Tax-n-Spend vs. Borrow-n-spend

[Shaun @ Tru6]

Now I wish I had taken economics back in school.

Anyone care to compare/contrast with projected ramifications?

[Superman]

With borrow-and-spend, you pay later and you pay more.

[tabs]

Don't you boyz get it.....Clintons tax surplus was due to the fact that the government was taking in more tax revenues than it was spending due to a robust economy...which by the begining of 2000 was begining to turn into a Recession....so that no matter who became President in 2000 (Gore vs Bush), he would be faced with shrinking tax revenues due to a decling economy..

Now as it happened Bush won the election in 2000 and was faced with a recession, there are 2 things you can do to stimulate the economy besides lowering interest rates...one is increase Federal Spending or Cut taxes to stimulate spending....Bush chose tax relief...

Then Bingo along comes 911.. an event that nearly capsized the whole financial system.... what was done was the lowering of interest rates 7 time to a 1% Fed Rate, Tax Relief and NOT CUTTING the Federal Budget...all in the face of Declining tax revenues and having to fight a war on terrorism...

Then on top of that..you have the Enron scandal...which further depressed things alltogether....

Now the hope is that when the economy picks up steam tax revenues will increase and the budget deficeit will go away..or lessen.

Now can you boyz understand why a fiscal conservatyive like Bushy would be willing to be considered a spendthrift....the last Repblican President that cut Federal spending during an economic downturn was Herbert Hoover and you all should at least know what happened then...The Great Depression of the 1930's.

[techweenie]

Is that grape Kool-Aid, Tabs?

[azasadny]

I don't beleive the president or his policies have any immediate effect on the economy. Too complicated and too difficult to manipulate....

[widebody911]

Tabs, you might want to take a closer look at the mushrooms in which they're sautee'ing your steaks at the buffet.

[hardflex]

I think it was Milton Friedman who used to say "without reduced spending, there are no tax cuts, only tax deferrments" . Somebody has to pay for the spending, either now or later.

We're getting into a situation where we are losing control of our own destiny, dependent upon some foreign interest to buy our debts just to keep us going. Not a healthy situation for American autonomy.


If Bush were as conservative as you say tabs, where is his program for cutting spending.

[widebody911]

Originally posted by hardflex
If Bush were as conservative as you say tabs, where is his program for cutting spending.

They're everywhere! He's cutting education for all those silly liberal entitlement programs. Only problem is, he's re-establishing them in Iraq.

[Shaun @ Tru6]

Originally posted by widebody911
Tabs, you might want to take a closer look at the mushrooms in which they're sautee'ing your steaks at the buffet.

At least they're all you can eat. One of Bush's new entitlement programs.

[Shaun @ Tru6]

Really, are there any economists on the board? People who actually analyze this kind of thing for a living?

[campbellcj]

In my view, Tax and Spend policy is at least as harmful -- ceterus parabus (i.e. equal economic conditions at the starting point) higher private-sector unemployment will result, but possibly be countered to some degree by public-sector bloat. With our "American Dream" tendancy to buy-now, pay-later, even greater borrowing will take place at the individual citizen level to "make up" for the lost spending power due to increased taxation. Once accustomed to a certain standard of living or spending level, Americans don't seem to adjust "downwards" very easily!

In other words, I think it has become an inherent behavior of our society to borrow and spend beyond our reach, regardless of the particular administration or economic policy in place at the time. As mentioned above, a given federal administration, in historical terms, can't really effect much meaningful change in the macro economy or socioeconomic behaviors. Those changes take place over decades if not longer...

[bryanthompson]

Like I've said before, it's expensive to buy the entire agenda of the democrats, which Bush has done. Interestingly, I don't remember _ever_ hearing the democrats whine about overspending when they were the ones doing it.

