America Goes Dark

[Edstock]

There's still a chance things'll trickle down . . .

 

http://www.nytimes.com/2010/08/09/opinion/09krugman.html?hp

 

Op-Ed Columnist

America Goes Dark

By PAUL KRUGMAN

Published: August 8, 2010

 

The lights are going out all over America — literally. Colorado Springs has made headlines with its desperate attempt to save money by turning off a third of its streetlights, but similar things are either happening or being contemplated across the nation, from Philadelphia to Fresno.

 

Meanwhile, a country that once amazed the world with its visionary investments in transportation, from the Erie Canal to the Interstate Highway System, is now in the process of unpaving itself: in a number of states, local governments are breaking up roads they can no longer afford to maintain, and returning them to gravel.

 

And a nation that once prized education — that was among the first to provide basic schooling to all its children — is now cutting back. Teachers are being laid off; programs are being canceled; in Hawaii, the school year itself is being drastically shortened. And all signs point to even more cuts ahead.

 

We’re told that we have no choice, that basic government functions — essential services that have been provided for generations — are no longer affordable. And it’s true that state and local governments, hit hard by the recession, are cash-strapped. But they wouldn’t be quite as cash-strapped if their politicians were willing to consider at least some tax increases.

 

And the federal government, which can sell inflation-protected long-term bonds at an interest rate of only 1.04 percent, isn’t cash-strapped at all. It could and should be offering aid to local governments, to protect the future of our infrastructure and our children.

 

But Washington is providing only a trickle of help, and even that grudgingly. We must place priority on reducing the deficit, say Republicans and “centrist” Democrats. And then, virtually in the next breath, they declare that we must preserve tax cuts for the very affluent, at a budget cost of $700 billion over the next decade.

 

In effect, a large part of our political class is showing its priorities: given the choice between asking the richest 2 percent or so of Americans to go back to paying the tax rates they paid during the Clinton-era boom, or allowing the nation’s foundations to crumble — literally in the case of roads, figuratively in the case of education — they’re choosing the latter.

 

It’s a disastrous choice in both the short run and the long run.

 

In the short run, those state and local cutbacks are a major drag on the economy, perpetuating devastatingly high unemployment.

 

It’s crucial to keep state and local government in mind when you hear people ranting about runaway government spending under President Obama. Yes, the federal government is spending more, although not as much as you might think. But state and local governments are cutting back. And if you add them together, it turns out that the only big spending increases have been in safety-net programs like unemployment insurance, which have soared in cost thanks to the severity of the slump.

 

That is, for all the talk of a failed stimulus, if you look at government spending as a whole you see hardly any stimulus at all. And with federal spending now trailing off, while big state and local cutbacks continue, we’re going into reverse.

 

But isn’t keeping taxes for the affluent low also a form of stimulus? Not so you’d notice. When we save a schoolteacher’s job, that unambiguously aids employment; when we give millionaires more money instead, there’s a good chance that most of that money will just sit idle.

 

And what about the economy’s future? Everything we know about economic growth says that a well-educated population and high-quality infrastructure are crucial. Emerging nations are making huge efforts to upgrade their roads, their ports and their schools. Yet in America we’re going backward.

 

How did we get to this point? It’s the logical consequence of three decades of antigovernment rhetoric, rhetoric that has convinced many voters that a dollar collected in taxes is always a dollar wasted, that the public sector can’t do anything right.

 

The antigovernment campaign has always been phrased in terms of opposition to waste and fraud — to checks sent to welfare queens driving Cadillacs, to vast armies of bureaucrats uselessly pushing paper around. But those were myths, of course; there was never remotely as much waste and fraud as the right claimed. And now that the campaign has reached fruition, we’re seeing what was actually in the firing line: services that everyone except the very rich need, services that government must provide or nobody will, like lighted streets, drivable roads and decent schooling for the public as a whole.

 

So the end result of the long campaign against government is that we’ve taken a disastrously wrong turn. America is now on the unlit, unpaved road to nowhere.

