Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (687417)	12/7/2012 3:16:41 AM
From: THE WATSONYOUTH	Respond to of 1584604

Currently the fed. govt. spends about 3.6/15.8 or about 23% of GDP and it seems headed upward to 25%. If the highest % of GDP in taxes EVER (since WW2) collected was 20.6% at the height of the dot.com boom in 2000 (under Clinton tax rates), I maintain that collecting even 20% in the future is a large stretch. At 20%, we are already at a 3% deficit (nearly $500 BILLION) Can anyone here explain how we resolve this without cutting spending about $500 billion a year? Anyone who thinks a VAT is not coming is totally naive. Barone: Higher Tax Rates Won't Support Entitlement State By Michael Barone December 6, 2012 6:55 am Text Size: A A A The fiscal cliff negotiations seem to be foundering on Barack Obama's insistence on higher tax rates on high earners and House Republican leaders' insistence on opposing them. The president believes he has a mandate from voters for his position, and House Republicans believe they have a mandate from voters for theirs. The real argument here is over the size and scope of government. Under Barack Obama, federal outlays -- the technical term for federal spending -- have increased to 24 and 25 percent of gross domestic product. That's a higher level of federal spending than in any year since 1946, when we were demobilizing after World War II. And the Obama budgets envision federal spending to continue at such levels more or less indefinitely. This is an inevitable result, some Obama backers argue, of our aging population. Spending for entitlement programs for the elderly -- Social Security and Medicare -- are on a rising trajectory, and so the federal government simply must absorb a higher percentage of the economy than in the last two-thirds of a century. Let's adjust the trajectory, House Republicans argue, by reforming the entitlements. Obama has given lip service to this idea -- but has offered no specifics. He seems to be paying attention to those Democrats who oppose any changes in entitlements. Just raise taxes, they seem to say, and entitlements can keep rising as scheduled. The problem is that, as historian Paul Rahe wrote earlier this year, "we no longer have the resources to support the entitlement state. We can certainly raise taxes, as President Obama and the Democrats intend to do, but that does not mean that in the long run we will take in more revenue -- and it is massively increased revenue that the entitlement state needs." Rahe seems to have history on his side. To see why, take a look at the Economic Report of the President 2012, Appendix B, Table B-79, on page 412, which shows federal receipts -- the technical term for revenues -- and outlays as a percentage of gross domestic product for every year from 1939 to 2011, with estimates for 2012 and 2013. Over that period of nearly three-quarters of a century, federal receipts have never exceeded 20.9 percent of gross domestic product. That was the number for the war year 1944. The highest number since was the 20.6 percent of GDP in 2000, the climax of the dotcom boom. In the Obama years, federal receipts have hovered at 15 percent of GDP. That's just because tax rates are too low, Obama backers reply. Just raise the rates on high earners, and the problem will be solved. Actually, high earners don't make enough money to close the current budget deficit. You'd need to raise taxes on middle-income earners too. But we have had higher income tax rates in most of the years since World War II. What history and Table B-79 show is that even much higher rates -- like the 91 percent marginal rate on top earners imposed from the 1940s to the 1960s -- have never produced federal receipts higher than 20 percent of GDP. Why is that? As the late Jack Kemp liked to say, when you tax something, you get less of it. When the government took 91 percent of what the law defined as adjusted gross income over a certain amount, not many people had adjusted gross income over that amount. According to a Congressional Research Service study, the effective income tax rate on the top 0.01 percent of earners in the days of nominal 91 percent tax rates was only 45 percent. Others have pegged it at 31 percent. In the 1970s, when the top rate on wage and salary income was 50 percent and 70 percent on investment income, high earners spent much of their time and energy seeking tax shelters. The animal spirits of capitalists, to use John Maynard Keynes' term, were directed less at productive investment and more at tax avoidance. But don't European nations extract more in taxes from their citizens? Yes, but through consumption taxes like the value-added tax. But those taxes tend to be regressive, and in this country sales taxes have been the province of states and localities. Barack Obama and the Democrats may well get higher tax rates. But it's not likely that high tax rates can ever generate enough revenue to fund unreformed entitlement programs.

To: i-node who wrote (687417)	12/7/2012 4:16:43 AM
From: Tenchusatsu	1 Recommendation Read Replies (1) \| Respond to of 1584604

Inode, Are you really that impressed by a damned Nobel? Look at some of the former recipients. Pubo is pathologically obsessed with titles. That's why he calls himself a "doctor" and demands that you try to outdo his self-awarded recognition. Tenchusatsu

To: i-node who wrote (687417)	12/7/2012 5:39:38 AM
From: puborectalis	Respond to of 1584604

Cliff Notes on the Three Real Perils Ahead ...........(R.Reich) WEDNESDAY, DECEMBER 5, 2012 The “fiscal cliff” is a a metaphor for a government that no longer responds to the biggest challenges we face because it’s paralyzed by intransigent Republicans, obsessed by the federal budget deficit, and overwhelmed by big money from corporations, Wall Street, and billionaires. If we had a functional government America would address three “cliffs” posing far larger dangers to us than the fiscal one: The child poverty cliff. Between 2007 and 2011, the percentage of American school-age children living in poor households grew from 17 to 21%. Last year, according to the Agriculture Department, nearly 1 in 4 young children lived in a family that had difficulty affording sufficient food at some point in the year. Yet federal programs to help children and lower-income families – food stamps, aid for poor school districts, Pell grants, child health care, child nutrition, pre- and post-natal care, and Medicaid – are being targeted by the Republican right. Over 60 percent of the cuts in the GOP’s most recent budget came out of these programs. Even if these programs are preserved, they don’t go nearly far enough. But the Obama Administration doesn’t talk about reducing poverty in America. It talks only about preserving the middle class. Yet unless we focus on better schools, better health, and improved conditions for these poor kids and their families, in a few years America will have a significant population of under-educated and desperate adults. The baby-boomer healthcare cliff. Healthcare costs are already 18% of GDP. Between now and 2030, when 76 million boomers join the ranks of the elderly, those costs will soar. This is the principal reason why the federal budget deficit is projected to grow. The Affordable Care Act offers a start but it isn’t nearly adequate to limit these rising costs. The President and the Democrats have to lead the way in using Medicare and Medicaid’s bargaining power over providers to get lower costs and to move from a fee-for-service system to a fee-for-healthy outcomes system of healthcare. But we can’t avoid the fact we have the most expensive and least effective system of health care in the world that’s spending 30 percent more on paperwork and administration than on keeping people healthy. The real healthcare cliff can only be avoided if we adopt a single-payer healthcare system. The environmental cliff. Global emissions of carbon dioxide jumped 3 percent in 2011 and are expected to jump another 2.6 percent this year according to scientists, putting the human race perilously close to the tipping point when ice caps irretrievably melt, sea-levels rise, and amount of available cropland in the world becomes dangerously small. Yet Republicans (and their patrons, such as Charles and David Koch) continue to deny climate change. And the Administration is no longer pushing for a cap-and-trade system or a carbon tax. Yet unless we act to reduce carbon emissions, other major emitters won’t do so. The only binding pact so far is the Kyoto Protocol, which the U.S. never joined. And we’re taking no leadership at the international climate talks now taking place in Qatar. Yes, America does face a cliff — not a fiscal cliff but a set of precipices we’ll tumble over because the GOP’s obsession over government’s size and spending has obscured them. And Democrats so far haven’t been able or willing to sound the real alarms.