David Stockman on Budget Reforms
By Barry Ritholtz - February 10th, 2010, 8:43AM
Very surprising commentary:
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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
February 10th, 2010 at 10:13 am
From around 6:30:
“the politicians are faking, in both parties but the Republicans especially. The Republicans think their mission in life is to cut taxes. Sorry, game over. We’re now in the tax raising business, and we’re going to be in the tax-raising business for the next decade.”
More (with my…enthusiastic…commentary) here:
http://www.asymptosis.com/david-stockman-on-starving-the-beast-game-over.html
February 10th, 2010 at 11:23 am
It will be vital for people like him and Bruce Bartlett to chip away at the false prescriptions being bandied about by the Supply Side School. As long as Kudlow has a platform and access to those like mined partisans the echo chamber will not cease. We need higher taxes, spending cuts (including defense), entitlement reform and honesty. The honesty part is a prerequisite.
February 11th, 2010 at 12:31 pm
I didn’t hear any comments from Stockman about Budget Reform, so the headline for the interview is misleading. I did hear him talk about regulatory reform for banks and support for higher taxes. Cutting taxes is not the same as budget reform, which would also require a massive reduction in government spending. Although I agree with Stockman’s statement that lower tax rates don’t reign in gov’t spending, if he thinks raising taxes will significantly raise revenues for the US Gov’t, he doesn’t understand economic history. Higher tax rates will result in a shift in behavior towards tax avoidance. Wealthy individuals have numerous means to shelter income from taxes, and the already over-burdened middle class (which can’t shelter income to the same degree) will take the majority of the hit.
The average American is already paying over 50% of income for taxes if you include state and local, social security, Medicare, etc. It’s very hard to build up savings when that’s the case.
Looking at it from a Chicagoan’s perspective, Cook County raised the sales tax to 10.2% from 9 something, now the highest in the country. Revenues dropped like a stone and now most of the alderman who voted for it are trying to undo it. Illinois already has a horrible track record on job creation, but now the governor wants to double the income tax to 4%, which will cause even more wage earners and jobs to flee the state. Higher Federal tax rates will compound the pressure on the middle and upper-middle class even further, leading to a continuation of depressed economic activity. Sluggish economic activity won’t lead to higher tax revenues. The whole point is, an economic system is a behavioral system, not a straightforward mathematical system like some people seem to think. Increases in taxes do not create dollar for dollar increases in revenues, and tax increase decisions shouldn’t be made in a vacuum.
February 13th, 2010 at 8:21 pm
Budget Reform : Monetary Policy Redo
Another Modest Proposal: The IRDC Super Party: The Independent Republican Democrat Centrist Super Party
The global monetary-banking-financial system that forms the basis for possibilities of reasonably fair and socially beneficial economic growth is …. simply … broken.
The self designated defacto fixers of that broken system are in fact both the principal causal elements of the broken system and the members and beneficiaries of the current broken system.
With the old system’s failed and bad rules enforced by its current principal beneficiaries, the broken system will never be fixed.
There will only be more disproportional rewards for the owner of the broken system: the self acknowledged too big to fail financial industry.
SNIP