Grover Norquist says letting the payroll tax break expire is not raising taxes

[Ausm]

Family budgeting and governmental budgeting are *not* analogous, no matter how simple that seems or how badly you might want it to be.

In a fiat money system, which is what we have, Government creates & destroys money as they see fit. A family can't print their own money, but our govt can & does.

Hard money favors savers & lenders, and deflation favors them even more. Soft money, some inflation, favors debtors.

For a nation deeply in debt, private & public, what kind of money serves the general population better? What kind of money serves the financial elite?

Expansionary austerity is humbug, something that the conservative govt of our British cousins is now proving. The more they cut spending, the lower their revenues, and the more they have to borrow to meet even reduced spending levels. Race to the bottom.

Part of any sensible way to reduce deficits is to raise taxes at the top, because money that goes there just stays there in the face of low demand & low employment. It's just parked... in govt bonds.

We the people are just paying rent on rich people's money, money that our govt created in the first place.

Why should the govt of the people borrow from the rich to make ends meet when more of that money can be rather painlessly converted to revenue by taxation? If they're just parking it in low yield govt bonds, how badly did they need it in the first place?

Job Creators? Where? Where is that magical growth that low taxes at the top supposedly creates? Isn't that why we lowered top tier taxes in the first place, following the assumptions of Reaganomics, trickledown supply side economics? Why should we keep doing that when it obviously doesn't work?

Soak the rich? Why not? They've been soaking the rest of us for 30 years, and it shows.

QFT

 

[werepossum]

I don't know if you realize this, but the economy still sucks. Cutting spending, reducing the federal workforce, makes no sense. Meanwhile the millionaires are hoarding huge sums of cash. They can easily afford a 2% tax increase (on income OVER $1 mil), and the money will go straight into the economy. They're people but they can pay a little more. We can't... because they've rigged the economy to screw us over for 30 years with "trickle down".

That money will go straight into the economy and then straight to China. I'm personally for cutting spending rather than eliminating the payroll tax cuts because of the licks retail has taken, but there are no free rides. Just as I don't believe that government taking money from one person and giving it to another adds any special magic to it, neither do I believe that taking money from the high earners can be done without harming the economy - just maybe not harming it as much as taking it way from lower wage earners. There are no free rides.

You are suffering from a critical lack of economic understanding. Money is not hoarded, money is invested. In the long run, a society must prosper or fail according to its wealth production; credit will only take you so far. We can create money, but we're fooling no one - we double our money supply and our money is then worth half of what it was. No. Free. Rides. Period. If you doubt this simple truth - and many on the left now do - then explain why Cuba, North Korea, Namibia and other poor countries don't simply create money and jump start prosperity via consumption.

 

[Jhhnn]

That money will go straight into the economy and then straight to China. I'm personally for cutting spending rather than eliminating the payroll tax cuts because of the licks retail has taken, but there are no free rides. Just as I don't believe that government taking money from one person and giving it to another adds any special magic to it, neither do I believe that taking money from the high earners can be done without harming the economy - just maybe not harming it as much as taking it way from lower wage earners. There are no free rides.

You are suffering from a critical lack of economic understanding. Money is not hoarded, money is invested. In the long run, a society must prosper or fail according to its wealth production; credit will only take you so far. We can create money, but we're fooling no one - we double our money supply and our money is then worth half of what it was. No. Free. Rides. Period. If you doubt this simple truth - and many on the left now do - then explain why Cuba, North Korea, Namibia and other poor countries don't simply create money and jump start prosperity via consumption.

When money is "invested" in essentially zero coupon govt securities, the way it goes back out into the general economy is through govt spending. When it's held as cash reserves in corporate accounts, it's not really being "invested" at all. While it theoretically allows more lending on the basis of fractional reserve principles, that's not happening, either.

We switched from a wage driven economy to a credit driven economy 30 years ago, one where growth occurs because consumers & business are willing to borrow. The ownership society bubble shot that right in the ass, and we're now in the part of the cycle where private debt is being paid down or written off, not increased, because consumers are more than maxxed out. Because an enormous amount of that debt is in longterm underwater mortgages, that won't be turning around any time RSN. Much of the faux "growth" of the Bush years came as a result of the refi-cashout craze at the time. Can't cashout when you're underwater...

The notion that we should cut spending vs increasing taxes to close the deficit gap is an absurdity, but Righties seem to love all sorts of absurdities. What it amounts to is that instead of raising taxes, where everybody gets a little less, we just lay off more people into an already dismal job market. With a little effort, we can create a true debt/deflation spiral.

It's the propaganda pitch from the financial elite, who've profited more from 30 years of govt largesse than anybody else. They have no intention of participating in any sort of shared sacrifice- sacrifice & taxes are for little people, and their paid representatives in the Repub party are doing their best to sell that proposition as desirable.

