PDA

View Full Version : 9 reasons our taxes are going up.


Carlota69
04-02-2008, 11:29 AM
9 Reasons Your Taxes Are Going Up
by Paul B. Farrell
Thursday, March 27, 2008
provided by

No matter who's elected president, the debt party's over

Reason No. 1: "Most Americans have yet to feel any of the costs of the Iraq war," write Nobel economist Joseph Stiglitz and Linda Bilmes in an excerpt of their new book, "The Three Trillion Dollar War," in Vanity Fair. "The price in blood has been paid by members of the volunteer military. The price in treasure has been financed entirely by borrowing. Taxes have not been raised to pay for the war."

Well, folks, the party's over. Campaign rhetoric won't hide America's excesses, denial, incompetence and arrogance much longer. No matter who's elected, taxes will increase to cover massive debts. Greed has driven America's great economic engine into a "debt contagion" ditch with a recession, bear market, price inflation, and weak job and housing markets ... you bet your taxes will increase.

Yes, our five-year war was totally financed by borrowing. But unfortunately, "deficit spending gives the illusion that the laws of economics can be repealed. They cannot. Americans will have to pay for the war at some point -- and when they do, they will be paying not the Bush markdown but the full price," the authors say.

We've been mislead by Washington's Enron-style accounting that hides many costs:

Supplemental financing bills, outside the budget
No veterans health-care estimates included
No equipment replacement costs to restore our military
Nothing about increases in state and homeland security

The real cost isn't $800 billion, it's already $3 trillion. And still, it doesn't include ...

Interest on the ever-increasing $9.3 trillion federal debt
Damage to our credibility from a weak dollar
Out-of-control inflation in energy
And the brutal damage to Iraq and other Gulf states

Washington's hiding all that from us. We were sold a war-on-the-cheap, to cost a mere $50 billion to $60 billion, to be self-financed out of oil revenues. Today we're spending $50 billion every month! This war is already an economic disaster for America and the bill's still coming due.

Still, we know there's strong opposition to taxes. But can a new president change much? Certainly not with two-thirds of the budget in untouchable entitlements and interest costs. Besides, Washington's not run by our 537 elected officials but by 35,000 lobbyists. And after the elections, all 35,537 will still be part of a conspiracy that hates change and loves to spend the $3 trillion Federal budget.

Mark my words: Taxes will (must!) be increased to recover from years of excessive spending, accumulating deficits and future earmarks. A new president may expose the problems but without Congressional restraint the taxpayers will get stuck paying "the full price."

Frankly, since both parties are mired in narrow ideologies, it's questionable whether either can manage a $15 trillion GDP economy. Read "Mismanagement 101," Dan Gross's Newsweek column: "As oil hovered near $100 a barrel, President Bush complained to OPEC about high oil prices. OPEC president Chakib Khelil responded acidly that crude's remarkable run had nothing to do with the reluctance of Persian Gulf nations to pump oil, and everything to do with the 'mismanagement of the U.S. economy.'" And our heavy reliance on borrowing keeps making it even more difficult for the next president.

But unfortunately, even though the party's over, that $3 trillion war debt is just a fraction of America's out-of-control debt which is bigger than the official $9.3 trillion federal debt. It's reason No. 1 taxes are going up.

Here are another eight problems increasing our government's debt and adding pressures for new tax hikes. I'm sure you can think of many others:

2. America's New Wall Street Welfare Program

This one's scary. For the first time in almost a century, the Fed's bailing out the investment bankers, those wild speculators who got us in this mess -- bailed out while two million homeowners face foreclosures and increasing interest rates.

The real sinners are free to sin again! Like J.P. Morgan Chase's $2 -- now $10 -- freebie of Bear Stern's equity, while the Fed stuck the taxpayers with billions of Bear's junk debt. Now Wall Street's greedy traders are free to start speculating again, playing in the same old $516 trillion high-risk derivatives casino. Bad move: The Fed's setting America up for an even bigger crash around 2012.

3. The Fed's Nationalizing America's Financial Industry

Bear Sterns is a symptom of a systemic disease. As BusinessWeek put it: "Financiers preached the free-market gospel and pocketed unheard-of sums of money, yet when times got tough they called for a government bailout."

The Fed's dealing with America like a third-world banana republic, effectively nationalizing our financial industry! Wall Street's speculators have over $200 billion in junk write-offs. But like the government accounting tricks hiding war costs, Wall Street has also been inflating junk asset values and ginning up profits. And now the Fed's even helping them mask losses to prevent panic. Eventually this PR stunt will cut Wall Street's future earnings and increase taxes.

