State Of The Union

[steelish]

Please feel free to include your evidence on the government requiring the banks to give loans they did not desire to give. My recollection seems to be banks actively lobbying to be able to extend further credit, not complaining about the government forcing them to. See various exemptions that were the result of direct appeals to the Bush administration, most notably Bear Stearns.

I've provided links to the sources:

During the Carter administration, government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this "subprime" lending by authorizing ever more "flexible" criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.

All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. "Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.

As long as housing prices kept rising, the illusion that all this was good public policy could be sustained. But it didn't take a financial whiz to recognize that a day of reckoning would come. What does it mean when Boston banks start making many more loans to minorities? Most likely, that they are knowingly approving risky loans in order to get the feds and the activists off their backs . . . When the coming wave of foreclosures rolls through the inner city, which of today's self-congratulating bankers, politicians, and regulators plans to take the credit?

Frank doesn't. But his fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.

Now that the bubble has burst and the "systemic risk" is apparent to all, Frank blithely declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train.

[oww-that-hurt]

I am so speechless that I don't know how to say what I want to say.

How can our government blow so much smoke up our ass and tell us it is good for us and not to worry about this near-4 trillion dollar budget?

Obama should be a used-car salesman at 'Slick Sam's' or something, the way he can stand there in a speech and say what he does into the camera as straight-faced as if he were telling us that sunrise will occur at 8:11 AM in Montana tomorrow.

Thanks, guys, for taking your valuable time to write about such important matters.

[SadisticNature]

I'll agree that the federal banking acts tend to be terrible, and that the links to those reports blame bankers for discrimination. This of course begs the question, if the bankers aren't actually fixing the discrimination problem by issuing bad loans, how did this cause the crisis? You can't both have your cake and eat it to. Your reports indicated that bankers are still denying loans to blacks at a disproportionately high rate, which means they are not making the high risk loans the ridiculous law would suggest. Ergo, this did not cause the financial crisis.

I point to the specific actions where the worst collapses in the crunch were by organizations that specifically requested overrides of debt limits that were already unreasonable and unsafe, not to comply with specific policies but to pad the bottom line.

As for Reagan, he started the myth that tax cuts pay for themselves, leading directly to the absurdly large $10+ trillion deficit that the US now faces. This has been shown to be false in every country in the world where it has been applied. That being said its nice to pay less taxes, after all it won't be your problem when the government goes bankrupt.

[steelish]

I'll agree that the federal banking acts tend to be terrible, and that the links to those reports blame bankers for discrimination. This of course begs the question, if the bankers aren't actually fixing the discrimination problem by issuing bad loans, how did this cause the crisis? You can't both have your cake and eat it to. Your reports indicated that bankers are still denying loans to blacks at a disproportionately high rate, which means they are not making the high risk loans the ridiculous law would suggest. Ergo, this did not cause the financial crisis.

????????

Because issuing bad loans IS the cause of the crisis. It doesn't matter whether or not it "fixed" discrimination. The fact remains that the banks were coerced into making loans that they well knew the recipients would default on.

Just because the government's ambitious goal of eliminating discrimination may or may not have worked has no bearing on the end result.

[DuncanONeil]

I'll agree that the federal banking acts tend to be terrible, and that the links to those reports blame bankers for discrimination. This of course begs the question, if the bankers aren't actually fixing the discrimination problem by issuing bad loans, how did this cause the crisis? You can't both have your cake and eat it to. Your reports indicated that bankers are still denying loans to blacks at a disproportionately high rate, which means they are not making the high risk loans the ridiculous law would suggest. Ergo, this did not cause the financial crisis.

I believe this is referred to as denial!

I point to the specific actions where the worst collapses in the crunch were by organizations that specifically requested overrides of debt limits that were already unreasonable and unsafe, not to comply with specific policies but to pad the bottom line.

Do not know what your source is but it sounds a lot like wishful thinking to protect the real perp.

