The Atheist Communist Caliphate Made Flesh, Spread the Clusterfuck Around Thread

[Tank]

On another topic, some fairly comprehensive coverage of the Iranian presidential election vis a vis the West...

http://thecable.foreignpolicy.com/posts/2009/06/10/all_quiet_on_the_western_front

The candidates...

http://www.foreignpolicy.com/story/cms.php?story_id=4989

[morpheus]

Bottom line is, the Laffer Curve is bullshit.

No, Fork.  You just have to know where you are on the curve, making it difficult to actually apply.  At some point raising tax rates is counterproductive, and at other points it raises government revenues by much less than you'd expect in a linear world.  That's all.

[morpheus]

On another topic, some fairly comprehensive coverage of the Iranian presidential election vis a vis the West...

http://thecable.foreignpolicy.com/posts/2009/06/10/all_quiet_on_the_western_front

The candidates...

http://www.foreignpolicy.com/story/cms.php?story_id=4989

Despite dramatic images this week of the largest campaign demonstrations taking place in Iran since the 1979 Islamic Revolution, including a human chain of as many as a million supporters for former Prime Minister Mir Hossein Mousavi, the leading opposition candidate, the Obama administration has remained largely silent.

That's almost "Hussein."  Conicidence?  I think not.

[RV]

Economics shit

I assume they used a static scoring model... and I'd be interested to see the same figures dynamically scored.  I.e., the Bush tax cuts of 2001 and 2003 changed how people behaved.  We've been over this, so I'm not going to argue that they were net revenue producers but I will argue that the true effect is not 1/3 of the swing.  We don't know what the economy would have done in absence of those tax cuts - we don't have the counterfactual.

Two things:

- The 1/3 isn't just the tax cuts - it also includes the prescription drug benefit (and other Bush legislation).

- On dynamic scoring:

In Washington, the debate became a bureaucratic battle focusing on the Congressional Budget Office and Joint Committee on Taxation, the two agencies responsible for advising Congress on the costs of budget and tax changes. By convention, both use "static" scorekeeping that assumes budget and tax changes have no effect on overall economic growth. Supply-side proponents have criticized both agencies relentlessly for this, but to no avail -- until last week.

Enter Douglas Holtz-Eakin, an economist on leave from Syracuse University and an avowed advocate of supply-side "dynamic" scoring. A few months ago, Republican congressional leaders plucked him out of a job at the White House and made him director of the CBO. Last week, in his agency's analysis of President Bush's tax and budget plan, he provided his new bosses with their first taste of dynamic scoring.

And in no case does Mr. Bush's tax cut come close to paying for itself over the next 10 years.

I'm sure glad I said above that I wasn't going to argue that the tax cuts paid for themselves.  Otherwise you might have wasted your time by trying to counter such an argument.

Fair point. Your argument was about the effect on the economy, not on government revenues. This is probably a more relevant quote from the article:

The results: Some provisions of the president's plan would speed up the economy; others would slow it down. Using some models, the plan would reduce the budget deficit from what it otherwise would have been; using others, it would widen the deficit.

But in every case, the effects are relatively small.

Getting back to the deficits, I think my overall point is that if we consider the CBO report (using dynamic scoring) predicted that the effect on the economy wouldn't be significant in either direction (positive or negative), taken along with the fact that we had a war to pay for, wasn't this particular set of tax cuts pretty irresponsible?

[Quality Start Machine]

Bottom line is, the Laffer Curve is bullshit.

No, Fork.  You just have to know where you are on the curve, making it difficult to actually apply.  At some point raising tax rates is counterproductive, and at other points it raises government revenues by much less than you'd expect in a linear world.  That's all.

What about cuts?

[Chuck to Chuck]

Bottom line is, the Laffer Curve is bullshit.

No, Fork.  You just have to know where you are on the curve, making it difficult to actually apply.  At some point raising tax rates is counterproductive, and at other points it raises government revenues by much less than you'd expect in a linear world.  That's all.

The Laffer Curve is bullshit at all put extremely high or low marginal tax rates.  Many economists, including the one who taught my Labor Econ course correctly point out that minor changes in marginal rates may actually have multiplicative effects on revenues.  At full or near full employment, the only way to get more income tax revenue is to get non-workers to begin working.  Where is the biggest pool of non-job seeking adults?  Married women.  Lowering tax rates may actually disincent them to work as their spouse's take home pay increases under a tax cut.  If you raise the marginal tax rates, you could not only get mroe revenue from current workers, but get new workers to being working to make up the shortfall in lost spousal income.

