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Stimulus Skeptics Wrong (Again)

Posted on Feb 5, 2009

By Joe Conason

Mythology is overshadowing history in the debate over President Barack Obama’s plan to stimulate the depressed economy. Excessive airtime is devoted to the prejudices of cable hosts and radio personalities who regurgitate ideas they barely understand (and who haven’t entertained an original thought since the Reagan era). Urgent action that could prevent enormous suffering is delayed by all the same old agendas that have dominated Washington for the past three decades.

So let’s dismiss the myths and get back to the facts.

At the top of the myth list is the Republican faith in tax cuts, particularly those designed to benefit wealthy investors. Anyone who has been paying attention knows that for every problem, conservatives have a consistent solution that involves reducing corporate or capital gains taxes, or lowering the top rate, or instituting a regressive flat tax or consumption tax. (They like spending, too, on certain favored contractors, notably in the defense sector, that donate generously to Republican and right-wing causes.)

But the argument for tax cuts—unless they are directed toward lower-income workers, who will spend them immediately—is contradicted by recent history and basic economics. As Moody’s forecaster Mark Zandi has pointed out repeatedly, what creates the greatest stimulative effect is putting cash in the hands of people who must spend that money immediately, namely the poor and working families. The smallest stimulus is created by tax cuts, and in particular the capital gains and corporate tax reductions most beloved by conservative Republicans.

It is worth recalling that the last time Congress debated these fundamental questions came during the winter and spring of 1993, when Republican members unanimously rejected President Bill Clinton’s first budget. Back then, Dick Armey, a Republican representative from Texas and former economics professor, warned that Clinton’s proposed increase in the top tax rate would lead to economic disaster. Those predictions were echoed by every right-wing politician and talking head and soon was proved utterly wrong by the historic growth rates of the Clinton years.

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Now we hear Armey offering the same kind of predictions about the Obama stimulus plan—and he is treated as a sage rather than a dolt who bet the ranch on his ideology and lost.

Another persistent myth denigrates spending on food stamps, unemployment insurance, tuition aid and similar programs as “welfare” that doesn’t promote growth. According to this argument, assistance to the poor doesn’t qualify as “stimulus” because it doesn’t create public assets such as roads or bridges. But the real purpose of fiscal stimulus is to boost demand in the economy and prevent the bottom from dropping out under prices for goods and services—in short, to forestall a deflationary spiral. Giving money to families that will purchase things immediately is the best kind of boost, as both Moody’s and the Congressional Budget Office have noted in recent studies.

It is true that we need to make real investments in transportation, energy, education and technology for the future—and that our future fiscal difficulties will be eased if we make those investments now. Yet the most immediate need is to promote demand, which will restore confidence and encourage investment.

What we ought to learn from this episode is that extreme inequality reduces national economic stability. The falling wages of working families forced them to rely too much on credit to maintain and improve their standards of living. Restoring the American dream means putting a floor under family incomes and reducing the gap between the richest and poorest, not only for the sake of simple justice but because that is the most reliable economic policy for the nation as a whole.

Joe Conason writes for The New York Observer.

© 2009 Creators Syndicate Inc.



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By Doug, February 10, 2009 at 6:39 am Link to this comment
(Unregistered commenter)

Poor people in this country don’t pay taxes, and often due to the EITC they actually receive money from the government.  You simply can’t cut taxes for people who don’t pay them.

However, I am a middle income earner.  If the government could manage to cut my taxes perhaps I’d buy a new sofa or actually go on vacation this year - two things that have already been canceled due to the economy.

Nope.  Instead they want to take the 3K I pay per year in income tax and spend it on a bunch of wasteful crap. 

I do hope the stimulus works.  But I have my doubts.  The money would be better spent in my pocket than in the pocket of the government.

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By Dave24, February 7, 2009 at 4:52 pm Link to this comment

Everyone has an opinion and none of them seems to agree.  Allow me to add to the conversations regarding the economy: Blah, blah, blah, blah, blah.

