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DiabloViejo
08-19-2012, 06:56 PM
<span style='font-size: 14pt'>Romney Tax Plan on Table. Debt Collapses Table.</span>
By Ezra Klein Aug 2, 2012 1:10 PM ET
Bloomberg.com (http://www.bloomberg.com/news/2012-08-02/romney-tax-plan-on-table-debt-collapses-table-.html)

I can describe Mitt Romney’s tax policy promises in two words: <u>mathematically impossible</u>.

Those aren’t my words. They’re the words of the nonpartisan Tax Policy Center, which has conducted the most comprehensive analysis to date of Romney’s tax plan and which bent over backward to make his promises add up. They’re perhaps the two most important words that have been written during this U.S. presidential election.

If you were to distill the presumptive Republican nominee’s campaign to a few sentences, you could hardly do better than this statement of purpose from the speech Romney delivered in Detroit, outlining his plan for the economy: “I believe the American people are ready for real leadership. I believe they deserve a bold, conservative plan for reform and economic growth. Unlike President Obama, I actually have one -- and I’m not afraid to put it on the table.”

The truth is that Romney is afraid to put his plan on the table. He has promised to reduce the deficit, but refused to identify the spending he would cut. He has promised to reform the tax code, but refused to identify the deductions and loopholes he would eliminate. The only thing he has put on the table is dessert: a promise to cut marginal tax rates by 20 percent across the board and to do so without raising the deficit or reducing the taxes paid by the top 1 percent.

The Tax Policy Center took Romney at his word. They also did what he hasn’t done: They put his plan on the table.

Favorable Conditions

To help Romney, the center did so under the most favorable conditions, which also happen to be wildly unrealistic. The analysts assumed that any cuts to deductions or loopholes would begin with top earners, and that no one earning less than $200,000 would have their deductions reduced until all those earning more than $200,000 had lost all of their deductions and tax preferences first. They assumed, as Romney has promised, that the reforms would spare the portions of the tax code that privilege saving and investment. They even ran a simulation in which they used a model developed, in part, by Greg Mankiw, one of Romney’s economic advisers, that posits “implausibly large growth effects” from tax cuts.

The numbers never worked out. No matter how hard the Tax Policy Center labored to make Romney’s promises add up, every simulation ended the same way: with a tax increase on the middle class. The tax cuts Romney is offering to the rich are simply larger than the size of the (non-investment) deductions and loopholes that exist for the rich. That’s why it’s “mathematically impossible” for Romney’s plan to produce anything but a tax increase on the middle class.

The Romney campaign offered two responses to the Tax Policy Center’s analysis, one more misleading than the other.

First, the campaign called the analysis “just another biased study from a former Obama staffer.” That jab refers to Adam Looney, one of the study’s three co-authors, who served in a staff role on the White House Council of Economic Advisers under President Barack Obama. But the Tax Policy Center is directed by Donald Marron, who was one of the principals on George W. Bush’s Council of Economic Advisers. Calling the Tax Policy Center biased simply isn’t credible -- a point underscored by the fact that the Romney campaign referred to the group’s work as “objective, third-party analysis” during the primary campaign.

Then the Romney campaign said, “The study ignores the positive benefits to economic growth from both the corporate tax plan and the deficit reduction called for in the Romney plan.” There’s a reason the study ignores those “positive benefits”: Romney has called for a revenue-neutral corporate tax plan that brings the rate down from 35 percent to 25 percent while also promising to balance the budget. He has not said how he will achieve either goal. Until he does, those positive benefits -- if they exist -- are impossible to calculate.

Regressive Cuts

If Romney tries to pay for his tax cuts by reducing spending, the results, as the Tax Policy Center notes, would be even more regressive. Romney has promised to increase defense spending and hold benefits steady for the current generation of seniors. The only remaining big spending programs are those that help the poor; that’s where Romney’s cuts would have to be concentrated. Paying for tax cuts for the rich by curtailing programs for the poor is even more of a reverse-Robin Hood act than paying for tax cuts for the rich by cutting the tax expenditures (deductions and the like) of the middle class.

The Center on Budget and Policy Priorities produced its own analysis of Romney’s plan, based on an assumption that Romney pays for half of his tax cuts through spending cuts. The conclusion: By 2022, Romney would need to cut all non-defense, non-Social Security programs by 49 percent. That is not plausible, to say the least.

The Romney campaign has not provided good answers to the questions raised by its own math. But we already knew the Romney campaign didn’t have good answers. If Romney had good answers, he would have made good on his rhetoric and put his plans on the table.

It would be great if Romney could fulfill his promise to cut taxes by trillions of dollars, increase defense spending, keep entitlement spending on pretty much its current path for the next decade, and balance the budget. But as Tyler Cowen, the George Mason University economist, put it in a pithy tweet (though perhaps “pithy tweet” is a tautology), “The proposed Romney fiscal policy just doesn’t make any sense.”

