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GM CEO Dan Akerson says higher gas taxes are the key to fuel efficiency.  (Source: AP Photo/Richard Drew)

Mr. Akerson, who claims to be a "Colin Powell Republican" praised Democratic President Barack Obama and called on the U.S. gov't to raise taxes on gas. He also suggested overall tax increases as well.  (Source: Trap-Blog.org)

Taxpayers may lose $12B USD or more from the bailout, due to depressed stock prices devaluing the U.S. government's remaining stake.  (Source: AP Photo)
"Republican" CEO admits taxpayers may lose $12B USD on bailout

It was almost two years ago this month that General Motors Comp. (GM) became the largest bankruptcy in U.S history and the largest nationalization.  Taxpayer money was spent restructuring the company, removing unprofitable segments

The approach worked.  The company has since been profitable and enjoyed a successful initial public offering of stock.  The only real issue for the company has been leadership turnover.  The company has seen string of CEOs come and go -- Rick Wagoner, Fritz Henderson, and, most recently, Ed Whitacre.  

I. GasTaxes++

The current CEO, Dan Akerson recently sounded off in an interview with The Detroit News, portions of which will likely offend some readers.  

Most notably Mr. Akerson called for a massive gas tax hike in the U.S. commenting, "You know what I'd rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas. People will start buying more Cruzes and they will start buying less Suburbans."

Mr. Akerson argues a tax increase would be a better way to "protect the environment" and promote consumer fuel efficiency than direct increases the U.S. Corporate Average Fuel Economy (CAFE) regulations.  The Obama administration and Congress are currently looking to extend increases in CAFE mandated fuel economy levels through 2025, with the current round of increases wrapping up in 2017.

GM currently is the only member of the U.S. "Big Three" to offer an electric vehicle.  GM's Chevy Volt launched late last year and carries a $7,500 tax credit for buyers.

Mr. Akerson's comments echo those of a former senior advisor to President George W. Bush, who also advocates raising gas taxes as the only "practical" solution to escaping dependence on foreign oil.  

Mr. Akerson suggested a tax of fifty cents or a dollar, which would make $4 USD/gallon gas cost either $4.50 or $5 USD/gallon.  This is slightly less than GM's previous suggestion to tax gas to $8 USD/gallon.

A Ford Motor Company (F) spokesperson refused to endorse the suggestion to raise fuel taxes, commenting, "[Ford] will leave the policy decision to Congress."

II. Akerson Praises Obama, Calls For More Taxes

The CEO, who bills himself as "a Colin Powell Republican — not a Sarah Palin Republican", praised U.S. President Barack Obama, stating he'd "done a pretty good job on the economy", which was a "nightmare" when he received it from former President George W. Bush.

Aside from gas taxes to incentivize buying fuel-efficient vehicles, Mr. Akerson also called for more taxes in general, stating, "Now, we need practical decisions. I think you need to cut the hell out of the budget and you've got to increase taxes … on everybody — including the middle class and the rich people."

He added that the U.S. government must increase the debt ceiling from $14.3T USD, a change that Congress has until Aug. 2 to think over.  He states, "We're too good a nation to let ourselves be a banana republic" and calls the possibility of a government default "unimaginable."

Such a default could harm auto sales, he argues.

III. No More Government Motors?

During the interview Mr. Akerson said he though the U.S. government would soon divest its remaining stake in GM, commenting, "I actually think the government will be out this year — within the next 12 months, hopefully within the next six months."

"I have nothing but good things to say about them," Mr. Akerson says of his government "investors", but adds that the relationships is wearing on GM.  He states, "It's kind of like your in-laws: It was a nice long weekend. We didn't say a week."

The U.S. Treasury Department once spent $49.5B USD to bail out GM and obtain a controlling 61 percent stake in the company.  It offloaded much of that stake during the Nov. 2010 IPO.  Mr. Akerson says a second PO could be incoming, commenting "[The Treasury] will likely look at another (stock) sale in August, after second-quarter earnings are announced."

His comments also hint that GM might buy back the stock directly, though he would only say "But we have a lot of cash."

If the U.S. gov't sold its stake now, it would have lost $12B USD in taxpayer money.  But Mr. Akerson says that taxpayer sacrifice was worth it.  He comments, "We are in the midst of transforming an iconic American company so 20 and 30 years from now (taxpayers) will look at this company and they'll say, 'Absolutely it was the right thing to do.' And it shouldn't be measured on did it sell for $43 or $53 (a share) or did they lose a couple billion dollars?"

Part of what is depressing tax prices is a 500 million-share stock PO, which has depressed prices of current shares 23 percent this year, down to $28.52 USD, well below the IPO price of $33 USD/share.  Mr. Akerson admits, "I think that it is an overhang — to have 500 million shares sitting out there — it's a problem. They don't know when (the Treasury is) going to come out. Investors hate uncertainty."

IV. Akerson Says Taxpayer Loss Was Worth It

Despite the reality that taxpayers will likely lose quite a bit of money, Mr. Akerson infers that it's worth it and that taxpaying Americans are so "generous" they will surely be happy to foot the bill.

He compares GM to a disaster stricken region like New Orleans post hurricane Katrina, commenting, "We're the most generous country, even in terrible times. We don't walk to the disaster as a nation. … We can't wait to help."

According to Mr. Akerson, CBS's "Face the Nation" has invited him to be a guess, but complains he would be unable to go.  He bemoans the hostility of "fellow" Republicans, stating, "I can't go on it. I'm toxic. I'm like a lightning rod. I couldn't have an intelligent discussion without someone saying, 'He's a welfare guy from the bailout.'"

Those Republicans don't realize the effects of a GM liquidation, he argues, stating, "If we had gone down, the supply chain would have gone down. … And Ford was hanging on by its fingernails, too."

He argues that taxpayers "took one of the team", so to speak, stating, "OK, we took the blow as a nation, we weathered the worst, and my God, we're back. It's why I came here. It was a story of underdog that tripped as we all have in our lives — it was a good feel-good story."

Mr. Akerson's interview will likely earn him some critics in Detroit, after he concluded, stating, "I have not seen a city in this bad a shape [Detroit] since I went to East Berlin in 1969."





Comments     Threshold


This article is over a month old, voting and posting comments is disabled

...
By DuctTapeAvenger on 6/7/2011 10:41:51 AM , Rating: 5
Mr. Akerson, you are the weakest link. Good bye.




RE: ...
By JasonMick on 6/7/2011 10:48:40 AM , Rating: 5
quote:
Mr. Akerson, you are the weakest link. Good bye.

He's sure not trying making any friends, I'll say that...
Checklist:
1. Call self Republican, alienate one-party Democrat voters.
2. Insult Sarah Palin, alienate Tea Party voters.
3. Call for higher taxes, offend a lot of the remaining voters.
4. Tell taxpayers you've lost their money, insult even more voters.
5. Insult Detroit, alienate the home of your business.

Doesn't seem like almost anyone will agree with this guy's comments.

[DISCLAIMER: The opinions I express in this comment are my own and not to be confused with the text of my articles.]


RE: ...
By BSMonitor on 6/7/2011 11:14:43 AM , Rating: 3
quote:
5. Insult Detroit, alienate the home of your business.


This is not an insult to anyone in Detroit. The city of Detroit IS a disaster. Apart from downtown area including the casinos and the 3 professional sport arenas, Detroit city itself is a wasteland. Take a drive along I-75 north toward the suburbs. The first 5-8 miles you will see hundreds if not thousands of giant 1900s townhomes completely desperate. Overpasses along I-96 East and West completely rusted and concrete falling apart. It honestly is amazing for there to be such a blight in a state with as much natural beauty (aka lakes, Great Lakes, forest regions, golf course communities, hunting and fishing lands/lakes/rivers) as this one.

It is both the Union and GM/Ford/Chryslers combined fault for letting one of this nation's greatest cities from the 1900s to come to the state it is now. aka Greed on both sides.


RE: ...
By mcnabney on 6/7/2011 1:09:51 PM , Rating: 3
Uhm. No.

White Flight (to the suburbs) plus MASSIVE layoffs in blue-collar sectors = urban donut.

Those older homes are closely spaced, offer few modern conveniences, and there might even be a black person nearby. So everyone with money buys the new homes going up in the suburbs. Detroit failed because America is failing. They are just the Canary due to their over-reliance on a single sector.


RE: ...
By Nfarce on 6/7/2011 1:41:32 PM , Rating: 1
quote:
Detroit failed because America is failing. They are just the Canary due to their over-reliance on a single sector.


Detroit's leaders failed, just like California's leaders have failed and just watched the great job exodus. And one has to wonder why the likes of Hyundai, Kia, Mercedes, BMW, Nissan, Honda, and Toyota have or plan on building auto plants and parts plants in non-northern and non-western states (like: Mississippi, Alabama, Georgia, South Carolina, [where Obama told Boeing they can't have the 787 plant and must have all news jobs in Seattle's plant], Tennessee, and Kentucky).


RE: ...
By mcnabney on 6/7/2011 3:19:59 PM , Rating: 2
Ooooh, ooooh.

I know!!!!!

Is it because they can treat the people like slaves and rule the local communities that will soon completey dependent on them?


RE: ...
By Nfarce on 6/7/2011 6:56:39 PM , Rating: 1
Well if you are a libtard, you believe that. Anyone else? Anyone?


RE: ...
By BSMonitor on 6/7/2011 3:33:02 PM , Rating: 2
quote:
Uhm. No.

quote:
Those older homes are closely spaced, offer few modern conveniences, and there might even be a black person nearby. So everyone with money buys the new homes going up in the suburbs. Detroit failed because America is failing. They are just the Canary due to their over-reliance on a single sector.


People seem to like that type of arrangement in other major cities. San Francisco, Chicago, New York, New Orleans...

Detroit is failing because the big 3 started hiring outside the U.S. to pad bottom lines. Because fools in the Union demanded more benefits and higher wages while this was happening, making it even easier for management to ship jobs elsewhere.

How can a city over rely on the largest trickle down manufacturing business on the planet??


RE: ...
By Hiawa23 on 6/7/2011 10:45:54 PM , Rating: 2
This would have a terrible effect on the economy especially middle class families, infact, this would hurt an already struggling middle class who seem to be getting poorer as the top continues to move up. There really is not such thing as the American Dream for most families & alot of the issue we face have been caused by those least affected by the collapsing economy.


RE: ...
By Kurz on 6/8/2011 9:48:07 AM , Rating: 2
So why did those US companies find 3rd world countries that have huge majority populations of unskilled labor the perfect place to set up shop? Especially when the work requires very skilled labor?


RE: ...
By Bad-Karma on 6/10/2011 2:00:53 AM , Rating: 2
Have you ever seen an actual vehicle assembly line? You do not need a skilled worker to do a singular repetitive task all day long. This is one of the reasons Henry Ford moved his plants to the assembly line process.


RE: ...
By 91TTZ on 6/7/2011 4:35:11 PM , Rating: 2
quote:
Those older homes are closely spaced, offer few modern conveniences, and there might even be a black person nearby


Yeah, that's the same reason why everyone left New York, Philadelphia, Washington DC, Los Angeles, Dallas, and just about every other big city that isn't Detroit.


RE: ...
By Reclaimer77 on 6/7/2011 4:45:22 PM , Rating: 2
I believe what you are describing is the failed, yet popular, practice of central city planning. Urban sprawl is only natural, nothing wrong with it. You have space, the schools are better, and the neighbors are better. Or you can stay in the "inner city" and be crowded, watch your property value decline yearly, the crime rate soar, and send your kids off to crappy schools.

