Lieberman Proposes War Tax (1 Viewer)

[THAJCODE]

An outspoken supporter of the Iraq war on Tuesday called for a new tax to pay for its astronomical cost as Congress opened a debate on President George W. Bush's $2.9 trillion budget plan for next year.

Sen. Joseph Lieberman of Connecticut proposed a "war on terrorism tax" at a Senate hearing during which he said the Pentagon's $622 billion defense budget proposal for fiscal 2008 threatened to crowd out funds for domestic programs.

http://today.reuters.com/news/artic...06250358_RTRUKOC_0_US-USA-BUDGET-CONGRESS.xml

This one's really going to confuse war mongers...it's a tax, which is bad, but it's for war, which is good.

 

[Doobsdemons]

Why is the first response from politicians, more taxation? Heaven forbid they cut the budget. Demos and Reps will tax the American people to the grave but never cut any spending. Wunderbar!

 

[NCSaint]

"threatens to crowd out funds for domestic programs" is an understatement.

I do like that the Senator is trying to bring focus to this issue though. This Iraq fiasco (yes this is officially a fiasco) is breaking us. This could be the mechanism that brings us (The US) to our knees. As we the Citizens shuffle the deck chairs on the titantic Bush is full steam ahead into the iceberg.

 

[dapperdan]

"threatens to crowd out funds for domestic programs" is an understatement.

I do like that the Senator is trying to bring focus to this issue though. This Iraq fiasco (yes this is officially a fiasco) is breaking us. This could be the mechanism that brings us (The US) to our knees. As we the Citizens shuffle the deck chairs on the titantic Bush is full steam ahead into the iceberg.

I realize that this is a political issue for you, not an economic issue.

But from a current economics standpoint, none of what you say holds water.

Statement: "Threatens to crowd out funds for domestic programs"
Fact: Bush is the biggest spender on domestic programs in our lifetime, by far. He is the big daddy of spending. Bush treats domestic spending much like Nixon did, he uses it as a political tool. Liberals could only dream of being able to spend on domestic programs like Bush has.

Statement: "This Iraq fiasco (yes this is officially a fiasco) is breaking us. This could be the mechanism that brings us (The US) to our knees."
Fact: You could be quite right from a foreign policy standpoint, at this point, no one knows for sure. But from an economic standpoint, it's nothing but empty rhetoric. The fact is, in relation to total U.S. govt budget receipts, the Iraq war is a relatively small war. very manageable. I believe that you'd have better luck trying to argue that the return on our spending is negligible, that we're wasting money; that argument would be more interesting. The truth is, we can easily afford this war, given the current state of the economy.

This isn't just my empty rhetoric, take a look at the financial markets. If what you are saying were true, the dollar would be collapsing and the interest rates would be heading much higher, in fear of the US monetizing it's debt. Federal deficits would be out of control. None of this is occurring.

All this political chicken little stuff regarding the deficits ballooning out of control, the economy in shambles,etc is just amazing considering that none of this is occurring. It only serves to highlight the lack of critical thinking by those engaging in such talk.

Political critics on the left state that the deficit is out of control. The actual deficit numbers coming in show that the deficit is coming down much faster than anyone predicted.

Critics point to "massive war deficits" which aren't massive at all. Whatever deficits there are, they are easily being absorbed into the financial markets. Just yesterday we had a 3 year treasury auction that was incredibly well received.

 

[dapperdan]

Here's a curveball:

Corporate tax receipts, measure by a 12 month rate of change of a 12 month summation of tax receipts, peaked in February 2006, increasing by 24.9% over the year ago period; the peak month during the Clinton years, August of 1994, with a 15.99% year over year increase. Corporate taxes, as measured by increases in actual tax receipts are going up at a much greater rate under Bush than they ever did under any other President in at least the last 20 years.For technical reasons in the data, I can only go back to May 1985.

The current year over year corporate tax increase is holding steady at an extremely robust 18.94%. In fact, the current economy has been generating corporate tax revenue increases at a rate higher than the peak Clinton month, every month for the past 25 months. This is not a aberation.

The only moral of the story, for both the left and the right, is before proclaiming Bush to be Corporate America's best buddy, it might make sense to take a look at the numbers first.

 

[Saint by the Bay]

Political critics on the left state that the deficit is out of control. The actual deficit numbers coming in show that the deficit is coming down much faster than anyone predicted.

Critics point to "massive war deficits" which aren't massive at all. Whatever deficits there are, they are easily being absorbed into the financial markets. Just yesterday we had a 3 year treasury auction that was incredibly well received.

No, everyone that's not a rabid blind partisan says the deficit is out of control. Throwing out the "left" feign to distract from the issue is pretty lame.

The reality is we are running a deficit that is higher than the GDP of all but 25 nations. It's nice smoke and mirrors to hit "Republican Defenders Economics Weekly" for some dazzling obscure proof it's just left wing loonieness but the reality is how much better would the economy and our situation be if we weren't running quarter of a trillion dollar deficits? Pulling out the "the debt is going down" talking point is equally misleading. It's not going down, it's just not as high as they originally predicted. It's still a completely ridiculous amount.

