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#869568 - 12/10/07 01:42 PM Demo's PayGo is Gone!
Pale Rider Offline
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The Paygo Farce
Democrats admit it was all a big confidence game.

Monday, December 10, 2007 12:01 a.m. EST


"Democrats are committed to ending years of irresponsible budget policies that have produced historic deficits. Instead of compiling trillions of dollars of debt onto our children and grandchildren, we will restore pay-as-you-go budget discipline."-

-Speaker Nancy Pelosi, December 12, 2006

Well, as Emily Littela, the half-witted Gilder Radner character on Saturday Night Live, would have put it: "Never mind." Last week Congressional Democrats formally renounced their ballyhooed budget pledge to offset any new tax cuts with other tax increases or spending cuts. We're delighted to see this false promise go, but there's a larger lesson in this failure for the tax and spending battles of 2008.

Senate Democrats gave up on "paygo," as it's called, when they realized they lacked the votes to offset the $50.6 billion cost of protecting more than 20 million middle-class taxpayers from getting whacked by the Alternative Minimum Tax this year. They've spent the year floating all kinds of tax increases to make up the difference. But in the end they passed an AMT relief bill without a penny to pay for it. Paygo is now pay gone.

this is a snipit from the WSJ editorial page of today------
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#869717 - 12/10/07 03:54 PM Re: Demo's PayGo is Gone! Pale Rider
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This is pathetic. prior to 1980, conservatives and conservative publications like the WSJ editorial page actually opposed deficit spending! Now the Republicans in the Senate (not the House where there is no filibuster) have blocked efforts to pay for the tax effect of keeping the AMT from hitting millions of Americans and they sound HAPPY about it!

So there will probably be a waiver from the paygo rules to prevent the train wreck that would occur if nothing is done and the minimum tax suddenly hitting millions of taxpayers that it was never intended to cover. But the Republicans will not always have the political leverage that they have on this AMT issue to force deficits on other budget issues.

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#869723 - 12/10/07 04:01 PM Re: Demo's PayGo is Gone! Yossarian
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You can't tax your way to prosperity, well except when you are liberal politicians
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#869727 - 12/10/07 04:04 PM Re: Demo's PayGo is Gone! Pale Rider
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But you can certainly borrow-and-spend your way into budget deficits if you are a conservative politician! Are there ANY deficit hawks left in the GOP?

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#869730 - 12/10/07 04:07 PM Re: Demo's PayGo is Gone! Yossarian
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the deficit is around 1% of GDP, that is historically on the low side

Keynsian econ is not the way to go
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#869741 - 12/10/07 04:18 PM Re: Demo's PayGo is Gone! Pale Rider
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But from FY 2000 to FY 2006 it went from a $236 Billion surplus to a $248 billion deficit! That's close to HALF A TRILLION of change in a negative direction! CBO Budget data

Doesn't that bother you at all?

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#869764 - 12/10/07 04:49 PM Re: Demo's PayGo is Gone! Yossarian
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That is a function of the dot-com bubble and burst, and spending that has grown, not an indication that taxes are too low. Look at what happened to federal revenues after the '03 implementation of the Bush tax cuts. But you know all this.

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#869786 - 12/10/07 05:02 PM Re: Demo's PayGo is Gone! Jokerman
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Your "dot-com" claim is just frivolous.

Quote:
Look at what happened to federal revenues after the '03 implementation of the Bush tax cuts.


'03 Implementation????????? What about the '01 implementation of the '01 cuts? 2001 tax cuts

The 2003 cuts were the SECOND round of cuts. But you knew that.

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#869822 - 12/10/07 05:25 PM Re: Demo's PayGo is Gone! Yossarian
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The immediate implementation of the '01 tax cuts was immaterial, because the Democrats were using the filibuster to their advantage and making the Republicans adopt tax cuts through the budget process - the Republicans had to structure it so that the ssignificant rate cuts were all in the later part of the 10-year period. The rate cuts came in earnest with the '03 bill after the Republicans gained Senate leverage in the Nov '02 elections. But you know that.

[edited to add: I should note, for anyone who thinks I don't have any criticism to offer about the Bush administration, that that's abysmally bad economic policy - telling the taxpayers that if they wait to realize income they'll pay a lower tax rate on it; when you're going to cut taxes, do so immediately.]

As to the "dot-com" claim, here's what the New York Times had to say about it last year:

Quote:
The unpredictable tax revenues first surfaced almost 10 years ago, as booming economic growth and the dot-com frenzy propelled the stock market to spectacular highs. The result was a tidal wave of tax revenue that far eclipsed projections by both the White House and the Congressional Budget Office. As if by magic, budget deficits disappeared and turned into surpluses.

For the most part, the Congressional forecasts missed the mark by less than 4 percent from 1982 until 1995. But starting in 1996, when the dot-com frenzy erupted in earnest, the agency began undershooting by as much as 9.5 percent. In 1996, tax revenues came in $93 billion higher than expected; in 1997, they were $163 billion higher; in 1999, they were $152 billion higher.

When the dot-com bubble popped in 2001, and the economy slid into a brief recession, tax revenues plunged $308 billion below what the Congressional Budget Office had predicted and remained depressed for the next three years.


Are you now going to claim that the source is biased?

