Tax Receipts Plummet as Americans ‘Go Galt’
On Good Friday, just ahead of Tea Party Wednesday, the Treasury Department delivered the latest news concerning Washington’s ongoing crucifixion of future generations’ financial well-being.
Straight from Uncle Sam’s March Monthly Treasury Statement, here is how the first six months of the federal government’s current fiscal year compare to last year:
If spending continues at the rate seen during this year’s first six months, the government will exceed last year’s outlays on July 6.
There’s little reason to believe the spending spree will slow down.
Even in supposedly routine areas, outlays have ballooned. Here is a short list of how some departments have been hemorrhaging dollars in comparison to last year:
- The Department of Agriculture is up $9.9 billion, or 18%.
- Defense (which, despite its importance, is in need of serious cost control) is up $23.5 billion, or 8%.
- Health and Human Services is up $40.6 billion, or 12%.
- Labor Department spending has more than doubled to $52.7 billion from $25.1 billion, largely reflecting its open-wallet approach towards bailing out state unemployment insurance funds.
- The Social Security Administration is up $24.4 billion, or close to 8%.
Then there are the new spending monsters on the block. The Troubled Asset Relief Program (TARP) has disbursed $293.5 billion out of the $700 billion Congress authorized in early October. Much of it was “given” to banks with a (figurative) gun pointed to CEOs’ heads. There is strong evidence that Treasury Secretary Tim Geithner and President Barack Obama are refusing TARP repayments from larger banks that want to get out from under the government’s current and imminent onerous terms. Does anyone want to bet against the remaining $400 billion-plus being forced out to either the willing or unwilling?
Remember Fannie Mae and Freddie Mac? Those were the government-sponsored enterprises Barney Frank, Maxine Waters, and other Democrats said were in ship shape not too long ago. Through March, Frank, Waters, et al. have “only” been wrong to the tune of almost $60 billion the Treasury has spent to shore up whatever remains of those two entities. This amount, by the way, roughly matches the worst estimates of the total losses from Enron, with one important difference: Investors and employees primarily ate Enron’s losses. Taxpayers are on the hook for Fan and Fred. Does anyone seriously think those two entities are done draining the Treasury?
Oh, and it’s going to get worse before it gets better (if it ever does). Not only has spending rocketed, but as you can see above, receipts have also fallen precipitously.
Just think: It was a bit less than a year ago at this time that we were celebrating the “supply-side stunner,” the fact that Uncle Sam’s April 2008 tax collections came in at an all-time one-month record of over $400 billion. Those collections not only included final payments of 2007 taxes due, but also first-quarter estimated tax payments for individuals, many of whom are small- and medium-sized business owners. As I wrote at the time, “The increase may not only reflect that entrepreneurs and the self-employed had pretty decent years in 2007, but that many of them are thinking, in the face of relentless media harping to the contrary, that 2008 will be at least as profitable.”
At that point, there was every reason to believe that the economy, which had gone through a tough fourth quarter of 2007, was back on track towards resuming decent growth. Indeed, the first two quarters of 2008 had positive GDP growth and the second quarter’s annualized 2.8% was far from tepid.
But then in mid to late June, along came the POR (Pelosi-Obama-Reid) economy. The Democratic triumvirate’s intent to starve the nation of energy, regardless of the consequences, and newly minted presidential nominee Barack Obama’s designs on punitively taxing 5% of the nation’s most productive in the name of redistributing money to everyone else, both became crystal clear. As a result, paraphrasing what I wrote at the time, businesses, investors, and entrepreneurs responded to the trio’s total lack of seriousness by battening down the hatches and preparing for the worst.
They haven’t stopped, which is why the POR economy is now the POR recession as normal people define it. It is also why tax collections have taken a dive.
March is supposed to be a big month for tax receipts from regular corporations whose years end in December. In March 2008 (go to Table 3 on page 2 at the link), $32.6 billion poured in. This year? I’m not kidding: $3.4 billion. For the fiscal year thus far, corporate income tax collections are down almost 57%.
Through March 31 of last year, according to the Daily Treasury Statement, “individual income and employment taxes not withheld,” which are largely payments made by the self-employed, partners, and those in S corporations whose income flows through to individual tax returns, are down about 13%, or almost $15 billion, from a year ago. These not-withheld taxes are what drove last April’s all-time collections record, which is definitely not going to repeat itself.
It’s clear that quite a few ordinarily industrious people “went Galt” months before the tea party movement even came into existence. As a result, fiscal 2009′s deficit could come in closer to $2 trillion than to the Obama administration’s estimate of $1.75 trillion, or even the Congressional Budget Office’s $1.85 trillion.
Pelosi, Obama, Reid, and their party created the conditions that led to this and are primarily responsible for how bad things are. After months of doing everything to tear down everyone’s confidence, they are the ones who are going to have to figure out how to restore it. If they can’t, it would seem that the tea partiers, a.k.a. the voters, will find others who can, as soon as they can.
I’m no fan of POR, but to blame the start of the economic crisis on them is absolutely absurd. There was a huge bubble in housing prices, obvious to anyone who paid attention. It had to burst at some point, and it did.
The drop in tax revenues is obviously a result of the resulting dramatic reduction in economic activity.
Shame to PJM for printing such nonsense!
Yep! So much for all of that tax moula that was going to pay for Zero’s spend-a-gasm.
People with small businesses [the back-bone of our country] are cutting back on everything including their productivity.
The next few years are going to be interesting [to say the least] and if what the moron-in-office has done thus far is any clue as to how the rest of his term is going to go…’scary’ might be a better word.
The ‘free lunch’ crowd are going to go hungry…REALLY HUNGRY when 0bama’s policies are enacted [especially the energy taxation]. Poor people will be hungrier and poorer than ever when their 0bama dollars are only worth a dime and the prices of all goods/foods/services becomes astronomical.
You voted for ‘change’ and that’s all you’ll get right in the END. Your ‘freebies’ will barely cover your butts. Idiots.
John Moore,
The housing bubble was created by reducing prudent lending to a joke, so risky borrowers could buy houses that eventually they were unable to pay for. This was Democratic Party legislation that can be blamed on every legislator that voted for it, because they voted for it not to help the poor, but to get votes from the poor. POR should also include F&D (Franks and Dodd, both of whom have made such valuable contributions to the destruction of the economy.
“John,”
To add an important detail to what “Howard” wrote you, it was
DEMOCRAT PRESIDENT BILL CLINTON
who signed the amended “Community Reinvestment Act” into law.
It was this law which, as “Howard” wrote, reduced “prudent lending to a joke.”
My income (and income tax I pay) has gone way down because the fed has slashed interest rates as part of the bailout effort. CD yields are 1/2 what they were last year.
POR didn’t start the recession but they sure made it deeper and longer. Nobody is clear what business taxes, regulations, and rules will be over the next few years. So, businesses have stopped expanding, stopped spending, and stopped hiring.
Contrary to what POR believe, it is businesses large and small that grow the economy, pay taxes and create real jobs. Government does not create wealth, it only destroys it.
What this makes clear is the stupidity of pushing through huge spending increases.
And yes, we can blame Obama for it.
Are you still glad that you voted for Obama?
Should be PoOR economy. Energy was a huge driver. Democrats in control of Fannie and Freddie and getting paid off by Wall Street. Worst is the clamp down on energy.
Energy is life. Cheap energy is prosperity.
PoOr is what we’ll all be by 2012.
I predicted that the more Obama spent the tighter people would hold onto to their money. This recession will last throughout his one term presidency.
Pretty scary. 200 trillion dollars a MONTH in the red. At this rate the dollar will become worthless in just a few years, even the chinese have started selling our bond rather than buying them.
As for taxes if the captial gains rate goes from 15% to 20% remember that 20% of nothing is still nothing! I personally will have to see a gain of $50,000 before I have to pay a dime.
The POR crowd has only one use for the private sector and that is to provide money for the government. Looks like that plan isn’t working out too good.
Tea party here I come
I will certainly be limiting my tax exposure with these goofballs in charge of the government. Fortunately, haha, they are making that pretty easy, as business has slowed down quite a bit.
I share jvon’s humor but fear it will prove to be gallows humor: tax rates will just be shifted down so each American can pay more of his or her “fair share,” damn the consequences. Then there’s always the magic of the printing press.
If it weren’t for the fact that there seems not a single country doomed by debt and/or demographics, I’d say dump the dollar (or keep it in an offshore tax haven account) but no other currency is better, long-term. The yen or euro? Shrinking populations, debt-to-GDP ratios (varies by EU state) often higher than that of the US. China? Not much better. Australia? Hmm. If the US and shrinking developed countries aren’t buying, can India and Brazil keep growing? I hope so.
8. Paul -Indiana: . . . “Are you still glad that you voted for Obama?”
Absolutely. Love him. Think he’s great.
So tell me, what are you protesting? Higher taxes? What higher taxes?
Government wasteful spending at work for the so-called greater good of all. President Obama is already Jimmy Carter, yet not even 100 days has passed. It’s going to be a long 4 years with Teleprompter Reader.
What higher taxes indeed!
There is no problem in glorious People’s Republic of Obamistan, comrades! Stop being counter-revolutionary already!
/Sarc. Of course.
Obama is great! All must love him!
/More Sarc. By the way, when’s he planning on sending more billions off to Gaza? Gotta support “Palestine”, ya know, even if American businesses are closing.
14. one of my own: These taxes:
http://www.realclearmarkets.com/articles/2009/03/obamas_higher_taxes_hit_workin.html
And it’s just the tip of the iceberg!
The Tea Party protests are not about taxes. They are a protest of profligate speending and expansion of Federal govt power. The Tea Party’s are a celebration of our Constitution, and our Founders principles, and a call on our lawmakers to respect these institutions and stop the downward slide to Socialism (started long ago I will add). It is time for Americans to wake up and see the big picture. We need to think long term. As it is now, our children and grandchildren will become serfs to the state just to pay back all the govt. debt we are accumulating. According to the CBO, the US has over $65 Trillion in committments. This is based on current figures, and does not include new programs such as nationalized healthcare and free college educations.
#14. I suspect you’ll love double digit inflation and higher costs for transportation which add to the cost of everything you will buy. Additionally, higher costs for energy, which also adds to the cost of purchased goods, will be another invisible, but real, tax. I suspect that you are too young to remember Carter’s contribution to American life, but it’s coming under Obambi.
So where were the tea parties over the past 8 years? And what sort of nonsense is the author basing his article on? I came here for a view that wasn’t slanted by the MSM, instead I find a view slanted by the New media… ARGH!!!
Unfortunately most of the Tea Party participants hoped in vain over the past 8 years that Bush would not continue to spend and institute many of the programs the Dems were asking for. He made the mistake of giving them what they wanted in order to remove “issues” from the Dem platform. Instead of being satisified the Left demanded more, and now with the current administration and congress there is no hope left for those who believe in the Constitution and traditional principles. This is why we are resorting to protests, hoping to get the attention of our elected representatives in govt.
so there are less turnips to squeeze so more squeezing of turnips required. what new taxes??? i’m waiting for the doorknob tax,the television tax. i know where they could get more taxes from, toilet paper taxes…….
