COL Gene COL Gene

A President that is OUT OF TOUCH!

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A President that is OUT OF TOUCH!

from JoeUser Forums



Today Bush is running around holding a news conference to brag about the new estimate that shows the Annual Budget deficit for FY 2006 will be per the president ONLY $300 Billion down from an earlier estimate of $425 Billion. Who would boast about an economic policy that during this so called boom is producing a $300 Billion dollar deficit in ONE year?

Then when you look at the Bush numbers you see he has LIED about the deficit by subtracting the surpluses from Social Security and Medicare BEFORE he reports the numbers. HE COOKS THE BOOKS by reducing the actual deficit by the $200 Billion surplus from these two unrelated funds. The earlier budget deficit for 2006 was actually $625 Billion and is now down to $500 Billion. The actual deficit in 2005 was $625 Billion not the $425 Billion Bush reported.

Anyone that could run around bragging about adding ½ a Trillion dollars this year to the National Debt shows how our president is OUT OF TOUCH! That is NOT an accomplishment but a DISGRACE.

If Bush needed a quadruple Bypass surgery, his solution would be to fix one of the four blocked arteries and then claim he was healthy! He truly made himself look pathetic by the statements he made today about running a $500 Billion annual deficit! If he had BALANCED the budget the way it was when he took office and had begun repaying the debt HE ADDED, then the president would have a reason to brag.
politics
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Reply #26 from JoeUser Forums Top
So unless Bush was president in 1997/1998, this has been going on since well before GWB came into office.


Funny...In PolySci in 1991, we were talking about "offbudget" expenditures as a longtime Washington thing...even then, it wasn't new.

I find it hilarious, though, that COL is doing the EXACT same thing he is accusing the Bush administration of doing...he is "spinning" the numbers to fit his agenda. The fact that a tax cut on the wealthiest segment of American taxpayers resulted in a net tax revenue INCREASE kills him and his fellow socialists, who want to believe the only way to run a state is with oppressive taxation on the wealthy and a massive redistribution of wealth, as well as the creation of a nanny state.
Reply #27 from JoeUser Forums Top
So unless Bush was president in 1997/1998, this has been going on since well before GWB came into office.

Funny...In PolySci in 1991, we were talking about "offbudget" expenditures as a longtime Washington thing...even then, it wasn't new.

I couldn't find anything on the Internet farther back than that without subscriptions to newspaper archives. But yeah, it's an established principle to add SS funds to try and pass off a balanced budget. Not a reputable principle, but it's got precedent.
Sins of a Solar Empire II
Reply #28 from JoeUser Forums Top
The tax cuts have increased economic growth but they have not offset the loss in tax revenue from the cuts and paid for inflation and increased. Spending. The fact remains that in 2001 we had a BALANCED BUDGET- the amount we spent was equal to the tax revenue collected. That is NOT the case today and since the first year of the Bush Administration we have been spending hundreds of Billions more EVERY year then we have been collecting in tax revenue. That can not continue. For Bush to be telling us that lowering the annual budget deficit from over $600 Billion this year to an estimate of $500 Billion is good is a joke. We need to STOP adding to the National Debt and begin repaying the over 8.5 Trillion currently on the books. That will take given the revised estimates first $500 Billion to stop adding to the debt and then is we generated $200 Billion in a REAL SURPLUS that was paid on the existing debt; it would take 30 years at $200 billion per year to repay the National debt.














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Tax Cuts Create Deficits
Philadelphia Inquirer Editorial

By COL Gene
Posted Tuesday, May 30, 2006 on Bush Truth
Discussion: Politics


Below is the Editorial today from the Philadelphia Inquirer titled, Tax Cuts and the Deficits which is 100 % in sink with the analysis I have included in my new book. In a nut shell, the Presidents former economic advisor, N. Gregory Mankiw admits that the NEW revenue generated from the Bush tax cuts have only provided 1/2 the revenue lost from the tax cuts and the other half have become part of the deficits. For those that claim the deficit is because of the added spending on hurricanes, terrorism and the War in Iraq. The Comptroller general, David Walker said only 1/3 of the growing deficit has been caused by that added spending.

