Soaring Economy Cutting Budget Deficits

[TexasTiger 13,006]

Seems like you still haven't read the text of the post. Big surprise. Strong opinions, limited info. Defiantly ignorant and proud! You go Raptor!

Seems that's all you've got...ad hominems and a desire to jack up your post count.

Atta boy, TT.

246519[/snapback]

Until you read and comprehend a post, it is hard to move forward. Don't blame the messenger.

[AURaptor 1,126]

Seems like you still haven't read the text of the post. Big surprise. Strong opinions, limited info. Defiantly ignorant and proud! You go Raptor!

Seems that's all you've got...ad hominems and a desire to jack up your post count.

Atta boy, TT.

246519[/snapback]

Until you read and comprehend a post, it is hard to move forward. Don't blame the messenger.

246525[/snapback]

You keep making the same mistake over and over. It's getting rather annoying. Just because someone doesn't agree w/ you doesn't mean they haven't read the post or they don't comprehend it. Get over yourself.

[DKW 86 7,440]

Total Fed Credit was

actually down by $1.1 billion last week. I look at the chart. I note that

in 2000, Total Fed Credit, astonishingly, also stopping growing,

admittedly for a little longer time than this. But it caused the stock

market to crash, and the S&P500 lost about half its value over the next

couple of years. There have been a couple of other short times since 2000

when Total Fed Credit stopped growing, and the stock market was not

pleased, but it did not actually crash. Mostly because, I assume, all the

other central banks and "investors" were taking up the slack.

BF, where do you get this crap from? This is so out there that no one ever trained in Economics could take this seriously. The writer makes a statement and then DISPROVES that statement multiple times. A Freshman in college could/should write better than that.

But things are a lot different now. There is a growing consensus that

global liquidity may be drying up, just like it seems to be doing in our

own Federal Reserve.

This might be true, but it is presented without any backup evidence.

… if Total Fed Credit is going up and keeps going up, then stocks

and the economy will go up. If Total Fed Credit is not going up and keeps

not going up, then stocks will not go up. They will, instead, go down,

just like everything else when money is withdrawn from any overheated,

highly inflated, grossly overvalued, monstrously over-indebted market.

Okay, that COULD happen. So are you/they trying to say, "just keep borowing?" It might also get to where the with the US quits borrowing that real estate really takes off due to lower interest rates. Lower interest rates will spur more car buying, more durable good sales etc. The CONICIDENTAL stopping of borrowing also occurred because of a balanced budget. The stock market crash happened due to a number of things mainly the Market was due for profit taking, was over valued, and major SEC Frauds were coming to lite, Enron, WorldComm, HealthSouth, et al. Never mind that the 8 year expansion was just due for a down cycle. This is as poorly written a piece as I have seen you quote EVER.

If the market is not overvalued would reduced Fed borrowing CAUSE anything to happen? Most would say not. If then the current reduced borrowing isnt causing a market plunge, can't we then say that the Market is NOT overvalued?

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[Bottomfeeder 244]

The writer is stating facts, to be interpreted by the reader. To the contrary, stop the borrowing from foreign countries and against equity in homes.

...Total Fed Credit and how it creates the credit, which creates the debt, which creates the money that creates the bubbles. And not only do they create bubbles, but actual spending cash, as we learn from Stephen Church, of Piscatasquaresearch.com, in his essay at PrudentBear.com entitled: "Consumer Crunch Update." He writes, "The latest 2005 economic statistics show that consumers depended on new debt for more than 90% of their cash flow during 2005. Most new consumer cash flow now comes from new debt."

Intrigued, I urge him to go on. He does so by saying, "Consumer liquidity has resumed its downward trend. Liquidity has fallen to 3 weeks of funds on our preferred measure. Consumer money supply now flows backward."

I'm thinking to myself, "Hmmm! I wonder what this 'money supply now flows backward' thing means? And, more importantly, will I have to do actual work to find out?" Luckily, Church immediately went on to explain: "Historically, household incomes were sufficient to generate a cash surplus after consumption and debt service. Now, households have a large cash deficit."

I might have made some mistakes not posting the entire article, so here it is.

http://dailyreckoning.com/Issues/2006/DRUS070706.html

He states that the fractional reserves that banks must keep on hand has actually decreased. And, that raising rates by the Fed, serves to fight inflation, "reload the gun" and make room to lower rates to fight deflation.

