It used to be boasted about around here how Clinton ended his term with a surplus

[MadHound]

How do you think he did it? A large part of that equation were his tax rates. These rates enabled us to reverse the slide into debt that we found ourselves in, and most people agreed that they were the right thing to do, the responsible thing to do.

Furthermore, there was widespread condemnation of the Bush tax cuts, condemnation of their irresponsibility, over the debt they would add, over the amount of money it would cost us and the price we would pay for shouldering such a massive debt.

If we continue the Bush tax cuts, our problems will only grow. Four trillion dollars of extra debt, raising the price for government borrowing, limiting the options that the government has to fund other necessary functions, acting as a headwind that our economy has to sail into.

Worse, this debt will be balanced on the back of the middle class, working class and the poor. Already a bipartisan movement is afoot to reduce SS and medicare, eliminate tax programs, such as the mortgage interest deduction, that are the foundation of middle class well being. Obama has already signaled that, even though the Catfood Commission couldn't come up with enough votes, he is willing to take their proposals under consideration.

Finally, if the Dems don't take a stand for once, the demands of the 'Pugs will become ever more extreme, and it will be harder for the Dems to fight back.

I say take a stand now, and let all the tax cuts expire. Yes, it will cause pain in the short run, but in the long run, it will be better for our country, for our government, and for the Democratic party. Everybody loves a fighter, nobody loves a wimp.

[Uben]

1. Yeah well everyone likes to eat, too!

Those who need those extensions might disagree with you.

[BrklynLiberal]

3. Do you know exactly how much more taxes you would be paying if the tax cuts expire?

If it is enough to make a big difference you are better off than most of us.

[TheWraith]

8. He means the UNEMPLOYMENT extensions.

You know, the thing that's keeping 400,000 Americans from slipping off the edge into not being able to pay their mortgage and feed their family.

[Uben]

13. No, I don't know, but.....

...I am better off than most and I do not need a tax cut. I have always been willing topay my fair share, whatever that might be.
I do think taxes need to be raised, especially on the rich. I never have considered myself rich, but well off is a good description.
I'm retired and I don't even come close to making $200,000/yr. MAybe half that in a good year.

[Bandit]

5. More people have been added to the ranks of the poor under these tax cuts than

Under Clinton's Budgets. I don't think you can demonstrate your logic here.

[MadHound]

6. You assume that I don't sympathize with your plight,

I am in your plight, and due to circumstances, I've been living without benefits at all.

Don't assume that all unemployed are only concerned about their next meal. Don't assume that those who disagree with you are elitists who aren't in the same position you are.

[Uben]

17. It's not my plight, I'm not hurting at all

I am a social liberal and a fiscal conservative, so this tugs from both ends. I tend to side with those less fortunate in cases like this because I've been there, too. Food and heat are important if you want to stay alive. Raising taxes on the wealthy is both necessary and imminent. The income gap has gotten way out of hand and taxation is about the only way to alleviate that.

[Dappleganger]

9. I want everyone to eat and have a roof over their heads.

A good education with a chance to go to college and on to a job paying at minimum a living wage.

We ALL deserve that, and it won't ever happen if these tax cuts for the rich go through.

[BrklynLiberal]

2. I would absolutely cry with joy if Obama lets all the cuts expire....

even if it meant higher taxes for me...I only wish I was rich enough that it would mean a lot more taxes for me, instead of the $20 or $50 it would actually mean.
Ironically, many of those that are, are saying the same thing..e.g. Warren Buffett.
It is about f**kin time that a line was drawn int he sand...

[sarcasmo]

4. No WAR in his 8 years. War is an expensive drain our budget ,

[MadHound]

7. Well, that's if you don't count

Thrice weekly bombing runs over Iraq (500,000 dead innocents as a result), various paramilitary and covert operations in South America and Asia, and let's not forget the War on Drugs.

[TheWraith]

10. Or Bosnia, or Kosovo.

However, how you equate the periodic incidents in Iraq with "500,000 dead innocents as a result" is a mystery to me.