4. Huge Resistance to Cutting Social and Entitlement Programs

Lobbyists like AARP will fight all cutbacks in Medicare and Social Security entitlements, even though those unfunded benefits will balloon to $50 trillion to $65 trillion within a generation. Economists say solving this problem will take Draconian cuts of 40% in benefits or tax increases of 40%. If we don't, entitlements will consume the entire budget in a generation. Untouchable near-term: Ergo, minimal cuts, higher taxes.

5. America's Pork Barrel Lobbying Machine

The Washington Post says lobbying is "Washington's biggest business." All those 35,000 lobbyists will be around for the entire 2009-2012 first term of the next president, and all screaming for government handouts. The Democrats need them. And while McCain promises to veto earmarks, his campaign's inner circle is made up of special interest lobbyists, ostensibly working for "free."

Expect little change. Lobbyists earn big bucks squeezing megabucks out of the federal budget, and your taxes pay the bills.

6. White House's Free Market Nonaction Policies

"We're on top of it," said the President in his St. Patrick's Day speech at the New York Economics Club, as if the credit meltdown had little effect on the economy. The Treasury secretary even got a Katrina-style "great job, Hank" for working one whole weekend to magically fix the crisis.

Unfortunately, the Treasury and the Fed are following the same playbook that pushed the 1970s economy into a long, deep recession. Pimco's Bill Gross says we need an aggressive Rooseveltian fiscal package. No chance. This administration only knows a free market (for business) and tax cuts (for the top).

7. Aging Infrastructure: Roads, Bridges, Water, Sewer, Etc.

Imagine taking that $50 billion monthly cost of fighting and rebuilding Iraq and shifting it to upgrading our own highways, hospitals, power, sewer and water plants. Dream on. Yet our deterioration continues and deferred maintenance only works so long. Expect higher gas taxes, plus sizeable cutbacks in state and local services, or general tax increases.

8. Paradigm Shift: Consumer Spending vs. Consumer Savings

In one generation our savings rate declined below zero. Policymakers favored a consumer-driven economy, capital formation fell and debt piled up. Meanwhile, consumers took a cue from an out-of-control "spend and borrow" government piling up huge deficits.

9. Recession Reality Replacing Arrogant Optimism

The past five years the Wall Street Bubble Machine relied on an artificially low 1% Fed rate to create the housing boom and then the subprime-credit meltdown. Meanwhile our optimism and faith in capitalism sank with all the phony asset values and stock prices concocted by Wall Street ... and it'll happen again ... because Wall Street's relentless, all-consuming greed is setting up the economy to crash and burn again, all too soon ... and the taxpayer will pick up the tab ... again.

SBK
04-02-2008, 07:36 PM
1-9. Democrats hate tax cuts.

bkkcoh
04-03-2008, 05:58 AM
1-9. Democrats hate tax cuts.

I think the more accurate list is:

1. Dems hate tax cuts.

1. Dems hate tax cuts.

1. Dems hate tax cuts.

1. Dems hate tax cuts.

1. Dems hate tax cuts.

1. Dems hate tax cuts.

1. Dems hate tax cuts.

1. Dems hate tax cuts.

1. Dems hate tax cuts.

Amnorix
04-03-2008, 06:04 AM
1. Bush ignored basic economic rules and just charged his entire administration on the nation's credit card.

2. Republicans avoid tough policy choices on economic matters like the plague.

3. Republicans are fundamentally irresponsible on economic matters.

4. BushCo lied about his deficit cutting during both campaigns.

5. BushCo was more worried about Republican tax cut desires than the economy, or good sense.

Amnorix
04-03-2008, 06:05 AM
Thsi one never gets old, really.

http://zfacts.com/metaPage/lib/National-Debt-GDP.gif

bkkcoh
04-03-2008, 06:20 AM
1. Bush ignored basic economic rules and just charged his entire administration on the nation's credit card.

2. Republicans avoid tough policy choices on economic matters like the plague.

3. Republicans are fundamentally irresponsible on economic matters.

4. BushCo lied about his deficit cutting during both campaigns.

5. BushCo was more worried about Republican tax cut desires than the economy, or good sense.

Amnorix,

How many government agencies have the republicans in the last 20 years tried to eliminate government programs?

How many times that they wanted to freeze spending in other agencies?

Tax cuts can be done, but they have to be done in conjunction with spending cuts, and that never happens to a federal budget. The spending always increases as a whole. Seldom any of the budgetary items actually decrease in the amount spent, if they are, they are increased somewhere else.

