A few questions about Obama and Next Year’s Presidential Election
by Mike Kimel
A few questions about Obama and Next Year’s Presidential Election
Assume that Michelle Bachmann wins the Republican nomination next year and Obama wins re-election. Given Obama’s governing style (i.e., fold early, fold often), in what way will the outcome of Obama’s final five years in office (i.e., next year plus the second term) differ from the outcome GW would produce were he President? And how would the outcome be different if Michelle Bachmann wins the Presidential election?
Assume that Mitt Romney wins the Republican nomination next year and Obama wins re-election. Given Obama’s governing style (i.e., fold early, fold often), in what way will the outcome of Obama’s final five years in office (i.e., next year plus the second term) differ from the outcome GW would produce were he President? And how would the outcome be different if Mitt Romney wins the Presidential election?
Assume that Mitt Romney of the year 2000 wins the Republican nomination next year and Obama wins re-election. Given Obama’s governing style (i.e., fold early, fold often), in what way will the outcome of Obama’s final five years in office (i.e., next year plus the second term) differ from the outcome GW would produce were he President? And how would the outcome be different if Mitt Romney of the year 2000 wins the Presidential election?
Why those alternatives? Hypotheticals?
If “O” wins a second term, this country’s economy is doomed. Whoever runs against him is meaningless.
The one thing that Obama’s administration has show is how bereft of success is liberal economic policies.
Since you believe in presidential economic metrics, is there any controlling party significance? Some might say there is. Similar policy attempts with similar length and depth results?
CoRev–The point of Mike’s post is that there is no material difference between this President’s fiscal policies and those of GWB. Republicans can control the legislative and Executive Branch’s policies just by saying no. In that case, it would be foolish to do anything except what they’re doing. After all, if the D’s can’t muster the moxie to resist them effectively, they get what they want without taking the heat.
Thus, the Dem’s would take the blame for everything while the R’s get to garner campaign contributions generated by the RW’s discontent. The bond guys will be happy one way or another as long as the country can still float a loan. So, the only people who have anything to lose are ordinary voters, esp. those who are likely to suffer further wage and salary erosion. Of all our problems, the latter seems to be of least concern for politicians in both parties.
The only thing a Dem president is for these days is Supreme Court nominations. That’s it. End of story. NancyO
We’ve been through this before. Measure the growth rate in real GDP per capita from the year before a President takes office (baseline) to his last year in office. Since 1929, the first year for which we have data, the rankings are:
1. FDR (even if you leave out WW2, even if you only count through 1938)
and so forth.
Now, perhaps you might have noticed something about this ordering? Also note… its not so simple as to say: “following a Dem results in a poor economy and following a Rep results in a good economy” since LBJ comes in second, but GHW Bush and Ford are somewhere near the bottom. Its also worth noting – the two Democrats that produced crummy economies so far (Truman and Obama) have both been guys who talked a big Democrat line and then essentially folded on just about every economic issue.
I think I’d prefer the kind of lack of success that results in, say, LBJ quality growth than anything else. But so far Obama has governed more like GW than like LBJ (or FDR, or JFK, or even Clinton) and he’s produced GW-like results. What a surprise.
Actually, there’s a bit more there. I suspect that the policies that get adopted by a guy whose M.O. is folding depends on what he is folding to. I suspect what we will see from Obama post-“it is now obvious who the Republican nominee will be” will be very different if the Republican nominee is Bachmann than if the Republican nominee is Romney. My guess is that if the Republican nominee is Bachmann,a second Obama term will resemble wahat Bachmann would have come up with. If the Republican is perceived as more centrist, Obama’s second term will more likely resemble those of a center-right Republican.
And yes, the Supreme Court nominates are it. But you can’t repeatedly signal that you will fold on everything and then successfully hold the line on something the other side wants to take away from you. If Bachmann is the Republican nominee, I think the next person Obama nominates to the Supreme Court will be someone that 30 years later will be praised by Republicans but not by Democrats.
Well Mike if I assume we have defaulted on our debt and another 30 million permanently lose their jobs (including military personnel who can no longer be paid), I’d say the Bachman presidency would provide the greatest circus entertainment value, the Obama presidency would provide the most bread–via community organizing of bakeries–and either Romney presidency would do a little of both by alternating each month. W would do neither but would defund tax collection operations, declare victory over the terror of market uncertaintites, and–with strong decider leadership and full bipartisan support–relocate the seat of government with all three branches moving to Wall Street.
