Starving the Beast 

This paper examines links between the Bush Administration's tax cuts and the goal of "starving the beast"--that is, holding down government spending.

It is at best unclear whether tax cuts are effective in restraining spending.

The data appear more consistent with the view that once fiscal discipline erodes on one side of the budget, it tends to erode on the other side, too.

Moreover, aiming to reduce spending does not justify regressive tax cuts, since most spending cuts would be regressive.

Even if "starving the beast" justified the original 2001 tax cuts, the strategy does not justify making the tax cuts permanent because the government will face future budget deficits even without extending the tax cuts.

article

Entire report. pdf

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> Starving the Beast 
>
> This paper examines links between the Bush Administration's tax cuts and the
> goal of "starving the beast"--that is, holding down government spending.
>
> It is at best unclear whether tax cuts are effective in restraining spending.
>
>
> The data appear more consistent with the view that once fiscal discipline
> erodes on one side of the budget, it tends to erode on the other side, too.
>
> Moreover, aiming to reduce spending does not justify regressive tax cuts,
> since most spending cuts would be regressive.
>
> Even if "starving the beast" justified the original 2001 tax cuts, the
> strategy does not justify making the tax cuts permanent because the government
> will face future budget deficits even without extending the tax cuts.
>
> article
>
> Entire report. pdf
>
Darn numbers keep getting in the way of Politicians!
If we could curb the spending of those Politicians we might be able to actually do something about the numbers, but as long as "pork barrel politics" is here, and it has been for a VERY long time, Policitans keep spending like there is no tomorrow!
You think they would take a check for my taxes that was post dated to a point where I actually made enough money to pay it? That is what their budget does?

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If you could spend someone elses money and was unrestricted in how much you could spend. What would you do? Its the tax payers money, but congress's to spend, unrestricted except by congress.

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Bush went back to Congress and asked for another 80 billion for the 'war' on Iraq and Afghanistan. (what is it about 80 some odd billion dollars, it's always 80 billion?)

Anyway, ....What do those stalwart war supporters in Congress do?

Why, they add in money for a new baseball stadium in DC...... they add in money for flood repairs in Utah, ........they add money for oil drilling in Mississippi.

Ah, what opportunities are seen in the 'War on Terra'....

Since a 'war' appropriations bill is almost sure to pass, it's the perfect vehicle for legislation that would be laughed out of the room if it was proposed in any other manner.

The Senate even tacked on an immigration measure.... (you might well imagine that immigration has a link to the 'War on Terra', but this measure is about making hiring easier for those large agribusinesses who don't want to pay a fair wage.

Emergency 'war time' requests..... bless this 'War' .....as baseball will be given a new home in our nation's capitol.

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> ....

Required reading.

L8R....

T'Khasi Time: Thursday, 21 April 2005 - 06:53 PM --700 (Pacific Standard Time)

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CAPT Siran d'Vel'nahr - L L & P _\\//
Winders 11 OS? "What a piece of junk!" - L. Skywalker
"Logic is the cement of our civilization with which we ascend from chaos using reason as our guide." - T'Plana-hath

The needs of America's most defenseless citizens and the wellbeing of our entire nation demand that we be cautious, wise and mindful. Changing horses in midstream is a risky business, and we are crossing very turbulent political and economic waters indeed. How we decide to take these first steps to re-work what has been a tool for both fiscal and public policy will underlie our fate as a society.
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What has made America great is the generosity of her people, and government support of programs in the name of social conscience and noble enterprise: the Salvation Army or the Disabled American Veterans, for instance; or numerous local organizations, which provide food, clothing, shelter, and home care for the indigent and infirm, as well as for women and children escaping abuse and neglect.

Conservation organizations such as The Nature Conservancy, National Audubon Society, and local land trusts help preserve open space, family farms, and species habitat, all contributing to our quality of life. Historic preservation organizations guard our national heritage and link us to important experiences of our past. Both fine arts and performing arts organizations provide all of us access to experiences that inspire, educate, and promote ideas to enhance our lives — work invaluable to our future.


Historically, a large support mechanism for these groups has been the U. S. Tax Code. Amended over the years to include an arsenal of deductions, deferments, and credits, the tax code has become a persuasive influence in public policy. But all of this is now threatened by the course change of reason in our nation's capital.