Just another example of how awesome those "Progressives" are.


RE: ...
By zozzlhandler on 6/7/2011 11:46:54 AM , Rating: 2
We need to use the Pournelle axes to rate politicians. The simple left/right thing is inadequate.


RE: ...
By theapparition on 6/7/2011 1:08:49 PM , Rating: 2
While I don't agree with everything he's said, I do respect his integrity for actually saying it.

Would you prefer a politician who says all the right things with no intention of doing it, or one who says what he believes, regardless of the outcome? The problem with this country is all the lemmings who actually do believe the political lies they are told and buy it hook-line-and-sinker.

But in the end, this guy isn't a polititian. His job is to run a business and attract investors.


RE: ...
By Dorkyman on 6/7/2011 6:47:49 PM , Rating: 1
I disagree completely.

The man's an idiot, eager to please Messiah.

Prediction: In a few years, GM will once again be offered the opportunity to fail. I sure as heck want nothing to do with them, and I can't think of a single friend or neighbor who supports them.

Great article here on the phony accounting within GM, appearing in--gasp!--the Washington Post, of all places:

http://www.washingtonpost.com/blogs/fact-checker/p...


RE: ...
By hyvonen on 6/7/2011 1:58:03 PM , Rating: 2
I agree with most of what he said. I've been suggesting gasoline tax increases for years (you know, starting back then when gasoline was <$2/gl and we actually could have afforded it). Now it seems almost too late, but once gasoline is $8/gl, then it really would be too late.


RE: ...
By TheDoc9 on 6/7/2011 10:55:24 AM , Rating: 1
When jackasses like this guy finally collapse the economy because of their bright ideas the people with pitchforks will be on his doorstep.


RE: ...
By mcnabney on 6/7/2011 1:11:06 PM , Rating: 2
You didn't even read the article, did you?


RE: ...
By TheDoc9 on 6/7/11, Rating: 0
RE: ...
By Hiawa23 on 6/7/2011 10:39:59 PM , Rating: 1
This guy sounds like a fool. We aint buying new vehicles especially in this economy. For many of us who are barely getting by any increase in gas prices would push many into the poor house. Families that are already struggling just to keep food on the table, make the mortgage payment, & if gas was taxed this would not only affect gas but everything we buy. I know he makes millions, for those who don't & live check to check or worse, I hope this never happens.


The saddest thing...
By gamerk2 on 6/7/2011 10:44:47 AM , Rating: 2
Is that everything he said is right. Granted, his motives are clearly to make his company [and by extension, himself] more money in the long run, but his arguments are correct.

Nevermind when talking cost, you need to do a comparision to the cost to the economy of GM going under, which when you factor in the fact DAPA and Ford were already on their last legs, probably would have lead to a total economic collapse, or at least a collapse of the domestic auto industry.




RE: The saddest thing...
By tastyratz on 6/7/2011 11:09:48 AM , Rating: 2
His opinion is right on paper.
Reality is that while it WOULD force consumer choice to more fuel efficient vehicles it would essentially drag middle class to poverty level. If gas went up 50% we would see... exactly the same thing we saw LAST time it went up 50%. Surging transportation costs, incredible increase.
The energy industry is powered by unimaginable greed. Taxing gas wont result in alternative fuel development, neither does the speculative gas price increases.
It's easy to say people will buy less suburbans, but in reality people will buy less milk/bread/eggs/peanut butter/etc.
When transportation costs surge it hurts EVERY industry powered with tangible goods.

Maybe that's how GM wants to handle the uaw, but the solution is not to throw more money at the government.

WE DON'T HAVE THE MONEY TO THROW


RE: The saddest thing...
By mcnabney on 6/7/11, Rating: 0
RE: The saddest thing...
By Nfarce on 6/7/2011 1:50:17 PM , Rating: 3
quote:
Or maybe that increase in fuel costs (still lower than Europe!) would encourage greater efficiency?


Actually that's an economically fatal error and shows the ignorance of so many. Just look what happens when gas prices go up like they have recently. Do people stop driving completely? Sure, maybe some do or some severely cut back on driving. Do people rush out and buy more fuel efficient cars in droves? Sure some do, but most do nothing of the kind.

Instead what happens is people cut back on discretionary spending. They will put off that HDTV purchase; they will put off that twice a month nice dinner out; they will put off that summer vacation; they will put off buying new appliances. And this doesn't even factor in the cost of food and staples that we need day to day which all go up in cost from rising fuel prices due to manufacturing and supply chain expenses.

Anyone who thinks raising gas taxes is a great idea is a blithering idiot - irrelevant of where the nation's economy is at any time.


RE: The saddest thing...
By hyvonen on 6/7/2011 2:04:17 PM , Rating: 3
You're thinking short-term. In the long run, the higher gasoline prices will affect consumption. Just look how many cruzes and fits and aveos and priuses you see on the streets now. It just takes some time...

People can't afford to replace their cars immediately, but eventually when they buy a new car to replace one that's almost 'dying', if the gasoline prices are high, it's more likely that they buy something efficient than something big and/or fast.

Also, calling those who disagree with you 'blithering idiots' don't score you any points; it just shows you that you are emotional about this and can't continue debating this logically.


RE: The saddest thing...
By Nfarce on 6/7/2011 2:12:49 PM , Rating: 1
quote:
You're thinking short-term. In the long run, the higher gasoline prices will affect consumption. Just look how many cruzes and fits and aveos and priuses you see on the streets now. It just takes some time...


I'm not just talking about consumer consumption. Go back and re-read the part about goods manufacturing and supply chain costs with rising fuel. We can't all just windmill and solar our way through everything we want. That's got nothing to do with a vehicle sitting in a driveway.

Again, what so many fail to realize is that gas prices go way deeper than just the car we drive (or will be forced to much to the smug satifaction of those who hate it that we have choices on what to drive).


RE: The saddest thing...
By mcnabney on 6/7/11, Rating: 0
RE: The saddest thing...
By Reclaimer77 on 6/7/11, Rating: 0
RE: The saddest thing...
By Nfarce on 6/7/2011 7:51:27 PM , Rating: 2
Not to flame here, but did you learn this way of thinking in public grade school? I'm curious. Because it sure as hell isn't reality in the business world.


RE: The saddest thing...
By Silvergoat on 6/9/2011 10:24:52 AM , Rating: 2
Your post is called inflation. Higher prices, higher wages, higher prices, higher wages. We tried that in the 60's and 70's. The solution at that time were called COLA's. You might not be old enough Jimmah Carter and the inflation of the late 70's. Inflation is a terrible thing, eroding the savings of people and the elderly on fixed incomes.


RE: The saddest thing...
By dcollins on 6/7/2011 4:47:02 PM , Rating: 5
How can you possibly say that increased gas prices have not driven consumers to more fuel efficient cars? Not too long ago, when gas was under $2, the Explorer was the most popular vehicle in the US and the 5mpg Hummer was the cool car to have. Most American automakers had more or less given up on the car market, letting the Japanese corner the low end market and European dominate the high end while they focused on trucks and SUVs.

Then gas prices shot up and Americans started caring more about fuel efficiency. In a short period of time, the SUV market has been almost completely replaced by significantly more fuel efficient crossovers. Even the venerable Explorer is now a crossover. Hybrids are selling at record rates and every car manufacturer in the world has made efforts to reduce fuel consumption across their line. Fuel efficiency now rates as consumer's number one consideration when buying a new car.

All of this can be traced directly to high gas prices. Whether that means the government should artificially raise prices is another matter, but history clearly shows that high gas prices lead to consumer interest in fuel efficiency. The economics and politics of the issue are complex, but the fact that increased prices would drive consumers toward more efficient cars is a given.


RE: The saddest thing...
By Nfarce on 6/7/11, Rating: 0
RE: The saddest thing...
By rdawise on 6/7/2011 7:53:11 PM , Rating: 2
Cool story bro! Source?


RE: The saddest thing...
By Nfarce on 6/7/2011 8:17:02 PM , Rating: 2
quote:
Cool story bro! Source?


Did you miss this part in my post?

quote:
But I have no actual statistical data to prove that .


I just have eyes, that's all.


RE: The saddest thing...
By tastyratz on 6/8/2011 7:36:06 AM , Rating: 2
Vehicle fuel efficiency is obviously influential in a consumer decision, even if it is the perception that it will be a huge savings in some cases and they pay a very high premium.

Nobody is arguing that fuel efficiency does not take into effect the choices consumers make in vehicles, but the big picture is much more than that, it's elementary to think otherwise.

We can not make airplanes run on unicorn farts
we can not make construction vehicles or wal mart big rigs that run on Sherbert.
and we can not heat homes where no gas pipeline exists with hopes and dreams.

But most importantly, as consumers we can not effectively choose to opt for alternatives in these sectors.

High Fuel costs gives us less value services and goods while our income remains the same. We then purchase less while paying the same, and those who make a living selling those services and goods make less money and we call it a bad economy.

If you travel fuel is a "cost of doing business" where the business is not who pays for it, the people are. Jet fuel is roughly 1/3 of us oil. Instead of stimulating the economy by buying that au bon pan in the lobby and giving that flight attendant someone to give a cocktail to you opt to stay home. Enough people do this that there are cutbacks.

If you eat (I find many people do) you have to buy food, food that got to the local market in a big truck, not a prius trailer.

If you are like me and live in the north east us, natural gas is not always available. I heat my home with oil and even with significant insulation upgrades I spent thousands to do so last winter. Biodiesel would be great... if it didn't double my cost. Doubling fuel would make it competitive and encourage green fuel... but it would still be double what you might budget. Imagine a heating bill larger than you mortgage on a cold month or 2. Mine already can be, could all others float it?

These are the realities. Expensive fuel has the minor side effect of influencing the middle and lower class decision in vehicle choice while proportionally negatively impacting the economy overall viciously. We are trying too hard too late at the wrong time.


RE: The saddest thing...
By hyvonen on 6/8/2011 10:53:48 AM , Rating: 2
quote:
But most importantly, as consumers we can not effectively choose to opt for alternatives in these sectors. High Fuel costs gives us less value services and goods while our income remains the same. We then purchase less while paying the same, and those who make a living selling those services and goods make less money and we call it a bad economy.


The products where fuel costs play a significant role will become less valuable compared to alternatives that don't suffer from high fuel costs.

quote:
fuel is a" cost of doing business"
: not all business travel needs to take place. Some of it needs to happen, but meetings can also be had over the phone or using videoconferencing. The cost analysis is taking place in businesses, and if the airline ticket prices double, travel will be heavily restricted.

quote:
If you eat (I find many people do) you have to buy food, food that got to the local market in a big truck, not a prius trailer


quote:
I heat my home with oil and even with significant insulation upgrades I spent thousands to do so last winter.


I opted for an efficient heat pump to heat my house. I also had solar panels installed (heavily subsidized by state and federal tax breaks). I'm paying about $1000 per year in electricity to heat/cool the house AND power everything from an oven/fridge to multiple computers, home theater and an electric sauna. Those efficiency upgrades will pay for themselves in about seven years. (Of course, my house is modest in size - maybe that plays a role here?)

Overall, your post sounds like you're holding on to the status quo when the world around you is changing. Yes - the gasoline/oil prices have gone up, and they will continue to go up.

You should take this new reality and start finding solutions for yourself. Your costs will increase in the short term, but if you don't do anything, they will increase way more in the long term.

Increasing gasoline tax is a way to encourage planning for the future. Status quo is dead.