As for Reagan, he started the myth that tax cuts pay for themselves, leading directly to the absurdly large $10+ trillion deficit that the US now faces. This has been shown to be false in every country in the world where it has been applied. That being said its nice to pay less taxes, after all it won't be your problem when the government goes bankrupt.

Simple statements with no support. A logical look at this should suffice. If people have more of the money they worked for then they can choose what to do with that money; save it, spend it, invest it. In each case this money creates work for someone, that work generates income that income is taxed. since there is an increase in income then the revenues to the Government increase.
The greatest cause for Government income problems is the fact that there is no restraint on the Government checkbook. Would you not love the ability to increase you credit line if you were getting close to that limit? Even under the current conditions, when any sane person would realize that income is down and the need to cut spending the Government is doing just the opposite! Where does the Government get its money? Especially when they have "promised" to see that there is not one dime in tax increase for people earning under a certain amount. What is a fee on a business other than a tax? When taxes are increased on a business who pays that tax?

[SadisticNature]

I believe this is referred to as denial!

There is a phrase about having your cake and eating it to. This is what applies here. The numbers in the article show that black communities are getting far fewer loans than white communities Yet the person is claiming that the cause of the problem is that the black community is getting more high risk loans which the bankers know are sure to default. You are hence claiming they are both getting less loans and more loans. This is obviously absurd. Your 1 word statement of "denial" does nothing to answer this criticism.

Do not know what your source is but it sounds a lot like wishful thinking to protect the real perp.


Simple statements with no support. A logical look at this should suffice. If people have more of the money they worked for then they can choose what to do with that money; save it, spend it, invest it. In each case this money creates work for someone, that work generates income that income is taxed. since there is an increase in income then the revenues to the Government increase.
The greatest cause for Government income problems is the fact that there is no restraint on the Government checkbook. Would you not love the ability to increase you credit line if you were getting close to that limit? Even under the current conditions, when any sane person would realize that income is down and the need to cut spending the Government is doing just the opposite! Where does the Government get its money? Especially when they have "promised" to see that there is not one dime in tax increase for people earning under a certain amount. What is a fee on a business other than a tax? When taxes are increased on a business who pays that tax?

So basically according to you when business spends money it creates work for people and when government spends money it doesn't. You have presented no evidence at all for this false dichotomy. You seem to support the idea that tax cuts generate wealth for governments yet you can't support the idea that governments spending money to drive the economy generate wealth for governments. Interesting. Seeing as you don't advocate deficit spending in a recession I'll just be happy you don't have a career in politics. ALSO PROVIDE A SOURCE FOR YOUR ARGUMENT.

[DuncanONeil]

Maybe not politics, but Government.
The basic point is the Government does not produce anything, although it does consume. On the basis of that it spends and others make money from their neighbors.
The attempts of this Government to "boost" the economy can be considered smoke and mirrors. Virtually all that has gone out has gone to social service groups or local governments, as a one time income. Even if they used this money for new hires, government jobs, who pays for it next year? The locals from an increase in taxes. Or the feds have to increase taxes, or the deficit, to fund it again.
The issue revolves around the fact that a business produces a product that creates income, a Government does not, hence any of its spending does not create income.
Now here comes the challenge, you claim this is a dichotomy and yet expect me to provide evidence that it is true. You have made a claim without any refutation. Therefore the original statements still stand.
You posit that I; "seem to support the idea that tax cuts generate wealth for governments yet you can't support the idea that governments spending money to drive the economy generate wealth for governments". It should be clear that both of these can not be true. When business has excess revenue it can do all of the things I mention previously. When the Government takes that money business can do none of those things. Therefore only one instance can create an increase in revenue to the Government. Past practice has shown that Government can not control, what can be called nothing else, its greed for money. The worst example was when Congress began to raid the Social Security Trust Fund. Which I believe is going red this year!
Deficit spending is what they tried in the 30s! Took 30 years and a World War to fix that solution. My parents lived through that I do not desire to emulate them!

"ALSO PROVIDE A SOURCE FOR YOUR ARGUMENT"
Which argument? And what facts are you challenging?