The Laffer Curve works at the +90% margins and the -10% margins.  Not much else.

[Gil Gunderson]

Bottom line is, the Laffer Curve is bullshit.

No, Fork.  You just have to know where you are on the curve, making it difficult to actually apply.  At some point raising tax rates is counterproductive, and at other points it raises government revenues by much less than you'd expect in a linear world.  That's all.

This.

Also, the CBO scored the Waxman-Markey Climate Change bill.  CBO and the Joint Committee on Taxation (JCT) estimate that over the 2010-2019 period enacting this legislation would:

Increase federal revenues by about $846 billion; and
Increase direct spending by about $821 billion.
In total, those changes would reduce budget deficits (or increase future surpluses) by about $24 billion over the 2010-2019 period.

In addition, assuming appropriation of the necessary amounts, CBO estimates that implementing H.R. 2454 would increase discretionary spending by about $50 billion over the 2010-2019 period.

A net loser overall.

Would a carbon tax simply be better?

[Oleg]

Bottom line is, the Laffer Curve is bullshit.

No, Fork.  You just have to know where you are on the curve, making it difficult to actually apply.  At some point raising tax rates is counterproductive, and at other points it raises government revenues by much less than you'd expect in a linear world.  That's all.

This.

Also, the CBO scored the Waxman-Markey Climate Change bill.  CBO and the Joint Committee on Taxation (JCT) estimate that over the 2010-2019 period enacting this legislation would:

Increase federal revenues by about $846 billion; and
Increase direct spending by about $821 billion.
In total, those changes would reduce budget deficits (or increase future surpluses) by about $24 billion over the 2010-2019 period.

In addition, assuming appropriation of the necessary amounts, CBO estimates that implementing H.R. 2454 would increase discretionary spending by about $50 billion over the 2010-2019 period.

A net loser overall.

Would a carbon tax simply be better?

Am I reading this correctly?  It would cost roughly $35 billion (net) over 10 years to go a good way towards a better environment?  What is that...like 3 months of the Iraq war?

Let's stop invading other countries, and we're golden!

[Brownie]

Bottom line is, the Laffer Curve is bullshit.

No, Fork.  You just have to know where you are on the curve, making it difficult to actually apply.  At some point raising tax rates is counterproductive, and at other points it raises government revenues by much less than you'd expect in a linear world.  That's all.

This fucking this.

The Laffer Curve is bullshit at all put extremely high or low marginal tax rates.  Many economists, including the one who taught my Labor Econ course correctly point out that minor changes in marginal rates may actually have multiplicative effects on revenues.  At full or near full employment, the only way to get more income tax revenue is to get non-workers to begin working.  Where is the biggest pool of non-job seeking adults?  Married women.  Lowering tax rates may actually disincent them to work as their spouse's take home pay increases under a tax cut.  If you raise the marginal tax rates, you could not only get mroe revenue from current workers, but get new workers to being working to make up the shortfall in lost spousal income.

The Laffer Curve works at the +90% margins and the -10% margins.  Not much else.

Or the other way to get more income tax revenue is to get people and companies to boost their earnings. Say I make more next year than my wife and I combined make this year and she elects to quit her job? Our income goes up. Say that I am willing work later more than I was at the smaller salary, and I produce more value for the company? Earnings go up, possibly more people need to be hired. At full employment, maybe it means overtime.

At a certain point, why bust my ass for another $1 when the government is going to take $0.37/$0.39/$0.40/$0.75 away? Hell, my wife's working her ass off too. I'm just going to go home, watch the Cubs fail to hit Wandy Rodriguez and go to bed.

[RV]

Bottom line is, the Laffer Curve is bullshit.

No, Fork.  You just have to know where you are on the curve, making it difficult to actually apply.  At some point raising tax rates is counterproductive, and at other points it raises government revenues by much less than you'd expect in a linear world.  That's all.

This.

Also, the CBO scored the Waxman-Markey Climate Change bill.  CBO and the Joint Committee on Taxation (JCT) estimate that over the 2010-2019 period enacting this legislation would:

Increase federal revenues by about $846 billion; and
Increase direct spending by about $821 billion.
In total, those changes would reduce budget deficits (or increase future surpluses) by about $24 billion over the 2010-2019 period.

In addition, assuming appropriation of the necessary amounts, CBO estimates that implementing H.R. 2454 would increase discretionary spending by about $50 billion over the 2010-2019 period.

A net loser overall.

Would a carbon tax simply be better?