Of course people are already going Galt. I know I won’t be investing a dime while POR is in power, and I have enough capital losses to carry me through this one-term. And, our income is variable as proportionate to effort. If it climbs too high, we’re laying everyone off and going fishing.
As I recall, when the dot comm bubble burst there was no structural issues; because the ten trillion dollar loss was in equities and the stock owners took the bath; it was their skin in the game. However, the current housing bubble’s three trillion dollar burst is a structural issue because the bond holders don’t want to take a bath after writing fantasy mortgages, and those zero down mortgage holders getting foreclosed on didn’t have any skin in the game, and the banks were leveraged 40 to 1, but we get to bail them all out. A pox on the and thine, force the bondholders to take stock and call it a day, issue tents and soup to the homeless, and offer former bankers and stock brokers enlistments in the U.S. Army; a little battlefield experience may improve their risk analysis skills. The military could use a lot of good people with MBA’s and good analytical skills; so as not to upset the Europeans, the military needs to do environmental and social impact studies before shooting pirates without due process.
It is absolutely amazing that the great intellectual, the strategic thinker in The White House did not manage to pick up a book of recent history and learn what a recession inevitably does to government revenues before he started pulling all those bundles of a trillion dollars out of his financial wizard’s sleeve.
Comfort yourselves with the thought that after 12 years of another “intellectual” running it, the UK economy is in a lot worse state.
You just can’t help the hackery, can you, Tom?
“Pelosi, Obama, Reid, and their party created the conditions that led to this and are primarily responsible for how bad things are.”
Hmmm…the collapse of global banking giants didn’t have a little bit more than the P-O-R Axis of Democrats?
Also, Tom, you write: “It’s clear that quite a few ordinarily industrious people “went Galt” months before the tea party movement even came into existence.”
But it’s not at all clear that’s the case.
First of all…not very many people have “gone Galt.” You haven’t; you’re still hacking away as always. Glenn Reynolds certainly hasn’t. In fact, he’s going to have a big day ahead of him today…
But you’re going to say that these few-to-nonexistent Galters are causing tax receipts to plummet????
I expect you to blame Pelosi-Reid-Obama, well, because you’re a hack and those three have name recognition that some of the TRUE culprits (guys like Joseph Cassano of AIG) don’t have. But to cite the chimeras in your own imagination???
A new low…even for you, Tom.
8. Paul -Indiana:
Are you still glad that you voted for Obama?
—————–
Hell yeah.
#27, thx for confirming that the column hit the bulls-eye. :–>
This is only partly true. The CRA and the behavior of Franny definitely had significant impact on the bubble. However, they were not the only cause. The securitization of mortgages led to a severe agency problem because the people selling the mortgages to borrowers no longer had a stake in the likelihood of the borrower paying it off. Furthermore, changing the rules to override state anti-gambling laws enabled the totally bogus Credit Default Swap industry, which is the most significant enabler of the whole thing. That law was passed under a Republican congress (sponsored by Graham) and signed by Clinton.
There is plenty of blame to go around, but laying it all on the Democrats, when Republicans controlled the congress the whole time, and the executive for a critical 8 years of the time is simply wrong.
For the record, I’m a conservative republican.
I just don’t like stupid spin – even for my side.
28. Pat J:
8. Paul -Indiana:
Are you still glad that you voted for Obama?
—————–
Hell yeah.
_____
How? Why?
Herb: It isn’t individuals going Gualt – it’s businesses. Why spend capital, hire people, or take risks when the administration is constantly changing the rules and upping taxes?
The fact is that the handful of politicians who actually believe in and support the Costitution of the United States are concentrated in the Republican party. They are a small and ineffectual minority and have been for decades.
Our political “leaders” are all agreed on one thing: they want government to expand. They only disagree on the details. Democrats are up front about this. Republicans are less candid but their actions over the years betray their true beliefs. At best they are Democrats with a 20% discount tag attached. Under Bush2 they offered no bargains at all.
Real fiscal conservatives have run for office. They almost always lose but occasionally one will be elected. When that happens they sooner or later conform to the overarching principle of Washington, D.C. which is to grow government in any and every circumstance.
The current crop of “leaders” is the logical result of decades of fiscal irresponsibility by both parties and a will to power that knows no bounds. Now that we are going to ensure that better than 50% of the electorate will pay no federal withholding at all (with many receiving payoffs called “rebates”) we can be assured that none of this will change. At least not voluntarily.
“29. Tom Blumer:
#27, thx for confirming that the column hit the bulls-eye. :–>”
As long as you’re making the libs mad…mission accomplished, right? The sign of a true hack…
“32. Old Soldier:
Herb: It isn’t individuals going Gualt – it’s businesses. Why spend capital, hire people, or take risks when the administration is constantly changing the rules and upping taxes?”
“Why spend capital, hire people, or take risks”
Here’s one good reason: PROFIT.
You act like profit isn’t incentive enough…
(PS…I don’t think a business can technically “Go Galt.” That opens a whole “collective versus individual” can of worms that the Randians can argue over.)
Going Galt means pulling yourself completely out of the system… not just scaling back. I doubt any of you schmucks actually have the Balls to “Go Galt”.
#34 “Here’s one good reason: PROFIT.”
And if taxes, rules and regs are jumping all over the place and things are unpredictable, it’s much harder to maximize profit and much riskier to do any capital outlays.
“You act like profit isn’t incentive enough…”
Depends. People who see a dimmer prospect for profit tend to get the idea that maybe this is the time to just go fishing or take a vacation and see what develops later. The owner of the company I currently work for “went Galt” in the early 90s after building up and selling off a successful company. He got back in the game a couple of years later and has now built up a second successful company. It would not surprise me at all to hear the announcement that he’s selling this one too now. Then new management will come in and a lot of people will likely get pink slips. What does he care? He’s already sitting on a pile and is doing this for fun and to help the community. If they make it too difficult and get in his way too much, eventually he’ll reach his limit.
“(PS…I don’t think a business can technically “Go Galt.” That opens a whole “collective versus individual” can of worms that the Randians can argue over.)”
Large corporations probably can’t. Companies run by one or a few people certainly can, and they’re the ones providing the majority of the jobs for others.
Appropos of nothing, I’m currently reading “Atlas Shrugged” for the first time, just to see what all the buzz is about. It’s a pretty good, if simplistic, story. What I’ve read so far (maybe 1/3 of the book) certainly gives me a hankering to just throw in the towel and live off a garden in a hovel for a few years.
Two thoughts:
1> Is the columnist claiming that people “going Galt” is contributing to a downturn in government reciepts? If so, is there any evidence for that? I ask because that seems like a massive stretch.
2> Blaming the CRA for the subprime bubble is factually wrong. The vast majority of subprime lending had absolutely nothing to do with the CRA. There was no one of consequence in the American political scene on either side of the aisle that spoke up against subprime lending until very, very late in the game. (Did you? Show us your posts from, say, 2005.) That is a sad and simple fact. The ownership ethic, with its key metric of success being percentage of home ownership (higher being better), was part of the established political ideology of this country. No one argued against it and many people argued for it.
You don’t like the Democrats? Fine. But c’mon: get your facts right.
I am expecting Hussein to declare Marshall law sometime between now and the 2012 election.
ACORN will sign up millions of illegal aliens to vote in 2010 and 2012.
Unfortunately the Freedomphone Hussein is forcing a race war on America. It will come. It is inevitable.
garhighway: the CRA is to the subprime bubble is that of a fuse to a stick of dynamite. That stick of dynamite was the Fed’s dropping of interest rates after 9/11; the blasting cap was the real estate market being by far the most profitable market when that cheap money flooded the capital markets. It didn’t have to be real estate; the previous bubble was in tech stocks, but that one had already burst.
That flood of easy credit would have created a bubble and exploded somewhere, in whatever sector happened to be the hottest at the time it hit. Real estate was already simmering, but that market is (normally) constrained by the finite supply of qualified buyers. Enter the CRA to short-circuit that constraint, and the stage was set for a huge, huge bubble and consequent misallocation of resources.
So yes, examining the rubble will show lots of private capital and securitization devices etc…. but to blame that while exonerating the CRA is like saying that there couldn’t have been any fuses involved in a demolition because they only have enough energy to go fszzzzz… and all we can find in the ruins are traces of dynamite anyhow.
john moore wrote:
“Furthermore, changing the rules to override state anti-gambling laws enabled the totally bogus Credit Default Swap industry, which is the most significant enabler of the whole thing That law was passed under a Republican congress (sponsored by Graham) and signed by Clinton).”
Gee whiz, you forgot something- the House sponsor was Jim Leach, the highest ranking Repub to endorse Obama, spoke at the Dem convention and the O man has sent him as a representative of his to several financial gatherings.
Seems that Obama doesnt agree that the Gramm-Leach was a major factor in the downturn.
As a former mortgage banker who was forced under regulatory blackmail to make loans to unqualified but ‘preferred’ applicants (main villain- Andrew Cuomo), I can personally attest that was the overriding problem. Use your common sense John, if these loans had never been made, they never could have been sold and defaulted on.
Duh.
As an anecdotal evidence, I sold my mortgage business in 2003, and started a totally different type of business in FL. Which I closed and laid off 7 people in January not cuz it wasn’t turnng a profit but cuz I didn’t feel like dealing with the headaches to come. I am John Galt.
Dear Number 14,
Maybe you can explain how b.o. is going to pay for the trillion plus stimulus.
Is he going lower taxes? Keep them the same? Print more money? He and pelosi and crew are in charge. What do you say will happen? I am curious as to where they will get the money.
I think that is what people are protesting. They know the money will have to come from somewhere.
He makes Bush look fiscally responsible. I believe the republicans were voted out for their excessive spending. B.O. is spending like a drunken sailor. B.O. and fellow democrats are out of control.
MzGabby
It’s millionaires such as Rush Limbaugh, who are continuing to create income for themselves, who are perpetuating the current government. I challenge Rush Limbaugh to put his money where his mouth is and refuse payment for his services as long as Barack Obama is the President.
He doesn’t need new income. He’s already a multi-millionaire. By creating new income for himself, he is the one who is financing the destruction of our country.
50% of Americans pay no income tax. If we can get the other 50% to not have income that can be taxed (by refusing to create income for themselves for a short period of time), then we can get Congress’ attention.
It is rich millionaires like Rush who have the power to change what is going on.
Why should we work harder and give up more? I went to the Tea party today and noticed that nearly everyone there was a major taxpayer. Tax revenues depend upon “willing” taxpayers, and if a high percentage of people simply fudged their numbers 20-25%, then that would have the same effect as going “Galt”. What I heard was that folks consider this Government to be hypocritical on the subject of taxes. More than one pointed out that the current administration is corrupt on the subject of taxes. It gave me a sick feeling ony stomach to realize that these are the seeds of a quiet rebellion against current fiscal policy. Does anyone expect that we will pay this enormous debt? There is no way that we can. So, how does Argentina sound like now, bitches?
A recent survey showed that 48% like socialism. Boy, we sure have raised a group of check getters! Sincerly angry, A CHECK WRITER aka a taxpayer.
