I have encountered stern resistance in the past here when I suggested that Reagonimics was a disproven theory. I keep seeing analysts saying that cutting taxes to raise government revenues is the best way to increase revenues. However I cannot think of a time when our government has fixed its budget problems by cutting taxes.

Sure a growing economy is the best way to increase revenues. But the wonderful idea of cutting taxes, spurring the economy and raising more taxes by charging a lower rate doesn't play out in reality. Also if this pyramidish scheme worked how long would it take until we got rid of almost all taxation.

It is a politician's fairy tale as far as I can tell. When has it worked? Because the system we used in the 90s seemed to be pushing us along pretty darn well.

Simple, it actually worked. The fact is revenues went up..WAY up but, the Congress spent, as usual, more than came in. That is plain and simple fact. It's funny the revisionists out there. JFK BTW was the genious behind that plan and gues what? Revenues went up. Amazing.

Darcaine

Bush doesn't really practice Reagonomics. He seems to lower taxes and raise spending. Reaganomics is now Bushonomics, lower taxes to the wealthy, raise tariffs and add more spending. These new tax cuts have not helped the economy that much if all. We did really well a couple of years ago before the tax cut. What Bush needs to do is cut pork, stop corporate welfare, and spend money wisely to make more jobs availible. That should work, call it Rancidomics.

So Reagan gets the credit for the tax cuts passed through congress but he gets no blame for the budgets? Under Reagan the deficits soared. I really don't recall any news of JFK's supply side spending. And the Reagan deficit was in peace time so there was no good justification except for passing the buck or bucks to later administrations. So no, it didn't work.

Whoa are you off base. Reagan was in the cold war. If you notice the Congress passed his tax cuts...which were effective. They just spent more than was coming in. You are again wrong...and why are you answering your own post if you already THINK you know the answer?

Darcaine

Partly right exept the government cannot provide jobs very well. Without the tax cuts that we woulda had one hell of a recession thanks to the "credit card" economy of the 90's. I agree cut pork get government out of doing things it's not supposed to be doing. Geez..let me think...I am middle class and I get a tax break does that make me wealthy? You are caught in the *** NOTICE: THIS WORD IS AGAINST THE RULES. FAILURE TO REMOVE IT WILL RESULT IN A STRIKE. *** liberal talking points. It sounds good but no facts.

Darcaine

Methinks, Darcaine, that you are pointing out the mote in the eyes of RU and Eeyore, while ignoring the log in your own. They addressed specific issues, which you respond to with the declaration that liberal "talking points" are no more than bovine excrement. Oh, it is indeed funny, the revisionists out there.

Are you enamored of facts, Darcaine? Provide a few yourself.

Household shares of aggregate income
1967-1980, bottom 20% 4.0 to 4.3 (+7.5 shares)
1967-1980, top 20% 43.8 to 43.7 (-0.2)
1967-1980, top 5% 17.5 to 15.8 (-9.7)

OK, so this shows not that the rich were getting poorer, but that the ratio of top to bottom was lessening during this period. Lets move on:

1980-1993, bottom 20% 4.3 to 3.5 (-11.6)
1980-1993, top 20% 43.7 to 50.1 (+7.3)
1980-1993, top 5% 15.8 to 22.4 (+17.7)

hmmmm. It seems that in the eighties, things were pretty good for those who were already wealthy.

(all data US Census Bureau)

"Trickle down" only "worked" in the sense that the poor in our society were indeed trickling down. There's a reason they called it "voodoo economics," Darcaine. But more importantly, perhaps you could stand to do a little less blanket deriding of liberals and their brains. Disagreement is one thing, but it can be done with a modicum of respect as well.

We should focus on wealth creation, not equality of income. Do you think we would be better off if the numbers read like this:

Bottom 20%: 20%
Top 20%: 20%
Top 5%: 5%

The income of the wealthy is, on a real and percentage basis, effected greater than the poor during busts and booms. In 1980 we were in the midst of a lengthy recessionary period, by 1993 we had experienced a decade of a relatively robust economy. That is why 1993 had a higher concentration of wealth in the higher income brackets than 1980.

Short term tax cuts can help stimulate an economy, so can deficit spending. Long term tax cuts without cuts in spending make no more sense then the Keynesian notion that, due to the multiplier effect, deficit spending will erase deficit spending.

Cut taxes and cut government that is a program I can favor.As Galbraith stated "It is more conservative to tax and spend, than borrow and spend."

