How long will it take to repair the damge to America done by the Bush regime

[DuncanK]

Wasn't 1980 a recession year?

edit: no it started in 1981

[Imran Siddiqui]

The income tax also increased, and there wasn't much raising of taxes there. Furthermore, in 1990 the tax rates as a percentage of income were substantially lower than in 1980 (and where do you think most of the money comes from?).

The deficit of the 80s was caused by the spending increases (though it was well worth it).

[DuncanK]

Originally posted by Imran Siddiqui
The income tax also increased, and there wasn't much raising of taxes there. Furthermore, in 1990 the tax rates as a percentage of income were substantially lower than in 1980 (and where do you think most of the money comes from?).

The deficit of the 80s was caused by the spending increases (though it was well worth it).

Well it was both, but I knew that there were spending increases I just didn't realize that they were so big. Two things really helped the eocnomy more than either tax cuts or spending increases. One was cheap gas, and the other was high consumer spending rate.

What is of concern is what people do with their money when they recieve a tax cut. In the 80s they did spend a lot of it and it did stimulate the economy a bit, but they also put a lot of it in the stock market. That is evident by the high stock prices.

So what will people do with the proceeds from the Bush tax cut? I think that the majority of the people who will recieve the biggest tax cuts will be baby boomers, and they will save their money (maybe not in the stock market though). They have lost a lot of wealth lately and they will want to save as much as they can for their retirement. Studies show that people in their 50s save a lot more money than younger people.

So these tax cuts wont stimulate the economy and create more tax revenue. That is really going to hurt because the demographic changes coming up are going to create even bigger deficits.

[Imran Siddiqui]

If they save, then that money will be invested, and will help down the line.

However, Baby Boomers defy historical age trends anyway. There is no telling if they will save like previous 50ish people did. Baby Boomers have proven to be highly materialistic.

Hell, my father is over 50, and he just bought a new HDTV and DVD player .

[DuncanK]

Originally posted by Imran Siddiqui
If they save, then that money will be invested, and will help down the line.

I assume you mean when they sell their stocks. They will sell their stocks when they retire (or pass it to their children), but they aren't going to invest in business they are going to spend it on their retirement. And what this is going to cause is a loss in wealth do to falling stock prices. That's going to have a dampening effect on spending and make things worse.

Originally posted by Imran Siddiqui
However, Baby Boomers defy historical age trends anyway. There is no telling if they will save like previous 50ish people did. Baby Boomers have proven to be highly materialistic.

Hell, my father is over 50, and he just bought a new HDTV and DVD player .

Yeah, they do tend to spend a lot historically, but they have lost money in the stock market and we already see that that is having a bad effect on spending. Stocks will probably keep falling in value over the next couple decades and this could be a serious problem.

[DuncanK]

btw, you can get all the stats on government revenue and outlays at the CBO web site. Very nice.

[DuncanK]

Spending only doubled (not trippled), so did tax revenue.

[DuncanK]

hehe, GDP about doubled too. I would say that the spending increases and the tax cuts had an equal contribution to the budget deficits of the 80s.

[Imran Siddiqui]

Seeing as tax revenues doubled in the 1980s, I fail to see how tax cuts had an equal contribution to the budget deficit, seeing as the tax cuts reduced revenues by less than half in the first years of the cuts.

Since revenues increased more than the cuts took out in the early 80s, its hard to say the cuts led to the huge deficits.

[Dis]

It's simple.

Eliminate stupid democratic programs and we would have plenty of money for tax cuts.

But the problem is the democratic programs are here to stay. The republicans can't get rid of programs enacted before their term. So they are forced to deal with it.

But I still feel the goverment can be trimmed down to save money. Bush hasn't done a good job with that. I understand the need for the homeland security division. But other areas can be cut, and that hasn't happened.

So if Bush would eliminate waste of the federal goverment, then I say cut the hell out of taxes.

[DuncanK]

Originally posted by Imran Siddiqui
Seeing as tax revenues doubled in the 1980s, I fail to see how tax cuts had an equal contribution to the budget deficit, seeing as the tax cuts reduced revenues by less than half in the first years of the cuts.

Since revenues increased more than the cuts took out in the early 80s, its hard to say the cuts led to the huge deficits.

You are assuming that tax cuts were the only contributor to economic growth and tax revenue. Many things contributed including the spending increases.

[DuncanK]

We are looking at increased tax revenue, but what we should be looking at is the taxes that weren't collected due to the tax cuts.
I would like to see a comparison of actual revenues lost due to tax cuts and spending increases.

[Dinner]

I wish they'd revise McCain's old idea of an across the board 10% cut to all government spending except social security. Every body gets hit with the axe. If my experience in the military is any indication there is alot of waste and ineffiecency in the government which can be cut out.

I've also noticed that recession or boom the government just keeps on hiring new workers but they never seem to fire any workers. That means there has to be a sizable amount of dead wood in the system. These folks need to get the axe as well then maybe we'll be able to get a handle on the deficit.

[DuncanK]

I didn't think the military was that inefficient when I was in.

[KrazyHorse]

I've also noticed that recession or boom the government just keeps on hiring new workers but they never seem to fire any workers. That means there has to be a sizable amount of dead wood in the system. These folks need to get the axe as well then maybe we'll be able to get a handle on the deficit.

I can't remember if it was the US or Canada, but I recently saw a report which said that civil servants and other government employees have consistently been at the highest risk for layoffs and downsizing for the last ten years (as compared to workers in other industries).