Sanctimonious frigging Liberal here on 2% FICA

[OZark Dem]

All the past years talk of the SSA running out of money, and now the solution put forth by Obamanomics is to reduce the income to the fund by 2% /????? DUH

[BzaDem]

1. Trust fund won't be reduced by one penny, since they are writing a 120 billion check from the

general fund.

[WCGreen]

2. Just like all the other IOU's floating around the trust fund from the

general fund..

[neverforget]

4. And where does that $120 billion come from in the general fund? We get to borrow it

and Republicans get to hoot and holler about the debt. Sweet deal.

[BzaDem]

7. Yes. It's called stimulus. Borrowing it is THE POINT. n/t

[neverforget]

10. I get it. But do you understand that the Republicans next hostage is going

to be the Budget, the debt and the debt ceiling? They just proved that hostage taking works. Now they are going to want CUTS and lots of them from the budget. That is MY POINT!

[BzaDem]

13. What makes you think they would act any differently if Obama's actions were different?

Do you think they would go "oh, Obama's made it clear he will veto any tax bill that raises taxes on anyone. So now we'll know to not play this game on the debt ceiling."

???

[neverforget]

15. At least the Republicans will like him now.....

Is this how you deal with bully's? If you promise not to punch me in the nose, I'll just give you my lunch money?

[Liberalynn]

21. And who says they will even honor their agreement to pay the SS fund back?

I mean lets face it no one on that negotiating crew is very good at keeping their word.

[Statistical]

12. DEBT BORROWING IS THE POINT OF STIMULUS.

Governmental spending isn't magic. Stimulus = DEBT BORROWING. Period.

Say country has $100B GDP. Govt collects 20% of that in taxes = $20B.

So you have $80B private sector spending. $20B public sector spending.

Recesion hits. Private sector spending falls to $75B (total $95B). Oh noes recession. How can we increase aggregate demand.

I know lets raise govt/public spending. Ok lets try it by taxes. Increase taxes from $20B to $30B and spend it. Great public sector increases $20B to $30B. Great we are out of the recession. Nope because as public sector spending increases it decreased private sector spending. private sector is now $65B. $65B + $30B = still at $95B GDP. DAMN STILL IN RECESSION.

There is no way to raise/lower govt spending to produce more than $95GDP. Public & private sector spending are coupled.

So lets try this. The govt BORROWS $5B. So now taxes stay the same and private sector spends $75B. Govt spends $25B ($20B from taxes + $5B from debt). WOOO HOOOO we are growing again. $100B GDP (vs $95B last year).

[neverforget]

14. Thanks for yelling at me.

I understand the borrowing. We need more stimulus such as public works programs but tax cuts don't create jobs thus making my point that the politics of this deal are terrible. We just validated the Republican mantra that tax cuts create jobs. And I didn't need to yell either to write this....

[Statistical]

16. Well technically tax cuts DO have a stimulative effect however...

tax cuts on wealth tend to have a low multiplier (low bang for the buck). I remember reading an analysis that put it at 0.32. $1 reduction in income taxes results in $0.32 gain in GDP.

On the other hand payroll tax reductions tend to have much higher stimulative effect $1.32 GDP gain per $1 in reduction. Unemployment insurance has an even higher multiplier roughly $1.62 gain in GDP per $1.

It is called a compromise for a reason. Yes tax cuts for rich are a "waste" not that they have no stimuative effect just that they are poor bang for the buck. Tax cuts for poor and middle class are better and payroll cuts and UI are highly stimulative.

[neverforget]

19. So you're saying that the Republicans are "technically" correct.

As i said in another thread, we lost the politics of this fight and we lost badly. Because not only did we cede to the Republicans that tax cuts create jobs, they also get to yell and scream about the debt because the debt will be that much higher and the budget cuts that much deeper.

[Statistical]

20. They are correct tehcnically but it still isn't a good strategy.

Say you can spend $1 on three options:

Option A will help the economy $1.61
Option B will help the economy $1.48
Option C will help the economy $1.32
Option D will help the economy $0.32

Obviously if the only thing that mattered was stimulating demand you would want to pick the best solutions. Remember those questions in school where it said "pick the best answer"

Well option A is extending UI, option B is public works infrastructure spending, option C is payroll tax holiday and option D is extending Bush tax cuts for everyone. Option D2 would be extending tax cut just for rich and it is likely an even samller mutiplier (like say $0.10 or $0.08).

If you have limited dollars to spend you want to maximize the return (in terms of aggregate demand) on that spending right?

Another way to look at it is....
cutting all taxes (extending Bush tax cuts) will stimulate the economy but dollar for dollar extending UI stimulates it 5x as much.

[Subdivisions]

5. How much money is in the general fund? n/t

[BzaDem]

9. Whatever the total tax revenue + bonds is. It will be borrowed, which is the point of stimulus. n/t

[RaleighNCDUer]

17. And who the fuck do you think is paying for that $120 billion check?

This is just a means of further blurring the boundries of what SS is supposed to be - it is SUPPOSED to be self-funded, and NO general revenues will pay into the fund, or pay benefits for the fund.

This is a wedge, meant to split SS in two - with Obama's help, the repukes will do away with SS within ten years - turn it over to Wall Street, just like our pensions were.

Hope you like cat food.

[Greyhound]

3. "Ignore what they say, watch what they do". n/t

[inna]

6. starve the beast. absolutely classic shit.

republican/neo-liberal wet dream.

:puke:

[Statistical]

8. It won't reduce the income by a single cent. The $120B is 100% offset by general fund. n/t

[WCGreen]

11. Kick and Rec

[leftstreet]

18. K&R