The Cellar - View Single Post - Laffer curve

tw · 04-13-2001, 08:00 AM

From The Economist of 31 Mar 2001 with editorial parallels to current federal mindset in [ ]s:

""James Gilmore of VA, the man President Bush picked to be the Republicans' national chairman, talks a lot about broadening the party's base. ...

Mr Gilmore ... was elected in a landslide on a promise to do away with the much-loathed annual tax on personal motor vehicles. Virginia is now covered with sprawling suburbs; everyone, Mr Gilmore argued, needs a car, and working families could not afford to pay a tax that ran, in some counties and cities, to $1000 or more a year. Not only would the tax be abolished, but taxpayers would get refunds.

In 1998, the Republican controlled legislature happily [emotion] voted to phase out the tax. Some ... wondered how Virginia would afford both the refunds, and the services and programmes that were partly paid for out of the car tax [thinking logically]; but, at that stage, politicans expected economic growth far into the future [more emotional conclusions]. The state would probably have ample funds to cover a phase out that would cost, said Mr Gilmore, $621m over five years [also the mindset of George Jr's tax cut].

Unfortunately the price of the programmme quickly doubled to $1.2billion [just like Bush says we can pay down the Reagan debt and still cut taxes] ... the cost peaked in the last half of 2000 just as the economy skidded to a standstill. By that point, Mr Gilmore found there was a $421million hole in the budget. He cannot run a deficit: state law does not allow it.

[OK - now we have a politican who has been playing Reaganomics and without a David Stockton to blow a whistle. Curious we now have a President advocating same tax cuts while increasing spending - justifying all this with expectations of continued economic growth. It suggests what we face with Jr's tax cuts - advocated for emotional rather than logical reasons. So what does the VA governor do?].

Mr Gilmore had promised, in 1997, that he would slow down the pace of the car-tax refunds if the economy slowed. [Like a current politican who forgot a Greenhouse gas promise]. He seemed to forget that; instead, he ploughed on with the refunds, and asked at the same time for spending cuts [more Reaganomics also being advocated by George Jr]. ... By March 27th the budget deadline loomed, with no budget and thousands of state workers and teachers without the pay rises the legislature had already promised them.

[Watch - more Reaganomics to such up money anywhere at the expense of the future] At the last minute, Mr Gilmore managed a magic trick. He declared (as the governor can) that the Virginia Retirement System was overfunded and could reduce its rates. This would save state and local governments $125m in contributions, and the money would be spent on the promised pay rises. With this book-keeping fiddle, Viginians can get their refunds and their pay rises too.""

Is that not what Reagan then did to coverup a cash flow problem? Of course. Reagan found sources of cash, then used illegal accounting tricks to strip the FAA, SS, and Highway Trust funds - taking the money without leaving an IOW. (On CNN, the current GAO director was asked the same queston and answered as written above.) George Jr has a future income stream intended to pay down Reagans debts - the 'yet to materialize' surplus. Geroge Jr will take those funds because so many emotionally and incorrectly feel the surplus has already arrived.

Since Bush has his own short term political interests (and "talks a lot about broadening the party's base"), he has others even in the Cellar saying we can pay down Reagan's debts (which we have not started to do yet) AND raise spending AND give a tax cut. Guns and butter? History alone says that does not happen. Ahhh but the tax cut is all about emotion - the facts be damned.

Logic folks. Anyone advocating the Bush tax cut nonsense is only appealing to emotional conclusions - the same reasoning used in Reaganomics and ***demonstrated by the current Republican national chairman***. That is the mindset of tax cuts - the facts be damned.

Logic says that paying down Reagan's debts first has the greatest ROI. Ahhhhh but a man already with a long history of screwing up American foreign relations in only three months and with no history of running successful free market corporatons is considered intelligent? Go figure. Tax cuts are only supported by emotional thinking. We have a perfect example in what to expect from these tax cuts. We have a Republican national chairman's recent history in running government into debt - then using MBA cash flow games to cook the books. The mindset of a President who promoted that governor to Republican national chairman is obvious.

Logics says that anyone finding an advantage to Bush's tax cuts has simply replaced logic with silly emotion. Of course the above story from The Economist is new news to the many who believe in tax cuts - more history to ignore. Facts have a funny way of being ignored when people's thinking is so easily distorted by emotional fiction - such as George Jr's tax cuts to boost the economy.

Some even emotionally believe there is a shortage of capital - despite facts such as interest rates.

