TranceAddict Forums (www.tranceaddict.com/forums)
- Political Discussion / Debate
-- Bush budget won't jump start economy says CBO
Bush budget won't jump start economy says CBO
| quote: |
Office: Bush Budget Won't Jolt Economy By ALAN FRAM, Associated Press Writer WASHINGTON - The tax cuts and other policies President Bush (news - web sites) proposed in his $2.4 trillion budget would probably have a minimal impact on the economy, the nonpartisan Congressional Budget Office (news - web sites) said Monday. In its annual report on the president's budget, the agency that provides fiscal analysis for lawmakers said Bush's proposals could either increase or reduce economic output through 2009, and improve it in the following five years. "However, the differences are likely to be small, affecting output by less than one-half of one percentage point on average," the study said. The conclusion by the budget office comes in the early stages of Bush's re-election campaign, in which the core of his plan for strengthening the economy has been his call to make earlier tax cuts permanent. The economy and a dearth of job creation in his administration have emerged as major issues this election year. Congress' Republican leaders have already decided to ignore Bush's proposal for permanent tax cuts this year because it would boost record federal deficits even higher and because they lack the votes to prevail. The Senate on Monday began debating a $2.36 trillion GOP-written budget for 2005 that includes just some of the tax cuts Bush proposed, plus lower deficits and spending than his plan mapped. The House Budget Committee will debate a similar plan later this week. The analysis attributed the budget's scant effect largely to the small size of the policies Bush proposed compared with the $12 trillion-a-year U.S. economy. For example, its proposed tax cuts would total only 0.3 percent the size of the economy over the next five years and its spending cuts would be 0.4 percent. In addition, the economic impact of some of the budget's proposals offsets the effect of others. Douglas Holtz-Eakin, the budget office's director, said Bush's plan for a health-insurance tax credit would help people spend more money, but his proposal to establish tax-free savings accounts for retirement and other purposes would encourage them to save � muting the economic effects of the two ideas. "When you start lumping stuff together, it's not surprising" that they might cancel each other out, Holtz-Eakin said. Underscoring the uncertainty of some of its analysis, the budget office cited conflicting views among experts on the economic impact of Bush's proposal to keep tax rates lower on capital gains and corporate dividends. It also said Bush's plan to keep the estate tax repealed after 2010 "could have varying effects on consumption and saving." The budget office began examining the economic impact of White House fiscal blueprints last year in response to congressional conservatives eager to see the "supply-side" effect of Bush's budgets. They say tax cuts spur the economy, in turn generating federal revenue, by more than analysts have credited. Many other Republicans � including Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) � have agreed that tax cuts have such an effect, but cautioned that there is no accurate way to measure it. Holtz-Eakin said he believes such analysis provides useful information, but said the budget cannot yet be exclusively measured that way because "the science isn't ready." A year ago, the Congressional Budget Office examined Bush's 2004 budget and concluded that its impact was "not obvious." As the Senate began its budget debate, Budget Committee Chairman Don Nickles, R-Okla., said his plan would help cut deficits in half in three years by clamping down on some spending. "Deficits are far too high," he said, referring to this year's projected shortfall of about a half-trillion dollars. "It's time to be responsible." But North Dakota Sen. Kent Conrad, the top Democrat on the budget panel, said the plans by Bush and the Senate GOP hid the real danger � the long-range deficits that loom as baby boomers begin to retire. Bush's policies "are truly dangerous to the economic security of our country," Conrad said. "We have a responsibility to alter that course." |
....whoa, that like makes sense and stuff....