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By Dave24, February 7, 2009 at 4:52 pm Link to this comment

Everyone has an opinion and none of them seem to agree.  Allow me to add to the conversations regarding the economy: Blah, blah, blah, blah, blah.

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By Leefeller, February 7, 2009 at 11:06 am Link to this comment

Some great posts, very enlightening thank you.

We could start more wars, and then all go and work in the Military complex, were the money never drys up.

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By csavage, February 6, 2009 at 10:34 am Link to this comment
(Unregistered commenter)

Taxation to pay for the privilege of living in this country isn’t an unfair proposition and it’s certainly not unpatriotic, as the neo-cons would have you believe. The neo-cons would have you believe that not taxing people like me, a resident of the top 5% wage earner bracket, would lead people like me to create new jobs. First off, people like me have their business as a separate entity and it’s usually incorporated. My personal finances have no bearing on my corporate finances and my corporation’s health has more to do with how many people I hire. My personal fiancial health has more to do with if I hire a maid or go to Starbucks more often. The wages dependent on my personal income are not very high-minimum wage, at best. As for my corporate health-the taxes I spend there are more a function of what’s listed as a profit. Of course, I have payroll taxes-I take out my employee’s withholding and I match their FICA contribution-those are fixed costs. Whatever I have left over is what I pay taxes on and I can minimize that with hiring more people or diverting the money from profit to capital investment growing my business. In any case, the issue of personal taxation has little to do with my ability or desire to do business and has more to do with a sense of civic duty. I pay taxes because those taxes go to good roads to drive on, safe water to drink and salaries for our active duty troops.
The real dividing line between what constitutes a conservative and what constitutes a liberal is this-
are we a nation of “me’s” or a nation of “we’s”?
Conservatives are all about the individual-that’s not a philosophy we need right now

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By CJ, February 5, 2009 at 11:41 pm Link to this comment

Very well said by Conason, though he doesn’t go far enough. Especially parts to do with certain myths still subscribed to (as I listened to Senate “debate” today) by those of both parties. Albeit, Republicans more than Dems, with never-ending grab for votes by means of promising tax break after tax break after tax break. In reality to those most well off, who long since haven’t paid anywhere near their share. Dems too. Note renewal of S-Chip to be paid for by low-income smokers, for whom a carton of cigarettes affords more entertainment (and some relief from daily stress) than taking a family of four to the movies once a week. (Speaking not only of regressive taxation, but also of discriminatory taxation. Smokers not likely to protest what with guilt-trip also devised and levied.)

Recall that when tiny boost in minimum wage was passed by Congress only when so-called “small business” was at the same time granted yet another tax break. U.S. Congress is a complete fraud, forever speechifying all sorts of nonsense—from talk of “our values” to what “American people” think; “American people” evidently monolithic. McConnell and Reid and cohort all forever claiming to know of what “American people” think. As though any has the remotest idea.

I had no idea Armey taught economics. What Armey really taught (sought to instill) was ideology. Not to let Clinton off so easily. He gave us NAFTA and then balanced budget. Historic growth rate Conason mentions was largely due to dot.com bubble, not to anything Clinton did. Otherwise, Clinton gave us “McJobs.” In some ways, Clinton turned out who Reagan only claimed he’d be. Reagan was never the Reagan as narrated by perpetuators of myth—those cable hosts and radio personalities Conason writes of. Indeed, all of whom d do not much more than regurgitate. Not a one has ever admitted to doing just that. As hosts, et al. pretend to us they know the slightest bit of economics. (My personal favorites are those at CNBC and CNN, the latter locale of an assortment of “experts” always with advice on what you should do next, whether regarding your long-gone retirement fund, or your long-gone job or house. American optimism as its most irritatingly unreal—in denial of reality lest the state or rather empire implode.)

