Asymmetrical Information

Right.

This comment, during the Dem primary, is comparable to Bush's fiscal record?

Right.

Still, an actual lie told by a Democrat is less offensive than something spoken by a Republican that's speculation, but later turns out not to be true. Get with it, Jane, you should know by now the (D) standard is quite different than the (R) standard.

It's hard to get excited about a presidential candidate who bases his fiscal policy on the expectation that the internet bubble is going to reinflate.

Democratic primary contenders should be prepared to use that line against Gov. Dean. He has a seemingly magical belief that is soon as he enters the White House, the Clinton economy will return. Lieberman, at least, should tear Howard a new one over this issue.

Dean, is quite simply, an idiot.

He wants to:
1) Repeal all the tax cuts
2) Provide health insurance for EVERYONE under 25 who doesn't currently have it
3) Provide health insurance for another 11 million who make 185% of poverty level income
4) Force all employers to offer health insurance
5) Increase funding to SS and Medicare without reforming them
6) Have the fed govt "create" jobs
7) Sign Kyoto
8) Elevate the EPA to cabinet level status (and therefore increase funding)

Yet he trashes Bush on the size of the deficit. Mr Dean, please tell me how you are going to pay for all this?

Tax increases, presumably.

And this qualifies him as "fiscally conservative" in what way exactly?

Oh, and might I point out that Dean's channeling the Rubin bit on "fiscal responsibility sends good signals to the bond market, which lowers long-term interest rates, which helps growth?" Seeing how that's a lot more obvious interpretation than "Dean expects the internet bubble to reinflate."

And "fiscal conservative" isn't the same as "small government."

But anyone fiscally responsible, Jason, knows that raising taxes back to 2000 levels, or even 1996 levels, isn't going to close the deficit, and that raising taxes enough to close the deficits is not going to produce either long-term actuarial balance in SS/Medicare, or sufficient interest savings to fund them. Not even Bob Rubin would argue that Dean's going to bring back the 1999 economy just by raising taxes.

Jane said:

I don't think that anyone can properly say that Howard Dean is more fiscally responsible than anyone he'll be running against.

And then says:

anyone fiscally responsible, Jason, knows that raising taxes back to 2000 levels, or even 1996 levels, isn't going to close the deficit,

So therefore, because raising taxes may not be enough to return to a surplus then Dean must be as bad fiscally as Bush?

As Brad DeLong commented on something from the Volokh Conspiracy, just because you can't do everything does not mean you can't do a lot.

Just because Dean's fiscal proposals will not completely fix the situation we are in does not mean that it would not be better than the mess Bush has gotten us into.

Yup, his faith that Clinton was magic, and that tax increases somehow were part of that magic, is amazing.

As I blogged this:

"Most Americans would gladly pay the same taxes they paid under President Bill Clinton if they could just get the Clinton economy back," said former Vermont governor Howard Dean, one of the leaders in the race for the Democratic presidential nomination. "People are not stupid out there."

Sheer policy genius.

A href="http://www.poliblogger.com/poliblog/archives/001215.html">http://www.poliblogger.com/poliblog/archives/001215.html

Yup, his faith that Clinton was magic, and that tax increases somehow were part of that magic, is amazing.

As I blogged this:

"Most Americans would gladly pay the same taxes they paid under President Bill Clinton if they could just get the Clinton economy back," said former Vermont governor Howard Dean, one of the leaders in the race for the Democratic presidential nomination. "People are not stupid out there."

Sheer policy genius.

http://www.poliblogger.com/poliblog/archives/001215.html

I would gladly pay the same taxes I paid under President Bill Clinton if I could just get the Clinton economy back.

One point: the 1990s economy, though clearly not all the "New Economy" was cracked up to me, was also much more than an "internet bubble." Productivity rose, capital markets became more efficient, the deficit dropped, etc.

Sure, whomever got elected in 2000 would get stuck dealing with the aftermath. The problem, IMHO, is that Bush has failed to deal with it.

The stock line going into this week about Dean from writers on the near-left was that while he was seemingly far out there on his Iraq and health care nationalization ideas, he was in the mainstream -- and even to the right of Bush -- on other issues, like fiscal policy.

Dean's quick abandonment of his stance on Social Security and retirement age shows he's not going to allow anyone in his party to tar him with the "moderate" brush. Look for a similar back-away on his gun control beliefs in the upcoming weeks, as one or more of his rivals goes after him on that issue.

