The thing a lot of people do not understand is the amount of the DoD
budget that is simply a jobs program. I just saw a show about the
C-17. (big military cargo jet). Congress is still pushing to build
more of them in spite of the fact that the Pentagon says they have
more than they need now. It becomes clear why when you find out the
plane has 600 vendors scattered across 47 states. That gets you a lot
of votes on an appropriation bill in the house.
Lawrence J. Peter (the man who discovered "The Peter Principle") once said:
"I have been studying governments, man and boy, for over forty years. I have
yet to discover whether we are being led by well-meaning fools or by really
intelligent people who are just jerking our chain."
I've been astounded how people who lived through that time believe it was
Reagan's tax cutting mania that brought the US billions in revenue.
It was the PC revolution that made American HW and SW the most sought after
product on the planet during that decade. Anyone who knew even a little
about PC's could get a job selling, installing, servicing or programming
them. The demand for PC's, SW, add-on hardware and programming was so great
it could be considered the second US industrial revolution and it had very
little to do with parasitical pols from either party, always willing to
claim credit for anything good that happened and point the finger elsewhere
when anything bad happened.
It was good old Yankee ingenuity, not voodoo "less equals more" economics
that caused the spectacular growth we saw in the 80's and 90's. Twisting
history to make it seem like tax cuts provided all that new revenue has
helped lead us to the mess we are in. Tax revenue shot up during those
very, very good years, and every cent of it was spent on projects that would
demand money even when the PC-revolution inspired income flagged.
Worse, still, all over the government there was a "spend it or lose it"
mentality that further encouraged the squandering of tax revenues. Since
giving away money in earmarks and pork barrel projects gets votes and
raising taxes does not, the idiocy continued well into the 21st century and
will likely continue unabated. Both sides got us into the mess and it will
take the cooperating of both sides to get us out. Instead, we're
backbiting, bickering and doing almost everything wrong we could do to
extract ourselves from this mess.
By the time 2012 rolls around, it will be the Republicans whose radical
changes will be rejected. People didn't vote for Republicans in the
midterms because they LIKE change. They voted *against* the changes Obama
stood for. In 2012 they'll vote against the Republicans, much like they did
after the notorious failure of the "Contract with America." As my J-prof
said so well "the pendulum swings."
Lean times have some value - they make us evaluate whether things like
giving movie companies huge tax breaks is really worth it in the long run.
A lot of states are coming to the conclusion that tax breaks don't do what
their pushers claim.
"An Associated Press survey found that from 2006 to 2008, states shelled out
$1.8 billion in tax breaks and other advantages to the entertainment
industry. The recession has officials in several states wondering if the
incentives are worth the lost revenue."
Whose pocket does that nearly $2B tax shortfall come out of? Jane and John
Q. Citizen. The highly skilled jobs almost always go to SAG card holders
and those folks are mostly found in Hollywood, as are the companies who make
the films. Pols, like starlets, are blinded to the real facts because they
think "we going to be in the MOVIES!"
Same with Clinton's surpluses. I have long called those
Gates-Greenspan surpluses. Gates as a surrogate for the great increases
in productivity (actually the basis for your discussion above) brought
about by computers and Greenspan for keeping rates so low for so long.
There was one great shining moment when the economy was so
breathtakingly overheated that the money was coming in faster than even
the combined work of BOTH parties could shove it out the door.
RR's revenue increases were largely brought about because the
stagflation of the 70s (guns AND butter policies during VN... sound
familiar??) was finally broken.
It is also at least as short sighted to suggest that NONE of the
advantages came from the tax cuts. Intesting little factoid. The Joint
Committee on Taxation scoring (Summary of HR 4242; The Economic Recovery
Act of 1981. Table 1 estimated revenue effects of HR 4242) showed
revenue effects of -$1,565 million (that is they way the put it and I
don't want to run the risk of screwing things up by changing it) in 81
cumulating in a negative $267,627 million in '86. Yet if you look at
what actually happened (Stat Abstract of the US) you find that the first
year's plunge was only about 75% of what thought and there were positive
increases each of the rest of the years. Even when you subtract the
negative effects from what happened, you find that the real world
increases were more than the models suggested the losses would be. So
reality worked differently from the models. Not a real big surprise.
AH but that wasn't ever going to happen. Both the CBO and OMB
models showed that there would be deficits as far as the eye could see
in the first year of the surplus and surpluses as far as the eye could
see after the surpluses had peaked (in 1999).
It is not whether you win or lose but where you place the blame.
I think Geo Wills was saying something similar. Both sides tend to
take their victories as mandates and then overplay their hand forgetting
that it wasn't (in this case) the Tea partiers that got them elected but
the moderate swing voters who can very easily swing back again.
Easy target. Nobody wants to do the math, they just want to
pontificate. For instance, I would submit that this is probably a good
thing. Movies use a lot of local people and spend a lot of money that
goes to sales taxes, income taxes, etc., that are only partly offset.
Movies also come and go with relatively little impact on infrastructures
(you don't have to build schools or roads to support them). So movies
are essentially a marginal cost.
The article did not indicate that there WAS an actual shortfall, as
far as I could tell. They took out the money, but never got around to
adding in supplies bought locally, locals hired, food and supplies
bought, etc. And, as I mentioned, it is all essentially marginal income.
DOn't know because I don't know if anyone actually got around to
"Even I realized that money was to politicians what the ecalyptus tree is to
koala bears: food, water, shelter and something to crap on."
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