The myth that leads to denigration of spending on so-called “welfare”—from food stamps to Medicaid—is the same myth that claims ours must be a nation of boot-strappers. Conason puts his finger on the myth/ideology that runs deepest in the collective American psyche: myth of Old West. If not of gunslingers then of homesteading sodbusters alongside itinerant cowboys and B-girls (Indigenous need not apply). Don’t laugh; Reagan got himself elected President by exploiting deep-seated myth. Lindsey Graham carried on today as though South Carolina along with all the rest of these states were “Deadwood.”

Myth, despite rather changed times (homesteading and cow-busting pretty much bygone), persists. Despite central myth, social welfare became necessary circa 1930 if nation wasn’t to disappear altogether (in socialism? Guy can dream, can’t he?). Delivery of essential welfare was carried out, though with prejudice that still attends so-called “entitlements.” Reality struck the homeland; something had to be done. Old West/capitalist myth persists to this day. Not even Modernity acknowledged. Sodbuster myth is central to American Dream.

Conason points to unreality by which abides “American values” according to which judgment is visited by vast majority of ardent believers upon those less fortunate but regarded as somehow in some way inadequate to the point of culpability. Not, “let us pray,” but let us laugh—at absurdity that is ongoing prevailing myth, aka ideology, endlessly regurgitated by those who claim to be in the know.

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By Shift, February 5, 2009 at 10:44 pm Link to this comment

There are very few honest people anywhere in America.  Because of this a stimulus will only enable more corruption.  The best solution is to let the crooked economy collapse and begin again.  Whether it’s through earthquakes, tornados, tidal waves, hurricanes, animal extinction, climate change, pandemic, comet strike, or all of the above, Americans are going down.  It’s the only way to refresh the spirit and the stock.  The game is over and we lose.

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By Hulk2008, February 5, 2009 at 12:58 pm Link to this comment

Cornerstone, If the unemployment rate continues to climb, tax cuts mean even less revenue - simple math:  fewer workers paying lower taxes plus unemployed-workers paying zero tax = less revenue = NO money for the Conservative Police State. Contrary to your claim that the rich will be paying more taxes, so far there have been NO calls to raise any taxes.  Fact: the GOP in the 90’s declared that Clinton’s era of increased employment would cause inflation to hurtle out of control and business would wither - instead business boomed and inflation stayed flat AND record surpluses were recorded. 
Here’s a suggestion:  YOU give up YOUR job to one of those “lazy unwilling to work” types.  Exactly when did the rich ever give to the poor in proportion to their income ?  Fact:  statistics show that the higher the personal income the lower percentage given to charity.

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By Spiritgirl, February 5, 2009 at 12:52 pm Link to this comment

For all of you that have deluded yourselves into believing that “free-market” ideology, and tax-cuts are the answer, Warren Buffet said it best a few years ago when W. started going on about tax-cuts, I’ll paraphrase it for you he said tax cuts for the wealthy would not stimulate the economy, because on his extra $35,000.00 that he saves in taxes - he was not going to spend it HE WAS GOING TO FIND SOMEPLACE ELSE TO INVEST IT!  He said it would be better to give the tax cut to his secretary that made $35,000.00 a year, because she needed it more!

The wealthiest people in this country are paying the lowest taxes, and no they are not stimulating anything except their bank accounts!  The average working American is the one that needs a tax cut! This stoopid idea has continued to be used as the magic cure-all since Reagan was in office it didn’t work then (does no one remember the massive amount of unemployment?), it hasn’t worked since, and it won’t work 50 years from now!  The corporate shills aka “Congressional representatives” that continue to push this drivel have been bought and paid for! 

But I do believe that the federal budget does need an over-haul: DOD needs massive cuts because those 355 billion dollar planes that can’t be flown into war are not doing anyone any good!  All of those other over-priced non working pieces of crap are totally unnecessary against those IED’s or desert warfare!  Don’t get me wrong, I’m all for defense, but (a)the COLD WAR is over, and (b)exactly whom are preparing to fight - ALIENS - yeah right!  Our Agriculture policies need to be rethought - as Agri-business now controls the food supply! If more people did the real homework and stop listening to the talking heads and shills this nation might not be as deep in the mess we’re in!