 

[dapperdan]

No, everyone that's not a rabid blind partisan says the deficit is out of control. Throwing out the "left" feign to distract from the issue is pretty lame.

The reality is we are running a deficit that is higher than the GDP of all but 25 nations. It's nice smoke and mirrors to hit "Republican Defenders Economics Weekly" for some dazzling obscure proof it's just left wing loonieness but the reality is how much better would the economy and our situation be if we weren't running quarter of a trillion dollar deficits? Pulling out the "the debt is going down" talking point is equally misleading. It's not going down, it's just not as high as they originally predicted. It's still a completely ridiculous amount.

Well, actually I hit economy.com and the Federal Reserve Board of St.Louis' website. I put the numbers together myself. I used to post these spreadsheets, but I don't believe we have that capability anymore onthe new SR boards.

Re the deficits in comparison to other nations, what studies/reports are you using? From what I read recently, our deficits are lower than virtually every country participating in the EU. That's off the top of my head, so I don't have the backup documentation for that statement, but I'm pretty certain I'm correct.

The annual federal deficits are much lower this year than last year. Of course, any deficits, no matter how small will increase the total national debt. But at the heart of the matter is the fact that the ultimate judge of whether these deficits are manageable or not is not you or me; the financial markets themselves ultimately make that judgement. And they have judged that whatever war costs we are incurring, whatever deficits are being added, are easily manageable within the structure of our overall economy.

 

[Saint by the Bay]

Well, actually I hit economy.com and the Federal Reserve Board of St.Louis' website. I put the numbers together myself. I used to post these spreadsheets, but I don't believe we have that capability anymore onthe new SR boards.

Well the comment was clearly a joke or at least I hope that magazine doesn't exist.

I know you have a very good understanding of these things, much better than me. However, I also think peoples perspectives even when they are knowledgeable gets run through the paint shop of their own biases before we all get to see them.

In my case I'm biased toward fiscal responsibility. That to me means controlling spending and balancing a budget which go hand in hand. Nobody can ever convince me it does no harm to spend money you don't have. Incurring unnecessary debt is just bad business. The last 6 years have been absolutely amazing and it's not the wars fault but the refusal you noted by the Bush Administration to control spending or veto anything that came from the Republican Congress.

This country needs a major overhaul of it's budgetary process. We need a balance budget amendment with an exception for a real Constitutionally declared war. We need line item veto to help trim pork. We need legislation requiring spending be related to the primary subject of the bill and spending caps on bills.

We need a lot but playing the debt off as unimportant encourages this continued irresponsible behavior.

 

[dapperdan]

No, everyone that's not a rabid blind partisan says the deficit is out of control.

Simply not true. Name some nonpartisan economists that can back up your statement.

 

[Saint by the Bay]

Re the deficits in comparison to other nations, what studies/reports are you using? From what I read recently, our deficits are lower than virtually every country participating in the EU. That's off the top of my head, so I don't have the backup documentation for that statement, but I'm pretty certain I'm correct.

I said the current expected 250 billion dollar deficit is higher than the GDP of all but 25 nations.

 

[blackadder]

I realize that this is a political issue for you, not an economic issue.

But from a current economics standpoint, none of what you say holds water.

Statement: "Threatens to crowd out funds for domestic programs"
Fact: Bush is the biggest spender on domestic programs in our lifetime, by far. He is the big daddy of spending. Bush treats domestic spending much like Nixon did, he uses it as a political tool. Liberals could only dream of being able to spend on domestic programs like Bush has.

Statement: "This Iraq fiasco (yes this is officially a fiasco) is breaking us. This could be the mechanism that brings us (The US) to our knees."
Fact: You could be quite right from a foreign policy standpoint, at this point, no one knows for sure. But from an economic standpoint, it's nothing but empty rhetoric. The fact is, in relation to total U.S. govt budget receipts, the Iraq war is a relatively small war. very manageable. I believe that you'd have better luck trying to argue that the return on our spending is negligible, that we're wasting money; that argument would be more interesting. The truth is, we can easily afford this war, given the current state of the economy.

This isn't just my empty rhetoric, take a look at the financial markets. If what you are saying were true, the dollar would be collapsing and the interest rates would be heading much higher, in fear of the US monetizing it's debt. Federal deficits would be out of control. None of this is occurring.

All this political chicken little stuff regarding the deficits ballooning out of control, the economy in shambles,etc is just amazing considering that none of this is occurring. It only serves to highlight the lack of critical thinking by those engaging in such talk.

Political critics on the left state that the deficit is out of control. The actual deficit numbers coming in show that the deficit is coming down much faster than anyone predicted.

Critics point to "massive war deficits" which aren't massive at all. Whatever deficits there are, they are easily being absorbed into the financial markets. Just yesterday we had a 3 year treasury auction that was incredibly well received.

Find yourself a chart of the dollar's value over the last 5 years. Look at the price of gold over the same time, and the movement in interest rates.

