Do you have any Hard Evidence of that?
by Anonymous at 9/02/2004 03:48:00 PM
There are a number of factors which affect economic performance. President Bush inherited an economy in which Corporate and Big Labor Scandals were out of hand, and an economic downturn was in progress. September 11th caused huge economic damage on top of these factors and growth is still depressed by fears of terrorist attacks. However, Real Wages didn’t fall over this period (But growth in real wages did) as would have been expected. The BLS has also revised its GNP numbers so that there now was no Textbook Recession in 2001. Unemployment numbers are at/near the historical average (5.62%) And the number of jobs lost/gained depends on which Government survey you are looking at. One says good jobs are being created, the other shows a divergent lag. Some argue for the household survey being right, others for the Payroll survey. The BLS compared the two and recently decided which one was right, and admitted it had overstated job losses by 251,000. I wouldn’t count on hearing that from the Democrats or the National Media. In 1Q2004, only 2% of the jobs lost went to overseas workers via outsourcing . Outsourcing is a reflection of market forces and the economy is not a closed system. A Job outsourced is not a job lost. Compared to Europe, even impoverished Americans live well, and Europeans have “lost” more jobs to outsourcing than Americans have.
The “poor” in the United States pay no federal income tax, and the “rich” have the majority of the burden. It is therefore impossible to give a Federal Income Tax cut to the poor. You can subsidize other taxes through the use of Federal income tax credits, but as this is welfare in disguise and it is extra cost, not extra revenue. As for Bush’s Tax cuts for the “Rich”, they affected many who earned under $50,000 and seem to be a factor in spurring the economy (it could have been worse). As for the recent CBO report and the increasing burden on the middle class, well, someday reporters might learn to read….
Demographics enter into the picture because tax liabilities differ by household and households differ from each other (number of children, married single etc). For instance, if you are “rich” chances are you are married or own a business. Then there is the whole question if a tax system’s goal is to fund the Federal Government or to redistribute the wealth of its citizens. Even if it is the latter, the demographics involved need to be accounted for in order to have a clear picture of who is impacted by a taxes and how. It should also be noted that “Class Warfare” is virtually non-existent in the United States. Everyone seems to assume that the impoverished are the same people from year to year, where in reality, very few people remain “poor” in the United States for even a few years, while very few of the rich are born into that “class” and remain there.
Different measures of poverty do not always take into account other forms of wealth (houses and stocks) , tax rebates, welfare, and other factors such as time worked (most College Students will be counted as in poverty even though their parents are still caring for them as well as those who work only part of a year due to a job loss)
Changes in Taxes influence the revenue of the federal government, but also influence future revenues depending on how the tax changes (as well as dozens of other factors) affect the future economy. The Economy is a chaotic function with many variables. We are trying to maximize one variable (tax revenues) over a period of time. Being Chaotic, the economy does not follow simple rules and lowering taxes may spur the economy on with better revenues the next year, or it may cause interest rates to soar (via increased public debt) and slow the economy so revenues the next year are poor. This all depends on multiple factors ( tax laws, current economic status (boon or bust) , the actions of individuals, other countries, acts of god, and the speed of butterfly wings.) most of which are outside of governmental control
Spending is entirely a different matter. The key to not having a deficit is to stop spending money that isn’t collected. Both Candidates are trying to deal with the Deficit and Public Debt problems via the manipulation of tax code (educated guessing and intuition) but what is needed is to reduce the spending (on which Bush has an abysmal record). Most of the deficit is due to a shortfall in revenue projections and increases in spending that have nothing to do with the Bush Tax Cuts and even if Kerry gets his way with taxes, very little will happen to the current level of the Deficit (Can anyone show me in the “Plan For America” where Kerry plans to cut?) Meanwhile, Kerry’s proposed increase in the Minimum Wage, ignores the demographics of who earns minimum wage, (for instance teenagers) and will decrease the number of jobs available. (A little supply and demand lesson anyone?)
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