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#869925 - 12/10/07 07:35 PM Re: Demo's PayGo is Gone! Jokerman
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Hmmm, crickets again, just like in the breastcancer/abortion thread after I posted the website unrelated to Newsmax identifying the PAPRI Study.
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#869948 - 12/10/07 07:58 PM Re: Demo's PayGo is Gone! TheManofSteel
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and we all know that budget defecits are not necessarily bad unless taken into the entire economic picture...
Defecits are often beneficial
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#869970 - 12/10/07 08:28 PM Re: Demo's PayGo is Gone! TheManofSteel
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CRICKETS!!!!!!!!
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#869997 - 12/10/07 08:53 PM Re: Demo's PayGo is Gone! Sound Tactic
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cleaerly the scope of this discussion has surpassed the knowledge of BOLposters(myself included)... guess we should revert back to the name calling and finger pointing...
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#870056 - 12/10/07 09:34 PM Re: Demo's PayGo is Gone! Yossarian
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Quote:
Now the Republicans in the Senate (not the House where there is no filibuster) have blocked efforts to pay for the tax effect of keeping the AMT from hitting millions of Americans and they sound HAPPY about it!


I guess that sounds better for you than, "the Republicans didn't think that offsetting a tax cut with a corresponding tax increase was the best policy." Maybe (as they say) they would rather pay for the tax cut with a corresponding reduction in spending? Now there's a thought!
Last edited by rainman; 12/10/07 09:35 PM.
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#870088 - 12/10/07 09:53 PM Re: Demo's PayGo is Gone! rainman
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Originally Posted By: rainman
Quote:
Now the Republicans in the Senate (not the House where there is no filibuster) have blocked efforts to pay for the tax effect of keeping the AMT from hitting millions of Americans and they sound HAPPY about it!


I guess that sounds better for you than, "the Republicans didn't think that offsetting a tax cut with a corresponding tax increase was the best policy." Maybe (as they say) they would rather pay for the tax cut with a corresponding reduction in spending? Now there's a thought!

or possibly the fact that a defecit was a good idea at the time...
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#870204 - 12/11/07 03:44 AM Re: Demo's PayGo is Gone! Jokerman
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Quote:
Federal Reserve Chairman Alan Greenspan said Thursday that his support for tax cuts in early 2001 unintentionally encouraged policies that helped swing the federal budget from surplus to record deficits.

In addition, he explicitly said for the first time that he expects tax increases to be part of any bipartisan agreement on deficit reduction.

But Greenspan, responding to questions during a Senate Budget Committee hearing Thursday, said it was unfair for critics to ignore the warnings in his January 2001 congressional testimony that the surplus forecasts might be wrong and his recommendation of some trigger mechanism that would limit tax cuts if certain budget targets were not met.



Greenspan on tax cut effect

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#870205 - 12/11/07 03:49 AM Re: Demo's PayGo is Gone! rainman
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Quote:
I guess that sounds better for you than, "the Republicans didn't think that offsetting a tax cut with a corresponding tax increase was the best policy." Maybe (as they say) they would rather pay for the tax cut with a corresponding reduction in spending?


No, they just don't want to pay for anything. They got away with spending increases and tax cuts at the same time for many years. They know that's better short-term electoral politics than being fiscally responsible. It's very easy to get people to accept tax cuts without any pain. Eventually the free lunch ends and someone has to pay.

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#870250 - 12/11/07 02:13 PM Re: Demo's PayGo is Gone! Yossarian
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Yoss' your post for Greenspan's article supported your argument about deficit spending but did not rebut anything that TT said.
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#870357 - 12/11/07 03:41 PM Re: Demo's PayGo is Gone! Sound Tactic
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I have very little time these days to post on here but it's hard to do anything with an opinion like saying the 2001 cuts were "immaterial". The rate cuts were effective in 2001 and they even gave tax rebates that year, remember? I consider that very material and Greenspan acknowledges the effect of the cuts.

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#870387 - 12/11/07 04:00 PM Re: Demo's PayGo is Gone! Yossarian
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If the rate cuts were all effective in '01, then what did the '03 bill accomplish?

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#870390 - 12/11/07 04:05 PM Re: Demo's PayGo is Gone! Jokerman
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Yes I remember the tax rebates, but as someone who owned a business doing people's taxes on the side, I also saw tax rates declining during the entire period (for all people - although the Democrats just claim it was to businesses and the wealthy).
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#870392 - 12/11/07 04:06 PM Re: Demo's PayGo is Gone! Sound Tactic
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http://www.moneychimp.com/features/tax_brackets.htm

Check this out Yoss, they were going down that entire period.
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#870417 - 12/11/07 04:17 PM Re: Demo's PayGo is Gone! Sound Tactic
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He knows, Shemp. He knows. He knows that the major impact from the cuts were all scheduled for the later part of the 10-year budget period.

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#870536 - 12/11/07 05:27 PM Re: Demo's PayGo is Gone! Jokerman
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Originally Posted By: Tom Thumb
He knows, Shemp. He knows. He knows that the major impact from the cuts were all scheduled for the later part of the 10-year budget period.


I guess from his respones I am not sure he does. Maybe he does, but then he is arguing something that is irrelevant.

Originally Posted By: Yoss
Your "dot-com" claim is just frivolous.


Quote:
Look at what happened to federal revenues after the '03 implementation of the Bush tax cuts.


'03 Implementation????????? What about the '01 implementation of the '01 cuts? 2001 tax cuts

The 2003 cuts were the SECOND round of cuts. But you knew that.


And he thinks that the defecit surplus was not supported by the dot com stuff? I don't get this? I would debate that there was no surplus:

http://www.worldfreeinternet.net/news/nws174.htm
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