Congressional Debate Over Extending the Payroll Tax Cut
http://thedianerehmshow.org/shows/2011-12-07/congressional-debate-over-extending-payroll-tax-cut
In a speech in Osawatomie, Kansas yesterday President Obama threw down a populist gaunlet: at issue Republican opposition to extending a payroll tax cut set to expire at the end of this year. The decision to extend the cut is, in the President’s words: “a make or break moment for the middle class”. Many Republicans support extending the cut, but they disagree with Democrats over how to pay for it. Senate Minority Leader Mitch McConnell has rejected the latest Democratic proposal suggesting a swift compromise on the issue is not likely: Join us to discuss political and economic stakes in the debate over extending payroll tax cut.
Guests
Isabel Sawhill
senior fellow, Economic Studies, The Brookings Institution.
Chris Edwards
director, Tax Policy Studies,
and editor,www.DownsizingGovernment.org
Cato Institute
Naftali Bendavid
national correspondent, The Wall Street Journal.
David Stockman
former Congressman from Michigan, R
budget director during the Reagan administration
Comments
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I have a friend, he retired 20 years ago because of health. He invests and receives a COLA with his Government service Pension every year and he also has a good Tri-care health coverage.
He thinks the same way you do.
I have met people in the Mortgage Broker industry when Sub-primes were in full bloom. He made 4% commission on Sub-primes and 60% qualified for fixed loans but he only got a 1% commission. When the loan was done, the loan was "thrown over the fence" and no accountability.
One fellow told me of "layers of mortgage agreements" with half pages, that allowed the broker to put in the income, from $3000 a year to $7000 a year.
I will agree that some baby boomers did not save, but you have to have money left over after ordinary expenses before you can save. The takeovers, merger and aquistions eradicated 100,000 defined benefit pensions in 20 years, my pension was cut in half with creative accounting.
Well, I could go on and on, but to say "These people were stupid, lazy, or irresponsible, is pretty cruel, Not true with the families I meet with, over a thousand in the last decade, trying to help them with finances.
When you fly in a helicopter at 40,000 feet and look down, focusing on the Financial mess, I know, from everything I have researched, the American Way of life has been attacked, quite aggressively, to drive our country into a third world country, Small Rich Class, Small Middle Class, and huge poverty. The definition by Barrons of the Middle Class is having discretionary income, how many of your clients, 18 to 55 have much money left over?
I have read many books, written recently, kind of a news junkie, and they all point to how the American People have been mugged by the Rich, Corporations, Banks, and Wall Street. The playing field has been tilted in their direction. It is not right and we have to wake up and take action before it is too late, like fostering a Revolution.
Kathleen wrote: Is it really true that the US has the highest business tax rates in the world? Hear this repeated all of the time. Compared to Which countries? I would think that Germany, France etc have high tax rates for companies.
Kathleen,
while the statutory top corporate tax rate in the US at 35% is one of the highest, the effective corporate tax rates (look at % of revenue) have dropped to historic lows, thanks to "creative accounting" firms, the govt/PrivateCorp revolving door (subsidies) and loopholes (offshore tax havens, etc).
Bank of America paid none in 09, Boeing paid none in 08-10, CitiBank paid none in '10, GE was even handed a $3.2B credit on top of $5.1B US profits.
Sadly, less "creative" and "affluent" companies don't have the same advantage, hence Obama's proposal to lower marginal rates while closing loopholes (the kind Eric Canter outright refused to close for the sake of doing so).
Mike123456789, your basic assessment is shared by many people and certainly those with any awareness.
"I have a friend, he retired 20 years ago because of health. He invests and receives a COLA with his Government service Pension every year and he also has a good Tri-care health coverage.
He thinks the same way you do."
I am not retired, Mike. I am still working, but, assuming the world doesn't end, I will retire with confidence in 7 to maybe as much as 10 years with no fear that I will run out of money. I lived through the same last three years that everyone did.
"I will agree that some baby boomers did not save"
Well, I'm not sure whom you're agreeing with, because that's not what I said. Not having saved is a different issue. People who did save, were nearing retirement, but put all their money in stocks when they were booming are the ones I'm talking about.
My point is not to brag on myself, or to say other people are lazy or stupid. My point is that education is the key. I wouldn't have known any better with respect to the risks if I hadn't learned about them.
As for assigning blame in the latter part of your post, I don't agree that you can pin it all on "the Rich, Corporations, Banks, and Wall Street". As I've been saying on this board over and over, they were doing what they do and (in most cases) what the law allowed. But the fault lies with the laws that Congress has created and the ones they have abolished (like Glass-Steagall for example). The repeal of GS allowed banks to take depositors' money and gamble it. Allowing risk to be passed from holder to holder (via package sale or insurance) was like playing hot potato. Whoever got stuck with the potato at the end was screwed. That's the fault of Congress and the laws in place at the time. I have solutions to those issues if you'd be interested in hearing them.