[MadHound]

11. It wasn't "periodic incidents", it was an ongoing, low level campaign

Thrice weekly bombing runs, week in, week out for nearly eight years. 500,000 dead innocents as a result of US sanctions and bombings. Though little publicized, this did indeed happen under Clinton's watch, part of his effort to build his military credentials.

[sarcasmo]

19. That is nothing compared to the daily budget over the 8 straight years of war

Around 700 million a day to fight the Iraq War alone. 700 million X 365 is?

[RandomKoolzip]

12. Didn't the false hope of the internet bubble also help create the surplus under Clinton?

i.e. investors throwing more money around, people getting hired to companies that would tank just a few years later, etc.

[mopinko]

15. the y2k panic went a long way, too.

part of the bursting of that bubble was the end of that scramble.

eta :hi: how you these days zip?

[RandomKoolzip]

18. DOing all right - which in this economy is really saying something.

How are you?

[mopinko]

38. i'm not too bad. looking for work, tho.

not the best time to try to enter the job force after 25 years as a mom and an artist. but getting a certificate in graphic design, and trying to hustle up some work.
other than that, i am pretty good considering.

you still at the same job?

[RandomKoolzip]

20. Delete - posted twice

[kenny blankenship]

16. A rising bubble lifts all boats, including govt balance sheets

and then it swallows them down straight to the bottom.

[SoCalDem]

39. www.buy-a-dog-some-socks.com

and other follies:rofl:

[Major Hogwash]

14. Cue Cher.

"If I could turn back time".

[OHdem10]

21. The cake is baked. Our Conservadems(Republican Lite)

want the tax cuts for the rich also. They run the party.

[BzaDem]

22. Just because you keep saying our costs for borrowing will grow doesn't actually mean they'll grow.

Right now, people/banks are trying to buy as many treasuries as possible with their excess cash, not the other way around. That's what happens in a recession -- everyone dumps their money in treasuries, because they don't want to invest elsewhere. Our annual deficit has increased 3-fold in 3 years, and borrowing costs have plummeted.

Clinton ended his presidency with a surplus because the economy was in good shape. Running budget surpluses in a recession is absolutely insane.

[MadHound]

23. I don't say that,

All reputable economists say that. It is the natural economic consequence of operating with a large debt load. Already, the dollar as a reserve currency is being slowly dismantled. The petrodollar is no longer king. But you already know these facts, you just can't bear any criticism of Obama.

Oh, and as far as the economy being in good shape when Clinton left office, aren't you forgetting the burst of the tech bubble, one of the originating factors in this mess?

[BzaDem]

25. How do you explain why borrowing costs have plummeted, despite the debt going up 3-fold?

You are completely wrong about "all reputable economists" (who all actually say the opposite in a recession), but that is a different question.

Your proposed explanation is entirely testable. Look at the debt over the last 3 years, and look at borrowing costs. Why have borrowing costs plummeted at the same time the deficit has tripled? You never seem to be able to answer this question. I don't blame you for not being able to answering the question, since your theory in a recession is completely false, but it would be nice if you would at least acknowledge your theory does not actually correspond to the data in any way.

As Krugman (who apparently doesn't fit your definition of a reputable economist) says,

" 'It’s clear that the bond market is now giving at least as strong a signal about its desired fiscal policy as it did in the early 1990s. But instead of demanding reductions in the deficit and government borrowing and threatening higher interest rates if those don’t happen, today’s vigilantes are unmistakably saying just the opposite. They want Washington to do more to stimulate the economy, and they welcome the deficit and debt it will take to do it.

In other words, the former bond market vigilantes have now become the biggest supporters of federal deficits and borrowing. I’ll follow in Yardeni’s footsteps and call them bond market deficit cheerleaders.'