Yes. But I think this accurately describes why it won't happen.

As far as policies to reduce greenhouse emissions go, most economists would argue that a straight-up carbon tax would work more effectively than a cap-and-trade regime, like the one Europe's struggling with. But politicians usually avoid even talking about carbon taxes—all of the big climate bills in the Senate involve cap-and-trade—for fear of being branded a puppy-hating socialist and all that.

Cap and trade is far from the best solution, but probably the best that can be done in the current political climate.

[RV]

Bottom line is, the Laffer Curve is bullshit.

No, Fork.  You just have to know where you are on the curve, making it difficult to actually apply.  At some point raising tax rates is counterproductive, and at other points it raises government revenues by much less than you'd expect in a linear world.  That's all.

This fucking this.

The Laffer Curve is bullshit at all put extremely high or low marginal tax rates.  Many economists, including the one who taught my Labor Econ course correctly point out that minor changes in marginal rates may actually have multiplicative effects on revenues.  At full or near full employment, the only way to get more income tax revenue is to get non-workers to begin working.  Where is the biggest pool of non-job seeking adults?  Married women.  Lowering tax rates may actually disincent them to work as their spouse's take home pay increases under a tax cut.  If you raise the marginal tax rates, you could not only get mroe revenue from current workers, but get new workers to being working to make up the shortfall in lost spousal income.

The Laffer Curve works at the +90% margins and the -10% margins.  Not much else.

Or the other way to get more income tax revenue is to get people and companies to boost their earnings. Say I make more next year than my wife and I combined make this year and she elects to quit her job? Our income goes up. Say that I am willing work later more than I was at the smaller salary, and I produce more value for the company? Earnings go up, possibly more people need to be hired. At full employment, maybe it means overtime.

At a certain point, why bust my ass for another $1 when the government is going to take $0.37/$0.39/$0.40/$0.75 away? Hell, my wife's working her ass off too. I'm just going to go home, watch the Cubs fail to hit Wandy Rodriguez and go to bed.

Or not.

A pay increase or a tax cut makes extra work both more attractive and less necessary. It is impossible to tell on the basis of theory whether a tax cut would increase the number of hours people put in at work or cut them. Or do nothing much at all if the two effects more or less cancelled each other out.

So in 1994 four American economists decided to investigate the group of workers they thought most free to respond positively to a hike in their hourly rates of pay.

New York taxi drivers are free to vary the number of hours they work each day up to a maximum of 12 hours a shift. After paying a fixed fee for use of the cab, they keep every fare they earn. And their hourly rate of pay varies from day to day. On good days, when business is brisk, their hourly rate of pay is quite high. On bad days it can be appallingly low.

A Caltech University economist, Colin Camerer, and his team examined more than 1000 taxi company documents providing data on the daily pay rates and hours of work of about 500 drivers. What they found appeared to defy common sense.

Typically on those days when business was good, New York taxi drivers knocked off the earliest. On those days when their hourly pay was at its lowest, they worked the longest. It's the opposite response to that assumed by the Centre for Independent Studies. Camerer concluded that taxi drivers were "target earners" who kept driving each day until they made a certain amount of money.

After surveying studies on all types of work Farber concludes that the response of men to an increase in pay is usually "very small and not significantly different from zero".

Intriguingly, he finds that for women, particularly married women considering returning to work, the response to a pay hike or a tax cut is a good deal larger.

Chuck is right? My whole worldview is shattered.

[Brownie]

I sort of come from the school that if you're not motivated by money, great! Be happy, and live your life, and work as long as you'd like to. If you are motivated by money, great! Work for it as hard as you can, be happy and work the long hours if you'd like to.

Time and a half is pretty standard for overtime. That's fair. At the very least, paying someone the same rate they've been being paid to work extra is fair. A progressive tax system makes extra income pay less for each marginal dollar worked. OK, I can live with the progressive tax, but as the rate increases, my marginal pay drops at various intervals. Again, you're talking about people who are already making enough money to be taxed in the first place, people who are making enough money to be taxed in a higher bracket. These people's incomes generally speaking come from taking risks, so if you're increasing a cost (taxes), your EBITDA might look good, but the bottom line might not support the risk/grief you're taking on.

[morpheus]

RV's "STUDIES"

All that study shows is that either the less experienced taxi drivers didn't understand their INCENTIVE structure, or that they gained more utility by targeting an income level rather than maximizing profit.  It would be impossible to generalize these findings to much of anything, especially when considering which income bracket they came from; the marginal gain from an extra unit of work, given the shape of the "average" indifference curve, just wasn't that much.  As TJ noted, this changes quite a bit when you move up the income spectrum - an extra unit of work can mean a lot more in marginal gain.

