Tax cuts: Pillows for a hard landing

Unless Obama limits tax cuts to people who earn 75,000 dollars or less a year and/or provides a stimulus check to those same people, an immediate call to action will not work. I feel he does not have a good grasp on what the median income of the average American is. People who earn 100,000 dollars or more per year don’t need any help!!!

No they will not help all im going to get is a $1000 if you divided that by 52 you only get about $20 a week that will not make me spend money my gas is more then that.All this is for the rich to get richer as you see all of the bailouts are doing is putting money in ther banks if you wont to help me give me 1 million i will pay off my house/cars/bills and then i will spend spend spend that is how they can help us not the rich if you can give it to the rich why cant you give it to us.If consumer make up 70% of the spending in the USA why not give it the ones that will put it back into the US not the ones that will pockets.NO THIS TAX CUT WILL NOT WORK THAY ARE GIVE MOST OF THE MONEY TO THE WRONG PEOPLE

If you don’t think that Social Security is a ponzi scheme then look no further than where the money is to fund the program. In the Social Security Trust Fund? Yeah right, just a big IOU in there because the government has used all that money and given you a big fat “trust me” that they will pay it back. So whats the difference between that and what Bernard Madoff did to his investors? NONE.
Same with Medicare. The total present value of the unfunded liability of what we have promised future generations in Medicare and Social Security is 99 TRILLION. The total value of goods and services (GDP) of the United States is 14 trillion. You don’t have to be a genius to figure out that you will receive much less in both future healthcare coverage and Social Security payments, if anything at all. My Dad is 89 and my mom is 86. My generation will live even longer and collect far more than they ever put into the system. There will also be many more of us baby boomers lining up to collect. So stop thinking that it “can’t” happen and start realizing that it WILL happen. There is simply not enough money to fund the promises.
What would it take to fully fund the programs? How about raising taxes 75% or cut government spending by 95%. This could be an either/or proposition or in conjunction with each other. But the kicker is you would have to keep this in place in perpituity. That means forever.
Even if we end up with a national healthcare system, it still needs to be funded.

“Social Security is not a Ponzi Scheme; it is an income replacement program.” – Mike

“You always write it’s bombing, bombing, bombing. It’s not bombing, it’s air support.” –Lt. Col. David Opfer, USAF (Air Attache for Cambodia, 1969.)

Sorry, I couldn’t resist. And, by the way, Social Security is a Ponzi scam.

It is impossible to actually cut taxes as long as the government is spending.

A real tax cut, that is, the government taking less out of the economy would help. But borrowing money today so we can have more in our pocket, today, wont help. We will still have to pay the piper.

We all, government and we, need to spend less. Not more. ANd produce more.

Giving people money and asking them to spend it on disposable junk made over seas. What a crock.

The only thing that is going to help is a total change in the way we do things. This is just more of the same.

Social Security is not a Ponzi Scheme; it is an income replacement program. Wall Street is not a retirement program; it is a Ponzi Scheme.

In fact, Social Security could be the income replacement program for the people who lose all of their money through Wall Street Ponzi Schemes, such as Madoff.

Let’s use taxpayer money to protect taxpayers and stop bailing out millionaires and billionaires.

Spending will prove to be good for the economy, iff the things we spend money on have a positive ROI in their own right.

Tax cuts, not so much.

The awful trap in this is the need to keep these monies circulating within the US, rather than flowing out to foreign producers, never to be seen again by Americans. There’s no amount of money we can raise that will help our economy, if all we do with it is to put it into other economies.

This is right off the internet today and is exactly what I am talking about.

Right now, we have an emergency on our hands,” counters House Appropriations Committee Chairman David Obey, D-Wis. “If the House is burning, you’re not going to worry about which hose you grab, so long as you get water on the fire.”

Obama officials promise a “use it or lose it” rule to force states and localities to spend new federal money quickly to stimulate jobs. Such an approach could prompt officials to choose more wasteful projects that can be built soon over better ideas that might take a while.

Tax cuts are nice. But in this shell game the spending that will be accomplished will still need to be paid, so expect local and state taxes to increase. The leadership has not yet been able to grasp the psychology of what a stimulas should truly accomplish – get consumer spending on the move. All of these are timid steps to maybe get a little bit of some minor activity ion some business sectors to crawl a little forward in a slow manner. It keep them in power and makes them look important. Sad really.