It's desirable to them, no doubt, but not to the rest of us, at all.

 

[momeNt]

When money is "invested" in essentially zero coupon govt securities, the way it goes back out into the general economy is through govt spending. When it's held as cash reserves in corporate accounts, it's not really being "invested" at all. While it theoretically allows more lending on the basis of fractional reserve principles, that's not happening, either.

We switched from a wage driven economy to a credit driven economy 30 years ago, one where growth occurs because consumers & business are willing to borrow. The ownership society bubble shot that right in the ass, and we're now in the part of the cycle where private debt is being paid down or written off, not increased, because consumers are more than maxxed out. Because an enormous amount of that debt is in longterm underwater mortgages, that won't be turning around any time RSN. Much of the faux "growth" of the Bush years came as a result of the refi-cashout craze at the time. Can't cashout when you're underwater...

The notion that we should cut spending vs increasing taxes to close the deficit gap is an absurdity, but Righties seem to love all sorts of absurdities. What it amounts to is that instead of raising taxes, where everybody gets a little less, we just lay off more people into an already dismal job market. With a little effort, we can create a true debt/deflation spiral.

It's the propaganda pitch from the financial elite, who've profited more from 30 years of govt largesse than anybody else. They have no intention of participating in any sort of shared sacrifice- sacrifice & taxes are for little people, and their paid representatives in the Repub party are doing their best to sell that proposition as desirable.

It's desirable to them, no doubt, but not to the rest of us, at all.

You touch on points that Steve Keen has made fairly popular in economic circles, yet you don't ever advocate one of his stronger talking points, the debt jubilee. You focus on who benefited the most from loose monetary policies that caused the default on gold and the greenspan false credit propserity as opposed to trying to fix the problem and relieving the debt burden on the middle class.

 

[the DRIZZLE]

When money is "invested" in essentially zero coupon govt securities, the way it goes back out into the general economy is through govt spending. When it's held as cash reserves in corporate accounts, it's not really being "invested" at all. While it theoretically allows more lending on the basis of fractional reserve principles, that's not happening, either.

We switched from a wage driven economy to a credit driven economy 30 years ago, one where growth occurs because consumers & business are willing to borrow. The ownership society bubble shot that right in the ass, and we're now in the part of the cycle where private debt is being paid down or written off, not increased, because consumers are more than maxxed out. Because an enormous amount of that debt is in longterm underwater mortgages, that won't be turning around any time RSN. Much of the faux "growth" of the Bush years came as a result of the refi-cashout craze at the time. Can't cashout when you're underwater...

The notion that we should cut spending vs increasing taxes to close the deficit gap is an absurdity, but Righties seem to love all sorts of absurdities. What it amounts to is that instead of raising taxes, where everybody gets a little less, we just lay off more people into an already dismal job market. With a little effort, we can create a true debt/deflation spiral.

It's the propaganda pitch from the financial elite, who've profited more from 30 years of govt largesse than anybody else. They have no intention of participating in any sort of shared sacrifice- sacrifice & taxes are for little people, and their paid representatives in the Repub party are doing their best to sell that proposition as desirable.

It's desirable to them, no doubt, but not to the rest of us, at all.

What percent of GDP should government spending represent?

 

[EagleKeeper]

What percent of GDP should government spending represent?

100% - the government can always print more paper until no one wants it or it becomes worthless.

See Germany pre WWII
See Rhodesia - present

 

[werepossum]

When money is "invested" in essentially zero coupon govt securities, the way it goes back out into the general economy is through govt spending. When it's held as cash reserves in corporate accounts, it's not really being "invested" at all. While it theoretically allows more lending on the basis of fractional reserve principles, that's not happening, either.

We switched from a wage driven economy to a credit driven economy 30 years ago, one where growth occurs because consumers & business are willing to borrow. The ownership society bubble shot that right in the ass, and we're now in the part of the cycle where private debt is being paid down or written off, not increased, because consumers are more than maxxed out. Because an enormous amount of that debt is in longterm underwater mortgages, that won't be turning around any time RSN. Much of the faux "growth" of the Bush years came as a result of the refi-cashout craze at the time. Can't cashout when you're underwater...

The notion that we should cut spending vs increasing taxes to close the deficit gap is an absurdity, but Righties seem to love all sorts of absurdities. What it amounts to is that instead of raising taxes, where everybody gets a little less, we just lay off more people into an already dismal job market. With a little effort, we can create a true debt/deflation spiral.

It's the propaganda pitch from the financial elite, who've profited more from 30 years of govt largesse than anybody else. They have no intention of participating in any sort of shared sacrifice- sacrifice & taxes are for little people, and their paid representatives in the Repub party are doing their best to sell that proposition as desirable.