04-13-2001, 08:00 AM	#6
tw Read? I only know how to write. Join Date: Jan 2001 Posts: 11,933	Re: Laffer curve - and other emotions From The Economist of 31 Mar 2001 with editorial parallels to current federal mindset in [ ]s: ""James Gilmore of VA, the man President Bush picked to be the Republicans' national chairman, talks a lot about broadening the party's base. ... Mr Gilmore ... was elected in a landslide on a promise to do away with the much-loathed annual tax on personal motor vehicles. Virginia is now covered with sprawling suburbs; everyone, Mr Gilmore argued, needs a car, and working families could not afford to pay a tax that ran, in some counties and cities, to $1000 or more a year. Not only would the tax be abolished, but taxpayers would get refunds. In 1998, the Republican controlled legislature happily [emotion] voted to phase out the tax. Some ... wondered how Virginia would afford both the refunds, and the services and programmes that were partly paid for out of the car tax [thinking logically]; but, at that stage, politicans expected economic growth far into the future [more emotional conclusions]. The state would probably have ample funds to cover a phase out that would cost, said Mr Gilmore, $621m over five years [also the mindset of George Jr's tax cut]. Unfortunately the price of the programmme quickly doubled to $1.2billion [just like Bush says we can pay down the Reagan debt and still cut taxes] ... the cost peaked in the last half of 2000 just as the economy skidded to a standstill. By that point, Mr Gilmore found there was a $421million hole in the budget. He cannot run a deficit: state law does not allow it. [OK - now we have a politican who has been playing Reaganomics and without a David Stockton to blow a whistle. Curious we now have a President advocating same tax cuts while increasing spending - justifying all this with expectations of continued economic growth. It suggests what we face with Jr's tax cuts - advocated for emotional rather than logical reasons. So what does the VA governor do?]. Mr Gilmore had promised, in 1997, that he would slow down the pace of the car-tax refunds if the economy slowed. [Like a current politican who forgot a Greenhouse gas promise]. He seemed to forget that; instead, he ploughed on with the refunds, and asked at the same time for spending cuts [more Reaganomics also being advocated by George Jr]. ... By March 27th the budget deadline loomed, with no budget and thousands of state workers and teachers without the pay rises the legislature had already promised them. [Watch - more Reaganomics to such up money anywhere at the expense of the future] At the last minute, Mr Gilmore managed a magic trick. He declared (as the governor can) that the Virginia Retirement System was overfunded and could reduce its rates. This would save state and local governments $125m in contributions, and the money would be spent on the promised pay rises. With this book-keeping fiddle, Viginians can get their refunds and their pay rises too."" Is that not what Reagan then did to coverup a cash flow problem? Of course. Reagan found sources of cash, then used illegal accounting tricks to strip the FAA, SS, and Highway Trust funds - taking the money without leaving an IOW. (On CNN, the current GAO director was asked the same queston and answered as written above.) George Jr has a future income stream intended to pay down Reagans debts - the 'yet to materialize' surplus. Geroge Jr will take those funds because so many emotionally and incorrectly feel the surplus has already arrived. Since Bush has his own short term political interests (and "talks a lot about broadening the party's base"), he has others even in the Cellar saying we can pay down Reagan's debts (which we have not started to do yet) AND raise spending AND give a tax cut. Guns and butter? History alone says that does not happen. Ahhh but the tax cut is all about emotion - the facts be damned. Logic folks. Anyone advocating the Bush tax cut nonsense is only appealing to emotional conclusions - the same reasoning used in Reaganomics and *demonstrated by the current Republican national chairman*. That is the mindset of tax cuts - the facts be damned. Logic says that paying down Reagan's debts first has the greatest ROI. Ahhhhh but a man already with a long history of screwing up American foreign relations in only three months and with no history of running successful free market corporatons is considered intelligent? Go figure. Tax cuts are only supported by emotional thinking. We have a perfect example in what to expect from these tax cuts. We have a Republican national chairman's recent history in running government into debt - then using MBA cash flow games to cook the books. The mindset of a President who promoted that governor to Republican national chairman is obvious. Logics says that anyone finding an advantage to Bush's tax cuts has simply replaced logic with silly emotion. Of course the above story from The Economist is new news to the many who believe in tax cuts - more history to ignore. Facts have a funny way of being ignored when people's thinking is so easily distorted by emotional fiction - such as George Jr's tax cuts to boost the economy. Some even emotionally believe there is a shortage of capital - despite facts such as interest rates.