Pres Bush will say we are addicted to oil tonight

[SonomaCat]

I agree that debate is needed, but the "Saving of Social Security" was a bit of a marketing ploy to present a "crisis" (the key to politics for both sides) and then come swooping in with a "solution" that is actually just a veiled means to of shifting to a system that one's own party prefers.

I like the idea of privatized accounts, and I'd like to see it done, but it just isn't feasible right now without some sort of tax hike, and that wasn't an option the Republicans would accept. We can't just keep running up the debt like Paris Hilton with Daddy's credit card.

As it stands, I think the phrase was "Social Security will be 'bankrupt' by 2040" if we don't do something. By 'bankrupt,' it merely means than benefit would need to be reduced by 10 or 20% -- the system could feasibly survive just fine as-is, but it certainly would be a good thing if debate continued in terms of ways to improve it. Sadly, the only way to do anything constructive will result in either cutting benefits (and listen to the old people scream) or raising taxes (and listen to the donors scream), and neither option seems to palatable to most politicians.

[catsrback76]

I agree that debate is needed, but the "Saving of Social Security" was a bit of a marketing ploy to present a "crisis" (the key to politics for both sides) and then come swooping in with a "solution" that is actually just a veiled means to of shifting to a system that one's own party prefers.

I like the idea of privatized accounts, and I'd like to see it done, but it just isn't feasible right now without some sort of tax hike, and that wasn't an option the Republicans would accept. We can't just keep running up the debt like Paris Hilton with Daddy's credit card.

As it stands, I think the phrase was "Social Security will be 'bankrupt' by 2040" if we don't do something. By 'bankrupt,' it merely means than benefit would need to be reduced by 10 or 20% -- the system could feasibly survive just fine as-is, but it certainly would be a good thing if debate continued in terms of ways to improve it. Sadly, the only way to do anything constructive will result in either cutting benefits (and listen to the old people scream) or raising taxes (and listen to the donors scream), and neither option seems to palatable to most politicians.

What do you think about the premise that "we are addicted to oil"? Are we? So what? Is it really the issue that any of us want to address? Are we saying that as a nation we are oil addicted and want to come clean, or, are we saying we need to find more oil closer to home?

[Stevicat]

I like the idea of privatized accounts, and I'd like to see it done, but it just isn't feasible right now without some sort of tax hike, and that wasn't an option the Republicans would accept. We can't just keep running up the debt like Paris Hilton with Daddy's credit card.

Tax hikes would be a disaster to the economy. The President needs a line-item veto so he can cut all the pork that gets thrown into spending bills. Tax cuts are not the problem, increased spending is the problem. Use the spending cuts to pick up the slack.

[SonomaCat]

I like the idea of privatized accounts, and I'd like to see it done, but it just isn't feasible right now without some sort of tax hike, and that wasn't an option the Republicans would accept. We can't just keep running up the debt like Paris Hilton with Daddy's credit card.

Tax hikes would be a disaster to the economy. The President needs a line-item veto so he can cut all the pork that gets thrown into spending bills. Tax cuts are not the problem, increased spending is the problem. Use the spending cuts to pick up the slack.

I agree with the line-item veto. That would be a good start. However, the suggestion that tax increases are always bad reminds me of some funny political stuff from the past. During the campaign, Bush said we needed tax cuts because the surplus that existed was our money, so we needed to get it back. Then the economy went to hell, and so he told us we needed tax cuts to stimulate the economy. Now we're told that the economy has recovered and is strong, so we need tax cuts to keep it strong. This begs the question -- is there EVER a bad time to cut taxes? It seems like the current administration thinking is quite simplistic. Cut taxes always, increase spending always. If Bush actually was interested in cutting spending, he could have vetoed any number of spending bills that were loaded with pork, most of which was inserted by the Republicans. It's clearly not a priority for him, as his zero career vetoes make clear.

Tax increases actually did work wonders in the Clinton years. We had a surplus, and the economy flourished. A billion factors played into that, just as it has during the Presidency, but I don't accept the argument that any and all tax increases would have an adverse impact on the economy. If it brought our federal budget closer to being in balance, it might even help the economy on a net/net basis.

That being said, I will repeat that I wasn't hoping for the increase in the FICA taxes. I like having more money for myself as much as the next guy. That's why I was content to just leave things as they are, as I also wasn't willing to accept a couple trillion in more debt.