Otherwise, I entirely agree with CoRev’s suggestion that the make-up of Congress will be more important after an Obama re-election scenario than which opponent Obama faces. I suspect a Bachman candidacy would be most harmful (compared to either Romney) to GOP congressional candidates in the general election, which would raise the odds that Speaker Pelosi returns and we’re back to early 2009 in some key ways.
Mike, I am not enthusiastic about this administration’s likely second term, no matter whom the President beats to continue in office. I have thought for a long time that this guy imagines himself to be neither a Dem nor a Repub. A new man in a new world of politics by agreement, never mind what you’re agreeing to. Neither fish nor fowl, he eschews the red meat needed to lead his party and sticks to the veggie plate. O just does what he wants to do and the R’s perhaps inadvertently give him cover. Maybe he’s not folding. Maybe he’s doing what he thinks is good for the people he knows and his contributors, whether we like it or not. Wish he weren’t so manipulative. This guy is hard to read and hard to trust. NancyO
Seems like the R’s gots to tell us now, we got to know…Will they stick or will they fold? NancyO
Ring-a-ding-ding! You’ve grabbed the brass ring. Having a Democrat in the Oval Office is good only for preventing a further rightward lurch of the Supreme Court. If a Republican were to win the 2012 election given the Justices who will likely need to step down, we could all expect a Supreme Court which would make Justice Taney proud, especially with the debt slavery the Court would allow. Does anyone know the current law on indentured servitude?
Actually, if the Dems can hold onto the Senate and the Dems could recapture the House, I think the best scenario would likely be Romney who at least is smarter than Dumbya. Bachmann would be a real disaster–worse than Obama- even if the Dems control Congress because she makes Dumbya look like an intellectual. My own sense is that Romney probably beats Obama while Bachmann probably loses. I could have this backwards because just as I do not see the liberal base turning out for Obama against Romney and think they will with their noses pinched tight to defeat Bachmann, it could be that Romney will get so little support from the teabaggers that Obama can beat him without the liberals. Bachmann of course would get close to a 100% turnout from the teabaggers and if the liberals do not hold their noses and vote Obama, she could prevail.My sense is that at the end of the day, the moneyed interests will not take a chance on a Bachmann presidency. I am sure they would take a chance on Romney. Romney strikes me as the kin of guy who will govern more toward the center–it works for the GOP but not for the Dems– so apart from Supreme Court nominations there will be little difference between the two. I do not think we can even imagine what Bachmann would do beyond it not being good.
The one thing CoRev’s comment shows is that he is unqualified to comment on economic poliyc. He has claims that one can judge liberal economic policies by the success of the Obama administration, clear evidence that he either doesn’t know anything about economic policy, hasn’t been paying attention to Obama’s policies, or doesn’t know anything about the root causes of the current economic situation. I have suggested “either” but there is the possibility that CoRev comes up short in understanding on all three points.
But never mind, because CoRev begins with his conclusion and works from there. The whole “the economy is doomed because of Obama” think is right out of the Cantor/McConnell/DeMint spin book – CoRev doing his masters’ bidding.
The question, as Kimel states it, begs the question. Kimel assigns Obama a governing style which presumes he will allow the GOP to dictate most of the agenda. Accept the terms of Kimel’s question, and the answer is fairly narrowly determined before the discussion begins.
To which I answer “ARRA, ACA”. Neither of these would have happned under Shrub. Yes, both ended up weakened through compromise with a GOP set on making the worst of anything that Obama tries, and that’s a shame. I understand that the popular coctail party thing to say these days is that Obama is too prone to trusting the other guy’s intentions. Even so, the begged question was – how would Obama’s outcomes differ from Shrub’s. The answer is ARRA and ACA, and those aren’t nothing.
Remember the last tim there was a presidential campaign in which “there’s no difference between the two” was a consequential idea? Nader said it and the Shrub presidency was the result. Given that history and the quality of the GOP presidential crop, I am baffled that this “makes no difference” idea can get any traction at all. Rethink this one.
While I see your point, I’d bet a Kagan,/Sotomayor vs a Scalia/Kennedy that there would be a difference between them.
regardless who wins we have a continuance of power by oligarchs. that’s what we had during bush and the first 3 years of obama and clinton and on and on.
