I can't see how "Republican roots" will embrace Jindal in any fashion other than attention seeking curiosity. If a lifelong Republican like Colin Powell stayed away from the presidential spotlight for whatever reasons, I can't see how Jindal can navigate through that minefield. Then again, it could be another 8 years and another cultural shift. He can only hope his handlers can rework his personality to look less toady.
Republicans have no credibility anymore - not with the country. They want to cut taxes when their is a surplus, a deficit, in a boon, and in a recession. Problem with the budget is that you can't cut spending in a recession. You have to run a deficit in a recession. Bush and his cronies squandered the surplus on war and tax cuts when they should have used it to pay off the national debt. Now they want to, when the economy desperately needs stimulous? Insane. Just ludicrious. If a business isn't making much profit, they aren't paying a lot of taxes. Cutting taxes won't stimulate growth....not when your labor costs are far greater than what you pay in taxes. And cutting taxes doesn't make a business profitable. Job number one is to right the credit markets and get investing back on track. Do that and wall street will recover and that alone will stimulate the economy. As people recover wealth in equity they will begin to spend a bit more...just a trickle, and that can be enough to start a recovery. Cutting taxes? Haha.
tax cuts vs. spending? Should be put this way- borrowing vs. borrowing The bailouts are borrowed money. The spending is borrowed money. Tax cuts are borrowed money. 2 yr temp suspension of income taxes would be the right bailout to help encourage consumer spending... fastest way to jump start things short term, much better than the current bailout, better results for about the same price tag. The price tag of the bailouts committed right now is about 1.5 trillion, not counting money the Fed has pumped into banks (probably another trillion). All of this is debt. The total income tax is about 1.2 trillion The government is estimating about 1 trillion in deficit spending not including the bailouts. All of this will be borrowed. So the worst thing would be to have some minor tax cuts and increase spending and bailouts. The result of this is a massive debt increase without any appreciable way to fuel consumer spending which would slow down the job drain temporarily. (it would be like a little credit bubble to slow the crashing) Debt has fueled the economy for 20 yrs and now it is too leveraged and the really bad debt is exposing the lack of liquidity in the markets due to leveraging. Government spending to prop up the economy is a deadly exercise and one that will not heat up consumer spending. It is inefficient, too narrow in special interest and not fast enough to improve productivity and profits. Without the large increases in productivity, production and sales and services necessary to save the economy the right way the only way to go is to ease the collapse of the overblown credit crisis- thus a contraction or as it used to be called a depression. Once the bad debt is purged and the government spending is cut and all the jobs are lost then the industry of the economy can recover through production and profits. Hiring will resume at that point, wages and profits will balance. So large tax cuts do the same thing as government spending, they both increase debt substantially but large tax cuts bail out the consumer faster and provide much better short term liquidity in the key area of consumer spending. In other words if you are borrowing most of your money to run the government anyways, just borrow enough to cover the income tax. It is only another trillion and we are going to throw that much more plus some at banks and business before this is all over. Give the consumer a break or bailout if you will. Problem with neglecting the consumer/taxpayer on the bailout is that bankers and companies are taking this money to just cut their losses, there is no way these bailouts can possibly loosen the credit crisis and fuel growth. This is why the current bailouts aren't going to work. Large financials and corporations are just cutting losses with the $$$$$. Oversight of the bailout isn't the problem, the financials are in real trouble do to over leverage of their positions and their risk exposure to bad debt. They have no sound liquidity at this point. The republican plan is ridiculous since small tax cuts don't help, the democratic plan is equally failed since it will do nothing to stop the contraction in credit. Simply put until the economy is able to shrink and absorb the liquidity crisis we will stay in a recession or a depression. Forget about a 10% reduction in taxes, needs to be closer to 100% for a short time. This would at least put money in the consumer's pocket instead of cutting losses for the wealthy in banks and business. I think with a 2 year free pass on the income tax and a withdrawal of troops from overseas chopping off that trillion we will spend over the next 18 months we could actually save jobs and soften the fall much more effectively.
on the flip side, we have the most tax loopholes available. one of which enables Conglomerates such as Accenture, Tyco etc, to file some paper work to declare themselves not subject to US taxation.
when was tax cut ever the solution ? The father of Reaganomics, after first cuttyin taxes, raised taxes "Read my lips" Bush Sr., reneged on his campaign promise, also raised taxes. Clinton, at the outset, raised taxes, which paved the way to reverse the Federal deficit. the only recent President to never raise taxe was W; look at the economic mess he has created.
