Nearly two weeks ago, I suggested the President let go of his fixation on overhauling of the nation’s health care system and focus in the economy. If he did so, I argued, he’d reverse his slide in the polls and leave Republicans clueless.
Now, a recent helps to confirm my hypothesis. In the FoxNews poll I referenced on Friday, 76% of voters thought “fixing the economy and creating jobs” should be a “higher priority for the federal government” than reforming health care. Only 12% thought health care should be the priority. (H/t to Jennifer Rubin for highlighting this statistic.)
Rubin also seems to think voters may want the President to focus on job creation:
Obama wants to talk health care, but voters in 42 states may wonder why he isn’t talking about jobs: “Forty-two states and the District of Columbia lost jobs last month, confirming that the nation’s labor market continues to deteriorate even as more ‘green shoots’ are sighted in other areas of the economy. Fourteen states and the District suffered double-digit jobless rates in August as the unemployment rate increased in 27 states and the nation’s capital, the Labor Department reported Friday. As a result, states whose budgets have been battered by soaring unemployment, rising social spending and collapsing tax revenues took another big hit in August even as the nation appeared to be climbing out of recession.”
Here on the West Coast, nearly 1 out of every 8 Californians are out of work. I wonder if our junior Senator, who is up for re-election next year, has any plans is currently pushing any policies designed to increase employment in her jurisdiction. On her home-page, she links a video promoting Hate Crimes Prevention, but has nothing on jobs. She also links a release on Small Business Administration (SBA) “low-interest disaster loans” for five counties “to help them rebuild after the devastating Station Fire,” but nothing about programs to reduce the regulatory and tax burden which hurts small entrepreneurs more than large corporations.
It seems that Mrs. Boxer, like her former Senate colleague from Illinois, has priorities which differ greatly from the vast majority of her constituents. That said, given what she and he have done and would like to do to fix the economy, it might be better than they stay away from trying to fix it. Their proposed solutions would only make things worse while increasing the national debt and quite possibly also the tax burden.
But, if they studied policies which worked, maybe they’d change their minds. So, I encourage them to study the economic history of the past eight years. When they do, they’ll learn that high tariffs and excessive government intervention do little to create jobs. But, free markets and reduced rates of taxation do.
Frankly, I see no evidence that the liberals give a crap about the unemployed. They could have taken steps to address the issue on day one. Remember, anybody making money is evil and “monstrous”.
Democrats like high unemployment because it allows them to direct more taxpayer money to their causes in the name of “stimulus”. High unemployment gives democrats more control of the economy, how much money people make, and gives them some new voters in the process.
Crisis, chaos, emergency spending, saving jobs, fending off total collapse, standing up to climate catastrophe, eliminating acne, curing toenail fungus, fending off ghosties and goullies and things that go bump in the night is the work of the Obamamessiah.
How does “dealing” with mass unemployment compare with such a lofty mission?
Surely you must know that the President has already fixed the economy! A well crafted stimulus bill with free money for all saw to that. Thus freeing up much needed time for the administration to move on to bigger and better things!
” I wonder if our junior Senator, who is up for re-election next year, has any plans to increase employment in her jurisdiction.”
Fascinating. How exactly do Senators increase employment?
And what exactly do you wish the President to do on this – something, I imagine, that will be so big, take up so much of his time, that he cannot do anything else. But, at the same time, not increase the federal government’s role in the economy, of course.
Well Tano, tax cuts will help the economy, and reduce government interference. And while there was some sarcasm in there, I’m sure Dan was pointing out that spending bills come from congress, though specifically the house. Unless you count making signs saying ‘we’re spending stimulus money on this sign’ like Dan’s Jr. Senator does.
Tano, thanks for pointing out a sloppy line in my post. I’ll have to change it. I meant what policies she supports to increase employment.