Imagine the president as “ky” in prison. we, the poor people, are the fresh meat. the rich are the rape gangs. the president makes it more comfortable for those rape gangs to do their stuff on the fresh meat.
Too prone to trusting the other side’s intentions? Nope,kh. Has the same intentions as the other side, Yeah. NancyO
Your reply is too easy, too general, too dogmatic. One of the characteristics of intellect is the ability to discriminate. Refusal to see Obama in fine detail can lead one to see him as having “the same intentions” as the GOP, but it ignores a lot of detail.
Look at him at all closely, and he isn’t the same guy at all. The cocktail party argument about Obama’s negotiating style is at least as good an explanation of his behavior as the notion that he is the same in all but party affiliation as his Republican opponents.
You mean the establishment that has been running the place since 1776.
Which ever wins the war profiteers will persist to skim 3% of GDP too much.
Unwarranted influence too entrenched.
Today in Aviation Week: ““While defense and other war-related costs — adjusted for inflation — have experienced substantial growth of 74%, ($364 billion) in the ten years since 2001, these costs are clearly related to the cost of countering terrorism, defending the homeland, and supporting a larger veteran population,” Inouye says.
Later he says reducing the insane spending would introduce “peril”?????????????????
The Germans’ $40B a year must be something else.
$700B a year to counter the taliban and bin Ladin’s successor!!
The US will maintain the empire and the war profiteers……………
“ Kimel assigns Obama a governing style which presumes he will allow the GOP to dictate most of the agenda. “
Actually, I think it was Obama who assigned himself that style. It began even before he took office – he voted for the GW bailout package, and then built on it.
ARRA, ACA is not an exception. Remember, even GW had dipped his toe in the healthcare waters (remember the donut hole?). The problem of escalating costs continued to rise… a third GW term might well have gotten around to do doing more. And if it had, more would probably have resembled a certain Heritage Foundation blueprint, right? The Republicans are only upset because Obama went with it, but his approach has been straight from Heritage.
“Remember the last tim there was a presidential campaign in which “there’s no difference between the two” was a consequential idea?”
Yes. A bunch of people decided Gore = GW based on what? Nader’s word? But Gore had a record (as senator and VP) that looked nothing like GW’s record as governor. So it was an irrational belief and anyone who had that belief was irrational.
Now… consider the last two and a half years. Tax cuts in place, bail out the big boys and nobody else, Heritage Foundation policies used as blueprints, the usual mess on the War on Terror, the same policies on secrecy. The continuation is seamless enough that it resembles GW’s VP running for office and winning on his own, rather than the Presidency falling into the hands of a political opponent. Heck, there was more of a difference when LBJ took over from JFK then there is here.
Well, you have managed to avoid the point I made, and my assumption is that you are smart enough to have caught it. So here’s what I suggest….cut it out. Playing clever is dishonest and annoying.
Now, in case I’ve over-estimated, let me try again. YEAH, I KNOW THAT’S WHAT YOU THING OF HIM, BUT IT BEGS THE QUESTION TO INSERT YOUR ANSWER INTO THE QUESTION. (Can you hear me now?) If you want to ask a fair question, you don’t slide your opinion into the premise of the question. If you want to push-poll, then you’re doing it just right.
By the way, Geithner is thinking of quitting after the debt ceiling increase passes.
The post isn’t a poll. I’m not tabulating answers and then claiming the sum total of how people answered those questions mean anything.
The post is a group of questions specifically intended to make readers question their assumptions. And yes, I am nudging the reader in a certain direction. Call it my attempt to be Socratic.
You may not like my assumption, namely that Obama’s approach can be described as “fold early, fold often” but I’ve defended that position.
OK. So say I’m wrong on that point. Given that elections for President are a repeated game, is it worth diluting the Democrat brand on everything from economics to civil rights for a Supreme Court justice, what with the consequences that will have on future elections?
There’s a third possibility – that B Hoover Obama is not folding as much as he is ending up in positions that he agrees with. In other words, he is no kind of liberal or progressive, and never has been. He is – in the current political landscape – a centrist conservative.
But the landscape has shifted since Reagan. Centrist conservative now would have been far right wing then.
Obama is to the right of Clinton is to the right of Eisenhower.