[Ford Jellymoulds]

Nothing will ever trickle down.

 

This is typical greenwash we will put all the lights out to protect the planet. Brits pay an absolute fortune for road tax every year annually to maintain roads and have its street lights lit up.

 

Folk who buy new gasoline Mondeo's pay nearly $1,000 a year in road TAX, a lot of our motorways have their street light switched off from Midnight to 5.00 AM in a bid to save the planet. Why are greedy governments not passing the electricity savings from not having lights on back to the motorist by reducing the road tax rather than keeping it all and rerouting the revenue and spending elsewhere to other government departments.

 

Women have complained they don't like the idea of breaking down in the pitch black darkness, but the British Government still wants to extend its no lights at night greenwash to all roads at night, motorway street lights have become expensive ornaments in the UK.

Edited August 9, 2010 by Ford Jellymoulds

[grbeck]

Misinformation galore in that editorial.

 

First there is this:

 

In effect, a large part of our political class is showing its priorities: given the choice between asking the richest 2 percent or so of Americans to go back to paying the tax rates they paid during the Clinton-era boom, or allowing the nation’s foundations to crumble — literally in the case of roads, figuratively in the case of education — they’re choosing the latter.

 

The federal portion of road and bridge construction is paid for by the revenue generated by the federal motor fuels tax. Road construction - even for federal highways - is paid for by a combination of money from the federal government (through the Highway Trust Fund) and the state where the road is located. State are REQUIRED to pay a set portion (usually 80 percent) of the total cost of a transportation project.

 

Raising the federal income tax rate on higher earners isn't going to make more money available for road construction.

 

Education is largely a STATE responsbility, and there is no proof that spending more on education yields better student achievement. Washington, D.C., spends more per-pupil than virtually all states; yet it ranks near the bottom in student achievement. California outspends Texas, yet Texas students achieve better results.

 

And if you add them together, it turns out that the only big spending increases have been in safety-net programs like unemployment insurance, which have soared in cost thanks to the severity of the slump.

 

Wrong. States were dramatically increasing spending BEFORE the current slump. The run-up in spending was largely fueled by increases in pay and pension benefits for state employees and public education employees.

 

That is, for all the talk of a failed stimulus, if you look at government spending as a whole you see hardly any stimulus at all.

 

Except that the stimulus used during the Great Depression constituted a greater percentage of the gross domestic product than the current stimulus did, and it still failed to get us out of the Great Depression.

 

Mr. Krugman also fails to note - or conveniently forgets - that taxes increased between 1928 and 1932 (the idea that Hoover slashed taxes is a myth). The unemployment rate hit 33 percent by 1933, and I doubt that higher taxes helped much.

 

Roosevelt increased taxes in 1937, and we had the "Roosevelt Recession" of 1938.

 

When we save a schoolteacher’s job, that unambiguously aids employment; when we give millionaires more money instead, there’s a good chance that most of that money will just sit idle.

 

Apparently, Mr. Krugman doesn't understand the difference between taxes and welfare.

 

Allowing people to keep more of their own money does not constitute "giving" it to them.

 

"Giving" money involves the government handing out other people's money to people it deems worthy, whether it's because they truly can't earn any on their own, or it wants to buy their votes.

Edited August 9, 2010 by grbeck

[Edstock]

The NEW YORKER has an article by James Surowiecki, "Soak the Very, Very Rich" that has some interesting points I'm sure you'll disagree with.

 

http://www.newyorker.com/talk/financial/2010/08/16/100816ta_talk_surowiecki

 

Between 2002 and 2007, for instance, the bottom ninety-nine per cent of incomes grew 1.3 per cent a year in real terms—while the incomes of the top one per cent grew ten per cent a year. That one per cent accounted for two-thirds of all income growth in those years. People in the ninety-fifth to the ninety-ninth percentiles of income have represented a fairly constant share of the national income for twenty-five years now. But in that period the top one per cent has seen its share of national income double; in 2007, it captured twenty-three per cent of the nation’s total income. Even within the top one per cent, income is getting more concentrated: the top 0.1 per cent of earners have seen their share of national income triple over the same period. All by themselves, they now earn as much as the bottom hundred and twenty million people. So at the same time that the rich have been pulling away from the middle class, the very rich have been pulling away from the pretty rich, and the very, very rich have been pulling away from the very rich.