Well, Tano, they could take your advice. They could raise taxes and spend us into prosperity. Greater prosperity forces the greedy, filthy rich to hire people to meet the increased demand for goods and services. As much as the filthy rich enjoy the spectacle of legions of people in misery, the lure of greater wealth and further degradation of the world propels them to go ahead and grudgingly let a little of their money trickle down.
Of course, since Obama has a plan to grow the economy from the bottom up, perhaps Senators should not just tax, but double tax at double time.
I knew the “cut taxes” line was going to be coming – even though that is a pretty bad idea right now – because it just adds to the deficit, and would have no stimulative effect unless people actually spend the money – which they are less inclined to do nowadays. They will just save it.
But even if you go down the road of cutting taxes – why does this preclude other things? Its not just being a bit sarcastic – the theme of this thread is something you hear quite a lot from the right these days – Obama should focus on the economy rather than health care – as if these are mutually exclusive things. Where does this silly notion come from?
Well, even gillie admits that cutting taxes increases revenue, but yes, cutting spending would help too. Why don’t we start with all the stimulus money that hasn’t been spent? And end funding for ACORN and signs saying ‘spending your stimulus money here’!
I knew the “cut taxes” line was going to be coming – even though that is a pretty bad idea right now – because it just adds to the deficit, and would have no stimulative effect unless people actually spend the money – which they are less inclined to do nowadays.
And herein lies the delusional nature of the Obamabots like Tano.
They support handing out welfare checks to people because it puts money into peoples’ hands and they will spend it.
They oppose tax cuts, which also put money into peoples’ hands, because they will save it.
But what’s interesting is what actual facts and economic research show.
A key issue facing the new Obama administration is to what extent the economic stimulus should take the form of spending increases versus tax reduction. One way to think about the issue is the size of the fiscal policy multipliers. The multipliers measure bang for the buck–the amount of short-run GDP expansion one gets from a dollar of spending hikes or tax cuts.
So what are these multipliers? In their new blog, Bob Hall and Susan Woodward look at spending increases from World War II and the Korean War and conclude that the government spending multiplier is about one: A dollar of government spending raises GDP by about a dollar. Similarly, the results in Valerie Ramey’s research suggest a government spending multiplier of about 1.4. (Valerie does not present her results in multiplier form, but she emails me this translation: “The right column of figure 5A of my paper shows that for a log change of government spending of 1, log GDP rises by 0.28, implying an elasticity of 0.28. To back out the implied multiplier, we can use the fact that government spending averages around 20% of GDP. This implies a multiplier of 1.4.”)
By contrast, recent research by Christina Romer and David Romer looks at tax changes and concludes that the tax multiplier is about three: A dollar of tax cuts raises GDP by about three dollars.
In short, spend a dollar and you get a dollar of productivity gain. Cut taxes by a dollar and you get three dollars of productivity gain.
That would seem to be a slam-dunk proposition. The problem here is that the selfish welfare Tano will not benefit from tax cuts because he does not pay taxes. He wants the government to take money from the people who work and give it to him so that he doesn’t have to work or be productive. He thinks the government should raise taxes on working people so that he can get fatter welfare checks. He believes that, if he gets a fatter welfare check, he can spend more of it, and therefore the economy will improve — totally ignorant of the fact that every additional dollar he gets to buy more candy bars is a dollar taken away from someone who could invest it in better equipment, use it to hire new workers, or make other improvements to their business and home, all of which DOES increase wealth and productivity.
But even if you go down the road of cutting taxes – why does this preclude other things? Its not just being a bit sarcastic – the theme of this thread is something you hear quite a lot from the right these days – Obama should focus on the economy rather than health care – as if these are mutually exclusive things. Where does this silly notion come from?
Again, from economic research (pages 40 – 41).