[RoninLB]

"Tax-n-Spend vs. Borrow-n-spend"

simple answer is that the velocity of money is much greater with "Borrow-n-spend".

and a tidbit.
The cowboy is playing hardball with world economics and Europe is paying for it. The world economic order is being re-mapped and India will eventually be closer to the US than socialist Europe both economically and militarly. China's central control deprives flexibility and will always cause radical curves.

In case anyone missed it? we have the strongest growth economy in the world presently and job creation is borderline extraordinary.

[SLO-BOB]

This is a test...............

[turbo6bar]

Originally posted by Sebring77
Hard to disagree with that, except that he left the word "fair" out. Pitting the U.S. labor force against the Chinese indentured servants is like pitting a Hummer against a Yugo in a gas mileage contest. I don't care what you guys say-It's not fair and it will undermine our economy. Not to mention-doesn't anyone give a crap about their fellow Americans anymore?-even if you don't know them-and they live a thousand miles away? Take your heads out of the sand and really look around you.

It's not just Bush. The Dems and Repubs enjoy this. It's not going to end any time soon.

tax vs. borrow: My take is everyone will suffer. Tax = poison now. Borrow = poison later. I'm disappointed few politicians are adopting a stance of cautious spending. The biggest obstacle, in my opinion, is program spending. The budget for these required programs is growing faster than discretionary spending. It becomes increasingly harder to manage the budget when a growing portion of that budget is mandatory ( no control).

[RoninLB]

Originally posted by Sebring77

. I was distracted by all the workers getting laid off.

I'm not an economist, but I suspect the growth you're seeing is not growth that helps keep food on the average guys table.

Pitting the U.S. labor force against the Chinese indentured servants is like pitting a Hummer against a Yugo in a gas mileage contest. I don't care what you guys say-It's not fair and it will undermine our economy. .

workers always get laid off and hired in a fluid economy. A contrast to that is socialist Europe, although Gremany has made some changes that will take a few years to flow thru. Their prob is just about everybody is on the dole one way or another and the elected have to worry about getting re-elected.

Bush's hustle of locking in the farm vote cost us about $200 billion thru some kind of Agriculture Bill. The not mentioned result is more selection and cheaper prices at the groceries for the average guy's table, maybe? He could have spent only $5 billion securing the small scale farmer but he was playing election hardball and most people didn't notice. Taking care of the small farmer is a kind of welfare, but I think most people would not have critized it. His lock on the mid-west industrial's vote thru the steel tariffs cost us probably more than $200 billion.

China's effect has to be managed. The real prob possibilities are outsourcing of white collar jobs in case anyone didn't notice. The economic impact of blue collar jobs are relatively small compared to white collar job outsourcing. We're in a situation that has never existed before. Relating to and modeling on the past is a losing strategy imo.

There is nothing fair about economics. It's one economy at war with another economy and the US is playing economic hardball. China is pacified as long as they're creating jobs. I never hear or read about China complaining of having to buy billions of treasuries to finance our mortgages and other spending.
Japan is a distant another story. Mexico screwed up their chances for hugh economic growth, India won't. IMO India will become a US white collar outsourcing depot if the situation is not properly managed. Playing hardball is necessary imo.

[lendaddy]

Originally posted by widebody911
They're everywhere! He's cutting education for all those silly liberal entitlement programs. Only problem is, he's re-establishing them in Iraq.

Thom,

You're on a roll buddy first the "rumored quote" then education cuts? Neither of these are true. In fact Bush spent like a drunken Kennedy on education in his first term. Even take out the NCLB and spending went through the roof.

Tisk Tisk

[widebody911]

Originally posted by lendaddy
You're on a roll buddy first the "rumored quote"

Nobody has disproven the quote; GWB has made similar statements, which leaves the quote in question in the realm of probability.

[lendaddy]

Originally posted by widebody911
Nobody has disproven the quote; GWB has made similar statements, which leaves the quote in question in the realm of probability.

Oh geez Thom, the Clintons never denied killing Vince Foster either

[Shaun @ Tru6]

Can we get back on topic.