Here is an example of “going Galt”. My husband and his partner have worked long arduous hours to build their business over the last ten years. This downturn is the first time they’ve encountered contraction in their business and now they are wondering if it is worth working the over the next year for no reward other than limping the business along. They are entertaining taking some of the savings, closing the doors for the year and traveling. That would mean no income to tax (the money sitting in accounts has already been taxed as profit) and no jobs for the remaining 5 employees for the rest of the year.
Zanne,
The “check getters” as you call them, are the heroes.
They are helping to bankrupt Obama. You are helping to fund him.
It’s people like you – the wage earners – who are funding the Obama government with your taxes. Stop and think. It’s YOU who is making Obama possible.
Zanne,
I challenge you to STOP FUNDING OBAMA.
Stop earning income that can be taxed. Instead, start getting a government check.
You wage earners are perpetuating and making possible the very government that is Socializing you. Please, stop earning money and paying taxes on those earnings. That is what is allowing Obama to socialize. He can’t redistribute what you don’t give him to start with.
Selling my house this summer (market is decent here), then I will be debt free. I will no longer make a large income and be a wage slave for Obama. The wife and I are retiring early. We have a house in the country that is F+C. Atlas is shrugging, get ready for it.
I’ve had some time to think about what I saw and heard at the tea party in Tyler, Tx. The Gov of O has a real problem with the actual taxpayers here in Texas. Most felt that Geitner et al are in no way qualified to collect or spend taxes. Basic problem of hypocrisy, you see. These older folks are the salt of the earth, and have made their minds up that they shouldn’t be paying so many taxes, and Government spending is insane. One fellow told me that he’s not going to pay nearly as many taxes anymore, and that was that. This guy has paid his taxes all his life, but, since the basic rules have changed, he’s not going to go along anymore.
I’ve been thinking about what I heard while I was at the tea party in Tyler, Tx. Everyone there expected that we were under video surveillance.
I’m a real talkative sort, and I spoke to quite a few people. Obama is counting on these folks to pay their taxes, but I think the social contract of trust has been violated. You see, these folks see his administration as a bunch of tax cheats. No getting around that one, and no amount of deflection is going to change their minds. Being a history buff, listening to some of these conversations was a trip back in time. Civil insurrection doesn’t rise up suddenly, and the Gov of O knows that. I hope that enough people go “Galt”, or become more creative in their tax payments. Why should the taxpayer play by the rules when the Administration of O doesn’t? Basic human nature hates hypocrisy, and the O is losing the very ones that are paying the lions share of the taxes. Who likes being played for a fool? This country is being changed into a second rate country like Argentina, and it’s a scary thing. What bothers me about what I heard today is no one expects the Democrats to put their interest first.
Another example of “going Galt”,and in its entirety. In late 2006 I sold my beach house at its peak and paid cash for a new, but a more modest home in a another state with a much lower cost of living. I have all the luxurys of life with little of the expense. My living expenses are one fifth what they were twenty years ago. Until my retirement benefits start, (which is years away) I will live a more reserved life.
I will not contribute one dime to Obama’s socialist agenda. This is the way I plan to live my life.
,,,,The securitization of mortgages led to a severe agency problem because the people selling the mortgages to borrowers no longer had a stake in the likelihood of the borrower paying it off,,,,,
The reason the banks invented securitization of mortgages is because the government made them loan to people they knew wouldn’t pay. Think of it as government half-baked hot potato. So here you allude to a result not a cause.
….It’s millionaires such as Rush Limbaugh, who are continuing to create income for themselves, who are perpetuating the current government…..
Poor economic illiterate… Must be a slow night in the coffee shop. I’ll have a mocha latte please.
swift boater wrote:
It is undeniable that banks were blackmailed into lending to unqualified but “preferred” applicants. However, as repulsive as the practice is, it doesn’t explain the size of the mess.
A large percentage of the sub-prime and liar loan market is made up of non-preferred people. Nobody forced the banks to loan to them, but loan they did, in huge quantities.
It may be argued that CRA and the practices of Franny triggered the creativity in the secondary loan market that enabled all of this lousy lending, but that assumes folks wouldn’t have come up with it first.
The fundamental problem was an unending supply of credit with a perception of zero risk on that credit due to CDO bundling, improper ratings by the ratings agencies (who need to be tarred and feathered) and the insurance against that risk by CDS sellers. Without the CDS’s and the bad rating agency behavior, the money would not have been available to cause the mess. Furthermore, without the creation of complex derivatives, the toxic assets which cannot be valued could not have been created.
So your experience with the blackmail simply illustrates one of the threads feeding into the problem.
As for my not mentioning the Democratic sponsor of the bill, it was irrelevant to my point that the blame should be spread around.
As I said, I’m a conservative republican. I don’t make these points for political reasons, but because oversimplifying the situation in order to put all the blame on the other side is something I’d rather leave to the left.
Been drafting people to go shopping with me on weekends in Indiana, away from Crook County IL 10.5% sales tax.
Starve the machine.
Herb, we cut back our business and laid off workers because Obama was elected. We knew what was coming and his insane action in running up more debt than the entire history of the Republic in just 60 frickin’ days has proved us right in our decision. We have also decided not to purchase and renovate the building we are in because of the idiot in the Whitehouse. My partner and I have scaled back our efforts and I personally have made the decision to not invest in a country run by a Marxist. I think a lot of the money sitting on the sidelines is there in protest as well as in fear of Obama and his tyrannical proclivities towards “solving” every problem through the use of more and more government force. Any small business person you talk to will tell some version of this same story. We will not be bailed out. We are not too big to fail. We can’t cook our books and keep operating. We can’t take money by force like the government. Our hard work, honesty and thrift makes us the fatted cows that everyone else intends to feast upon. I do not think you will find the meal to your liking though. It will only be stringier for all your efforts.
No one will invest in the stock market because no one knows what the rules and regulations will be from one day to the next. The government has announced its intentions of picking which industries shall be permitted to survive and which shall not. On top of destroying productivity the amount of debt we have committed to is so crippling that the only way out will be to repudiate it or to inflate the currency. The latter is the plan because then it gives the government an excuse to impose wage and price controls. We have been down this road before with Ford and Nixon and Carter. It will work equally well this time. It is the Marxist playbook and unless you get a Reagan who stands athwart the tide of history it always ends in multi-generational disaster.
I would just like to add to the discussion of the mortgage backed securities that they were a perfectly rational play given the way the government set things up. The government put the full force and faith of the federal treasury behind these bad loans… thus making a liability an asset. It was reasonable for these securities to be traded based upon that promise. In effect they made it possible to create an asset out of whole cloth.
Imagine if you will that the government came to a casino you were in and promised to pay for all your losses while you got to keep the winnings. What would any rational person do? You would bet the house with impunity. If you get behind and the government hasn’t bought your losses in a timely enough fashion then you can sell them at a discount to people outside the casino in return for money to keep playing. That is what mortgage backed securities were. Chits at the government craps table. None of this of course has anything to do with a free market. Such a situation cannot exist in a free market. It is completely artificial and absurd. But it is what happens when the government guarantees a loan based on political reasons rather than economic ones and it was utterly predictable. As big a spendthrift as George Bush was he warned the congress 18 different times what was about to happen during the course of his administration.
Now for the final blow, just remember that the people who set all of this up are the same ones running things now and tell me you would do anything other than sit this round out? Barney Frank is even probably still sleeping with the people he should be regulating as he has done in the past. The heads of Fannie and Freddie who were given their positions as political rewards are prominent in the new administration and Obama is committed to bringing the same incentive structure to health care and the energy industry as we just witnessed in the mortgage fiasco.
And still, there are people ignorant enough to claim that they are happy they voted for the new Chauncey Gardiner that occupies the White House.
I refuse to believe anyone is that stupid… although I am always open to being proved wrong.
My wife & I made about $15k less in 08 than 07, and I’m trying to decide if I feel bad about that or not, considering what I didn’t have to hand over to IRS today.
Government Wall Street financial firms does not create wealth, it only destroys it.
Apr 15, 2009 – 4:39 am
re: Robin #45 – Tell them to go ahead. If their business is important, someone else will fill the void – supply/demand and all that.
For those still glad they voted for Obama, three words: get a job.
I’m not Going Galt. I’m Going Geithner. What they can’t find, they can’t tax.
“get a job”
Got one. I Make over $100K.
Eat Me.
Jackasses, all of you.
I realize that the plural of anecdote is not data; but I do personally know of 4 small businesses here in my county whose owners looked at the country on November 5, looked at the probable future under Obama and a totally Democrat-controlled Congress [and our Democrat Governor and Democrat-controlled legislature], and decided to close their businesses down before January 1. These were businesses which were not in financial trouble before. It cost about 2 dozen jobs. And I am pretty sure that the proceeds of the liquidation of the businesses are sheltered from confiscation by the Federales. Take it for what you will.
Subotai Bahadur
Herb: Businesses don’t need to go Gault – they just go offshore. They go to Ireland where the corporate tax rate is 15%. My employer bought a Swedish company where the corporate taxes are far lower than the U.S. We’ll make our profit, just not here.
You guys must be joking. No wonder Pajama media did not go anywhere because of articles like this. First Obama was not there last year and he is in office for only 100 days. Second, when people dont have jobs what do you expect them to do. Pay tax for the money they did not earn!!!! I dont even know where to begin. Going galt yea right!!!
Got one. I Make over $100K
Oh, my, I had no idea McDonald’s paid burger flippers so well.
We went from over $100k salary and bonuses to $0 last year. Le Car, hope you choke on a big fat “Zero” soon.
I have been planning on this market for years, so it was not a surprise. I paid off and sold my house in Houston a while back at the top of the market for a huge profit. I don’t think the “boys” who bought it were “Qualified” but they were Hispanic and at least one of them had a job. Money in the bank for us.
Almost all of our Stocks got sold, and I invested in Gold when it was cheap. Look at GLD, the ETF if you are interested. It will preserve the value of what you have set back if indeed the dollar becomes monopoly money.
I went through the layoffs in 1993 and had to wait until my BD in 1994 to get my retirement from CONOCO. At 50 there were no jobs then.
And now, my wife is finding the same even with a Masters Degree. This is a really bad job market.
The outplacement firm that she went through has hired her to help with their client load which is increasing. It is a growth industry, sadly.
Next month I pick up my first SS check, so Le Car, you better keep earning all 100k for me to share with you.
We built a small place out in the country a few years back. We have 16+ AC of jungle with our house out of sight. No door to doors, no nosy neighbors,no bother, no thiefs, but still have the riot gun by the front door just in case.
Time to feed the Raccoons I guess.
Politicians like big govt. and high taxes to pay for them. If big govt. is so good, why not just expand the govt.: cut the unemployment rate to zero by employing the unemployed to push papers in the govt., pay them with greenish papers freshly churned out every night, raise their taxes to 90% of their incomes to pay for the cost? Brilliant, no?
Ratatosk (#35) claimed, “Going Galt means pulling yourself completely out of the system… not just scaling back.”
I disagree. John Galt himself scaled back to holding an unskilled laborer’s job (track wiper). Going Galt means depriving the looters of some or all of the productive benefits of ones use of ones own mind.