So basically according to you when business spends money it creates work for people and when government spends money it doesn't. You have presented no evidence at all for this false dichotomy. You seem to support the idea that tax cuts generate wealth for governments yet you can't support the idea that governments spending money to drive the economy generate wealth for governments. Interesting. Seeing as you don't advocate deficit spending in a recession I'll just be happy you don't have a career in politics. ALSO PROVIDE A SOURCE FOR YOUR ARGUMENT.

[SadisticNature]

Not only do you continue to argue your point without a single source, but you now expect me to source my challenge to your argument when you won't source either your arguments or your challenges to my arguments in this or other threads. This is a ridiculous double standard.

Furthermore you hold: The original statement stands. The original statement fails to stand because it contains a bunch of unsourced, unproven claims.

As for economic growth:

Even one time income for social service groups does create income for other businesses. Grocery stores make money because welfare recipients spend money there. Government workers spend their money on various goods in their communities, etc. In fact, in many cases the government can create faster cycling of money because it can distribute wealth into ways that encourage spending rather than saving, and spending drives economic growth at a faster rate than investment or savings do. The rate of money changing hands is a primary economic driver.

Taxes->Government->Social Security Recipients->Businesses providing essentials
is a rather quick turnover that drives a lot of economic spending.

Maybe not politics, but Government.
The basic point is the Government does not produce anything, although it does consume. On the basis of that it spends and others make money from their neighbors.
The attempts of this Government to "boost" the economy can be considered smoke and mirrors. Virtually all that has gone out has gone to social service groups or local governments, as a one time income. Even if they used this money for new hires, government jobs, who pays for it next year? The locals from an increase in taxes. Or the feds have to increase taxes, or the deficit, to fund it again.
The issue revolves around the fact that a business produces a product that creates income, a Government does not, hence any of its spending does not create income.
Now here comes the challenge, you claim this is a dichotomy and yet expect me to provide evidence that it is true. You have made a claim without any refutation. Therefore the original statements still stand.
You posit that I; "seem to support the idea that tax cuts generate wealth for governments yet you can't support the idea that governments spending money to drive the economy generate wealth for governments". It should be clear that both of these can not be true. When business has excess revenue it can do all of the things I mention previously. When the Government takes that money business can do none of those things. Therefore only one instance can create an increase in revenue to the Government. Past practice has shown that Government can not control, what can be called nothing else, its greed for money. The worst example was when Congress began to raid the Social Security Trust Fund. Which I believe is going red this year!
Deficit spending is what they tried in the 30s! Took 30 years and a World War to fix that solution. My parents lived through that I do not desire to emulate them!

"ALSO PROVIDE A SOURCE FOR YOUR ARGUMENT"
Which argument? And what facts are you challenging?

[steelish]

You seem to support the idea that tax cuts generate wealth for governments yet you can't support the idea that governments spending money to drive the economy generate wealth for governments. Interesting. Seeing as you don't advocate deficit spending in a recession I'll just be happy you don't have a career in politics. ALSO PROVIDE A SOURCE FOR YOUR ARGUMENT.

Andrew Mellon — he was the Timothy Geithner without the TurboTax scandal — did a study in 1921 on why the wealthier classes had paid less and less in taxes as the government raised the rates on them over and over again. Mellon found that higher taxes actually drove the money underground.

Let's put it in today's context. Oprah Winfrey has a mansion in Montecito, California but because California has one of the highest progressive tax rates on people making over $1 million a year, she actually monitors the number of days she stays there, in order to avoid being considered a "full-time resident" and thus avoid paying the full punishment in taxes.

Here's another example: In 1969, Ireland introduced a tax-exempt status for artists. When they decided, in 2006, to put a cap on that tax break — 250,000 euros — Bono, another one of these celebrities who champion progressive politicians, promptly moved U2's business operations to the Netherlands.

That's how the money goes "underground," just like Mellon found in the 1920s; the uber-rich look to save money any way they can. And as long as it's legal, I don't blame them. But it drives me nuts when I see people like Oprah campaigning for the guy who wants more taxes and then she doesn't want to pay the taxes.