I agree that Gov't spending needs to be cut, but the idea that the gov't should spend more money to "make jobs avail" does not make sense. The only way the gov't can create jobs is to add more federal employees, who they pay with money taken from taxes. The gov't does not in reality "produce" anything, they simply use the money taken from U.S. citizens. I don't understand how people think that giving someone a $400 unemployment check helps the economy more than creating conditions in which it is lucrative and profitable for businesses to grow and as a result hire more employees. You know the old saying "Give a man a fish, he eats for a day; teach a man to fish, he eats for a lifetime." The same can be said about the economy. Would someone rather get a check each month for unemployment from the gov't, or have the gov't help to foster an economic environment in which the company which laid him off can become more profitable and then hire him back? The notion that tax cuts only help the rich does not make sense. If everyone gets an across the board 5% tax cut, does it not make sense that a person paying 100k in federal income taxes get a larger break than someone only paying 10k? That being said, are we now going to apply the same twisted logic to investments? Say someone has $100 in a mutual fund, and another person has $10,000 in that same fund. The fund goes up by 12% in one year. Are we going to say it us unfair that the person who had $10,000 invested made more money? I am sorry, but I just don't see the logic there. Sure people that make more money benefit more from tax cuts than lower income people because, they have more invested.

So Reagan gets the credit for the tax cuts passed through congress but he gets no blame for the budgets? Under Reagan the deficits soared. I really don't recall any news of JFK's supply side spending. And the Reagan deficit was in peace time so there was no good justification except for passing the buck or bucks to later administrations. So no, it didn't work.

This is what I said. Where was I off base? I could not tell from your post. You seemed to reiterate that Reagan should get credit for the tax cuts and pass the blame in the deficits off to Congress.

And I am sorry. I thought we were here to debate so I posted an opinion about an issue and used a question in the title. Is there some rule of debate and discussion that means the person who introduces a strand cannot introduce his opinion?

I calculated government revenues during the Reagan/Bush years and adjusted for inflation. In 1992 government revenues were almost at the level of revenues of 1980. So revenues adjusted for inflation did not increase from 1980 to 1992.

Reagan was in the Cold War? I missed the point there.

You are totally off topic. He was referring to tax revenues. Plus you are totally ommitting the middle 55%.

http://www.house.gov/jec/growth/prosper/prosper.htm

Darcaine

http://www.chariscorp-wordgems.com/decepti...an.deficit.html

Try that link,

Darcaine

Darc.

Nice balance source here. (Inserted Cut and Paste) [from the web site: godblessronaldreagan.com]

That makes me feel comfortable that nobody is pushing an agenda with those numbers.

Surprisingly the sight gives Reagan credit for cutting taxes and puts the blame on Democrats for increasing spending. Even though it shows a large increase in defense spending that when along with the tax cuts.

Inflation was pushing America into the wrong tax brackets. But the Reagan tax cuts went too far and let us run up debt. The fact that it was part of his "plan" to let debt spiral until it had to be dealt with, does not improve my impression of Reaganomics.

That's what really gets me about Reaganomics... The real effect is that a significant amount of the taxes that are sucked up by the IRS each year are used to pay the interest on Reagan's borrowed economy of the 80's. I don't see how anybody can say that it worked when we're still paying for it to this day. I'd rather see 'tax and spend' than 'borrow and spend', anyday. At least with 'tax and spend' you only have to pay for it once instead of over and over again through lofty interest payments.

Yes, but the military spending was one of the key factors of ending the "cold war" to which I was referring and you were questioning. The fact is tax revenues were increased despite a tax cut. Are you spinning off topic?

Darcaine

What is really fascinating Stephan is that the power of the purse is vested in a Congress. The fact is a balanced budget was not achieved until a Republican Congress came into session. For 40 years the Democrats had run our country into the red ink or is that something wish to debate? Reagan had both tax cuts and spending cuts...one was done, the other did not. What is even more fascinating is that the DNC still blames Reagan for the spending when they controlled the Congress. Tax revenues went up and so did spending at an increased rate..thus a deficit. It is a well know FACT that the more money the government takes out of the private sector the less returns you get. Or, has the DNC forgot what JFK (praise be his name) had taught the AND proved to them. The TRUE borrowed economy was the 1990's I dare say. No over site (Enronism), no companies making true profit (ala dot com), and the gutting of our military for which no small part was due to the Republican Congress. If we can control spending we will get out of this mess by growing the economy thus, increasing tax revenues. The federal government is bloated wasteland of fat and pork. It needs to get back to it's primary duties and get out of our lives.

Darcaine

Yes! Now when is either of the two major parties going to cut federal programs? In Bush's short term in office he has championed the biggest agriculture boondoggle in history and imposed steel tariffs.

