Think before gloating over Bush's spectacular fiscal incompetence

[rah]

Originally posted by MikeH
Giving back billions in tax cuts was an election promise wasn't it, how has that got anything to do with 9/11?

The surplus that was supposed to cover the tax cuts shrank considerably due to 9/11. 9/11 was a big contributor to the economic slide. Granted there would have been/was a slide to begin with, but a lot of layoffs and falling confidence can be directly attributed and helped it pick up steam.

[Whaleboy]

Yes, a considerable amount. But don't worry, they'll just blame that on Bush too.

Reagun

Agathon (minus ad hominems):

If theres one thing I cant stand its populist, reactionist, simple minded (insert expletive here) politicians.

[MikeH]

Absolutely, 9/11 totally changed the economic situation and proceeding with the cuts under those changed circumstances is lunacy (even if you didn't think it was a bit dumb in the first place). Who's fault is that? It's irresponsible to make tax cuts in a climate like that. Especially when you are increasing spending...

Because at the same time he's committed the country to an overseas war that is costing tens of billions of dollars without increasing taxes to pay for it. That increases the deficit even more. Not to mention the fact that his inability to build an international coallition to help in Iraq is now costing the US even more money in peacekeeping and rebuilding, hence the current compromised in the UN to try and get more international help.

So 9/11 was bad for the economy, I totally agree. But Bush's policies made the situation much worse.

I think I read the other month that US unemployment levels were at a 20 year high?

[Solly]

Absolutely, 9/11 totally changed the economic situation and proceeding with the cuts under those changed circumstances is lunacy (even if you didn't think it was a bit dumb in the first place). Who's fault is that? It's irresponsible to make tax cuts in a climate like that. Especially when you are increasing spending...

If Bush had changed his tax cuts after being elected, those who voted for him would be less likely to next time around as he'd broken a promise. Democrats wouldn't vote him anyway...

Don't blame the politicians, blame the people that elect.

[FrustratedPoet]

blame the people that elect.

Or don't elect, as the case may be.

[Solly]

Huh FP?

[FrustratedPoet]

That was supposed to mean both
1. Bush wasn't really elected democratically blah blah blah. The usual lefty troll ( ), and
2. The people who don't elect their leader (ie. by choosing not to vote) are also to blame. It still amazes me how anyone who doesn't excercise their right to vote has the almighty gall to complain about anything the government does.

I seem to have trouble making myself understood today.

[rah]

Yeah, I agree that after 9/11 the tax cut should have been trimmed a bit.

Individuals judge a lot of things on their personal experiences. Since Bush has been elected, my salary has increased a good chunk, my tax burden is less due to the tax cuts. So while I don't necessarily agree with a lot of the things that he has done, I have benefitted and would vote for him again. (of course, subject to change at a moments notice. )

[JohnT]

"Yeah, I agree that after 9/11 the tax cut should have been trimmed a bit."

IIRC, it was trimmed "a bit." From ~$800 billion to $350 bil.

[MikeH]

And the proportion of your taxes that now goes on paying off interest from international debts rather than on actual services has increased massively.

[rah]

Originally posted by MikeH
And the proportion of your taxes that now goes on paying off interest from international debts rather than on actual services has increased massively.

But the average person doesn't realize that impact. They're just counting what's in their own pocket.

And yes John, but I still believe it should have been trimmed farther. While the money that I got back was nice, I could have done without it.

[Solly]

Did you spend it or save it Rah?

[rah]

Spent it, just like the president told us to.

I'm a good little na... I mean american.

[MikeH]

I hope you spent it on stuff made in America.

[Adam Smith]

Just a couple of comments

He said that a tax cut that was not designed to stimulate the economy would stimulate it. But it did not.

Any tax cut will stimulate the economy, at least in the short run. Stiglitz knows this.

Now, after handing billions to rich Americans through tax cuts, the Bush administration is passing the hat around, asking for contributions from other countries to help to pay for the Iraq war.

I agree that this is a bad policy. It is starting to look like Lyndon Johnson guns (Vietnam) and butter (Great Society programs) in the 1960's. The results were not pretty.

it is inevitable that it will focus on China, with its large trade surplus

By not allowing its currency to rise in value, China is using export industries to soak up workers who were laid off by rusting and inefficient state industries. In the long run this is probably a good thing economically, if not politically.

Reagan's irresponsible tax cuts combined with America's paltry savings, meant the US had no choice but to borrow abroad.

Tax cuts are a standard response to the high unemployment we had in the early 1980's. Stiglitz knows this. However, if you cut taxes to people who save 80 percent of their income, have to cover 100 percent of the resulting deficit with borrowing, you just reduced the amount of money available for investment, making matters worse in the long run. The trick is to find ways to reduce government spending without losing services. This means health care reform, social security reform, and defense procurement reform. Not too many politicians have the guts to take on these issues.

demonstrable lack of competence in macroeconomic management

Interesting Stiglitz should make this charge with respect to the US when many countries have larger deficits as a percent of GDP even after instituting the fiscal reforms he mentions.

close to a quarter of American imports were covered by some form of trade restriction at the peak of Reagan protectionism

Since when was this a Reagan issue? Then, as now, Democrats in Congress are responsible for the vast majority of protectionism. See e.g., 1984 Democratic Party Platform, Democratic votes against NAFTA and WTO, and the current presidential campaigns of Gebhart and others. Stiglitz certainly knows this.

Edit: spelling