 

The current debate over taxes takes none of this into account. At the moment, we have a system of tax brackets well suited to nineteenth-century New Zealand. Our system sets the top bracket at three hundred and seventy-five thousand dollars, with a tax rate of thirty-five per cent. (People in the second-highest bracket, starting at a hundred and seventy-two thousand dollars for individuals, pay thirty-three per cent.) This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates. LeBron James and LeBron James’s dentist: same difference.

 

For the whole article, click on the link.

Edited August 9, 2010 by Edstock

[97 F350]

And Paul Krugman is such a non-biased writer.

 

 

He is such a left-wing Keynesian hack that he makes Howard Dean look conservative. And he makes extremely selective use of facts.

 

 

The US spends more per student than any other county on education. Now whether we get our money's worth or not is an entirely different discussion.

 

And the federal government, which can sell inflation-protected long-term bonds at an interest rate of only 1.04 percent, isn’t cash-strapped at all. It could and should be offering aid to local governments, to protect the future of our infrastructure and our children

.

 

This quote sums him up in a nut-shell - just turn on the printing press - that's the solution.

 

And his arguement about the cost of the tax cuts for the richest (which I'm not saying is right or wrong) is that it will cost $700 billion over ten years. But he leaves out the fact that the cost of the tax cuts for the "middle class" that is being thrown around will cost over $2.6 trillion in the same time. Very disingenious.

 

I find it interesting that for the last two years, individuals and businesses both cut expenses, downsized, etc. to adjust to lower consumption. But government shouldn't ? They got fat and happy during the bubble years just like business and consumers did. But according to Krugman governments don't need to rationalize their size like everything else.

 

............to vast armies of bureaucrats uselessly pushing paper around. But those were myths, of course; there was never remotely as much waste and fraud as the right claimed.

 

And this is no myth. I deal with state and some city governments every day. It is an absolute nightmare. Nobody is responsible for anything and they couldn't care less about doing their job. Their are some good people, but the bulk are just biding their time till their retirement kicks in. More of these kind of employees is not the solution to anything.

[grbeck]

Between 2002 and 2007, for instance, the bottom ninety-nine per cent of incomes grew 1.3 per cent a year in real termswhile the incomes of the top one per cent grew ten per cent a year.

 

During those years, we were in the middle of an asset bubble, and the very rich are more likely to get more income from assets, as opposed to paychecks.

 

This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates. LeBron James and LeBron Jamess dentist: same difference.

 

Then cut the income tax rates for LeBron James' dentist, and others like him, instead of raising rates.

 

If taxing the rich were the answer, then California would be booming...it has the sixth highest overall tax burden of any state in the country, and it has the highest personal income tax rate in the country. Yet it is basically broke.

 

Also remember that people can avoid taxes, and not just conservative people, either. Note all of the Obama Administration appointees who didn't pay a variety of taxes (it's easy to champion higher taxes when you don't pay them yourself). Or Senator John Kerry, former Democratic presidential candidate, who avoided taxes by docking his yacht in Rhode Island instead of Massachusetts.

Edited August 9, 2010 by grbeck

[97 F350]

This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates. LeBron James and LeBron James’s dentist: same difference.

 

 

Yes they pay the same rate - is there a problem with that? Lebron pays a butt-load more actual $$$ than his dentist does. As it should be.

 

Average Tax Rate, 2007 (Percent of AGI paid in income taxes) sorry about the formatting.