In terms of consequences, there are six main findings. First, tax changes have very large effects on output. Our baseline specification suggests that an exogenous tax increase of one percent of GDP lowers real GDP by roughly three percent. Our many robustness checks for the most part point to a slightly smaller decline, but one that is still well over two percent. Second, these estimated effects are substantially larger than those obtained using broader measures of tax changes, such as the change in cyclically adjusted revenues or all legislated tax changes. This suggests that failing to account for the reasons for tax changes can lead to substantially biased estimates of the macroeconomic effects of fiscal actions. Third, investment falls sharply in response to exogenous tax increases. Indeed, the strong response of investment helps to explain why the output consequences of tax changes are so large. Fourth, the output effects of tax changes are highly persistent. The behavior of inflation and unemployment suggests that this persistence reflects long-lasting departures of output from its flexible-price level, not large effects of tax changes on the flexible-price level of output.
To put that in perspective, 1% of US annual GDP of 14.4 trillion dollars is 144 billion dollars. If Obama imposes a tax of 144 billion, according to Romer’s research, GDP will contract by three times that amount, or $432 billion dollars.
And what does Barack Obama want to do? Impose a tax increase of nearly a trillion dollars for Obamacare, which means GDP will drop by 3 trillion dollars — or just over 20% — in the middle of a recession.
What do you think a 20% drop in GDP is going to do to unemployment, Tano? Does your intellect even comprehend the damage that will do to the country? Or are you so desperately lost in fatting up your welfare check and getting free health care that you honestly don’t give a damn, because you don’t want to work or run a business anyway?
The leftists always ask for suggestions, we give em and they dismiss them.
How can Obama and the liberals increase employment?
We currently have record unemployment amongst teenagers. Wonder why? hmmm Everytime there is a minimum wage increase, unemployment with teenagers spikes. This is record setting like a lot of Democrat and Obama innitiatives. The Democrats raised the minimum wage in stages culminating in this past July’s increase. Teenagers were laid off or simply not hired. Democrats would prefer instead of working they were out committing petty crimes or playing midnight basketball.
Roll back the minimum wage Democrats and more kids would be off the street being productive, paying taxes and feeling good about themselves.
#12 NDT the leftists don’t worry much about unemployment because they think all they have to do is increase the months of unemployment the masses get. Case solved. Problem is unemployment comp funds across the nation are at record lows. They are all almost empty. Who typically fills the funds….employed people. With record HIGH unemployed Obama isn’t getting these safety net accounts filled fast enough. And of course the liberal Democrats have no answers or solutions.
The problem, again, is that because of the Dear Reader’s philosophy of anti-capitalism and Big Government, the more he tries to “fix” the economy, the more he is doomed to fail. It is the path of the Great Depression.
The Great Depression started out as an ordinary recession. Recessions naturally fix themselves: that is, when left alone, people naturally ‘do things’ that make the economy and employment grow in the aggregate. When they are allowed to, and when not given perverse incentives by socialism / Big Government, people will naturally behave to improve their lot: they will start a business (creating jobs), work at the business or job someone else just invented, etc.
It takes a powerful, oppressive government to ruin that. And in the 1930s, that’s what we had. First Hoover, and then Roosevelt, tried and tried to “fix” the economy – and the very effort undermines what *people* naturally do to fix it. Between them, Hoover and Roosevelt took an ordinary and healthy recession – one needed to liquidate speculative excesses from a Fed-created investment bubble, sound familiar? – and dragged it out into a 13-year torment.
FDR has THE single worst economic record of any U.S. President. And Obama is now on the same dark path. Obama is repeating most of the Big Government mistakes of Hoover-Roosevelt. We haven’t had Hoover’s or Roosevelt’s massive tax increases just yet; but give him time. Obama has proposed massive tax increases – see cap-n-tax, and the Baucus bill; and insane levels of spending – see Porkulus, $1.6 trillion deficits and most of all, KopechneCare. Obama has proposed and/or enacted massive increases in regulation that must inevitably lower production, and therefore employment. What he’s still missing is the Smoot-Hawley tariff. But the Dear Teleprompter has started up on that one, too, with his recent steps in the direction of a trade war with China.
