DEBT REDUCTION IS NOT Problem ONE!
GET THE FACTS BEHIND THE NEWS
I believe that both political parties have their economic priorities mixed up. The mere cutting back of large parts of the federal gov’t will not help the economy or increase employment. The reason is that the economic problems are not caused by the size of gov’t or by the size of the debt.
The size of the debt has to be watched but the debt now is not an imminent danger. A study by the National Bureau of Economic Research found that public debt levels become dangerous when they reach 90% of GDP. At the present time(2010 figures) the US debt level is 63% of GDP according to the CIA World Factboo
Recent figures for other countries are Japan, 192%, France 80%, Canada 72%, UK 69%, India 60%, Saudi Arabia 20% China 18%.
Furthermore the gov’t is not having any trouble selling its financial bonds and other financial instruments. In fact during the recent stock meltdown capital from all over the world came to this country to buy our bonds as the safest investment they could find. There is also no indication that gov’t borrowing is crowding out the private sector. Money is plentiful. Interest rates are low.
My reading of economics and prominent economists indicate that our primary economic problem is a poor economy. The problem in a recession is demand. We must create an environment that encourages innovation and demand.
MY suggestion is concentrate on improving the economy so that business improves and more people have jobs. Then healthy debt reduction that does not cut needed services can follow.
Wednesday, August 24, 2011
Monday, July 11, 2011
Republican demands WII NOT HELP THE ECONOMY
Republican demands for the debt extension
WILL NOT HELP THE ECONOMY!
Get the facts behind the news!
The mere cutting back of large parts of the federal gov’t will not help the economy. The reason is that the economic problems are not caused by the size of gov’t or by the size of the debt. Dr. John Rutledge adviser to Pres. Ronald Reagan estimates the US total assets over $200 trillion compared to a debt of $14 trillion. There is no indication that gov’t borrowing is crowding out the private sector. Money is plentiful. Interest rates are low.
Low interest rates and large amounts of money in banks and large co’s do not necessarily add up to good economic times as we are finding out. This approach to stimulate the economy is like trying to push a wet noodle. A problem is these remedies are all supply side. The problem in a depression is the DEMAND SIDE. MAKING MONEY AVAILABLE AT LOW INTEREST RATES is helpful but not sufficient. The Republican program does nothing for the demand side. Lower tax rates for business will only have a small marginal effect on the economy. Note in the 1950’s. 60’s and into the 70’s the corporate Federal Income tax rate varied from 90% to 70%. TAX Rates ARE A FACTOR BUT DO NOT DETERMINE INVESTMENT. PROFIT OPPORTUNITIES DETERMINE INVESTMENT. The 40'S, 50'S AND 60'S were some of the best years this country ever had. In fact a case can be made out that high corporate tax rates stimulate investment more than low tax rates. WHAT CAN WE DO TO STIMULATE DEMAND? We must create an environment that encourages innovation and demand. Then the public can have confidence in the economy.
To understand the Republican position we have to go back to the basic Republican position. The foundation of Republican economic policy is that RICH PEOPLE SHOULD NOT PAY TAXES. This dressed and camouflaged many different ways, But this is the basis of Republican thinking.
This Republican position is not really an economic policy. It is not based on economics. THE REPUBLICAN POSITION IS REALLY A POLITICAL STATEMENT MASQUERADING AS AN ECONOMIC POLICY.
This is not surprising as it is being presented by politicians who appear to have political knowledge but very little knowledge of economics.
However there is a problem. Politics and economics while effecting each other are two different spheres of activity. The Republican position maybe very good politics but it very poor economics. More later.
WILL NOT HELP THE ECONOMY!
Get the facts behind the news!
The mere cutting back of large parts of the federal gov’t will not help the economy. The reason is that the economic problems are not caused by the size of gov’t or by the size of the debt. Dr. John Rutledge adviser to Pres. Ronald Reagan estimates the US total assets over $200 trillion compared to a debt of $14 trillion. There is no indication that gov’t borrowing is crowding out the private sector. Money is plentiful. Interest rates are low.