It's desirable to them, no doubt, but not to the rest of us, at all.

The government (whether through benign neglect or intentional error is debatable) has either steered us into ruin, or allowed us to drift into ruin of our own accord. Your solution is for government to take more wealth out of the economy, apply its magic sauce, and then put it back into the economy - except of course for the wealth consumed in the taking and putting. I can only assume that in addition to a lack of any logical economic theory you also lack any sense of irony.

No money is just lying around in corporate reserves; it's all invested in interest bearing accounts. This interest is paid by the money earned from loaning out the deposited principle - either as private sector ventures or to the government. Money isn't being invested at the needed scale because our government has grown so rapacious that loaning money to government has become a desired result. The financial elite are the very people benefiting from all this government spending - they get their businesses bailed out if needed, they get interest paid on their money, and they get the armed might of government promised to extract their principle from the taxpayers. It's the ultimate safe investment. Nonetheless, there is no long term prosperity to be gained through borrowing, just as there is no long term prosperity to be gained through consumption. Otherwise North Korea and Cuba would simply borrow and consume their way to prosperity. Long term prosperity to gained only through wealth production. Our private sector has grown bad (largely due to the overwhelming disadvantages we have set up for domestic production versus importation) but government creates NO wealth. And worse, the more you feed government the hungrier it gets; government has no more efficient competitors because government sets the rules and gets to take its share at the point of a gun.

 

[werepossum]

100% - the government can always print more paper until no one wants it or it becomes worthless.

See Germany pre WWII
See Rhodesia - present

You right wing crazy! Any good Democrat knows it's 200%!

 

[Jhhnn]

You touch on points that Steve Keen has made fairly popular in economic circles, yet you don't ever advocate one of his stronger talking points, the debt jubilee. You focus on who benefited the most from loose monetary policies that caused the default on gold and the greenspan false credit propserity as opposed to trying to fix the problem and relieving the debt burden on the middle class.

Oh, I agree with Keen, for the most part, but the subject at hand is taxes, so I focused on that.

He's utterly correct about irresponsible lenders and big time write downs of debt. They expected to fail, and to be bailed out, for their corporate steeds to become zombies. When practiced on a smaller scale, it's called creative bankruptcy, where the management gets rich looting the company. The collapse of the ownership society wasn't just inevitable, it was planned in advance- the greatest scam in the history of finance, with the Japanese experience a smaller scale test case. Very few Americans understand what happened there, but our financial community followed it very closely, modeled our own boom/bust on their example. Complicity by the FRB & the Bush Admin is obvious, particularly the latter. The notion that we inadvertently wandered into terra incognita is pure propaganda.

Keen is quite eloquent & persuasive, here-

http://www.creditwritedowns.com/2011/10/steve-keen-debt-jubilee.html

 

[Jhhnn]

The government (whether through benign neglect or intentional error is debatable) has either steered us into ruin, or allowed us to drift into ruin of our own accord. Your solution is for government to take more wealth out of the economy, apply its magic sauce, and then put it back into the economy - except of course for the wealth consumed in the taking and putting. I can only assume that in addition to a lack of any logical economic theory you also lack any sense of irony.

No money is just lying around in corporate reserves; it's all invested in interest bearing accounts. This interest is paid by the money earned from loaning out the deposited principle - either as private sector ventures or to the government. Money isn't being invested at the needed scale because our government has grown so rapacious that loaning money to government has become a desired result. The financial elite are the very people benefiting from all this government spending - they get their businesses bailed out if needed, they get interest paid on their money, and they get the armed might of government promised to extract their principle from the taxpayers. It's the ultimate safe investment. Nonetheless, there is no long term prosperity to be gained through borrowing, just as there is no long term prosperity to be gained through consumption. Otherwise North Korea and Cuba would simply borrow and consume their way to prosperity. Long term prosperity to gained only through wealth production. Our private sector has grown bad (largely due to the overwhelming disadvantages we have set up for domestic production versus importation) but government creates NO wealth. And worse, the more you feed government the hungrier it gets; government has no more efficient competitors because government sets the rules and gets to take its share at the point of a gun.

Just beat the drum, huh?

Interest rates on deposits are so low as to be insignificant, and that's because lending only occurs at an extremely reduced level. It's called a liquidity trap. Learn it.

Of course govt creates wealth, unless you're claiming that the interstate highway system isn't wealth, or the investment in massive flood control/ irrigation/ power generation projects. Govt managed forests & grasslands aren't wealth either, I suppose, nor are the commons of parks & recreation areas we all share. Stable food production from subsidies doesn't do us any good, obviously, and neither does the CDC, FBI and a host of other govt agencies. Nothing good ever came out of the space program, either, and GPS is useless.

Is that kinda what you're trying to say?