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VinBucFan

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: May 16, 2012, 10:43:05 AM

There's a lot of talk on these threads about what impact tax cuts have on the economy.  No matter where you come down on that issue, everyone should be able to agree (but probably will not --lol)  that the actual problem is not revenue (taxes) but spending.  More specifically, the problem is that the federal goverment is the absolute worst place to run money through to impact the economy.  There should simply no reasonable basis for people to think that the best approach to stimulating the economy is to take money from the private sector (through taxes) and then redistribute through government prgrams.  There is proof everywhere, but her is just one example:  "stimulus" money spent on a ED study:

http://usnews.msnbc.msn.com/_news/2012/05/16/11730775-stimulus-dollars-funded-erectile-dysfunction-study-in-california?lite

Here's an excerpt discussing the recipient's claim that the grant had an impact on  . . ."jobs" . . .  which I presume everyone agrees is the goal of stimulus money:

"The number Sheehy quoted during an interview with NBC Bay Area did not match information on recovery.gov, the government's website for stimulus funds. According to the site, the grant produced 0.85 jobs. "It does make you scratch your head and wonder," Amey said, "Wait a second taxpayer dollars went to a sex study that barely funded less than one person."

All of the money that the government spent on "stimulus" would have been better used and largely saved if instead of giving the money away the government did nothing other than actually guarantee certain loans through private sector banks or simply buy off bank debt at a discount to allow banks to clear their balance sheets quicker so they could start lending.  The difference is banks LEND, they do not GIVE AWAY like the federal government. LENDING keeps everyone invested in utilizing the capital as efficiently as possible.  Giving money away . .  . well.

So talk all you want about taxes, the real discussion should be about SPENDING.  People should want to keep taxes as low as possible BECAUSE THE GOVERNMENT IS THE MOST INEFFICIENT AND ILL-EQUIPPED funnel ever, unless someone can explain to me the virtues of handing money to a bureaucrat over an actual business person.


spartan

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#1 : May 16, 2012, 11:06:03 AM

At the end of each year, each Govt Dept goes on a spending binge. The reason is if they do not spend their entire budge, it is cut by that amount the next year. That is all you need to know about the mindset and methodology of our Govt.

Politicians like rebates and stimulus rather than tax cuts et al because rebates and stimulus do not alter the "revenue stream."  They then don't have to justify it raising taxes later.

BucfanNC12

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#2 : May 16, 2012, 12:35:03 PM

@VinBucFan..Actually real discussion is not about spending. It is about how government finances are set up. That is the issue that is completely ignored by politicians, the media, and The People. History has already told us cutting spending does not fix the problem. Its like putting a small band-aid on a four inch cut. The way the system is set up, agencies are rewarded to spend. For example. your budget for the Dept. of VinBucFan is $1 million a year. Within that year your spent $800,000 because you used a smart way to spend the funds. If you show a history of that, your annual budget would be reduced. If you spend the million dollars, you can get your budget increased. The problem isn't the spending itself, but how it is set up.

wreck ship

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#3 : May 16, 2012, 01:05:32 PM

So why not elect Ron Paul?

philosophy is questions that may never be answered
religion is answers that may never be questioned

BucfanNC12

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#4 : May 16, 2012, 02:18:47 PM

That answer is part of the problem among The People. Each election voters think a new President will wave a magic wand and fix problems like this. It would take a collective bipartisan effort in government to correct it. Not just a President.

VinBucFan

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#5 : May 16, 2012, 02:42:15 PM

It would take people learning or accepting that the government is not the solution. I was not just typing about the systemic failures referenced in this thread I was typing about understanding that government decision making is absurd. The only role the government should play in stimulating the economy is getting out if the way or at most assisting credit markets


BucfanNC12

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#6 : May 16, 2012, 03:47:33 PM

The answers provided by Spartan and myself answered your question. A millionaire who inherited his money is going to look at his funds differently than the blue collar worker who started a business and became a millionaire. Your question is very easy and has been answered. In other words, do you think a 15 year old will really understand his/her parents complaining how long showers run up the utility bill? I think you are looking for a complex answer when it isn't.

wreck ship

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#7 : May 16, 2012, 04:23:10 PM

That answer is part of the problem among The People. Each election voters think a new President will wave a magic wand and fix problems like this. It would take a collective bipartisan effort in government to correct it. Not just a President.
expecting a new president to fix problems with a wave of his wand is like having bipartisan faith. Atleast with Ron Paul, he'll make those career politicians uncomfortable by waving the constitution around.

philosophy is questions that may never be answered
religion is answers that may never be questioned

tatmanfish

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#8 : May 16, 2012, 04:31:40 PM

@VinBucFan..Actually real discussion is not about spending. It is about how government finances are set up. That is the issue that is completely ignored by politicians, the media, and The People. History has already told us cutting spending does not fix the problem. Its like putting a small band-aid on a four inch cut. The way the system is set up, agencies are rewarded to spend. For example. your budget for the Dept. of VinBucFan is $1 million a year. Within that year your spent $800,000 because you used a smart way to spend the funds. If you show a history of that, your annual budget would be reduced. If you spend the million dollars, you can get your budget increased. The problem isn't the spending itself, but how it is set up.

government spending does play a role. The financing only goes up when the spending goes up. Cut out the spending and the finances go down as well. Thats why many people believe a smaller government is a good thing because there are far less things to finance and in turn spending goes down. Financing is a big part, but its silly to completely throw out spending as well as the two are pretty closely related.