Anybody who renounces an increase in the retirement age simply cannot be taken seriously, at least no more seriously than any other candidate. Why does anybody pay any attention to these knaves and jackals?

GT, for anyone to be saying that the problems of SS are going to be fixed because once he's in office, the late 1990's economy and budget surplus are going to return, is as wildly irresponsible a campaign promise as you can get.

WSJ wrote that more than a few large firms raided their pension funds in the late 90s, replacing cash with corporate stocks whose value was projected to increase at 1990s rates. As a result, many pension plans are now seriously underfunded.

If Clinton, and now Dean, want to claim credit for the irrational exuberance of the 1990s, then they ought to take the heat when union retirees find out their pension benefits have been slashed.

Unfortunately, leftist shills will pin it all on GW Bush and the left wing shills will march in lock step.

Clinton had nothing to do with the economy of the 90's. Business was simply steady. Clinton coasted though it. Name one policy change he did that improved the economy.

It's been shown that lowering high taxes stimulates the economy, thus creating more jobs and more spending. Just about every Province in Canada has found this out. In Alberta, they have no Provincial tax on goods at all.

Why can't liberals get their heads around that? More people working and paying taxes actually increases government coffers. It also increases economic activity because people have more money to spend.

And "fiscal conservative" isn't the same as "small government."

A “fiscal conservative” is one who wishes to minimize as much as possible the economic costs of government usually through lower taxes and spending. It’s pretty much synonymous with “smaller government.”

Since Dean and the rest of the Nine Dwarves have pretty much made it clear that none of them has any interest in any real reductions in spending (and they’re even worse on entitlement reform), none of them can in any meaningful way be considered “fiscally conservative.”

Jane,

I'm not saying Dean is a paragon of fiscal virtue.

But this is primary season. He's already said he's going to raise taxes. What more do you want him to say? At least he wants to pay for his spending proposals and not kick the bill forward as Bush is doing.

He's not perfect. But to say he's no better than Bush, based on a campain comment? No better than Bush, who has the worst fiscal record in memory?

It's your opinion but that sounds ridiculous to me.

"But anyone fiscally responsible, Jason, knows that raising taxes back to 2000 levels, or even 1996 levels, isn't going to close the deficit, and that raising taxes enough to close the deficits is not going to produce either long-term actuarial balance in SS/Medicare, or sufficient interest savings to fund them. Not even Bob Rubin would argue that Dean's going to bring back the 1999 economy just by raising taxes."

Um, but the deficit is the result of a) the Bush tax cuts, b) the recession, and c) the defense spending increases. Even Bush recessions eventually come to an end, and Dean wants to junk the tax cuts, so that doesn't leave much of a deficit.

As to the changing his mind on the SS retirement age thing: it appears that in 1995 he was talking about closing the federal budget deficit for that year, not the long-run actuarial health of the system. This is Dean's 1995 quote:

"The way to balance the budget, Dean said, is 'for Congress to cut Social Security, move the retirement age to 70, cut defense, Medicare and veterans pensions, while the states cut almost everything else. It would be tough, but we could do it.'"

"A “fiscal conservative” is one who wishes to minimize as much as possible the economic costs of government usually through lower taxes and spending. It’s pretty much synonymous with “smaller government.”"

Google gives conflicting answers, and wikipedia doesn't have anything, so we'll have to disagree. I remember lots of mid-90s talk about how it was "fiscally conservative" to balance the budget, independent of spending levels, though.

And what's Bush's position on the SS demographic problem? The individual retirement accounts switchero sure as hell isn't going to fix it, unless by that he secretly means "cut benefits way back while we're at it."

Jason, you're incorrect. Both the CBO and the OMB are now saying that if it hadn't been for changes in the structure of the revenue base introduced by the late 1990's boom, Clinton's budgets would have been in deficit, not surplus. The recession will end, but even if all tax cuts and spending increases are reversed (but the farmers and teacher's unions are going to be awful mad. . .) the budget won't go into surplus without slashing spending or raising income taxes substantially higher than they were when Clinton left office, substantially higher even than they were after the 1993 tax hike. And that's before Dean gets to propose one drop of new spending, do anything about SS/Medicare, or explains to the world why he's summarily pulling our troops out of Iraq.

Even the Cato Institute is reminiscing for the days of the spendthrift Democrats!