RE: The saddest thing...
By tastyratz on 6/8/2011 1:52:03 PM , Rating: 2
The issue is I don't think we have viable alternatives that remain cost effective at this time. I think we SHOULD look at alternatives but the solution is not to artificially inflate oil prices so they become cost effective in comparison. We definitely sat idly by for too long, but it is at the forefront now and people understand it is a reality. Panic mode is not how to handle it nor is it required with as many oil pockets that still exist out there.

I wish I had the OPTION to elect for natural gas, and I did get quotes for a geothermal heating and cooling system for my home 2 years ago... but it was around $40-50k and at the time the ROI was over 30 years - effectively near the life expectancy of a large part of the system. Solar panels have a terrible ROI as well, if you break even you live in the south and are lucky.

Effectively this is like telling people we think they should drive a premium vehicle such as a lexus or mercedes, so to do so we are going to make the corolla a $60,000 car. Does that mean more people can afford a mercedes?


RE: The saddest thing...
By Silvergoat on 6/9/2011 10:29:40 AM , Rating: 2
quote:
I also had solar panels installed (heavily subsidized by state and federal tax breaks).


So in different words, other people's money paid for your benefits.


RE: The saddest thing...
By Starcub on 6/7/2011 11:43:01 AM , Rating: 2
quote:
Is that everything he said is right. Granted, his motives are clearly to make his company [and by extension, himself] more money in the long run

You mean by giving the govt more money to fund the next round of GM 'bailouts' so they can continue to fund operation at a loss? Greed is systemic.

You can cover a pile of dung with snow but it will still stink. If there's a market to support a product then the void will be filled, otherwise let it die.


Bailed out by Obama's administration
By vtohthree on 6/7/2011 11:05:25 AM , Rating: 2
Of course this guy is going to kiss Obama's butt, after GM was graciously bailed out. This guy is going to be puppet now.




By SublimeSimplicity on 6/7/2011 11:30:29 AM , Rating: 2
This guy (and most enormous US company CEOs) are best categorized (and understood) as James Taggart from Atlas Shrugged. While some may openly admit to wanting a government controlled economy, they all support it. Since they are the biggest today, the easiest way to protect that position is to hire lobbyists and be the current president's puppet.

Doesn't matter if the current power in DC is left or right... as long as they get a seat on the gravy train they agree with them.


By Nutzo on 6/7/2011 11:49:35 AM , Rating: 2
quote:
Of course this guy is going to kiss Obama's butt, after GM was graciously bailed out. This guy is going to be puppet now.


Bought and paid for with our tax dollars.
Obama say jump and he says how high.


RE: Bailed out by Obama's administration
By rdawise on 6/7/2011 7:42:04 PM , Rating: 2
Did you forgot the bailouts were started by Bush and passed to Obama? My oh my revisionist...


By Nfarce on 6/7/2011 8:30:31 PM , Rating: 3
Uh, we're talking about he GM bailout currently here, ace. We can talk about Bush's fiscal irresponsibility (and those of the Pelosicrat Congress during his last two years in office) elsewhere.

http://online.wsj.com/article/SB100014240527487048...


By superstition on 6/9/2011 4:13:05 AM , Rating: 2
That and the auto part of the bailout is a drop of the bucket in comparison with the money thrown at the corrupt banks and Wall Street.

But, bashing the unions and auto companies is so much fun... right? Unions are to blame for America's economic woes! Ask Wal-Mart... they'll tell you all about it.


By Silvergoat on 6/9/2011 10:34:02 AM , Rating: 2
Bush was stupid, Obama is stupid on steroids.


If the US taxpayer is owed $12B...
By Golgatha on 6/7/2011 10:58:06 AM , Rating: 2
put a lien on the company and make them pay back every last cent with appropriate interest attached to it. It's good enough for my household if I default so it should be good enough for them.




By SublimeSimplicity on 6/7/2011 11:39:35 AM , Rating: 4
In this case though, the government played the stock market and lost. They were given 23% of the shares for an IPO at $33. This would have fulfilled the debt. At one point the stock was over $38 (government made money), but now it's below $33.

Government held on to the stock, so they have no one to blame but themselves. That doesn't mean they won't.


A more logical solution
By Beenthere on 6/7/2011 1:44:24 PM , Rating: 1
Force GM to repay the $12 Billion loan. Force GM to compensate stock holders, vendor suppliers, employees and every other entity who suffered financially as a result of GM's bad management.

Then they should increase income taxes by 20% on those earning more than $1 million a year. Then they should apply a 500% tariff on all imports from Asia - which will create U.S. jobs. Then they should place a sliding scale tax on oil company net profits that exceed 10% so that for every dollar in net profit above 10% they pay $1.50 in taxes.

This will prevent oil company price gouging and record profits and make the oil industry operate in the same world as the rest of us. If they don't like the tax structure go sell your oil to someone else. See how much profit you can lose by not selling to U.S. consumers.

Punishing U.S. consumers so that oil companies can reap record profits on reduced sales volume, is not an energy policy, it's insanity.




RE: A more logical solution
By Cerin218 on 6/7/2011 2:04:12 PM , Rating: 2
Tariffs? Seriously?

Except in all but the rarest of instances, tariffs hurt the country that imposes them, as their costs outweigh their benefits. Tariffs are a boon to domestic producers who now face reduced competition in their home market. The reduced competition causes prices to rise. The sales of domestic producers should also rise, all else being equal. The increased production and price causes domestic producers to hire more workers which causes consumer spending to rise. The tariffs also increase government revenues that can be used to the benefit of the economy.

There are costs to tariffs, however. Now the price of the good with the tariff has increased, the consumer is forced to either buy less of this good or less of some other good. The price increase can be thought of as a reduction in consumer income. Since consumers are purchasing less, domestic producers in other industries are selling less, causing a decline in the economy.

Generally the benefit caused by the increased domestic production in the tariff protected industry plus the increased government revenues does not offset the losses the increased prices cause consumers and the costs of imposing and collecting the tariff. We haven't even considered the possibility that other countries might put tariffs on our goods in retaliation, which we know would be costly to us. Even if they do not, the tariff is still costly to the economy. In my article The Effect of Taxes on Economic Growth we saw that increased taxes cause consumers to alter their behavior which in turn causes the economy to be less efficient. Adam Smith's The Wealth of Nations showed how international trade increases the wealth of an economy. Any mechanism designed to slow international trade will have the effect of reducing economic growth. For these reasons economic theory teaches us that tariffs will be harmful to the country imposing them.


RE: A more logical solution
By mcnabney on 6/7/2011 3:34:31 PM , Rating: 1
Would you trade 4% inflation for 4% unemployment?

I'm employed and I sure would. I don't mind paying more when I know that those higher costs mean that my dollars are leaving the country.

Also, tax receipts are much better in that situation since there are more domestic workers making more money.

The only downside is that we all buy less shiat. I can live with that, can you?


RE: A more logical solution
By 91TTZ on 6/7/2011 4:40:19 PM , Rating: 2
quote:
I don't mind paying more when I know that those higher costs mean that my dollars are leaving the country.


It sounds like you're saying that you like it when your dollars leave the country.


Prosperity...
By zozzlhandler on 6/7/2011 11:44:38 AM , Rating: 2
Prosperity happens when there is less regulation and cheap energy. Making energy more expensive will not help any sort of recovery.

Unfortunately, what we have is a culture of more and more regulation (we want to make it good for everyone, and it should be the LAW, so no-one can do any different...) and debts from recent stupid behavior.

We have to give up something. At the moment, its beginning to look like we will give up prosperity, because we are unwilling to stop giving handouts and making regulations for everything.
Not all regulation is bad, but we have definitely gone too far, and we cannot sustain all our regulations and economic growth except by borrowing, but that cannot last.

Remember, anything that cannot go on forever will stop. One way or another.




RE: Prosperity...
By mcnabney on 6/7/11, Rating: -1
RE: Prosperity...
By Nutzo on 6/7/2011 1:25:04 PM , Rating: 3
Actually, during the first 2 years of Clinton, the economy slowed and unemployment went up. Why do you think the Republicans won the House and the Senate in 94? It was a rebuke of what Clinton and the Democrats where doing (much like they've done the last 2 years).

There was a slight rollback in regulation and taxes during years 2-8, along with alot of gridlock that kept the Federal government from enacting new regulations.


RE: Prosperity...
By mcnabney on 6/7/11, Rating: 0
Re-read what Akerson said
By MrFord on 6/7/2011 12:52:54 PM , Rating: 2
I know you want to make the point that Akerson is dumb to call for a tax increase, and that we will all suffer through $6-8 gas with that.
But at least get this part straight:
quote:
"You know what I'd rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas," Akerson said.

Unlike what you said:
quote:
Mr. Akerson suggested a tax of fifty cents on the dollar , which would make $4 USD/gallon gas cost $6 USD/gallon.

It would make a $4 gallon cost $4.50 to $5. 50-cent or a dollar, not on . Big difference.

But I know that it doesn't sound as dramatic and end-of-the-world that way.




RE: Re-read what Akerson said
By rdawise on 6/7/2011 7:45:12 PM , Rating: 2
Thank you, you beat me to this...


By Shadowmaster625 on 6/7/2011 11:29:35 AM , Rating: 3
Of course it was. It always is worth it for the good ol USSA. Now git yer butts outtin dat field and pick ma cotton, ya stupid bastads.




Raise gas 50 cent on the dollar?
By Skott on 6/7/2011 11:34:05 AM , Rating: 2
I remember Ross Perot saying raise the gas tax 50 cents a gallon and use the money to pay down the National Debt then once done remove the tax. He didn't get elected because he was considered too extreme for many even though he got about 19% of the vote in his first run at the presidency.

Its true if you were to raise gas prices considerably the car manufacturers would sell more electric cars but I like to think we could do it without drastic measures of artificially raising gas prices. Besides, gas prices will go up on their own. World demand will see to that.




RE: Raise gas 50 cent on the dollar?
By mcnabney on 6/7/11, Rating: 0
By hyvonen on 6/7/2011 2:06:04 PM , Rating: 1
^ This. I agree 100%. This should've been done years ago, but it's not too late yet.


Turnover
By btc909 on 6/7/2011 1:12:35 PM , Rating: 2
You can sell WAY more Cruze's then you can Surburbans. Much easier to get someone financed due to the lower MSRP. How do you get someone to buy a Cruze, jack up gas prices.
After reading this article I see the Volt plug quietly being pulled. Too expensive, probably will never recoupe the development costs. If the US ended up with $6 a gallon gas good luck finding a Prius anywhere & the Honda Insight would actually start selling. Plus the ecomony would slow to a crawl.




Puppet
By btc909 on 6/7/2011 1:15:22 PM , Rating: 2
Now this puppet is speaking like Obama. Had to cycle through a few but it looks like Obama has a winner this time.




Tax Losses = Generosity?
By Schrag4 on 6/7/2011 1:25:59 PM , Rating: 2
A lot of offensive stuff, for sure, but this one was the worst in my opinion:

quote:
Despite the reality that taxpayers will likely lose quite a bit of money, Mr. Akerson infers that it's worth it and that taxpaying Americans are so "generous" they will surely be happy to foot the bill.


I'm sure my neighbor would be happy to lend me his TV. Maybe I should break in while he's not home and steal it. He's a pretty generous guy, after all...

In all seriousness, you can't force someone to pay someone else and then claim it was done out of generosity. The difference between private citizens' response to Katrina (which he cites) and this is whether people helping had a choice. Why is this so hard to grasp?




CEO?
By dinc on 6/7/2011 2:15:33 PM , Rating: 2
And this is a CEO? Scary.