Both Bernanke and Greenspan recognized the deflation enemy, and raised rates - not to fight inflation (although that is what they appeared to be doing), but to “reload the gun.” They had to hike rates in order to be able to cut them to fight deflation. Now, with 525 basis points from here to zero, at least the Fed has a new round of ammunition.

With Japan raising rates above zero percent the short loans will flood the market with dollars and they have to go somewhere, GOLD?

http://dailyreckoning.com/

[otterinbham 0]

Hi, folks. I'm back. For some reason, I couldn't post for several months. I don't remember cussing on this cotton-picking board, so I guess I said something the administrator couldn't handle.

Anyway, this is a perfect example of the Laffer Curve in action. When you cut tax rates, especially in terms of capital gains, there is a short term lag in collections. However, the long-term result is actually an increase in tax revenues. Need an example? In 2002, capital gains taxes amounted to $45 billion dollars. In the same year, future capital gains tax rates were reduced from 25% to 15%. As a result, 2005 capital gains taxes were $85 billion, or roughly double the 2002 amount.

There is a simple explanation for this. When transactions take place that ultimately will involve capital gains taxes, the intelligent seller has to factor in his profits AFTER TAXES. A 40% drop in capital gains taxes several years ago meant that the market became much more attractive for sellers and buyers alike. More transactions meant more tax revenues generated.

So while we hear a lot of nonsense about the "rich getting richer," what is actually going on is that the overall economy is getting stimulated. And the same principle applies to personal incomes.

The ultimate question then for my liberal counterparts is this: What is the driving purpose behind the modern tax system in this country? Is it to generate the most revenue for the operation of government in the most efficient manner possible without harming the economy? Or is it really about the redistribution of wealth? When capital gains taxes were above the 50% mark in this country in the 1970s, it is no coincidence that economic growth was nonexistent.

[Bottomfeeder 244]

The ultimate question then for my liberal counterparts is this: What is the driving purpose behind the modern tax system in this country? Is it to generate the most revenue for the operation of government in the most efficient manner possible without harming the economy? Or is it really about the redistribution of wealth? When capital gains taxes were above the 50% mark in this country in the 1970s, it is no coincidence that economic growth was nonexistent.

246867[/snapback]

Not that I wish to be considered a liberal. I have no problem with tax cuts, and I guess I got away from the topic a bit. What I am trying to explain is the deficit increasing the foreign debt. Regardless of the revenues taken in, our government and consumers spend too much, period. As a matter of fact, that is all we really have today is debt. And the budget reduction Bush is lauding is nonexistent.

[TexasTiger 13,006]

Hi, folks. I'm back. For some reason, I couldn't post for several months. I don't remember cussing on this cotton-picking board, so I guess I said something the administrator couldn't handle.

Anyway, this is a perfect example of the Laffer Curve in action. When you cut tax rates, especially in terms of capital gains, there is a short term lag in collections. However, the long-term result is actually an increase in tax revenues. Need an example? In 2002, capital gains taxes amounted to $45 billion dollars. In the same year, future capital gains tax rates were reduced from 25% to 15%. As a result, 2005 capital gains taxes were $85 billion, or roughly double the 2002 amount.

There is a simple explanation for this. When transactions take place that ultimately will involve capital gains taxes, the intelligent seller has to factor in his profits AFTER TAXES. A 40% drop in capital gains taxes several years ago meant that the market became much more attractive for sellers and buyers alike. More transactions meant more tax revenues generated.

So while we hear a lot of nonsense about the "rich getting richer," what is actually going on is that the overall economy is getting stimulated. And the same principle applies to personal incomes.

The ultimate question then for my liberal counterparts is this: What is the driving purpose behind the modern tax system in this country? Is it to generate the most revenue for the operation of government in the most efficient manner possible without harming the economy? Or is it really about the redistribution of wealth? When capital gains taxes were above the 50% mark in this country in the 1970s, it is no coincidence that economic growth was nonexistent.

246867[/snapback]

To tax capital gains at a lower rate that the income one earns from work is to favor the wealthy over the worker-- i.e. passive income over active income. You may argue that it should not be taxed more, but there is better argument for taxing it the same instead of less.

You talk about "long-term" impact, but don't illustrate that. If the cap gains rate drops, there will be an uptick initially from those that have held on to assets, but then it will level off.