(Interestingly, he found that not all drivers behaved that way. The more experienced drivers did tend to work longer hours on those days when business was good, as assumed by the centre, but the effect was small and overwhelmed by the behaviour of the less experienced drivers.)

[RV]

The AMA does not approve of the Obama plan for health care.

http://www.nytimes.com/2009/06/11/us/politics/11health.html

WASHINGTON — As the health care debate heats up, the American Medical Association is letting Congress know that it will oppose creation of a government-sponsored insurance plan, which President Obama and many other Democrats see as an essential element of legislation to remake the health care system.

The opposition, which comes as Mr. Obama prepares to address the powerful doctors' group on Monday in Chicago, could be a major hurdle for advocates of a public insurance plan. The A.M.A., with about 250,000 members, is America's largest physician organization.

In other news, Germany surrendered in 1945.

Not that AMA opposition to reform is anything new, but they've "clarified" their position:

Today's New York Times story creates a false impression about the AMA's position on a public plan option in health care reform legislation. The AMA opposes any public plan that forces physicians to participate, expands the fiscally-challenged Medicare program or pays Medicare rates, but the AMA is willing to consider other variations of the public plan that are currently under discussion in Congress.

http://voices.washingtonpost.com/ezra-klein/2009/06/hardball_on_health_care.html

[MikeC]

It's not Obama's "lies" that are the problem.  It's the lack of introspection from the "loyal Bushies" taht leads to them being ignored.

And, if you are upset about the debt now (ME!) you better have been upset about the tax cuts in 2001 (ME!)

I wouldn't classify myself as upset about the deficits Bush ran up, but i certainly didn't like it. However there is debate on whether Clinton even had budget surpluses when his administration was still adding billions to the national debt. Clinton claimed the national debt was reduced by 360 billion his last 3 years when instead there was a 281 billion increase in those same 3 years to the national debt.

http://activerain.com/blogsview/855368/the-clinton-budget-surplus-fact-or-fiction-

http://www.craigsteiner.us/articles/16

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm

To be honest that was before the time i even cared about politics or understood what side of the political spectrum i most identified with. Hell i wanted Al Gore to beat Bush. I would like Morpheus opinion (if he would )if it's one of those examples of "fuzzy math."

Anyways i am just gonna roll on like Clinton had his surplus and Bush didn't. I Didn't like the idea of cutting taxes, i like the idea of keeping the taxes the same and doing what we could to bring down the debt. Two factors that i believe hindered Bush early on was the recession from the Dot.Com bubble bursting and the events of 9/11. So no matter what the economy is taking 2 massive blows and i think that fundamentally changed how he envisioned government.

The other aspect of the deficit spending was Bush is going to be extremely generous to the military. The Clinton years saw a dramatic decrease in military spending from research and development, sea lift capacity, and just plain not buying the military much needed upgrades in weapons systems and parts. So a big part of Clinton's budget surplus is coming on the back of stripping the military by denying them funding. Bush was going to increase defense spending anyways during his years but dramatically began doing that after 9/11. I don't even want to get into the debate of whether we should be in Iraq or not. What did happen after 9/11 is that we needed to act and do it quickly to buy time. What were we buying time for? To get our military up to speed. Clinton gutted the armed forces and our nation needed time to get our equipment ready for deployment, and get our military sea lift capacity back in order which was also damaged. The sea lift capacity was especially dire as it prevented us from projecting our home based divisions over seas.

So i can see why he is running a deficit and what he believed could get the economy back on track. We can argue till we are blue in the face on whether the tax cuts improved the economy or not or whether the market corrected itself. He dealt with a recession, he dealt with 9/11, he dealt with Katrina, he liberated 2 countries that have a real chance at freedom and he ran what was then i think record deficits. I can live with the reasons why he ran a deficit.  So besides a recession that Obama has bean dealt explains his projected budget deficits through 2019? Is he gonna liberate Iran and North Korea? Is there another Katrina on the horizon? Is any American City going to suffer a 9/11 type attack? His budget plans don't factor in any unforeseen catastrophes or disasters. Imagine what the federal budget would look like if Obama suffered anything like what happened during the Bush years. No i don't agree with the Bush deficit spending, but i do agree with some of the actions that needed to be taken that made him rack up that kind of spending. I am having a real hard time seeing how Obama can justify his.