In other words, the Bush Tax Cuts are driving America into debt that our children will pay for in the years to come! The sources of this analysis are the CBO and OMB. So please do not tell me it is some liberal conspiracy. What we have is just what Bush 41 said, Voodoo Economics. Another good reason to retire Senator Rick Santorum who supported the Bush Tax cuts including the $70 Billion raid on the treasury in early May.





Posted on Tue, May. 30, 2006



Tax Cuts and Deficits

Editorial | Bad math, slick politics: We'll pay, eventually


For the past five years, Congress and President Bush have been cutting taxes in the face of huge deficits, all the while peddling a math myth to the public.
Tax cuts won't make the deficits worse, they say. Tax cuts will stimulate so much economic growth that federal tax revenue will actually increase. Tax cuts, they are fond of saying, pay for themselves.
Actually, no. Economists of all stripes agree that federal tax cuts by themselves do not boost federal revenue back to the level before the cuts were enacted.
Tax cuts do boost economic activity. This growth does replace a portion of the revenue once generated by the eliminated taxes. But far from all. Very far. Researchers' estimates of this replacement effect vary from around 15 percent to 50 percent, depending on the type of tax cut and the prior rate.
Any responsible politician should know this, but polls persist in peddling the cozy myth. Sen. Rick Santorum (R., Pa.) played along earlier this month when Congress extended tax cuts on capital gains and dividend income for two years, at a cost to the federal treasury of $70 billion.
"We've put these tax provisions in place," Santorum said, "and they've raised money."
Even President Bush's former economic adviser, N. Gregory Mankiw, concedes that activity spurred by the capital gains tax cuts made up only about half of the lost revenue.
What do you call the other half? Under this administration, you call it "deficit."
Data from the president's own Office of Management and Budget refute the argument that tax cuts "pay for themselves." Over the past three years, with tax cuts in effect, federal revenue was $316 billion lower than OMB had predicted, in 2003, that it would have been without tax cuts.
The federal deficit this fiscal year is projected at more than $330 billion.
From 2001 to 2005, federal revenue fell at an average rate of 0.6 percent when adjusted for inflation and population growth, according to the left-leaning think tank Center on Budget and Policy Priorities in Washington.
Some Republican lawmakers point out that tax receipts through April were up about $137 billion, or 11 percent, compared with the same period last year. Credit tax cuts for some of that, if you want, but be aware that national economies are complex creatures that grow or shrink based on dozens of factors, of which tax rates are only one. Inflation, too, could partly explain it.
But that increase still is not nearly enough to offset recent losses to the federal coffers. Nor do the White House's own projections expect deficits to end anytime soon.
Again, the key point: No matter what you've been repeatedly told, an improved economy does not generate all the tax revenue that was lost due to cutting federal taxes in the first place. The evidence proving this basic point has been piling up since Ronald Reagan's tenure, but many tax-cut fans still won't admit it. Why? Because the pay-for-themselves theory was never based on fiscal evidence. It was a theology, a faith-based system defended all the more strenuously because of that.
(A side point: Tax cuts can come much closer to paying for themselves on a local stage, in a city such as Philadelphia, where comparatively high taxes really do discourage investment, and those seeking to escape those taxes do not have to leave the nation but merely take a step across City Avenue.)
The federal tax-cut mythology wouldn't have such dire consequences, if Congress and the president reduced federal spending in line with the lower revenues.
Since Reagan, that draconian balancing act has been the goal of some conservatives bent on cutting the social programs that always have irritated them.
Trouble is, that plan hasn't worked. In five-plus years of almost total domination of Washington by the self-described "conservatives" of the White House and Capitol Hill, federal spending has increased about 29 percent, even as tax cuts drained the Treasury.
And, no, not all that spending is due to hurricanes, terrorism and wars. (Let's not even get into the point that the wildly costly Iraq War was a choice, not a necessity.) David Walker, comptroller-general of the United States, says only about a third of the stated deficit can be traced to those causes.
Remember those golden days of the 2000 presidential campaign when the big issue was how to spend the roughly $5.6 trillion in federal surpluses projected for this decade?
Instead, surpluses turned to deficits, with a vengeance, once the Bush tax cuts went into effect. During the Bush years, the national debt has soared from $5.8 trillion to more than $8.3 trillion.
Why haven't the Republican powers inside the Beltway cut government more? Well, some of them were too busy throwing government money at the corporate friends who keep them in power and get them onto all the nice golf courses.
But the bigger reason is that every time budget-cutters hover their ax over any of the middle-class benefits where the big money flows, voters scream bloody murder.
Turns out people really like most of what big government provides.
They like the help with J.J.'s college tuition, and with Grandma's nursing home bills and prescription drugs. They like having a teaching hospital full of brilliant doctors and expensive equipment nearby. They demand a strong national defense and better homeland security. And they are really, really fond of the tax deduction for their home mortgage interest.
Taxpayers are human. They like a good deal. If politicians tell them they can get all the government benefits they secretly love at a discounted price, they'll cheer.
And, as some genuine fiscal conservatives are ruefully coming to realize, people who are getting government at what feels like a discounted price (i.e. lower taxes) aren't going to clamor for less government. They're going to clamor for more, for benefits like a prescription drug benefit that Medicare has no idea how to pay for.
But, in fact, these government benefits aren't really being bought at a discount. They're being bought with reckless borrowing. They'll get paid for, all right, but the payment will come down the road in higher taxes, higher interest rates and economic anxiety.
Tax cuts pay for themselves? That's just an irresponsible alibi for making our children and grandchildren pay for our self-indulgent little party.



