On 8/12/08 4:40 PM, "Jeffrey Watts" [email protected] wrote:
On Tue, Aug 12, 2008 at 4:30 PM, Jon Pruente [email protected] wrote:
How did the tax cuts (that have brought more revenue to the treasury) ruined the economy and done anything to the war? Oh, we are in a recession, is that the current economy scare line? Is that it, because just a week or so ago I heard that we had nearly 2% growth in the last quarter. A recession is defined as 2 consecutive quarters of *negative* growth.
You obviously live in a different country than I do, sir. In my country milk and other basic foods have doubled in price, gasoline is through the roof, my house lost value, my neighbors have been foreclosed on, the deficit and debt are at historical highs, and inflation is the highest in almost thirty years.
Your grammar is excellent, your grasp of economics less so.
Nearly twenty years ago, while I was a freshman at the University of Missouri, my Econ 101 professor discussed a phenomenon known as "the business cycle." Supply and demand are not static; changes in one often lag the other. When the two are not in sync, we tend to get cycles of inflation (demand outstripping supply) or deflation (supply outstrips demand).
Anyone born before 1980 is probably fairly familiar with the business cycle, since many of our parents ended up unemployed during a particularly nasty recession in the early 80's. Regrettably, those who entered the work force in the new millenium grew up under the false assumption that ever-increasing productivity, combined with a massive money supply, guaranteed that the business cycle would never again raise its bloody axe, and we would all be guaranteed good jobs forever.
I guess in your country everything is peachy, all due to the excellent work of George Bush and co.
Since you are very much into critiquing the work of others, let's analyze your logic. Last I checked, the Constitution of the United States granted Congress, not the President, the power of the purse. I know some are concerned about the power of the Presidency, but I do believe that when it comes to the national fisc, that responsibility still rests with the House and the Senate. Therefore, our budget deficit is the direct responsibility of 535 men and women. The President is not blameless; he could have vetoed the irresponsible spending which has plagued us since the New Deal. But in the end, it is the responsibility of the legislative branch, not the executive, to set the nation's fiscal priorities and fund them appropriately.
Congress has chosen not to do so, under both Democrat and Republican control.
The President is free to expound on what he thinks tax and budget policy should be. However, he has very little control over how that money is spent; traditionally, the national budget is rather explicit in how pieces of the fiscal pie are divvied up between departments. The President can move some money around, but generally, Senators and Representatives tend to be suspicious of Presidents who take money from Account A and move it to Account B without a hearing and permission from a committee chair, so they generally write the language to be as restrictive as possible.
While the government's spending patterns have a discernible effect on the economy, most of the really important money movement is done by groups over which the President has no control. The Federal Reserve System is politically independent; so are Fannie Mae and Freddie Mac, which help fund the credit markets through their mortgage activities.
While the government has a discernible effect, as I mentioned above, that effect is rather small when compared to the real drivers of the American economy -- you and me. The new car, the burger at McDonalds, the choice to purchase groceries at Aldi or Price Chopper, all effect our economy far more than tax policy (which again, is a Congressional issue, not a Presidential one) or monetary policy (which is set by an independent Federal Reserve, the President). Our decisions are somewhat influenced by government interference, but in general, we don't consider the overnight discount rate when we choose to spend money; we consider the local effects of supply and demand. The Invisible Hand, not George Bush (or Bill Clinton, or Obama, or McCain, or Hillary, or Reagan) is responsible for our economic situation, and Congress is responsible for the government's poor fiscal record, assisted gleefully by an equally irresponsible President who does not understand what the word "VETO" means.
The conclusion is that a ham sandwich could be President of the U.S., and the business cycle would continue, your taxes would be about the same as they are now, and the deficit would be just as great.
If you want a balanced budget, demand one from your Congressman/woman. I guarantee Obama and McCain won't give you one, no matter how many platitudes they deliver on the subject.
Matthew Copple