Low interest rates and large amounts of money in banks and large co’s do not necessarily add up to good economic times as we are finding out. This approach to stimulate the economy is like trying to push a wet noodle. A problem is these remedies are all supply side. The problem in a depression is the DEMAND SIDE. MAKING MONEY AVAILABLE AT LOW INTEREST RATES is helpful but not sufficient. The Republican program does nothing for the demand side. Lower tax rates for business will only have a small marginal effect on the economy. Note in the 1950’s. 60’s and into the 70’s the corporate Federal Income tax rate varied from 90% to 70%. TAX Rates ARE A FACTOR BUT DO NOT DETERMINE INVESTMENT. PROFIT OPPORTUNITIES DETERMINE INVESTMENT. The 40'S, 50'S AND 60'S were some of the best years this country ever had. In fact a case can be made out that high corporate tax rates stimulate investment more than low tax rates. WHAT CAN WE DO TO STIMULATE DEMAND? We must create an environment that encourages innovation and demand. Then the public can have confidence in the economy.
To understand the Republican position we have to go back to the basic Republican position. The foundation of Republican economic policy is that RICH PEOPLE SHOULD NOT PAY TAXES. This dressed and camouflaged many different ways, But this is the basis of Republican thinking.
This Republican position is not really an economic policy. It is not based on economics. THE REPUBLICAN POSITION IS REALLY A POLITICAL STATEMENT MASQUERADING AS AN ECONOMIC POLICY.
This is not surprising as it is being presented by politicians who appear to have political knowledge but very little knowledge of economics.
However there is a problem. Politics and economics while effecting each other are two different spheres of activity. The Republican position maybe very good politics but it very poor economics. More later.
Sunday, March 13, 2011
NOW is the Time to help Libya!
GET THE FACTS BEHIND THE NEWS. Efforts to help Libya are not sufficient to rid the country of Maommar Gadhafi. Director of National Intelligence James Clapper told a Senate Panel that the Gadhafi regime will probably prevail due to superior fire power and logistics. Much more needs to be done. Embargo’s, freezes, travel bans, speeches take time, months and years to be effective. The rebels need help NOW. They may all be dead or captured before these measures take effect
The first priority is sending military supplies and equipment IMMEEDIATLY! Other measures might be missiles such as were used in Bosnia, air strikes, etc.
The administration is strangely timid and hesitant, maybe in a state of denial. Its foreign policies seem to be based on several faulty assumptions. Let’s consider.
1) We are being asked to help. This is different than our invasion of Iraq and our second invasion of Afghanistan, and Viet Nam.
2) Ground forces are not needed. A large number of Libyans are ready to fight. In fact they are fighting and dying while the world is talking.
3) The Obrama administration foreign poicy is based on the faulty assumption that we can not do anything unless everyone agrees. This approach leaves the US and the world leaderless. It is a recipe for doing nothing for Libya and anybody or anything. By the time you get the UN, NATO, the Arab League, the African group, Australia, and the city council of St. Louis to agree the Libyans will certainly be captured of killed.
4)In 1950 if Pres. Harry Truman had followed this advice S. Korea would now be part of N. Korea. Pres. Truman saw a need for action. He acted and invited the other nations to join us, which they did. This is leadership.
5) It is important to note the Arab League of 22 nations has asked the UN to take action against Maommar Gadhafi.
6) What are the implications for the US if we continue on our present path of speeches and long range actions? The world, good and bad, will see the US as a nation not interested in furthering democracy and helping others no matter what the justice of their situation.
7) What are the implications for the UN if we continue on our present path? The world will see the UN as an organization that can not maintain the peace and solve the worlds problems. This will be another large step in making the UN another League of Nations, where people give fine speeches and nothing happens.
The first priority is sending military supplies and equipment IMMEEDIATLY! Other measures might be missiles such as were used in Bosnia, air strikes, etc.
The administration is strangely timid and hesitant, maybe in a state of denial. Its foreign policies seem to be based on several faulty assumptions. Let’s consider.
1) We are being asked to help. This is different than our invasion of Iraq and our second invasion of Afghanistan, and Viet Nam.
2) Ground forces are not needed. A large number of Libyans are ready to fight. In fact they are fighting and dying while the world is talking.
3) The Obrama administration foreign poicy is based on the faulty assumption that we can not do anything unless everyone agrees. This approach leaves the US and the world leaderless. It is a recipe for doing nothing for Libya and anybody or anything. By the time you get the UN, NATO, the Arab League, the African group, Australia, and the city council of St. Louis to agree the Libyans will certainly be captured of killed.
