Ron Paul to propose $1T in specific budget cuts

[Free Thinker]

Quote from DAS Trader:

Hyperbole aside, how does Ron Paul's plan take us back to the 1937 depression?

study the 1937 depression. might learn something. after the 1929 depression things were starting to look up when the country decided to do severe austerity and balance the budget. we fell right back into depression.
there are no doubt places where we could do some cutting but to do a trillion all at once would destroy final demand.



http://en.wikipedia.org/wiki/Recession_of_1937–1938
By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was considerably lower than the 25% rate seen in 1933. In June 1937, some of Roosevelt's advisors urged spending cuts to balance the budget. WPA rolls were drastically cut and PWA projects were slowed to a standstill.[1] The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 per cent and production of durable goods fell even faster.

Unemployment jumped from 14.3% in 1937 to 19.0% in 1938.[2] Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels.[3] Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. In most sectors, hourly earnings continued to rise throughout the recession, which partly compensated for the reduction in the number of hours worked. As unemployment rose, consumers' expenditures declined, leading to further cutbacks in production.

 

[Ricter]

Quote from DAS Trader:

Very business friendly and very realistic.

Which businesses, the ones whose primary, or even only, customer is government? The B2Bs who service those businesses?

 

[DemZad]

Quote from Free Thinker:

study the 1937 depression. might learn something. after the 1929 depression things were starting to look up when the country decided to do severe austerity and balance the budget. we fell right back into depression.
there are no doubt places where we could do some cutting but to do a trillion all at once would destroy final demand.



http://en.wikipedia.org/wiki/Recession_of_1937–1938
By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was considerably lower than the 25% rate seen in 1933. In June 1937, some of Roosevelt's advisors urged spending cuts to balance the budget. WPA rolls were drastically cut and PWA projects were slowed to a standstill.[1] The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 per cent and production of durable goods fell even faster.

Unemployment jumped from 14.3% in 1937 to 19.0% in 1938.[2] Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels.[3] Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. In most sectors, hourly earnings continued to rise throughout the recession, which partly compensated for the reduction in the number of hours worked. As unemployment rose, consumers' expenditures declined, leading to further cutbacks in production.

Well if you wish to make a point, perhaps you could make it...rather than suggesting I need to study in order to be able to 'get' your unsupported statement.

I find it interesting that you would comment on what might lead to a furthering of the depression we are in without alluding to what got us here in the first place. The boom and bust cycles ala the Federal Reserve System are responsible for all of it.

http://abolishthefederalreserve.org/

Further, I would contend that a correction is what's needed in order to return our markets to normalcy. You seem to want to kick the can down the road and that will only lead to more pain. Nothing the powers that be did actually ended our Great Depression. As you would probably agree, the fact that we were the last economy standing at the end of WWII had more than anything to do with our recovery. Unless you see such a world changing event on our horizon, simply continuing the failed Keynesian strategy of throwing more fiat on the fire will not get the job done, and will likely lead to the complete destabilization of our currency.

 

[Ricter]

Quote from DAS Trader:

Well if you wish to make a point, perhaps you could make it...rather than suggesting I need to study in order to be able to 'get' your unsupported statement.

I find it interesting that you would comment on what might lead to a furthering of the depression we are in without alluding to what got us here in the first place. The boom and bust cycles ala the Federal Reserve System are responsible for all of it.

Business cycles are normal, equilibrium is an average, not a constant.

Anyway, what actually got us here was gambling with other people's money but with our responsibility. So the banks are laughing, well they were laughing, last year, when they were happily foreclosing and snapping up real estate. But now with gov regulation headed their way, and society turning on them like they were no better than, shudder, teachers, now they're crying. Maybe some European-style desperation and write-offs are in their future. One can hope.

 

[CaptainObvious]

A total non-starter for me because of the statement below:

Quote from DAS Trader:

Paul would also make far-reaching changes to federal tax policy, reducing the top corporate income tax rate to 15 percent, eliminating capital gains and dividends taxes, and allowing for repatriation of overseas capital without tax penalties. All Bush-era tax cuts would be extended.

Read more: http://www.politico.com/news/stories/1011/66114.html#ixzz1b2syqnjl

Now if there wasn't so much historical evidence I might support these ideas because on the surface they make sense, but there is so much historical evidence. Let's review.
The reparation of overseas capital was done during 2004 all under the premise of job creation, of course. What actually happened was tens of thousands lost their jobs at those corporations receiving the benefit, and the repatriated capital was used to buy back stock and give bonuses to exec's.
Bush era tax cuts have been in place for years, and yet millions of jobs have been lost. The cuts were extended last December under the premise, you guessed it, creating jobs. We find ourselves nearly a year later with an unemployment rate still over 9% and thousands of good jobs still being lost. Where da' jobs?
Sorry fella's, the facts don't lie. Tax breaks/cuts for corporations do nothing in the way of job creation.

 

[Ricter]

Quote from CaptainObvious:

...Tax cuts for corporations do nothing in the way of job creation.

This part is not quite so conclusive, though I agree with the rest. Of course tax cuts, under the right conditions, would help create jobs, or at least stop hindering hiring. We'd look for evidence of strong sales and projected sales, capital scarcity, and "crowding out" to confirm those conditions are present.

 

[CaptainObvious]

Quote from Ricter:

This part is not quite so conclusive, though I agree with the rest. Of course tax cuts, under the right conditions, would help create jobs, or at least stop hindering hiring. We'd look for evidence of strong sales and projected sales, capital scarcity, and "crowding out" to confirm those conditions are present.

Under the right conditions one could argue that taxes are irrelevant as evidenced during the 90's when taxes were higher than now and jobs were created by the millions. "Under the right conditions" is a very relative phrase.
The true measure is, do corporations want to grow their business in this country, or abroad? The evidence is clear they make more money destroying business in this country while expanding their business abroad.
My ideal tax plan would reward those corporations that grow business/hire on American soil, while severely punishing those that eliminate jobs here while hiring abroad.

 

[DemZad]

Ron Paul's policies may not instantly create jobs (only an increase in demand will cause employers to want to hire). What they will do is force the correct and enable a business friendly tax environment, while not burdening the poor with a tax increase (like with Cain's 9-9-9 plan).

A return to sound money will be the best thing to happen to the middle class because it will halt the most insidious form of taxation, inflation.

Here's why we need to get drastic...

http://www.usdebtclock.org/

 

[walter4]

Quote from CaptainObvious:

Under the right conditions one could argue that taxes are irrelevant as evidenced during the 90's when taxes were higher than now and jobs were created by the millions. "Under the right conditions" is a very relative phrase.
The true measure is, do corporations want to grow their business in this country, or abroad? The evidence is clear they make more money destroying business in this country while expanding their business abroad.
My ideal tax plan would reward those corporations that grow business/hire on American soil, while severely punishing those that eliminate jobs here while hiring abroad.

Great post.

 

[Free Thinker]

94% of US Tax Revenue is spent on War and defense

interesting chart to show where money comes from and where does it go in US. It can be seen from the chart that total revenue from all taxes was $ 2.57 trillion whereas total spending $ 3.83 trillion which means there is a deficit of $1.27 Trillion. Now if we look at the pattern of the spending once again, we find that mandatory spending accounted only for $2.166 Trillion. This amount is still less than the total revenues. So that means US is making unnecessary use of its discretionary spending which causing the high deficits. US spent $1.415 Trillion on Defense and other discretionary. This spending can be cut down if there is a political will to do that.