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By Anarcissie, February 5, 2009 at 12:29 pm Link to this comment

Ahh a Lion:
Wouldn’t falling prices make things more affordable for poor people?  Doesn’t trying to prop up prices of good and services benefit the evil corporations while screwing over the consumer?

Hush!  You’ll give the game away.

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By thebeerdoctor, February 5, 2009 at 11:38 am Link to this comment

Purple Girl makes a salient point about being jobless means a tax break is completely meaningless. It is also true as she pointed out, that the so-called solutions offered up by the ownership class are demeaning and insulting. No one wants to admit that what is most needed are jobs. The uuber rich, as Big B would say, only care about their crunching numbers. It does make you wonder why in the world does the United States government fund, or even have a Chamber of Commerce, when it has been revealed, time and again, that their only mission is to increase the bottom line of corporations, by running rough shod over any impeding environmental and/or labor laws. Does anybody remember their “Yes You Can In Yucatan” campaign, where they promoted, at tax payers expense, for companies to move their operations from the United States, to the “free trade zone” of Yucatan.
Purple Girl’s outrage is well founded. The crummy half-ass solutions being offered up are but another smoke screen for blatant thievery. The rich do what they will, the poor bear what they must.

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By Purple Girl, February 5, 2009 at 11:07 am Link to this comment

Seems most of the Repugs,Financial ‘ANALysts’ & ‘Market’ Channel ‘gurus’ are attempting pull a Cheney.
If they keep claiming their proven failed ideas, perhaps someone would still listen.
Tax Breaks are counterproductive to generating an economic recovery- less income tax due to job losses. Less property taxes because of foreclosures. Increased deficits because of higher Unemployment compenstation and Welfare,to boot!Tax breaks are like a bandaid on a Head shot wound by a shot gun blast.And further ‘Deregulation’ only adds a stake to the heart.
This BS debate over CEO comepensation is intellecutally insulting and criminal. What ‘talent’ are they referring to? Those who drove the national car over the cliff? Besides why should we allow CEO’s to access the ‘Free market’ system when we are barring those in labor from doing the same. TheCEO’s who are responsible for this economic treason should be thanking God we have only capped their pay, instead of imprisoning them in Gitmo, or worse!
Workers nor small business want tax breaks they want Incomes. Jobs that pay and customers with jobs that pay. If your income is Zero, what does a tax break provide? It also does nothing to eleviate the burden from future generations, nor even provides necessary infrastructure, so they needed try to rectify catastrophes caused by continued delay (another Katrine, MN Bridge collapse).These disasters not only cost more money- but also Lives!
Repugs not only live in a ‘echo chamber’ their heads are up their asses. Tax breaks and Deficit concerns are an oxymoronic agrument. and don’t scream Free Market when it comes to CEO comp while refusing access to the average citizens.Even more indicting is when your policies are exactly those which Our ancestors waged a Revolutionary War against. Trickel Down has always been the economic stratedgy of Kings and Dictators!

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By thebeerdoctor, February 5, 2009 at 10:40 am Link to this comment

re: Cornerstone

Big B’s response is on target concerning the poor. Since you are a veteran, I understand your feelings about defense, although I must tell you, if you look into the research of people like Chalmers Johnson, you might discover that much of the bloated , misdirected defense appropriations actually weaken this nation’s defense. Many proposed weapons systems have much more to do with enforcing American hegemony, rather than defending the United States. That of course is my opinion. Since you mentioned Miller Lite, I thought I would provide you this Miller beer link:
http://beerdoctor.wordpress.com/2008/09/04/1150-for-a-hamburger/

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By Ahh a Lion, February 5, 2009 at 10:09 am Link to this comment
(Unregistered commenter)

“But the real purpose of fiscal stimulus is to boost demand in the economy and prevent the bottom from dropping out under prices for goods and services—in short, to forestall a deflationary spiral.”