In regard to the purpose of modern taxation, many "conservatives" have the mythological view that any tax increase is about the redistribution of wealth. Study the budget to see where the money goes-- especially ACTUAL income tax revenues. Any "redistribution of wealth" in this country is minimal. The first purpose of taxes is to pay the bills that most voting Americans determine that they want their government to incur. This is includes a very large defense budget. The best military in the world comes with a price tag. We need to pay for it.

[Bottomfeeder 244]

I don' t even want this. No flat tax,nothing, they have plenty of money to run the government. It's long past time to eliminate congress' spending habits. Way past time. I say cut them off cold turkey and reduce their salaries to zero, then we'll see who the public servants are. Back to the US Constitution.

A SOLUTION TO THE NATIONAL DEBT PROBLEM: A CONSTITUTIONAL AMENDMENT

$336 billion spent on interest payments!

President Bush put in tax rate cuts, the economy recovered and tax revenue is up. So it wasn't a "tax cut" (tax revenue increased), it was a tax rate cut! and it worked perfectly.

--- "Budget Deficit" vs. "National Debt" ---

Suppose you want to spend more money this month than your income. This situation is called a "budget deficit". So you borrow. The amount you borrowed (and now owe) is called your debt. You have to pay interest on your debt. If next month you don't have enough money to cover your spending (another deficit), you must borrow some more, and you'll still have to pay the interest on the loan. If you have a deficit every month, you keep borrowing and your debt grows. Soon the interest payment on your loan is bigger than any other item in your budget. Eventually, all you can do is pay the interest payment, and you don't have any money left over for anything else. This situation is known as bankruptcy.

Each year since 1969, Congress has spent more money than its income. The Treasury Department has to borrow money to meet Congress's appropriations. The total borrowed is more than $8,000,000,000,000 and growing. Even when government officials claim to have a surplus, they still spend more than they get in. We pay interest on that huge debt.

States that have not yet called for a constitutional convention to propose a federal balanced budget amendment: Alabama, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Montana, New Jersey, New York, Ohio, Rhode Island, Vermont, Washington, West Virginia, and Wisconsin.

[DKW 86 7,440]

Hi, folks. I'm back. For some reason, I couldn't post for several months. I don't remember cussing on this cotton-picking board, so I guess I said something the administrator couldn't handle.

Anyway, this is a perfect example of the Laffer Curve in action. When you cut tax rates, especially in terms of capital gains, there is a short term lag in collections. However, the long-term result is actually an increase in tax revenues. Need an example? In 2002, capital gains taxes amounted to $45 billion dollars. In the same year, future capital gains tax rates were reduced from 25% to 15%. As a result, 2005 capital gains taxes were $85 billion, or roughly double the 2002 amount.

There is a simple explanation for this. When transactions take place that ultimately will involve capital gains taxes, the intelligent seller has to factor in his profits AFTER TAXES. A 40% drop in capital gains taxes several years ago meant that the market became much more attractive for sellers and buyers alike. More transactions meant more tax revenues generated.

So while we hear a lot of nonsense about the "rich getting richer," what is actually going on is that the overall economy is getting stimulated. And the same principle applies to personal incomes.

The ultimate question then for my liberal counterparts is this: What is the driving purpose behind the modern tax system in this country? Is it to generate the most revenue for the operation of government in the most efficient manner possible without harming the economy? Or is it really about the redistribution of wealth? When capital gains taxes were above the 50% mark in this country in the 1970s, it is no coincidence that economic growth was nonexistent.

246867[/snapback]

otter, there was no ban from us. Welcone back though. What is your backgrund? Do you teach?

[Bottomfeeder 244]

Tax cuts will work if we cut spending, and that hasn't happened, so we owe money.

http://www.cbpp.org/3-8-06tax.htm

http://releases.usnewswire.com/GetRelease.asp?id=69055

[TexasTiger 13,006]

Hi, folks. I'm back. For some reason, I couldn't post for several months. I don't remember cussing on this cotton-picking board, so I guess I said something the administrator couldn't handle.

Anyway, this is a perfect example of the Laffer Curve in action. When you cut tax rates, especially in terms of capital gains, there is a short term lag in collections. However, the long-term result is actually an increase in tax revenues. Need an example? In 2002, capital gains taxes amounted to $45 billion dollars. In the same year, future capital gains tax rates were reduced from 25% to 15%. As a result, 2005 capital gains taxes were $85 billion, or roughly double the 2002 amount.

