A Plan To Save Our Economy

[MTI]

The first is that tax cuts are part of the solution. Harvard professor and economist Greg Mankiw points out that recent research confirms that tax cuts have a greater multiplier effect than new spending — more economic bang for the federal buck.

We should lower tax rates for middle-income families and eliminate their tax on savings altogether — no tax on interest, dividends or capital gains. Let’s also align our corporate tax rate with those of competing nations. These actions will rapidly expand consumption and investment, and right now, time is of the essence.

On the spending front, infrastructure projects should be a high priority. But because infrastructure projects involve engineering, environmental studies, permitting and contracting, they can take a long time to actually boost the economy.

Spending to refurbish and modernize our military equipment is urgently needed, and it has a more immediate impact on the economy. A great deal of our armament was damaged or lost in the Middle East, and the rest is long overdue for maintenance.

We should also invest to free us from our dependence on foreign oil, not by playing venture capitalist, but by funding basic research in renewables, material science, combustion, nuclear reprocessing, and the like. During the 2008 campaign, virtually every candidate agreed on the need for an “Apollo-like mission” to achieve energy independence. Now is the time to start.

Cities and states will clamor for government dollars. Like the Big Three automakers, states should first take advantage of the downturn to do some needed cost cutting and restructuring. State employee numbers, pensions, and health-insurance premium sharing — as well as duplicate and ineffective agencies and programs — should be high on the hit list. State budgets should be brought in line with those of the most efficient of their comparables. And the federal government should look to ease the burden of mandates on states, like Medicaid..

Lowering taxes for middle income taxpayers, infrastructure spending, upgrading military stockpiles and renewable energy research funding, in a federal stimulus program. A good idea?

[BAVBMW]

In a word, yes.

I'd have to see some numbers on the tax cuts and so forth, but as for the spending, defense and infastructure have my vote. For one thing, these two are big on the list of what I expect a government to do for it's people. But moreover, when you spend the money to build a bridge or a ship, you put people to work and keep industries churning, both good things. But at the same time, when the project is done, you have said bridge or ship. When you play venture capitalist, maybe whatever you funded works, maybe it doesn't, but either way, the government is out the money.

I agree that states need to cut, but good luck getting them to do it.

MV

[MS Fowler]

Like they say, " The devil is in the details", so I can't comment on a specific plan, but as a broad outline, I like it.

[ah-kay]

We have been down this path before on tax cut. Look at where we are with Bush/Reagan's cut. The deficit just BALLOONED. Just look at the deficit in relative terms after they left office.

We have to make ends-meet just like every household by cutting spending and raising income(taxes) . How? I do not know. Just commission an economist to do it for us just like we have done it many many times before.

[retmil46]

Originally Posted by MTI

[I]We should also invest to free us from our dependence on foreign oil, not by playing venture capitalist, but by funding basic research in renewables, material science, combustion, nuclear reprocessing, and the like. During the 2008 campaign, virtually every candidate agreed on the need for an “Apollo-like mission” to achieve energy independence. Now is the time to start.

On this point, a definite yes, especially the part in bold. For 40 years, we've had essentially nothing but lip service and subsidies, nothing resembling a workable long-term energy policy.

The Bush-era ethanol program and BO's Solyndra-type loans are the two prime examples of failed "venture capitalist" approaches by the government that come to mind.

I'd add in that straightening out this mish-mash of EPA and CARB regulations, with one set of national rules, and bringing said regulations in line with other developed regions such as Europe, would help facilitate developments along this line.

To grow an economy, and encourage investment and development, you need a readily available supply of reasonably priced energy - trying to bring alternatives on line by the simple expedient of making "conventional" sources of energy increasingly more expensive, and restricting their availability - ie, Smartgrid, nonsensical EPA/CARB regulations, mandated ethanol useage - are simply going to encourage said investment and development to be done elsewhere.

[MS Fowler]

Originally Posted by ah-kay

We have been down this path before on tax cut. Look at where we are with Bush/Reagan's cut. The deficit just BALLOONED. Just look at the deficit in relative terms after they left office.

We have to make ends-meet just like every household by cutting spending and raising income(taxes) . How? I do not know. Just commission an economist to do it for us just like we have done it many many times before.

Look at the whole picture if you are seeking truth.
The monies INTO the US Treasury increased dramatically under Reagan. He made a deal with Congress--he would allow a tax increase, and they promised to match it "dollar-for-dollar". Congress failed to cut spending. Both Repubs, and Dems were responsible for the over-spending, and THAT caused the deficit to balloon.
Spending by Congress, not tax cuts ballooned the deficit. Look at all the facts, not just the partisan ones.

[Air&Road]

I can't disagree with much of anything I've read in this thread.

The point I would like to add, however, is LBJ's "Great Society." All his give aways had cost about $7T as of about the time B.O. took office. I would be scared to death to see what that number has grown to now.

It's a bit ironic, I would say, that the Great Society spending has cost an amount that is a HUGE part of our national debt.

[MTI]

Well, I suppose that there's a chance that the 2008 version of Mitt Romney will show up again.

[ah-kay]

Originally Posted by MS Fowler

Look at the whole picture if you are seeking truth.
The monies INTO the US Treasury increased dramatically under Reagan. He made a deal with Congress--he would allow a tax increase, and they promised to match it "dollar-for-dollar". Congress failed to cut spending. Both Repubs, and Dems were responsible for the over-spending, and THAT caused the deficit to balloon.
Spending by Congress, not tax cuts ballooned the deficit. Look at all the facts, not just the partisan ones.