The Comptroller of the United States DOCUMENTED that we are loosing MORE revenue from the tax cuts then than new revenue from growth. His data from both GAO and OMB showed that only 50% is being paid by the tax cuts.
Reply #29 from JoeUser Forums Top
Ah, but a growing economy due in part to tax cuts is a sustainable long-term plan for future economic growth and stability.

An increased government revenue and shrinking economy due in part to tax increases is NOT a sustainable plan for future economic growth and stability.

And as usual, Gene gives no countenance at all to the very real possibility that perhaps finding people with money and taking it away from them IS NOT a good way to fund government projects, no matter how profitable it is, and no matter how much money the government thinks it should spend.
Reply #30 from JoeUser Forums Top
Also, a nation can function just fine over the mid term with even a huge budgetary deficit.

A nation can't function at all without an economy.

That is why I'm in favor of fixing the economy first, and the deficit later, and it's why I approve of Bush's policy of fixing the economy first, and the deficit later--especially since he seems to be making good headway on both right now.
Reply #31 from JoeUser Forums Top
What is not a good idea is continually adding to the debt. We are in the third year of what Bush calls an economic recovery and we are $500 Billion in the RED. This is the same BS that Reagan tried in the 1980's and what Bush 41 called Voodoo Economics. The proof is that we had a balanced budget when Bush took over and EVERY YEAR he has been in office we have run the largest annual deficits in our history! We need the added revenue from returning the tax rates on the top 5% to the pre 2000 levels along with a cut in ALL pork barrel spending and stricter enforcement of our tax laws.

The economy was never better then during the 1990's when the tax rates were higher!
Reply #32 from JoeUser Forums Top
Bush is on track to CUT THE DEFICIT IN HALF.

THIS YEAR.

How is that "continually adding to the debt"?

At the end of the 90s, that economy collapsed. Maybe because the taxes were so high? (Also because of the dot-com boom, which doesn't really count as a "good economy", since it wasn't based in real value and obviously wasn't sustainable.)

After the dot-com bubble burst, and 9/11 happened, the economy tanked, which is exactly what you'd expect. Now sources both inside the government and outside the government are agreed that 1) the economy is recovering nicely and 2) its recovery is due in part to tax cuts.

In summary: during the 1990s, we were enjoying the tail end of the economic growth initiated under Reagan and fueled by a recent surge in telecommunications technology and commercial applications. We were also on the verge of an economic collapse, on account of rising tax rates, over-valuation of that technological surge, and an imminent and devastating terrorist attack. After the collapse, the government took some steps to recover the economy, including tax cuts. Since then, the economy has been recovering steadily, partly due to the tax cuts.