Republicans have become like unimaginative boyfriends. The American public are the girlfriends. They gave a gift(tax cuts) one year for the girlfriend's birthday, and she liked it. So after that they gave the same gift every valentine's day, Christmas, birthday, anniversary, etc. Well the girlfriend isn't impressed anymore. She's already got a lifetime supply of bath soaps and body oils. She's in trouble now, and needs something different. But the Republicans keep showing up with the same old crap.
Things have changed in both the Republican Party and the country in the last 13 years. At least I would hope things have changed if not then the Republicans are as doomed as the Whigs.
To be fair to Bush 43 when his first tax cuts were passed we were in a recession and loosening up capital through tax cuts did help and we also were running a surplus. I agree with most of the rest of your post though.
There is still a basic problem that even if the government suspends taxes that doesn't address the income problem that individuals and businesses are facing. As I mentioned in my own situation we are getting back almost everything that we paid in 2008 in taxes and in 2009 will probably be the same thing. That still doesn't mean that we can increase our spending or hire people because we aren't getting more revenue. The lifeblood of my field is credit and until the credit markets thaw then we aren't going to see more business. Tax cuts are good but are meaningless without revenue. I agree with you to a certain extent in principle and recognize the problems with relying upon government spending. The problem that I'm seeing is in a time when the private sector isn't spending the government becomes the client of last choice. Structurally yes it might make sense to go through a depression and purge out the bad debt but the problem with that is that there is a lot of misery in the short term. The problem with that is depending on how things get there could be some serious social upheavels, along the lines of riots and population displacements like in the Great Depression, the other problem is that our political system won't allow that to happen. Hoover for the most part tried to simply let the cycle work itself out during the first part of the Great Depression with little results and a few years later he was voted out of office. There are many historians and economists who make very compelling arguments that Hoover's course was the right course but it was a doomed course politically. I've not been a fan of the bank bailouts and think they have been mismanaged but without thawing credit putting more money back in the form of tax cuts I don't think is going to do much. Banks will still not be lending and until they do business and individual revenues will be continue to be down. The course you suggest might very well work but I don't see how that could be implemented at the current time politically or without some severe risk possibly to the stability of the country.
Cutting payroll taxes/self-employment taxes are the one thing I think they could do as far as tax cuts that would stimulate the economy, considering that would be a cut for the vast majority of people and companies. Unlike income taxes, you are paying payroll taxes even if you are operating at a loss, as long as you have employees.
Tax cuts work if tax revenue is increased as a result of the cut. For instance, the last round of capital gains tax cuts increased the revenue received by the government from capital gains taxes. That is the only test at this point. I can't imagine that ANYBODY would oppose a tax cut if the net result is more revenue.
Wait, I was wrong. President Obama knows that the last capital gains tax cut increased government revenue, but he is looking at increasing the capital gains in the interest of "fairness". Sheesh!
The tax revenues increased less under the latest rounds of tax cuts than they normally do. It's been shown before. Tax revenue is expected to up anyway, but the increase was far less than previously with the latest round of tax cuts So I would argue that tax cuts that make revenue increase only 4% instead of 8% are a bad thing.
If a non-partisan group of our best and brightest could convince Conservatives that further tax cuts would cut revenue, then I would sit back and wait for the result without complaining. This really isn't a partisan issue. We need more revenue, and we need to create more revenue in way that supports business.
I'm not denying we need more revenue. But if we could have a 10% increase but because of tax cuts we only get a 5% increase that's not good. It's still an increase, but not the most effective way of dealing. I agree it isn't or shouldn't be a partisan issue.
That's my whole point. Tax cuts, especially income tax cuts, without revenue are meaningless. The way Bobby Jindal portrayed our choices are between either more spending or more tax cuts. At the moment tax cuts aren't doing much.
I don't get what you are saying. Even if we take action that results in a .00011% increase in government revenue, and we keep more money in our pockets, that is a great thing.