On January 27, 2005, a list of proposals titled, Options to Improve Tax Compliance and Reform Tax Expenditures, was prepared by the staff of the United States Congressional Joint Committee on Taxation. Giving the argument that loopholes and overly generous deductions are denying the government needed revenue, and are too immense and complicated for the IRS to police, the document slashes or eliminates almost all deductions for large contributions to non-profits, as well as for conservation easements and historic home restoration and preservation. It additionally limits the deductible amounts for charitable giving in general. This shotgun approach to simplifying the code will cause severe collateral damage to the good work of thousands of organizations across the country – organizations in which two-thirds of Americans are involved, and which provide social benefits for all.


Reducing or eliminating deductions for estate trusts and conservation easements will effectively mean the end of public land conservation as we have known it, and affect the ability of family farms to remain competitive – or, in many cases, to remain at all. Without tax-supported market value incentives, most farmers and landowners will find it financially impossible to favor conservation over development. We are already decommissioning federal wilderness with increased granting of federal development rights, and there is no end in sight.

Eliminating deductions for the restoration of historic homes, a practice that often leads to the revitalization of urban communities, will allow many urban neighborhoods to continue to deteriorate as people increasingly look to the suburbs for affordable housing. This will worsen suburban sprawl and increase costs to taxpayers as schools, utilities, and roads will require upgrading and expanding further from cities and towns.


We were once a great nation, built upon the revolutionary entrepreneurial ideals of individuals – ideals representing an independent American spirit that endowed our economic life with a diversity and vitality unequalled in history.

These rapidly disappearing entrepreneurial companies allow for more empathetic relationships among business owners, customers, and employees; but the only way many people can achieve the American dream of starting and maintaining a small business is with the benefit of taking a portion of their income through dividends.

Ironically, while the federal government currently favors eliminating the taxes on dividends flowing from large corporations, the new tax proposal will increase the taxes on dividends to owners of smaller companies, known as Subchapter S corporations.

Increase the tax burden on these individuals, and the small family-run business will become a thing of the past, furthering the seemingly inexorable evolution toward large, multinational corporations. These impersonal, bureaucratic mega-businesses increasingly base their operations on short-term shareholder value, and on the cold, hard, science of profitability, with little sensitivity to their employees' and customers' conditions or social needs. This aspect of the current tax reform bill will facilitate a cultural change in an exceedingly un-American direction.

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Edited out...

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End Not in Sight for Interest Rate Hikes



(AP) - WASHINGTON-The Federal Reserve, worried about climbing inflation, pushed a key interest rate higher Tuesday and signaled that Americans' borrowing costs are likely to keep climbing in the months ahead.

Fed policy-makers, walking a tightrope, are confronted with two challenging economic forces: rising inflation pressures on the one hand and slowing economic growth on the other.

Higher interest rates are a defense against rising inflation. But when it is more expensive to borrow money, some consumers and businesses are less inclined to spend and invest, factors that would further chill an already cooling economy.

"The Fed, while acknowledging the slowdown in the economy, is focused more on inflation.

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There were no cameras, not a single microphone, and no evidence of a lawmaker or Bush administration official in the room -- just some hungry congressional staffers and boxes of sandwiches from Corner Bakery. But what the three spoke about will have greater consequences than the current fuss over filibusters and Tom DeLay's travel.

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"I'm trying to maintain a shred of dignity in this world." - Me

There were no cameras, not a single microphone, and no evidence of a lawmaker or Bush administration official in the room -- just some hungry congressional staffers and boxes of sandwiches from Corner Bakery. But what the three spoke about will have greater consequences than the current fuss over filibusters and Tom DeLay's travel.

Yet in the coming months and years I am sure you will find a way to blame this on Bush as well.

There were no cameras, not a single microphone, and no evidence of a lawmaker or Bush administration official in the room -- just some hungry congressional staffers and boxes of sandwiches from Corner Bakery. But what the three spoke about will have greater consequences than the current fuss over filibusters and Tom DeLay's travel.

Yet in the coming months and years I am sure you will find a way to blame this on Bush as well.

Except for Reagan, presidents have always been blamed for what happens on their watch.

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@ Paully-PooZ:

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CAPT Siran d'Vel'nahr - L L & P _\\//
Winders 11 OS? "What a piece of junk!" - L. Skywalker
"Logic is the cement of our civilization with which we ascend from chaos using reason as our guide." - T'Plana-hath

There were no cameras, not a single microphone, and no evidence of a lawmaker or Bush administration official in the room -- just some hungry congressional staffers and boxes of sandwiches from Corner Bakery. But what the three spoke about will have greater consequences than the current fuss over filibusters and Tom DeLay's travel.