What you're demanding is that we bring back the economic collapse of the late 90s, by increasing the tax rate again. Do you also want a ludicrous stock bubble and a major terrorist attack, to ensure a complete return to the glory days of the 1990s?

Bah.

It's all beside the point, anyway. If you were truly a conservative, and truly concerned about the deficit, you'd shut your gob about tax hikes and spend all your time ranting at the legislators who actually write the budget.
Reply #33 from JoeUser Forums Top
Stutefish

If Bush cuts the annual deficit in half by the end of his term we will still be running a deficit of $250 Billion per year and will have $10Trillion total debt from all the years that we did not balance the budget. The annual deficit each year cumulates and that is how we went from a Total National debt of less the $1 Trillion in 1980 to $10 Trillion by the time Bush goes back to Texas! How has that solved the problem? We have to pay the interest and repay the $10 Trillion dollars and we are still adding to the debt even if Bush does cut the annual deficit in half. He is not talking about cutting the national debt in half but just cutting the annual debt we add to the total in half!
Reply #34 from JoeUser Forums Top
If higher taxes are needed to BALANCE the Budget then that is what must be done!!!


Fine col. As long as tax increases are for everyone, not just one class.
Reply #35 from JoeUser Forums Top
Editorial from the Philadelphia Inquirer 13 July 2006: Posted on Thu, Jul. 13, 2006
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Editorial | A Smaller Deficit
Worth a Bronx cheer

Score one for President Bush, but his budget team is still way behind.

The president said Tuesday that the federal deficit for the fiscal year ending Sept. 30 would be only $296 billion. That is good news; last year's deficit was $318 billion. And the Bush administration, never shy about managing expectations, had projected in February that this year's deficit would be a whopping $423 billion.

So a less catastrophic deficit is indeed a ray of sunshine.

But, in this week of the All-Star Game, Robert Bixby, executive director of the nonpartisan fiscal watchdog group Concord Coalition, put the news in perspective with a baseball analogy:

Suppose your team is trailing by eight runs. Then your side scores one run. That is good news. But you are still far behind, and opportunities to erase that deficit are dwindling.

Worse, it's as if Manager Bush glanced at the scoreboard, saw his team trailing 10-3 and pronounced that his pitching staff was doing great. No need to change strategy.

"We're not looking at tax and spending policies in a rational way," said Bixby.

The lower deficit is due in part to an increase in taxes paid by corporations, wealthy individuals and small business owners. It's another bit of evidence that, in this economy, high wage earners are benefitting at a greater pace, with bonuses and bigger salary hikes, than their lower-paid counterparts.

The wealthy are getting wealthier and opening a larger gap on the rest of America.

The president and supporters of his tax cuts claim that the latest revenue uptick proves that tax cuts "pay for themselves" by boosting the economy. It's wishful thinking, this absolutist version of "supply side" theory.

Without doubt, tax cuts can spur economic activity that generates revenue to offset the impact of tax cuts. While this "replacement effect" can vary, it's never 100 percent and rarely more than 50 percent.

The Bush tax cuts are a big reason the government is still operating at a large defict. The red ink is projected to get worse next year.

Fact is, economic growth since the tax cuts in 2001 hasn't been as strong as the growth in the economy in the years following the large Clinton-era income tax increase in 1993. For three consecutive years after the 2001 cuts, tax revenue declined. While revenue has increased over the past year, tax receipts are only now recovering to where they were in 2000.

A lot of factors go into the economy's health, many beyond government's control. What recent history suggests is that supply-siders overestimate the economic benefits of tax cuts, while trying to excuse or minimize the damage they do to the nation's fiscal health.

The last thing the nation should do is look at this budgetary blip and conclude that it justifies extending tax cuts that are set to expire.

"We still have a $300 billion deficit," Bixby said. "We're still not raising enough money to pay for the war, prescription drugs and all else."