4)In 1950 if Pres. Harry Truman had followed this advice S. Korea would now be part of N. Korea. Pres. Truman saw a need for action. He acted and invited the other nations to join us, which they did. This is leadership.
5) It is important to note the Arab League of 22 nations has asked the UN to take action against Maommar Gadhafi.
6) What are the implications for the US if we continue on our present path of speeches and long range actions? The world, good and bad, will see the US as a nation not interested in furthering democracy and helping others no matter what the justice of their situation.
7) What are the implications for the UN if we continue on our present path? The world will see the UN as an organization that can not maintain the peace and solve the worlds problems. This will be another large step in making the UN another League of Nations, where people give fine speeches and nothing happens.
Sunday, October 24, 2010
IS AN UNREGULATED ECONOMY BEST?
GET THE FACTS BEHIND THE NEWS!
In the 1880's to 1920's the US was a nation of individual farmers and shopkeepers. Since that time the nation has changed. The US has become a group of large social and business organizations. People work for large co's, join large organizations. This necessitates a realignment of gov'ts role. The individual is frequently powerless against these large organizations. This is why people join labor unions, buy from coops--Costco, political parties etc.
Now one of the main purposes of gov't is to protect the public against the excessive greed, and power seeking of these large organizations. Some examples--the raliroads in the 1880's, the sub-prime mortgagor people in the 2000-2008, the pharmaceutical co's, the banks and wall street, 2000-2008, teachers unions etc Lastly we need protection against the protectors
The tea party financed primarily by Rupert Murdoch, Beck is on his payroll, and the Koch brothers and others do not want to be regulated Can we leave our future in the hands of these large organization and very wealthy people?. This was the George Bush program of gov’t without oversight, or unregulated. Judging by the results the answer is NO.
In the 1880's to 1920's the US was a nation of individual farmers and shopkeepers. Since that time the nation has changed. The US has become a group of large social and business organizations. People work for large co's, join large organizations. This necessitates a realignment of gov'ts role. The individual is frequently powerless against these large organizations. This is why people join labor unions, buy from coops--Costco, political parties etc.
Now one of the main purposes of gov't is to protect the public against the excessive greed, and power seeking of these large organizations. Some examples--the raliroads in the 1880's, the sub-prime mortgagor people in the 2000-2008, the pharmaceutical co's, the banks and wall street, 2000-2008, teachers unions etc Lastly we need protection against the protectors
The tea party financed primarily by Rupert Murdoch, Beck is on his payroll, and the Koch brothers and others do not want to be regulated Can we leave our future in the hands of these large organization and very wealthy people?. This was the George Bush program of gov’t without oversight, or unregulated. Judging by the results the answer is NO.
Sunday, October 10, 2010
GET THE FACTS BEHIND THE NEWS!
WHY DOESN’T PRES OBRAMA USE THESE Three GREAT REASONS TO ADVANCE HIS PROGRAM?
1) On Tax cuts for the rich the Pres again has let the republicans set the terms of the debate. The debate should not be primarily on the SIZE OF THE DEFICIT. The debate should be on measures to help the economy grow. As it stands now everyone is expecting the Pres to cave and agree to tax cuts for the very rich. There will some whiney excuse about the mean republicans who held the tax cuts hostage unless given to the rich. WHY NOT TURN THIS SITUATION AROUND! AFTER THE ELECTION THE PRESIDENT ANNOUNCES THAT HE WILL VETO ANY TAX LEGISLATION THAT HAS A TAX CUT FOR THE VERY RICH.
If the republicans want a tax cut they agree to leave the rich out. This would probably be the outcome as the Republicans seem much more strong on tax cuts than the democrats.. John Boehner let the cat out of the bag IF THEY DON’T AGREE THE TAX CUTS EXPIRE. Take a clue from Bill Clinton in 1993, this might be the best outcome.
2 In 1948 Harry Truman campaigned against the ”do nothing Congress” Why can’t Pres Obrama use this type of approach against the do nothing Republicans now? There is an old saying, “Are you part trying to help or are you part of the problem?” There are many approaches that should show the Republicans are part of the problem.