Re: Bush budget won't jump start economy says CBO
| quote: |
| Originally posted by PHALPAX Honestly, is any one surprised?! Your average hobo on the street can figure out that spending money + 500 billion trade deficit + rising national debt + Iraq = dismal economy? ....whoa, that like makes sense and stuff.... |
Re: Re: Bush budget won't jump start economy says CBO
| quote: |
| Originally posted by occrider Yup, I was for the first bush tax cuts, against the second tax cuts (but pleasantly surprised at their results), and definitely against his desire to make the tax cuts permenant. Like I said in the economics thread ... the economy is "healthy." It's time to be a true "conservative" and be fiscally responsible. I'm sickened that the republican congress has departed from one of their core values. |
Re: Re: Re: Bush budget won't jump start economy says CBO
| quote: |
| Originally posted by Verona^My Granted, the strength of the economy affects revenues, but taxes all get spent back INTO the economy anyways, I fail to see how that would have any effect. What would? Gas prices. |
| quote: |
Well, when you cut taxes, you just simply dont get as much revenue, my pet cat could have told you that. |
| quote: |
Granted, the strength of the economy affects revenues, but taxes all get spent back INTO the economy anyways, I fail to see how that would have any effect. What would? Gas prices. Conservatives dont make much sense to me with their theories on taxation. I'm familiar with the Laffer Curve, but we have some of the lowest tax rates on Earth in America. Plus conservatives seem to think that government tax money just sort of dissapears forever. Wrong, in reality it goes into wages and investments, etc, that go straight back into the economy and it keeps recirculating itself. Gas Prices on the other hand help fund other things... |
| quote: |
But still Republicans will pander to the people with the rallying cry of Tax Cuts, just as much as the Democrats will pander with social programs. At least they follow the law always appeal to peoples self interest Of course this can make for bad policy. |
Hey Occ, here's your favorite liberal op-ed. guy:
| quote: |
 March 9, 2004 OP-ED COLUMNIST Promises, Promises By PAUL KRUGMAN Despite a string of dismal employment reports, the administration insists that its economic program, which has relied entirely on tax cuts focused on the affluent, will produce big job gains any day now. Should we believe these promises? Each February, the Economic Report of the President forecasts nonfarm payroll employment � generally considered the best measure of job growth � for the next several years. The black line in the chart above (inspired by a joint report from the Economic Policy Institute and the Center on Budget and Policy Priorities) shows the actual performance of employment, both before and after its peak in March 2001. The gray lines show the forecasts in the 2002, 2003 and 2004 reports. Notice that the February 2004 forecast, which, as in previous years, is based on data only through the preceding October, is already 900,000 jobs too high. Economic forecasting isn't an exact science, but wishful thinking on this scale is unprecedented. Nor can the administration use its all-purpose excuse: all of these forecasts date from after 9/11. What you see in this chart is the signature of a corrupted policy process, in which political propaganda takes the place of professional analysis. |
| quote: |
| Originally posted by MisterOpus1 Hey Occ, here's your favorite liberal op-ed. guy: |
| quote: |
| Originally posted by occrider I have a favorite liberal op-ed guy? |
| quote: |
| Originally posted by MisterOpus1 No silly, you just ripped his op-ed piece apart in the Greenspan thread a few days back. That's all. Nothing more. Please disperse, nothing to see here..... |
The return of Clintonomics?
http://www.guardian.co.uk/uselectio...1163632,00.html
| quote: |
New ball game, same old team Judging by John Kerry's economics advisers, a Democratic White House would mean a return match for Clintonomics. Faisal Islam reports Sunday March 7, 2004 The Observer A deficit expected to top $521 billion this year is the key statistic in the US presidential election campaign. But it is a surplus of another kind that is shaping the competing economic policies of the two camps. Judging by the entourage of economic advisers that surrounds US presidential hopeful John Kerry, Clintonomics may be primed for a comeback. The senator, who this week clinched the Democratic nomination, has recycled old Clinton-era thinkers such as Alan Blinder, a Princeton economist and former vice chairman of the Federal Reserve; Laura Tyson, formerly White House economics chief and now the Dean of London Business School; and Gene Sperling, also a former economics chief. The candidate's top economic adviser is Roger Altman, briefly Bill Clinton's deputy Treasury Secretary. Clinton's Labour Secretary Robert Reich has written Kerry's health care plan. Another former Clinton economist - the Nobel prize-winning Joseph Stiglitz - says that there is a simple reason for the 1990s reunion. 