终局逆风

Mike Krechevsky

May 10, 2011, 9:15 a.m.

Objective source like the Heritage Foundation. Now that is laugh out loud funny.

Keith Covington

May 2, 2011, 11:29 p.m.

enjoy the comments even though I don’t agree with all pov..some of you who need to question the motives of John should simply unsubscribe or at least provide the data when you are in disagreement rather than take cheap potshots.

my only question is a possible conflict of the graphs: total US debt as % of GDP is shown as 369% in 2009 in the large graph and looks like 100% in the graph when shown in the 2nd set of graphs, the lower right graph in the set of 6? am I missing something?

Fred Swartz

May 1, 2011, 11:53 a.m.

Thought provoking as always.  Thanks.  Two additional issues that might be addressed:

(1) Some countries with high standards of living (eg, Nordic) have high level of taxation.  How have they been able to do this so successfully?

(2) Maximizing GDP has always seemed like looking for keys where the light is, instead of trying to optimize the well-being of the citizenry.  For example, reducing income disparity may not increase GDP, but could increase overall happiness, decrease crime etc.  Throwing a rock through a store window may increase GDP, but ...

Russ Abbott

May 1, 2011, 10:56 a.m.

Two quick comments.

1. You lose credibility when you cite work from the Heritage Foundation (2% unemployment?) as believable.

2. You confuse government with non-productive work. I’d much rather have the government spend taxes on public infrastructure than have the private sector spend its money on non-productive activities like sports, other big-money entertainment, or junk food like sugar-based soft drinks. The former will make the economy more efficient and productive. The latter won’t. In fact, the free-market’s success at selling soft drinks is putting tremendous pressure on the economy in the form of unnecessary medical expenses. This is not to say that I would have the government limit the ability of the market to manufacture, advertise, and sell soft drinks. I wouldn’t; and please don’t accuse me of wanting a big-brother government.  My point is that it’s far too simplistic to adopt the attitude that it’s bad for government to provide services and good for the market to do so. It’s much more complex than that.

NR Peterson

April 30, 2011, 11:54 a.m.

The Debt to GDP chart is one factor. How about incorporating interest rates and the maturity schedule? The only reason the US economy hasn’t blown up sooner is because interest rates have dropped to zero and the maturity schedule is being dramatically shorten. The US Government balance sheet is more similar to Bear Stearns than we might like to think: look at the mismatch or assets and liabilities and the increasing significance of off-balance sheet items. Clearly, there are no adults in the room and this ends badly!

Clayton Buerkle

April 30, 2011, 9:37 a.m.

I was thinking the same thing as Robert Gilroy. I keep reading these polar opposite viewpoints that both make sense and seem backed up with reliable data and analysis. How can that be? Yet, the two sides are unwilling to have a “point-by-point discussion” because, why? In the meantime vacuum of anything close to agreement, partisan politics decides the nation’s fate.

Phil Printz

April 30, 2011, 9:28 a.m.

As a liberal, I agree with most of what John writes concerning our serious problems with a rising deficit. My question concerns his failure to specifically address the effect of tax increases on just the wealthy as a potential solution and the effect of companies outsourcing jobs overseas to achieve greater productivity. 

Also what many analysis fail to include in the deficit reduction calculation is the cost of rising crime as the poor lose the social entitlements that they have received for generations. We are a country after all of gun owners, unlike europe, and when people feel they have been unjustly treated and watch family members go hungry and not receive needed medical care it is not hard to imagine they will act out in unpleasant ways. Does anybody really think the poor will just quietly sit by and watch their humble lives destroyed? How much spending will we need to control the angry poor of the inner city. What is the cost of people being afraid to shop at malls and grocery stores because of potential violence. To avoid this violent scenario we must all tighten our belts and share of the pain with the wealth carrying more than the middle class and the poor if we hope to solve this very challenging problem. We must use wisdom to make very gradual spending cuts in social entitlements, while sharply raising taxes on the rich and changing our defense spending programs.

CArolyn Lilly

April 30, 2011, 9:26 a.m.

I find it disappointing that you choose healthcare to lessen government - what about cutting back on military spending (certainly Vietnam and Iraq were huge costly mistakes)-it’s foolhardy to believe we can control the world. Let Europe and Asia fend for themselves. Also delete other worthless government spending as incarcerating drug addicts (instead provide rehab!).  QE has only benefited the already rich bankers, and worsened the situation for the middle-class.  “The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976.”- Read about the new US Banana Republic at: <http://www.nytimes.com/2010/11/07/opinion/07kristof.html?_r=1>
Why wasn’t QE used to create jobs (improve infrastructure, renewable energy, mass transit, etc.)? That would increase productivity and lessen the need for “social welfare”. People need JOBS!
Yes, taxes need to increase- capital gains and dividends should pay the regular earning rate, Bush tax cuts dropped, etc.  Current government policy is for the rich (catering to rich political contributions). The middle class are the workers who made this country great… too bad our country has significantly moved towards a two-class system (rich and poor),  which, if continued, will result in real class warfare=revolution.

Gerard Longpre

April 30, 2011, 7:44 a.m.

John:  pretty hard to accept your proposition that Government spending sucks the money out of the economy so the entrepreneurs cannot bring their start up businesses to fruition.  Start ups pay no tax. 

Between 1960 and taking into account the large decreases in 1982 and 1986, when tax rates in 1986 came down from top of 50% to 38% approx for top earners and 2010 Federal tax receipts have all averaged between 16% and 18% of GDP.  GDP between 1986 and 2011 has averaged between 4% to 5%.  Total Federal Spending between 1986 and 2010 has averaged between 18% and 20% of GDP.

US Government Public Debt under Reagon and Bush 1 went from 36% of GDP to 66% of GDP under Clinton, then 57% to 81% under Bush and under Bush with brainless Greenspan who created the Great recession’ to about 88% under Obama.  So the Republican geniuses increased the Debt by 54% in the last 30 years.

Between 1980 and 2008 the Private Savings Rate has dropped from 10% to -2% (at least).  Interestingly Corporate profits have gone from 8% of GDP in 1985 to 10.6% of GDP in 2005.  However from 2005 have gone from 10% of GDP to 12% today.

So even though the Reagan and Bushes increased the public debt 54% and Reagan and Clinton dropped the tax rates where is this dynamic growth that you state will take place if the Government stops spending and decreases taxes, going to come from?  Because neither tax receipts have really increased or decreased or Government spending increased or decreased over the last 15 years and other than Federal Government borrowings increasing dramatically, GDP up until 2008 was pretty much in the same range of 4 to 5%.  Corporate Profits only went up about 2.5% in the bull market (18 years) while since 2008 Corporate profits have gone up 2% in 3 years.

Sorry I cannot see based on the facts of the economy where decreasing taxes without government spending will give the magic growth.  With all of the government and Fed largess in 2008 to 2011, with tax receipts staying pretty much the same we have seen quite dramatic Corporate profit growth but GDP is now 1.8%

Abel Rossenblat

April 30, 2011, 4:45 a.m.

I basically agree with yr comments regarding government size all around the world.The main problem I see is that will be very difficult to reduce spending due to al the created interests and the lack of understanding for the majority of the people.
We realy need great leaders and excellente managers to rationally reduce government spending and we have not them today.