Anyone who thinks BHO’s policies are liberal is either blinded by ideology or drowning in ignorance. On second thought, make that “or” an “and.”
He is clearly not the same as the Rethugs. But he is far to the right of what anyone who calls himself a Democrat ought to be.
BHO is right of center, the Rethugs are to the right of the right-side edge of any rational political landscape.
By which I mean bat-shit crazy, and often stupid as well: Bachman, Pauls the greater and lesser, Palin. The fact that any of these people can get even the slightest political traction is confirmation that democracy has failed.
My read of the main post boils down to these questions. If Obama is elected, how will his administration’s performance for the next five and half years compare to a hypothetical performance by the Bush Administration. If an opponent is elected, how will that individual’s administration perform in comparison to anticipated performance by the Obama Administration and a hypothetical performance by the Bush Administration.
I wouldn’t know how to answer the questions in a serious manner considering that I have not read enough detailed economic proposals from the current group of presidential challengers to make such a judgment.
What I do know is that the Obama Administration has projected economic assumptions and Federal Budget summary data through FY2021. You can access it here. CBO has provided a final analysis of the Obama Administration’s projections, which is available here. The question is whether I or anyone else agrees with the Obama Administration projections.
I would take a look at OMB historical data available here if I want to look back at the Bush Administration’s performance and pretend that they were still in power. For starters, I would be interested in understanding what drove the high levels of corporate Federal tax revenues identified for 2005-2008, two years of which had not been achieved since 1978 as a percentage of GDP. I would want to understand why there are no meaningful discussions about that issue. The Bush haters probably don’t want to explain the high growth of corporate tax revenue because it might undermine their position on eliminating the Bush tax cuts since continued by the Obama Administration. [Disclosure: I want to eliminate all Bush era tax cuts, but I can’t explain why corporate Federal tax revenues jumped up so high.]
I would review OECD statistics available here if I was interested in measuring performances of the U.S. during any president’s terms. Overlooking this economic data eliminates any serious consideration of U.S. economic performance relative to that of other nations. Instead, many rely on a handful of soundbites related to the global economy, some of which are right and some wrong.
What is clear to me is that the Obama Administration nor any opponent’s administration for 2013-2016 are likely to benefit from the relatively low unemployment rates observed during 2005-2007, and perhaps more broadly, any year during the two Bush administrations from 2001-2008. Granted, my position disputes one of the economic assumptions put forth by the Obama Administration, but I have no confidence that the Obama Administration (or CBO) has identified realistic economic assumptions for the near term future.
I do know that I am quite fed up with the ongoing political hatreds being displayed by representatives of both major political parties.
Making matters worse, Obama is the biggest bullshit artist to occupy the Oval Office during my lifetime.
I believe that the United States of America is in serious trouble on a number of fronts.
Can a Republican presidential candidate and subsequent administration perform better? I have no idea.
That’s my personal opinion.
Given Obama’s governing style (i.e., fold early, fold often),
R U kidding me? I agree with kharris – Obama rammed through the ACA and ARRA over near unanimous Republican opposition, and considerable public opposition, no folding there, not even the slightest compromise.
He is currently bombing Libya in defiance of Congress and the War Powers Act. No folding there, no regrets even.
But if you look at Obama closely, the “fine detail,” as kharris said, you find this: Obama didn’t come up with any of those policies. Congress did 100% of the woebegotten Stimulus and ACA, and Hillary and Stephanie Powers got us into Libya. Currently 0 sits on his hands doing nothing while the country careens towards a debt crisis. Well, nothing except speechify Congress that “Leaders lead.” This is a gross dereliction of duty.
So “fold early, fold often” is not the Obama governing style. I would describe it more as “lazy, inexperienced and indulgent” which is not good.
Well, one parting thought. Turns out that Geithner has publically quoted the 14th Amendment as meaning that the Congress cannot act in order to cast the full faith and credit of the US Treasury in doubt. Said so whilst displaying his copy of the Constitution at a Politico function this past May. And, even offered to read Section 4 of the 14th in support of his reading of it.