We're still down seven runs, and it's getting late in the game.
Reply #36 from JoeUser Forums Top
IslandDog

The MOST important issue is balancing the budget and repaying the National Debt. That WILL NOT happen if we continue to follow the tax and spending policies of GWB and the GOP in Congress!
Reply #37 from JoeUser Forums Top
The MOST important issue is balancing the budget and repaying the National Debt. That WILL NOT happen if we continue to follow the tax and spending policies of GWB and the GOP in Congress!


The MOST important issue is waging a war against islamists who are trying to kill us. A job democrats will not do. As I said, raise taxes all you want, as long as it's a tax on everybody.
Reply #38 from JoeUser Forums Top
Since you want to post editorials.

This week, the White House will revise its fiscal year 2006 budget deficit estimate to roughly $300 billion, a significant reduction from its January forecast of $423 billion. This will continue the White House's pattern of very conservative estimates.

Our calculations suggest that the federal budget deficit this year will be approximately $260 billion. This is down from $318 billion in FY-05 and $413 billion in FY-04.

Strong gains in tax receipts have overwhelmed increased federal spending. Congressional Budget Office (CBO) data show that federal tax receipts during the nine months ending in June were 12.8% above the same period in FY-05. Withheld income taxes increased 9% in June from last year; non-withheld income tax payments surged by 20%, while corporate tax receipts grew by 17%.

If federal receipts continue to grow in a similar fashion during the final three months of this fiscal year, they will climb to an all-time high of $2.4 trillion dollars, $275 billion above last year, $400 billion more than in 2000, and equal to 18.5% of GDP.

Federal spending is on track to increase 9% this year, and will end the year at 20.7% of GDP, up sharply from the 18.4% share in 2000. If federal spending had remained at 18.4% of GDP this year, the US would have recorded a small surplus of $21 billion.

It has become popular to say that, "tax cuts do not pay for themselves." In fact, Henry Paulson, who will be sworn in today as the 74th US Treasury Secretary, was all but forced to say this in his confirmation hearing last month. The problem is that it is not clear whether this statement actually means anything.

In a static world, tax cuts do not pay for themselves. But the world is not static. As Secretary Paulson said at his Congressional hearing, tax changes affect people's behavior. As a result, tax changes alter the course of the economy. To assume otherwise is naïve. Equally as important is the fact that different types of tax cuts impact the economy in different ways.

In 2001, most reductions in marginal income tax rates were phased-in over many years. But, if people know that tax rates will be lower in future years they will push as much economic activity as they can into those lower tax years. This resulted in anemic economic growth (and declining tax revenue) during 2001, 2002 and early 2003 even though the Fed was cutting interest rates.

The 2003 tax cut ended the phase-in, accelerated the tax cuts and reduced tax rates on qualified dividends and long-term capital gains. This caused an immediate acceleration in business investment and tax revenues surged. In fact, inflation-adjusted tax revenues have grown more than 10% annually over the past two years; a feat rarely accomplished in US economic history.

As a share of GDP, tax receipts are still well below the 1998-2000 average of 20.3%. But those were abnormal years. Since 1930, there have only been 19 years in which the tax share of GDP was at or above 18.5%, and in the past 20 years, tax receipts have averaged 18.3% of GDP. This means tax receipts in 2006 will be above historical norms.

Since the tax cut was passed in May 2003, US GDP has expanded by more than 20%, or roughly $2.2 trillion. To put this in perspective, we have added more to GDP in the past three years than an entire China (current estimate of $1.9 trillion in annual GDP). In the three years before the tax cut, GDP in the US grew just 10.4%.

Most importantly, tax revenue trends suggest that government statistics are underestimating economic growth. People and companies do not pay taxes on income or profits they do not earn. There is no sign of a slowdown in the budget data.
Reply #39 from JoeUser Forums Top
I used this information in my Blog. Please explain why Bush subtracts the Social Security and Medicare Surplus from the numbers? Those two trust funds have NOTHING to do with the annual budget. The only thing that does is make the deficit appear smaller i.e. $300 Billion rather then $500 Billion. Either number is unacceptable as it is piled on top of the $8.5 Trillion that exists today. Any president that would think what he announced was good is OUT OF TOUCH!