THE MOST PROMISES OF ALL - AND HE HAD "GREAT PROMISE"
Obama was seen as a man of great promise - but unfortunately we missed the practicality problem: inexperience and holding to ideology above results and the benefits to the people. He would be good at other jobs however, those that he had some skills in.
His Key Promises:
Unemployment below 8%, within a year.
Cut the deficit in half (instead of by far being the highest spending, highest defict President in history)
Solve the Social Security And Medicare solvency problem (he hasn't put any concrete proposal out there)
BUT HE APPEARS TO BE WORKING ON ALL THESE THINGS
Look deeper, at what he is actually doing. Look at the results rather than the rhetoric.
Divisiveness, continuing huge deficits, debacle of the good idea of health care coverage, politics above benefitting Americans [e.g. oil], and a myriad of not-so-good results, as laid out in The Cost Of Inexperience And Impracticality
The president preaches fiscal restraint but he has advanced a reckless budget and refuses to suggest any entitlement reform.
It is doubtful if his results could be any worse - though he is good at spinning it otherwise, blaming others, and taking credit for things that he actually damaged. (And I like the guy, and am prejudiced for him.)
GIVING LOTS, BUT WHO PAYS AND WHAT IS THE ULTIMATE EFFECT?
If one doesn't think about it and/or look deeper, then rescues, help, redistribution, give aways - all appear to be great. But if it is from the government, doesn't it mean that the taxpayers have to pay for something they did not agree to in the first place. And don't they eventually end up paying so much in taxes that they are choked or eventually have to pull more money out of the economic system so that growth is stifled.
"The problem with socialism is that eventually you run out of other people's money." Margaret Thatcher
If you take more and more money out of the economic system for taxes, isn't there going to be less to invest productively and to grow and have more jobs?
Doesn't everything have a consequence? Isn't life and economics full of trade-offs, with no free lunch? Aren't there limits to what we can do in any one area? Shouldn't we look at what those are?
Perhaps he doesn't understand this, as the other things he has done seem to indicate that he is oblivious to it and/or not going to do anything about it (until forced, maybe). A budget not dealing with it at all (rejected 97-0 by the Senate) and no written, committed plan for dealing with the big problems that will come to roost in Social Security and Medicare. (He criticizes others for doing that, with all sorts of accusations of not caring - but going forward and addressing the problems to attempt to resolve them is an indication of great caring and the willingness to confront and try to solve problems!).
ECONOMIC JUSTICE FOR THE MIDDLE CLASS - MORTGAGES
Whenever he gets a chance Obama will "hammer home the theme of economic justice for the middle class."
"It is wrong for anybody to suggest that the only option for sturggling, responsible homeowners is to sit and wait for the houseing market to hit bottom. I refeus to accept that, and so do the American people."
Yes, who doesn't want a handout and economic justtice, after all we ("even responsible homeowners) have been victimized by unscrupulous banks and mortgage brokers." (You are a victim; you need to be rescued and someone else should pay for it; and it is the fault of all those unscrupulous banka and mortgage broker, as they are all bad and trapped you; you're not responsible for your decisions and you're certainly not responsible for what happens in the world, with the housing bubble meltdown, etc. and etc.).
A good guy. Right? Who could not want that. We should be rescued, even though we are responsible.
But is that really, actually true? Can we afford to rescue people from their own decisions and circumstances?
Surely not all the banks and mortgage brokers were unscupulous, though some were - to paint all with the same brush is a non-fact-based, non-reasoning, non-sound practice.
And there is a cost for the rescue, as always. There is an economic loss (less payment, less interest) to Fannie Mae and Freddie Mac, who will later have to be bailed out even more than the huge bailout so far. Less money in = less money accumulated = bigger bailout = taxpayers have to pay for it = since we are running a deficit, our children must bear the burden.
Obviously, there are trade-offs, and who is really qualified to make a God-like determination of what is right in the short term and the longer term? (Maybe, only God?) I think the truth is somewhere in between - and I think the solution could be implemented if we had no net spending increase - taking it from other spending, so that we came out at least even, financially, without burdening our children. That is just using basic prioritization, but not continuing to spend without prudence.
Who's right? Who's the most humane? I think there is an argument in favor of both sides. And they both have a common goal: to do what is best for the American people. (Though I suspect the one that is most politically popular might have a possible political motivation - sadly.)
TAKE IT FROM THE RICH - THAT'LL SOLVE THE PROBLEM!
Here, there is an arguable trade-off, with no one having the perfect mix. If we pull more money out of the economic system by taking more from the rich (who also pay most of the taxes already), aren't we leaving less money to be invested for growth? Of course, as the rich may spend what they want to and not have that affected, but they'll be less extra money to plow back into investments. And no new investments = no new growth, plus decline. Less investments = less growth
Currently abot half of all taxpeyer pay almost no income tax and the other half pays for them. Anything wrong with that picture?
DOES "CAPITAL" MOVE WITH HIGHER TAX RATES?
The super high marginal tax rates for the rich originally caused the money to go to tax-free municipal bonds and away from investments - and growth went down while taxes also went down (the opposite effect of that which alot of people assume). A bit of history on the effects.
