Black Hole....errr The Political Roundtable

[nate33]

That's misleading. That $8.7 trillion in foreign equity owned by U.S. citizens won't help the government's balance sheet. Also, this free ride of low interest TBills won't last forever. The debt is mostly financed with short-term securities. When the next black swan comes along and spooks foreign investors of U.S. debt, those interest rates could jump quickly. Hell, the only reason interest rates remain so low right now is because the Fed is printing money and buying treasuries to drive down the rates.

[nate33]

CBS Investigates How The High Corporate Tax Rate Is Preventing Job Creation & Investment
[youtube]http://www.youtube.com/watch?v=qDcOc4GUhl0&feature=relmfu[/youtube]

[dobrojim]

CBS = corporate media

explain why I should believe ONE thing they say,
particularly wrt govt-corp relationship.

[Zonkerbl]

That's misleading. That $8.7 trillion in foreign equity owned by U.S. citizens won't help the government's balance sheet. Also, this free ride of low interest TBills won't last forever. The debt is mostly financed with short-term securities. When the next black swan comes along and spooks foreign investors of U.S. debt, those interest rates could jump quickly. Hell, the only reason interest rates remain so low right now is because the Fed is printing money and buying treasuries to drive down the rates.

Erm... well, if you want I can send you the data. This phenomenon that I showed you for 2010 has been going on at least since 1992. That's almost twenty years, not a short term trend. Remember, all that matters is the relative interest rate between us and, say, Bangladesh. When our interest rates go up, theirs go up too.

[dobrojim]

re corp taxes - why should we operate under the assumption that
corps will take their business elsewhere if we make things too hard
on them. That's ignoring the fact that the US is a great market
to do business in because here is where the money is. If a corp
says no thanks to doing business here on We the People's terms,
another one will be too happy to fill the void. We have a highly
productive well educated work force and a ton of wealth.
Stop acting like corps are in the driver's seat. That's true
now only because of legalized bribery. It doesn't have
to be that way.

That mindset only applies to industries where there is no competition from foreign imports. Sure, you can tax the bejesus out of homebuilders or restaurants, but you can't tax manufacturers like that.

this demonstrates a lack of imagination and creativity and/or fatalism
saying there is nothing we can do. There is plenty that can be done
when govt demonstrates the moxie to do it. In the current environment
where money is everything, maybe we should have your point of view.
I refuse to accept that status quo as the best we can do.

[nate33]

I never said the data was wrong. I'm just saying that you are using it wrong to imply that the U.S. government doesn't have a debt problem. You can't say that the incoming interest payments to private U.S. citizens offsets the outgoing interest payments made by the U.S. government.

[nate33]

CBS = corporate media

explain why I should believe ONE thing they say,
particularly wrt govt-corp relationship.

So you dont' see it as a problem that the U.S. has the highest corporate tax in the world and that every major multinational company has a motivation to ship jobs and overseas where profits margins are higher? And I'm not talking about shipping them to China for their slave wages and lack of environmental regulation, I'm just talking about the incentive to ship them to Western Europe and Korea purely for tax purposes.

Corporations aren't evil, they just... are. They exist to make a profit. They are motivated to make a profit. They will do what it takes to make a profit or they will go out of business. That's what they do.

If you want more tax revenue, go after rich individuals, not corporations.

[Zonkerbl]

Oh, I'm not saying that. I'm saying the U.S. doesn't have a debt problem. As an economist I stay neutral on whether govt debt is better or worse than private debt. Assuming we are borrowing money to pay for real stuff that we need (the govt (federal and local) spends money mainly on things like infrastructure, education, national defense, firemen, policemen, fixing environmental market failures, retirement for old folks for whom the private sector market investment tools are too expensive because of failure in the capital market, medical care for old folks because of market failures in the insurance market) I don't care who borrows it.

You can be a hard core rigorous economist and still be liberal. I consider myself a Hayek devotee (because he was the twentieth century's most awesome cold warrior economist who did as much to bring down Communism as Reagan) and I still have pretty liberal views (or to be precise, I am ok with the general concept of the government spending money on certain things, although from bitter experience working in the government I know there are better ways to do it). All it takes is a belief that markets aren't perfect, and they're not.

Not that I disagree with a lot of the Ohio governor's proposals to privatize everything. Technology has grown to the point where it's a lot more feasible to privatize things now than it would have been just thirty years ago. That's an excellent way to shrink the govt. I also personally think the EPA needs to be razed to the ground and the whole idea has to be rethought, because currently environmental regulations are a zero-sum game and they don't have to be. EPA doesn't want to consider creating markets for pollution to let companies spend money pursuing innovations rather than litigation. They want to fight, fight, fight for right. That's a losing strategy. We could be much farther along in reducing pollution and creating green jobs if environmental regulations were simply more market oriented. Anyway, I rant.

[nate33]

Fair enough zonker. I think we could find a lot of common ground.

[nate33]

Changing the subject a bit:

What do you think the media reaction would be if George Bush decided to institute a no fly zone in Iraq without Congressional authorization? The Dems contemplated impeaching Bush because he allegedly cherry-picked the intelligence about WMD's. Obama isn't even bothering with such a ruse. He is simply ignoring Congress completely and dropping bombs!

[dobrojim]

CBS = corporate media

explain why I should believe ONE thing they say,
particularly wrt govt-corp relationship.

So you dont' see it as a problem that the U.S. has the highest corporate tax in the world and that every major multinational company has a motivation to ship jobs and overseas where profits margins are higher? And I'm not talking about shipping them to China for their slave wages and lack of environmental regulation, I'm just talking about the incentive to ship them to Western Europe and Korea purely for tax purposes.