I have to laugh every time I refresh this page and see the photo at the top. From left to right:
Tweedle Dum, Tweedle Dumber, Frick, and Frack.
johnandere,
Want a REALLY good laugh.- say after a debate Have you seen all the republican presidential nominees standing side by side away from podiums. WOOHOO, that's a chuckle- There's only a couple that don't grant the appearance of being complete clowns.
David Stockman, a guest on your show today, defended the 1% by calling the FICA tax cut the wrong thing to do. He insisted that reducing the deficit should be the first priority of this Administration. And, that raising taxes is what the Administration should do. Stockman knows better. He knows that he's making a disingenuous and subversive argument for fiscal policies bound by the rules of a gold standard.
In case you need a refresher David here it is: If you live in America, for example, you have to pay American taxes to the IRS with American dollars. So demand for otherwise worthless bits of paper, is driven by the fact that all tax obligations have to be extinguished with that currency. You, then, immediately realize that the national government is the monopoly issuer of that currency.
That means that the national government can never be short of that currency; it can never run out of money. It doesn’t need you or I to lend it money or you and I to pay taxes to get more money. Sovereign governments with sovereignty over their currency are not constrained in their spending by a need to raise revenue.
Spending is the prior act in a fiat monetary system; taxing and borrowing are following acts. In effect, the government is only taxing what it has already spent, and it’s only borrowing back money that it has already spent. Once you start pursuing this logic, you realize that most of the propositions that are occupying the current deficit debate around the world are based upon false premises. With 90 million Americans in dire to barely manageable straights, government needs to spend now and make credit and debit entries later. The fraud of the deficit debate is that it benefits only the 1%.
These rentiers are perfectly happy earning rents from arbitraging interest rates and leveraging Federal loans, rather than earning profits resulting from the efficient use of under utilized factors of production.
PotomacOracle wrote:
"In case you need a refresher David here it is: If you live in America, for example, you have to pay American taxes to the IRS with American dollars. So demand for otherwise worthless bits of paper, is driven by the fact that all tax obligations have to be extinguished with that currency. You, then, immediately realize that the national government is the monopoly issuer of that currency.
That means that the national government can never be short of that currency; it can never run out of money. It doesn’t need you or I to lend it money or you and I to pay taxes to get more money. Sovereign governments with sovereignty over their currency are not constrained in their spending by a need to raise revenue."
PO, you are right. The FG can never run "short of currency". But currency can certainly run "short". For every dollar that's printed, every other dollar is worth less. That is the stealth inflation of poor monetary policy.
Read about the Weimar Republic in pre-war Germany.
"kathleen wrote:
Karen Ann great points. MSNBC ED keeps pointing this out also. Where are the jobs? Where were the alleged rich job creators duing the tax cut hoe down during the Bush administration.
WHERE ARE THOSE JOBS"
Kathleen:
Why don't you do your own research and see how we had middle 4% unemployment with Bush in 2006 instead of listening to that lame brain Sergent Schlutz.
Meangreen, there was in 2006 an unemployment rate of 4% and yet less jobs were created under W than any Prez since WW II. How do these 2 facts jive?
Well, for one, W was handed an economy with a low unemployment rate. For another, during those bubble years, EVERYBODY and their dog was spending. They were using their house’s equity to buy more stuff, and all those credit cards kept going up, and fixing up old house and selling them , and buying flat screen TV’s and keeping up with Joneses. WOOPEE!! Bush said we’re not going to fund our wars and if you want to fight terrorism- go out and buy Hummers. That’ll show ‘em. The point is that if everyone is spending off the charts, services & goods are required and economy does swell. But it WAS A BUBBLE. It wasn’t REAL prosperity. It was a mirage. It can’t be recreated.
Although certainly when economy was good would have been the time to address looming issues such as Social Security and Health care.
To be fair, W tried to address SS, he wanted us to be allowed to invest all our retirement savings in stock market before it crashed because he was so “business friendly”.
Obama does not have the artificial bubble credit economy to prop up his administration.
W administration left our economy in shambles (unless you’re a top couple %er).
W was unmitigated disaster.
IMO.
Brookings Institution, Cato Institute, Wall Street Journal, Ronald Reagan's budget director--is this really a debate??? Is this NPR or Fox? Eerie panel. Diane, try to find some economists that are not in some way working for the Koch Brothers.
John Doe wrote:
Brookings Institution, Cato Institute, Wall Street Journal, Ronald Reagan's budget director--is this really a debate??? Is this NPR or Fox? Eerie panel. Diane, try to find some economists that are not in some way working for the Koch Brothers
So John Doe, do you want an economist who works for George Soras, Puffington Post, Daily Kos,or Barrack Hussein Obama?
The government no longer really prints money in the amounts you think it does. 99.9% of our "money" is really credit created through fractional reserve practices. It's that process which devalues our dollar. While perceptions are very important, we need to also remember that during the Weimar period it was the burden of reparation payments that created inflation, devaluation, not spending into an economy with idle resources.