Proposed budget gets a surplus without cutting entitlements

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Notice how unemployment is climbing into the elections in November, then starts dropping precipitously right when the Bush tax cuts get renewed.

In January unemployment went down and jobs remained stagnant. In January the population was adjusted down 347,000 people through the Labor Department. The weather was also bad in January, these two factors were considered it trying to figure out why unemployment was going down and jobs were stagnant.

House Speaker Boehner blamed the Obama administration for runaway spending leading to stagnant job creation. The administration took a cautious approach that we were on the right trajectory.

Because of the bad weather and lower unemployment in January economists predicted a bounce back of Jobs in the following months, which we have seen.

Recently Boehner took credit for the job increases we have seen in the last two months as evidence that Republicans created the job growth through halting the tax hikes.

Judging from the comments of the Republican speaker of the house the Republicans did not claim credit until after January when there was significant evidence of job creation.

It is unusual for one factor to control unemployment or job creation. I don't think we can give anyone or anything all the credit: weather, population decline, big increases in jobs in healthcare and social services, no tax hikes for the rich, economic stimulus packages. There are a myriad of other factors impossible to count.

I find it interesting when either party takes credit for unemployment stats on a monthly basis, as if the whole nation conducts business based on the results of political policy. At best, the reason behind unemployment numbers are a guess, particularly on a monthly basis.

Why are you talking about January? The drop in the unemployment rate started in December, when the Bush tax cuts were renewed and small businesses had some confidence they could commit money to job creation without having it suddenly taken away by a tax increase.

I wonder what the confidence interval is on those data points on the bar graph. How much overlap is there in the confidence intervals for the unemployment rates for each month? That graph doesn't show it. It's hard to tell how much of a trend there is without the confidence intervals.

Also, I wonder if there has been an increase in the number of people who have simply given up looking for a job recently? These people would not be counted as "unemployed". If the unemployed stop looking for work, it makes it seem as though the unemployment rate is dropping - silly but true.

From the heritage foundation, a conservative organization, reporting on unemployment and job growth in December 2010:

http://www.heritage.org/research/reports/2011/01/heritage-employment-report-december-jobs-increases-slow-but-steady

They go on to blame Obamacare for continued weak job growth for the year, because companies can't forecast healthcosts, and projected weak job growth for the next two years.

They mention that since the tax cuts were extended we are not likely to see a backslide in the economy in the coming months.

Healthcare retained its spot as the fastest growing sector of the economy in December 2010. We are still seeing this factor as of March.

I'm sure there is concern for some companies on what the eventual price for healthcare will be, but there is no doubt that the healthcare reform act is going to continue to produce strong job opportunities in the healthcare industry.

If Obamacare is repealed we won't see the same potential for future healthcare industry job growth.

LALALALALALA WE ARE NOT LISTENING.

Notice how there is no statistically relevant trend in the graph.

The tax rates are still low historically for the US and in general for every single country in the world that is not the US. You guys are under-taxed. More so, all the claims that tax cuts are good for the economy and stop unemployment seem to originate out of ... thin air.

And what Bernie Madoff style accounting gimicks were used? If you seriously believe that actually works I have some land on Jupiter I'd like to sell you.

A dominant theme of President Obama's budget speech last Wednesday was that our fiscal problems would vanish if only the wealthiest Americans were asked "to pay a little more." Since he's asking, imagine that instead of proposing to raise the top income tax rate well north of 40%, the President decided to go all the way to 100%.

Let's stipulate that this is a thought experiment, because Democrats don't need any more ideas. But it's still a useful experiment because it exposes the fiscal futility of raising rates on the top 2%, or even the top 5% or 10%, of taxpayers to close the deficit. The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class—because that's where the big money is.

***
Consider the Internal Revenue Service's income tax statistics for 2008, the latest year for which data are available. The top 1% of taxpayers—those with salaries, dividends and capital gains roughly above about $380,000—paid 38% of taxes. But assume that tax policy confiscated all the taxable income of all the "millionaires and billionaires" Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.

Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That's five times Mr. Obama's 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion. And remember, the top 10% already pay 69% of all total income taxes, while the top 5% pay more than all of the other 95%.

We recognize that 2008 was a bad year for the economy and thus for tax receipts, as payments by the rich fell along with their income. So let's perform the same exercise in 2005, a boom year and among the best ever for federal revenue. (Ahem, 2005 comes after the Bush tax cuts that Mr. Obama holds responsible for all the world's problems.)