This suggests that the President is offering to make budget cuts knowing that the Repulicans’ threat of default is bogus because legally impossible? And, if so, how does that stack up as being distinctly different in basic fiscal policy from the R’s? Here’s the link. http://www.dailykos.com/story/2011/06/30/990235/-Geithner-Believes-in-the-14th-Amendment?via=recent
Nice to see you, JzB. NancyO
I believe you may be correct Nancy. If Obama has to break a law–either by borrowing above the debt limit or impounding funds that Congress ordered him to spend–I think the smart move is to ignore the debt limit. It’s the “safe” course because anything else might be a violation of the 14th Amendment, (which might interest the third branch of government, or civil laws (like contract law). Public opinion probably would be with him on this choice between two evils.
The validity of the U.S. national debt isn’t being challenged with the debt ceiling. Rather, it is focused on the growth of such U.S. Government debt.
There are ways that the U.S. Government can continue to pay its external and internal debt obligations on time or against revised terms of payment (which without mutual or multi party agreement would constitute a default).
Most people may not like the ways in which the U.S. Government could continue to pay its ongoing debt obligations, but it could be accomplished.
Geither’s debt validity reference from the U.S. Constitution didn’t cover the primary issues raised by the debt ceiling issue unless one wants to solely focus on default. Eliminate the default consideration and look again, noting that the legality of the debt ceiling still exists for the purpose of incurring additional debt as opposed to making changes in revenues and outlays of the General Fund.
The President must act through the Treasury to uphold the Constitution regarding the debt of the US. So, he’s gotta pay past debts. Congress does not have the legal power to disavow promises to creditors made by past Congresses. If they try, they are violating the Constitution and any laws they pass in pursuit of this goal are unconstitutional on their face. They are free to alter spending prospectively, but not to repudiate past debts.
If the President must order Treasury to print currency or borrow money to avoid violating the Constitution, I think he would be acting within the law. Now, the politics is another thing. But, boy, with a different President, the conversation would have taken a completely different tack from the git go. We wouldn’t be worrying about a bunch of playacting drama queens chewing the scenery and threatening bringing down the country to save it from debt. In fact, Obama probably understands this quite well. I always question the motives of any President who says, Don’t throw me in that briar patch, Brother Bear! I expect there is much more to this situation than meets the eye. Of all politicians, Presidents are the slipperiest. NancyO
The corporate tax thing… here at AB we’ve had several posts on that. I don’t remember the precise details now, but there was a big tax break on repatriated corporate income (I think the figure of 5% tax rates rings a bell). But that’s not a sustainable business model, any more than Argentina privatizing its state owned industries was because there’s only so much foreign income to be repatriated.
And no, I don’t think Obama’s economic assumptions are very realistic. Better than in the GW years, but that says nothing.
I’m not an Obama fan, by any stretch, but I don’t think he’s much of a bullshit artist relative to recent Presidents. Inept yes, but I can’t think of BS that rises to the level of “I am not a crook” or “I was out of the loop” when it came to providing weaponry to Iran or or “I never had sex with…” or “British intelligence has learned…” and then there are a whole lot of Reagan recollections or Johnson talking democracy and pushing the Brazilian military into overthrowing a civilian president or pulling a Tonkin or whatnot.
My take is a bit different. I guess he showed up in Washington a community organizer, believing it was best to help the downtrodden. But he bought into the supply side, er, theory, and actually got convinced that the way to help the poor is to help the rich first.
Sorry. If a Democrat “rams through” a Heritage Foundation proposal, its because the other side was pretty sure he’d have been willing to go with a Cato Foundation proposal instead if they only bleated a bit louder.
I agree that O is mostly letting Congress run the show. But that is his choice. If you read Presimetrics, you may recall the appendix entitled “Is it Congress?” If I say so myself, that is pretty damning evidence that even Presidents without control of Congress have tended to get their way on the key economic issues.
You’re well off the subject of the main post at this point, but let’s see if you follow what Peter Morici explained today in an email which has subsequently been published in an article available online.
The U.S. Government does have options available to avoid default. Here is an approach that is relatively painless in the short term:
No Default, No Shutdown Inevitable if Debt Ceiling Talks Fail
by Peter Morici
The United States does not have to default on its debt, and the social security and Medicare checks can go out even if Republicans and President Obama cannot strike a deal to raise the debt ceiling by August 2.