Amnorix
04-03-2008, 06:30 AM
Amnorix,

How many government agencies have the republicans in the last 20 years tried to eliminate government programs?

None, I guess. They controlled the WH and both houses of Congress for a few years and I don't remember anything getting eliminated.

How many times that they wanted to freeze spending in other agencies?

Same answer. And they controlled the purse strings during the Clinton presidency for a while there. The impasse was good for both sides, I think.

Tax cuts can be done, but they have to be done in conjunction with spending cuts, and that never happens to a federal budget. The spending always increases as a whole. Seldom any of the budgetary items actually decrease in the amount spent, if they are, they are increased somewhere else.

No argument. Once we pay off the debt, then tax cuts are fine. Heck, we'd stop spending os much on interest.

The point is once Clinton left the WH, the budgetary discipline that had been instilled, and the increased taxes that had helped put the Feds' financial house back in order went with him. Structural tax cuts were put into place that were primarily designed just to be tax cuts, not to boost the economy. Bush followed through on campaign promises regarding tax cuts that were based on the then-looming massive surpluses that were CLEARLY not going to happen. The change in facts didn't change his plans one damn bit, however.

bkkcoh
04-03-2008, 07:00 AM
None, I guess. They controlled the WH and both houses of Congress for a few years and I don't remember anything getting eliminated.

Same answer. And they controlled the purse strings during the Clinton presidency for a while there. The impasse was good for both sides, I think.


The republicans tried to eliminate a few agencies and there was such an outcry by the democrats and they went out on the sunday morning political shows and cried about how the republicans were going to take the food out of the mouths of the poor and elderly. What was truly sad about that was the amount for those agencies still increased, just not the incrase that the dems wanted, so in there eyes it was a cut.


No argument. Once we pay off the debt, then tax cuts are fine. Heck, we'd stop spending os much on interest.

The point is once Clinton left the WH, the budgetary discipline that had been instilled, and the increased taxes that had helped put the Feds' financial house back in order went with him. Structural tax cuts were put into place that were primarily designed just to be tax cuts, not to boost the economy. Bush followed through on campaign promises regarding tax cuts that were based on the then-looming massive surpluses that were CLEARLY not going to happen. The change in facts didn't change his plans one damn bit, however.

I honestly don't think that Clinton had the fiscal discipline to cut the spending, I think the way in which he tried to balance the budget was with tax increases. It would be interesting to see the proposed budget numbers vs the passed budget numbers for the last 25 or so years. I would dare say that the budget amounts of the passed budgets never decreased from year to year. There may be a couple of exceptions.


Have the democrats ever tried to do away with any government agencies or tried to decrease spending in a responsible way. Remember the first 2 years of the Clinton administration, he had a democrat congress to work with. Did anything get accomplished then?

tiptap
04-03-2008, 07:28 AM
Well as a reflection of the fall of the Soviet Union and the Peace Dividend, the Democrats curtailed spending on the Military side. I realize that Republicans don't have that as their agenda for cutting spending, but it is an example of the fiscal response to budgetary situation, reflective of Democratic goals. That is opposed to the Republicans who spend and showed absolutely no restraint including 1 trillion off the books spending for a war that has yet to bring about a level of security that existed before the war started. (If it had we'd be home.) Had the chance to show they could govern and not just yap like a dog at the heels of the issue and failed.

banyon
04-03-2008, 07:59 AM
The republicans tried to eliminate a few agencies and there was such an outcry by the democrats and they went out on the sunday morning political shows and cried about how the republicans were going to take the food out of the mouths of the poor and elderly. What was truly sad about that was the amount for those agencies still increased, just not the incrase that the dems wanted, so in there eyes it was a cut.



When did this happen? What agency? I don't remember anything like this happening at all. Was it in 95 with Newt's gov't shutdown?

bkkcoh
04-03-2008, 09:03 AM
When did this happen? What agency? I don't remember anything like this happening at all. Was it in 95 with Newt's gov't shutdown?



Link (http://query.nytimes.com/gst/fullpage.html?res=9B0DEEDF1739F937A35752C1A963958260)


not the best, but what I could do in a quick search.

banyon
04-03-2008, 09:19 AM
Link (http://query.nytimes.com/gst/fullpage.html?res=9B0DEEDF1739F937A35752C1A963958260)


not the best, but what I could do in a quick search.

Take your time, because that was just a proposal to cut some Medicare benefits, not to do away with the Agency (at least not directly, they "hoped" the agency might go away).

bkkcoh
04-03-2008, 09:22 AM
Take your time, because that was just a proposal to cut some Medicare benefits, not to do away with the Agency (at least not directly, they "hoped" the agency might go away).