Wouldn’t falling prices make things more affordable for poor people?  Doesn’t trying to prop up prices of good and services benefit the evil corporations while screwing over the consumer?

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By Big B, February 5, 2009 at 9:18 am Link to this comment

We have had supply side economics and lower taxes on the corporations and the wealthy for almost 30 years now. We have had a deregulated financial system for nearly as long. I have but one question to all the conservatives who supported these policies,

How’s that working out for ya?

Oh, the uuber wealthy and big business have thrived. They took their tax cuts, and lack of oversite, and moved operations to the third world where they can produce their product at a much lower labor cost, without having to worry about the burden of environmental responsibility, or employee benefits, or working conditions. Then they can still sell their product in america, at the same price, and pocket the savings of being socially irresponsible. This is why their profits looked great, for a while.

Now years of this cycle have led us to today. Too many well paying jobs have been moved overseas or eliminated all together. These same workers now have service sector jobs that pay much less than their predesessors, with less benefits, that create less per capita tax revenue for all government entities, thus creating budget defecits, and eventually the need to raise taxes or eliminate services. The only increase in tax revenue under this cycle is found in increasing population. But as population increases, so does the need for public services, and so the cycle gets worse.

Lowering taxes and deregulating business was supposed to create a republican conservative paradise. Well, where is it? Lost in a sea of greed and avarice. It has, like the Confederacy, died of a theory.

And Cornerstone, stop blaming the poor for this nations problems. They have no political power base, no lobbying firm, and thus, no voice in american politics. They have not run america into the ground by buying big screen tv’s and cadillacs. Too many of them have had to use credit cards to buy food, pay rent, keep their utilities on, all the while working for less money and benefits than they did 10 years ago. The poor did not lobby DC for tax breaks that they used to move operations to another nation. The children of the poor go to inadequete schools, are il prepared for college, which is a good thing because they cannot afford to go in the first place. Thus perpetuating the cycle of poverty in america. A cycle that includes more and more people every day.

Now, thanks to a corrupt system run by corporate america, the US is floundering. It has once again fallen on the government to step in and try to save our system from itself. While nobody has much confidence the governments plan, it is better than Exxons, and goldman Sachs, and Microsofts. Oh, that’s right, they don’t have one.

But wasn’t the unregulated market supposed to take care of all this? Wasn’t Big Business and the marketplace supposed to take care of all of our needs?

Their plans must be in the Easter Bunny’s trunk, under the spare tire.

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By s c mailen, jr., February 5, 2009 at 8:56 am Link to this comment
(Unregistered commenter)

Conason - like most people addicted to Mary Poppins and Peter Pan politics - does NOT have a CLUE. America may never be able to pay off this insane debt. To pass this debt on to future generations proves there is NO accountability in Washington, and that Americans are getting DUMBER. Wake up! Our prostitute politicians need to be OUTSOURCED. The Fed screwed it up before WWII, and they did it AGAIN! How can anyone trust our politicians to get us out of this disaster? If you love freedom, you do NOT reward incompetence with more power.

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By Cornerstone, February 5, 2009 at 8:56 am Link to this comment

re: thebeerdoctor

I think it would be a great evening if you and I would ever sit and talk over a beer.  I’m a Miller Light man myself.

I agree with most everything you stated in your response.  I just read an article on salon.com http://www.salon.com/opinion/feature/2009/02/04/obama/ from a liberal that I actually agreed with.  Joan Walsh actually put it into perspective that I could appreciate. 

A lot of my posts present me as far right, but I’m really not.  I am just a firm believer in providing for yourself, not relying on hand outs unless absolutely necessary.  I hate the corporate welfare and the rediculous amount of money executives make.  I do not believe anyone is worth 14 million a year plus perks, bonuses and stock options.