Just to add a further point: the austerity now now now crowd poses as the sober voices warning governments not to ignore the dictates of all-powerful financial markets. But the signals from the financial markets don’t at all point to a need for early austerity. So what the austerity people are in effect saying is that they are smarter than bond investors — that they know what the bond market is going to want, it just doesn’t know it yet."

http://krugman.blogs.nytimes.com/2010/08/03/bond-market-deficit-cheerleaders/

Or, as Brad Delong said,

"Thus a Hicksian analysis last fall would have said--did say--"don't worry: a large flood of government bond issues won't push up interest rates; it will stem a collapse in monetary velocity instead as people who want to hold their wealth in safe form and would otherwise be holding money find themselves happy holding government bonds instead."

And it has all come true."

http://delong.typepad.com/sdj/2009/08/if-you-are-looking-for-a-monument-to-john-hicks-look-around-you.html

[MadHound]

28. You obviously know little about economics, other than talking points that back the administration

We're standing at a critical point, our debt to GDP level stands at right over 90%, that magic number where higher borrowing costs start kicking in. The only reason that they haven't so far is because the Fed has been printing money like it is out of style, and the fact that we've been the reserve currency for so long, but as our debt load increases and our currency weakens, that will change. Already China and Russia have dropped the dollar for bilateral trade, a number of oil exporting countries are shifting to the Euro as the petro-currency, and many are talking about going to a basket of currencies for their reserves, rather than simply the dollar.

Even the GAO states that our debt level is far too high and unsustainable <http://www.gao.gov/financial/citizensguide2008.pdf> As do economists like Kenneth Rogoff and Carmen Reinhart.

What you want to do is exchange a little short term gain in exchange for massive long term pain. That is irresponsible and it will make our efforts at recovery useless.

But you know all this, you simply can't bear any criticism of Obama.

[BzaDem]

29. Both Krugman and Delong think your theory is completely false, yet YOU are telling ME that I don't

know anything about economics?

Isn't that the very definition of projection?

Krugman:

"Brad DeLong has been writing about the falsity of the claim that large-scale government borrowing in a liquidity trap will lead to soaring interest rates. I was looking for some corroborating data, and came up with a picture that surprised me, though it shouldn’t have. Here it is:

It turns out that there’s a strong correlation between budget deficits and interest rates — namely, when deficits are high, interest rates are low."

http://krugman.blogs.nytimes.com/2009/08/14/deficits-and-interest-rates/

[MadHound]

30. Yet even Krugman thinks we shouldn't make this deal, that we should let all tax cuts expire

Here is an especially pertinent point that Krugman makes

"Oh, and what about confidence? I’ve been skeptical about claims that budget deficits hurt the economy even in the short run, because they undermine confidence in the government’s long-run solvency. Advanced countries, I’ve argued, have a lot of fiscal leeway. But anything that makes permanent extension of obviously irresponsible tax cuts more likely also sends a strong signal to investors: it says, “Hey, we aren’t really an advanced country; we’re a banana republic!” And that can’t be good for the economy."

Read the whole piece here,
<http://www.nytimes.com/2010/12/06/opinion/06krugman.html?_r=2&hp>

I imagine you'll now be throwing Krugman under the bus, again.

[BzaDem]

31. Before you post articles, you should make sure they don't make my point for me.

As for the false economics you have been stating (interest rates versus deficits), here is what Krugman says:

"Oh, and what about confidence? I’ve been skeptical about claims that budget deficits hurt the economy even in the short run, because they undermine confidence in the government’s long-run solvency. Advanced countries, I’ve argued, have a lot of fiscal leeway. But anything that makes permanent extension of obviously irresponsible tax cuts more likely also sends a strong signal to investors: it says, “Hey, we aren’t really an advanced country; we’re a banana republic!” And that can’t be good for the economy."

Of course Krugman agrees that a permanent extension would be disastrous. I would of course agree with that. Deficits of course matter in normal, non-liquidity trap economies.

That doesn't change the fact that your point about the deficit in a liquidity trap is completely false, as explained by Krugman himself, even in the very article you just posted.

[MadHound]

32. And you don't think that these "temporary" tax cuts won't become permanent?

Are you that gullible, that foolish?

