Election 2010: Teabaggin' the Ds & Rs

[Sidd Finch]

Originally Posted by Hank Chinaski

put him on ignore and you can't whiff.

I will remember today as the day Hank finally acknowledged the basis of his personal scoring system.

[sebastian_dangerfield]

Originally Posted by Sidd Finch

I admit, I was a little surprised. You are rarely so earnest -- I attributed it to post-NYE detox.

Oh, I whiff quite a bit. That was just an awful one.

[Adder]

Originally Posted by sebastian_dangerfield

The distinction between payroll SS taxes and income tax is not so easily brushed away. The people on whom that was raised do, in fact, receive that money back. The income tax you and I pay "goes to money heaven."

Yes, the payroll tax increases did eventually go to spending. However, technically (and yes, I appreciate your wincing at the arguable weakness of this point), the money is owed to the SS fund.

You saw the numbers Cletus posted yesterday, right? That money will never be "paid back," at least not in a way that most people would think of that term. Instead, future benefits (at whatever, likely reduced levels) will be paid out of current tax receipts.

Which means people who paid won't "receive that money back" and their payroll taxes will have "gone to money heaven." But they will still get a cut out of the paycheck of those who are still working.

[sebastian_dangerfield]

Originally Posted by Sidd Finch

That was the justification. But reality is rearing it's ugly head. The SS Trust Fund will not be repaid; the money that people paid through payroll tax went to federal spending and will never come back. It was income taxes by a different name and calculation method.

My criticism is much broader: I don't like the GOP fiscal-bullshit line. "Reagan cut taxes for everyone" is one example, and the Reagan ethos of reducing taxes while increasing spending -- maintaining ridiculous deficits even while the economy is expanding as it did in the late 80s -- got us where we are today.

And yes, I recognize, as Club pointed out, that Obama's deficits are higher than ever. But I think you agree that a massive cut in federal spending or massive tax increase in 2009 would have been disastrous. I have no fundamental problem with deficit spending in a recession, but that's the only time the fed government should be running big deficits.

I would hope some of that money would come back. But I can't disagree with your projection. All I can say is it wasn't supposed to work that way in theory - that assumptions were made which didn't pan out. (Which kind of underlines my dislike of HCReform, but that's another discussion. And yes, I understand you probably disagree with the argument Reagan's people ever had any true belief the money would be paid back to SS.)

I think we all agree on deficits. The problem is always, what cure? I think a radical pullback in defense spending, slashing of entitlements and across-the-board restructuring of society to have a much less involved govt is needed along with any tax increase. Saying it can be done solely from the revenue side is delusional. Raise taxes to 1950 levels and it still won't cover the obligations. The difficulty is our govt has become such an enormous part of the economy as a purchaser of services and goods, and creator of administration that supports entire service industries, that if we engaged in the pullback necessary, our economy would crater.

What we have is the immovable object up against the unstoppable force. We can't raise taxes in our precarious situation, or cut govt. Either damages the economy too much. Hence, I remain quite bleak in my outlook.

Really, I'm not fucking around when I write dire shit. I think most of the finance info thrown at us in the media is absolute bullshit. Most of the pundits are collectively agreeing to eschew negative info for a while to run with a positive narrative that has little connection to the Main Street economy. We are headed for the mother of all class splits in the coming 24 months and nobody - nobody - will say it out loud. Will it matter? Who knows. Maybe it won't, as the street is betting. But when 1/3 of the country is insolvent, some radical political shit happens. And whatever that radical shit is, it will have huge ripple effects in the market and broader economy.

By way of simple example, the Street has ganged up on Meredith Whitney. Why? Because she's pouring cold water on their narrative. They're arguing, wrongly, that muni bond investors will shrug off individual defaults. Or that defaults will never occur because of covenants to pay bondholders first. That is outright, absolute fucking 100% grad A horseshit. That is nothing more than an industry hacks trying to kill a story that could scare the markets. First, the municipalities will blow out those covenants in a heartbeat. They're politicians, and they fear angry voters incensed over prop tax increases more than they do some shmuck lawyer trying to sue them to enforce a covenant. Second, the majority of muni investors are retail, they're interconnected and the market is scared silly. If Harrisburg, PA collapses, the domino effect runs across the state. Everybody wants out in a tsunami. If Chicago defaults, well... you do the math.