'Clearly there's an aura of success from the Clinton years. The economy did so well it was natural for them to gravitate back to the advisers involved,' he says. And the identity of these advisers may offer better clues to the broad macroeconomic strategy of a prospective Kerry administration than mere election rhetoric. In 2000, few could have envisaged the seismic shift in economic policy that would accompany the arrival of President Bush in the White House. At that time government forecasters predicted a surplus over the decade to 2010 of some $4.6 trillion. Four years on, the outlook for that period is a deficit of about $2 trillion. Yet a look at Bush's entourage during his election campaign - mainly recycled from the high-deficit era of Reaganomics - would have given clear indication of how his administration would go. Larry Lindsey, Bush Jr's chief economist, was charged with fleshing out the economic policy details of Dubya's 'compassionate conservatism'. Lindsey's expertise was in tax cuts, and that putative surplus gave him the opportunity to cut like never before - to the tune of $1,300bn. Glen Hubbard, who headed the White House Council of Economic Advisers, argued that the 1990s boom years were not the work of Clinton policies at all, but the long-term consequence of the feted two-band (15 and 28 per cent) Reagan tax reform of 1986. Hubbard's most famous paper dis puted the widely held belief that, between 1977 and 1988, Reaganomics had exacerbated inequality to the point that the richest 1 per cent of American families had gained 70 per cent of income growth. Taking account of lifetime incomes, he said, the proportion was markedly lower. So the zeal with which Bush would cut taxes, and the focus of those cuts on the rich, was clear from before he set foot in the White House. George W. Bush's economic policy was always going to be a return to a type of Reaganomics. So how do the two candidates' broad economic strategies compare? 'Both men aim to halve the deficit over the next four years. The key policy difference is that Bush will make his tax cuts permanent and hold back spending, while Kerry would repeal the Bush tax cuts for high-income earners to pay for his spending programmes,' says Ian Morris, US economist at HSBC. Stiglitz is unconvinced by Bush's plan. 'The basic outline of Bush's economic policy is reckless. Tax cuts for the rich is disguised as a stimulus which did not provide much stimulus but a large deficit. With Kerry's plan we will get more stimulus with less deficit and more equity. The economy is still anaemic. We need more stimulus, and you can't do that with tax cuts,' says the Nobel prize-winner. Bush's sums simply don't add up, he says. 'The truth is that Bush is lying when he says that he'll halve the deficit. Expansion of the military and making his tax cuts permanent means that there is no way he'll cut the deficit in half,' he says. Kerry is specifically planning to reverse Bush's tax cuts for those earning above $200,000 to pay for $72bn worth of healthcare reform. But HSBC's Morris points out that clashes with Congress are likely to stifle the deficit-cutting verve of whichever candidate is elected. 'Deficits of $400-$450bn are likely until 2008 and beyond under both men. This would raise the public debt-to-GDP ratio from 37 per cent currently to 45 per cent in 2008,' he says. Stiglitz sees the imprimatur of the Clintonian economics team. 'They are all very centrist. Kerry has adopted clearly a very mainstream macroeconomic policy, whereas with Bush you have non-mainstream people saying deficits don't matter'. Altman, Kerry's electoral economics chief, demonstrated strong worries about deficits under Clinton. Gene Sperling is 'very committed to educational issues', says Stiglitz. Blinder is famous in economics circles for a speech saying that the objective of monetary policy should not just be inflation but unemployment and growth - in contrast with Alan Greenspan, chairman of the Federal Reserve Board. Indeed, Blinder resigned after just 18 months' service at the Federal Reserve in 1994 because of such tensions. That experience marks him out as a potential successor to Greenspan should Kerry get elected. Greenspan himself has controversially become embroiled in the election campaign following a series of speeches. He has discussed the drawbacks of 30-year fixed-rate mortgages, the privatisation of public mortgage companies Fannie Mae and Freddie Mac, cutting pensions for future generations, and current laws on intellectual property rights. 'Many of us have long suspected that Greenspan had a political agenda and has not fulfilled the role of an independent non-partisan central banker,' says Stiglitz. Greenspan is likely to be reconfirmed in the summer for a final stint at the Fed until 2006. But Blinder would be a hot favourite to replace him under a President Kerry. Blinder's analysis of the role of 'pointy-headed' economists is perhaps relevant whoever wins November's election. His 'Murphy's Law of Economic Policy' says: 'Economists have the least influence on policy where they know the most and are most agreed and the most influence where they know the least and disagree most vehemently.' Whatever they disagree on, neither camp is likely to revert to the formal strong-dollar policy tacitly abandoned by Bush during this time of relatively high unemployment in the US. The difference, says Stiglitz, may be that a more multilateralist Kerry administration would take greater account of the dangers of a weak dollar to other countries. And so, a real choice has opened up. As Stiglitz says: 'The strange thing is that the Republicans have become extremists, and the Democrats are centrists [in that they are] for fiscal conservatism and stimulus. This is a contest between two alternative philosophies'. |
| quote: |
| Like I said in the economics thread ... the economy is "healthy." It's time to be a true "conservative" and be fiscally responsible. I'm sickened that the republican congress has departed from one of their core values |
Those Bush backers in the House just want to have their cake and eat it too!