Actually, Dean has suggested more troops in Iraq, not less. His statements are much more enlightening if you read them, and not the media spin.

Like Gore's were.

So, Dean is going to raise taxes, take more of my money,take more of business money, who will respond by cutting jobs to maintain the bottom line, thus increasing unemployment, welfare, medicare care costs, housing subsidies. Meanwhile, cuts to pension benifits, veteran benifits, etc, takes more money out of the local economy, which puts the squeeze on small business, who in tern react like big business, or simply fold up.
Meanwhile Dean is spending even MORE on the military? Sounds like he'll top bush's spending by a long shot, as well as reduce the nations GNP, which will give us even higher trade deficits, which right now are slowly going DOWN.

How about actually reading his positions:

http://www.deanforamerica.com/site/PageServer?pagename=policy_statement_economy

Should we feel sorry for the press as they try, frantically, to apply a barrel of pancake makeup to Howard Dean and present this raging leftist to America as a soggy "centrist"? This is a really tough job. The entire political spectrum is going to have to be dragged off to the left of Massachusetts.

It’s hard not to snicker at the thought of newspapers like The Washington Post declaring in a Sunday front-page headline: "As Governor, Dean Was Fiscal Conservative." Liberal reporter Michael Powell (last noticed in a furious fit of powder-puffing Senator Hillary Clinton) trotted out an assortment of Vermont "liberals" to declare that Dean was far too moderate for them. It should have come with a disclaimer: "The following story was gathered in Vermont, where the acceptable middle can be defined by the persistent re-election of Congressman Bernie Sanders, a flaming socialist."

Let’s review a smidgen of what the networks and news magazines have desperately tried to explain away or paper over in the last few weeks. Dean is agnostic on the closing of Saddam Hussein’s totalitarian torture house, and has to be poked and pushed into acknowledging that Saddam was a bit of a bad egg. Dean obediently followed the leftist judicial activists of Vermont’s Supreme Court into providing gay "civil unions," which has led to a Republican electoral surge. Dean, according to the Cato Institute, led one of the nation’s highest taxing and spending states. Dean backs partial-birth abortion, and thinks the whole issue of skull-sucking infanticide is "phony."

Perhaps most ridiculously, reporters make excuses for Dean’s fierce attacks on President Bush. They make Democratic hearts "soar." They are not described as "red meat" for "Bush haters," although those words would apply. They use words like "brusque," "feisty," "testy," and "in-your-face."

What they’re not doing is dipping into the vocabulary they used for conservatives, for example Newt Gingrich. CBS called Newt "bombastic and ruthless." NBC chided his "rabid attack dog against anything liberal." ABC claimed that his "slash-and-burn rhetoric against Democrats has made him the poster boy for political resentment and rage, and he's proud of it." Network reporters wrapped these attacks in "news" stories on Gingrich, and now Dean is only "feisty."

If any of these outlets breathe a word about the need for Republican "civility" in politics, please direct them back to everything Dean has said this year already. And he’s just getting started.

In Time, Newsweek, and U.S. News & World Report, reporters piled the pages high on the Dean campaign. They were willing to acknowledge that Republicans may find in Dean’s record and daily statements a heaping helping of things which might be described by some as liberal. But for the purposes of frustrating George W. Bush in this election cycle, that labeling will not be done by the reporters. It will be attributed to the apparent hyper-partisans penning RNC press releases and making GOP ads, and then pooh-poohed by the so-called referees of the media elite.

Time’s John Cloud spun furiously that "Sure, there is a much-remarked-upon bloom of anger in his speeches, but it's petaled with irony...Dean sometimes seems not so much the angriest man in politics but the most bemused." He’s not mean or harsh or humorless. He’s "intentionally unpolished."

Newsweek’s Jonathan Alter – who flits from week to week between sharp-elbowed columns and "news" reporting – dragged out the old chestnut: "The old labels are increasingly useless." Tell that to a voter who’s looking at a presidential wannabe eager to raise his taxes, withdraw his troops from terror-backing locales, mistake "homeland security" for government-employee-union payoffs, confiscate his SUV as a planetary menace, escort his daughter for an abortion without parental consent (another apparently phony pro-life issue), and turn his local hospital into a laboratory for Hillary Clinton experiments, with "universal" recessionary results.