Things may not get "worse," but they are going to get really fucking strange over the next couple years.

[Tyrone Slothrop]

Originally Posted by Sidd Finch

And yes, I recognize, as Club pointed out, that Obama's deficits are higher than ever. But I think you agree that a massive cut in federal spending or massive tax increase in 2009 would have been disastrous. I have no fundamental problem with deficit spending in a recession, but that's the only time the fed government should be running big deficits.

And just so we're all clear, deficits are large now because we had a recession and revenues dropped, not because Obama has presided over a transformation to socialism or some such crap. What got us to the current situation is -- mostly -- Bush-era policies (and their continuation under Obama (hi Burger!)).

[Penske 2.0]

Originally Posted by adder

no billionaire investor is "far left." in his case, left, yes, but not far.



Again, i think you're straining "far," but also fading into obscurity.



Yeah, in the "nobody paying attention to" camp.



Ditto.



Ditto.



I could say the same to you.

None of the groups you mention is marxists, socialist or even european-style democractic socialist, which means each of them has a lot of room to their left.

Clinton and gore killed everyone to the left of robert reich (whom we could discuss if you would like).

fail!

[Penske 2.0]

Originally Posted by Cletus Miller

(thx to P) .

De nada.

ps: New Board Motto?

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

Saying it can be done solely from the revenue side is delusional. Raise taxes to 1950 levels and it still won't cover the obligations. The difficulty is our govt has become such an enormous part of the economy as a purchaser of services and goods, and creator of administration that supports entire service industries, that if we engaged in the pullback necessary, our economy would crater.

Why do you think that other developed countries can support much higher tax burdens but we can't? Our government isn't enormous by comparison to other countries, whether you measure by tax burden or expenditures.

[Gattigap]

Originally Posted by sebastian_dangerfield

We are headed for the mother of all class splits in the coming 24 months and nobody - nobody - will say it out loud.

Sebby,

What do you mean by class split? I assume you're referring to the middle and working class getting hosed economically, but am probably missing something.

[Penske 2.0]

Originally Posted by Gattigap

Sebby,

What do you mean by class split? I assume you're referring to the middle and working class getting hosed economically, but am probably missing something.

I'm thinking revolution. I'm ready. Bang bang!

[sebastian_dangerfield]

Originally Posted by Gattigap

Sebby,

What do you mean by class split? I assume you're referring to the middle and working class getting hosed economically, but am probably missing something.

The widening. It's turning into a canyon. And the number of people on the other side is way, way bigger than any of us think.

These people vote.

ETA: I see unemployment rising. There is no upswing in corporate hiring coming. This is the new new. No cycle. Companies may hire on the margins, but what we have is what we've got for the next 10 years. The Street is right - the stock market can decouple from the underlying economy. My fear is what happens when we have 40 million Americans un/underemployed? That's a political stew I'd rather not see, but will.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

Why do you think that other developed countries can support much higher tax burdens but we can't? Our government isn't enormous by comparison to other countries, whether you measure by tax burden or expenditures.

"What's your house worth? What someone will pay for it."

Running comparisons to other nations is noodling on the esoteric. We're where we are, we have our demographics. It's all subjective, from problems to solutions.

[Penske 2.0]

Originally Posted by sebastian_dangerfield

The widening. It's turning into a canyon. And the number of people on the other side is way, way bigger than any of us think.

These people vote.

Also, they have guns.

[Adder]

Originally Posted by sebastian_dangerfield

The widening. It's turning into a canyon. And the number of people on the other side is way, way bigger than any of us think.

These people vote.

Have you read Reich's Aftershock?

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

"What's your house worth? What someone will pay for it."

Running comparisons to other nations is noodling on the esoteric. We're where we are, we have our demographics. It's all subjective, from problems to solutions.

It's completely subjective. Which is to say, that when you say we "can't" raise taxes, we obviously can, but rich people wouldn't like it. (Also, a recession is a terrible time to do it.)