EDWARD MORRISSEY writes about Clinton-era nostalgia:
In his eight years as President, Clinton reduced federal spending to 18.2 percent of GDP from 22.1 percent, thanks in large part to a Republican-controlled Congress that forced the issue……. Barack Obama managed to hike it 3.5 points in just one term, with 3.2 points going to non-defense spending. Under Obama, federal spending now exceeds 25 percent of GDP, and his has been the biggest increase of any of his predecessors over the last 60 years – even for two-term Presidents.The real debate over deficits isn’t over whether to go back to Clinton-era tax rates. It’s how to get back to Clinton-era spending levels, and then create a tax system that will adequately fund it. The 18.2 percent level of federal spending is one piece of Clinton-era nostalgia worth recalling – as well as the bipartisanship that eventually produced it.
Nostalgists should also remember that the housing bubble started in this era — as did the internet boom — followed by the dot-com bust just as Clinton left office. This article is definitely worth reading.
Edward
Here we go again, an often repeated piece of history that basically say’s if we did it before we can do it again. This is a completely unhelpful contribution to the discourse of ideas on what to do about the US economy, that is heading ever faster to a wall of insolvency. We need to look at how we can find work for the unemployed that recycles some of the massive amount of cash held by the wealthy few.
My experience of the wealthy is that they hold investments not cash.
and then there is this. http://www.youtube.com/watch?v=Bx-j_s3-Zjs&feature=share
Senator Sanders talks about the top 400 individuals owning “more wealth” than the bottom half of the population. How do you own wealth? You own assets. The top 400 individuals own shares in public companies worth trillions of dollars. Some are founders of those companies and their immediate families. They are not sitting on a pile of cash. That is a fantasy from Grimm’s fairy tales.
When it comes to income, that is another matter. To me fairness comes when everyone pays the same share of income as taxes. If you earn a dollar you pay 20 cents; if you earn a million you pay $200,000. Progressive income taxes are immoral and undermine society, destroying the partnership between capital and labor required to achieve economic success. No partnership will work if each side is trying to stick the other with the bill.
Medelmeg
With respect you really are wrong here. There are estimated to be $US 3-400 trillion in debt notes out there, Since the entire Forbes billionaires list only amounts to about $US 4.5 billion it stands to reason that some people not on the Forbes billionaires list are sitting on a huge pile of cash. As for your idea of fairness , it misses a few points. the governments tax take is made up of many different taxes such as sales. There is a large section of society that the government has decided need not pay tax, as what they earn does not pay there basic bills. You clearly believe that they should pay more to the government so that the super wealthy can continue to accumulate an amount of cash that they could buy countries with.
It is those at the bottom of the economy whether small businesses or low paid workers who spend ever dollar as soon as they get it that keeps the economy going. If you reduce their income then the economic contraction will look like a childes slide in comparison to the fiscal cliff.
That is a question of ethics/principle rather than of fact. I do not intend to debate ethics as they are subjective. We may have different values.
To extend Senator Sanders example:
If you go to a restaurant with someone who earns a lot more more than you, do you expect them to pay the entire bill or do you offer to contribute?
The amount the bottom-end will contribute is miniscule but it is the principle: no free rides.
You mentioned sales and consumption taxes. I believe these are far superior to income taxes because of their ease of administration and their perceived fairness.
But if we are going to have an income tax it should be a low, flat rate with no loopholes/exemptions.
Medelmeg
My apologies for bringing ethics into the debate. However you used the word fairness a number of times, which last time I looked in the dictionary, fairness is all about ethics. You also believe ,the contribution from the the bottom end is minuscule in terms payments. Perhaps the minimum wage could be raised so that they had a greater amount of income to spend/ pay taxes with. The bottom line is the gap between ” the bottom end ” and the “top end” has been expanding experientially for the last 30 years which is not healthy for social cohesion..
And finally, it would be more efficient to have a dictatorship instead of democracy , however that would not be fair now would it.
Colin
Much of the investments you refer to is cash in the form of debt notes. As you are aware debt and cash are two side of the same coin. This may sound silly but it is the inefficiant economies that have the least amount of unemployment and citizen unrest
cash = government debt
does not mean that debt = cash
You’re right. That does sound silly. Take a trip through Africa, Asia or South/Central America before you say that inefficient governments tend to have low unemployment or less civil unrest.
Colin
Not all debt is government debt, and all debt as with any other asset has a cash value.. I would agree that the values move up and down as any one who has run a fire sale will tell you. An asset by definition has a cash value so can be cashed up at any time.As for my ” silly statement ” a couple of points. I said inefficient economies not governments , and I have lived in one of the twenty poorest countries in the world for the last 6 years. The thing is you and most of you contributors see the world through western eye’s , perhaps it you who need to turn off CNN and Bloomberg et al , and take a trip to look at how things really are.
“An asset by definition has a cash value so can be cashed up at any time.”
That just doesn’t make any sense. There is a limited stock of money in the economy — a fraction of the value of assets held as wealth — so how can all these assets be cashed up? Google on “money supply” or “money stock” for some background to this.
I am introducing a moderator’s queue in an attempt to improve the quality of comments made. Criticism is welcome. It is only by testing opposing ideas that we can arrive at solutions. But these ideas need to be based on research or reasoned argument rather than wild assertion.
Colin
I realise that the amount of cash is far less than the perceived value of all the assets combined. The point I was trying to make at the beginning was, that the problem with most economies is two fold. First technical efficiencies in many area’s have reduced employment opportunities for many, especially the 18-25 year olds. The second is the accumulation of huge amounts of control over the economy by a few connected families, who’s names strangely don’t appear on the Forbes billionaires list. The wealth accumulation at the top is considerably greater than a generation ago. If this financial crises is temporary ( and i sincerely doubt it is ) then the only people who can smooth the transition to better times are those who don’t need to keep accumulation more assets.