The fact that you're trying to twist Krugman's words to fit your POV is laughable on the face of it, and simply a sign that even you know your position is untenable. So is the fact that you're dismissing the work of such noted economists as Rogoff, Reinhart, and the findings of the GAO. In fact Krugman isn't even discussing just the extensions for the rich, but all the tax extensions, you know, including the middle class ones which are permanent

Psst, one more thing, Krugman is making absolutely no statements about a "liquidity trap" in this piece, that is just wishful thinking on your part.

[BzaDem]

33. Krugman has actually attacked Rogoff and Reinhart head on.

"John Irons and Josh Bivens have the best takedown yet of the Reinhart-Rogoff paper (pdf) claiming that debt over 90 percent of GDP leads to drastically slower growth. R-R specifically highlight the case of the United States:

Irons and Bivens show, in a nice clean chart, what’s really going on:

It’s all, repeat all, the postwar demobilization.

I think we can say that this paper has been completely discredited. I’m actually sort of shocked that R-R apparently failed even to notice that all of their high-debt observations for the US — and remember, it was their own choice to highlight US data — come from the years immediately after World War II, and to think about what that means."

http://krugman.blogs.nytimes.com/2010/07/27/debt-and-growth-yet-again/

And no, I don't think these tax cuts will become permanent. When the economy is better, and the Republicans play their hostage game again, Obama can veto the tax cuts, since there is actually an economic argument for doing so in a normal economy. As for whether I'm "gullible" or "foolish" for thinking so, we both know what happened last time you told me that a prediction of mine was "gullible" and "foolish."

[MadHound]

34. So at best, it is dispute,

But again, the fact of the matter is that the dollar is already starting to weaken, countries are turning to other currencies, or a basket of currencies, as their reserve. China and Russia are no longer using the dollar in bilateral trade. Oil exporting countries are slowly but surely transitioning to a basket of currencies and getting of the petro dollar, part of the reason why gas is going up. These things are happening now, and are but an indication of worse to come, all brought about by our mounting debt.

Do you honestly think that we'll be out of this economic mess in two years, or three years, when the extension will be set to run out? Economists are forecasting unemployment to remain high through 2012 and into 2014 or 2015. So, when the extensions run out, and we have what is shaping up to be 'Pug control in DC, you don't think that those tax cuts will become permanent? At best, even if the Democrats remain in power, we'll have another showdown about "raising taxes" come around again in a couple of years, and of course the Dems will do what they do best, cave.

The fact that you're willing to sacrifice our long term economic success for short term, minimal gain says a lot about you, none of it good.

[BzaDem]

35. The dollar weakening right now is a GOOD thing, as Krugman never ceases to point out.

"Is it really possible that the CNBC-watching crowd doesn’t understand that right now a weak dollar is good for America? Have the usual suspects turned their backs not only on the insights of Keynes, but on basic monetary economics as well? Is goldbuggism triumphant?"

--snip--

http://krugman.blogs.nytimes.com/2010/10/25/ignoramity-triumphant/

"Do you honestly think that we'll be out of this economic mess in two years, or three years, when the extension will be set to run out?"

No, but we will be growing again. The trend is what matters here -- not the absolute level of unemployment.

"and we have what is shaping up to be 'Pug control in DC"

If we have 'Pug control in DC, why in the world do you think that Republicans wouldn't not only make the Bush tax cuts permanent, but make the tax code much more regressive? REGARDLESS what happens this month?

"At best, even if the Democrats remain in power, we'll have another showdown about "raising taxes" come around again in a couple of years, and of course the Dems will do what they do best, cave."

The Democrats are "caving" because the default option in this negotiation -- taxes going up for everyone -- would be bad for the economy. That does not mean in 2 years, when the default option (taxes going up for everyone) would likely not be bad for the economy, Democrats will do the same thing. The outcome of negotiations is largely shaped on what happens if both sides walk away, and there is a huge difference in economic affect between what happens when both sides walk away NOW and when both sides walk away in a few years.

[MadHound]

36. Wait, you agree with Krugman on inflatin being a good thing,

But disagree with him on letting all the tax cuts expire?

