Yes Bush passed tax cuts for the richest, but he spent money just as much as any other president has, liberal or conservative.
Three days ago, S&P lowered U.S. credit rating to AA+.
So, ultimately it happened. Many newspaper are guessing wether this could be the end of the U.S. as a "superpower" and write about how humiliating it is that they get critizised by China now.
Well, this is significant but I kinda have my doubts about this being the end of the US as a superpower. Surely there will be trouble associate with it but not enough to do that much, specially if other country's debt seems to be slowly but surely getting as uncontrollable. A number of other things have to go wrong with the US to stop it from being a superpower IMO and more particularly, a number of others things don't have to go wrong with other countries (which is unlikely). US economy is in bad shape (understatement of the year lol) but if the other superpowers are in bad shape too then its position should remain comparatively the same. More importantly, for US to lose its position there has to be someone to take over it. As things are, even china might not be quite up there. That said, I would rather have US in charge than china any time of the year.
As for the US debt problem - Grit your teeth and pay your taxes. Or maybe stop fighting overseas wars.
Well, china needs the world as a whole, not just the US. I mean, they sell everything to everyone right? I guess you can ultimately trace everything to the US considering everything its sheer importance though... China should be about close to paying for their child control policies though, they are screwed in that regard (not talking about karma or anything of the sort though).
I don't think the debt issue is as simple as paying your taxes, the debt is far to huge for that to solve the issue. One fo the more prominent aspects of obama's government has been the ideological fights between parties. According to the democrats anyone who wishes to reduce taxes and decrease spending is immediately a right wing nutjob who only cares about making rich people richer.... Then on the other hand you have the republicans claiming that anyone that wants to increase taxes and spending is a freedom hating communists who would be better off sucking of castro's balls. have these guys gone utterly insane? As a result, there is no clear direction as to what is being done to improve the economy..... Democrats lost strength over the years (the result of voting for a guy who obviously has lacked the leadership to unite the country simply because they perceived that he could bring change because he was black rather than the usual white dude) and as a result both the democrats and republicans are failing to do whatever they were originally planning to do and settle for somewhat stopping the sheer insanity of the other party. Increasing or decreasing taxes or expenditure (within certain ranges of course) does not make you a freedom hating communist nor a right wing nutjob, it all depends on the situation the economy is in and what they are trying to achieve. brazil for example has a butload of money coming in even now and god knows inflation would have destroyed them by now if certain taxes were not as high as they are now.
As far as I am concerned, there is no 1 way to deal with the crisis at large right now but I do think that having both parties reaching only half or scraps of what they wanted will not help anyone. Rather than thinking in terms of right or left wing they should be thinking of controlling the debt. Replublicans can't afford to not tax individuals and companies and democrats sure as fuck cannot afford the level of spending they want (worst, they wanted to further increase it...). Hopefully obama will be nowhere near the presidency for the next term and someone who can actually give the nation some actually direction is elected as obama has proven to be a terrible leader who only caused further division... Ok, maybe obama was not as terrible as I make him out to be but at the very least he was not the precident the US or the world needed IMO.
Hm, looking at the state of the world...
I got the feeling many more countries will be in such bad debt soon, and worlds nations have gathered abstruse amounts of debts. I'm still waiting for a massive wave of bankrupcy around the world, and I'm very curious what will follow to that. The states might actually come out of that strengthened, beeing less influenced by economy once they got rid of their debts, but just as well massive crisis can occur and maybe carry further when banks will once more lose billions.
What do you mean about countries being less influenced by the economy? Or do you mean by the market?