By rdawise on 6/7/2011 7:50:05 PM , Rating: 2
Mick, I know you like to bring out the partisanship in the so-called "tech" readers here, but what logical reason is this doing on a tech site?




Balmer
By hiscross on 6/7/2011 8:47:01 PM , Rating: 2
He sort of looks like Balmer, the man who ruining Microsoft. Hey, this would be cool, Microsoft crashes, they blame Jobs, Microsoft gets a bailout and Balmer says it was Apple's fault.




Lets see....
By rdhood on 6/8/2011 9:19:14 AM , Rating: 2
"We couldn't get them to buy our shiiiitttttyyyyy cars by demagoging the Japanese. So now we have a nice new electric car that costs twice as much as Japanese and Korean gas-sippers, so we will enlist the Federal Government... who bailed us out and who's pocket I currently reside... to raise gasoline taxes in order to make our electric powered roller skate feasible in the eyes of people who cannot afford it"

What a tool. "Government Motors" is not just a derogatory slur by the right. This guy proves it.




re: gas taxes
By wallijonn on 6/8/2011 8:07:37 PM , Rating: 2
quote:
what I'd rather have them do — ... — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas. People will start buying more Cruzes and they will start buying less Suburbans."


The plain fact is that every time the price of gasoline goes up the city, state and federal taxes go up.

Saying that prices are "going to go down ... now" ignores the fact that gasoline prices can go up tomorrow.

When people can't afford to make their house payment because they're paying $600 to $1000 a month for gas, then people will start to lose their homes. Gasoline prices go up, electricity prices go up, and everything else under the Sun. Except wages. CEOs may see obscene salaries but the guy on the street is told that his job is going overseas or he has to pay more for benefits, take mandatory leave without pay, and/or take a cut in pay.

If the feds want more money then they can start by taxing corporations more - specifically overseas profits which are lower rated than domestic.




The Volt subsidy
By superstition on 6/9/2011 4:16:15 AM , Rating: 2
The $7500 is only part of it. There is also something like $1500 or more to install a power system in one's garage to recharge the thing.

Add up all this money and we're talking about quite a lot of taxpayer money going toward the purchase of these impractical electric gizmos.

If GM were to care about fuel efficiency, they'd be selling us the diesel Vauxhall models they sell in the UK. Ford would be selling its diesel Focus. We'd see the BlueMotion VWs here. And on and on.

Fuel efficiency in the US is still farcical.




History repeating
By Silvergoat on 6/9/2011 10:13:54 AM , Rating: 2
quote:
We are in the midst of transforming an iconic American company so 20 and 30 years from now (taxpayers) will look at this company and they'll say, 'Absolutely it was the right thing to do.'


Right. So, as an example, we were to look back 20-30 years to Chrysler, we would see that we bailed out a company, just to have to bail it out again. Good example.

GM is playing catch up to a 1970's world that has moved into a global 21st century. They can't protect the unions anymore. The only reason that the government owns 61% was that they gave the other 39% to the unions. This wasn't about saving GM, this was about union payback and union protectionism.
Look at the restructuring that the airlines went though and remember Pan-Am, TWA, Eastern, and all the other airlines that failed. Now we have SouthWest, JetBlue, and others that manage to survive in that competitive world.
Until America realizes that it can't insulate themselves from the rest of the world, we will be bailing out the next set of protected industries.




i don't think so...
By pitchnresin on 6/7/2011 10:43:28 AM , Rating: 1
Go pound sand you moron!




Hmmm.
By rjwerth on 6/7/2011 10:53:17 AM , Rating: 1
Well, I guess we all know now how he got his job....




You've got to be kidding me....
By navair2 on 6/7/2011 6:41:17 PM , Rating: 1
Everything that has transpired in the last couple of years with the GM bailout, bank bailouts etc, REGARDLESS of the outcome, was WRONG.

The federal government, by bailing out every Tom, Dick and Harry, has taken what most Americans stand for and thrown it under the bus. It's called," the consequences of your actions" and by replacing them with a "suspended sentence", they'll just continue the selfish and stupid practices that got them into trouble in the first place.

The RIGHT thing to do would have been to let the whole bloody house of cards come tumbling down in the name of an actual FREE MARKET, rather than prop the twisted and broken thing up with OUR money.

Truly, we are a socialist nation...it began in the 1800's with "public school", gathered steam with Franklin Roosevelt's policies and now we have a locomotive barreling full speed down-hill threatening to take everything in its path with it to ruin.

People, this nation has gone WAY past red-line and the warning flags are being BURIED by the people running this "mess" we call a country.

I read articles like this and I get physically ILL at how many greedy moneysl#ts there are in positions of leadership. We're taxed enough already, with the horizon darkening worse every year and no end in sight for how much money our "representatives" can squander on "you-name-it".

I don't know about you, but this CEO is PATHETIC...his way of thinking makes me want to find a deserted island and set up a shack...better to go it alone than have to live in his "Utopia", where the fruits of my labor are subject to such a stranglehold.

Forced charity is not the answer people, and greedy corporations that take little thought as to how their actions might affect others NEED to fail.




Moron
By Alphafox78 on 6/7/11, Rating: -1
RE: Moron
By gamerk2 on 6/7/11, Rating: -1
RE: Moron
By Alphafox78 on 6/7/11, Rating: -1
RE: Moron
By gamerk2 on 6/7/2011 11:01:06 AM , Rating: 2
quote:
corporations spend money and create jobs


Really?

Coorporitons create a product when there is DEMAND for that product. That demand is satisfied by consumers spending money.

When consumers can not spend, there is no demand for an increase in production, and thus, no jobs. Thats exactly what we are seeing in the economy: Consumer spenidng is flat, so job hiring is also flat, because there is no demand for increased production.

The economy is bottom up, not top down. As long as conservatives continue to ignore basic economic principles, the economy will continue to struggle.


RE: Moron
By Cerin218 on 6/7/11, Rating: -1
RE: Moron
By artemicion on 6/7/2011 11:51:14 AM , Rating: 2
Good grief. I don't care if you're conservative or liberal, this post is vapid. Do you run a grocery store? Do you stock an aisle full of fish-flavored peanut butter REGARDLESS of demand?


RE: Moron
By Cerin218 on 6/7/11, Rating: -1
RE: Moron
By juserbogus on 6/7/2011 2:19:57 PM , Rating: 2
you clearly have no idea what you're talking about and your posts are utterly illogical.


RE: Moron
By Cerin218 on 6/7/2011 7:51:46 PM , Rating: 1
Great job of explain WHY my posts are illogical. Please explain to the rest of the class what you find so illogical.


RE: Moron
By Paj on 6/8/2011 7:58:58 AM , Rating: 2
Your posts is illogical because it makes no sense. Having to use double negatives to support your premise means that your premise is weak.

Low supply creates high demand. This is why Ferrari only make a handful of cars compared to Toyota. Their products are high value, low volume, luxury items. They cater to the demands of a specific, and very small market.


RE: Moron
By Maurice Enchel on 6/8/2011 4:21:32 PM , Rating: 1
Cerin - the initial demand was for transportation that would replace a horse. Ford didn't invest millions before he perceived the value of the auto (value meaning its demand value.) come on...

... the supply of a troll doll key chain does not ensure demand for same... it is the demand of a parent to keep his child busy in the checkout line that prompts the purchase....


RE: Moron
By Maurice Enchel on 6/8/2011 4:26:10 PM , Rating: 2
... in reflection; to break this down to its simplest elements:

... fish flavored peanut butter would never be a product unless the guy who first made it tried to satisfy his demand for it.

supply follows demand... its a basic principle... Learn it, love it, live it !!! B-)


RE: Moron
By gamerk2 on 6/7/11, Rating: 0
RE: Moron
By sedoo on 6/7/2011 12:25:33 PM , Rating: 2
Granted, I took the Defense track, but I'm VERY well schooled on almost all known failed economic theory.

There fixed that for you.


RE: Moron
By gamerk2 on 6/7/11, Rating: -1
RE: Moron
By Denigrate on 6/7/2011 1:15:28 PM , Rating: 5
You do realize that it was Clinton policies and a Democrat agenda of getting their constituents into homes they couldn't afford that drove demand on housing and caused the price to sky rocket, right? That's probably the reason you received a D on the paper. You correctly identified that housing prices were inflated, but not the root cause.


RE: Moron
By Reclaimer77 on 6/7/11, Rating: -1
RE: Moron
By juserbogus on 6/7/2011 2:35:55 PM , Rating: 3
you should realize that you are completely wrong! there was not enough capital in the fundamental mortgage market to come anywhere close to causing this problem. It's true that Clinton, dems (and pubs) had their hands in this by loosing decades old laws that prevented things like this happening. the cause came down to simple fact that when someone can write a mortgage, sell it and wash their hands completely of it... that person will write bad mortgages all day. of course we will package them up with "good" mortgages to "spread the risk" which of then just infects everything! then on top of all that we will take "insurance" out on these investments resulting in the insurance providers taking out "insurance" on that "insurance" they just wrote and pretty soon the mortgage market assets have multiplied by a factor of 10 to 60 tillion dollars.


RE: Moron
By Maurice Enchel on 6/8/2011 4:47:41 PM , Rating: 2
there still must be an underwriter of the mortgage, good or bad... you can't just "sell mortgages"... who was the underwriter securing all the bad mortgages?? ... FM/FM, that is who... Quasi-governmental institutions with taxpayer backing... run by the former Clinton administration..

This is fun...


RE: Moron
By Maurice Enchel on 6/8/2011 4:40:10 PM , Rating: 2
... partly right... most demand driven by low interest rates... Feds to blame.


RE: Moron
By Maurice Enchel on 6/8/2011 4:38:24 PM , Rating: 1
c'mon, you didn't study economics let alone write a dissertation on the econ collapse? you're bs'n us aren't you?!... ha ha.


RE: Moron
By Cerin218 on 6/7/11, Rating: -1
RE: Moron
By juserbogus on 6/7/2011 2:37:57 PM , Rating: 2
jeeze dude... stop talking!


RE: Moron
By Cerin218 on 6/7/2011 7:54:05 PM , Rating: 1
Geez dude, come up with some logic that magically refutes mine. 1, 2, 3, GO.

Oh, you can't. Darn. Thought you knew.


RE: Moron
By TacticalTrading on 6/7/2011 3:09:00 PM , Rating: 2
Necessity is the mother of Invention...
Ever heard that one.
Let me translate: When there is a need (read: Demand) and if that demand is significant enough and sustained, eventually/typically, supply will materialize.

Invent something people want, will want, or need, and you sell a lot.
Invent something people do not need or want, and you go broke.

A big problem today is that too many people have a solution, in search of a problem.

Econ 101: Demand drives supply
Econ 441: The best cure for high prices is high prices


RE: Moron
By Cerin218 on 6/7/2011 7:59:38 PM , Rating: 2
So there was a demand for Chevy to create an electric car? They didn't create on and hope that demand would materialize?


RE: Moron
By Maurice Enchel on 6/8/2011 5:06:59 PM , Rating: 2
yeah cerin, there was demand for an electric car... or, more precisely, a demand to replace the combustion engine... you do see that??


RE: Moron
By maugrimtr on 6/8/2011 8:17:41 AM , Rating: 1
Stupidest concept ever. Demand drives supply. If you can create a completely new crazy product, the only way it will ever get sold is someone wants to buy it. You're confusing the basic point because demand can only be fulfilled by supply. That does NOT mean supply created demand - the demand was already there waiting. If you had a clue you could even try measuring it using market research.