Spinning off topic?

That Reagan spent and spent. PResident's win budget battles, plain and simple. You persist in saying that the President gets credit for tax cuts while congress gets blamed for the spending.

Who cares what the military spending did? Remember that much of the spending of the previous half century was related to the cold war. Reagan was one of many presidents to use Truman's foreign policy to contain the Soviet Union until it collapsed under its own weight.

Reaganomics ran up a huge deficits. The increased revenues were offset by inflation. Revenues remained stagnant and the bills went up and the Reagan team blamed the spending problems on the 1960s democrats while he failed to try to claim that the biggest programs Social Security and Medicare should be cut.

Reagan and GWB's budgets have been dishonest because they ran up bills for the next presidents to deal with. My standard of living soars if I use all of my available credit. But I am only honestly dealing with my financial situation when I later pay the bills back and the interest on top of that. That is the legacy of Reaganomics and Dubyanomics.

Go ahead and continue your pro-Reagan revisionism and be a good Reagan scholar and call your opponents' views that have been there all along revisionist.

I don't what else to say to you. I have already proven that tax revenues increased and spending increased as well. The fact that revenues INCREASED has nothing to do with the fact the budget wasn't balanced. These are 2 separate issues. Fiscal discipline is the only way they can possibly fix this budget. When 51% of the country is living off the public dole something has to give. Tax cuts work, plain and simple and you would be hard pressed to find a reputable economist that would tell you differently.

Darcaine

Ok, in order for a one dollar tax cut to return $4 in increased income the multiplier has to be 4 to 1. Most economists will tell you it is barely over 1 to 1. It takes greater than $4 in increased income to equal $1 of revenue. The Reagan tax cuts did stir the economy, the cost was budget deficits.

I can tell. No matter what I say you repeat the same reply. If you have $100 and the inflation rate is 10% that year then having $108 the next year is more money but you are not better off.

As for fiscal discipline, where was it on either side of the aisle in the1980s?
Reagan was president during most of the decade and the deficit skyrocketed. If I run a company and my revenues skyrocket but my expenses increase at twice that rate then the ship is sinking.

Precisely, but had Reagan not cut taxes, then taxrevenues would NOT have gone up. The Congress still overspent and we would probably be in a worse condition today. The "aisle" as you put it was a 40 years of a Democratic Congress that pretty much put us into the problems we have today. The fat and pork in the budgets ONLY come through the Congress. What I find fascinating is that Clinton takes credit for balancing the budget when he had absolutely nothing to do with it. As far as I can remember the Congress controls the spending in this country and until someone can prove differently I have made my case.

Darcaine

And so do any tax cuts! That is what Eeyore has been trying to point out this whole time.

You also said and This is disjointed. The President can enact NO tax cuts without the cooperation of Congress.

This is one of the many reasons I've become more libertarian over the years. Conservatives who preach about the greatness of Reagan's tax cuts often chose to ignore the Congress that had to help enact them. However, they are quick to point out that Congress overspent. (Of course, I could go on about the misconceived notions of some Democrats who chose to believe that Clinton was responsible for the boom of the 90's but this is not the thread.)

Presidents may advise on what they feel are sound economic policies but it has been and always will be ultimately up to the representatives of the people to decide how the money is collected and/or spent.

So this rising interest rate thing has nothing to do with the value of revenues? $101 dollars tomorrow is a revenue increase over $100 today. The power of the mantra is alarmingly effective. Say tax and spend democrats enough and the Republicans get absolved of budget deficits. Blame sixties programs when the chart of government debt only goes into orbit in the 1980s.

Here is the budget process. The President (who always has a consensus in his part of the process) plays a major role. The party that has the Presidential veto can win budget battles.

Link

Formulation of the President's Budget
(begins 19 months before Fiscal Year)

Budget Policy Development

President, with assistance from Office of Management and Budget (OMB) establishes general budget and fiscal policy guidelines. (March)
Based on President's decisions, OMB gives federal agencies instructions for budget preparation, along with budget ceilings and economic assumptions. (April)

Compilation and Submission of Agency Estimates

ETA submits budget request to Department of Labor (DOL) Budget Office, based on OMB instructions.
DOL reviews/makes determinations on ETA/other DOL agencies' budget requests.
DOL submits initial budget request to OMB. (1st week in September)

Office of Management and Budget Review and Presidential Decisions

OMB prepares major issues/options for consideration/determination by President, based on agency requests.
OMB reviews agency budgets, holds hearings with agencies, gives "passback" decisions to agencies, and makes decisions on agency appeals.
Federal agencies prepare final budget materials for President's Budget and Congressional committee hearings. (December-January)