Tax cuts will result in a “blip” of growth for one or two quarters we have been there and done that already. The government has run out of options. Interest rates cannot go any lower they are basically at 0% now. All that is left is fiscal policy which the Fed is currently monetizing to pay for all of the guarantees already. In our quest for full employment all fiscal responsibility has been thrown out the window. Having any resemblence of a recession is not acceptable anymore. Free markets are a curse word. The sign of the times is intervention, government ownership, and socialism. It has worked so well in other countries I guess our leaders think we should try it. (like national healthcare)
The end result is interest rates will need to be raised to kill the inflation beast. We will eventually experience a much worse recession than the currrent one. We are just postponing the day of reckoning.
We are currently being sold a bill of goods to justify the special interests getting what they want and to pay back lobbysists and voter support.
Instead of forcing the states to alter their budgets to survive in the new economic environment we will throw money at them to subsidize their entightlement promises and ridiculous benfit and pension programs that most of us can only dream about. After all when we can’t pay our bills why shouldn’t we just be able to keep going to our bosses for raises.
Finally we will expand the Federal entightlement programs that we already cannot afford (unfunded by 99 trillion dollars, thats right its a T) to include healthcare. Living in Michigan we get to see how great the government healthcare system is in our neighbors to the north. They come over to our hospitals all the time to pay for treatment they cannot get. A Canadian doctor friend of mine who is now practicing in the U.S. enlightened me on how a government run program works. He said it is great in the first couple years until cost controls force cutbacks in services and people need to start making decisons on weather your worthy of treatment or not. He told me that he got tired of having to play God. It was interesting, they have 5 MRI machines in all of Canada.
My advice to everyone is to stay healthy.

I feel like I am seeing Ponzi Schemes and Ponzi-like Schemes everywhere I look these days. (note: regular Ponzis use present investment to reward the few. As noted by Mike of FL below, this stimulus beauty rewards the few by claims against the future! What a nice twist!!!)

But the beauty of all this hullabaloo is that it takes our attention off the Great Ponzi Scheme of our day: Social Security and related entitlement programs. Stay tuned Gen Xers and younger! The best is yet to come!

But back to the problem at hand: How about another Ponzi variant in which we use money from the past? Find those persons who make boatloads on flipping houses and the like and collect some real taxes from them. I know people who made $500k and what was their value-added proposition to merit this princely sum? Living in a house for a couple years.

Bailouts, BAILOUTS, when will it end? Another trillion what’s that when you already are nearly 60 trillion in the red?
Our Federal, State, and local (Big Brother) Governments are in for a rude awakening when the money is not there. And this is the same mistakes our Government did in the first depression. (Yes folks, I’m not going to wait a year for it to be official, we are in a depression, just wait for the unemployment numbers later this week.)
This entire bailout approach does nothing for the main stream American, but it will sure enough ensure some nice bonuses for the Wall Street executives.
Well, let’s take a look at the big assumption in this article…
“If consumers spend more, then corporations would need to produce more, and hence, hire more people to meet such demand.
And businesses, faced with a less onerous tax burden, would have even more reasons to invest in new factories, equipment and projects, which should also lead to more jobs.”
Hmmm, is this a true fact? I say no, because we have a very large amount of consumer inventory on hand now, once this is sold, the producers will not be making more nor will they add more jobs. Employing new workers will cut into the executive bonus, on the goods sold already, so what they will do is extend lead-times, to match the current capacity of production. If increased production is needed this will be out sourced to India, China, Mexico.
This is what our (Big Brother) Government needs to do, instead of increasing our debt; they should be looking at radical spending cuts. But that would hurt all of Governments buddies, like special interest groups, corporate campaign contributors, and the best friend the lobbyist.
We were promised by the Congress in November of 2008, that the Wall Street bailout was needed to protect Main Street. I see no protection of Main Street, what I do see is homelessness and hunger. I see increased violence on the streets, I see more political corruption being exposed, and I only see one arrest for the Wall Street collapse for one small 50 Billion scheme? And he is sitting in his penthouse? He’s not even in jail? Over 8 trillion dollars was stolen from the American economy in 2008 where are the rest of the arrests for these crimes?

Probably not much. Tax cuts for businesses just end up in some corporate account, and businesses spend less than 10% of US GDP. Tax cuts for the rich don’t help either; that’s what Bush did for the past 7 years, and the money ended up in rich people’s bank accounts. A lot of it was squandered in real estate and other investment schemes, creating bubbles, which also did not help the economy.

On the other hand, tax cuts for the working class, which account for 70% of GDP, could help if the money is spent (not saved) on US-supplied services and products, not imported cars and flat-screen TVs. It’s a big if, but it’s possible.

We really need direct stimulation of the economy, like Roosevelt’s Works Progress Administration of 1932. By the end of the first year, he already had a million new jobs (in a country of 120 million people) and still growing. We still use most of these projects today, more than 70 years later.

More borrowing against the future to shore up the present is not a viable long term strategy. Of course that won’t keep our politicians from trying just that, to sustain the unsustainable by borrowing against our future. It doesn’t take a crystal ball to see that our future will be very bleak if we continue on the current trajectory.

Tax cuts are just fine for people who still have jobs, but are worthless to people truly in need. In today’s economy, tax cuts are largely window-dressing, whose main purpose is to forestall Republican intransigence.

We have to focus on creating demand, and tax cuts just don’t do that. At best tax cuts create opportunities to spend, which may or may not translate into demand. At least the currently-proposed tax cuts are to go to people with real needs, instead of those addicted to self-indulgence in greed.