RE: Moron
By TheDoc9 on 6/7/11, Rating: -1
RE: Moron
By gamerk2 on 6/7/2011 11:09:07 AM , Rating: 1
quote:
Most democrats these days are socialists


No, most democrats are Kenysians. The liberal wing of the party died when Nixon was elected. Most democrats these days either hail from the LBJ branch of the party, or are socailly liberal Republicans [Blue Dog Democrats] that were kicked out of the Republican party.

The Dennis K baranch of the party represents the socalist wing, and as I'm sure you noticed, it hasn't done to well come primary time.


RE: Moron
By JasonMick on 6/7/2011 11:03:24 AM , Rating: 4
quote:
corporations spend money and create jobs, the government just takes money from people. the jobs its 'creates' are just leaching off tax payers. people who have money spend it on things which is how more jobs are created. your idea is pure socialisim, taking money from corporations because you deem them to have 'too much' of it.. wow.

The original op's suggestion of taking all of the profits from corp.'s is ridiculous, as you say -- pure socialism, which has failed many times before.

That said, the reality is somewhere in between your comment and his. Both corporations and consumers need to pay taxes under the current system to support vital infrastructure like roads and defense.

At some point those functions could be contracted out on a state/local level, eliminating the need for direct national taxation, but for now the logistics of such a scheme are prohibitive, despite its attractiveness.

That said the system currently is really f*cked up. America supposedly has the highest corporate tax rate in the world, but most large corporations pay virtually no taxes based on tax loopholes. In fact, many -- like General Electric -- are GIVEN taxpayer money. Meanwhile taxpayers and business have to pay more money.

The ONLY solution that seems equitable is a flat tax on both corporate and private income. That would eliminate a vast amount of bureaucratic gov't expenses by slashing the bloated IRS accounting budget. It would also cut on corporate and private exploitation of the tax code. It'd be much easier to catch offenders under such a system.

But the solution is most definitely NOT to RAISE taxes overall in my mind. Tax smarter, not more.

[DISCLAIMER: The opinions I express in this comment are my own and not to be confused with the text of my articles.]


RE: Moron
By icemansims on 6/7/2011 11:13:00 AM , Rating: 2
That may be true, but by the same token "trickle down economics" have been shown to not work either. What happens is that the wealth gets further concentrated. How do you reconcile the two problems?


RE: Moron
By gamerk2 on 6/7/2011 11:24:12 AM , Rating: 1
Tickle down doesn't work for a very simple reason: The CEO is interesting in one thing and one thing only: Stock price. And what makes stock prices go up quicker: 5% increases to worker salaries, or an increase in coorporate profit?

The irony is, Supply-Side is actually the way out of this recession. Simple way to increase housing prices again: Have governemnt buy and then destroy all forclosed properties. Reduce supply leads to increased price, as per basic rules of capitalism. That will instantly stabalize the housing market, and spur new contruction [Jobs]. Either that, or wait 5-6 years for the market to clear out...[and yes, it will take THAT long.]


RE: Moron
By surt on 6/7/2011 11:45:25 AM , Rating: 2
The government can't afford 10 trillion worth of foreclosed property at the moment. They can't even afford 1 trillion.


RE: Moron
By TerranMagistrate on 6/7/2011 1:45:24 PM , Rating: 2
Nonsense!

Just turn up the dial on those printing presses at the Federal Reserve.


RE: Moron
By web2dot0 on 6/8/2011 3:11:46 PM , Rating: 1
Hey loser .... it's called INFLATION ....


RE: Moron
By juserbogus on 6/7/2011 12:01:46 PM , Rating: 2
No irony because what you describe is actually the opposite of supply-side... supply-side economics is all about increasing supply to lower costs which supposedly increases demand. and as you pointed out in other posts... supply side is folly at the macro level.


RE: Moron
By gamerk2 on 6/7/2011 12:18:34 PM , Rating: 2
But the inverse is also true: A reduction is supply would lead to increased prices, just like an increase would lead to reduced prices.

The failure of supply-side was forgetting that business could just pocket the profits, which is exactly what they did. The economic basis the theory was based on, however, is solid.


RE: Moron
By Kurz on 6/7/2011 12:25:02 PM , Rating: 2
Broken Window Fallacy... Why should Homes increase in value?
They are just a place to live not an investment.


RE: Moron
By gamerk2 on 6/7/2011 1:06:17 PM , Rating: 2
Ok, your right on that one. But people treat housing like an investment, so that makes the housing market an investment.


RE: Moron
By Kurz on 6/7/2011 3:17:20 PM , Rating: 2
No the Housing Market is not an investment unless you intend to rent it out properties. We have the highest individual home Ownership in the world. The reason we had the housing bubble is because of Cheap interest rates, the Ever inflating dollar.

In a Sound monetary system Homes will not be treated as investments, but more like a place to hang your hat.


RE: Moron
By Kurz on 6/7/2011 8:36:28 PM , Rating: 2
How is it an investment? If you live in it, there is no added income? When you move you most likely will have to sell it and when you go to another house most likely the prices on that home will have risen as well to similar degree.


RE: Moron
By mcnabney on 6/7/2011 1:50:00 PM , Rating: 2
Property increases in value, not homes.

Unless you live in Dubai, they ain't making any more land and every second of every day brings more people into this world and this nation. Combine that with inflation and yes, property should go up in value. It will go up faster in areas that are more desirable - but it always goes up over time.


RE: Moron
By Kurz on 6/7/2011 5:51:44 PM , Rating: 2
He was talking about Homes... So I responded about homes.


RE: Moron
By Reclaimer77 on 6/7/11, Rating: 0
RE: Moron
By alphadogg on 6/7/11, Rating: 0
RE: Moron
By gamerk2 on 6/7/2011 1:14:47 PM , Rating: 3
quote:
e GDP of the United States DOUBLED under prolonged periods of Republican "trickle down" economics. If that's "not working" I would like to see what is.


Provably incorrect:

Yearly Increases to GDP/Debt as a percentage over previous year:

Clinton:
1994: 3.8/4.6
1995: 2.7/3.4
1996: 2.7/3.0
1997: 4.3/1.7
1998: 4.4/1.0
1999: 4.2/0.8
2000: 3.7/-2.1 (Surplus)
2001: 1.2/0.2

Bush:
2002: 1.3/5.5
2003: 1.4/6.2
2004: 3.4/5.7
2005: 2.6/3.7
2006: 2.9/3.4
2007: 2.8/0.6
2008: 2.0/5.0
2009: 2.6/5.5

Obama:
2010: 3.0/6.2

Note how the deby skyrocketed Bush's first year, and how GDP increases only cracked 3.0% ONCE over an 8 year period, which Clinton managed 5 times [3 years of >4/.0% GDP increases].

So Clintons policy gave less yearly increases to the debt, and more increases to GDP growth. Why'd we go away from that again?

I could have included Regan/Bush, but seeing those years of 12% increases to the debt might have given some people heart attacks...


RE: Moron
By gamerk2 on 6/7/2011 1:19:06 PM , Rating: 2
As an aside, its strange that GDP decreases were actually greater in the .com bust [2000-2003; 3 years of sub 2% GDP growth] then they were under the great recession [no years under 2% GDP growth]. Even I'm unsure what caused that behavior, and I eagerly await this years final numbers [I'm betting 2.5% GDP growth over previous year].


RE: Moron
By rdawise on 6/7/2011 7:59:09 PM , Rating: 2
You brought actually figures on Dailytech!!!!! For shame</sarcasm>

Unfortunately you will probably get voted down because you brought figures that no one can argue against. Welcome to DailyPolitics! (or is it still DailyTech?)


RE: Moron
By rdawise on 6/7/2011 8:10:26 PM , Rating: 2
quote:
The GDP of the United States DOUBLED under prolonged periods of Republican "trickle down" economics. If that's "not working" I would like to see what is.


And so did the national debt which jumped from 997 billion to 2.85 trillion to pay for the budget shortfall when he left office. That worked to you, you must love whats going on now then right?


RE: Moron
By gamerk2 on 6/7/2011 11:15:51 AM , Rating: 2
Good argument, wrong conclusion.

Lets look at the flat tax example: The primary problem is you'd also be hitting the poorest part of the population with some tax rate. So aside from the immediate reduction in consumer spending [and thus, Demand for goods, leading to job losses], you would also put a larger percentage of the population of government welfare programs, increasing the deficit as a result.

Here's my plan, which I've pitched numerous times now:
1: Repeal Bush Tax Cuts [Unaffordable cost of $750 Billion per year. Cuts deficit in half]
2: 30% cut to defense [Approx $250 Billion a year. I work in defense, and it needs cutting]

Right there, I've got the deficit down to ~$500 Billion a year. Coincidentally, due to unemployment, tax reciepts are down ~$500 Billion a year. At the very least, you have a manageable base to work with again.

As far as the tax code goes, keep the current brackets, but reduce all tax rates by some percent [lets say 10%] and remove ALL deductions. No more loopholes; you make some income, you pay x% of that income in taxes. Done.

Also: ALL INCOME WILL BE TREATED THE SAME AND TAXED AT THE SAME RATE. Can't leave that giant investment loophole lieing around...


RE: Moron
By JasonMick on 6/7/2011 11:31:37 AM , Rating: 4
quote:
Lets look at the flat tax example: The primary problem is you'd also be hitting the poorest part of the population with some tax rate. So aside from the immediate reduction in consumer spending [and thus, Demand for goods, leading to job losses], you would also put a larger percentage of the population of government welfare programs, increasing the deficit as a result.

That's a flawed argument, because in modern American society people have the means to increase their income by hard work.

Don't like your tax burden? Work harder. If you're low income, your education level is clearly low, and that's your own responsibility to remedy, not Big Brother gov'ts. Take some personal responsibility.

The argument that $5K USD to a person that makes $30K USD annually is worth more to that person than $166,000 USD to someone who makes $1M USD annually is essentially attempting to justify that we take money from the rich and use it to exempt low income people from paying taxes. That would essentially remove incentive to produce and gain wealth.

If you're going that route, you might as well just forcibly take money away all wealth from everybody and give everyone the exact same amount of money. That is a horrible idea, though.

quote:
As far as the tax code goes, keep the current brackets, but reduce all tax rates by some percent [lets say 10%] and remove ALL deductions. No more loopholes; you make some income, you pay x% of that income in taxes. Done.

Easier said that done. A bracket system inherently gravitates to loopholes as it's already a complex beast. With a flat tax, any attempt to incorporate loopholes would be glaringly obvious.

Your plan flat out won't work when it comes to closing the loopholes, and you're missing the bigger problems here, namely the bloated federal government, the confusing tax situation, and the fact that the public and SMBs are paying the U.S. gov't to give tax subsidies to major corp. like GE.

[DISCLAIMER: The opinions I express in this comment are my own and not to be confused with the text of my articles.]


RE: Moron
By gamerk2 on 6/7/2011 11:46:24 AM , Rating: 2
quote:
Don't like your tax burden? Work harder. If you're low income, your education level is clearly low, and that's your own responsibility to remedy, not Big Brother gov'ts. Take some personal responsibility.


Lets take that argument you just made to the extreme then: If Income is purly a function of work, then 100% of the unemployed are clearly lazy, uneducated bums.

Hard work does NOT gurantee economic advancement in america. Thats the fundamental misunderstanding that dooms conservative economic thinking.

quote:
The argument that $5K USD to a person that makes $30K USD annually is worth more to that person than $166,000 USD to someone who makes $1M USD annually is essentially attempting to justify that we take money from the rich and use it to exempt low income people from paying taxes. That would essentially remove incentive to produce and gain wealth.