What I consider most significant about all the talk of “going Galt” is not the hesitant way most folks are going about it but that there are significant numbers of productive Americans who have begun to speak of such a thing at all. Never before has this happened in U.S. history. The willingness to bear up under the predations of pirates, hijackers, and other looters has diminished. I believe this is a permanent attitude change among those in America’s earning and producing classes. Whatever Obama does, there will be a next time. Watch for it.
>First Obama was not there last year and he is in office for only 100 days
Firstly, Pelosi and Reid have been their for a while driving up spending. As for Obama,
believe it or not, but people do actually look ahead. Look at where the stock market went when Obama was a certainty for winning the election. Look where the markets went when Obama won the election. On Nov 4th 2008, the dow closed at 9625, it has never been that high since.
Who was talking about increasing capital gains taxes by 10%, what do you think people will do? Sell their assets before the end of the year. Congress doubled down on this by saying they were going to scrap 401Ks, what would that do to the market? Send it down, so people sold off in the markets before they got to the tax year that Obama raises the rates.
Obama spends a fortune we don’t have so people downscale their businesses, not as a direct result of the current economic environment, but as an indicator of where it is going. Business survive by anticipating the future and the rising unemployment means things aren’t looking rosy.
As for going Galt, I went Galt by not taking consulting work on the side, on top of my salary that $15K would be taxed at around 40% that the government won’t be making. Sure, someone else might get the work, but they will probably be in a lower tax bracket.
Without a doubt one of the dumbest and most ridiculous posts I have read. And I’ve read a lot.
Mind boggling. Is it the purpose of posts like this to keep the stupid to keep visiting your site? Or is it the financiers of PJ media have so much to gain by keeping uneducated American’s voting against their own best interests? Or are you trying to go out of business?
You repulse me.
IC: “Brilliant No?”
Uh, well, no. (I assume you were not being serious.)
The numbers in the receipt column should be lowered to show the real numbers:
lowered by subtracting the monies siphoned out of Social Security to pay for present outlays.
According to the 2008 Financial Report of the United States Government (U.S. Treasury Report),
“Total present value of future expenditures in excess of future revenue” in 2008 was:
$42.7 Trillion
Gee, maybe the U.S. Government should “Go Galt”…so lets hear the lefties blame $42.7 Trillion in spending on George Bush.
YEAH!! I’m a pro football player who makes $20,000,000 a year and i think i’m going to retire because with this socialist in power, it’s just not worth it to me to make all that money.
I find it amazing that 85% of the posters in here are all in the top 5% of income earners in this country.
By the way, you mention tax receipts. Look at the record. Between 1962 and 2000, in 38 years, tax revenues increased from one year to the next 36 times. They decreased twice in 38 years. Then Bush and his fiscal policies come along. Tax revenues decreased 3 of his first 7 years, and likely decreased in his 8th year too, when all is said and done. That’s 4 out of 8 years they’ll have decreased under Bush, when they decreased only twice in the 38 years before Bush. Looks like people “went Galt” long long long before Barack Obama came along.
@jharp I would assume you lost a ton…
Haha…
Global recession? What global recession?
It all the fault of the guy who’s been in office 3 months.
Love it.
Wait, this isn’t a satire site?
Doh! I’m gonna go teabag my mom. Er, I mean with my mom. Er, I mean. I hate fascists!
Ring: “As for going Galt, I went Galt by not taking consulting work on the side, on top of my salary that $15K would be taxed at around 40% that the government won’t be making. Sure, someone else might get the work, but they will probably be in a lower tax bracket.”
Right. You deprived yourself of more income because you’d pay less than an additional 4% in marginal taxes on that amount.
To the barricades!
Happy to take your business, btw. Marketshare always shifts in a recession. Lots of little pieces turn into companies I can sell on the bounce back. Yummy.
71. Dave: Of course I’m serious. I think like a politician. Vote for me. I’ll take your campaign contributions, and earmark taxpayers’ money to you to make sure the campaign contributions keep coming and I return to office to earmark more taxpayers’ money … Of course I’ll never acknowledge on tape that the suitcase of Ben Franklins that you handed over to my shady brother-in-law was a bribe. I will write laws to protect myself from being sued by whoever wanted to sue me for whatever I’ve done to enrich myself and my buddies. If we are caught, you will be sent to the big house, I’ll donate your contributions to a favorite charity in my name. I can also loan myself campaign money and charge myself usurious interest rate, then I can request you to contribute to the fund to “retire” my campaign debts. “Retire” means to pay myself back as slowly as possible so the interest can keep on coming. I’ll let the loan last longer than my 30 years friend-of-Angelou mortgage. The law says I can’t use campaign contributions for personal use. But the interest of my loan is personal. My brilliancy is blinding.
“…quite a few ordinarily industrious people “went Galt” months before the tea party movement even came into existence”
Did they “Galt” or just lost their jobs?
I know a person who is working in shipping. He is “lucky” to still have a job. He gets calls from Switzerland at 3 o’clock in the morning, and somewhere around the globe 24 hrs a day. He is working 3 shifts, same salary. 2 less workers to pay Uncle Sam.
To the posters here.
I cannot believe the wingnut idiocy.
OBAMA JUST CUT TAXES FOR 95% OF AMERICANS.
Good grief. What planet are you guys on?
The person who wrote this asked the right question. We have embarked on the same populist politics of envy and destruction which reduced Argentina to a chronic economic basket case.
Demonstrating that the left is even wackier than the writer of this blog article.
The innumeracy of jharp is amazing. If the big zero cut taxes for 95%, who does he think is going to pay for the government? Furthermore, it’s pretty tough to cut taxes for the almost half of the country that pays no taxes.
74. jharp:
Are you saying that 95% of Americans PAY TAXES you MUTHF***ing idiot?
WTF planet are you on, dipsh*t?
Your government is taking the tax dollars you are paying, and laundering it through AIG to send billion-dollar checks to foreign bankers. It’s is not sustainable.
Going Galt is not easy, but you can make a contribution in small, unexpected ways:
1) Defer your income – If you are already very well off, and you can afford to have your employer defer your income to a future year, DEFER. Work for free now and pay no tax while they are in office, with the promise that you’ll get income down the road. Then, make it clear to the government that you will continue to defer your income until these billions are reclaimed.
2) Have your wife (or you) re-engage your children: Most spouses work for very little money by the time you pay for the child care expenses, plus the taxes on the second income, plus the additional taxes you pay on the first income because the second income pushes you into a higher tax bracket. RUN THE NUMBERS – you’ll be surprised how very little your second wage-earner is actually making while someone else raises your kids. QUIT THE SECOND JOB. Forgo that income. Defy Obama. Take back the tax dollars on that income and instead, put it to your children’s future by raising them yourselves.
3) Stop spending! Unnecessary Spending = unnecessary sales taxes. Most of the products you are buying are made in China, so every dollar you spend on such items is shipped out of our country. Stop doing that. The side benefit is that you deprive badly run bloated state governments of sales tax revenue.
4) Keep some cash at home! It’s just a good idea to have a few thousand dollars at home anyway for emergencies. Get a fire safe for several hundred dollars and put away a few thousand dollars. Obama and Bernanke are printing money hand over fist using inflation to make your present dollars worth less. We can fight them back by taking some cash back out of circulation and not putting it in the banks. Plus, what they can’t find, they can’t tax and they can’t redistribute.
5) Work for cash, if you can. Tim Geithner had it right: Cash incom (like his reimbursements from his employer) are frequently not taxed. Keep that cash at home, spend it on everyday expenses, like our Treasury Secretary did for years and years and years. It’s how he became a millionaire. He knows the ins and outs. Follow his lead.
Going Galt doesn’t mean quitting your job and putting your family in jeopardy. It means depriving the government of your services in every way possible that you can without putting your family in jeopardy, while at the same time being very vocal about why you’re doing it. You have to deprive the government of your taxes, and then vote them out at the same time. VOTE ALL OF THEM OUT. Republicans and Democrats alike. They’re all in it together anyway.
Signed,
John
jharp, you need to look at Obama’s actions, not just his words. Even if personal income taxes are “cut for 95% of Americans” (by a whole $13 per person — whee!), that loss of government revenue will be more than offset by increased business taxes, capital gains taxes, “sin” taxes such as on cigarettes (that one hurts poor people more than rich, BTW). Don’t be fooled by the “shell game”!
And in the end, we all still have the problem that in order to pay for the stimulus package, we’ll have to go into many times more debt than we’ve ever had as a nation. That will eventually lead to inflation, which hurts everyone but, again, hurts poor people more than rich.
You may not remember the 18% inflation we had in the Carter years, but I do. It was not fun for working-class people, or anyone else except authors of books on how to survive inflation.
74. jharp: I’m on planet Earth. I have risen to the top 5% of the income bracket without knowing it. Mayhaps most of the people are unemployed, no incomes, no taxes; or have their incomes cut: incomes cut, taxes cut. The rest of us who still hold our jobs paying the same salaries have floated to the top 5% and do not deserve a tax cut.
Do you really believe that?
Obama’s in the process of devaluing the dollar via inflation. Everyone is going to pay more, for everything. Your ‘official’ income is going to increase, too (altho you won’t actually be any wealthier). Welcome to the wonderful world of bracket creep (google it).
It’s gonna be the 1970s all over again. Ugh.
might I suggest that everyone threatening to go Galt either shit or get off the pot, you’re going to make us randians look bad if you keep on talking about depriving society of your irreplaceable worth but never pull the metaphorical trigger.
Frankly I’d go Galt but I just love my plasma TV too bloody much. I’ll raise an objectivist, creative glass to you as society crumbles in your absence.
I read lots of complaints and no prescription for what we will do, if we can VOTE ALL of them out.
In 2008, the Federals passed 60,000 NEW LAWS. This year they’re on schedule to pass 90,000 NEW laws. These new FED laws on top of hundreds of thousands of LAWS already on the books. Each State has tens of thousands more.
The Fed tax code is over 60,000 pages. Each State has thousands of pages more.
What does the “unwinding” look like? Do we just send these thieves home temporarily, so they can get re-elected in the future?
Mary in LA:
jharp, you need to look at Obama’s actions, not just his words. Even if personal income taxes are “cut for 95% of Americans” (by a whole $13 per person — whee!), that loss of government revenue will be more than offset by increased business taxes, capital gains taxes, “sin” taxes such as on cigarettes (that one hurts poor people more than rich, BTW). Don’t be fooled by the “shell game”!
——-
LOL. Boy, don’t cut taxes and we have a rebellion. Cut taxes and we come up with whines as to why that’s not good either.
So what the hell is your point, Mary?
Galt? Well, we are about to find out soon. Data on 2008 tax receipts should be available shortly. My guess is that the situation won’t be pretty.
Well I can report that for the first time in my 55 years of adult, wage earning, life I paid NO federal or state taxes. None. And the way it looks right now it will be NONE for 2009. So I guess that the Zero has reduced my tax burden. If he keeps it up I will send him all my bills so he can pay them for me.
We have already socialized ourselves into unsustainable. Remember the guy who killed the goose that laid the golden eggs? Well time for term limits – vote the spenders out.
So much ignorance here, so much intellectual dishonesty, so much twisted logic. The premise of the original article is absurd (unless you believe the ~650K newly unemployed each month have “gone Galt”) and the comments are just ridiculous. I mean, really… you’re still blaming the CRA for this mess? Really? Please, for God’s sake… educate yourselves. An opposition party of fools is not helpful to the cause.
