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I read this and I just had to share this. David Stockman who was in Ronald Reagan's director of the OMB in the Reagan's administration just called out the GOP and its economic policies. This was originally in the New York Times on Sunday. Here is a summation I got from a blog called "The Big Picture". This blog ain't no left-wing screed.
Now from what I see in the polls the US is about to elect the same folks to run the US House of Representatives. Please read this.
• The total US debt, including states and municipalities, will soon reach $18 trillion dollars. That is a Greece-like 120% of GDP.Well, I think this is what President Obama is trying to undo. This is over 20 years of Republican policies. Yes, we did have Bill Clinton and he followed some of these policies but did manage to tweek them and balance the budget which Bush promptly just spent on the massive tax cuts for the rich. Now the same Republicans who RAIL against President Obama for deficit spending now want to increase the defitit to keep the Bush tax cuts going. Even Alan Greenspan states its NOT a good a idea to have tax cuts with deficit spending. Yup, he gave political cover for the Bush Administration for the tax cuts to pass Congress. So read this and think about it. Oh here is a 1981 article that was published in the Atlantic Magazine which David Stockman talks about the Reagan tax cuts. Enjoy!
• Supply Side tax cuts for the wealthy are based on “money printing and deficit finance — vulgar Keynesiansism robed in the ideological vestments of the prosperous classes.”
• Republicans abandoned the belief that prosperity depended upon the regular balancing of accounts — government, trade, central banks private households and businesses.
• Once fiscal conservatism was abandoned, it led to the serial financial bubbles and Wall Street depredations that have crippled our economy.
• The Nixon administration defaulted on American obligations under the 1944 Bretton Woods agreement.
• Who is to blame? Milton Friedman. In 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold.
• According to Friedman, “The free market set currency exchange rates, he said, and trade deficits will self-correct.” What actually occurred was “impossible.” Stockman calls it “Friedman’s $8 trillion error.”
• Ideological tax-cutters are what killed the Republicans’ fiscal religion.
• America’s debt explosion has resulted from the Republican Party’s embrace, three decades ago, of the insidious Supply Side doctrine that deficits don’t matter if they result from tax cuts.
• The GOP controlled Congress from 1994 to 2006: Combine neocon warfare spending with entitlements, farm subsidies, education, water projects and you end up with a GOP welfare/warfare state driving the federal spending machine.
• It was Paul Volcker who crushed inflation and enabled a solid economic rebound — not the Reagan Supply Side Tax cuts.• Republicans believed the “delusion that the economy will outgrow the deficit if plied with enough tax cuts.”
• Over George W. Bush 8 years in office, non-defense appropriations gained 65%.• Fiscal year 2009 (GWB last budget): Tax-cutters reduced federal revenues to 15% of GDP — lower than they had been since the 1940s.
• The expansion of our financial sector has been vast and unproductive. Stockman blames (tho but not by name): 1) Greenspan, for flooding financial markets with freely printed money; and 2) Phil Gramm, for removing traditional restrictions on leverage and speculation.
• The shadow banking system grew from a mere $500 billion in 1970 to $30 trillion by September 2008 (see Gramm, above).
• Trillion-dollar financial conglomerates are not free enterprises — they are wards of the state, living on virtually free money from the Fed’s discount window to cover their bad bets.
• From 2002 to 2006, the top 1% of Americans received two-thirds of the gain in national income.
I find it fascinating that the most incisive criticism of the irresponsible GOP policies has comes from two of its former stars: Bruce Barlett and now David Stockman.
5 comments:
I think this is what President Obama is trying to undo
The article is correct on a lot of things. Fiscal conservatism is wonderful when it is used. Bush abandoned it as have many others. But to tout Obama's economic policies as working is just a partisan ostrich sticking its head in the sand. Running up the debt the way the man has is not sound.
If your man has his way, married couples will pay more in taxes for being married than if they were single. It makes absolutely no sense whatsoever, Mark.