[BWahlberg]

Its funny, the typical Republican excuse for why they don't get anything done is partisan politics, something I'm sure we'll hear more and more of tonight and this spring/summer. Republicans now control all 3 branches of the government, what would stop them from doing this? Does the AARP have a vote in congress, or did the Democrats magically get extra votes in the house or senate?

If the republicans wanted to they could call a vote, and along party lines pass it, and they blame Dems? Thats makes a lot of sense...

Did you notice the Democrats gave Pres Bush a standing O when he said that he was unable to get Social Security passed last year. They were proud of the fact that they were able to stop it.

Yeah, so? If every republican voted for it, and every Dem against it, the bill would've passed. So some GOP members voted against it, whats so partisan about that?

[BWahlberg]

I like the idea of privatized accounts, and I'd like to see it done, but it just isn't feasible right now without some sort of tax hike, and that wasn't an option the Republicans would accept. We can't just keep running up the debt like Paris Hilton with Daddy's credit card.

Tax hikes would be a disaster to the economy. The President needs a line-item veto so he can cut all the pork that gets thrown into spending bills. Tax cuts are not the problem, increased spending is the problem. Use the spending cuts to pick up the slack.

Now here I disagree. Bush, and congress has cut taxes many time since he's been in office and our economy sucked for the first 3 - 4 years while Bush was in office, it is doing better now.

While Clinton was in office there were many new taxes, but ones that seemed to benefit communities, families, the middle/lower class, and schools (basically to improve the quality of life) and during a long while in his presidency the economy was very strong.

[SonomaCat]

I agree that debate is needed, but the "Saving of Social Security" was a bit of a marketing ploy to present a "crisis" (the key to politics for both sides) and then come swooping in with a "solution" that is actually just a veiled means to of shifting to a system that one's own party prefers.

I like the idea of privatized accounts, and I'd like to see it done, but it just isn't feasible right now without some sort of tax hike, and that wasn't an option the Republicans would accept. We can't just keep running up the debt like Paris Hilton with Daddy's credit card.

As it stands, I think the phrase was "Social Security will be 'bankrupt' by 2040" if we don't do something. By 'bankrupt,' it merely means than benefit would need to be reduced by 10 or 20% -- the system could feasibly survive just fine as-is, but it certainly would be a good thing if debate continued in terms of ways to improve it. Sadly, the only way to do anything constructive will result in either cutting benefits (and listen to the old people scream) or raising taxes (and listen to the donors scream), and neither option seems to palatable to most politicians.

What do you think about the premise that "we are addicted to oil"? Are we? So what? Is it really the issue that any of us want to address? Are we saying that as a nation we are oil addicted and want to come clean, or, are we saying we need to find more oil closer to home?

"Ya might as well face it, we're addicted to oil" [cue dozens of identical dancing hotties with their hair pulled back and wearing tight black dresses]

My answers: I like the admission. Yes. Depeding on oil is not a long term solution and it makes us vulnerable to foreign interests. Depends on how we want to spin it.

It's funny, not too long ago (Vice) President Cheney was telling us in a condescending tone that we couldn't conserve our way into energy independence, which was his justification for essentially saying we shouldn't conserve at all (or at least not passing any legislation that would encourage that kind of responsible behavior). Now with Bush's proclomation about oil's addictive qualities, it would certainly suggest that the adminstration is saying that we should look to conservation and exploring alternative fuels. Kudos to Bush for that flip-flop (the euphemism for "changing your mind when you get better information and/or your poll numbers tell you that everybody thinks you were wrong before"). He's got the right message, now I just hope he follow through on it with some kind of real plan.

I certainly don't want to be worried about the politics in the Middle East and their impact on our economy due to oil prices 20 years from now. We've accomplished some amazing things in the past as a country, and it's high time we learn how to power a car or a big screen TV without having to pump decomposed plant and animal matter out of the ground in the homeland of Islamic fanatics and ship it across the ocean.

And yes, I am in favor of responsible domestic drilling, including ANWR, to fill in the gap as we perfect the next generation of energy production. But we must have urgency in this matter. If there is one thing that comes close to being a "cure all" for a lot of our current problems, this is it. I'd like to see a would where oil is worth virtually nothing.

[Ponycat]

The economy during the Clinton years had little if anything to do with tax hikes or cuts evident by the rapid decline in the economy his final year.

[SonomaCat]

The economy during the Clinton years had little if anything to do with tax hikes or cuts evident by the rapid decline in the economy his final year.

I'm never one that will point to a change in tax policy and assert that A caused B, so I certainly can't argue against your statement. A billion different factors play into the economy, so it's impossible to state anything with any degree of accuracy. At the same time, the anecdotal evidence that tax increases in the past haven't damaged the economy might show that statements suggesting such results might not be slam dunk arguments, either.