No wonder you're becoming decreasingly cognizant, your head has exploded from the hypocrisy.

So you think that having nation after nation ditch the dollar as their reserve currency is a good thing? Because that is what is happening now, as we speak, because the Fed continues to print money.

And no, we're not experiencing hyperinflation now, but as any economist can tell you, even Krugman, hyperinflation can turn on a dime, and what seems like a sound currency today will become worthless tomorrow if we continue to print money like we are. Why the hell do you think folks like China and Russia are getting out of the dollar? Because they see the writing on the wall.

And yes, if the 'Pugs have control, they will make the tax cuts permanent. Which is why we should take away that opportunity now and not extend the tax cuts.

And if you think, in a consumer driven society like ours, that our economy is going to recover anytime soon with such a high unemployment rate, well, good luck with that.

It is obvious that we're not going to agree on this, and it is useless to go any further with this discussion. So I'm going to cut out of this now and do something more productive with my time. Bye:hi:

[BzaDem]

37. You are once again wrong on Krugman on hyperinflation. Krugman wants MORE money printing, not less.

"Yet to maintain employment, we need to sustain spending, one way or another. One way is to have the government take advantage of its low financing costs to spend on useful things; but the deficit peacocks in Congress are blocking that solution. Another is to get real interest rates low enough to get the private sector spending; but that, as we can see, means that the real interest rate on medium-term government debt has to be negative.

The only way you can do that is by having the Fed credibly promise to deliver significant inflation.

Oh, and the invisible bond vigilantes continue their invisible attack: nominal 10-year bonds at 2.71%."

http://krugman.blogs.nytimes.com/2010/08/11/why-we-need-an-inflation-target/

"And yes, if the 'Pugs have control, they will make the tax cuts permanent. Which is why we should take away that opportunity now and not extend the tax cuts."

Why in the world do you think that not extends the tax cuts "takes away the opportunity" for them to be made permanent under a 'Pug administration? Is there some Constitutional clause that states that once tax cuts expire, they cannot be reinstated and be made permanent?

[ProfessorGAC]

24. Right On Tax Rates

And, let's not forget that Clinton furthered tax rate increases first initiated by 41. Those first round on increases are the reason why the republicans abandoned GHWB in the first place. Those tax cuts are what enabled Perot to mean something in 1992.

The lunatic right and radical libertarians resented those increases so much that they forgot it could lead to a dem in the White House.

The 90's established that tax rates, set at a fair, non-confiscatory level do not stifle growth. And, markets tend to respond favorably because when the gov't is selling fewer bonds, investment money ends up in equity and venture capital. So, not only do higher rates NOT stifle growth, they can actually stimulate it.
GAC

[Joe Fields]

26. Well put. Recommended. Thank you.

It's bizarre, how no one in the democratic leadership offers this coherent message to the public through the airwaves.

[Igel]

27. Sure, tax rates were important.

More important was limiting the increase in spending after '95/'96 while the tax revenues continued to increase. Revenues increased not so much because of the tax rate increase as because of greater employment, increased wages, and decreased expenses from cutting services like welfare as more people got jobs. It's the same way American families increased their household income: higher pay rates, sure, but mostly by having more family members work. Then, to ensure a surplus, you limit the growth in spending and try to make some expenses unnecessary.

The actual Clinton budget surplus was quite modest. The budget surplus *projection* was huge and utterly unrealistic, assuming that the prosperity from '96 to '99 would continue, unabated, until 2010--in other words, the longest post-war growth period would be uninterrupted for another entire decade. (This wasn't irrational exuberance; this was exuberant irrationality.) By the time the forecast was bandied about the NASDAQ was crashing and the stock market had suffered a lot of gyrations. By the time it was a big election issue the leading indicators all said "recession," but to say that was to be accused of "talking down the economy" and being fascist. At the time I rather liked the wildly unpopular (among (D)) idea of having the OMB adopt dynamic forecasting assumptions, even if it would lead to spurious charges of politicizing the forecast. After all, the forecast was already politicized.