In 2005 the top 5% earned over $145,000. If you took all the income of people over $200,000, it would yield about $1.89 trillion, enough revenue to cover the 2012 bill for Medicare, Medicaid and Social Security—but not the same bill in 2016, as the costs of those entitlements are expected to grow rapidly. The rich, in short, aren't nearly rich enough to finance Mr. Obama's entitlement state ambitions—even before his health-care plan kicks in.

http://online.wsj.com/article/SB1000142 ... 83554.html

I thought you were a Math Major Orwell.

Ah, the old Post hoc ergo propter hoc fallacy.

On balance, they raised taxes relative to current rates while decreasing total expenditures. How is that "Bernie Madoff style accounting?" I would think that Ryan's plan whereby bringing in less revenue magically results in a smaller deficit would be more Madoff-esque than what the CBC proposed.


This wasn't Obama's budget, so those comments are all entirely irrelevant.


Ignoring that you were not talking about the tax policy that was proposed in this budget, which would repeal the Bush tax cuts for everyone (including the middle class), I don't know how you believe $938 billion is negligible. If the deficit is $1.65 trillion and we can get $938 billion, we're more than halfway there in balancing the budget. The rest would come from a combination of spending cuts and broader-based taxation.


I am. And it is increasingly more apparent why you weren't able to cut it in the basic math classes required for your engineering program.

I though Inuyasha was a "almost" History major?

And that has been proven to be bull, you can cut all spending except entitlements to 0 and we would still be running a deficit. As I also pointed out earlier raising taxes to 100% on the wealthy wouldn't help either. Plus we still aren't counting the $2 trillion dollar expenditure called Obamacare or should be better known as Obamascam.



The instant you brought up "Progressive" it got equivalent credibility as Obama's budget, in other words no credibility.



As I pointed out before in the last thread you argued this faulty argument, the Bush tax cuts caused an increase in revenue for the Government which completely contradicts your claims.



At least I can add and subtract, which you apparently think 1+1 = 25 or something, because the numbers don't add up.

@Inuyasha, the taxcuts you keep talking about generating revenue were the ones directed at Business in 2003. The increased revenue was from 2003 to 2007.

The same Article you presented as evidence for revenue generated from the tax cuts of 2003 clearly stated the tax cuts in 2001 did not generate revenue for the government; instead people saved the money.

The tax cuts in 2001 were the big ten year temporary tax plan costing over a trillion dollars, that included all the cuts to brackets and tax credits for the middle class.

If there is no evidence that those tax cuts of 2001 have generated revenue since 2001, what makes you think they would effect anything now, other than people saving less money, if they were returned to previous levels. There is no evidence for it or against it.

It is not likely that the whole package is going to expire. But, there is no evidence that the increases in those two top tax brackets is going to pose a significant issue with our economy. If people are already putting it in their savings; it is very possible that they will decrease their savings a little in the same way they increased it when the tax cuts went into effect.

Most of these upper income class people are in a position to save a significant amount of their income. And remember, on average, an AGI of $250,000, is the equivalent of $315,000 in total income. So on average people that make a total income of $315,000 will see no increase in taxes from an adjustment to the top two tax brackets.

And even those that make $400,000 in average total income a year will only see a $2550 increase in taxes because of the tax brackets. They still keep the average $6500 tax break from the first $250,000 of tax cuts.

Seriously, if you made $40,000 in total income a year would you get upset if your bi-weekly paycheck was cut $10? Would you even notice? Would you be motivated to make a change in finances? We are talking about a six-tenths of one percent reduction in total income.

$2550 might seem like an incredible amount of money to you, but for a typical family that makes $400,000 a year, it is not that much money.

And certainly is not going to be the difference for a small business, in getting rid of employees, if their services are needed. They might raise the price of a hamburger or hammer by 10 cents, but I doubt that would even be seen as worth the trouble.

And that the fact that we avoided these terrible tax increases in the top two tax brackets, has lead to the wave of hiring in February and March, according to Boehner. I doubt any small Business owners bringing in $400,000 in total income have been holding back for months in hiring over a possible $250 dollar month cut in pay. That is not the way real business works; and accountants for these small businesses don't fall prey to exagerrated fears on TV.

@ aghogday

Most small business owners file their taxes as individuals, not as corporations.

Okay....so why should everyone suffer for their filing mistakes?

If they were filing as Corporations they would be double taxed, not just taxed as an individual. Stop blaming small business owners for the mess known as the tax code.