The Clinton years were basically defined on the upside and the downside by the infancy and maturation of the tech market. It was the hot new thing and literally created wealth out of nothing (slideware, as they like to call it -- companies that have no real product, but have nice power point slides with pie in the sky ideas and projections). Then, when the economic realities of the market started to set in (investors started to realize that positive cash flow was necessary for a company to have any value), the whole sector imploded and killed the economy at the end of the Clinton's second term.

We've now recovered from that implosion (most likely due to the business cycle working out the inefficiencies that led to the implosion in the first place), and the remaining tech companies are making money and acting like real bona fide mature companies, which bodes well for the future.

We've lived through an amazing part of business history in a few short years.

[Stevicat]

I like the idea of privatized accounts, and I'd like to see it done, but it just isn't feasible right now without some sort of tax hike, and that wasn't an option the Republicans would accept. We can't just keep running up the debt like Paris Hilton with Daddy's credit card.

Tax hikes would be a disaster to the economy. The President needs a line-item veto so he can cut all the pork that gets thrown into spending bills. Tax cuts are not the problem, increased spending is the problem. Use the spending cuts to pick up the slack.

Now here I disagree. Bush, and congress has cut taxes many time since he's been in office and our economy sucked for the first 3 - 4 years while Bush was in office, it is doing better now.

While Clinton was in office there were many new taxes, but ones that seemed to benefit communities, families, the middle/lower class, and schools (basically to improve the quality of life) and during a long while in his presidency the economy was very strong.

Tax cuts and tax increases take time to have an impact. Clinton benefited from the Reagan tax cuts in the 80s. He took the top individual rates from over 90% to the low 30%. This is what helped created the boom in the 80s that Clinton rode along with the technology boom he enjoyed. His tax increases (including Bush #1's increase) started to have an impact on the economy towards the end of his second term and into Bush's first few years. Bush's tax cuts are now impacting the economy now which you even admit is doing better.

Tax cuts put more money into the pockets of the taxpayers which allow them to fuel the economy. To put it simply, they have more money to buy a first house or a bigger house which employs contractors and sub contractors to build, loan officers to process the loans, people to process titles, and real estate agents to help sell and buy. Multiply this across the country and one can see that the contractors, banks, title companies, and real estate offices have to hire more people to handle the volume which puts more money in these people's pockets which increases the Treasury's tax receipts. More people employed who pay taxes. It's a beautiful system and it works when allowed to.

[SonomaCat]

Yeah, I have made those same arguments before myself. They're textbook. In practice, though, it's virtually impossible to test those assertions. It's also difficult to quantify the impact of tax cuts when they directly lead to a spike in the deficit (such as now), and how those impacts flow through to our interest rates (and corresponding value of our currency, which in turn impacts the world economy and the cost of our transactions internationally).

The more I learn about economics and business, the more I realize that there is never a simple correlation that can be drawn. There's just way too many moving parts (being each decision that each person on earth makes every moment of the day).

[BWahlberg]

See Stevi, I just don't see it that way.

With everything thats going on and being promoted we're running in circles.

The current leadership supports outsourcing, taking Americans jobs and sending them overseas, which reduces the amount of income earning citizens in the US

Health care costs and prescription costs have risen sharply, meaning more money needs to be spent on that.

Education is vastly ignored and after school programs have lost funding, resulting in many families needing to absorb extra costs there.

The people who benefit enough from the tax breaks are the elite of the upper class, and big corporations, what is that doing to affect me, an average person? Not much...

[SonomaCat]

See Stevi, I just don't see it that way.

With everything thats going on and being promoted we're running in circles.

The current leadership supports outsourcing, taking Americans jobs and sending them overseas, which reduces the amount of income earning citizens in the US

Health care costs and prescription costs have risen sharply, meaning more money needs to be spent on that.

Education is vastly ignored and after school programs have lost funding, resulting in many families needing to absorb extra costs there.

The people who benefit enough from the tax breaks are the elite of the upper class, and big corporations, what is that doing to affect me, an average person? Not much...

I'd also argue that you are oversimplifying things as well.