Sadly, that's the same rationale Standard and Poor's used to justify the downgrade. While it is true that the ideological divide is hampering efforts to grow the economy and decrease sovereign debt, in no way does it put the U.S. in the same position as Greece, Portugal, or Ireland where there is a real threat of default. Now that the debt ceiling through 2012 was lifted there is no chance of U.S. default in the short or medium turn. The U.S., simply put, can not run out of money. As the world reserve currency the U.S. has license to print as much money as needed, tempered only by inflation (printing to much would be insane, the dollar would become worthless). The only possible way for the U.S. to default is if the debt ceiling crisis is repeated in 2013. Considering how unlikely it is for the political situation to remain the same after the next election the odds are very low. Credit rating agencies are not in the business of making long term political forecasts. There job is to assess the risk that a party will fail to service their debt obligations. As there is no chance of the U.S. running out of money in the short or medium term, revoking our AAA rating was simply asinine, another example of Standard and Poor's failing to read the market. In 2007 it was clear that mortgage backed securities were quickly losing value, yet they retained a AAA rating. Last week it was clear that U.S. bonds remained safe havens, as investors sought risk free investments in the face of a growing Eurozone crisis. Yet Standard and Poor's again ignored the market and revoked our AAA rating. The market spoke again yesterday: as stocks fell, investors moved money into U.S. bonds as a safe haven, along with the Yen and Swiss Franc.Quote:
The debt ceiling crisis and budget debate had as much to do with internal Republican politics as an inter-party divide. Any bill that the sixty Tea Party representatives would be willing to vote for would never pass the Senate and White House. Anything that would pass the Senate and White House would lose Tea Party support, requiring Boehner to cross the aisle and court a large number of Democrats. Obviously, that is politically unacceptable. Come election time the Democrats could use that against the Republicans. What he did instead was actually politically savvy. He knew the debt ceiling had to be raised, he was not going to be the Speaker who forced the country into default. So he passed a bill that was acceptable to the Tea Party, without any Democrats voting yes, even though he knew it would die in the Senate. He knew that the Senate would reconcile his bill with the Reid bill, that the reconciled bill would likely pass both houses and be signed into law. That way the U.S. would not default, a bipartisan compromise would be reached, and he would not have to explain why he needed to lobby Democrats for votes. Had the Tea Party not begged for more concessions (that were not in the final bill anyway), the Boehner bill would have passed the House on Wednesday and we would not have come so close to the deadline. The mainstream of the two parties were never that far apart, it was the Tea Party that brought us to the brink. It would not surprise me if most donors turn there back on the Tea Party, pouring money into primary challengers in 2012 and 2014.
As far as reducing long term debt goes, tax reform is essential. Major corporations are essentially untaxed, costing the U.S. trillions. Corporate profits deposited in an off shore bank can not be taxed, a completely legal way to avoid taxes. Some industries, like oil and coal, are not taxed. Targeted spending cuts are also important but it is important to avoid cuts that hinder growth. The government should reform how it negotiates prices for medicare, how it negotiates contracts with sub-contractors and other smart ways of spending money. Only cutting programs means that someone else is losing money, hurting the economy more than any deficit spending could. For example: to large a cut in military spending means bases are closed and jobs are lost. Ultimately lowering unemployment, investing in growth industries, building infrastructure, and restoring growth to pre-banking crisis levels will build a surplus faster than any cuts possibly could.
Last edited by Kaiten; August 09, 2011 at 06:09 PM.
I just read an interesting article on my cnn app. The taxes on the rich which obama wants to implement affect a mere 3% of the taxpayers who are those who earn more than 200000 dollars a year. 0.2% of taxpayers make more than 1 million a year and only 8274 people made more than 10 million a year. Now, with the proposed tax rases obama plans on raising 750 billion over a decade. If this numbers are indeed true then I just can't imagine how this would even begin to make a dent on the trillion dollar debt which continues to grow. I agree in that taxes should overall be raised but in turn even what obama is suggesting the government would make out of it seems marginal at best. In the end I do get the impression cuts could have to be made elsewhere. of course, the debt does not have to be paid overnight either but at the moment tax raises for a marginal section of the population don't seem to be the answer at all (at least if the numbers are real), kinda seems more like generic not very useful populism.
Actually german right wing said that even when it was about a tax only for millionaires...
It eventually will hurt U.S. armor industry, but the U.S. definitly have to cut their military spendings. They're ridiculous right now.
Well, as far as economics decision goes everything you do is speculation. The only way to actually know whether that will happen is to actually implement the measure. Even applying the same economic method under similar circumstances won't necessarily yield the same result. Could a tax raise for the rich hurt the middle class? It could -basic idea is that the rich invest less or not at all, they remain as rich due to keeping their money and middle classes have less jobs- yes. Will it always result in such a thing? No, it won't.