Even though the government cannot borrow additional money, it still has tax revenues equal to about 55 percent of expenses-$2.2 trillion against expenses equal to about $3.8 trillion for a $1.6 trillion deficit. With those tax revenues, Washington can fund interest on the national debt, social security, Medicaid, and crucial national defense responsibilities. With the interest on the debt honored, the government can sell new bonds to replace bonds that come due without piercing the statutory debt limit.
Interest, benefits to seniors and defense would absorb virtually all tax revenues. It would appear the other functions of government would have to shut down, but the Administration has other options.
Often overlooked, the Treasury can print money to pay its bills. Before you gasp that Washington would be flooding the world with greenbacks-it doesn’t have to be.
The Federal Reserve holds on its balance sheet about $2.6 trillion in securities, mostly Treasury bonds, which it could sell to absorb the money the Treasury prints to pay its bills. At $1.6 trillion a year, that could keep the government running past the next election.
Also, since 2007, government spending has jumped $1.1 trillion but only $200 billion was needed to cover inflation-the $900 billion additional was new programs and benefits and higher pay. That has increased federal spending’s share of GDP from 19.6 percent to more than 25 percent.
Temporarily, slicing that additional government spending by $450 billion, by executive order, would likely stand up in court as an emergency measure. Especially if President Obama and Secretary Boehner sat down and did a deal, alone and with no help from their partisan friends but if necessary.
It would be good politics for both sides-either the President is right and Americans would see how painful it is to cut government that much, or Republican would be able to point that we are better off.
The Treasury would have to print about $1.2 trillion a year in new money, and the Fed would sell an equal amount of securities from its balance sheet; however that maneuver would take us until a new Congress is seated and a reelected President Obama or his successor has a clear mandate.
Before you say this is kicking the can again, consider that in 2012, both the President and his opponent would have to table specific alternatives for slashing the deficit and restoring normal operations, and the winner would emerge with a mandate for his plan.
Right now, neither side is tabling credible plans. The president’s taxes on the rich and other schemes would only slash at best $150 billion annually from the $1.6 trillion deficit, and the Republicans about a similar amount in spending cuts they have managed to propose.
Neither side is talking about harnessing the rapidly rising prices the government pays for health care-both sides just talk about trimming benefits a bit or the pain of it.
The United States pays double, or more, than European governments for […]
Just stop the Defense Finance and Accounting System (DFAS) from writing checks. They can get away with it for us retirees and the soldiers, but…………
No kidding I was there (lead in to a sea story):
Once upon a time in a DoD component program office a youthful, highly military program manager decided he did not want to go on contract to buy s system he had no cause to believe was any thing but pork for the profits of a firm connected to the Reagan Adminstration. There was lots of that when we had to spend all those borrowed bucks.
This was a week or so before the end of the fiscal year and the plan was at the end of the month the money would “expire”, and poof there goes the waste, the money staying in the treasury.
Then a letter comes for member of congress in the district the company resided (or a political ally, if I recall) endorsed by some under secretary of defense for spending profligary reminding youthful program manager that the appropriations are law and failing to waste the money is a violation of law.
It was a weekend intense admin work to get the contract ratified to waste the money and no be inviolation of the law.
So, which is it the debt ceiling or violating appropriation law?
I would, knowing how congress works with the pentagon trough, suspend all check writing at the DFASes as soon as 2 Aug………………
If Obama wins our new wars will be for humanitarian reasons, if a republican wins our new wars will be for national security reasons. The economic policy … print baby print … will be the same either way. There will be slight differences in domestic spending on the order of a hundred billion dollars or so out of a budet of trillions giving the pundits something to argue about.
MG, agreed. The 14th Amendment is the basis of the Sec. of the Treasury and The Pres. of the Fed’s possible actions. My thoughts are directed at the meaning of Mr. Obama’s actions regarding future budget cuts which is an aspect of the President’s possible course of action now and after his reelection, should it occur. NancyO
Mike Kimel – “The corporate tax thing… here at AB we’ve had several posts on that. I don’t remember the precise details now, but there was a big tax break on repatriated corporate income (I think the figure of 5% tax rates rings a bell). But that’s not a sustainable business model, any more than Argentina privatizing its state owned industries was because there’s only so much foreign income to be repatriated.”
The reasons for the corporate Federal tax revenue growth for 2005-2008 have very little to do with the corporate tax holiday approved in 2004.