Let's start with outsourcing. Is it bad? On a simplistic level, one could say that for every job that get sent to India, that is one less American with a job. Is that accurate? No. In many cases, outsourcing a group of jobs overseas allows the company to make more money. What do they do when they make more money? In general, they expand. This creates new jobs in the U.S. in pay scales higher than those jobs that were outsourced. You can't outsource all jobs -- just certain lower-tier jobs. In turn, India's economy grows, and they can afford more stuff. If we are successful U.S. company, that leads us to throwing a sales sub in India, selling into the Indian market. This increases profits and, if the company can figure out a way to repatriate the cash around the very flawed and uncompetitive U.S. tax laws, they can reinvest those earnings into more growth.

So outsourcing can certainly be a net positive. The trick will be for us to continue to be a place where the ideas can be developed, the capital raised, and the headquarters started. When Indian companies start stealing our market share, then we will have problems in terms of losing jobs.

[BWahlberg]

Brad,

I am oversimplifying, maybe because with my job (and here in Montana) it doesn't really affect me that much.

I see it as a benefit for the owners/investors in the company more than the average consumer. If a company sends 5,000 jobs to India, the upper echelon of that company (a small handful) will make more money. But it will cost 5,000 US jobs.

While its good for owners/investors/upper managers its not good for those in the lower class that, at one time, worked that job. They're now out on the street b/c their former company can pay someone overseas much less to do the same job.

I see that as a further class seperation, and it's vastly being ignored. I remember seeing some things on TV saying that 1/3 of America is now considered to be living in poverty. Is that where we want things to be, the royalty and then the serfs?

[Stevicat]

See Stevi, I just don't see it that way.

With everything thats going on and being promoted we're running in circles.

The current leadership supports outsourcing, taking Americans jobs and sending them overseas, which reduces the amount of income earning citizens in the US

Health care costs and prescription costs have risen sharply, meaning more money needs to be spent on that.

Education is vastly ignored and after school programs have lost funding, resulting in many families needing to absorb extra costs there.

The people who benefit enough from the tax breaks are the elite of the upper class, and big corporations, what is that doing to affect me, an average person? Not much...

I'd also argue that you are oversimplifying things as well.

Let's start with outsourcing. Is it bad? On a simplistic level, one could say that for every job that get sent to India, that is one less American with a job. Is that accurate? No. In many cases, outsourcing a group of jobs overseas allows the company to make more money. What do they do when they make more money? In general, they expand. This creates new jobs in the U.S. in pay scales higher than those jobs that were outsourced. You can't outsource all jobs -- just certain lower-tier jobs. In turn, India's economy grows, and they can afford more stuff. If we are successful U.S. company, that leads us to throwing a sales sub in India, selling into the Indian market. This increases profits and, if the company can figure out a way to repatriate the cash around the very flawed and uncompetitive U.S. tax laws, they can reinvest those earnings into more growth.

So outsourcing can certainly be a net positive. The trick will be for us to continue to be a place where the ideas can be developed, the capital raised, and the headquarters started. When Indian companies start stealing our market share, then we will have problems in terms of losing jobs.

Please remember that I did qualify my example with "to put it simply". I would argue, however, that there are many foriegn companies who are "outsourcing" to the US. The foreign auto industry of Toyota, Nissan and Volkswagon, for example, have built plants and offices here. I'm pretty sure there are other industries that have done the same but I don't have time to research. I would rather have Americans doing this kind of higher paying work than working in a call center which are the jobs we are losing to India.

For the most part, the outsourcing is for low paying, undesirable type jobs. We should want better for the American people.

Here is an article about a study that shows how outsoucing jobs can actually create jobs in the US.

http://money.cnn.com/2004/03/30/news/ec ... tsourcing/

[SonomaCat]

Brad,

I am oversimplifying, maybe because with my job (and here in Montana) it doesn't really affect me that much.

I see it as a benefit for the owners/investors in the company more than the average consumer. If a company sends 5,000 jobs to India, the upper echelon of that company (a small handful) will make more money. But it will cost 5,000 US jobs.

While its good for owners/investors/upper managers its not good for those in the lower class that, at one time, worked that job. They're now out on the street b/c their former company can pay someone overseas much less to do the same job.

I see that as a further class seperation, and it's vastly being ignored. I remember seeing some things on TV saying that 1/3 of America is now considered to be living in poverty. Is that where we want things to be, the royalty and then the serfs?

And my counterpoint is that you don't end up with 5,000 on the streets. You generally have those people moved to another division, while 1,000 more people are hired as well. Or maybe those particular 5,000 are let go, but 6,000 new people are hired (maybe some of whom are the original 5,000, but after more training).

A corporation is not, as is often portrayed in pop culture, a couple guys making all the money surrounded by little people. In general, as the corporation makes more money, that money is spent on growing salaries and headcount. If a company isn't growing, it's dying (a common expression -- true for the most part).