The Hoover-Roosevelt-Obama-Democratic Party view that the economy should be very actively managed by government may accurately be termed “fascism”. The essence of fascism is worship of the State as the answer to life’s problems (or at least every problem undergoing public discussion). In the sphere of economics, fascism is that form of totaliarian socialism in which the socialist government pretends to compromise with private enterprise and private property, but directs and expropriates them ‘de facto’ through regulations, controls and mandates. The fact that the fascist government takes such measures in the name of “creating jobs” does not furnish them with actual effectiveness in creating jobs.
ND30,
I’m glad we are keeping you off the streets at least. BUt if you notice, I said that tax cuts are a bad idea NOW. They have zero multiplier effect and zero stimulative effect if everyone just puts the money under their mattress. Multipliers only kick in if the money gets spent – which is not the first priority of people these days. As I said….
Your second response is totally off the wall. And not germane to the issue I raised either – which is why people think that the President cannot both do health care and economy fixing at the same time.
You seem not to have the slightest clue as what you are talking about. First off, the trillion dollars is not a net tax increase. Obama has put his neck on the line making very public promises that he will not sign a bill unless it is revenue neutral.
Secondly, the trillion dollars is OVER TEN YEARS. Thats 100b a year – or 1/140th of GDP. So even if it were a tax increase, which it isn’t, it would not have anywhere near the effect you claim.
You do know, don’t you, that the author of this study that you quote as authoritative is now Obama’s Chair of the Council of Economic Advisors? Right? So relax – the people who you seem to admit know what they are talking about, are in charge.
P.S. to my #15 – I am aware, of course, that Hoover – who started many of the Big Government, anti-business policies that Roosevelt then intensified – was a Republican. Just like George W. Bush, who started many bad policies that Obama has since taken over and intensified. Fascist philosophy, and ignorance about basic economics, unfortunately pervades both of our major parties. But there is a slight difference: the Democrats are a bit worse. Fascist economics aligns most closely with the Democrats’ basic philosophy (that government is the answer to everything).
Oh, this is hilarious.
First off, the trillion dollars is not a net tax increase. Obama has put his neck on the line making very public promises that he will not sign a bill unless it is revenue neutral.
Perhaps we need to slap the ignorant affirmative-action child Barack Obama with what “revenue-neutral” actually means.
In short, if a plan is “revenue-neutral” to the government, it means the government will take in as much as it spends for carrying it out.
From where, pray tell, does the government take in revenues? TAXES.
Thus, in order for a plan that increases government spending to be revenue-neutral, TAXES MUST INCREASE.
This was, after all, the argument that the screaming Obama used against John McCain’s health care plans during the campaign, arguing that the fact that they were “revenue-neutral” proved that they would increase taxes.
BUt if you notice, I said that tax cuts are a bad idea NOW. They have zero multiplier effect and zero stimulative effect if everyone just puts the money under their mattress.
Which is, of course, why the Obama administration wasted billions of dollars on them, then.
Meanwhile, if people are saving money, it isn’t going under their mattress; it’s going into their bank account, where it earns them interest and where it can be leveraged by the bank to extend credit to other people to purchase items like homes, cars, and whatnot.
Tano’s economic idiocy is truly breathtaking –but unfortunately an indicator of the mentality and understanding of economics of the Obama Party. To these neo-Marxists, nothing is of value that does not come from the government. They honestly believe that the value of our currency, the Federal government’s revenues, and everything of the sort originate with and rest upon the government. This is why they so vehemently oppose tax cuts; they are incapable of understanding how taking actions that reduce cost to the consumer can actually generate increased revenue for an entity.
Henry Ford got fabulously stinking rich by REDUCING prices. He was able to make up on volume what he lost on a per-consumer basis. Wal-Mart, every discount chain in the universe works on the same theory — the cheaper something is, the more people are inclined and able to buy it.
Yes; to my point.