Corporations aren't evil, they just... are. They exist to make a profit. They are motivated to make a profit. They will do what it takes to make a profit or they will go out of business. That's what they do.

If you want more tax revenue, go after rich individuals, not corporations.

you keep saying that over and over. The truth is that the EFFECTIVE tax
rate is zero or worse for a large number of highly profitable corps.
GE made 5 BILLION profit, paid ZERO taxes. Do you think they are
going to take their ball and go home?

[nate33]

Fine. Eliminate the loopholes for GE. (Have fun convincing Obama on that one.) I'm not arguing in favor of loopholes. I'm arguing for fair, competitive tax rate across the board. What we have now is not fair in the case of the politically connected like GE, and not competitive for everyone else. It's a horrible, horrible policy that's killing jobs and depriving the government of revenue. For the life of me, I can't understand why you (and others) don't see this.

[Zonkerbl]

I guess the context is completely different. Saddam wasn't really doing anything wrong and Bush had to manufacture an excuse to go after him, and, well, he's an idiot and didn't do a very good job. Ghaddafi was murdering women and children with, probably, soviet bombs.

As to your question about Congressional authority -- meh, that's a Hamiltonian/Jeffersonian thing as old as time itself. I can see both sides. I guess the important thing is to make sure there's a balance, and as long as people are still arguing about it I see that as a good sign.

How's that for a wishy washy, typical economist answer?

[dobrojim]

Changing the subject a bit:

What do you think the media reaction would be if George Bush decided to institute a no fly zone in Iraq without Congressional authorization? The Dems contemplated impeaching Bush because he allegedly cherry-picked the intelligence about WMD's. Obama isn't even bothering with such a ruse. He is simply ignoring Congress completely and dropping bombs!

I think it's wrong.
Edit to add -media reaction would be largely the same IMO.
How much critical journalism was done prior to the Afghanistan/Iraq?
Kucinich has called for impeachment hearings

I love the thinking of Andrew Bacevich on foreign policy/national security.
He's written at least 3 great books that touch on these issues.
The New American Militarism, Washington Rules and the Limits of Power.

I also enjoyed, agreed with, and was troubled by Garry Wills' Bomb Power.
The presidency was not intended by the founders to be this powerful.
It is NOT a good thing no matter which party holds the white house.

Barack Obama thought it was wrong when he was Sen Obama. <sigh>

[dobrojim]

Fine. Eliminate the loopholes for GE. (Have fun convincing Obama on that one.) I'm not arguing in favor of loopholes. I'm arguing for fair, competitive tax rate across the board. What we have now is not fair in the case of the politically connected like GE, and not competitive for everyone else. It's a horrible, horrible policy that's killing jobs and depriving the government of revenue. For the life of me, I can't understand why you (and others) don't see this.

GE isn't an isolated case. It may be somewhat extreme but it's clear
corps are not pulling their weight. The Banksters are probably
the worst/best example of this. Financial reform without ending
Too Big To Fail was a joke. Money = Power, power corrupts, absolute
power corrupts absolutely.

[nate33]

I guess the context is completely different. Saddam wasn't really doing anything wrong and Bush had to manufacture an excuse to go after him, and, well, he's an idiot and didn't do a very good job. Ghaddafi was murdering women and children with, probably, soviet bombs.

As to your question about Congressional authority -- meh, that's a Hamiltonian/Jeffersonian thing as old as time itself. I can see both sides. I guess the important thing is to make sure there's a balance, and as long as people are still arguing about it I see that as a good sign.

How's that for a wishy washy, typical economist answer?

Pretty damn wishy-washy Zonker.

I think things have gone way too far. Actions like Grenada and Panama were bad enough, but at least the executive made a pretense that they were American lives at risk that needed to be rescued. Then we had Kosovo which had no Congressional approval and no defensive implications. Now we have Libya.

This is not the way it's supposed to be.

[nate33]

Fine. Eliminate the loopholes for GE. (Have fun convincing Obama on that one.) I'm not arguing in favor of loopholes. I'm arguing for fair, competitive tax rate across the board. What we have now is not fair in the case of the politically connected like GE, and not competitive for everyone else. It's a horrible, horrible policy that's killing jobs and depriving the government of revenue. For the life of me, I can't understand why you (and others) don't see this.

GE isn't an isolated case. It may be somewhat extreme but it's clear
corps are not pulling their weight. The Banksters are probably
the worst/best example of this. Financial reform without ending
Too Big To Fail was a joke. Money = Power, power corrupts, absolute
power corrupts absolutely.

Agree completely. The banking cartel (and it is indeed a cartel) is the worst. The corruption in government must be at all time high right now. And I point the fingers at both parties.

[dobrojim]

Darrel Issa got earmarks that he will personally benefit from.

he was a crook before, apparently still is, at least in spirit
if not in actual law.

http://thinkprogress.org/2011/03/30/iss ... -property/

[dobrojim]

the corp tax scandal (no other word to describe it) is actually worse
than I indicated above

http://tinyurl.com/66fckan

1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.

3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.

5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.

6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.

7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.

8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.

9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.

10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.

[Spence]

This is hilarious and fantastic.

"I was happy to see that Newt Gingrich has staked out a position on the war, a position, or two, or maybe three. I don’t know. I think he has more war positions than he’s had wives. [...] There’s a big debate over there. Fox News can’t decide, what do they love more, bombing the Middle East or bashing the president? It’s like I was over there and there was an anchor going, they were pleading, can’t we do both? Can’t we bomb the Middle East and bash the president at the same time?

-- Senator Rand Paul [R-KY]