So when a corporation saves money in one part of its business (favorable tax laws, outsourcing low-value work overseas, discontunuing a failed product line), there are often short term pains, but in the long run, the company has more cash to spend, and generally spends it by putting more money in the pockets of middle class employees.

There are some fabulous examples of execs who care only about enriching themselves, but those are the exception and not the rule ... and they are never successful in the long run as it is impossible to run a business like that (as nobody will work for you, and execs don't like to unload trucks).

[Grizlaw]

Tax cuts and tax increases take time to have an impact. Clinton benefited from the Reagan tax cuts in the 80s. He took the top individual rates from over 90% to the low 30%. This is what helped created the boom in the 80s that Clinton rode along with the technology boom he enjoyed. His tax increases (including Bush #1's increase) started to have an impact on the economy towards the end of his second term and into Bush's first few years. Bush's tax cuts are now impacting the economy now which you even admit is doing better.

This is something I meant to post yesterday, but I was too swamped at work to find the time to write it in an intelligent manner (I still am too busy, actually, but I'll do my best).

Liberals and conservatives always debate the question of who deserves credit for the economic boom of the 90's. Liberals always credit Clinton's policies, and conservatives always claim that Reagan's tax cuts in the 80's are the real reason for the economic boom of the 90's.

Here's my point: with the benefit of hindsight, we now know that much of the economic boom of the 90's was a mirage. Tech companies were overvalued, the demand was never really there to support the level of supply that we created in several industries, etc. It's not really accurate to say that the economy "got worse" at the end of the 90's; the truth is, it was never as strong as it appeared in the first place, and the crash at the end of the 90's was a market correction.

Given all of this, does it really matter whether it was Reagan or Clinton who was responsible for the boom in the 90's? The "boom" represented artificial gains, not true economic growth -- a few people got out at the right time and got rich, but overall, our economy did not really grow in the 90's. We built infrastructure in certain industries (e.g., the telecom industry) that far exceeded our demand for such infrastructure, and as a result many businesses went bankrupt (i.e., Touch America) -- do you think Clinton or Reagan would like to step forward and accept their award for that?

I'm not sure if either president's policies had more to do with it than the other's, but frankly, why does it matter?

--GL

[catbooster]

Another aspect that gets overlooked when discussing the '90's is the demographics. I recall reading several articles prior to Clinton's first election that due to the large number of baby boomers reaching the highest earnings stage of their careers, a surplus was expected. At that time, quite a few pundits thought the next few presidential terms would be relatively easy to post surplusses.

Conversely, as the baby boomers retire, it will be harder to balance the budget. Which, of course, starts to bring SS, Medcare, etc. into the discussion.

And then, if you do get a surplus, you can debate whether it's really a surplus if the SS and highway trust fund balances are used to cover the shortfall in the rest of the budget.

[ChiOCat]

See Stevi, I just don't see it that way.

With everything thats going on and being promoted we're running in circles.

The current leadership supports outsourcing, taking Americans jobs and sending them overseas, which reduces the amount of income earning citizens in the US

Health care costs and prescription costs have risen sharply, meaning more money needs to be spent on that.

I just posted some ponderings I had about that yesterday http://bobcatnation.com/bobcatboard/vie ... php?t=5109 But I don't think you can entirely blame the gov't.

Look at beet growers here in Eastern MT. When my FIL was a boy here, beet growers all spent the winter months tending hogs or some other revenue sorce. Now, most grow beets in the summer months, which is not all that time consuming compared to yester-years. Then they take the winters off. And they gripe because they don't make enough from Sidney Sugars and the subsidies that they get.

Not just the beet growers, many Americans don't want the hard work jobs. They'd rather take a tech job in an office and just get their food from the grocery store, no matter where it comes from.

[SonomaCat]

And as those of us whose immigrant families (at some relatively near point in history) have given us the luxury of education and other skills (language, etc.) opt for the better paying and less backbreaking jobs, we rely on importing labor (immigrants) for much of the hard labor. Their children then have the luxuries that we now have, and the cycle continues.

So in the end, it sucks to be an immigrant or a person living in India as compared to us, as they get the work that, for the most part, we don't want. But it doesn't suck as bad as not having the opportunity to have that work. We leverage off their relatively cheap labor costs to improve our standard of living, and they are paving the way for their won kids to have the same advantages we now enjoy.

That's a tab bit pollyanna, but in a general sense, I think it is accurate.