 

Year 2007

Total 12.68%

Top .1% 21.46%

Top 1% 22.45%

Top 5% 20.53%

Between 6% & 10% 12.66%

Top 10% 18.79%

Between 11% & 25% 9.43%

Top 25% 15.98%

Between 26% & 50% 7.01%

Top 50% 14.03%

Bottom 50 2.99%

 

The top 5% already pay more than 20% in taxes. The bottom 75% pay less than 7%. We already have an extremely graduated or "progressive" income tax code.

 

20% of a person making $10 million a year is a lot more than 20% of someone making $300k. I personally think we should have a flat tax and everyone pay 20%. People would pay a lot more attention to how government spends their money if it actually came out of their pocket.

 

If you notice - the bottom 50% of tax payers only pay a tax rate of 3%. But I wonder who complains the most about government and what can I get out of it.

[Roadtrip]

According to Citizens Against Government Waste's 2009 Pig Book:

 

The latest installment of Citizens Against Government Waste’s (CAGW) 19-year exposé of pork-barrel spending includes $3,800,000 for the Old Tiger Stadium Conservancy; $1,900,000 for the Pleasure Beach water taxi service project; and $1,791,000 for swine odor and manure management research.

 

In fiscal year 2009, Congress stuffed 10,160 projects into the 12 appropriations bills worth $19.6 billion. The projects represent a 12.5 percent decrease from the 11,610 projects in fiscal year 2008. The $19.6 billion is a 14 percent increase over the fiscal year 2008 total of $17.2 billion, belying claims of reduced spending. Total pork identified by CAGW since 1991 adds up to $290 billion. (

Source

)

 

It seems to me that the $19.6 billion spent on pork projects in 2009 alone could power an awful lot of street lights.

 

In addition, total spending by all governments (federal, state, and local) as a percent of U.S. GDP has risen from about 3 percent in 1900 to about 43 percent in 2010, a 1,433 percent increase. (Source)

 

I guess no amount of government spending is ever enough, and the way the the government and politicians spend the ever-increasing amount of money available to them is of little consequence -- at least to people like Paul Krugman.

[xr7g428]

This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates. LeBron James and LeBron James’s dentist: same difference.

 

Taxes

 

LeBron James pays $70 MILLION.

 

Lebron James dentist pays $70 THOUSAND.

 

Same difference? Anybody want to bet that LeBron has found a way to take a good chunk of the income outside the USA?

[nicoledc109]

There's still a chance things'll trickle down . . .

 

http://www.nytimes.com/2010/08/09/opinion/09krugman.html?hp

 

Op-Ed Columnist

America Goes Dark

By PAUL KRUGMAN

Published: August 8, 2010

 

The lights are going out all over America — literally. Colorado Springs has made headlines with its desperate attempt to save money by turning off a third of its streetlights, but similar things are either happening or being contemplated across the nation, from Philadelphia to Fresno.

 

Meanwhile, a country that once amazed the world with its visionary investments in transportation, from the Erie Canal to the Interstate Highway System, is now in the process of unpaving itself: in a number of states, local governments are breaking up roads they can no longer afford to maintain, and returning them to gravel.

 

And a nation that once prized education — that was among the first to provide basic schooling to all its children — is now cutting back. Teachers are being laid off; programs are being canceled; in Hawaii, the school year itself is being drastically shortened. And all signs point to even more cuts ahead.

 

We’re told that we have no choice, that basic government functions — essential services that have been provided for generations — are no longer affordable. And it’s true that state and local governments, hit hard by the recession, are cash-strapped. But they wouldn’t be quite as cash-strapped if their politicians were willing to consider at least some tax increases.

 

And the federal government, which can sell inflation-protected long-term bonds at an interest rate of only 1.04 percent, isn’t cash-strapped at all. It could and should be offering aid to local governments, to protect the future of our infrastructure and our children.

 

But Washington is providing only a trickle of help, and even that grudgingly. We must place priority on reducing the deficit, say Republicans and “centrist” Democrats. And then, virtually in the next breath, they declare that we must preserve tax cuts for the very affluent, at a budget cost of $700 billion over the next decade.