Thats a flawed, idiotic argument. How does taxing some bracket at a higher rate remove the incentive to make more money? At the end of the day, even if you are taxed at a higher rate, because the tax scale is graduated, you have more money in pocket. Thats your incentive to make money.

Secondly, the reason you exempt those making below some level of income is simple: If you take money away from them, their only option is government assistance. The more people on those programs, the more their cost rises. That leads directly to higher taxes for everybody or a significant reduction in services [which will often lead to farther reductions in consumer spending, and thus higher unemployment].

quote:
If you're going that route, you might as well just forcibly take money away all wealth from everybody and give everyone the exact same amount of money. That is a horrible idea, though.


Wouldn't work, as you'd destroy consumer demand of high priced, production heavy items [Airplanes and the like], and thus throw the economy into chaos [lots of local unemployed construction jobs will have significant downward impact, as we are discovering in the current recession]. Because you have some goods that only the rich can afford, removing the rich is an economic impossibility.

quote:
Easier said that done. A bracket system inherently gravitates to loopholes as it's already a complex beast.


Again, graduated scale. You report income "X", you pay "Y" in tax. How is that open to abuse? The idea that taxing the poor because it is "fair" is idiotic, as you'd end up increasing costs in the long run.


RE: Moron
By sedoo on 6/7/2011 12:24:09 PM , Rating: 2
How many Keynesian fails in one post.

Lets take that argument you just made to the extreme then: If Income is purly a function of work, then 100% of the unemployed are clearly lazy, uneducated bums.

Straw man

Hard work does NOT gurantee economic advancement in america. Thats the fundamental misunderstanding that dooms conservative economic thinking.

Because Hard work never accomplish nothing

Thats a flawed, idiotic argument. How does taxing some bracket at a higher rate remove the incentive to make more money? At the end of the day, even if you are taxed at a higher rate, because the tax scale is graduated, you have more money in pocket. Thats your incentive to make money.

Maybe because you are punished for your success? How does taxing someone more create more incentive than not, that makes zero sense.

Again, graduated scale. You report income "X", you pay "Y" in tax. How is that open to abuse? The idea that taxing the poor because it is "fair" is idiotic, as you'd end up increasing costs in the long run.

Yeah, if you can't provide free services without paying, people might actually be self reliant, can't have that.


RE: Moron
By Kurz on 6/7/2011 12:29:18 PM , Rating: 2
Umm Problem with your post.
Its happened to my own father he didn't want to take the slightly better pay raise since he'll land in the higher tax bracket. So he waited almost 10 years before a position/pay came along that would justify moving up to the higher tax bracket.

So Tax brackets are not fair to anyone except the Government that loves to play class warfare to get people jealous and angry at each other for votes.


RE: Moron
By gamerk2 on 6/7/2011 1:50:29 PM , Rating: 2
Do you understnad what a Graduated scale means?

Taking your example: If your father was making 200k/year, and the next bracket was 250k, and he received a raise to make 255k a year, only the last 5k would be taxed at a higher rate, so he would still have more money at the end of the day.

People really need to understand how the tax code works. THERE IS NO SITUATION WHERE MAKING MORE MONEY WILL RESULT IN HAVING LESS MONEY THEN YOU DID BEFORE AFTER TAXES


RE: Moron
By juserbogus on 6/7/2011 1:53:05 PM , Rating: 2
sorry... but this just shows complete ignorance of how a progressive tax code works! going up a tax bracket ONLY taxes the new money at the higher rate. the amount your dad was making would continue to be taxed at the lower rate.


RE: Moron
By Kurz on 6/8/2011 9:53:15 AM , Rating: 2
No... there is an disinsentive.
He was saying 'why am I taking a position that has more work involved for only a slight pay increase on top of that its taxed to the wazzo?'



RE: Moron
By gamerk2 on 6/7/2011 12:35:58 PM , Rating: 2
quote:
Straw man


If JM's argument is that income is a function of work, and work is a function of education, then by definition, those not making any income are uneducated and wish not to work hard.

I also note you failed to produce any actual rebuttal yourself.

quote:
Because Hard work never accomplish nothing


Again, failure to make a rebuttal, but I'll reply anyway:

I am NOT arguing that hard work is not needed to make a decent living, but I AM arguing that working hard does NOT gurantee a decent living. Correlation != Causation.

You generally need to work hard to make money, but working hard does not guarentee that you do make money. Thus, the idea that working hard will make things batter is a logical fallacy.

quote:
Maybe because you are punished for your success? How does taxing someone more create more incentive than not, that makes zero sense.


Because regardless of teh increased tax rate, they still have more money in pocket. And history has shown, if people can do something to make more money, they will.

quote:
Yeah, if you can't provide free services without paying, people might actually be self reliant, can't have that.


Again, lack of a rebuttal of my point...

Taxing the poorest of the population does nothing except make then LESS self-reliant, as their megaer income would become even less, and force them onto government programs to survive. How is THAT self-reliance? Seems to be the exact opposite of what you are calling for...


RE: Moron
By Schrag4 on 6/7/2011 1:51:50 PM , Rating: 4
quote:
You generally need to work hard to make money, but working hard does not guarentee that you do make money. Thus, the idea that working hard will make things batter is a logical fallacy.


Yeah but you gotta admit that giving money to people who refuse to work at all isn't exactly helping things either.

quote:
Because regardless of teh increased tax rate, they still have more money in pocket. And history has shown, if people can do something to make more money, they will.


Actually this is quite simple. If I can work twice as hard to make twice as much money, I will. If I can work twice as hard to make 10% more money, I won't. Obviously these are extremes, but you get the point, right?


RE: Moron
By Cerin218 on 6/7/2011 1:49:53 PM , Rating: 5
"How does taxing some bracket at a higher rate remove the incentive to make more money?"

An economics professor at Texas Tech said he had never failed a single student before but had, once, failed an entire class. That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said ok, we will have an experiment in this class on socialism.

All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A. After the first test the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy.

But, as the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too; so they studied little.. The second test average was a D! No one was happy.

When the 3rd test rolled around the average was an F.

The scores never increased as bickering, blame, name calling all resulted in hard feelings and no one would study for the benefit of anyone else. All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great; but when government takes all the reward away; no one will try or want to succeed.

Could not be any simpler than that…”


RE: Moron
By juserbogus on 6/7/2011 12:46:30 PM , Rating: 2
a progressive tax system is inherently fair to all levels of income as everybody pays the same % of tax on the income they earn. the "rich" pay exactly the same % of income tax as the "poor" does for same amount of (work) income.

Actually in the US it's pretty easy to argue that the rich have many advantages and statistics show they actually pay smaller % of total income than many but the very lowest income earners. this is easy to see because generally as one rises in income more and more of that income come from investment which is taxed at lower rates. in addition as one rises they are able to take advantage of more and more "loop holes".

also, argument that the $5k is worth more to the $30k income person is attempting to justify taking money more money from the other person. it's just acknowledging the fact that basic goods and services needed to survive have the same fixed cost for both of those people.


RE: Moron
By Nfarce on 6/7/2011 1:34:35 PM , Rating: 2
Indeed we have a very progressive income tax in the US. The bottom line for IRS figures is that the bottom 50% of US income earners pay 3% of all household income tax revenue, the top 25% pay 86%, the top 10% pay 70%, and the top 1% pay 39% respectively when all factored together as a whole. The middle class 25%, those above the bottom 50% but below the top 25%, pay 11%. And that percent paid is only going up for those above 50% (specifically those at or above the top 25%) and down for those below 50%.

What many progressives propose is to return the tax rates that were under JFK which topped out around 70%, who himself cut taxes. But there's a big difference the left either fails to tell you about or doesn't want you to know: there were a lot more available tax breaks back then that drove the effective tax rate back down well below 50% for those higher income earners.


RE: Moron
By juserbogus on 6/7/2011 2:13:46 PM , Rating: 2
and when citing those numbers lets never forget to include why they split up that way...

in 2010 the bottom 80% controlled only 7% of the wealth in this country while the top 1% controlled 42% of the wealth. or another way to look at it is 93% of all the wealth in the US is controlled by only 10% of the population!

so of course most tax revenue comes from the rich.


RE: Moron
By Nfarce on 6/7/2011 2:30:28 PM , Rating: 1
quote:
in 2010 the bottom 80% controlled only 7% of the wealth in this country while the top 1% controlled 42% of the wealth. or another way to look at it is 93% of all the wealth in the US is controlled by only 10% of the population!


Well, I'll admit I've got no PhD in economics, but I really wouldn't expect any low income earner to have wealth. Who in his right mind would? The only way that can manifest itself is if wealth is taken from others and redistributed. And to further drive the point across I tried to make for example, the top 1% paid 39% of the income but "control" (I prefer invested in) 37% of America's wealth.


RE: Moron
By juserbogus on 6/7/2011 4:03:05 PM , Rating: 2
quote:
The only way that can manifest itself is if wealth is taken from others and redistributed.


and during the last the 10 years the bottom 50% now control less than they did while the upper have increase their wealth by staggering levels... I agree, wealth is being taken away from other and redistributed just not in the way you believe. tarp was a perfect example of the rich having little to fear while the rest of us worry about jobs and income.


RE: Moron
By Nfarce on 6/7/2011 7:13:55 PM , Rating: 1
TARP stands for Troubled Asset Relief Program. It was a bailout generally tied to sub-prime mortgages which were given to those who would not qualify for a traditional mortgage: those with no money for a down payment or no capital assets. Basically, the lower classes and others who have a higher risk of not paying back the loan, if you will (and a reason Fannie/Freddie crashed as well, but that's another topic).

So back to my question: how can those who have low income "control" (your words, not mine) any wealth? I don't see TARP being relevant to any of this discussion.


RE: Moron
By Kurz on 6/7/2011 7:30:47 PM , Rating: 2
So how does a progressive tax system protect the lower classes?
When you said it yourself the bottom 50% lost more control.

Wealth distribution doesn't work.


RE: Moron
By Nfarce on 6/7/11, Rating: 0
RE: Moron
By Reclaimer77 on 6/7/11, Rating: 0
RE: Moron
By alphadogg on 6/7/2011 1:15:54 PM , Rating: 2
Labels, assumptions and characterization attacks. Is that all you can do? How about some real content in your posts for once?


RE: Moron
By nshoe on 6/7/2011 11:39:31 AM , Rating: 3
I love how you can't even keep your estimate of the Bush Tax cuts consistent across two posts... fist it was $700 Billion/year, now it is $750 Billion per year.

The truth is that the two year extension of the Bush tax cuts (based on revenue estimates from the Joint Committee on Taxation) cost a total of $544.3 Billion for the two years (so approximately $272.2 Billion per year - or a little more that a third of what you are claiming.)

So given that you seem to be incapable of even keeping your story straight, much less looking up facts, why should we pay any attention to your claims or ideas?


RE: Moron
By gamerk2 on 6/7/11, Rating: 0
RE: Moron
By sedoo on 6/7/2011 12:27:33 PM , Rating: 2
As kenysians like me see a recovery in 2011-2012

A recovery based on what, Keynesian polices have thoroughly failed.


RE: Moron
By gamerk2 on 6/7/2011 12:51:31 PM , Rating: 1
How so?

The first month Obama was in office [January 09], the US lost over 750,000 jobs. Within two years, we were making 250,000 jobs. Thats a 1 Million job net turnaround from the starting condition.

Now granted, the final number isn't particularlly good, but consideration must be taken to the starting conditions, which were horrendous.