Submittal to Congress

President transmits full budget to Congress . (15 days after Congress convenes in January prior to upcoming Fiscal Year)




Congressional Budget Process
(begins 10 1/2 months before Fiscal Year)


Development of Budget Targets

Congressional budget committees report first concurrent budget resolution. (April 15)
Congress completes action on first concurrent budget resolution. (May 15)
Congress adopts second concurrent budget resolution, which sets spending and revenue and other budget ceilings for the upcoming Fiscal Year. (September 15)

Action on Individual Bills

Congressional appropriations subcommittees begin to review budget justifications and hold hearings with each federal agency and draft appropriation bills and reports. (beginning in March)
President provides Congress with mid-session update of budget estimates. (July 15)

Enactment of Appropriations

Congress completes action on appropriations/spending bills. (after Labor Day)
Appropriation bills are sent to the President for approval or veto.
If action on bills is not completed by September 30 or Congress fails to override a Presidential veto of appropriation bills, Congress enacts continuing resolution.

Reconciliation

Congress completes action on budget reconciliation bill so that budget totals for enacted legislation conforms with budget targets in the second concurrent budget resolution.

Yes, but you are out of context Jaime. If the President asked for 2 things tax cuts and spending cuts and he got one and not the other. Simple logic says you credit him for the one he asked for and got not the other.

Darcaine

Simple logic. Yes Reagan gets credit. Democratic Party gets blame. On the count of three you will wake up and the mantra will have taken over your capacity for reason. 1 . . . 2 . . . 3. . . . SNAP

LOL...wake up and still have to educate Dems on common sense.

Darcaine

Holy Crap, I knew I wasn't the only person that thought this way. What liberals don't want to hear is what you said in your post. Of course wealthy people will benefit more from tax cuts, they pay all the taxes. The top 5% of earners in AMerica pay 90% of the taxes. These people also create jobs, invest in companies, drive the economy. How novel that they will get the lion share of tax cuts and capital gains tax savings. Liberals are so jealous of wealthy($250,000/year in my book)people. If liberals are so envious of wealth, why don't they do the things required to obtain it? I am not wealthy, but I like my life, live within my means, and I celebrate the success of those who create jobs, drive the economy. I define success by the state of my marriage, the morality of my life, etc. I think there is room in the world for poor and rich alike, no?

Back to the topic I pulled a comment from Santasdad from another thread about Reagan/Bush deficit spending.

One day the public will realize that "cutting taxes"(easy) means nothing if you don't curb spending (very very hard). Bush knows they don't understand this.

But I know Darcaine, Reagan cut the taxes and the congress spent the deficits even though Reagan then and not Congress gets credit for ending the Cold War by spending a ton of money on defense.

I wish us liberals could just start catching on to this super common common sense.

That's the nature of the beast. The President sets foreign policy in this country. I guess US Government wasn't mandated teaching at your school? The Democrats controlled the Congress for over 40 years and when we FINIALLY got a Republican Congress we got a surplus...how could that be? Please...take as much time to THINK about it as you need.


Darcaine

Where exactly is that surplus? Now this means that the Democrats get credit for passing the Reagan era tax cuts and they get credit for ending the Cold War right? Without their tax cut and spend policies these things never would have happened. (This assumes that Reagan-era programs get full credit for winning the half-century long Cold War)

My repeated point in this section is that you are trying to have it both ways. Either the plan was good or it was bad.

Also, as I thought I pointed out in some detail the president holds the power in budget debates. The single voice of the president starts the process and holds the power of the veto.

The multitude of voices in Congress can then try to pass a budget against the will of the president but it takes a lot of will and a lot of votes. I think the president should get the bulk of the credit AND blame for budgets.

The Rebublican class of 1994 was quite helpful at getting the budget under control and I give those congressmen credit for their role in the balanced budget. But if Clinton chose to stall their program he could have done it single-handedly.

Maybe my government class did too good of a job. It taught me to understand the complexities of our system with a multitude of checks and balances.

Oh, I don't think that the deficit was ever that bad. You compare our debt compared to GDP against any other country I think will would be surprised. It's not fiscal policy that is at fault here it is the fact the stock market adjusted. After the economy picks up things will get better..they always do.

Surplus=in taxation terms=too much money being stolen from the people. Reagan's plan was good, look at it this way...we still have a planet and haven't been nuked by the USSR. Clinton was one thing, he was not stupid...he may have done stupid things but he was smart enough not to challenge the Congress.

Darcaine

Close enough to common ground for this thread. I'll tag out.