In the 1920s, Mellon found that "the rich" tended to invest abroad rather than build new factories and mills in the United States and pay the 73 percent tax on the income from those investments. That's right, 73 percent.

It didn't start that way, though. When progressive Woodrow Wilson introduced the "progressive income tax" in 1913, the 16th Amendment had to be passed because income taxes were unconstitutional. How did these reformers manage to get it passed? They said taxes would be extremely low. Many would pay no taxes at all.

The richest of the rich only paid seven percent, while the average American paid one percent. Of course, it didn't last. By the end of Wilson's term the lowest bracket bumped up to four percent and the highest at 73 percent.

President Harding decided to listen to Mellon. And from 1921 to 1926, Congress worked to reduce the top tax rates. Eventually they got to top rates down to 25 percent. The result: Tax revenues from the wealthiest taxpayers tripled. The national debt dropped from $24 billion to $18 billion.

President Calvin Coolidge assumed the presidency in 1923 after Harding suddenly died and continued with the smaller government, lower tax strategy. He talked about not building up the weak by pulling down the strong; not being in a hurry to legislate and cutting the size of government. Coolidge and Harding decreased the real per capita federal expenditures from $170 per year in 1920 to $70 in 1924.

These policies, along with fostering the mentality of self-reliance (the opposite of what progressives had been preaching the previous 20 years and the opposite of what they preach now, by saying "too big to fail" or you can't make it without government safety nets) was followed by what was arguably one of the most prosperous eight years this country has ever seen. You've probably heard of a little term called "The Roaring Twenties," right? The progressive history books have done their best to hide the fact that a lot of it had to do with Mellon's tax policies, including the tax cuts for the wealthy.

Progressives don't want you to know this. They'll say the tax cuts and small government caused the Great Depression. No, I'm going to go out on a limb here and use common sense: The same things that caused the problems of today were the root of the problem in 1929: greed; the Federal Reserve; government making every single mistake. The president before the crash was a Republican, but a progressive Republican. But, that's for another show.

Let me get back to what happened when they cut taxes in 1921:

Automobile production was up 191 percent for the decade and while the elites bemoaned those wealthy fat cats and their automobiles, their appetite for driving created jobs. The demand for auto-related products skyrocketed: metal; lumber; steel; cotton; leather; paint; rubber; glass and of course, gasoline. Companies had to be created to meet the demand. This is real job creation. People had to be hired. Roads were being built. State highway construction spending increased tenfold between 1918 and 1930; did they fire all the cops and teachers?

In 1920 there were only 5,800 passengers who had flown on a plane. By 1930 it was 70 times that amount.

RCA brought us the radio and along with it, advertising. Now you could hear Babe Ruth hitting home runs all anywhere in the country.

Thomas Edison brought us movies in the 1880s, but in the 1920s the true modern-era motion picture arrived with Cecil B. Demille and "The Ten Commandments."

A whistling Mickey Mouse was introduced to America by Walt Disney in 1928; the first cartoon with synchronized sound.

Conveniences like telephones became less exclusive and more commonplace in the '20s. More Americans had irons, vacuums, washing machines and refrigerators. And all of these new products meant there was a demand for something else: energy. America needed huge power plants.

Does all of this innovation and growth seem to anyone else, like lasting job creation? Assuming the Fed and the government don't come in and screw everything up. And unlike the temporary jobs or the low-paying census jobs our government creates, per capita income had increased 37 percent from 1921 and 1929. People saved and invested like never before, gaining access to things for the first time such as life insurance.

It was America's coming-out party. And all of this success, all of the innovation, all of the prosperity without punishing the rich, without big government, absolutely baffled progressives. Especially the fact that everyone benefited; from the bottom up.

Evidence? Leon Trotsky, a Marxist revolutionary in the Soviet Union with Lenin, later lived in New York City in 1917. He fought all his life for Marxism to help the working class. Here's what he said about New York: "We rented an apartment in a workers district... and that apartment, at $18 a month, was equipped with all sorts of conveniences that we Europeans were quite unused to: Electric lights, gas cooking range, bath, telephone, automatic service elevator, and even a chute for the garbage."