As for the deficit, Obama inherited the first $1 Trillion shortfall. A farther ~$450 Billion or so was tacked on due to declines in tax revenue. Increases to federal spending for budgets that passed after Obama was in office [FY 2010 and 2011] were actually LESS then the increase in GDP [1.7% increase to spending to 3.0% rise in GDP].

So, expalin to me by what measure teh economy is doing badly, and how that is sorly Obama's fault. I grade presidents on based on comparisions to where we were when they took office, and we are SIGNIFICANTLY better now then we were two years ago. My main complaints are on his implementation of Kenysian theory, as the methods used were inefficent, at best. [Personally, I wanted a Federal Work Program, so money would be put in peoples hands, rather then more expensive and economically limited Quantative Easing approach he took].


RE: Moron
By Reclaimer77 on 6/7/2011 1:17:16 PM , Rating: 4
quote:
Within two years, we were making 250,000 jobs. Thats a 1 Million job net turnaround from the starting condition.


The vast majority of which are GOVERNMENT jobs or jobs only available because of Federal money. Which does NOT grow the economy and only puts the treasury further in the hole.

Government sector jobs do not grow the economy, they burden it.

That's what your trillion dollar stimulus got us after almost 4 years? A paltry amount of mostly government sector jobs. Yup, the policies you support sure are the way to go.

I guess Carter also had a great economy as well, right?

quote:
As for the deficit, Obama inherited the first $1 Trillion shortfall. A farther ~$450 Billion or so was tacked on due to declines in tax revenue.


Ok I'm tired of seeing you post these lies. I want a link to your source and I want it NOW. I'm betting there IS no source, you're just full of shit.

Obama inherited a recession and has managed to turn it into a near depression going on 4 years. THAT'S his legacy. And there is nobody else to blame.


RE: Moron
By gamerk2 on 6/7/11, Rating: 0
RE: Moron
By Reclaimer77 on 6/7/2011 1:57:19 PM , Rating: 4
quote:
FY2008 tax receipts: 2.524 Trillion FY2009 tax receipts: 2.105 Trillion FY2010 tax receipts: 2.165 Trillion Theres your $450 Billion is missing tax dollars. I'm expecting an apology in your next post, now that I've proven you wrong.


WHAT? You specifically leave out my quoted period from 2004-2007 and instead use the years where our economy nearly collapsed from recession! And that's supposed to prove the tax cuts from 2004 somehow "lost" us money 5 years later!? If your argument was correct, we would see the impact IMMEDIATELY, 2005 would have "lost" us 450 billion according to you. Instead the 4 year period after the cuts brought record breaking gains! How can you account for that?

You are truly the most dishonest debater I have ever seen on here. Shame on you, really. Apology? You must be joking!


RE: Moron
By gamerk2 on 6/7/2011 2:05:44 PM , Rating: 2
The point up for debate was that I claimed that the recession caused a decline in Tax Revenue of $450 Billion. I proved that tax revenue in fact declined by $450 Billion the year after the recession.

Farther, I linked the page with the data for every year starting with 1990 for your reference, so don't give me that I didn't provide all my data.

http://www.census.gov/compendia/statab/2011/tables...


RE: Moron
By Reclaimer77 on 6/7/2011 2:15:45 PM , Rating: 2
And that's cherry picking! The tax cuts didn't go into effect after the recession, they went in effect that YEAR! So why are you using data 5 years later? You are simply cherry picking a time frame where you can plausibly make your argument valid, while ignoring all other contradictory proof. So the Bush tax cuts "cost" us 450 billion, but we just so happened to not feel it until AFTER the recession!? How can you seriously make that argument?


RE: Moron
By gamerk2 on 6/7/2011 2:22:23 PM , Rating: 2
1: I sourced teh data, so I didn't "cherry pick" anything
2: You totally misunderstand the argument: I argued that the recession has caused a decline in tax returns due to a large segment of the population being unemployed. I am NOT talking about tax rates.

The argument was simple [for me at least]:
Obama started with a ~1Trillion/year deficit.
Additionally, ~$450 Billion was lost in tax revenue due to the recession

The conclusion I was going to give was that the 1.45 Trillion/year deficit is due to continued bush era programs combined with declining tax revenue due to the recession.


RE: Moron
By gamerk2 on 6/7/2011 2:25:06 PM , Rating: 2
The origional quote that started this whole thing:

quote:
As for the deficit, Obama inherited the first $1 Trillion shortfall. A farther ~$450 Billion or so was tacked on due to declines in tax revenue.


I was hoping people would understand teh decline in tax revenue was due to the increased in unemployed; I thought that was rather obvious...

As such, I provided budgetary numbers that showed that as of the start of the recession, tax revenue in fact, declined ~$450 Billion [and has not recovered].

So either you totally misunderstood the point, or you are purposely trying to move the debate in another direction.


RE: Moron
By juserbogus on 6/7/2011 4:05:44 PM , Rating: 2
no they haven't.... cite an example.


RE: Moron
By Reclaimer77 on 6/7/2011 1:04:28 PM , Rating: 4
quote:
The truth is that the two year extension of the Bush tax cuts (based on revenue estimates from the Joint Committee on Taxation) cost a total of $544.3 Billion for the two years (so approximately $272.2 Billion per year - or a little more that a third of what you are claiming.)


No, that's funny math. See you have to understand how politicians think. Ok so Mr. Bush cut taxes, so that means that same amount of taxes he cut is now that much less taxes we'll collect. Right? This stems from the flawed belief in Washington that ALL our money belongs to the Government, they just decide how much we get to keep.

Well, wrong. This WOULD be true if we had a total zero sum economy and every dollar was a static amount percentage of taxable money. But this isn't the case. When you cut taxes you STIMULATE the economy, and ironically enough, Federal tax receipts increase because you have GROWN the economy, thus the money supply has grown, thus you collect more taxes.

Gamer reads like someone who has watched MSNBC and is completely ignorant of this well documented economic fact. Want to know how much the Bush tax cuts "cost" us? From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history.


RE: Moron
By gamerk2 on 6/7/2011 1:36:00 PM , Rating: 2
quote:
Gamer reads like someone who has watched MSNBC and is completely ignorant of this well documented economic fact. Want to know how much the Bush tax cuts "cost" us? From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history.


Well, considering we just exited a recession where we had three consecutive years of sub 2% growth to GDP, I would hope economic growth lead to an increase in tax revenue. One could easily argue the end of the .com recession, and NOT the tax cuts, was the cause of the sudden increase in tax returns.


RE: Moron
By gamerk2 on 6/7/2011 1:39:34 PM , Rating: 2
Also, for note:

1994 Tax Receipts: 1.258T
1999 Tax Receipts: 1.827T

Increase: 1.827-1.258 = $569 Billion

And thats NOT comming out of a recession. Funny how those higher tax rates resulted in higher GDP growth and just as much increases to tax revenue...


RE: Moron
By Reclaimer77 on 6/7/2011 1:50:10 PM , Rating: 3
quote:
1994 Tax Receipts: 1.258T 1999 Tax Receipts: 1.827T Increase: 1.827-1.258 = $569 Billion


Wow you really think you're being cute, don't you? You throw some unsourced numbers at me, and I'm supposed to go with it? You are NOT dealing with a moron sir.

You know goddamn well those increases were because of the massive 1997 tax cut. NOT because of the 1993 tax increase package Clinton pushed through.

You know what, if you can actually comprehend it. This exactly and correctly explains the "phenomenon" you seem to be suffering from about the Clinton years. TAX CUTS, not increases, are what caused that growth.

http://www.heritage.org/research/reports/2008/03/t...

And please, don't belittle yourself by accusing my source of being biased. They are completely credible, something I can't say for you.


RE: Moron
By gamerk2 on 6/7/2011 2:03:13 PM , Rating: 1
My source is the Fy2010 budget. You can't get much better then that.

http://www.census.gov/compendia/statab/2011/tables...
http://www.whitehouse.gov/omb/budget/fy2009/pdf/hi... [the 2009 one, just for good measure]

Secondly, the rate of year over year increases to tax receipts was basically flat during that timespan. Your argument also fails to address why those returns increased after taxes went up [where according to your argument, they should have gone done, or at least accelerated at a slower rate then they were before.]

The exact year over year returns, starting with 1990 and ending in 2001:

1990: 1.032T
1991: 1.055T
1992: 1.091T
1993: 1.154T [Note the slow rate of increase thus far]
1994: 1.258T [Note the jump]
1995: 1.351T
1996: 1.453T
1997: 1.579T [Still over $100 Billion increases/year]
1998: 1.721T [One year jump]
1999: 1.827T [Slowing down back to $100 Billion increase]
2000: 2.025T [Jump again]
2001: 1.991T [.com bust]

So only two years after 97 did we see increases in revenue greater then the average increases seen 94-97, one of them exactly on pace, and then we had the .com bust.

I'd argue that there simply isn't enough data prior to the recession to make an argument that the tax cuts by themselves increased revenue. Its also important to note GDP growth accelerated over that same exact timespan [GDP growth was >4% yearly 1997-1999 and >3% in 2001] could also explain the increases in revenue after 97.

Then again, its easy to say decreased taxes increases revenue if you choose the timespan GDP is growing at a 4% tick. [Feel free to argue if those cuts impacted GDP growth in any way though]


RE: Moron
By Reclaimer77 on 6/7/2011 2:10:38 PM , Rating: 2
quote:
I'd argue that there simply isn't enough data prior to the recession to make an argument that the tax cuts by themselves increased revenue.


Oh I see, but you seem to be certain there IS enough data to prove the inverse? After all, I've seen you say we "lost" 500+ billion three times before I even entered the discussion. With no proof given at all.

As far as the GDP growth, that would only be relevant if the rate was the same as the increased receipts. I'm not talking a 10 or 20 year period, I'm talking record income tax receipts in only 4 years. 4 years where we did NOT have record GDP growth, I might add.


RE: Moron
By gamerk2 on 6/7/2011 2:18:59 PM , Rating: 2
quote:
Oh I see, but you seem to be certain there IS enough data to prove the inverse? After all, I've seen you say we "lost" 500+ billion three times before I even entered the discussion. With no proof given at all.


I mearly pointed out that under your argument, and increase in taxes should slow down the rate of tax receipt growth. I mearly pointed out that over a 4 year period, the exact OPPOSITE occured. That goes against your economic theory, and something you have not been able to explain away yet.


RE: Moron
By juserbogus on 6/7/2011 4:24:16 PM , Rating: 2
and history since the great depression shows that to be true. Reclaimer77 doesn't have the data on his side.


RE: Moron
By Reclaimer77 on 6/7/2011 1:40:33 PM , Rating: 2
The growth happened BECAUSE of the tax cuts, not the other way around. Sorry but I don't believe in a $785 billion dollar coincidence. Although obviously you can't bring yourself to see it that way. The .com recession? Oh that's almost comical! You went from straw man arguments to just outright pulling at straws.

But this is all semantics, the larger point is Gamer, WHERE is this 500+ billion you are claiming the tax cuts "cost" us. Where is it?


RE: Moron
By Nfarce on 6/7/2011 2:04:51 PM , Rating: 2
I don't even know why you are wasting your time with this mouth breather. Keynesians are emotion driven economic plebes who believe that enhanced government and artificially pumping money into the economy actually works (see: $860 billion stimulus bill rammed through congress over two years ago that was supposed to keep unemployment from going above 8%).

And when he said he believes we are on the road to economic recovery - while our dollar and our credit rating under record deficits continues to fall - I laughed out loud. These people really believe what they are saying. Give it up. Don't waste more time you'll never get back.