 

In effect, a large part of our political class is showing its priorities: given the choice between asking the richest 2 percent or so of Americans to go back to paying the tax rates they paid during the Clinton-era boom, or allowing the nation’s foundations to crumble — literally in the case of roads, figuratively in the case of education — they’re choosing the latter.

 

It’s a disastrous choice in both the short run and the long run.

 

In the short run, those state and local cutbacks are a major drag on the economy, perpetuating devastatingly high unemployment.

 

It’s crucial to keep state and local government in mind when you hear people ranting about runaway government spending under President Obama. Yes, the federal government is spending more, although not as much as you might think. But state and local governments are cutting back. And if you add them together, it turns out that the only big spending increases have been in safety-net programs like unemployment insurance, which have soared in cost thanks to the severity of the slump.

 

That is, for all the talk of a failed stimulus, if you look at government spending as a whole you see hardly any stimulus at all. And with federal spending now trailing off, while big state and local cutbacks continue, we’re going into reverse.

 

But isn’t keeping taxes for the affluent low also a form of stimulus? Not so you’d notice. When we save a schoolteacher’s job, that unambiguously aids employment; when we give millionaires more money instead, there’s a good chance that most of that money will just sit idle.

 

And what about the economy’s future? Everything we know about economic growth says that a well-educated population and high-quality infrastructure are crucial. Emerging nations are making huge efforts to upgrade their roads, their ports and their schools. Yet in America we’re going backward.

 

How did we get to this point? It’s the logical consequence of three decades of antigovernment rhetoric, rhetoric that has convinced many voters that a dollar collected in taxes is always a dollar wasted, that the public sector can’t do anything right.

 

The antigovernment campaign has always been phrased in terms of opposition to waste and fraud — to checks sent to welfare queens driving Cadillacs, to vast armies of bureaucrats uselessly pushing paper around. But those were myths, of course; there was never remotely as much waste and fraud as the right claimed. And now that the campaign has reached fruition, we’re seeing what was actually in the firing line: services that everyone except the very rich need, services that government must provide or nobody will, like lighted streets, drivable roads and decent schooling for the public as a whole.

 

So the end result of the long campaign against government is that we’ve taken a disastrously wrong turn. America is now on the unlit, unpaved road to nowhere.

Thanks you for the post.

 

__________________

Watch The Expendables Online Free

[97 F350]

[if taxing the rich were the answer, then California would be booming...it has the sixth highest overall tax burden of any state in the country, and it has the highest personal income tax rate in the country. Yet it is basically broke.

 

100% agree. From someone who prepares corporate taxes for a living - the most onerous states to file in pretty much line up with the states in the worst fiscal shape.

 

California, Michigan, New York, New Jersey, Pennsylvania, Illinois, Massachusetts, Louisiana. These states are all nasty, nasty returns with high tax rates. Yet they are still broke.

 

 

Taxes

 

LeBron James pays $70 MILLION.

 

Lebron James dentist pays $70 THOUSAND.

 

Same difference? Anybody want to bet that LeBron has found a way to take a good chunk of the income outside the USA?

 

I would.

 

I've prepared returns for NBA and MLB players. They pay a butt-load of tax. In a lot of states + to the fed. In general, not very savvy on the ways you can legitimately reduce the tax burden. (Supporting your posse is not a charitable contribution although I'm sure a few posters on here will argue that being paid for not doing work is critical for society to function)

 

And if anybody rich should not be taxed at a high rate, it is professional athletes. They are almost by definition one-man economic stimulus machines. Three or four cribs, plus one for mama, a garage full of Bentleys, Hummers, Escalades, Benzes, gallons of Dom and Hennessey, armful of Rolexes, stable of pit bulls and Rotties put more people to work than any jobs program ever dreamed of.

 

Of course, five years after retirement, they are filing for bankruptcy - but by then they have already stimulated the economy.