The American Jobs Creation Act of 2004 authorized the one-time tax holiday that encouraged U.S. corporations to repatriate their foreign earnings. The Internal Revenue Service outlined the results of the “one time deduction of 85 percent of the extraordinary dividends received from their controlled foreign corporations (CFCs)” here.
The IRS explained, “Some 843 corporations, a relatively small number of corporations given that roughly 9,700 corporations had CFCs [controlled foreign corporations] in 2004, took advantage of the deduction. But these corporations repatriated almost $362 billion. Of that, $312 billion qualified for the deduction, creating a total deduction of $265 billion. In comparison, $804 billion of end-of-year, accumulated, nontaxable earnings and profits were reported for all controlled foreign corporations of all U.S. corporations for Tax Year 2004, the last tax year for which this statistic is available. Most corporations, 86 percent, reported the deduction for Tax Year 2005, while 7.7 percent reported it for Tax Year 2004, and the remaining 6.8 percent reported it for Tax Year 2006.”
Corporate Federal tax revenue in 2003 was $131.778 billion. Corporate Federal revenue source grew to $189.371 billion in 2004, $278.282 billion in 2005, $353.915 billion in 2006, $370.243 billion in 2007, and $304.346 billion in 2008. The OMB data is located here and here.
The one time tax provision for repatriated corporate income impact on 2005 corporate Federal tax revenue was far less than 10% of the revenue volume growth from 2004; the Joint Committee on Taxation estimated that the tax holiday only provided an additional $2.8 billion of corporate Federal tax revenue in 2005.
The corporate tax holiday provided only a tiny portion of the corporate Federal tax revenue during 2006 and, by appearances, had nothing to do with corporate Federal tax revenue in 2007-2008 as measured against corporate Federal tax revenue in 2003-2004.
The answers exist elsewhere. I am not convinced that the Bush era tax cuts did not play a role, though other factors were involved.
Mike, saying this: “… he’s produced GW-like results.” Just shows a bias and weak analysis. Revenues, spending, employment, jobs, new business creation, new job creation, housing starts, etc, are all measures that could be compared. But, you choose to make blanket statements.
Oh, why can we not have those bad ole Bush years back?
From KH this: “Playing clever is dishonest and annoying. ” is hilarious. Seldom do we see anything but clever personal attacks. Need confirmation? Read the comment again.
Really nice find, MG. What’s amazing is that none of the usual suspects have commented.
I have proposed an alternative. Fix SS for the long term, a generation or even longer. It’s simple. Then use the, now infinitely growing but unneeded, SSTF as borrowing head space. It does two things, 1) adds trillions tot he borrowing head space, 2) does away with an out of control growing Trust Fund.
I see few unanticipated economic consequences to this approach. The only difference is political. Another demagogic area would be eliminated.
If the Bush tax cuts had an effect, one would presume they would have been first noticeable sometime between 2001 and 2003, which is when they occurred. Maybe 2004 if push comes to shove. And since they hadn’t been rescinded since, it just makes it very hard to understand why the effect would occur only from 2005-2007.
When you pine for the bad ole Bush years, I assume you mean pre-Dec 2007. Not, say, 2008, right? Or was that already an Obama year?
I like CoRev’s “housing starts.” Which of course had nothing to do with the current recession, not to mention deficit.
without knowing much about any of the candidates, i think you miss two points.
first, their handlers will make sure they appeal to the tea partiers enough to get their votes.
second, after elected, their handlers will make sure they do the right thing.
yep. that means both O and W are doing / did the right thing for their handlers.
actually i remember a candidate who ran on “there’s not a dime’s worth of difference between” the R’s and D’s. His name was George Wallace. And he didn’t win, but he taught the Republicans the “Southern Strategy” which has changed the country.
granted i am a fanatic on the subject, but my take on the Supremes is that they are ALL the same as far as the relation between the “establishment” and the people.
Differences on things like abortion are just cosmetic, the kind of distraction that helps make the good cop bad cop thing work so well for them.
Now, YOU may care about those differences, but THEY don’t.
MG that is an interesting article mostly for the one sentence “The Federal Reserve holds on its balance sheet about $2.6 trillion in securities, mostly Treasury bonds, which it could sell to absorb the money the Treasury prints to pay its bills.” I have not read elsewhere that the government has this piggy bank available and, if true, certainly there is no need to worry about default in the coming year-plus. Why have I not read this elsewhere? (I disagree with most of the author’s other points, like how to chop $1.6T to $1.2T per year, but that does not detract from his piggy bank concept.)
your plan is a tax on working people, taxing them in the name of Social Security in order to pay for the general government is dishonest.