It is not a good idea to simply be against "no new taxes", including being for not taxing the rich - if you hold to that but never create the understanding of the "why" of it - and that you are actually looking out for the interests of all of the nation. It is not a good idea to use the phrase "trickle down economics" as it is offputting and to some degree not really representative of what actually occurs. It looks like the rich get all the money and then let some slip down to the lower enders. What is true is that we all prosper more when there is growth - the rich, the middle class, and the poor (who will mostly no longer be poor). The more apt term is "all boats rise in a rising tide" and "all citizens benefit from a rising economy" (of course, they have to be responsible for earning their share of it!!!!)
Notes to be further integrated into this page or other pages
This sounds rational, on its own, but everything is in the context of the actual world: “”People like (Obama), as he’ll say, who’ve been very fortunate in life, have the ability to pay a little bit more.” And, believe it or not, the majority of voters support taxing the wealthy - why not!!!?
One of the errors even midlevel accounting students would make is to judge the probable results on only one part of the whole, failing to consider corollary effects.
Those who want to tax the rich more should look at history. Taxing too much actually too money out of the investment system and lowered growth (and actually lowered tax collections in total!). We can argue how much the offset will be, but we can't argue that there will be no trade-offs, no costs otherwise.
If we held all other things equal and assumed no other impacts:
A 45% rate on incomes of more than $1 million would generate $31 billion, while an even more progressive tax, with rates of 50%, 60%, 70% on incomes of $500,000, $5 million, $10 million respectively would generate an added $133 billion." (Megan Mcardle)
Let's see now - the deficit is $1.6 trillion - uh, we can't solve it by taxing the rich. We could get another $270 billion by taxing the middle class on the pre-Bush-tax-cut rates.
Oops, that's not enough.
Maybe there is some sense to this being a spending problem first.
History suggests that low taxes on the rich encourage investment and growth. With many economies weak, now is not the time to saddle capitalists with greater taxes, particularly since the rich are among society’s most mobile: the footloose wealthy will simply move, taking their taxes with them.
Yes, the rich "can afford it" and still be ok. And we are not particularly interested in their welfare (so to speak). So our criteria must be based on how it will affect us.
In the late 1970s top marginal income-tax rates of 60-90% were not uncommon across advanced economies. But with the dawn of stagnation, academic economists favoured reduced government intervention, and lower, flatter tax systems gained ground.
America’s rich have done better still. The top 1% of earners in America (roughly, those earning more than $400,000 a year) captured 58% of real economic growth from 1976 to 2007, and now take home roughly 18% of all pre-tax income earned, up from less than 10% in the 1970s.
The supply-side tax revolutions of earlier eras prompted a wave of studies looking at the effect of lower taxes. Did people behave as expected? And were tax changes good for growth? Early results were instructive. The rich do not often respond to tax increases by working less, for instance, as was widely assumed. But taxable income is very responsive to tax changes. The rich adjust by tweaking the manner and timing of their compensation.
In general and across time periods and countries, tax changes affect the choices of the rich, though the big responses of the 1980s and 1990s may have been unusually large. (Goalsbee did a study showing that the effects of taxes being lowered was exaggerated by another factor that increased incomes.) Studies generally show that a 1% increase in the marginal tax rate reduced taxable income by 0.1-0.4%, though sometimes and in some places it may be higher. The rich, though, are more sensitive, responding two to three times more than poor households, according to a Danish study. Changes in taxes on capital income also generate bigger responses than changes on labour income.
New technologies benefit highly talented workers, who market themselves globally and reap large returns. These “superstars” are more mobile than ever before.
In the short to medium term, tax changes have large effects. An isolated tax increase of 1% reduces real GDP by almost 3%, mostly because tax rises have a significant effect on investment.The impact on growth is relatively persistent; the greatest effect is felt more than two years after the change.
Higher rates on the rich are not, then, a free lunch. At low levels rate increases will lift revenue, but not without a cost in efficiency and short-term growth. If the budget is a government’s primary concern, then the evidence is that reforms which close loopholes and broaden the tax base are a more efficient way to bring in more money than higher taxes for the rich.
Don't tax you.
Don't tax me.
Tax that fellow
behind the tree.
Perhaps a clearer example is Ross Perot, who founded EDS, sold it to GM for many billion dollars, and invested the proceeds in government bonds. Clearly, if his taxes were increased, he would not say to himself "ah well, it was nice to be able to eat filet, but now I'll have to go back to hamburger" but would simply sell off some of his government bonds to pay the taxes, which the government would then use to buy the bonds.
In other words, it would be purely a bookkeeping operation, totally without effect in the real world.
TO make this a moral gesture of fairness is not reasonable, though it could be appealing. Since time memorial, groups have developed hostility to other groups, each calling the other immoral. But who's right?
Neither, they just have different points of view and values. The other isn't evil. Maybe uninformed, but not evil. The solution is to inform the other, not spew invictives!
If you assume that the effort the taxpayer is willing to put forth is proportional to his incentive
My own belief is that total tax rates of more than 50% on the rich are certainly pointless and destructive