3 Show the public that the gov't is their friend and protector not their enemy.
The social security provides us with money in later years, Security and Exchange Commission guards against financial fraud, the FDIC protects against loss of assets if a bank goes under, the FBI protects us against criminals and terrorists, the US Dept of the Interior protects our land resources and helps supply our energy. We benefit when these dept's perform their duties. One of the reasons the country is in trouble now is the Bush administration did not fund these dept's and appoint people interested in helping the public.
4 All of these approaches seem more powerful than saying however bad the democrats are the republicans are worse. The “worse” approach seem noticeable lacking in motivation and generating enthusiasm.
1) On Tax cuts for the rich the Pres again has let the republicans set the terms of the debate. The debate should not be primarily on the SIZE OF THE DEFICIT. The debate should be on measures to help the economy grow. As it stands now everyone is expecting the Pres to cave and agree to tax cuts for the very rich. There will some whiney excuse about the mean republicans who held the tax cuts hostage unless given to the rich. WHY NOT TURN THIS SITUATION AROUND! AFTER THE ELECTION THE PRESIDENT ANNOUNCES THAT HE WILL VETO ANY TAX LEGISLATION THAT HAS A TAX CUT FOR THE VERY RICH.
If the republicans want a tax cut they agree to leave the rich out. This would probably be the outcome as the Republicans seem much more strong on tax cuts than the democrats.. John Boehner let the cat out of the bag IF THEY DON’T AGREE THE TAX CUTS EXPIRE. Take a clue from Bill Clinton in 1993, this might be the best outcome.
2 In 1948 Harry Truman campaigned against the ”do nothing Congress” Why can’t Pres Obrama use this type of approach against the do nothing Republicans now? There is an old saying, “Are you part trying to help or are you part of the problem?” There are many approaches that should show the Republicans are part of the problem.
3 Show the public that the gov't is their friend and protector not their enemy.
The social security provides us with money in later years, Security and Exchange Commission guards against financial fraud, the FDIC protects against loss of assets if a bank goes under, the FBI protects us against criminals and terrorists, the US Dept of the Interior protects our land resources and helps supply our energy. We benefit when these dept's perform their duties. One of the reasons the country is in trouble now is the Bush administration did not fund these dept's and appoint people interested in helping the public.
4 All of these approaches seem more powerful than saying however bad the democrats are the republicans are worse. The “worse” approach seem noticeable lacking in motivation and generating enthusiasm.
Monday, October 4, 2010
USA TODAY!
THE USA TODAY- ONCE A LEADER NOW AN ALSO RAN
The USA Today is not all sunny. There are a shadowy dark spaces. The USA was once a glamorous Queen first in many important aspect of living a good life. Now the USA is slowly disintegrating, and decaying do to neglect. NEWSWEEK RECENTLY LISTED THE 100 BEST COUNTRIES INN THE WORLD. WE USED TO BE 1ST. NOW WE ARE 11TH,NOT EVEN IN THE TOP 10. The moral decline of the US is reflected in the small bore thinking of our elected representatives and the impractical distortions of some of our leaders.
Since the public and its leader seem to be consumed and distracted by the diverse opinions and political divisions in this country many important needs are neglected. We have created a civilization that was once beautiful but is now a damaged and crumbling world.
Without a great deal of care the modern world with its large unsolved problems has been placed on top of our fine elegant world of the past, and now violated is likely ready for destruction.
The USA Today is not all sunny. There are a shadowy dark spaces. The USA was once a glamorous Queen first in many important aspect of living a good life. Now the USA is slowly disintegrating, and decaying do to neglect. NEWSWEEK RECENTLY LISTED THE 100 BEST COUNTRIES INN THE WORLD. WE USED TO BE 1ST. NOW WE ARE 11TH,NOT EVEN IN THE TOP 10. The moral decline of the US is reflected in the small bore thinking of our elected representatives and the impractical distortions of some of our leaders.
Since the public and its leader seem to be consumed and distracted by the diverse opinions and political divisions in this country many important needs are neglected. We have created a civilization that was once beautiful but is now a damaged and crumbling world.
Without a great deal of care the modern world with its large unsolved problems has been placed on top of our fine elegant world of the past, and now violated is likely ready for destruction.
Monday, September 27, 2010
A Tale of Two Presidents!
GET THE FACTS BEHIND THE NEWS!