Yet in the coming months and years I am sure you will find a way to blame this on Bush as well.

Except for Reagan, presidents have always been blamed for what happens on their watch.

Steven since Reagon was a Republician I am sure that Pauly Poo blames him as well. The only difference then and now was his lack of links to boister his claims.. You know Al Gore didn' invent the internet until after Reagon left office..

Steven since Reagon was a Republician I am sure that Pauly Poo blames him as well. The only difference then and now was his lack of links to boister his claims.. You know Al Gore didn' invent the internet until after Reagon left office..

I'm sure Zimmerman had wished he was Fischer, as he could get the votes! So, even Zimmenman is a fischer, he's certainly not Fischer!!!

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"I'm trying to maintain a shred of dignity in this world." - Me

Oh, Pauly-poo, remember, "Figures don't lie, but liars figure."

From your link:

Walker put U.S. debt and obligations at $45 trillion in current dollars -- almost as much as the total net worth of all Americans, or $150,000 per person. Balancing the budget in 2040, he said, could require cutting total federal spending as much as 60 percent or raising taxes to 2 1/2 times today's levels.

No, Pauly-poo, the sky is not falling. It's 2005 and this $45 trillion debt is predicted for 2040. At $150K per person, average, that would be taken care of by a tax payment of about $348 per month, and that’s without cutting spending. No one is going to be required to come up with $150K in one lump sum in 2040, and it's misleading of the article (and you by citing it) to suggest that would happen . . . but you do tend toward the sensational, don't you.

The US has had debt for most of the modern era, and will continue to have debt into the foreseeable future. So if the average American generated an average over the next 35 years of, say, $200 per month more in taxes (not from a rate increase, but through increased wages/productivity), that by itself would generate $84,000 per average taxpayer over the next 35 years, or $25.2 trillion. I understand that productivity will not increase to generate a $200 increase in taxes tomorrow, or in the next few years, but by 2040 incomes will be much higher, and taxes will also be higher, and a $200 per month average increase over 35 years is not that great. Then there are spending cuts, which could take care of the rest of this article’s projected shortfall–all without a tax increase. Your figures, based as they are on 35 years of spending are nothing more than a scare tactic. Show me in that article where the projected increase in productivity and wages was taken into account?

Then there is this idiotic statement, "Balancing the budget in 2040 . . . could require cutting total federal spending as much as 60 percent or raising taxes to 2 1/2 times today's levels." Read that again: "Balancing the budget in 2040", but no one is suggesting that the Congress will do absolutely nothing about balancing the budget until 2040. This is another scare tactic. Part of the problem will be solved by natural growth in GDP (that's Gross Domestic Product, Pauly-poo) and decreases in government spending will also help. But no rational economist thinks that all government debt is fatal–as I said before, we have survived with debt for much of this country's history–FDR greatly expanded the use of debt to help us out of the depression and finance WWII.

Then there is this statement from the article: "without changes to Social Security and Medicare, in 25 years either a quarter of discretionary spending would need to be cut or U.S. tax rates would have to approach European levels." Again, scary stuff, unless you realize that no one is going to wait 25 years to cut discretionary spending. Changes to Social Security (including personal retirement accounts) are being discussed right now–no one is waiting 25 years–though so many politicians who think like you do are resisting any rational changes to the system.

Pauly-poo, this gets back to your major problem: you can't seem to comprehend and analyze what you read (not news reports, nor posts in these boards, nor instruction on how to download software to allow you to crunch in BOINC). No, Pauly-poo, the sky is not falling, just your credibility.

Oh, Pauly-poo, remember, "Figures don't lie, but liars figure."

.....

No, Pauly-poo, the sky is not falling, just your credibility.

Tom, remember paulie-poo's favorite play:

And his personal problem! and

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"I'm trying to maintain a shred of dignity in this world." - Me

.....more idiots, pay no mind.

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.....more idiots, pay no mind.

OK we won't... Well I might if you want to pay my annual bill to the New York Times..

.....more idiots, pay no mind.

I might if you want to pay my annual bill to the New York Times..

Subscribe on-line..... no charge.

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