they’re doing they’re going to ignore me and I can’t vote them out of their office if they ignore me. Basically, from my perspective you want me to trust greedy people to do the right thing when I think they’ve shown they shouldn’t be trusted.
In answer to you question about letting my neighbor manage my 10k or me manage it, I would manage it b/c my neighbor is probably going to figure out a way for my 10k to make the most advantage for him and probably care very little about what it does for me. Your scenario is flawed though, b/c its not my neighbor that’s managing my money its the government. And while I know first hand how bad the government is with money, I have a little more faith that its more likely to do something for the greater good, which I’ll benefit from, than my neighbor is.
I hate to say it, but I laughed at the idea that politicians are worried about the “greater good”. Have you read the bill being signed today? $30 million for wetlands in San Francisco for the “greater good”? Millions to fund non-profit art organizations because they aren’t meeting their fundraising goals, for the greater good? $8 billion for a rail line that will most likely benefit the “greater good” of Harry Reid’s home state achieving the all important greater good of linking Las Vegas and Disneyland. And on and on…
Politicians are worred about having their job and keeping their job, just like anyone else. Why do you think these crazy bills and “pork” are so common? They are paying back the people who employ them. You know that when you raise millions of dollars to get your job from people who have an agenda, you are going to make decisions to benefit those people and their agenda because if you don’t, they won’t fund you and you won’t have a job. Show me a politician that takes no money for campaigns and gets no earmarks and I’ll show you one closer to caring about the greater good. I’d be very interested to see which politicians give their own money to charities. That would be potentially indicative of caring about a greater good. (Joe Biden – Patriotic to pay taxes, but gives very little to charity personally.)
I do agree that greed ruins everything both in business and in politics (Peanuts, get your hot roasted salmonella dipped peanuts!). I’ve been at functions where we provide some little trinket for people from our company and I’ve seen people grab handfuls of them for no reason other than they could. I mean seriously, what is anyone going to do with 10 wristbands with our company name on them?
We now live in a world of “me first” and until that changes, I have little hope for any greater good. I also feel like we’ve lost any national identity as well, which hinders thoughts of a greater good. But maybe the Amercian Dream is what ruined everything in the first place? It doesn’t exactly cause you to focus on others does it? So maybe taking more of people’s money and forcing them to do something else with it beyond their control will wake people up to making those choices on their own in the future and reconnect folks to the idea of helping one another. We’ll have to wait and see I guess.
A great example of my point is Republicans who voted against this bill but are now “bragging” about the money their state (and their constituents) will get from it. No principles, no ethics, just marketing to get re-elected. One article I read had a great point – it told the South Carolina governor, who apparently has been complaining very loudly about this bill, to refuse the money offered to make his point. Now that I would love to see! That would bring reality into this mystical world of words and opinions very quickly. I wonder what would happen and how people would react.
Hell, our idiot governor here in Georgia said yesterday that the money from this bill will cover the many millions of dollars deficit we were expecting. I’m sure they’ll work “really hard” to make the necessary cuts to balance our budget now that we’ve received a bucket of cash. I’m sure we’ll just keep going and next year beg for more money.
And did you see what the automakers said yesterday? Once you put food in the trough, it is hard to keep the animals from coming again and again and again. Eventually you have to just go and get the gun and put Ol’ Yeller out of his misery.
And go see the movie “Taken”…great pic if you like vigilante style justice. Watch it again and again once you have kids!
And by the way, I love you man!
Steven, you do know that the “Disneyland-to-Vegas-Rail-Line” bit isn’t actually true, don’t you? It’s not in the bill. Here’s the actual text of the passage in question. And it doesn’t specify ANY city, and in fact, leaves the disposition of the funds up to the discretion of Ray LaHood, former Republican congressman (now Obama’s transportation secretary) to determine the worthiness of each project.
This is simply GOP spin and talking points, first dreamed up in the bowels of the Republican party’s spin room, then catapulted into the news cycle by prominent Republicans (Boehner: “Tell me how spending $8 billion in this bill to have a high-speed rail line between Los Angeles and Las Vegas is going to help the construction worker in my district.”), and thence on to the usual suspects like Charles Krauthamer on Monday’s “Live Desk” on FOX News, Newt Gingrich on Tuesday’s “Hannity,” and Steve Doocy on Wednesday’s “Fox and Friends.”