| quote: |
| Mar 17, 2004 In Awkward Dance, GOP Embraces Both Deficit Reduction and Tax Cut By Alan Fram Associated Press Writer WASHINGTON (AP) - Congressional Republicans are engaged in a complicated political two-step, pursuing both tax cuts and deficit reduction in an election year when record federal shortfalls are starting to draw the public's attention. Ignoring Democrats and deficit hawks who said the two policies are contradictory, the GOP-run House Budget Committee embraced both goals Wednesday through approval of a pair of measures. The panel by voice vote approved a bill making it harder for lawmakers to expand benefits for programs like Medicare unless they are paid for with spending cuts. Unlike the Senate-passed version, the tax cuts would not have to be paid for, protecting a prime priority that President Bush and GOP lawmakers have retained even as this year's deficit nears an unprecedented $500 billion. "New spending and new tax cuts are not equivalent. New spending does not help maximize economic growth and tax cuts do," said Rep. Patrick Toomey, R-Pa. The committee neared passage of a $2.41 trillion budget for 2005. It largely follows the fiscal outline Bush proposed last month, but it differs from his proposal in that it seeks faster deficit reduction, smaller tax cuts and lower spending. The conflicting strains - erasing red ink yet reducing federal revenues, endorsing Bush priorities while recasting them - underscore the tricky terrain Republicans must tread as they try to retain the White House, House and Senate in November's elections. The loss of 2.2 million jobs since Bush took office in 2001 means they need a plan for invigorating the economy. Their chief answer has been tax cuts which appeal to the GOP's conservative and business supporters. Yet many Republicans have become disenchanted as deficits have spun out of control. Many in the party like the idea of clamping down on spending, but omitting tax cuts from the requirement for budget savings has rankled GOP deficit hawks, raising questions about whether it will garner enough votes to pass the narrowly divided Congress. "I'm not sure reducing taxes and cutting deficits are necessarily corollaries of each other," said moderate Rep. Michael Castle, R-Del. Democrats hope to use the red ink as a sign of Bush's inability to manage the economy and create jobs. They mock the GOP proposal to require savings for expanded spending, but not tax cuts, as a half-measure aimed more at protecting Bush's tax agenda than reducing red ink. "What you're doing is ignoring the elephant in the room," said Rep. John Spratt, D-S.C., referring to the exemption of tax cuts. "This is a dodge." "They've created a mess, and now they're trying to cover their flanks," said Rep. Rahm Emanuel, D-Ill., a budget committee member. Until they expired in 2002 after a dozen years, budget controls required lawmakers to find savings for any tax cuts or expanded benefit payments. But that was a compromise from an era when the White House and Congress were held by different parties. With the GOP controlling both branches of government, most of its members - including Bush, House Speaker Dennis Hastert, R-Ill., and Senate Majority Leader Bill Frist, R-Tenn. - have no interest in renewing those strictures for tax cuts. The House budget panel rejected a Democratic effort to impose the restrictions on tax cuts also by a party-line, 24-18 vote. Last week, Democrats teamed with GOP moderates to force through the Senate a measure applying the requirement to spending boosts and tax reductions. It would let tax cuts or spending increases go unpaid for if 60 of the 100 senators would vote accordingly. Under the House plan, most benefit programs - excluding Social Security - would be automatically cut if increases for those programs were enacted but not paid for. The prospects for a final House-Senate compromise are uncertain. The House committee's budget would hold most domestic programs to the same levels as last year and give Bush the boosts he wants for defense and domestic security. Republicans defeated Democratic efforts to add spending for emergency workers and veterans while trimming tax cuts. The budget would allow $138 billion in five-year tax cuts - including renewals of popular, expiring breaks for married couples and families with children and the expanded 10 percent tax bracket. But it would ignore Bush's effort to make permanent other tax cuts expiring later this decade, the bulk of the $1.3 trillion in 10-year tax reductions he proposed last month. The House plan also claims to halve this year's expected record $477 billion deficit in four years, a year sooner than Bush proposed. Like Bush's budget and a similar plan approved by the Senate last week, most deficit reduction comes not from budget cuts; rather, an assumption that a strengthening economy will produce extra federal revenue. The budget sets guidelines for spending and taxes for the year and leaves actual changes in revenues and expenditures for later legislation. AP-ES-03-17-04 1701EST This story can be found at: http://ap.tbo.com/ap/breaking/MGAEOLMYXRD.html |
| quote: |
| Originally posted by MisterOpus1 Those Bush backers in the House just want to have their cake and eat it too! Doesn't it kinda seem that these guys are deliberately trying to bankrupt our government? For what reason? |
Powered by: vBulletin
Copyright © 2000-2021, Jelsoft Enterprises Ltd.