I am speechless.
Simo Wrote: “An opposition party of fools is not helpful to the cause.”
We’re not an opposition party. Republicans are just as bad as Democrats. It was George W. Bush who wrote the first $350 billion bailout check.
We’re not deferring our income to deprive Democrats of money. We’re doing it to deprive GOVERNMENT of the taxes. We’re not quitting our second jobs to punish Democrats. This is a non-partisan movement. We want to punish Democrats AND Republicans, politicians of all stripes who have joined together (Stowe-Collins-Spector) to spend our nation into oblivion, all the while ushering in a new era of Socialism.
Defer Your Income if You Can.
Quit Spending and sending dollars to China.
Quit That Second Job and raise your own kids.
Work the cash economy like Geithner does.
Deprive them ALL of your taxes.
Go Galt.
I’m tired of hearing how Obama inherited the bad economy — he helped cause it. A year ago when Obama and Hillary were viciously debating who was going to raise taxes the highest, I concluded that doubling the capital gains tax would cause the stock market to tank because everyone would be selling out to avoid the higher tax rate. I dumped all my stock investments and parked my assets in money markets, CDs, and Treasuries. I know several people who sold out just like I did because of Obama was likely to win, and they wanted to protect their investments. I make decisions based on what I expect to happen in the future, not what happened last month. I still haven’t bought back in because Obama’s going to drag the market even lower once the Bush tax cuts expire next year. I plan to “go Galt” then — who’s Obama kidding? “Tax the wealthy”??? The feds tax income, not wealth (except for the insane double taxation death tax). I’ve lived modestly and socked away the maximum in my retirement accounts. I can stop earning a taxable income from which the state and federal governments grab nearly 40%, and I can live comfortably while POR scramble to figure out why half the population pays no tax and the other half earns no income to tax.
“So what the hell is your point, Mary?”
Cut spending?
Nicely said Bob!
Half the people pay no tax to Obama. They’re the heros. The other half – the rich – are quickly figuring out that there’s no incentive to earn an income. Earning an income enables Obama to tax that income to support his Socialist movement.
The easiest way to defeat these Socialists is to bankrupt them by refusing to earn income. Or even better by deferring it until they are no longer in power.
Work = income = taxes = Obama funding the change to Socialism.
STOP the merry go round. I’m getting off.
Good thing you guys are into Rand and not Kafka, otherwise you’d all be crawling around pretending to be insects now.
It makes me laugh to hear the middle management sect talk about going Galt.
bob —
They’re bound to try to tax accumulated wealth sooner or later when the house of cards collapses, as it inevitably must. Teddy Kennedy couldn’t care less, ’cause he’ll be dead before it happens.
To those of you who’re “intellectual” economists –
I’m not. I too own a small business, and hundreds of thousands of us have already “Gone Galt”, me included. We’re not in this for the intellectual exercise; this is practical, real-world experience. For the first time in the 15-year history of the company, we’re getting a chunk back from the Treasury post 4/15 rather than having to write a final-resolution check. This is the result of conscious decisions we made and implemented in the last quarter of 2008, including significantly reducing our salaries.
See, small-business people, y’know, those of us who provide 75% of the private sector jobs in this country, become very conservative and risk-averse in an atmosphere of regulatory uncertainty. When it became clear that our next president was going to be an individual with a resume so thin you could read through it, whose executive experience consisted entirely of p!$$ing away $150 million worth of other peoples’ money to absolutely no visible result, and whose economic matriculation occurred at Saul Alinsky’s knee, and with no prostect for meaningful legislative resistance to executive policy initiatives, we had a pretty good idea of what was coming, regardless of the current state of the economy, and acted accordingly. Lest this sound like partisan sniping, we also hammered Dubya for his failure to curb spending and poleaxed the Congress in 2006 for years of fecklessness in carrying out “The Contract With America”.
We’ve gone largely cash-and-barter in our private lives as well; we live in rural Kansas and can fairly easily do so.
We are John Galt.
And not necessarily due to, nor to the exlusion of, idealogical motives.
‘Berg
Unbelievable.
I am just floored by the wingnut stupidity. Taxes are lower now than under Reagan for God’s sake.
And it looks like another 650,000 of your fellow American’s went Galt this month.
I’m sure those 650,000 who lost their jobs need nothing but a tax cut.
Readerer: If you’re going Galt then you might as well quit your first job, too.
It’s disingenuous beyond belief — disgusting, actually — to attribute to Galt the tragic wave of job losses that have been occurring. The people I know who’ve lost their jobs in the past six months aren’t voluntarily dropping out of the work force to support someone’s childish idea of an anti-tax tantrum, and as they scramble to find new jobs I think they’d be horrified to know their loss is being co-opted as such.
“Taxes are lower now than under Reagan for God’s sake.”
jharp … nice try, but we’re not morons.
What you fail to include for is that the Socialists don’t much care about how much tax they confiscate. Tax receipts are lower because we’ve gone Galt and are not paying them anymore. But the Socialists just keep right on spending more and more by borrowing the money they spend, without a care if it ever gets paid back.
Was the deficit $3 trillion under Reagan’s leadership? No, it wasn’t, but under Obama, Socialism and bank account takeovers will occur whether tax receipts are collected or not. They have no intention of paying any of it back anyway.
Obama has figured out that he can promise tax cuts, because he really doesn’t care whether taxes are collected at all. He’s going to spend the money anyway regardless of whether taxes are collected. So why not promise tax cuts?
Their goal is to destroy America. Best way to do that is to bankrupt it, they feel.
“It’s disingenuous beyond belief — disgusting, actually — to attribute to Galt the tragic wave of job losses that have been occurring.”
That, is what disingenuous disgusting people do.
Oh, and they are unbelievably stupid too.
Seriously, wingnuts. Take a good think about your idiocy. Maybe talk to God about. I’m sure he isn’t happy with you.
101. readerer:
“jharp … nice try, but we’re not morons.”
“Their goal is to destroy America.”
Maybe you’re right. Imbeciles is probably more accurate.
You honestly can’t possible believe the utter nonsense you post. Or if you do, please see a mental health professional for your sake and ours.
jharp,
How do you explain the AIG payouts to foreign bankers?
Billions of our tax dollars are being funneled through AIG to millionaire foreign bankers. Your government … Obama and your Treasury department … is undertaking these payments.
Why do you think I’d continue paying into a system that takes my tax dollars and gives it to millionaire German and Swiss bankers?
Not going to do it, bub.
Yeah, Jesus would be disgusted with these reactionary right-wingers who only protest when money is involved. When it comes to protesting the loss of human lives, they stay home and fondle their rifles.
Top income tax rate under Reagan was 28%. That is less than the current top income tax rate of 36%.
Obama said that he would cut taxes for 95% of Americans. That does not mean that he did or will. In fact, his record of failing to do what he says means that it is almost certain that he will not.
Moving beyond that, people pay more than just income tax. They pay all of the taxes placed on business, too, by way of higher prices. They pay all of the taxes placed on fuels, on electricity, on CO2 emissions, on whatever you want to come up with. Regular folks buying bread pay all of those taxes.
Obama and his supporters are being dishonest.
Can one of you leftie real estate geniuses please explain to me how the combination of 1) forcing banks to make bad loans and 2) guaranteeing that Freddie and Fannie would buy loans of any level of stench had no significant role in the rise of the housing bubble?
Because that seems to be what you are arguing.
jharp,
How do you explain the AIG payouts to foreign bankers?
Simply put. AIG insured the worthless securities those foreign bankers bought from us.
The payouts were to keep the entire world banking system from collapsing.
And it is absolutely sickening.
And tell me again whose watch this happened on?
jharp, just calling people morons, imbeciles and nonsense speakers is not a compelling arguement. You’re not even trying to see another’s POV. Do you really think I want to work half the entire year for free? That’s half slavery. Are you pro-slavery? Your messiah would be so ashamed.
109. Karin:
“jharp, just calling people morons, imbeciles and nonsense speakers is not a compelling arguement.”
That’s why I always make sure to cite the stupidity and not just name call.
“You’re not even trying to see another’s POV.”
Sure I am. But when another’s point of view is “Their goal is to destroy America” or “Tax Receipts Plummet as Americans ‘Go Galt’” I intend to call them out on it. They are stupid remarks made by stupid people.
“Do you really think I want to work half the entire year for free? That’s half slavery.”
You don’t work for free, idiot. Your taxes pay for police, fire, military, roads, bridges,airports, air traffic controllers, the SEC, the CDC, and many other government functions that directly or indirectly benefit you.
“Are you pro-slavery?”
And another ignorant comment by an ignorant person.
“14. one of my own:
So tell me, what are you protesting? Higher taxes? What higher taxes?”
Um, ok; I thought this was clear. The Government takes in 20% of the GDP every year for the past 50 (regardless of tax rates). The GDP is between 12 and 13 trillion; so the Government received 2.6 trillion in income.
The Government has been spending around 3.2 trillion; and this is being ramped up to 4 trillion plus per year.
Add on another 9-10 trillion in bailouts, “loans”, and other costs from the “stimulus”.
So, Income 2.6 trillion; debt load 12 trillion, annual spending 4 trillion.
At what point do you think we’ll have to pay for this? Never? Sure we’ll just print 1.5 trillion extra dollars every year. The inflation will be 10-20% per year… that or someone has to get another 1 trillion dollars per year.
You can take 100% of the income from the top 5% and not get enough… so pardon me if I mistrust that only the top 5% will get hit.
Either people lower will get hit, or inflation will skyrocket (hurting everyone).
Clear enough?
Oh, and
“89. Frankie:
LOL. Boy, don’t cut taxes and we have a rebellion. Cut taxes and we come up with whines as to why that’s not good either.
So what the hell is your point, Mary?”
Maybe, just as a thought… we could um, cut spending? Oh sorry, I forgot the Government rule… No spending cuts at any time for any reason, unless perhaps when they’re offset by spending increases at least 150% of the “cut”.
Is there a reason spending can never ever go down? Besides buying votes to stay in power of course.
I read “Atlas Shrugged” a couple of years ago and saw thru Obama right away. Now when I’m offered extra work at my well paying job, I think “Why Bother? Obama will just take it”. I also realize that when BHO realizes that there’s no money coming in, he’ll just raise taxes and create new ” fees, fines, carbon taxes , etc…” to try to cover it. We’ll soon see the lazy welfare types threatened with losing their handouts become more radical and violent- orchestrated by ACORN most likely just as in the book. Going Gault is by far the best way to deal with these Marxist idiots. Even if it’s just cutting down on work hours or whatever.
You’re an idiot.
I’m having a difficult time imagining a political essay in the history of man that even approaches the mind-boggling stupidity of what I just wasted 60 seconds of my life reading. The only thing more horrifying than the sheer inanity of this article is the litany of similarly moronic individuals lining up to praise it. The American right is no longer a sinking ship. It’s resting peacefully at the bottom of the ocean.
I have personally been going Galt since early last year. I got tired of holding up this economy for all these looters for all these years. Enough is enough. So when I got my pink slip, I just said fine, you looters that destroyed my job with your carbon taxes can try to do it on your own. Not working out so well for the looters so far. Looters=loosers. I’m not lifting a finger until this Christian nation returns to it’s own “roots” and quits treating the whitehouse like the set of same.