There is a simple explanation for this. When transactions take place that ultimately will involve capital gains taxes, the intelligent seller has to factor in his profits AFTER TAXES. A 40% drop in capital gains taxes several years ago meant that the market became much more attractive for sellers and buyers alike. More transactions meant more tax revenues generated.

So while we hear a lot of nonsense about the "rich getting richer," what is actually going on is that the overall economy is getting stimulated. And the same principle applies to personal incomes.

The ultimate question then for my liberal counterparts is this: What is the driving purpose behind the modern tax system in this country? Is it to generate the most revenue for the operation of government in the most efficient manner possible without harming the economy? Or is it really about the redistribution of wealth? When capital gains taxes were above the 50% mark in this country in the 1970s, it is no coincidence that economic growth was nonexistent.

246867[/snapback]

otter, there was no ban from us. Welcone back though. What is your backgrund? Do you teach?

247221[/snapback]

David:

I know why you banned Shug 2003, but why Otter?

[DKW 86 7,440]

Hi, folks. I'm back. For some reason, I couldn't post for several months. I don't remember cussing on this cotton-picking board, so I guess I said something the administrator couldn't handle.

Anyway, this is a perfect example of the Laffer Curve in action. When you cut tax rates, especially in terms of capital gains, there is a short term lag in collections. However, the long-term result is actually an increase in tax revenues. Need an example? In 2002, capital gains taxes amounted to $45 billion dollars. In the same year, future capital gains tax rates were reduced from 25% to 15%. As a result, 2005 capital gains taxes were $85 billion, or roughly double the 2002 amount.

There is a simple explanation for this. When transactions take place that ultimately will involve capital gains taxes, the intelligent seller has to factor in his profits AFTER TAXES. A 40% drop in capital gains taxes several years ago meant that the market became much more attractive for sellers and buyers alike. More transactions meant more tax revenues generated.

So while we hear a lot of nonsense about the "rich getting richer," what is actually going on is that the overall economy is getting stimulated. And the same principle applies to personal incomes.

The ultimate question then for my liberal counterparts is this: What is the driving purpose behind the modern tax system in this country? Is it to generate the most revenue for the operation of government in the most efficient manner possible without harming the economy? Or is it really about the redistribution of wealth? When capital gains taxes were above the 50% mark in this country in the 1970s, it is no coincidence that economic growth was nonexistent.

246867[/snapback]

otter, there was no ban from us. Welcone back though. What is your backgrund? Do you teach?

247221[/snapback]

David:

I know why you banned Shug 2003, but why Otter?

248558[/snapback]

Apparentl;y you dont know much because we never banned either one...

[TexasTiger 13,006]

Hi, folks. I'm back. For some reason, I couldn't post for several months. I don't remember cussing on this cotton-picking board, so I guess I said something the administrator couldn't handle.

Anyway, this is a perfect example of the Laffer Curve in action. When you cut tax rates, especially in terms of capital gains, there is a short term lag in collections. However, the long-term result is actually an increase in tax revenues. Need an example? In 2002, capital gains taxes amounted to $45 billion dollars. In the same year, future capital gains tax rates were reduced from 25% to 15%. As a result, 2005 capital gains taxes were $85 billion, or roughly double the 2002 amount.

There is a simple explanation for this. When transactions take place that ultimately will involve capital gains taxes, the intelligent seller has to factor in his profits AFTER TAXES. A 40% drop in capital gains taxes several years ago meant that the market became much more attractive for sellers and buyers alike. More transactions meant more tax revenues generated.

So while we hear a lot of nonsense about the "rich getting richer," what is actually going on is that the overall economy is getting stimulated. And the same principle applies to personal incomes.

The ultimate question then for my liberal counterparts is this: What is the driving purpose behind the modern tax system in this country? Is it to generate the most revenue for the operation of government in the most efficient manner possible without harming the economy? Or is it really about the redistribution of wealth? When capital gains taxes were above the 50% mark in this country in the 1970s, it is no coincidence that economic growth was nonexistent.

246867[/snapback]

otter, there was no ban from us. Welcone back though. What is your backgrund? Do you teach?

247221[/snapback]

David:

I know why you banned Shug 2003, but why Otter?

248558[/snapback]

Apparentl;y you dont know much because we never banned either one...

248625[/snapback]

Quit with the excuses and just apologize.