Let me just say this. Bush/Reagan are the 2 Presidents which ballooned the relative % term deficit the highest after their tax cut. Tax cut to boost revenue never work and never will. This is analogy to "reducing your income and expect to have more spending money". Just ask a layman in the street and see what answer you get.

I do not have an answer and I do not think any politicians, Repub or Dems, have it neither. US government has to balance the book one way or another. We owe it to our children and their children. Alternative energy is a good start.

[MS Fowler]

Originally Posted by ah-kay

Let me just say this. Bush/Reagan are the 2 Presidents which ballooned the relative % term deficit the highest after their tax cut. Tax cut to boost revenue never work and never will. This is analogy to "reducing your income and expect to have more spending money". Just ask a layman in the street and see what answer you get.

I do not have an answer and I do not think any politicians, Repub or Dems, have it neither. US government has to balance the book one way or another. We owe it to our children and their children. Alternative energy is a good start.

You refuse to understand that cutting marginal tax rates can produce greater money into the treasury. Remember, it is not a closed system. Reducing tax rates CAN free the economy to grow. When the economy grows, more tax revenue is produced.
Your answer looks as it you are looking at democrat talking points. Yes, the deficit grew under Reagan and Bush, but the "cause and effect" is not as you assume. Look deeper.
Its a SPENDING issue; not a revenue issue.
I agree that repubs have been at fault as much as dems. Over-spending is a bi-partisan endeavor.

[roflwaffle]

It can, but it's kinda rare, and largely a function of income. The lower you go the more tax cuts work, since poor people generally have to spend all the money they get. Otoh, tax cuts for the wealthier, and even the upper end of middle income, generally don't do much. The only exception is when interest rates are super high and the economy is ready to grow, in which case cutting taxes can free up money for investment, but that isn't the case now given how low the prime rate is.

[Honus]

Originally Posted by MTI

The first is that tax cuts are part of the solution. Harvard professor and economist Greg Mankiw points out that recent research confirms that tax cuts have a greater multiplier effect than new spending — more economic bang for the federal buck.

We should lower tax rates for middle-income families and eliminate their tax on savings altogether — no tax on interest, dividends or capital gains. Let’s also align our corporate tax rate with those of competing nations. These actions will rapidly expand consumption and investment, and right now, time is of the essence.

On the spending front, infrastructure projects should be a high priority. But because infrastructure projects involve engineering, environmental studies, permitting and contracting, they can take a long time to actually boost the economy.

Spending to refurbish and modernize our military equipment is urgently needed, and it has a more immediate impact on the economy. A great deal of our armament was damaged or lost in the Middle East, and the rest is long overdue for maintenance.

We should also invest to free us from our dependence on foreign oil, not by playing venture capitalist, but by funding basic research in renewables, material science, combustion, nuclear reprocessing, and the like. During the 2008 campaign, virtually every candidate agreed on the need for an “Apollo-like mission” to achieve energy independence. Now is the time to start.

Cities and states will clamor for government dollars. Like the Big Three automakers, states should first take advantage of the downturn to do some needed cost cutting and restructuring. State employee numbers, pensions, and health-insurance premium sharing — as well as duplicate and ineffective agencies and programs — should be high on the hit list. State budgets should be brought in line with those of the most efficient of their comparables. And the federal government should look to ease the burden of mandates on states, like Medicaid..

Lowering taxes for middle income taxpayers, infrastructure spending, upgrading military stockpiles and renewable energy research funding, in a federal stimulus program. A good idea?

You left out the other thing Romney said in that article:

...So this is surely the time for economic stimulus....

A Republican Stimulus Plan - Mitt Romney - National Review Online

Of course, that was then...

[pmckechnie]

It would be very easy to cut spending, pay down the debt and get this country back on track and the greatest nation on this old earth. Make it a law that if a politician makes a comment that he is for "Lowering the deficit is one of this campaign promises or cut spending, or anything like this and he\she votes on ANYTHING that would increase spending, doesn't reduce the deficit, etc, then they loose all their benefits, and spend the rest of their term in prison. Problem solved. The only way this can happen is for every person in the US sign a partition to make it happen. Not likely. I believe that if a politician says anything to get elected, then doesn't do what they say, or does the opposite, they should be arrested for purgery(sp) (senior moment), same as in a court of law.

You can tell me anything and I won't think less of you, but if you lie to me, then you are the scum of the earth.

Paul

[Pooka]

The original quote sounds good until you consider the effect of the velocity of money and then it falls apart pretty quickly.

Cutting taxes on anyone might be good for them, but if they don't spend it then where is the gain to the economy overall? And while the poor will spend every dime the wealthy are apt to save any excess money which is akin to a contraction in the money supply.

Taking the velocity out of the question is like taking the effect of gravity out of the theory of multiple dimensions. Take it out and the theory works, but gravity exists.

H. L. Hunt, one of the biggest Conservatives that ever lived, said money is like manure. It does no one any good unless you spread it around.

[Botnst]

Oh boy, an Ivy Leaguer is going to tell us how to correct an economic situation created by other Ivy Leaguers. What could possibly go wrong?