My wife and I made $267,000 in taxable income last year – from our jobs and our small business. We voted for Obama, think he’s mostly doing exactly what we want, and consider writing our annual check to the IRS as an act of patriotism. (Not quite as patriotic as my own enlistment and three tours of duty in Vietnam, but it still felt good.) Nearly everyone at a Teabagger Party yesterday got a tax cut from Obama’s plan, but we didn’t, and we think that’s okay.
The Rob’s of the world are content to name-call, thinking it will do any good. Rob, stop reading and get back to work for Obama paying my taxes for me while I go Galt.
Wow. Wow oh wow oh wow. Don’t quit your day job Blumer. Wow.
An idiot talking to idiots. “Democratic legislation … so risky borrowers could buy houses that eventually they were unable to pay for… to get votes from the poor.” So the Republicans held Congress for 12 years and the White House for 8, but they couldn’t do anything about this (non-existant) problem?
This sort of stuff is why the GOP is increasingly being viewed as having gone off it’s head. It will be picked up and parrotted across the blogosphere by far right conservatives as if it were holy writ. I’m a Republican apostate, voted virtually that way all my life until 2004 and still cling to the basic precepts but this increasing barminess is never going to bring me or many of my acquaintances back. It’s the total denial of any sort of reality, not very different from those first world war generals who couldn’t look beyond the end of their noses, or our own experience in Vietnam. Once you start denying reality you’re doomed.
And “Atlas Shrugged”? Cheez. You mock Scientologists for basing a religion on a fiction writer, but you’re willing to base your financial (and political) philosophy on one.
Tom, I just want to tell you that I had nothing to do with John Cole calling your essay the dumbest thing ever. Yes, I am your biggest detractor, but seriously…
You have no one to blame this on but yourself, bud.
114. Rob:
“I’m having a difficult time imagining a political essay in the history of man that even approaches the mind-boggling stupidity of what I just… read”
Quite true and well put.
“The only thing more horrifying than the sheer inanity of this article is the litany of similarly moronic individuals lining up to praise it.”
This is just the beginning. Remember this was written while the dimmest bulbs, the teabaggers, were out for the day.
I’m sure when the teabaggers commence to posting that they can top the stupidity of this article and the comments.
The stupid, it burns.
Anyone who thinks the housing bubble and subsequent recession were caused by Bill Clinton or the Democrats doesn’t have the slightest idea what they’re talking about. For starters, the banks covered under the Community Reinvestment Act account for less than a third of subprime mortgages. Same for Fannie and Freddie. The vast vast majority of risky loans were made by institutions that fell outside these regulations. The bubble and crash was a combination of ballooning credit, unscrupulous lenders, often stupid consumers, greedsters on Wall Street who thought they were invincible and created all kinds of securities that were essentially black holes, accounting rules that encouraged banks to create insane derivatives to get around reporting requirements and a government that couldn’t be bothered to ask if what was obviously an unsustainable boom might need a bit cooling down.
Here’s the thing about global recessions. They’re very complicated. Anyone who thinks the whole thing can be boiled down to Barney Frank or George Bush is not being honest, or just isn’t very smart. And anyone who thinks that an epic financial crisis is the result of people going Gault is nothing short of a moron. You may now start mindlessly attacking me.
I appreciate that this is “complicated” and that I you think I’m a “moron” etc., but at the risk of being rude, I’ll ask again:
Can one of you leftie real estate geniuses please explain to me how the combination of 1) forcing banks to make bad loans and 2) guaranteeing that Freddie and Fannie would buy loans of any level of stench had no significant role in the rise of the housing bubble?
Because that seems to be what you are arguing.
As a bonus, related question, can any of you explain why any bank would make very risky loans if they were not guaranteed that some other entity would take the loans off their hands, no matter how risky the loans were?
Oh, and + jillion to 111. Gekkobear.
These most recent tea parties were HELD on tax day. They were not exclusively, or even mainly, tax protest parties.
Tea parties have been happening for a couple of months now, though many of you may not have noted it.
They are protests against government waste and expanded government intrusion into those areas of life previously understood to be reserved to the States and the People.
To the extent that they are tax protests, they are protests against the unavoidable tax increases that must occur if we are ever to pay for all the garbage that the government is demanding.
readerer:
Half the people pay no tax to Obama. They’re the heros. The other half – the rich – are quickly figuring out that there’s no incentive to earn an income. Earning an income enables Obama to tax that income to support his Socialist movement.
—–
Man, this is some seriously contorted logic. Find me one, just one person, making $75,000/yr who would turn down an opportunity to make $350,000/yr simply because he’ll be paying too much in taxes. Just one. And for that matter, find me one, just one person, making $350,000/yr who would turn down an opportunity to make $500,000/yr simply because he’ll be paying an extra $7500 on that $150,000 increase – starting 3 years from now! Good grief already. Your arguments are absolutely absurd.
“Man, this is some seriously contorted logic.”
Only if you don’t future-pace to what the tax levels WILL be after the DOUS (Deficit of Unprecedented Size) sinks its teeth into you.
Your inherent assumption that taxes on that additional $275K or $200K won’t be increasing to outrageous levels is juvenile. To say nothing of how virtually no one gets paid that much more without a comparable increase in their workload. Put those two together and the case for Going Galt becomes dead simple obvious.
Please note, fellow Galters, that these critics are almost certainly much more dependent on your productivity than their own, through the State’s redistribution of your income.
That’s why they’re squealing so hard and so angrily. They find the prospect of being denied their unfair share of your wealth terribly, terribly threatening, and so they’re going to continue to try to intimidate you with their little tantrums and insults and blatant lies.
They won’t actually get out there and work for their daily bread unless and until they’re cornered like rats by a collapsing economy that leaves them no other choices.
I am dumbfounded by the ignorance. Utterly stunned.
By all means go for Galters. Please do. Actually I beg you to do it.
Unemployment is approaching 10% and it sounds like a novel solution.
This is not the year of the ”Going Galt.”
That won’t come until next year.
This years’ drop in gov’t receipts is mostly a result of the drop in capital gains tax and dividends tax collected.
Give it a year, then we’ll see who really is John Galt.
Acksiom:
“Man, this is some seriously contorted logic.”
Only if you don’t future-pace to what the tax levels WILL be after the DOUS (Deficit of Unprecedented Size) sinks its teeth into you.
———–
Oh brother. This country has survived, even thrived, with tax rates higher than they will ever be again.
When Rush Limbaugh, Sean Hannity, Bill O’Reilly, et al demand a pay cut because they’re being oppressed with over taxation at their current levels, come see me with your garbage.
And the argument that deficit spending equates to tax increases renders Bush and Reagan as 2 of the most flagrant tax increasers in history. If not, of course, for the obvious fact that this only became the argument on 1/20/09.
When all of you fools actually do some research and learn about the way the US tax system actually works…Who am I kidding? Education is the food of fools. Go ahead, don’t take that salary increase because it will cause you to hit a higher income tax bracket. Now that’s smart since that higher income tax rate is only for the amount of money you make above the lower income limit. It doesn’t mean that pay that amount on your whole income. So go ahead deny yourself that raise from 249,999 to 260,000 because there’s nothing better than making $0 more instead of making $6100 more! That on top of closing a highly profitable business just because you disagree with our democratically elected president. Now that’s some scorching hot pile of stupid. But hey don’t worry, the market has a tendency to fill voids. So when you do decide to get back in and your market share has been taken by someone else…well I guess there’s always welfare or social security for ya.
Ha! Conservatives complain about high taxes when tax receipts are down! That shows how stoopid conservatives are!
/liberal
Frankie, the reason why you don’t see the logic is because you don’t understand that there’s a relationship between how hard someone works and how much money they make. That is, people can actually make more money by working harder. However, their incentive to work harder (and be more productive) is less when, at a certain point, they’re making less per unit of work.
That’s why liberals don’t understand taxes; they don’t understand the relationship between work and income.
Geez. I didn’t realize how insane these people are. Are you people seriously that blind? The question isn’t a matter of choosing how much income to make. The question is choosing how much work to do, and therefore how productive to be. A person, in deciding whether or not it is worth his or her effort to produce something of value, is influenced by how much that effort is rewarded. How idiotic do you have to be to not realize that someone would do less work (and be less productive) for five thousand dollars than for ten thousand?
134. JohnJ:
“How idiotic do you have to be to not realize that someone would do less work (and be less productive) for five thousand dollars than for ten thousand?”
It is you who is the idiot.
What we are talking about is doing $10,000 more in work to take home $6,150 instead of $6,400 under the failed Presidency of George Bush.
You are an utter fool.
Kind of embarrassing when you realize the ignorance of your argument, huh?
114. Rob:
Well, don’t waste any more time reading stuff. Just get out there and work hard and pay lots of taxes because a bunch of us John Galters are not going to do it anymore.
——————————————
Who is John Galt?
Jharp,
We’re not talking about doing 10,000 more in work to take home $6,150 instead of $6,400.
We’re talking about Obama and Geithner taking those tax dollars and laundering them through AIG to write checks to millionaire bankers at Goldman Sacks, Deuthche Bank and Swiss Re.
It’s not about Republicans, or Democrats, or tax brackets any more. It’s about the rape of our Constitution. Germand and Swiss bankers are receiving our tax dollars and NOBODY EVER VOTED ON THAT.
It is nothing less than taxation without representation, and we should do exactly what our forefathers – men such as George Washington and Thomas Jefferson did about that. They started a war and began killing their oppressors.
Who’s side will you be on?
Will you be on America’s side; will you be on the side of the US Constitution?
Join us.
123. jharp:
Just keep up your rage and ranting but don’t forget to go to work today, that is if you have a real job. Take those raises and maybe one of these days you will get the wonderful benefit of paying 90% of your income out to taxes. That must sound like paradise to you. Or maybe, just maybe you will understand what the workers in the old Soviet Union were saying when they said, “they pretend to pay us and we pretend to work”
————————————
Who is John Galt?
“The Democrat Effect” -the rational response by firms and individuals to prepare for the inevitable insult to the economy from oppressive regulation, litigation, and taxation- which started election night of ‘06 led to the POR Economy of ‘08 as predicted 2 years ago!
Bu$h comes in with a budget surplus, and leaves us and our children straddled with a 10 Trillion dollar debt!! And you want to blame a president that has been in office for less than 100 days?!! Boy, if you hate wasteful government spending, you must despise Bu$h and Dick! C’mon, Get real! Your hate and duplicity is spewing out all over and it is an ugly display for all to see.
135 jharp:
What we are talking about is whether anyone wants to work overtime for 20% less than their straight-time rate.
Despite the stereotypes, lots of people on the right really aren’t so greedy that they’d rather work overtime at a rate cut as opposed to enjoying some time off.
Actually, many of the elites did indeed “go Galt” and withdraw from productive endeavor. But it wasn’t because the government was penalizing them, it was to a large extent for the opposite reason: Republicans pushed for cuts in capital gains tax rates, which encouraged switching from being paid for work done to flipping stocks and houses etc. (long or short-term, there were still various incentives – and it’s hypocritical for those who talk of “flat rates” to support different rates on different kinds of income.) These Galtards were specifically promoted by *conservative* forces in government by being given what they wanted.