The source? A Patriot's History of the United States by Michael Allen and Larry Schweikhart

[SadisticNature]

Andrew Mellon — he was the Timothy Geithner without the TurboTax scandal — did a study in 1921 on why the wealthier classes had paid less and less in taxes as the government raised the rates on them over and over again. Mellon found that higher taxes actually drove the money underground.

Let's put it in today's context. Oprah Winfrey has a mansion in Montecito, California but because California has one of the highest progressive tax rates on people making over $1 million a year, she actually monitors the number of days she stays there, in order to avoid being considered a "full-time resident" and thus avoid paying the full punishment in taxes.

Here's another example: In 1969, Ireland introduced a tax-exempt status for artists. When they decided, in 2006, to put a cap on that tax break — 250,000 euros — Bono, another one of these celebrities who champion progressive politicians, promptly moved U2's business operations to the Netherlands.

That's how the money goes "underground," just like Mellon found in the 1920s; the uber-rich look to save money any way they can. And as long as it's legal, I don't blame them. But it drives me nuts when I see people like Oprah campaigning for the guy who wants more taxes and then she doesn't want to pay the taxes.

In the 1920s, Mellon found that "the rich" tended to invest abroad rather than build new factories and mills in the United States and pay the 73 percent tax on the income from those investments. That's right, 73 percent.

It didn't start that way, though. When progressive Woodrow Wilson introduced the "progressive income tax" in 1913, the 16th Amendment had to be passed because income taxes were unconstitutional. How did these reformers manage to get it passed? They said taxes would be extremely low. Many would pay no taxes at all.

The richest of the rich only paid seven percent, while the average American paid one percent. Of course, it didn't last. By the end of Wilson's term the lowest bracket bumped up to four percent and the highest at 73 percent.

President Harding decided to listen to Mellon. And from 1921 to 1926, Congress worked to reduce the top tax rates. Eventually they got to top rates down to 25 percent. The result: Tax revenues from the wealthiest taxpayers tripled. The national debt dropped from $24 billion to $18 billion.

President Calvin Coolidge assumed the presidency in 1923 after Harding suddenly died and continued with the smaller government, lower tax strategy. He talked about not building up the weak by pulling down the strong; not being in a hurry to legislate and cutting the size of government. Coolidge and Harding decreased the real per capita federal expenditures from $170 per year in 1920 to $70 in 1924.

These policies, along with fostering the mentality of self-reliance (the opposite of what progressives had been preaching the previous 20 years and the opposite of what they preach now, by saying "too big to fail" or you can't make it without government safety nets) was followed by what was arguably one of the most prosperous eight years this country has ever seen. You've probably heard of a little term called "The Roaring Twenties," right? The progressive history books have done their best to hide the fact that a lot of it had to do with Mellon's tax policies, including the tax cuts for the wealthy.

Progressives don't want you to know this. They'll say the tax cuts and small government caused the Great Depression. No, I'm going to go out on a limb here and use common sense: The same things that caused the problems of today were the root of the problem in 1929: greed; the Federal Reserve; government making every single mistake. The president before the crash was a Republican, but a progressive Republican. But, that's for another show.

Let me get back to what happened when they cut taxes in 1921:

Automobile production was up 191 percent for the decade and while the elites bemoaned those wealthy fat cats and their automobiles, their appetite for driving created jobs. The demand for auto-related products skyrocketed: metal; lumber; steel; cotton; leather; paint; rubber; glass and of course, gasoline. Companies had to be created to meet the demand. This is real job creation. People had to be hired. Roads were being built. State highway construction spending increased tenfold between 1918 and 1930; did they fire all the cops and teachers?

In 1920 there were only 5,800 passengers who had flown on a plane. By 1930 it was 70 times that amount.

RCA brought us the radio and along with it, advertising. Now you could hear Babe Ruth hitting home runs all anywhere in the country.