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dbucfan

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#9 : May 16, 2012, 06:14:19 PM

Simply stopping automatic increases in spending would be a great start.  Cutting below amounts already being spent would be stunning.

\"A Great Coach has to have a Patient Wife, A Loyal Dog, and a Great Quarterback. . . . but not necessarily in that order\" ~ Coach Bud Grant

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#10 : May 16, 2012, 08:36:25 PM


Everyone always cries "Cut the fat!"

But no one ever cries quite as loud as those who live on the fat when they find out it's in danger of being cut.

Illuminator is a good poster. He sticks to his guns and makes good points. Some don\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t like that.

dbucfan

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#11 : May 16, 2012, 10:26:57 PM

It isn't even a matter of cutting fat Illuminator - the current programs will not be able to survive, the financial commitment is simply beyond the capability of the population and its' earnings. The debt it too large, the cost are too high.  We can watch as it continues to fail on a regular basis as we see Europe failing.  And 435 Neros in Congress, and those Neros in the Executive Branch continue.  Something needs to change and soon. 

\"A Great Coach has to have a Patient Wife, A Loyal Dog, and a Great Quarterback. . . . but not necessarily in that order\" ~ Coach Bud Grant

CBWx2

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#12 : May 17, 2012, 12:04:11 AM

There's a lot of talk on these threads about what impact tax cuts have on the economy.  No matter where you come down on that issue, everyone should be able to agree (but probably will not --lol)  that the actual problem is not revenue (taxes) but spending. 

It's both.

More specifically, the problem is that the federal goverment is the absolute worst place to run money through to impact the economy. There should simply no reasonable basis for people to think that the best approach to stimulating the economy is to take money from the private sector (through taxes) and then redistribute through government prgrams. 

Taxes aren't collected to impact the economy. They are collected to fund the government. Tax cuts and stimulus programs can be used to impact the economy, but those are means of injecting taxes already collected or to be collected back into the economy to increase demand, not the purpose of collecting the taxes in the first place.

All of the money that the government spent on "stimulus" would have been better used and largely saved if instead of giving the money away the government did nothing other than actually guarantee certain loans through private sector banks or simply buy off bank debt at a discount to allow banks to clear their balance sheets quicker so they could start lending.  The difference is banks LEND, they do not GIVE AWAY like the federal government. LENDING keeps everyone invested in utilizing the capital as efficiently as possible.  Giving money away . .  . well.

Isn't that what TARP was supposed to do?

So talk all you want about taxes, the real discussion should be about SPENDING.  People should want to keep taxes as low as possible BECAUSE THE GOVERNMENT IS THE MOST INEFFICIENT AND ILL-EQUIPPED funnel ever, unless someone can explain to me the virtues of handing money to a bureaucrat over an actual business person.

When a middle class or lower class person gets a tax cut, unemployment comp, food stamps, or any other form of welfare they do hand it over to an actual business person because they buy things with it.


spartan

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#13 : May 17, 2012, 12:34:35 AM


Isn't that what TARP was supposed to do?


There were 2 MAJOR problems with TARP on top of the theoretical ones on if was the right thing to do or not and it is this. We (the US) had to borrow the money to lend to others. That increased Govt spending to the nth level. Then, on top of that, when those involved actually paid back what they borrowed, the frickin' Govt went and spent it again on other things instead of paying back those who we borrowed it from. How dumb is that?

CBWx2

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#14 : May 17, 2012, 11:20:40 AM


Isn't that what TARP was supposed to do?


There were 2 MAJOR problems with TARP on top of the theoretical ones on if was the right thing to do or not and it is this. We (the US) had to borrow the money to lend to others. That increased Govt spending to the nth level. Then, on top of that, when those involved actually paid back what they borrowed, the frickin' Govt went and spent it again on other things instead of paying back those who we borrowed it from. How dumb is that?

Actually, there was really only one problem with TARP, and that is that we repealed Glass-Steagall in 1999. Before that, the primary way commercial banks made money was by loaning money. Now, because there is no more line drawn between commercial banking and investment banking, loaning money is simply one way in which a bank makes money, not the that a bank makes money. So basically, the Troubled Asset Relief Program provided the banks with more opportunity to lend, but it also provided them with more opportunity to acquire more troubled assets.

Then again, had Glass-Steagall not been repealed, there wouldn't have likely been the need for the TARP program to begin with, so go figure.

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