The only umbrage I take with your response is the defense spending.  I am a veteran I stronly believe in a well funded fighting force.  Peace through superior fire power.  I do not agree with giving government contractors a blank check and military spending needs to be checked for fleecing, but we need to keep our military strong.  A weak military position only encourages those who want to do us harm.

If a robber knows I have loaded guns in my house, and I do, they are less likely to rob my house than the guy next door who they are not sure if he has one.

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By thebeerdoctor, February 5, 2009 at 8:37 am Link to this comment

re: Cornerstone
A fact that gets overlooked is that those who are actually on welfare is the lowest in forty years. This is of course due to the “welfare reform” of President Clinton and continued through the Bush years. Mind you, the increase in government spending has not gone to the poor, but rather such welfare clients of the military budget, who have new the aircraft carrier U.S.S. George H. W. Bush built for for $6.5 billion, and now are clamoring to build a fleet of F-22 planes at a cost of at least, $350 million a piece. Add to that the welfare of such corporate clients as A.I.G., Citigroup, Goldman Sachs, Bank of America… and I believe your disgust is aimed at a minor set of villains. This is a classic example of “bait and switch” employed by Ronald Reagan in his hey day. For all the outrage against the “Cadillac welfare queen”, it is absolute peanuts compared to the looting of the national treasury, by those in well connected positions.
Thank you for sharing your thoughts, please forgive my unnecessary snarl.

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By Cornerstone, February 5, 2009 at 7:54 am Link to this comment

SamSnedegar: “And by the way, Kennedy notwithstanding, the very idea that decreasing taxes INCREASES revenue is stupid and what you have to know is that revenue has increased EVERY YEAR, taxes notwithstanding, increase, decrease, stay the same . . . goes with POPULATION increase. The supply siders like to cite individual tax cuts and revenue increases, but they don’t treat the subject with any respect at all; in fact, they lie.”

Where are you getting your information from?  Review the information at:  http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=203

The Tax Policy Center run by The Urban Institue and The Brooking Institute is well respected for having accurate information.  It tells a different story about tax revenue increasing every year. It is just not so. 

People want to believe something so bad, they ignore the facts.  “My mind is made up, do not confuse me with the facts.”

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By Cornerstone, February 5, 2009 at 7:49 am Link to this comment

TheBeerDoctor: 

To answer your curiosity, I refer to those that “earn it” as anyone who works any job.  Doesn’t matter if they are construction, stock broker, etc. 
I do not believe it the governments right to take income (taxes) from the individuals who work for a living and give it to those that do not work.  I am all for helping those in need.  I am not for helping those that ride the welfare train as a way of life.  Most people need assistance now and again.  I am all for that, but a unilateral throw money at the poor approach does not help.  I give to charity and I certainly gave a higher percentage of my income to charity last year that Obama did (less than 1%) and he makes a helluva lot more than I do.

I am not complaining about paying taxes, everyone should have to provide their share, just don’t make make certain groups provide more than there share.  I am by no means rich, single income family, married over 20 years, six kids (one with special needs), work in manufacturing, earn mid 50’s/year.  So no, I am not rich by no means.  Taxing the wealthy at a higher rate will not affect me at all.  In fact, Obama’s plans would probably benefit me.  It’s the principal ideas of taking more from some one just because you can that I find absurd.

I am all for helping those who try to help themselves, it’s the ones who constantly have their hand out and complain about what everyone else has and they do not that is the problem.

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By SamSnedegar, February 5, 2009 at 7:21 am Link to this comment

“...Yet the most immediate need is to promote demand, which will restore confidence…”

One can approach riding a bucking horse or bull with all the confidence in the world, but if he tries to ride it without holding on, he will find himself in a heap in the dirt.

I just don’t think the answer to a ten trillion dollar debt is to promote MORE debt of the same kind and to put a band aid over blood gushing from arterial bleeding.

