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Re: Romney's Budget Fairy Tale 

By: Decomposed in FFFT | Recommend this post (1)
Wed, 16 May 12 5:38 PM | 50 view(s)
Boardmark this board | Food For Further Thought 		Msg. 42023 of 65535
(This msg. is a reply to 42021 by clo)
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clo,

Your author doesn't seem to grasp that today, taxes and spending are BOTH sky high. They both need to be lowered tremendously.

I don't advocate maximizing tax intake for the government. But even if that WERE the goal, the way to do it is *NOT* by raising tax rates to ridiculous levels. After all, if government raised rates to 100% of income, it would collect NOTHING because no one would work any longer.

The government would maximize its tax intake by setting rates to some point between ZERO percent and ONE HUNDRED percent. I don't think you liberals understand that. Liberals only want tax rates to go up, without giving any thought to what the optimal tax rate to maximize state income should be. At least, *I* have never heard a liberal say that "the maximum tax rate should be XX%."

Look at California. Its tax collections were far lower than the state projected just three months ago. Why? At least in part because they didn't think about businesses that were closing their doors. If Jerry Brown gets his way (and I think he will), higher taxes will be imposed and still more Business will shut down or leave.

Just watch California and see. When a government increases taxes during weak economic periods, the effect is usually the OPPOSITE of what was intended.




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The above is a reply to the following message:
Romney’s Budget Fairy Tale
By: clo in FFFT
Wed, 16 May 12 5:17 PM 		Msg. 42021 of 65535

Romney’s Budget Fairy Tale
By Jonathan Chait 5/15/2012

Mitt Romney delivered a speech today about the budget deficit. It’s hard to wrap your arms around Romney’s argument, because it’s an amalgamation of free-floating conservative rage and anxiety, completely untethered to any facts, as agreed upon by the relevant experts.

In the real world, the following things are true: The budget deficit was projected to top $1 trillion even before President Obama took office, and that was when forecasters were still radically underestimating the depth of the 2008 crash. Obama did propose temporary deficit-increasing measures, an economic approach endorsed in its general contours, if not its particulars, by Romney’s economists. These measures contributed a relatively small proportion to the deficit, and their effect is short-lived. Obama instead focused on longer-term measures to reduce the deficit, including comprehensive health-care reform projected to reduce deficits by a trillion dollars in its second decade. Obama put forward a budget plan that would stabilize the debt as a percentage of the economy. Obama has hoped to achieve deeper long-term deficit reduction by striking bipartisan deals with Congress, and he has tried to achieve this goal by openly endorsing a bipartisan deficit plan in the Senate and privately agreeing to a more conservative plan with John Boehner, both of which were killed by Republican opposition to any higher revenue.

The story told by Romney is one in which all of these things are either untrue or could not possibly be true. 

Romney elides some inconvenient facts — for instance, by asserting “Then there was Obamacare. Even now nobody knows what it will actually cost,” which is literally true in the sense that precise cost estimates are always impossible, but sounds to his audience like a claim that the program will swell the deficit in vast, unknowable ways. But most of Romney’s speech doesn't even refer to the facts stated above. It's simply orthogonal to facts. It’s a story, one in which Obama increased the deficit because he loves big government and Europe and hates the private sector.

Not only does Romney elide vast swaths of established facts about the deficit, it’s fairly clear that he does not operate within the mainstream understanding of the term “deficit” at all. As Jonathan Bernstein has repeatedly explained, modern Republican behavior and even language in relation to the deficit is completely nonsensical if you understand “the deficit” to mean the gap between revenue and outlays. Republican use of the term only makes sense if you define “the deficit” to mean “spending Republicans don’t like.” That’s why Republicans consider it impossible to believe that one could simultaneously extend health insurance to the uninsured while reducing the deficit.

Look at Romney’s terms to describe deficits, and it’s pretty clear he has adapted himself to his party’s conceptualization of it. His speech includes the following phrases:

a financial crisis of debt and spending

Washington has been spending too much money

out-of-control spending sprees, or to piling up massive amounts of debt

This is why I do not, for one moment, share my opponent’s belief that our spending problems can be solved with more taxes.

In Romney’s telling, the terms debt and spending are essentially interchangeable. When presented with Obama’s position — that the solution to the debt ought to include both higher taxes and lower spending — he rejects it out of hand. Naturally, Romney has admitted before that his budget plan “can’t be scored.” It’s an expression of conservative moral beliefs about the role of government.
While loosely couched in budgetary terms, Romney is expressing an analysis that resides outside of, and completely at odds with, mainstream macroeconomic forecasting and scoring assumptions. 

http://nymag.com/daily/intel/2012/05/romneys-budget-fairy-tale.html

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