I know the republicans wanted to do away with the Education Department and give it back to the states.

But don't push it back on it was a cut to an agency and not cutting the agency, both are seldom done in DC.

Amnorix
04-03-2008, 09:25 AM
Have the democrats ever tried to do away with any government agencies or tried to decrease spending in a responsible way. Remember the first 2 years of the Clinton administration, he had a democrat congress to work with. Did anything get accomplished then?


Yes, the deficit reduction plan that put us on track for fiscal sanity, until Republicans gutted it, and Democrats similarly lost control.

bkkcoh
04-03-2008, 09:29 AM
Yes, the deficit reduction plan that put us on track for fiscal sanity, until Republicans gutted it, and Democrats similarly lost control.

But they did it by raising taxes, not reducing spending. Correct?

Have the Democrats ever actually tried to decrease spending in order of balancing the budget versus raising taxes to do so?

Chief Faithful
04-03-2008, 10:17 AM
Yes, the deficit reduction plan that put us on track for fiscal sanity, until Republicans gutted it, and Democrats similarly lost control.

The Democrats did this while simultaneously tried to milk America with Hillarycare the biggest spending increase proposal in decades. Bill Clinton even stated he wanted to increase spending day one, but found when he got in office there was no money. His only motivation for fiscal sanity was to increase spending.

The only fiscal sanity we have seen from Congress since JFK was while the Republicans controled Congress during the Clinton White House. What makes me angery was the spending spree when W was elected. The Republicans deserved to be voted out for going nuts with our money.

I fully expect the Democrats to introduce us all to a new level of taxes, spending and deficits over the next few years. Maybe that is what it will take before America screams in pain.

banyon
04-03-2008, 10:28 AM
But they did it by raising taxes, not reducing spending. Correct?

Have the Democrats ever actually tried to decrease spending in order of balancing the budget versus raising taxes to do so?

Correct, he raised taxes on the wealthiest 1.2% of Americans and left the rest unchanged.

BucEyedPea
04-03-2008, 10:31 AM
The truth of the matter is: every time there is a tax increase it is followed by more spending increases. So raising taxes on anyone is the problem.

And both parties are responsible for the problem.

We have defense trough-feeders and social-welfare trough-feeders.

banyon
04-03-2008, 10:46 AM
The truth of the matter is: every time there is a tax increase it is followed by more spending increases. So raising taxes on anyone is the problem.

And both parties are responsible for the problem.

We have defense trough-feeders and social-welfare trough-feeders.

Great, what we were missing in this thread was some "truth".

Post Hoc, Ergo Propter Hoc, eh? Well, that of course says nothing about the amount of the spending increase relative to the tax increase, which is exactly why the budget was balanced. The other "truth" that you left out is that these are in absolute terms you are talking. Given a continually increasing population, there's almost zero likelihood that spending will ever go down in absoulte terms.

Pitt Gorilla
04-03-2008, 11:33 AM
The republicans tried to eliminate a few agencies and there was such an outcry by the democrats and they went out on the sunday morning political shows and cried about how the republicans were going to take the food out of the mouths of the poor and elderly. What was truly sad about that was the amount for those agencies still increased, just not the incrase that the dems wanted, so in there eyes it was a cut.



I honestly don't think that Clinton had the fiscal discipline to cut the spending, I think the way in which he tried to balance the budget was with tax increases. It would be interesting to see the proposed budget numbers vs the passed budget numbers for the last 25 or so years. I would dare say that the budget amounts of the passed budgets never decreased from year to year. There may be a couple of exceptions.


Have the democrats ever tried to do away with any government agencies or tried to decrease spending in a responsible way. Remember the first 2 years of the Clinton administration, he had a democrat congress to work with. Did anything get accomplished then?If the Reps really wanted the department of ed gone, it would be gone. If they were really swayed by a few Dems, that is more pathetic than lying about wanting to cut it in the first place.

BIG_DADDY
04-03-2008, 01:57 PM
Don't forget the rolling out of the red carpet to illegal aliens in this country. Free medical, schooling and no taxes and the robbbing of our SS. Where do I sign up?

The biggest deception of all is that we have any control whatsoever. The biggest danger moving forward is raising taxes to the point that people just want to work under the table and do the illegal alien shuffle.

Don't forget the war on drugs, very spendy on many levels.

SBK
04-03-2008, 03:01 PM
The real problem is spending, not tax rates. The only solution to our budgetary problems is on the spending side, not on the taxation side.