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The answer is: confidence. Recent reports state that companies are borrowing money not to be spent but to save. Fear is playing on our economy. What is the answer to this panic and what does it stem from?
Ramifications of the deficit:
Why Tax Cuts is Better than Spending
Tax Cuts and the Deficit
The Numbers:
The Outstanding Public Debt is approximately: $14,000,000,000,000.00.
The estimated population of the United States is 309,655,522, so each citizen’s share of this debt is $45,211.53
After Bush lowered the tax bracket in 2001, the tax revenues were 17.9% of the GDP (as opposed to 19.5% the year before) and went down to a low of 16.1% after the tax cuts in 2003. However, it rebounded in 2005 (at 17.5%) and reached 18.5% (higher than the average of 18.2%) before the economic crisis.
Actually, it did. The economy has been growing since June 2009.
“Obama passed stimulus bills and an overhaul on healthcare that was largely seen as anti-business. “
The healthcare bill was basically a bailout of the health insurance industry. That isn’t anti-business. Neither was the bailout of the auto industry.
“The deficit is an imminent threat to our future and those of our children.”
No, it isn’t. Interest rates remain at historic lows. There is no inflation except for a few cartel-controlled commodities such as petroleum; the problem in much of the US is DEflation. We actually need some inflation to get homeowners out from under water and the deficit can help.
“The Laffer Curve suggests that a tax cut can actually increase tax revenue.”
There has yet to be such a tax cut.
This exposes your ignorance on economics. “Might” spend it??? Have you ever been unemployed, with no savings? The tax cuts to businesses and zillionaires will get stashed away (as you mention, companies are hoarding cash) while tax cuts to the poor and unemployment insurance gets spent, increasing consumer demand and giving businesses a reason to produce.
” I’m talking about actual economic growth not induced growth.”
For most of this year private sector employment has increased, while public sector employment has not. That’s what you call “actual”.
“Bailouts are not pro-business – they’re anti-business.”
Then why does every business want a bailout when they get into trouble?
” higher interest rates “
Wrong. Interest rates remain at historic lows.
“for the first time in history people are talking about a government default. “
Wrong. The US *did* default on its foreign debt in 1914 by suspending convertabilty, and then again in 1933 by suspending the gold standard for what would turn out to be forever. Fortunately in 1914 the Federal Reserve System had *just* been created, and Treasury Scretary William McAdoo worked with the House of Morgan to handle the worst financial crisis the US had ever seen. Among the actions taken was to shut down the New York Stock Exchange for FOUR MONTHS because the free market was destroying the world economy. The actions were so successful that the Panic of 1914 does not even appear in history texts.
TARP was incredibly unpopular but it may go down in history as being just as successful.
“high debt leads to high interest rates”
As I have pointed out, what is happening right now shows clearly that that is not the case.
“it would’ve “
You continue to use conditional logic rather than actual empirical evidence.
” it still isn’t a direct effect on the GDP”
Wrong again. Purchasing goods and services DIRECTLY contributes to GDP.
“it’s either tax cuts permanently extended or nothing. “
You are blinded by ideology and are willing to destroy the economy as a result. Fortunately neither President Obama nor most of the Congress is as blinded.
if tax cuts are so wonderful for the economy, why didn’t they, after an entire decade, either prevent or soften the ecomomic disaster we found ourselves in?
I thought there was a Coffee Room rule against posting a “megillah.”
When are you tax cut shtarkers going to specify the spending cuts that will support your proposed tax cuts. Yes, sometimes lower tax rates increase revenues, but sometimes they do not. I personally think Hashem is telling us something when He caused the (human and false) theory that tax cuts always yield revenue increases would be illustrated by something called the “Laffer curve”.
The idea that tax cuts always lead to revenue increases is as plausible as the tooth-fairy story. Deficits grew under Reagan, Bush Sr. and Bush the Dim. Deficits disappeared under Clinton (thanks, in part, to the “new taxes” that Bush Sr. supported, which ended the Republican party’s support for him). Fiscal policy is difficult, and sloganeering, e.g., Reagan’s “government is always the problem, never the solution,” is a poor substitute for careful analysis and hard choices.
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