In 1992 during an economic downturn Bill Clinton was elected president. During the campaign Bill had promised a tax cut for the middle class if elected. However in Feb 1993 when Bill addressed a Joint Session of Congress. He presented a plan to reduce the deficit rather than a middle class tax cut. This plan would raise taxes on higher income brackets and included a surtax for incomes over $250,000. For incomes less than $30,000 there was no change. It eliminated income taxes on 15 million of the lowest income families.
The purpose Bill said was that a smaller Federal budget deficit would reduce bond interest rates. It is said Robert Rubin the Secretary of the Treasury persuaded Bill to take the debt reduction route rather than the middle class tax cut.
The result was the longest period of economic expansion in American History. After 8 yrs of Presidency Bill left office in 2000 with a 65% approval rating.
---------------------------------------------------------------------------------------------
In 2000 George Bush was elected President. George inherited a balanced Federal budget with a large surplus.
George believed in a smaller role for gov’t and depended on unregulated market forces to govern the economy. In 2001 and 2003 Bush obtained Congressional approval for large tax cuts. The 2001 tax cut was $1.35 trillion. These tax cuts decreased all tax rates, decreased the capital gains tax, increased the child tax credit, and eliminated the “marriage penalty. Economists figure the tax cuts from 2001 to 2007 resulted in an increase of $3 trillion in Federal debt,(constant 2000 $) Since 2007 the debt has increased substantially. Together the tax cuts and war(Iraq, Afghanistan) have accounted for 84% of the debt increase according to Richard Kogan and Matt Fiedler. Over this period excluding home equity extraction the US economy grew 1% during the Bush years as figured by Niall Ferguson. George left office in 2008 amidst the largest economic downturn since the Great Depression of 1929 with an approval rating of 28%.
How have these two different approaches effected Job GROWTH?
1990 thru 1999 Clinton yrs 1999 thru 2009 Bush yrs
21.3 Million new jobs --940,000 jobs lost
How about economic growth?
1990 thru 1999 Clinton yrs 1999 thru 2009 Bush yrs
4% growth per yr 1% growth per yr
PERHAPS THE BEST ECONOMIC PLAN IS TO JUDICIOUSLY RAISE TAXES.! Not cut taxes.
In 1992 during an economic downturn Bill Clinton was elected president. During the campaign Bill had promised a tax cut for the middle class if elected. However in Feb 1993 when Bill addressed a Joint Session of Congress. He presented a plan to reduce the deficit rather than a middle class tax cut. This plan would raise taxes on higher income brackets and included a surtax for incomes over $250,000. For incomes less than $30,000 there was no change. It eliminated income taxes on 15 million of the lowest income families.
The purpose Bill said was that a smaller Federal budget deficit would reduce bond interest rates. It is said Robert Rubin the Secretary of the Treasury persuaded Bill to take the debt reduction route rather than the middle class tax cut.
The result was the longest period of economic expansion in American History. After 8 yrs of Presidency Bill left office in 2000 with a 65% approval rating.
---------------------------------------------------------------------------------------------
In 2000 George Bush was elected President. George inherited a balanced Federal budget with a large surplus.
George believed in a smaller role for gov’t and depended on unregulated market forces to govern the economy. In 2001 and 2003 Bush obtained Congressional approval for large tax cuts. The 2001 tax cut was $1.35 trillion. These tax cuts decreased all tax rates, decreased the capital gains tax, increased the child tax credit, and eliminated the “marriage penalty. Economists figure the tax cuts from 2001 to 2007 resulted in an increase of $3 trillion in Federal debt,(constant 2000 $) Since 2007 the debt has increased substantially. Together the tax cuts and war(Iraq, Afghanistan) have accounted for 84% of the debt increase according to Richard Kogan and Matt Fiedler. Over this period excluding home equity extraction the US economy grew 1% during the Bush years as figured by Niall Ferguson. George left office in 2008 amidst the largest economic downturn since the Great Depression of 1929 with an approval rating of 28%.
How have these two different approaches effected Job GROWTH?
1990 thru 1999 Clinton yrs 1999 thru 2009 Bush yrs
21.3 Million new jobs --940,000 jobs lost
How about economic growth?
1990 thru 1999 Clinton yrs 1999 thru 2009 Bush yrs
4% growth per yr 1% growth per yr
PERHAPS THE BEST ECONOMIC PLAN IS TO JUDICIOUSLY RAISE TAXES.! Not cut taxes.
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