Monday, July 12, 2010

More Economics

I think this is worth reading for the right and the left as a look at where we are economically and what should be done next. It is by a Reagan economic guru but that doesn't mean the left shouldn't think about what he said.

[Reagan Budget Guru David Stockman on Obama's Shoddy Economic Team]  And you on the left, never fear that this is just knocking the left. He has plenty of hits against the Republicans too for getting us where we are economically.

One of my first concerns when Obama took office was his economic team. Looking at this article, it makes me even more concerned with Ben Bernanke as head of the Federal Reserve. I haven't known much about him; but if he still believes what he had said earlier, left and right should be worried.

For anyone who believes deficits don't matter, that it's just some abstract set of numbers and won't impact them personally, a deficit isn't just about a deficit. It's about the money supply which the Federal Reserve controls mostly with no control from anybody else. Nobody votes on that. If they want to print more money to cover the debt; they can. So you think that doesn't matter?

When the price of basics like food jumps but our incomes are held steady due to other controls, it's obvious where that leaves us. It's what happens when the money supply is increased simply to cover debt. For those who can get pay raises or charge more for a product to go along with the devaluing, it might not matter as much, but a lot of people are not in that position; and for them it will mean it is harder and harder to make ends meet. Economic policy is not unrelated to our personal lives.

[We should extend Bush Tax cuts but not unemployment benefits?] That's the line from the right. The logic (loosely using that word) is that unemployment benefits increase our debt but apparently tax cuts do not... It would seem logic would say both would increase the deficit if we don't cut spending at the same time. How do we effectively cut spending with two wars and a recession? Where do we cut? Don't expect any of this to make logical sense because it almost never does. It's based on emotion as much as anything else.

Finally, yes, I know probably most of you reading this blog do not think astrology has anything to offer in terms of understanding anything in the world; but for the few who might think otherwise, check out this link: [Spend or Save for Economic Growth] with not only the astrologer's thoughts on how the planets could impact our world, how that changed in 2008, and also what various 'experts' (who are not astrologers) are saying in terms of which way we should go next as a nation where it comes to economics.

13 comments:

Greybeard said...

Tax cuts or tax increases?
A smart statistician can lie with numbers, and I'm sure we've seen the truth stretched pretty far by BOTH parties.
One thing I know for absolutamente...
If folks like Tim Geithner and Kathleen Sebelius would just pay their taxes when they were supposed to, we'd have a more solvent economic situation today and I'd feel a WHOLE LOT more comfortable about the people running this administration today!

Dion said...

Stockman makes a few good points. Anyone with thought can make some good points. I attempt it all the time. Here goes...

Stockman's embrace and salesmanship of trickle down economics shows him to be more corporate lackey than budget guru. Cut tax, cut entitlements, cut discretionary spending, cut regulation but increase the military industrial complex expenditures is what Stockman supported when he was director of OMB under Reagan.

Gee, why not just kill off middle class America by enslaving us to the corporations that lobby (buy) government legislation.

Maybe it's naive on my part but I believe that a living wage paid to the American worker is the answer to our economic strife.

Rain said...

Obviously I think the middle class is the at risk group and where the strength of this country has been. I though don't always disagree with Republicans on their points either.

The main thing I came away from Stockman's opinion was that tax cuts can't be just handed out. They must have a reason and be budgeted realistically. A lot of our economic policy has been anything but realistic recently on either side. Maybe it's too late for realism?

Rain said...

I have thought about writing a blog on this economic point and might but the desire to reinstate a full inheritance tax doesn't seem right to me. They would go back to taxing everything above one million dollar estates at 55%. Here's where i leave the Democrats and think that is totally unfair. I liked what bush did about inheritance taxes with the 3.5 million before taxes but if it was me, I'd lower the inheritance tax to 35% and I agree with Republicans on this that money has been taxed once already and this is really about preventing a permanent wealthy class. It doesn't work and when they go back to one million, it will impact many middle class families. With inflation as it is, a $3 million estate isn't really that much. That kind of tax kills small ranchers and businesses as their families have to pay the taxes and often sell the ranch to do it.

Greybeard said...

But you're rich, Rain.
Others are not so lucky as you.
Don't be selfish.

Rain said...

I could wish *s* But my main concern is ranches and businesses but also fairness... and yes, I do believe in sharing but 1/3 seems sufficient-- actually more than sufficient. In many ways I think that the estate tax keeps ordinary people from rising up more than impacts the extremely wealthy who have ways around it.

TorAa said...

