Alright; I have decided to go ahead and give my prediction of the election. I am predicting that Barack Obama is going to be the next President of the United States of America. I came to this conclusion not because of the current polls-because those will change-but because of the economy.
Why is the economy such an important issue? Why is it more important than the war? Well, because money pays for things like war with tax dollars. We pay for war with $; we pay for food/shelter/clothing with $; we pay for healthcare/education/social security with $; we pay employees with $; etc.
McCain could have made an argument for why his economic policies would be better up until Monday. Monday ended everything for McCain.
So what happened on Monday? On Monday $2.2 Trillion - yes with a T - was pulled out of the market. This exodus was done by people with money-obviously. These are the same people that John McCain wants to give tax cuts to because they are the people who will invest in the economy. WELL , AS OF MONDAY, APPARENTLY NOT. Now, I'm not saying that when the economy is running smoothly that cutting taxes is a bad thing. If the rich are investing and we cut their taxes they will obviously only invest more; so I'm all for tax cuts then. But if the rich are pulling their money out; cutting their taxes will be detrimental to the economy. This is the time period when the government needs to be taking the rich's $$$ and investing it into the economy. Not necessarily redistributing the wealth without earning it, however. The government can just use this time to rebuild our infrastructure with the labor of people who are losing their jobs, and with the $$ of the rich who are pulling $$ out of the economy.
There are only a few ways that I think can be avoided and McCain stop this: 1) The Dow double in the next few weeks before the election. 2) McCain say that he changes his mind, and that he won't cut taxes and instead will raise taxes. 3) Some military conflict in the Mid-East or Asia occur. 4) A terrorist attack occur before the election.
Well, if I were working on the McCain campaign I'd start looking for work.
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8 comments:
"But if the rich are pulling their money out; cutting their taxes will be detrimental to the economy"
This makes no sense. No economist would agree. No logical person would agree. You have to show evidence (historical or through economic analysis supported by research) to show that this is true. Also, we still have 80% of the people invested in the stock market still.
First of all; 80%? Where does that number come from?
Secondly, The rich are currently pulling their $ out of the market = fact. The Bush tax cuts are currently in place = fact. No logical person would or could disagree with that because I'm just stating an observation of the current situation.
I realize that in good economic times that tax cuts are more economically beneficial than raising taxes, but that is a side-note because we are not currently growing economically.
Now an important difference that I didn't mention, however, is that I think that the tax cuts should be temporary short-term increases that would be phased out after the economy is back on the right track and investors start pouring in again; then I'd love to see a minimization of taxes.
The 80% is from the stock market dropping roughly 20%. That's what I mean there.
"I realize that in good economic times that tax cuts are more economically beneficial than raising taxes, but that is a side-note because we are not currently growing economically. "
Tax cuts are economically beneficial even during downturns. Raising them would do MORE harm to the economy. If tax hikes harm the economy during good times, that also means it make it worse during bad times.
Also, for things like cap gains and dividends, if the next administration says it will raise those taxes wouldn't more people pull out before the next President is sworn in? Do we really want to incentivize more investors out of the stock market?
OK. I get the 80% now. Your saying that there is still 80% of the value in the market. I thought that you meant 80% of the American people are still invested in the market. I would add, however, that we are down more like 40% from our 14k DOW high.
Are tax cuts economically beneficial during downturns? Who are we speaking of? People in general? The rich? The middle-class? The poor?
And remember, when your talking about free market principles don't forget that we don't live in a pure free market. So some of the arguments you are making are pointless. You are arguing that it is best to cut taxes, cut taxes, cut taxes, and on and on until there are no taxes. If we do that then eventually we will have no taxes at all; and that would be the ideal situation in a pure free market society. Unfortunately, in America we have to pay taxes; period; there is no debate on that. The question is what is the right amount or percentage. This amount changes as times change; sometimes it is better to tax more; sometimes it is better to tax less. There is no absolute rate that always works. I mean look at the Federal Reserve; they change rates, and rates don't go down to 0% too often.
An example of this is that during the Great Depression-when people were starving to death-it made more sense to tax more; whereas during the 80's it made more sense to tax less. Sometimes I feel as though you forget that. Would you actually argue that we should have cut taxes during the Great Depression? Would it have helped the economy? Is money more important than human life?
You're wrong. Let me explain.
It doesn't matter that we don't live a pure free market, lower taxes are better than higher taxes. I understand we are going to have taxes and I'm fine with that, but comparing it to the Fed. Reserve rate is comparing apples to oranges. A 0% Fed rate is NOTHING like a 0% tax rate.
It didn't make sense to tax people more during the depression. Why on Earth would it make sense to take more money from people who need it for food and necessities? Or even those that create jobs? If you take more of their money they have less money to hire workers do they not? Also, many (myself included) believe FDR's policies during the Depression pro-longed the Depression.
http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx?RelNum=5409
What you seem to forget is that the when you take money from people, it is less they have to spend, save, and create jobs with. Some might argue that the government creates jobs, but do so it would have to take them away from the private sector first. Follow this analogy to explain: The government could break the windows of all the businesses in the U.S. to create jobs. Why shouldn't it do this?
"It didn't make sense to tax people more during the depression. Why on Earth would it make sense to take more money from people who need it for food and necessities? Or even those that create jobs? If you take more of their money they have less money to hire workers do they not? Also, many (myself included) believe FDR's policies during the Depression pro-longed the Depression."
The increase in taxes was not for the 25% of unemployed people. It was for the top tax rate. And I realize that the federal reserve lending rate and the tax rate are not the same thing. My point is that they both change during different economic times.
So your saying that you agree with these guys from 1933:
"* Alarmed by Roosevelt's plan to redistribute wealth from the rich to the poor, a group of millionaire businessmen, led by the Du Pont and J.P. Morgan empires, plans to overthrow Roosevelt with a military coup and install a fascist government modelled after Mussolini's regime in Italy. The businessmen try to recruit General Smedley Butler, promising him an army of 500,000, unlimited financial backing and generous media spin control. The plot is foiled when Butler reports it to Congress."
Too bad they failed because if they succeeded we could have joined with the Italians and the guys they teamed up with in WWII; I'm forgetting who they were though.
And obviously if you take money from people they have less money to spend, create jobs, and save; because they will have less money. Your analogy is not what I'm arguing. I'm not saying to have a 100% tax rate because that would be communism, and that is what your analogy is referring too. But I'm also not saying that the rates can be 0%.
"It doesn't matter that we don't live a pure free market, lower taxes are better than higher taxes. I understand we are going to have taxes and I'm fine with that"
If this is the case that we don't live in a pure free market-which would be 0% tax rate-then the answer cannot always be lower taxes. Think about that dichotomy. If the answer is always lower taxes you head towards the 0% tax rate, therefore, the answer can also not always be to raise taxes-which I said. There is a middle ground, and sometimes you have to raise taxes-not always but sometimes.
Funny you should bring up fascism, because there wasn't much difference between Italian Fascism and FDR's New Dealism when it comes to economic policy. Those who wanted to overthrow the government wanted to do so because he wasn't fascist enough.
Mccain will win, because God votes republican, and God's vote equals to 50%+1 of all electoral votes.
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