Actually, by using capital to raise the productivity of labor. But when you have a hard currency, productivity increases will show up as price decreases; as an expanded production of goods priced ever more affordably. Price decreases are healthy, contra the fascist party’s anti-“deflation” propaganda (i.e., pro-inflation propaganda). But that’s a rant for another time.
Tano:
Oh, I get it! The costs of health care drives the economy. If the government taxes the breath out of those who have not escaped paying taxes and provides “free” government health care (with certain enumerated restrictions) then health care will no longer be a factor in production and services costs.
Let’s try it this way: A slice of pizza sells for $2.00 a slice and $0.50 for each topping beyond sauce and generic cheese. So, we change the basic cost to $6.00 dollar a slice with any 5 toppings of your choice. Sauce and generic cheese count as two toppings. Also, there is a $1.00 surcharge for baking the pizza.
Same difference, but a slight added cost ($1.50) which is only “fair” considering the added complexity, bookkeeping and angst involved.
ND – you really are an economic illiterate, aincha?
“… in order for a plan that increases government spending to be revenue-neutral, TAXES MUST INCREASE.”
That is obviously not true. The government can offset new spending by cutting spending in other areas, without affecting taxes. Which is, of course, precisely where most of the money in the healthcare bills come from.
As to tax cuts, you say two totally contradictory things:
“Which is, of course, why the Obama administration wasted billions of dollars on them,”
“…if people are saving money, it isn’t going under their mattress; it’s going into their bank account, where it earns them interest and where it can be leveraged by the bank to extend credit to other people…”
So which is it. A waste or a stimulus? What is the multiplier for money put in a bank – these days?
And by your silence I guess you have FINALLY figured out – after shooting your damn mouth off for months on this issue – that the number up to a trillion dollars refer to spending over TEN YEARS. How is it possible for a normally intelligent person to discuss this issue for so long and not understand that?
And the ignorant affirmative-action child Barack Obama demonstrates his stupidity once again.
That is obviously not true. The government can offset new spending by cutting spending in other areas, without affecting taxes. Which is, of course, precisely where most of the money in the healthcare bills come from.
“Most” is not “all”. You are lying when you state that any of these bills are revenue neutral; they all involve vast net increases in government spending. You are lying in epic proportions when you state that they will not involve raising taxes; they all raise taxes, despite your idiotic argument that something that is clearly called a tax and defined as a tax in the bill in question is not a tax.
As to tax cuts, you say two totally contradictory things
Wrong, liar Barack Obama; you apparently are so stupid and ignorant that you don’t even remember what you said mere posts ago.
I knew the “cut taxes” line was going to be coming – even though that is a pretty bad idea right now – because it just adds to the deficit, and would have no stimulative effect unless people actually spend the money – which they are less inclined to do nowadays.
YOU said that tax cuts were a waste. YOU said that tax cuts had no value whatsoever. And now you are trying to blabber and spin your way out of the fact that, by your own logic and your own statements, YOU wasted billions of dollars on things that had no stimulative value in your so-called “stimulus” package.
Poor blabbering child. You’ve never been held accountable, have you? Now you’re just throwing tantrums and calling “illiterate” those who quote peer-reviewed studies that show what a load of horse crap your economic theories are. Next you’ll be screaming how I’m a “racist” who should be on “meds” for daring to challenge you and to demonstrate that you’re wrong. Given your obvious status as an intellectual and emotional child, we expect nothing less.
Then what was the point of the paltry $12 a week, or whatever the hell it was, that folks are going to have to pay back? What was all that crowing the other day about consumer spending being up? T
There was back to school shopping and the holidays are coming up. Little Johnny could get that firetruck he wants instead of paying for Michelle’s entourage travelling one block to get vegetables. She could have gotten them from her own mercury-laced garden instead.
Because he has no constitutional authority to “do health care”.
He also made public promises that he would not sign a spending bill without putting it online for 5 days for public scrutiny. So much for that promise. And you already know all the other promises he’s broken, so why in the hell should we believe this one?
“All Barack Obama’s promises come with expiration dates. All of them.”