We have seen and not learned the simple fact:
It must be a ballanced and controlled economy between private and public spendings.
If not: Economic Crises.
Both Government and Private grief is in the long run a very bad future for peace and economic growth and wellfare for most human livings and even the Nature.

btw. Just back in Norway after 9 Days in Turkey.

Greybeard said...

Now see, you're being selfish again.
You have a nice home in the Northwest. You have a nice second home in Tucson. Not only that... you have the luxury of being rich enough to DRIVE all the way to Tucson (using precious resources along the way and adding tons of carbon to the atmosphere!), and you are rich enough to be able to leave business in the Northwest and stay in Tucson for extended periods while someone else takes care of your property and belongings in Oregon.

33 percent is EASY for you!
Think of all those who are out there suffering that you could help if you'd just share a bigger chunk of that wealth!

(Obviously sarcasm, but that seems to be the attitude expressed by some seemingly pretty intelligent people that stop by and comment here!)
Ants and grasshopper...
What happens to the grasshopper at the end when you tell the tale?

Rain said...

hey, I always appreciate humor and a little cynicism. I like it when I read something here and either get a laugh out of it or a smile which I did this time. However, in this case, I might have many reasons for which I maybe should feel guilt (but don't) but absolutely none for not paying more than I must in taxes. And if I thought there was a way around the tax rate we do pay, I would definitely favor it. I also want to get full value for my taxes which I feel I don't always get... I do not though mind paying for those things I value and there are many of those in this country including our military, highways, police protect, etc etc. I don't want to be cheated though and I am not fond of knowing we are paying 25% of our tax collars directly to pay interest (that is doubtless going up) before it even starts to buy services or help others.

Glad to see you here ToraAa because it's nice to get opinions on these issues from people in other countries where we often don't know how they see the problems but their countries face them also.

Rain said...

Incidentally, I grew up in a home without a lot of money, wearing hand me down clothes, living on a little farm where it never made a dime but what a lifestyle, where recreation was heading to a river for a swim, or visiting family. I valued that life and how I was raised then and now for what it taught me.

I have had times since where we had more money and times we have had less. Having more is more fun but it's not important in comparison to things that are. I have never had a taste for expensive restaurants or cruises somewhere exotic which is good since feeding livestock and coyotes tends to be a luxury all of its own. For me, my favorite recreation had been sleeping in the van somewhere along a river and when I say van, I mean van ;). Although as we have gotten older, we do rent a house somewhere when we can as that's a lot easier than stumbling out in the dark to try and find the outhouse if there is one-- especially in bear or moose country which is my favorite country. We keep the Tucson house now because we rent it out as a vacation rental. We're definitely comfortable but a long way from rich. We just put our money into different things than some have chosen and we quit borrowing a long time ago.

I don't explain this to readers here because I must or even because I think people don't know if they read my main blog. Small farms like ours, well you only do one if you love the life. It's sure not a paying proposition.

I don't say I like taxes but I value what this country has given me. I know some are not so fortunate as I have been. I don't want to throw that money away though and I want value for it. I don't think most of those who read this blog are probably a lot different.

cj said...

Rain, do you even know why the Republicans have been blocking the unemployment benefit extension?

They want the government to pay for the give-away with some of that unspent stimulus money instead of passing yet another unfunded mandate that will crush tax payers.

How unreasonable of them to want the government to acutally pay for something.

cjh

Rain said...

I had written before that I didn't favor extending those benefits and got into quite a lengthy argument with some lefties over that. I see that if we want to do that, call it welfare as unemployment was intended to be temporary. My point with that link was purely the viewpoint out there and that if you cut taxes, as Stockman said, without a way to pay for it, it's irresponsible. So to favor more cuts for the wealthy is okay with the right but not to do the unemployment extension. That was ridiculous reasoning in my opinion.

And does anybody know that there is stimulus left? I think a lot has been aimed toward starting new businesses, new technologies, at least that is what Farm Boss tells me. Some went directly to the states. Some was tax cuts for the middle class. I have no idea but not sure it won't require taking an extension from the general revenue.

As I mentioned either here or elsewhere, I do know those who I think have abused it and profited from it. It was one of those times where I was on the side of the Republicans in Congress whether they intended to extend it eventually or not.

Rain said...

My main concern though is the middle class as Dion said earlier. That there be jobs that give a living wage and that they not all be shipped overseas to profit the stock market. I look in my newspapers though and see a lot of jobs advertised and think maybe a lot of people just need to face retraining or moving. Not fun but it's what our ancestors had to do.