I’d like very much to suggest a way out of our dilemma, but there may not be one short of an Argentina type bankruptcy which of course would impact the entire financial world.

In other words, “don’t just DO something, Doctor; STAND THERE!” (and while you’re standing there, do try to THINK, if that is possible.)

The same type of “confidence” that would be engendered by whatever “stimulus package” anyone tries to implement would be the same type of false confidence which got us into this mess in the first place, and nothing will destroy our confidence like the absolute truth, meaning that this is why the economists don’t explain the REAL problem to us.

What is that problem? We can print money as fast as we like, but our wealth has gone: our oil has been used up, our coal won’t sell, our steel gave way to Japanese manufacturers, our appliances are being made in Iceland, Ireland, and CHINA, our airplanes in France, our foodstuffs in Mexico and CHINA, our precious metals in South America, and our computers in India . . . a “stimulus package” can do little about that, only put off the denouement pending our final admission that we are bankrupt as a result of our previous profligacy.

What did Rome try to do about the fall of their civilization? Went marauding to steal some shit. Did it work? For a while, but not for long; then it was bye-bye birdie. What did Germany do when they were in economic trouble in 1930? Went marauding to steal some shit. Did it work? Yes, until 1944 when the world spanked them and put them to bed without any supper.

And by the way, Kennedy notwithstanding, the very idea that decreasing taxes INCREASES revenue is stupid and what you have to know is that revenue has increased EVERY YEAR, taxes notwithstanding, increase, decrease, stay the same . . . goes with POPULATION increase. The supply siders like to cite individual tax cuts and revenue increases, but they don’t treat the subject with any respect at all; in fact, they lie.

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By taxman, February 5, 2009 at 7:17 am Link to this comment
(Unregistered commenter)

Give every American Tax Payer 100,000 dollars and see what happens.

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By thebeerdoctor, February 5, 2009 at 7:08 am Link to this comment

It would be curious to learn what ranters such as Cornerstone mean exactly by “money from those that earn it”. What part of the “working” population is he referring to, sanitation workers and other “service” jobs, or stock brokers, bankers and middle management. Or maybe it refers to construction contractors, or caterers, or people that polish your shoes. Typical liberal spew? How about typical talk-radio nonsense. Maybe the people who complain about taxes, should do what their brethren claimed should be done to those who oppose the wars: leave.

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By Cornerstone, February 5, 2009 at 6:28 am Link to this comment

What a crock of BS.  Typical liberal spew that we need to take the money from those that earn it and give it to those that can’t, won’t, unable, too lazy, unwilling, etc. to go out and earn it themselves.

Conason writes, “The falling wages of working families forced them to rely too much on credit to maintain and improve their standards of living.”

It’s not he falling wages that forced families to rely on credit, it’s the fact that families had to have the big screen tv, the $200,000 home, the Lexus or any other luxery item they could not afford, so they used credit to get it.  Now that the payments are due they find they are over extended and can’t make it.  No one plans for the day if their job isn’t there anymore.

Fact:  Clinton lowered the Capital Gains Tax from 28% to 20% and tax income for the governement increased.

Fact:  Bush lowered the Capital Gains Tax from 20% to 15% and tax income for the government increased again.

Fact:  Carter raised the Capital Gains Tax and tax revenue decreased.

There are definately things that need fixed and addressed in the financial sector.  Corporations and the banking industry need to monitored more closely and the off shore tax havens done away with.  If the money is made in the US then taxes should be paid on it.  Corporations should not be able to get out of paying taxes because their HQ’s is overseas.  I.E. Haliburton, whose the largest government contractor but moved their HQ to the UAI to get out of taxes.

But do not preach the need to increase the personal income tax of the rich just because they are successful.  The government has no more right to take the rich mans money to give to the poor than the poor has to rob the rich mans house.  Same principal, just the liberals justify it because the government is doing it, so it must be legal.

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