The danger is certainly there. What keeps the floor under the dollar is Asian purchases of our T-bills. They recycle the dollars they earn through trade back into our budget deficits. That keeps the whole cycle running.

The Chinese and Japanese are not necessarily thrilled about this but if they don't, the dollar would collapse, severe recession or depression would set in here and then be transmitted to their own economies when strapped American consumers stop buying their cars and electronics.

Our economy is propped up by foreign borrowing and we are vulnerable. Should they decide to stop recycling dollars we are in big trouble.

Already the state of our budget and trade deficits have the Chinese looking to diversify their reserves away from the dollar. In some crisis this could lead to a stampede that would cripple the currency.

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/09/AR2006010901042_pf.html

 

[dapperdan]

Well the comment was clearly a joke or at least I hope that magazine doesn't exist.

I know you have a very good understanding of these things, much better than me. However, I also think peoples perspectives even when they are knowledgeable gets run through the paint shop of their own biases before we all get to see them.

In my case I'm biased toward fiscal responsibility. That to me means controlling spending and balancing a budget which go hand in hand. Nobody can ever convince me it does no harm to spend money you don't have. Incurring unnecessary debt is just bad business. The last 6 years have been absolutely amazing and it's not the wars fault but the refusal you noted by the Bush Administration to control spending or veto anything that came from the Republican Congress.

This country needs a major overhaul of it's budgetary process. We need a balance budget amendment with an exception for a real Constitutionally declared war. We need line item veto to help trim pork. We need legislation requiring spending be related to the primary subject of the bill and spending caps on bills.

We need a lot but playing the debt off as unimportant encourages this continued irresponsible behavior.

I think we can agree on virtually everything you say. In an ideal world we would have fiscal responsibility. But, unfortunately, we've got what we've got. There are solutions, but typically solutions of this magnitude are only turned to in times of severe desperation. Realistically, we've been moving forward with virtually the same system of government spending parameters for over 40 years; I would say the demarkation point came withthe Great Society programs of LBJ. Ever since then, we've been fortunate that advances in productivity have allowed the governements (federal and state) to absorb slightly increasing levels of economic production without a major impact on the lives of our citizens. A blend of a creeping federal socialism with a much more productive private sector.

 

[Saint by the Bay]

Simply not true. Name some nonpartisan economists that can back up your statement.

Anyone I name will be defined as partisan because believing the debt is a problem makes you partisan to other partisans. Frankly I don't pay much attention to the names of the people I'm reading or listening to on the economy as I take more of a common sense approach to these things. Spending money you don't have = bad.

However I consistently hear economists on conservative radio and television lambasting the deficit and the Bush Administrations spending habits. I'll start paying attention to names since it's apparently important to the discussion.

 

[dapperdan]

Find yourself a chart of the dollar's value over the last 5 years. Look at the price of gold over the same time, and the movement in interest rates.

The danger is certainly there. What keeps the floor under the dollar is Asian purchases of our T-bills. They recycle the dollars they earn through trade back into our budget deficits. That keeps the whole cycle running.

The Chinese and Japanese are not necessarily thrilled about this but if they don't, the dollar would collapse, severe recession or depression would set in here and then be transmitted to their own economies when strapped American consumers stop buying their cars and electronics.

Our economy is propped up by foreign borrowing and we are vulnerable. Should they decide to stop recycling dollars we are in big trouble.

Already the state of our budget and trade deficits have the Chinese looking to diversify their reserves away from the dollar. In some crisis this could lead to a stampede that would cripple the currency.

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/09/AR2006010901042_pf.html

Take a look at the dollar's value over the last 25 years. Interest rates are extremely low by historical standards. Gold still hasn't reached the levels of 26 years ago. I'm not saying that you couldn't be right someday. If we attack Iran, all bets are off. But as of right now, there is no crisis.

The Chinese aren't going anywhere with their reserves. They'd have to stop selling to the U.S., and if that occurred, their entire speculative economy would go down like a suffle. The U.S. is much more important to the Chinese, economically, than the Chinese are to us. Don't get me wrong, it's best if we cooperate with each other, but I believe you are underestimating the level of speculation involved in the Chinese economy. They've got some serious issues to deal with. Now, maybe on the margin, they look to diversify, but their core holding aren't going to change much. We'll see what happens when they decide to float the yuan.

 

[dapperdan]

Anyone I name will be defined as partisan because believing the debt is a problem makes you partisan to other partisans. Frankly I don't pay much attention to the names of the people I'm reading or listening to on the economy as I take more of a common sense approach to these things. Spending money you don't have = bad.

However I consistently hear economists on conservative radio and television lambasting the deficit and the Bush Administrations spending habits. I'll start paying attention to names since it's apparently important to the discussion.

Well, that's one of the reasons why I point out the financial market's reaction to the current situation. The financial markets are, truly, nonpartisan. Whatever Rush or Hannity or Michael Savage has to say on the right, or Air America has to say on the left; the financial markets don't really care, the markets are non-partisan.