Sure seems to be a theme over at that particular station. In fact, it’s almost as if FOX personalities and anchors are actually making a concerted effort to advance talking points (regardless of their truth or accuracy) which were dreamed up and first advanced directly by the GOP. Naw. That’s just not possible, is it? No self-respecting news station would read unedited talking points as if they were news, right?
Same deal with the “salt marsh mouse/San Francisco wetlands” escapade. That one was circulated by a House GOP staffer (later discovered to be Michael Steel, a spokesman for – again, surprise! – House Minority Leader John Boehner), who claimed in an email that an unnamed Federal agency had told GOP staffers that “IF it got money from the stim package, it would spend ‘thirty million dollars for wetland restoration in the San Francisco Bay Area — including work to protect the Salt Marsh Harvest Mouse’.” So, in reality, what we have is the word of a GOP staffer that he heard that other GOP staffers heard from “a federal agency” he doesn’t name that IF they get stimulus money, THEY (not Pelosi) would choose to spend money on wetlands restoration in San Francisco. Suddenly, though, with the speed that only the Internet can deliver, headlines like Pelosi’s mouse slated for $30M slice of cheese began appearing in conservative outlets like The Washington Times – and, again, FOX News.
That neither of these stories seems to bear much resemblance to fact doesn’t stop the juggernaut of propaganda from claiming that they are true. Heck, you have to hand it to them: a lot of these headline-grabbing fauxtrages (fake outrages; outrages over things which aren’t even really happening) make for excellent news stories: $30M for a mouse? Ridiculous!….if it were true, that is.
The bigger piece of news in the whole stim-bill kerfuffle, though, was the fact that if you totaled up the entirety of everything the Republicans mocked or objected to (at least what they were on record as objecting to publicly), it came to less than 5% of the total amount of the proposed stimulus. Yet, with only that as sticking point, not one single vote? I personally find that difficult to understand, especially when one of the largest parts of the bill contained the Republicans favorite economic panacea, tax cuts. Just on a total-dollar basis, it’s hard to understand how not one GOP representative would vote in favor of a bill which contained hundreds of dollars in tax cut aid for every dollar of “objectionable” spending.
You’re right, though, about both GOP congresspeople who voted against the bill now touting the benefits of it to their state, and the notion of GOP governors potentially refusing stimulus money. I agree: that latter one would indeed be something to see. Unfortunately, you’ll never see it. Oh, you may, in fact, see certain GOP governors posturing against the stimulus money, even to the point of officially “refusing” it. I doubt you’ll see governors from truly hard-hit, large-population states like California and Florida (both of whose governors, Crist and Der Governator, support the stim) engaging in such theatrics. But it’s distasteful in the extreme – to me, anyway – to hear governors like “rising star” Bobby Jindal of Louisiana seriously threatening to refuse stimulus money. In LOUISIANA!! The Katrina state! A state which has lost over 40,000 jobs recently. You’re telling me that the man charged with ensuring that state’s well-being, the governor, is going to turn down billions of federal dollars? Yep. Unfortunately, it seems so.
How could he do such a thing? Well….because he can. You see, when the South Carolina governor you reference – Sanford – was the first to start making a big stink about refusing stimulus money, South Carolina representative James Clyburn, who also knew how badly people out there were hurting, inserted language into the bill which would allow individual states’ legislatures to override the governor and accept stimulus money on behalf of the state, even if the governors of their state attempted to refuse it. Which means, in other words, that guys like Jindal and Sanford are now free to (as the article linked above put it) “burnish their conservative credentials,” secure in the knowledge that their legislatures will likely step in and do the right thing for the people of their states, even if the governors are more interested in striking an ideological pose than in assisting the citizens of their states.
Oh, and….Steven? I don’t know why you “have little hope for any greater good.”
You live it every day, sir. You are one of the good guys. Don’t be modest; you know you are. And though you get a paycheck, that’s not the reason you do what you do, is it?
So why do you doubt it so much? You (literally) ARE it. And so are a lot of other people. Not all, certainly, but you’re far from the only one.
I hear you…my problem is that things are far too important for games and that is all politics is anymore. Take money and life-time job security (term limits) out of politics and you will attract a different result.
Lars – The greater good is definitely achieved by the unnamed and I agree that there are many.