RE: Moron
By gamerk2 on 6/7/11, Rating: 0
RE: Moron
By Cerin218 on 6/7/2011 8:05:07 PM , Rating: 2
Can you show me that "surplus"? Or are you talking the PROJECTED surplus that was calculated after Clinton raided Social Security to retire high interest debt to make himself look better before he left office? He added to the deficit just like nearly every other president in history.


RE: Moron
By Modeverything on 6/7/2011 11:44:09 AM , Rating: 2
quote:
No more loopholes; you make some income, you pay x% of that income in taxes. Done.


I agree with this part. One issue is there is too many types of taxes. Just to name a few, there is income tax, sales tax, property tax, and capital gains tax. I pay taxes when I receive a paycheck, and I also pay taxes on the same money when I purchase something, making me feel like I'm being double taxed on the same dollar. Then I pay taxes on my property, my car, etc.

I would like to do as you say and pay a one time % of my money in income taxes, then be done with it.


RE: Moron
By superstition on 6/9/2011 4:18:27 AM , Rating: 2
The so-called "flat tax" is a regressive tax in disguise.

Regression taxation is unfair. But, exploiting the poor is a popular solution in many circles.


RE: Moron
By superstition on 6/9/2011 4:21:19 AM , Rating: 2
And, if people can't figure out why the "flat" tax is a regressive tax... keep the following fact in mind:

Money makes money.

Money is a tool. People can use it to do things, like make more money. The more money one has, the greater potential one has to make more of it.

A flat tax ignores this truth and thus imposes a greater punitive burden on the poor. It's no wonder why the rich love the idea of a "flat" tax.

There is one type of fair taxation: progressive taxation.


RE: Moron
By MeesterNid on 6/7/2011 11:40:00 AM , Rating: 2
quote:
how exactly would you pay the $700 Billion/year cost of keeping the Bush Tax Cuts?


Hey, dill wad, when the revenue is "generated" by taking the money out of my pocket then giving it back to me is not a freaking cost! it's simply that, giving it back to me.


RE: Moron
By superstition on 6/9/2011 4:24:16 AM , Rating: 2
Let's not have any taxation. We'll pay for roads by having people pull really hard on their bootstraps.

Or, we can use all those copies of Atlas Shrugged to fill the potholes.


RE: Moron
By sedoo on 6/7/2011 12:13:32 PM , Rating: 2
For arguments sake, how exactly would you pay the $700 Billion/year cost of keeping the Bush Tax Cuts?

*crickets*

How does taking 700 billion/year out of the private sector help the economy? There reason corporations are not spending is the uncertainty of the current economic climate, who would expand now?

And no, don't say "cut spending" without specifics. That very minor tax break is 50% of our deficit problem.

That's right, let's increase spending that's worked so far.

Likewise, if you cut spending on the poorest segment of the population, you end up with more people with less money, which will drop consumer spending, hurting economic growth.

We got to keep a dependent class somehow.


The economy grows when people spend money. Period. With that money being hoarded by the few, farther reduction of taxes will accomplish nothing except increasing debt. You want economic growth, give the money that coorporations are hoarded and give it back to the consumer.

Yes, we must give the money back to their rightful owners, classic.


RE: Moron
By gamerk2 on 6/7/2011 12:26:38 PM , Rating: 2
quote:
How does taking 700 billion/year out of the private sector help the economy? There reason corporations are not spending is the uncertainty of the current economic climate, who would expand now?


That $700 Billion gets spent, and thus has economic impact. It doesn't vanish into thin air.

Simple example: If you offered a government run plan for at-cost healthcare, you would drastically reduce prices for medical insurance. That puts more money into more peoples hands, which would lead directly to increased consumer spending, and thus, economic growth. Hence why its foolish to look JUST at the cost of programs when trying to determine if we need them or not.

quote:
That's right, let's increase spending that's worked so far.


When did I mention increasing spending? I simply wanted specifics on what to cut, as saying "Cut spending by 2 Trillion" is SO easy until you try and decide what to actually cut.

If anything, year over year spenidng increases should be no more then the increase in yearly GDP [which would keep the nations debt-GDP ratio flat].

quote:
Yes, we must give the money back to their rightful owners, classic.


Taking your economic argument to the extreme: If one coorporation managed to accumulate 100% of the nations wealth, would you have any problems with the nations wealth distribution? When pay for top executives rises by 23%, and the workers who make their sucess possible by only 3%, something is fundamentally wrong with the economy.

If normal people were making more money, you would be seeing an increase in consumer spending, and more jobs being created. I view this recovery as slow BECAUSE of the accumulation of wealth among the few, and expect this trend to continue through the next recession we enter.


RE: Moron
By Reclaimer77 on 6/7/2011 12:40:45 PM , Rating: 3
quote:
For arguments sake, how exactly would you pay the $700 Billion/year cost of keeping the Bush Tax Cuts?


Please stop repeating the Democratic lie that the Bush Tax cuts "cost" the Government money. The real jolt for tax-cutting opponents was that the 03 Bush tax cuts also generated a massive increase in federal tax receipts. From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history.

People like you NEVER seen to understand that lowering taxes INCREASES private sector growth which leads to MORE tax revenue being generated.

Saying the Bush Tax cuts are "50%" of our deficit is an almost criminal allegation. You are either flat out lying or just making up numbers.

quote:
The economy grows when people spend money. Period.


Well duh, way to contradict yourself. So what do you think happens to that spending when income taxes AND fuel taxes go up?

Your second, or third, gross lie or ignorant statement is that when taxes are cut, corporations "horde" money or even hoard money in general. Where do you get this crap? Bypassing the fact that you are, again, repeating the Liberal lie that only Corporate America gained from Bush tax cuts, you again demonstrate a complete lack of business knowledge. Corporations reinvest money, they also expand which leads to HIRING PEOPLE. They don't just sit there and "hoard" money.

You really need to get a clue, I mean, this stuff isn't even funny anymore Gamer.


RE: Moron
By gamerk2 on 6/7/2011 1:00:11 PM , Rating: 2
quote:
Corporations reinvest money, they also expand which leads to HIRING PEOPLE. They don't just sit there and "hoard" money.


Coorporations re-invest and expand when they need to produce more goods to satisfy demand. No demand, no expansion, no hirings, no jobs. Evidenced by record setting coorporate profits, and the total lack of new hiring. Why? Because of the lack of demand for products/services, caused due to a decline in consumer spending due to people being out of work. [Yes, its a chcken and egg situation].


RE: Moron
By Reclaimer77 on 6/7/2011 1:10:18 PM , Rating: 3
Yes I have seen you repeat this, and for the second time, you're wrong again. Because the ENTIRE economy is stimulated by tax cuts, so overall demand for goods and services DO go up.

When people are allowed to keep more of the money they EARNED, good things always happen. You seem to be under the belief that ALL our money is the governments, and their job is to decide how much of it we get to keep.

Corporations do not "take" money from consumers. If I buy a car, what have they taken from me? Did I not just purchase transportation from a corporation providing it? Hasn't my life been enriched? What has been taken from me exactly?

quote:
due to people being out of work.


So wait, let me get this straight. People get "out of work" when corporations get tax breaks and "hoard" their money??

You are retarded.


RE: Moron
By gamerk2 on 6/7/2011 1:47:14 PM , Rating: 1
quote:
Yes I have seen you repeat this, and for the second time, you're wrong again. Because the ENTIRE economy is stimulated by tax cuts, so overall demand for goods and services DO go up.


Then would you care to explain why GDP growth under Clinton was higher then GDP growth under Bush? After all, those tax cuts should have resulted in significantly higher GDP growth, right?

Of course, to me, the answer is obvious: The amount of money returned to most individuals by the BTC's are miniscule; a few hundred at most. That equates to one time increase in spending following the tax receipt being mailed, which does not provide a LASTING economic boost.

So the results of the Bush Tax Cuts are a one time seasonal increase in coorporate profits [via increased consumer spending], that is not sustained year round. As such, business can not justify new hires to increase production, and thus, you have limited economic impact of the tax cuts.

A far more effective way to create growth is increase in wages. As the increase is year round, you get a year round increase in consumer spending, which is more able to justify new hires to increase production of goods, leading to more economic growth.

quote:
So wait, let me get this straight. People get "out of work" when corporations get tax breaks and "hoard" their money??


People being out of work results in decreased consumer demand. Less demand for good leads directly to less incentive to increase supply. Without that incentive to increaes production, there is no reason for business to expand and hire new employees, as that would only lead to increased costs without increasing sales.

As such, you have a situation where the economy won't grow until people spend, but htey can't spend until they are hired, which business won't do until people spend, which they can't do until they are hired...you get the idea. Thats the US economy, right now.


RE: Moron
By Reclaimer77 on 6/7/2011 2:54:45 PM , Rating: 2
quote:
Then would you care to explain why GDP growth under Clinton was higher then GDP growth under Bush? After all, those tax cuts should have resulted in significantly higher GDP growth, right?


No. Claiming GDP growth is exclusively partnered to the tax rate is a completely baseless assumption. There are a myriad of factors contributing to GDP. For instance, don't you think the .com bubble growing during the Clinton years just happened to have a LITTLE bit to do with GDP? As well as the draw down in defense spending due to the Cold War being over? Nope, I notice you conveniently don't mention these factors.


proof read
By qkool on 6/7/11, Rating: -1
RE: proof read
By gamerk2 on 6/7/11, Rating: 0
RE: proof read
By Nutzo on 6/7/2011 11:25:23 AM , Rating: 5
quote:
Question: What would the taxpayer loss have been if GM had entered liquidation?


It nnever would have came to that, and it would have been less than what it has already cost the taxpayer, and a lot less than it will eventually cost us.

GM should have filed for chapter 11 bankruptcy, and used it to re-organized the company. Specifically renegotiate union contracts, building leases, etc, just like any other bankrupt company would do. That’s why we have bankruptcy laws. Would they have lost some market share? Yes, but that would have helped Ford and other car companies by increase their market share.

Instead we have a company (GM) that is making money on paper due to the huge influx of taxpayer money, but has not really reorganized and will end up loosing money once they have burned through the cash.

The main reason for the bailout was to protect the union, so that the union can continue to send millions to the Democrat’s campaign funds.


RE: proof read
By gamerk2 on 6/7/11, Rating: 0
RE: proof read
By Nutzo on 6/7/2011 1:32:03 PM , Rating: 3
So the scare tactics worked on you.

I doubt they would have actually filed chapter 7, as too many rich/powerful people would have had too much to loose.
Without the bailout, they would have worked something out on thier own to limit thier losses.

Even if they did end up in chapter 7, someone would have bought the valuable assets (without all the liability attached) and restarted the company.


RE: proof read
By Reclaimer77 on 6/7/2011 1:36:50 PM , Rating: 2
quote:
Wrong. GM wasn't going into Chapter 11, they would have entered chapter 7.


We don't know that. And anyone SAYING that only said it because they had something to gain from the bailout. GM had LOTS of options.

I don't believe any business is "too big to fail". The role of the government isn't to decide which business is more important than others. Constitutionally, how is GM any more viable than Pam's Flower shop down the street? They aren't.

If Gm's fate was truly to die, than they should have. Because, in the end, it would have been their fault. Our economy doesn't shatter just because a large corp goes under.


RE: proof read
By 85 on 6/7/11, Rating: 0
RE: proof read
By Cheesew1z69 on 6/7/2011 11:06:52 AM , Rating: 1
Um..no, it's not....


"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser













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