Thomas Edison brought us movies in the 1880s, but in the 1920s the true modern-era motion picture arrived with Cecil B. Demille and "The Ten Commandments."

A whistling Mickey Mouse was introduced to America by Walt Disney in 1928; the first cartoon with synchronized sound.

Conveniences like telephones became less exclusive and more commonplace in the '20s. More Americans had irons, vacuums, washing machines and refrigerators. And all of these new products meant there was a demand for something else: energy. America needed huge power plants.

Does all of this innovation and growth seem to anyone else, like lasting job creation? Assuming the Fed and the government don't come in and screw everything up. And unlike the temporary jobs or the low-paying census jobs our government creates, per capita income had increased 37 percent from 1921 and 1929. People saved and invested like never before, gaining access to things for the first time such as life insurance.

It was America's coming-out party. And all of this success, all of the innovation, all of the prosperity without punishing the rich, without big government, absolutely baffled progressives. Especially the fact that everyone benefited; from the bottom up.

Evidence? Leon Trotsky, a Marxist revolutionary in the Soviet Union with Lenin, later lived in New York City in 1917. He fought all his life for Marxism to help the working class. Here's what he said about New York: "We rented an apartment in a workers district... and that apartment, at $18 a month, was equipped with all sorts of conveniences that we Europeans were quite unused to: Electric lights, gas cooking range, bath, telephone, automatic service elevator, and even a chute for the garbage."

The source? A Patriot's History of the United States by Michael Allen and Larry Schweikhart

This argument is an interesting take, however it isn't really supported by the data. The roaring 20's had the following tax rates on the top brackets:

1920: 73%
1921: 73%
1922: 56%
1923: 56%
1924: 46%
1925-1928:26%
1929: 24%
1930-31: 25%

So the tax rates were lowest during the crash of 1929 and the first part of the recession, while prosperity ensued in the early 1920's despite a 73% and a 56% tax rate.

As for the comment "all of the prosperity without big government, without punishing the rich baffling progressives", this reads like a party line. Progressives don't set out to punish the rich, they see government as a provider of services, and set out to adequately provide and pay for those services. This requires the raising of revenues (through various forms of taxation).

Furthermore, the entire postwar prosperity period 1946-1973 was defined by some of the highest income taxes in US history. If those tax levels were actually causing people to avoid investing the GDP growth seen over this period would not be occurring.

While various economic indicators show the Reagan administration did well in the short term, this was at the cost of a dramatic debt increase. US Debt as a percentage of GDP declined under all presidents after 1950 before Reagan. Under Reagan (and all presidents since) it has increased as a percentage of GDP. To put this in perspective, when Reagan came into power the US national debt was $930 Billion and was $2.6 trillion at the end of 1988. In addition, the national deficit was staggering.

You seem to be phrasing the debate as an argument between communism and capitalism, when in fact it is an argument between different types of capitalism. I argue for a capitalist system that more closely resembles the post-war boom policies of the government, while you argue for a capitalist system like that of the Reagan and post-Reagan period.

The system I've argued for worked for a significant period in the past century. It saw the growing of the economy and a shrinking of the national debt relative to GDP. This means that each president was leaving his successor a more prosperous America that placed less of a burden on future generations.

Your system is individually rewarding, but as the past 30 years has shown its a disaster for the country. The economy has grown slower than the national debt and each president since (Republican or Democrat) left his successor with a greater burden for future generations. The tax rates were so low in fact that they got raised during a Republican presidency (Bush I) in order to pay for proposed programs.

I think communism is a terrible system that is incredibly oppressive and doesn't work. The extreme political left is a disaster. Similarly various nationalist systems showed that the extreme political right is a disaster.

The question is not which tax rate on the top bracket is best: 0% or 100%.

But rather, what selection of services and taxes provides the best economic and social outcomes for the country.

The Mellon study sounds interesting do you have a link to it?