Its also true that taxpayers making less then $300k will see taxes go down. I am saying that Obama is being slammed for deficit spending and the GOP wants to continue tax cuts that benefited those making 300,000 per year.
Public education and socal programs are a nice target. I believe that public employees will continue to be targeted since we have decent benefits and pensions.
Obama;s deficit commission seems to want to cut Social Security. Now I completely disagree with the President on that one
I make less than $300,000 annually. I am married. By instituting the marriage penalty again, I will pay more taxes next year.
It is a myth that those making less than $300,000 ($250K, $200K, or whatever is currently en vogue) will pay fewer taxes under this Administration.
I suspect this change will also affect the Krull household, but perhaps I am misinformed about your annual earnings.
There is WIDESPREAD CONFUSION about taxes that the common man is paying and will likely be paying under the current administration vs. the former administration.
Attention Common Man!
YOUR TAXES WENT DOWN LAST YEAR!
Generally speaking, if you were single and made less than $200,000 or were married filing jointly and made less than $250,000, then your taxes went down last year (2009 vs. 2008 tax years). This is because of the Recovery Act.
Polls have shown that most people (um, idiots?) think that Obama kept taxes the same or raised them.
The exact income thresholds are neither en vogue [sic] nor out of vogue -- the thresholds vary depending on the particular tax credit or deduction, and some credits and deductions phase out over varying ranges. So, it isn't that people are being fashionable or deliberately vague or deceptive; the rules for last year are quite clear, but you cannot pick a single threshold amount and say it applies overall because each taxpayer may be eligible for different credits and deductions. This is what keeps tax professionals in business (and, this is how The Man sticks it to The People)!
For a married couple filing jointly, here's how your taxes went down in 2009:
- If you both worked, you got an $800 tax credit (from the Making Work Pay credit, which phases out starting at AGI of $150,000).
- If you have a kid, the comically named "Child Tax Credit" went up from $800 to $1000.
- If you had a kid in college, you got up to a $2,500 credit.
- If you did home improvements for energy efficiency, you got a credit of 30% of the cost of materials, up to a credit of $1,500. [That credit is also available this year. We replaced a leaky window with a new EnergyStar window and got a nice $400 credit.]
- If you bought your first house, you got a tax credit up to $8,000.
- If you bought a new car, you got a deduction for any state and local taxes on the car. Not as good as a credit, but still good.
- If you are a small business, you got a wider range of deductible expenses [I am a small business, but this did not benefit me.]
Now, if you qualified for any of these but didn't take advantage of them, you can file a 1040X amended return and get your money.
YOUR TAXES WILL BE HIGHER?/LOWER?/THE SAME? THIS YEAR
The marginal tax rates are set to be the same for 2010. Some of last year's deductions and credits are scheduled to expire, but may or may not depending on Congress.
As it looks now, 2010 is looking to be similar to 2009 for the common man. Which means, lower taxes than in 2008.
YOUR TAXES WILL BE HIGHER?/LOWER?/THE SAME? IN 2011
The big topic here is that the lower income tax rates established by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the capital gains tax rate cuts from 2003 and 2006 will expire.
What will Congress do?
Well, the President is proposing keeping the marginal income tax rates the same for the first four tax brackets (10/15/25/28%) and keep the tax rates for the fifth and top brackets at the levels prior to the Bush cuts (36/39.6%). So, families earning more than $250k will see an income tax rate increase as compared to rates under the Bush administration (but not as compared with rates at the end the Clinton administration).
Also, the President is proposing keeping the same capital gains rates for the first four tax brackets (0/0/15/15%) and keep the capital gains rates for the fifth and top brackets at the levels prior to the Bush cuts (20%). So, families earning more than $250k will see a capital gains rate increase as compared to rates under the Bush administration (but not as compared with rates at the end of the Clinton administration).
@RDOwens: If you and your spouse will make less than $250,000 combined next year, then there is no tax penalty for filing jointly.
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