This is not a surprise. Even some Republican policy experts admit in private that Romney’s promises simply don’t add up. To twist Abraham Lincoln’s famous formulation, the Romney campaign has decided it’s better to remain silent and be thought evasive than to reveal your plan and remove all doubt that you’re cutting taxes on the rich while increasing the deficit, raising taxes on the middle class and cutting programs for the poor.

Unfortunately for the Romney campaign, the Tax Policy Center’s analysis has removed all doubt. Romney needs to come up with a way to make his promises mathematically possible -- and quick.
(Ezra Klein is a Bloomberg View columnist. The opinions expressed are his own.)

Read more online from Bloomberg View.

LWW
08-19-2012, 07:37 PM
Probably so.

So was/is Obama's.

What is your point, if any?

pooltchr
08-19-2012, 08:17 PM
For that matter, Obama's stimulus was mathematically impossible. How is it possible to add to the economy, when the government must first take money out of the economy in order to have anything to add to it?

If you have a 5 foot long blanket and you are 6 feet tall, cutting one foot of the end of the blanket and adding it to the other end will not make it long enough.

Steve

Soflasnapper
08-19-2012, 08:30 PM
The government doesn't need to take money to have money. It can add to its debt, either by borrowing from people with money laying around unused, or in effect printing it. (As of now, the government can borrow for a 10-year term for 2% annual interest, below inflation.)

The economic activity level is expressed as the quantity of money times the velocity of money. So adding to the quantity of money can stimulate the economy, just as putting idle money to use by borrowing from where it lays fallow and spending it can increase the average velocity of the monetary aggregate.

As you may know, everybody and their brother-in-law has put way too much debt on their personal balance sheets, and in this unsettled time, people are less willing to add to their debt to spend, and similarly, want to pay down debt and get deleveraged.

As everybody and their b-i-l spends less and less, and borrows less and less to spend, overall economic activity shrinks, inexorably and automatically. You want it to grow, SOMEBODY has to spend. Businesses are equally debt-burdened, to record levels. They aren't going to be spending more, or even the same as they did.

There's an overhang of $28 trillion dollars of debt apart from government debt (in personal debt and business debt) that must be de-leveraged, paid down, or defaulted upon, so looking for an economy bottom under non-governmental intervention will take a generation probably.

DiabloViejo
08-19-2012, 08:43 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">Probably so.

<span style="color: #000099">Probably so...what? What are you talking about?</span>

So was/is Obama's.

<span style="color: #000099">So was/is Obama's...what? And how is it like Romney's? Please enlighten us.</span>

What is your point, if any? </div></div>

The point is that Romney's plan is doomed to fail. Which is why Romney has been all hush-hush about it. The truth is he will cut taxes on the richest Americans, increase the deficit, raise taxes on the Middle Class and working poor, and gut social programs that help the poor.

But then again, you already knew that. But, of course, being a Romney nut-hugger, you just have to defend him no matter what.

As you also must know by now...Mitt Romney ran for governor of Massachusetts promising more jobs, decreased debt, and smaller government.

Here’s what Massachusetts got instead:

■ Jobs: 47th out of 50 states in job creation
■ Taxes and fees: Increased by $750 million per year
■ Long-term debt: Increased more than $2.6 billion

Watch this video to see why Romney economics didn’t work then, and won’t work now. http://youtu.be/PlnaYOv0DZY

pooltchr
08-20-2012, 04:12 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">The government doesn't need to take money to have money. It can add to its debt, either by borrowing from people with money laying around unused, or in effect printing it. </div></div>

Borrowing or printing money simply devalues the dollar, making each dollar in your pocket worth less. And this stimulates the economy how????????

People aren't spending money because they have little confidence in Washington's ability to fix our debt problem. I have to admit that this administration has done little to change that perception.

Steve

LWW
08-20-2012, 05:02 AM
Nobody thought you ad a point.

Do they at least give you remium crackers as a reward?

cushioncrawler
08-20-2012, 05:03 AM
Full employment will fix the ekonomy.
Full employment iz the economy.
How u get full employment duzzenmadder very much.
There are good ways, and there are gooder ways, and there are gooderer ways. All good.
mac.

Gayle in MD
08-20-2012, 07:47 AM
These ignorant views on stiulating the econoomy parroted by the right completely ignore the FACT that Repiglicans have done everything they could possibly do to obstruct any economic recovery from the moment they vowed that their number one priority was to obstruct this president's policies for recovery!

Their priroties were to maintain, or make worse, a sluggish economy even if they had to create obstruction by weakening the entire U.S. economy by refusing to raise the debt ceiling, at a time of severe economic stress.