While there is an abundance of anecdotal evidence for money going underground due to high taxes. The fact is much of it does not. For every U2 or Oprah there are tons of people like Bill Gates that actually pay their taxes, and place much of their investments in the country. Furthermore, there is a lot of business in the country that is fixed. It is difficult to provide a local service in the US from a business operated and taxed in the Netherlands for instance. What would be nice is if instead of providing anecdotes for your claim you could provide figures from studies showing:

(i) total investment by Americans in the US economy.
(ii) total investment by Americans in other economies.

and possibly also
(iii) total worldwide investment.
(iv) total investment in the American economy.

Without these figures we end up in a situation where one side points to one anecdote (the people getting fed up and leaving or working around the system), while the other side claims that those people are few and far between, and in many cases the effects on investment are negligible.

[SadisticNature]

I believe this is referred to as denial!


Do not know what your source is but it sounds a lot like wishful thinking to protect the real perp.


Simple statements with no support. A logical look at this should suffice. If people have more of the money they worked for then they can choose what to do with that money; save it, spend it, invest it. In each case this money creates work for someone, that work generates income that income is taxed. since there is an increase in income then the revenues to the Government increase.
The greatest cause for Government income problems is the fact that there is no restraint on the Government checkbook. Would you not love the ability to increase you credit line if you were getting close to that limit? Even under the current conditions, when any sane person would realize that income is down and the need to cut spending the Government is doing just the opposite! Where does the Government get its money? Especially when they have "promised" to see that there is not one dime in tax increase for people earning under a certain amount. What is a fee on a business other than a tax? When taxes are increased on a business who pays that tax?

You are in denial.

You claim there is no evidence for my claim that tax cuts don't pay for themselves, yet ever since the Reagan Administration the national deficit has grown at a faster rate than the GDP.

This obviously fails. At the logical extreme if taxes are 0% then no amount of additional work will generate additional income. With taxes being cut from 70% to 30% on the top bracket the amount of taxable income generating activity would need to increase by 233%, which historically has not been the case. You talk of everything in terms of general principles with no sound numbers to evaluate them. Decreasing taxes will increase productivity in many situations. The question becomes does the productivity increase result in enough additional tax revenue to make up for the tax decrease. You have attempted to completely ignore the downside of increasing taxes, while glorifying the upside. You avoid any attempt to use numbers because the numbers we have disprove your argument.

It's very nice to believe tax decreases are good for the government, after all who doesn't want to pay less taxes, but the evidence shows they are not.

Furthermore, it's easy to say the problem is government spending, yet somehow in 30 years no one has managed to slash the programs causing the problem. Note that not a single person voted against Medicare which is a bad offender in terms of spending. Maybe its because government programs actually correspond to things we value as a society and should be paid for?

[DuncanONeil]

He essential is a used car salesman. But rather than go into that field he chose "community organizer". Which appears to be how he views his current job.

I am so speechless that I don't know how to say what I want to say.

How can our government blow so much smoke up our ass and tell us it is good for us and not to worry about this near-4 trillion dollar budget?

Obama should be a used-car salesman at 'Slick Sam's' or something, the way he can stand there in a speech and say what he does into the camera as straight-faced as if he were telling us that sunrise will occur at 8:11 AM in Montana tomorrow.

Thanks, guys, for taking your valuable time to write about such important matters.

[SadisticNature]

I've provided links to the sources:

During the Carter administration, government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this "subprime" lending by authorizing ever more "flexible" criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.

All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. "Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.

As long as housing prices kept rising, the illusion that all this was good public policy could be sustained. But it didn't take a financial whiz to recognize that a day of reckoning would come. What does it mean when Boston banks start making many more loans to minorities? Most likely, that they are knowingly approving risky loans in order to get the feds and the activists off their backs . . . When the coming wave of foreclosures rolls through the inner city, which of today's self-congratulating bankers, politicians, and regulators plans to take the credit?

Frank doesn't. But his fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.

Now that the bubble has burst and the "systemic risk" is apparent to all, Frank blithely declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train.

This is probably the only post in this entire thread that makes a serious attempt to support statements.