Also, if I may add: Most of the deregulation of lending and speculation (like repeal of Glass-Steagall in ’99 under pressure from lousy-fare blowhard Phil Gramm) was promoted by glibertarian, market anarchists and that was the major cause of the meltdown. Haven’t you heard about CDOs, credit default swaps and all that garbage? Think: there aren’t all that many minority home buyers anyway. Can any sane person imagine, that any more than a very small percentage of those who went into foreclosure were minority buyers who otherwise couldn’t get loans? What about all those white people’s homes going under?
tyrannogenius
You hate intrusive and wasteful government, spending us into financial ruin and creating deficits that strangle our economy? Wow, you must really hate Bu$h and Dick. On the basis of outrageous lies, they began waging a murderous and utterly illegitimate war in Iraq. Ask yourself, how many Iraqis were involved in 9/11/ Zero! Remember that? How many were Saudi’s ? 15 of the 19! So we attack Iraq?! The cost to us as taxpayers is over $600 Billion so far, and counting. That is $600 billion that will never go to education, or infrastructure, or improving America’s competitive edge, or to new technology, or back to us as refunds. Where is your outrage? And how many have died? Do we, as Christians believe and trust the 10 Commandments, or not? Before the war, White House economic adviser Lawrence Lindsay estimated the cost at $100 to $200 billion. So the bu$h WH ridiculed and fired him, and “re-estimated” the cost at $50 to $60 billion. Remember that? The bu$h regime told us that the war would ‘pay for itself” (We are dealing with a country that can really finance its own reconstruction, and relatively soon.” – Wolfowitz, March 28, 2003.) Where is your outrage? C’mon, get real!
132 bozzy:
If the increased income comes without an increase in work (say as a raise to a salaried employee), then of course you’d want the raise regardless of how it would be taxed.
The issue is that small business people (plumbers, doctors, lawyers, dentists, electricians, shop keepers, and independent contractors of all type and description) and most of the people who work for them do not get salaries. They have to do more work in order to make more money.
The after tax income for a married person filing jointly on $249,999 is about $194,000. The partial going Galt that lots of people are discussing is making the choice to play golf / read the classics / hang with the kiddos rather than doing overtime for a reduced rate.
And enough already with the claim that the rate increase will only be 4.6%. President Obama has also proposed a 2 to 4% SSI surcharge on income above $250,000. And Charlie Rangel has proposed a 4% surcharge on income above $250,000.
That’s a proposed rate of 45.6% to 47.6% by the top two Democrat tax politicians. And those numbers are from before the election. So were the comments from Obama staff, from tax committee Democrats, and from Biden (IIRC) suggesting that the increases might affect incomes down to $150,000 or less.
No telling what rates and brackets they’ll propose now that they are ensconced in office.
So,
1) Your rate increase number is wrong. Even ignoring Rangel, Obama has promised 6.6% to 8.8%.
2) There is no good reason to believe that the final tax changes will be as limited as the campaign “promises” said they would be.
3) There is substantial reason to believe that the break point will be less than $250,000.
4) MOST importantly, lots of people who get paid by the hour would rather do something other than work overtime for ~20% less than their straight time rate.
Money may be everything to you lefties, but people who actually have to work for it often value other things much more.
You are completely nuts and this piece is absurd.
The sad thing is that there will be other wingnuts that will run with it for no other reason than because it has numbers.
Blumer, you like to spread fear about our elected officials, eh? I am sure you are an equal opportunity fearmonger and that you spread the fear of God about bu$h ad Dick, didn’t you? We should all be afraid, very afraid, of a regime that began openly torturing people, and justifying it with bogus legal statements. Torture is against national and international law, so where was your outrage? Where were your demands for the ‘rule of law’ to be enforced? Where was your fearmongering of a lawless government run amok? If they can torture your neighbor, they can possibly come and torture you too. So c’mon, start your fear spreading of the policies instituted by those loyal bushies already. Or is something wrong, Blumer? Bu$h and Dick started a process that puts people in jail on the merest suspicion, refusing them lawyers, and either holding them indefinitely or deporting them in the dead of night (Indefinite detentions and extraordinary renditions ring a bell?). They suspended our most American basic right, the right of habeas corpus. Where was your outrage? Your fear? Yet now you want to spread fear about a slight marginal tax increase on those making over a quarter million dollars/yr? (while the other 95% of us get a tax cut!) Why did you not strike the fear alarm and rise up to protect us and our rights and the Constitution then? And you now want to talk about people “tearing down” confidence in our government?! C’mon, get real!
“You are completely nuts and this piece is absurd.”
What an amazing analysis, full of insight and arguments that support your central thesis. Did you go to school at Harvard?
What you’ve just seen ladies and gentlemen is exactly how LIBERALS argue a position: When they are unable intellectually to assemble a set of facts and make a coherent presentation that would support their position because they went to Harvard instead of getting a real education – they resort to name-calling and emotional outburst.
That’s why America is broken. These liberal ivy-league morons are running it.
Those of you claiming that people will work less because they will be taxed more on their additional income need to start doing some serious survey work.
Good luck with that.
Please please please find me a statistically significant amount of people who turned down a raise because they didn’t want to pay more in taxes…or decided they didn’t want to work more so they can buy a nicer car.
And that ends this discussion.
readerer: Face it, your name-calling and 5th grade behavior only point to who the “moron” (to use your word) actually is. Republican rule enforces a culture of greed, bigotry, intolerance and ignorance, and uses your ignorance to keep the wealthy and powerful in control, at your expense. I am sure you can’t see any connection between Texas oil men in the WH, and the oil industry making more money than ever before, and more than any corporation in history? Mere coincidence, right? Exxon and Mobile set an annual profit record in 2008 by earning $45.61 billion last year – or nearly $1,350 per second! But the bu$h regime still supported and defended tax breaks for them (tax revenue that you and I have to make up for, get it?) while we average citizens saw prices at the pump go over $4.50/gallon! Where is your outrage over corporate welfare? Over unfair tax breaks for multi-billionaire corporations? Over legal corporate tax-dodging in the Cayman Islands? That missing tax money has to come from somewhere. Guess who gets to pay? That’s right, us. Get a clue. Iraq had no connection to 9/11, but is oil-rich. Mere coincidence again, right? And Blumer, where was your fear of government and corporate collusion, (a.k.a. fascism), during the bu$h years (Haliburton/Black Water/KBR no-bid contracts anyone?) The Bu$h regime set out to radically remake society very quickly, illegally spying on patriotic American citizens and targeting those who disagreed with smear campaigns. Rove/bu$h and Co. politicized the Justice Dept. so they could selectively persecute those who spoke out or opposed their policies. They fired non-loyal bu$hies and used the law as a weapon of fear and oppression (See Don Siegelman, the firing of US prosecutors, etc.) In back-to-back hearings in the Senate and House, former U.S. attorney David C. Iglesias of New Mexico and five other former prosecutors recounted specific instances in which they felt pressured by Republicans on corruption cases and one said a Justice Department official warned him to keep quiet or face retaliation. Where is your outrage? Your fear of government interfering in the lawful application of justice? Of corruption? Here is link for readerer and you. Try reading (http://www.washingtonpost.com/wp-dyn/content/article/2007/03/06/AR2007030600606.html), instead of name calling, unless you like exposing yourself in such an embarrassing manner by writing such vacuous drivel.
Boy TB, you must be more right than we know because you’ve hit a nerve with the Uber-rich fascisti puppetmasters that have sicked their astroturfing minions on you. These economics-challenged Garofolos are besides themselves that Pres. Affirmative Action got elected and reality didn’t play along.
The worse than necessary economic decline following Dem control and then Heir ‘Prompters election was predicted months ago. The fact that it nominally started at the tail end of the Bush Administration (whose economics policies after the tiny tax rate cuts of ’03 we didn’t support either) is irrelevant because it was overwhelmingly voted for by the Dems in Congress, and John Kerry (who, I believe, served in Viet Nam) said it was all Obama’s idea, anyway! B. Hussein and the leftists own this, and they know it; but are trying to play rhetorical games (enabled by the legacy Media) to avoid culpability by the dumbed-down free-riders that make up their base. The question is will this political business cycle game catch up with them in 2010 or 2012?
‘The trouble with our liberal friends is not that they’re ignorant; it’s just that they know so much that isn’t so.’- Ronald Reagan
151. Joe C.:
You are a vile lying piece of scum. Go Chaney yourself..
I am through with this sewer of a blog.
I wonder how long tile tha wingnut welfare runs out. It can’t be long as this place is a disgrace to the internet.
Golly, sweetheart…don’t go away mad or whatever…
One down.
Get Real….The Democrat party is controlled by unions, trial lawyers and environmental extremist. Please explain how that will be favorable for the business community?
Neocomrade Lord Rove was quite right: THEY are indeed an Empire now and THEY can just make up any parallel reality THEY please and then go live in it. Except maybe for death and taxes.
Happy days.
150. GetReal:
“In back-to-back hearings in the Senate and House, former U.S. attorney David C. Iglesias of New Mexico and five other former prosecutors recounted specific instances in which they felt pressured by Republicans on corruption cases and one said a Justice Department official warned him to keep quiet or face retaliation.”
I hate to give you the bad news here Mr. GetReal but David Iglesias was dragging his feet on the prosecution of a former New Mexico Democrat state senator and others who, after Mr. Iglesias’ replacement got the job done, were found guilty of massive corruption in skimming off money from public construction projects. No small amounts either, it was to the tune of hundreds of thousands of dollars. Makes one wonder why David Iglesias was dragging his feet. Did he want in? So spout the ACORN talking points all you want but sometimes a little research helps in uncovering the truth.
THE MIND OF A LIBERAL IS MUSH
They cannot grasp simple human nature.
http://greensrealworld.blogspot.com/2009/04/liberals-have-no-common-sense.html
145. Troll Feeder:
“The issue is that small business people (plumbers, doctors, lawyers, dentists, electricians, shop keepers, and independent contractors of all type and description) and most of the people who work for them do not get salaries. They have to do more work in order to make more money.”
Well, I know a ton of electricians, shop keepers, independent contractors, you name it – I don’t know a single one that wouldn’t work more hours right now. The issue for them is that they want to build up cash and pay down debt. I don’t see a lot people that won’t take work.
My issue with this article is that there is no compelling evidence presented to say that the decline in revenue is attributable to people “going Galt”. And, in the author’s definition of “Going Galt” he lumps in just about everything associated with a recession, so there is no way to separate those supposed Galt followers from just people who have been laid off.
160. sassy
I certainly concede your point that there are not a huge number of people who are going to react as I described. The proposed tax hike has been promised to only hit those making above $250,000, so the pool of directly affected people is already limited to less than maybe 5% of wage earners.
Also, peoples’ circumstances and priorities differ. Some folks want or need the money more than they want more free time, so they might agree to work OT at a reduced rate.
It is relevant to note that the small businessmen who do fall into the going Galt category, however, are going to reduce the hours that their employees work, too, so the reduced economic activity effect will extend beyond just the $250,000 man.