Morici spoiled his analysis for me by assuming SS has anything to do with the deficit, and that in particular raising the retirement age was “the” answer to that.
the whole deficit / raising the debt limit hysteria is just theater. not that the R’s know they are play acting. the thing about politicians is that they are completely dumb about policy, all they know is how to get elected. and that does mean feeding the people what the people want to hear. and delivering the money interests what the money interests want.
oh, i failed to notice
now the Trust Fund which is going to go broke in 2036 is “out of control and growing.”
This is almost as funny as “The trust fund is filled with phony iou’s. And when it runs out of those phony iou’s in 2036, we’re all going to die!”
gives us an example of what’s wrong with political “thinking” in this country:
“fix SS for the long term” words that don’t mean anything but sound good.
here is a “fix” for SS for the long term: write a law such that whenever the Trustees report short term fiscal insolvency, the payroll tax will automatically be raised one tenth of one percent for each the worker and the employer. alternatively, whenever the Trust Fund Ratio rises over 300% of one year’s reserves, the tax will be cut by one tenth of one percent.
This would fix SS forever, until something else comes up, at which time congress could enact another fix. though it would be nice if we had an honest Congress that actually understood what SS is and what it does. And why adding an extra year to the retirement age is not a fair price to pay to “save” forty cents per week.
This fix would avoid an infinitely growing SSTF, and would end the yearly cries of we’re all going to die because the Trust Fund is going to run out of worthless iou’s. And of course it would do it without creating a way for Congress to kill SS while continuing to collect the SS “tax” and use the money to buy neat toys for the Pentagon, and bail out “free enterprise” when the market does what they say it does to dishonest or inefficient companies.
and of course does not add “borrowing head space”, which as far as i can tell means the CoRev thinks that “deficits don’t matter” except when they can be blamed on a Democrat.
you don’t seem to have much insight into your own nastiness. Mike is not begging the question, he is stating an opinon, one which he illustrates, but not one, i think, he claims to “prove.”
it pains me to say this because i agree with you about CoRev. except of course when he correctly points out that your playing clever is dishonest and annoying.
again. yes, intellect is related to the ability to make fine discriminations…. like between your fingers and your toes. But at some point your “fine discrimination” is my “off the subject irrelevant detail”
and that’s what all argument is about. some arguments being a little more careful than others to close on those facts and relations between facts that can be agreed about, or left as “not yet determined.”
it strikes me as bending logic a bit to go from “rams through” to “Congress did…”
So I’ll just say that in general I am not at all satisfied with O, but I keep hoping he’s only laying an elaborate trap. Certainly the R’s are out in the open now as insane.
Trouble with that, of course, is that the insane make up a huge voting block.
Dale, so after you fixed SS, what do you propose for the SSTF? It will grow annually to infinity due to its interest.
My solution solves that problem, plus it solves the problem of raising (or not) the debt ceiling.
Are you b eing sarcastic or do you not understand that “wars for humanitarian reasons” is an oxymoronic statement?
no it won’t. the “fix” raises the tax when the TF ratio threatens to fall to 100. Which is to say the Trust Fund is being used to pay for the “cash shortfall” in SS finances. Rather than grow to infinity as you suggest, it stabilizes at just over 100% of a year’s benefits… as designed.
your plan is no plan at all. you would just use SS taxes to pay for non SS programs and pretend that it wasn’t a debt.
i was pretty sure that Steve was merely describing the excuse each respective party would give for its wars of choice.
islsm no, since 1972.
Regarding the increase in corp tax revenue. The only way for corp tax revenue to go up is for corp profits to go up, right? Well, that’s exactly what was happening. During that time, the only growth in the US economy was in finance (mortgage refinances, CDS, etc.). It was in a bubble, after all, right? The rest of the economy was stagnating. The only way economic policy affected this is that because the rest of the economy was stagnating, the Fed had to keep interest rates low, which had the unintended consequence of funnelling ALL the “free” investment dollars into the housing bubble. Which by design or by coincidence, happens to have had all the profit front loaded.