Their governors have thrown as many public workers into unemployment as they possibly could, refusing to keep them in their jobs, and block every jobs bill, even if it put Americans in danger, driving over and under unsafe bridges, eating poisoned food, dealing with unprecedent numbers of earthquakes that scientist increasingly believe are caused by fracking, some citizens even waiting for fire trucks, when they homes were burnng to the ground, that would show up and refuse to put the fires out!

While they were destroying as many jobs as they could, yapping, Jobs, Jobs, Jobs, they were on The Hill, trying to destroy anything and everything that average Americans rely on to get through their own personal economic problems, and reversing a hundred years of progress for equal rights for equal pay for women in the work force, blocking women's rights to sue when they are raped by defense contracting war profeering pigs over seas, destroying a woman's right to birth control, and protection from rape, and fighting to remove women's life saving aid from Planned Parenthood for early detection of serious, life threatening diseases.

their War On Personal constitutional rights have even invaded the voting booth!

When it comes to beng PIGS, you name it, they have done it!

What PIGS, to now step right up to ctiricize this president, when we all know that Repiglicans never had The People's interests at heart, from day one of this admiistration, unless the recipients were millionaires and billionaires!

<span style='font-size: 17pt'>What's worse, is that their ignorance regarding economics, has expanded, as one can easily see by reading their lies and ignorance, as they continue to deny realities at hand, and slurp with gusto the Repiglican Propaganda, regardless of how many economists have agreed with the president's policies, and disagreed with their Party's UNPRECEDENTED obstruction!</span><span style='font-size: 17pt'>Interesting that we now learn that just two weeks after Repiglicans tried to create a double dip by blocking raising the debt limit, designed to weaken economic security and recovery, across the board, Repiglicans were drinking, partying and celebrating, by drunken skinny-dipping on foreign trips!

PIGS!</span>

G.

Gayle in MD
08-20-2012, 09:44 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: pooltchr</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">The government doesn't need to take money to have money. It can add to its debt, either by borrowing from people with money laying around unused, or in effect printing it. </div></div>

Borrowing or printing money simply devalues the dollar, making each dollar in your pocket worth less. And this stimulates the economy how????????

People aren't spending money because they have little confidence in Washington's ability to fix our debt problem. I have to admit that this administration has done little to change that perception.

Steve </div></div>

And can't admit that the Republicans have done everything they could do to keep public AND foreign confidence in the U.S.A. from gaining confidence, like refusing to raise the debt limit, which was incredibly obsructionist, irresponsible and dangerous.

Nothing I know of, nothing in our history, has provided more proof of collusion by a political party operating in concert against the best interests of the country, anymore moreso than Republicans refusing to extend the debt limit, in the midst of a recessionary recovery, other then Bush Lying the country into an illegal WAR, and completely ignoring eight months of what we now know, since the latest releases of classified information, eleven specific warnings of how, when and where the attacks would occur.

The bottom line is that Bush et al, let it happen, on purpose.

G.

Soflasnapper
08-20-2012, 11:41 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: pooltchr</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">The government doesn't need to take money to have money. It can add to its debt, either by borrowing from people with money laying around unused, or in effect printing it. </div></div>

Borrowing or printing money simply devalues the dollar, making each dollar in your pocket worth less. And this stimulates the economy how????????

People aren't spending money because they have little confidence in Washington's ability to fix our debt problem. I have to admit that this administration has done little to change that perception.

Steve </div></div>

So, when the federal government borrowed half the money it spent, and put it towards the arsenal of democracy in WW II, huge Liberty ship construction, tanks, trucks, artillery, and the like, that did NOT cause full employment, and those people working there full time or even on overtime did NOT spend those wages into their communities, providing customers for the various service businesses, diners, dry cleaners, whatever?

I doubt you'd agree, but that would seem the clear implication of your misguided claims.

Because of deficit spending on a scale that is almost unimaginable, 50% of all federal government spending needing to be borrowed, nearly any able bodied man or woman was working, had a paycheck in their pocket, and was able to spend those good wages. The debt to gdp ratio grew to over 125%, and yet we had set the stage for an unprecedented prosperity for the next 25 years?

It's as if I borrowed money to have a house built, and then had a construction crew employed for a couple months. That didn't create a job, or contribute to increased economic activity, or support other businesses and people as these workers spent this new project money wages? Really? Of course it did.

A city, county or state may make a bond issue, borrow money from the marketplace at interest, and create a construction project to connect this highway with this overpass to another spur, but according to you, nobody extra is working, nobody has more money, and no economic activity has been enhanced?

Or you admit all of that, but claim the currency depreciation is so great that on net, people are still worse off?