I also agree that it would be difficult to separate the amount of reduced economic activity due to Galt-induced scale backs vs that due to other scale backs.
I think that the author does over-extend the generally understood definition of going Galt to include actions that would normally be taken by any prudent businessman to defend a business against hard times (e.g. increasing cash reserves, reducing debt, aggressively cutting costs, being more conservative in taking risks, putting off capital investments and new hiring, etc.).
Taking a prudent, defensive approach to the more difficult business environment promised by the POR group is not going Galt; it is just common sense. I think that it has and is happening, but that Mr. Blumer confuses the issue by conflating it with Galt.
To be exact, deciding that you are not going to do overtime work if your rate goes down isn’t going Galt in the classical sense either (as several others have pointed out), but it is in the same vein. And,yes, only a limited number of people will decide to do it, but they by definition all be people who previously made significant individual contributions to the economy.
161. Troll Feeder:
“It is relevant to note that the small businessmen who do fall into the going Galt category, however, are going to reduce the hours that their employees work, too, so the reduced economic activity effect will extend beyond just the $250,000 man.”
Yes, that is true, but I don’t personally know of any small business that isn’t reducing due to anything other than the lack of revenue/customer interest. Again, this is not going galt – this is just a normal economic cycle. But my data, like the author’s is clearly anecdotal in nature.
“I think that the author does over-extend the generally understood definition of going Galt to include actions that would normally be taken by any prudent businessman to defend a business against hard times (e.g. increasing cash reserves, reducing debt, aggressively cutting costs, being more conservative in taking risks, putting off capital investments and new hiring, etc.).”
Agreed – it is a tortured definition that basically includes anything recession related. This has the effect of making it seem like the Galt effect, if any, could be quite large. But in reality, there are very few people in America, in any income bracket, that can truly afford to “go Galt” – in fact, I would argue these opposite (and more measurable, I would argue) points:
1. Americans have had a negative savings rates for many years, so they clearly have been spending more than they earn. Therefore, they are unlikely to be able to go galt very easily. We can measure this with the US savings rate.
2. Americans have huge amounts of debt, both in terms of real estate and credit cards. Credit card debit is going up, not down – indicating that people are trying to fill the gap between income and lifestyle. Again, a strong indicator of not going galt.
3. Baby boomers, in particular, have no savings. They’ve pulled all the money out of their houses, and they lived above their lifestyles.
4. People are pushing out retirement. Here’s an interesting data point: Nurses. Two years ago, there was a huge nursing shortage, but now, it is gone because many of the nurses due to retire cannot due to their 401k going down the drain. Nurses make, comparatively, very good money as well. There is tons of data out there about people retiring later – again, not an indicator of going galt.
“To be exact, deciding that you are not going to do overtime work if your rate goes down isn’t going Galt in the classical sense either (as several others have pointed out), but it is in the same vein. And,yes, only a limited number of people will decide to do it, but they by definition all be people who previously made significant individual contributions to the economy.”
An interesting statement – but how would we prove it?
I’ve seen it only once, where my electrician brother-in-law elected to not work overtime because it would have “just” pushed him into the next tax bracket. He makes less than $100k a year. The next year, when he was substantially in that tax bracket, he worked all the overtime he could.
More broadly, if we take the author’s basic premise – that the Galt effect is a big factor in the current economic numbers, and then we determine that:
1. It affects a small number of people by default (5% of the population).
2. It affects a small number of that sub-group.
Then why would conclude that it has any large impact? And if there is no way, outside of ancedote, to measure it, and there are substantial other inputs that are clearly large in nature and measurable (credit tightness, unemployment, savings rate, median income, etc), then why would we conclude that it has any large effect on the numbers?
So if the premise of the article is that people going galt is a significant impact on overall government revenues, I stand very unconvinced.
The final fault I put with the author is that he quotes CBO and Treasury numbers as if they, by themselves, are enough to show that Galt is having an effect – but if we go back to 2000-2002 in the Treasury numbers, we find similar numbers. And no one was talking about Galt back then. So why would we conclude, again, that it is having a large impact?
Overall, the author’s basic premise is both unprovable and, it seems to me, unlikely when measured against the larger canvas of the total economic picture.
I own a small business, and we have been “Going Galt” for about 6 months now. We raised our pay to our employees, cut our pay to ourselves, in order to reduce the overall profit to our business and reduce our tax burden. We are cutting spending to the bone. None of my employees makes over $250,000 per year, so they should not bear the big tax burden, either. I would rather see my employees get the money than the government.
I will NOT support this huge government fiasco. I will NOT be a slave to the moochers and looters who think they can spend money that I work hard for. I’ve better things to do with my time.
“We raised our pay to our employees, cut our pay to ourselves, in order to reduce the overall profit to our business and reduce our tax burden. We are cutting spending to the bone. None of my employees makes over $250,000 per year, so they should not bear the big tax burden, either.”
So you:
- Raised your pay to employees
- Yet cut spending to the bone
Which is it? What percentage of your business costs are labor costs?
And I take it, as a small business owner, you can afford to lower your own pay because you can make it up in savings? How do you pay your own bills?
One final question for you Jean – if you wanted to reduce the amount of taxes you paid to the government, why didn’t you increase spending rather than decrease it? That would reduce the amount of profit you’d have, and lower your tax bill.
Sassy Wrote:
“So you:
- Raised your pay to employees
- Yet cut spending to the bone
Which is it?”
Let me dumb it down for you sweetheart, since you’re obviously incapable of following the storyline:
Jean and her husband used to make over $250,000. Their employees obviously make less than $250,000. But, since Obama is targeting everyone who makes more than $250,000 and then laundering that tax money through AIG to send it to uber-rich millionaire European bankers, some people don’t feel like participating.
So, rather than give the additional taxes to Obama, who is systematically destroying America, this woman and her husband have cut their own pay to below $250,000. They’ve given the extra money to their employees, who will also now still make less than $250,000.
The point is that, rather than give money to Obama, she’s giving it to her employees. This action (known as “Going Galt”) reduces government receipts, while at the same time, helps her build her business by rewarding her employees. This enables her to cut other costs (such as perhaps costs for vacations or other benefits) and still be able to retain employees, since now they’re pay is higher since now they’re getting paid with money this woman used to be forced to give to her government.
People are quitting their jobs (or not trying to find new jobs once laid off) rather than work for slave wages so that Barack Hussein Obama and Tax Dodger Tim Geithner can launder our taxes writing AIG claims checks to millionaires in Germany and Switzerland.
I, and many others, have vowed to not earn any taxable income while Barack Obama is president. Many others have reduced their income as much as possible to limit his ability to execute the Socialization of our country. When push comes to shove (and it will) and our government tries to continue the Socialization anyway, we’ll Tea Party that government.
Is everything clear to you now?
166. readerer:
I’m capable of following the storyline (despite your condescending tone) – I asked a simple accounting question – why would you cut spending if you’re trying to reduce your tax load?
If you want to reduce your profit, increase your spending (in the form of wages and or cost of goods sold), or reduce your revenue. I simply asked Jean why she was decreasing her spending.
Or is that too simple a question for you to understand readerer?
162. sassy
First, thank you for providing one of the only truly good faith conversations I’ve ever had on the intertubes. I can scarce believe it.
I have only anecdotes of people curtailing their work hours due to the currently proposed tax increases. Well, that plus the deduction presented above that some people who have the ability to control their hours will cut them because working for less pay won’t be worth it to them.
As you note, some people will come out of retirement because their retirement investments have cratered. People have differing circumstances and goals, so there are likely to be many different reactions to the currently proposed, relatively mild increases in tax rates.
What many people are concerned about — and also the major motivation behind the Tea Parties — is that the thoroughly unconservative spending that has occurred since October 2008, the continuance of which is promised through 2019, will result in tax rate increases that are much larger than those currently proposed.
Many people think that the current tax rate proposals are a bait-and-switch, a pig-in-a-poke, a bad faith, bald-faced, never-let-a-crisis-go-to-waste lie.
I and many others also think that the rate increases will not be limited to those at $250,000 and above, but will instead reach down into many middle class incomes. As noted above, some Democrats (accidentally?) said as much even before the election, but then shut-up about it.
All this does mostly leave the Galt argument behind, because people do still have to eat.
But the Galt argument still exists and becomes ever more likely with greater rate increases for those people who do possess sufficient pre-existing resources to curtail their current and future work.
I do not know how one would effectively determine what portion of the lost economic activity was due to Galtism, however.
“First, thank you for providing one of the only truly good faith conversations I’ve ever had on the intertubes. I can scarce believe it.”
Anytime – happy to have found someone willing to engage in the same way.
“What many people are concerned about — and also the major motivation behind the Tea Parties — is that the thoroughly unconservative spending that has occurred since October 2008, the continuance of which is promised through 2019, will result in tax rate increases that are much larger than those currently proposed.”
I completely agree that this is a concern – I’m not questioning whether the Tea Parties or Galtism is a reasonable reaction to the issue. Protest is an important part of any democracy.
So none of this is to say that Galtism doesn’t exist, isn’t happening or isn’t a growing movement in America – but to say, as the author does, that this is a cause for the steepness in the decline of government revenues is still, in my mind, an unsupportable claim.
One thought I had after I wrote my last post was just about the financial sector in NYC. I believe the job losses in NYC, specifically in the financial sector, are roughly around 70,000 – that number doesn’t include the losses in the hedge fund sector. These people all made a tremendous amount of money. A salary of $2m was considered very “middle of the road”. If we’re looking for a factor in the steepness of the revenue drop, I would argue that the huge job cuts in the financial sector probably play a huge role – it’d certainly be something interesting to look at.
We make the stuff civilization survives on in the spec chem ect… to the world. 52 percent down as such across global markets so the swamps are and will fill with discord and misery since so few caused so much carnage to acountability which is basically treason to the american people and the malinvestment to what we need today. This is what my father in law conveyed before he passed away. This man survived d day to be transfered to the end of the japanese resistance. This country is not worthy to bear many of its worthless citizens. I can convey many numbers and facts but that will not change anything. I have worked over 30 years for the common good and cleary understand capital and labor have responsibility’s. You may not have further insight to events over time. I can give only 50 years. I can tell you what Thucydides thought and did and like countless other tell you what socialism will do as such. The point is I have never seen so many people feel the world owes then so much. Mind you that you are soon to find out. You are not prepared for what will happen. Blinded as warned, see the weather but not the sign’s of the times. I pity what my children must tolerate and wise men plan grandchildrens inheritance. Since many regard the constitution as a dead letter you will see what that is like I see very soon. I fear my creator and nothing else has been changed until the price was paid for me on as hill. Also he warned for our benefit. My warning is Zechariah 11.4-8 I, as such will retire to the family farm soon to preserve my childrens inheritance at all living cost’s since I am weary of a faithless generation and we are on the edge of lingering darkness unless we change our hearts and thus our minds to the common good. I understand the remnant do exist as do many good people and will tell the family and friends about the famine of the word and the lack of acountability to the unbounded avarice and where we are today. I have given up on the senate as a voice to reason to date since contacting them availed nothing. Prove a old man wrong and tell a young man how you did it would be my best day. I have hope that some will hear and change there ways in this polar society.