It’s also not promising that Dean can make "factual" statements about Team Bush that cannot be located in the realm of reality. In one answer to Newsweek, Dean claimed that Bush’s "environmental record is widely understood to be probably the worst in most people’s lives." Would anyone try to argue against the facts and say that, for instance, air quality is worse than 1970? Newsweek had no space for corrections. Bush also apparently "massed trillions of dollars’ worth of debt" – not yet he hasn’t – as if Bush is the only politician in Washington in favor of loading up the federal budget. Newsweek doesn’t put an asterisk by that whopper, either.

The Dean media boomlet makes one thing clear: it’s going to be another trying election cycle of liberal media propaganda, bombastic and ruthless, thinly disguised as your "objective" news product.

Should we feel sorry for the press as they try, frantically, to apply a barrel of pancake makeup to Howard Dean and present this raging leftist to America as a soggy "centrist"? This is a really tough job. The entire political spectrum is going to have to be dragged off to the left of Massachusetts.

It’s hard not to snicker at the thought of newspapers like The Washington Post declaring in a Sunday front-page headline: "As Governor, Dean Was Fiscal Conservative." Liberal reporter Michael Powell (last noticed in a furious fit of powder-puffing Senator Hillary Clinton) trotted out an assortment of Vermont "liberals" to declare that Dean was far too moderate for them. It should have come with a disclaimer: "The following story was gathered in Vermont, where the acceptable middle can be defined by the persistent re-election of Congressman Bernie Sanders, a flaming socialist."

Let’s review a smidgen of what the networks and news magazines have desperately tried to explain away or paper over in the last few weeks. Dean is agnostic on the closing of Saddam Hussein’s totalitarian torture house, and has to be poked and pushed into acknowledging that Saddam was a bit of a bad egg. Dean obediently followed the leftist judicial activists of Vermont’s Supreme Court into providing gay "civil unions," which has led to a Republican electoral surge. Dean, according to the Cato Institute, led one of the nation’s highest taxing and spending states. Dean backs partial-birth abortion, and thinks the whole issue of skull-sucking infanticide is "phony."

Perhaps most ridiculously, reporters make excuses for Dean’s fierce attacks on President Bush. They make Democratic hearts "soar." They are not described as "red meat" for "Bush haters," although those words would apply. They use words like "brusque," "feisty," "testy," and "in-your-face."

What they’re not doing is dipping into the vocabulary they used for conservatives, for example Newt Gingrich. CBS called Newt "bombastic and ruthless." NBC chided his "rabid attack dog against anything liberal." ABC claimed that his "slash-and-burn rhetoric against Democrats has made him the poster boy for political resentment and rage, and he's proud of it." Network reporters wrapped these attacks in "news" stories on Gingrich, and now Dean is only "feisty."

If any of these outlets breathe a word about the need for Republican "civility" in politics, please direct them back to everything Dean has said this year already. And he’s just getting started.

In Time, Newsweek, and U.S. News & World Report, reporters piled the pages high on the Dean campaign. They were willing to acknowledge that Republicans may find in Dean’s record and daily statements a heaping helping of things which might be described by some as liberal. But for the purposes of frustrating George W. Bush in this election cycle, that labeling will not be done by the reporters. It will be attributed to the apparent hyper-partisans penning RNC press releases and making GOP ads, and then pooh-poohed by the so-called referees of the media elite.

Time’s John Cloud spun furiously that "Sure, there is a much-remarked-upon bloom of anger in his speeches, but it's petaled with irony...Dean sometimes seems not so much the angriest man in politics but the most bemused." He’s not mean or harsh or humorless. He’s "intentionally unpolished."

Newsweek’s Jonathan Alter – who flits from week to week between sharp-elbowed columns and "news" reporting – dragged out the old chestnut: "The old labels are increasingly useless." Tell that to a voter who’s looking at a presidential wannabe eager to raise his taxes, withdraw his troops from terror-backing locales, mistake "homeland security" for government-employee-union payoffs, confiscate his SUV as a planetary menace, escort his daughter for an abortion without parental consent (another apparently phony pro-life issue), and turn his local hospital into a laboratory for Hillary Clinton experiments, with "universal" recessionary results.

It’s also not promising that Dean can make "factual" statements about Team Bush that cannot be located in the realm of reality. In one answer to Newsweek, Dean claimed that Bush’s "environmental record is widely understood to be probably the worst in most people’s lives." Would anyone try to argue against the facts and say that, for instance, air quality is worse than 1970? Newsweek had no space for corrections. Bush also apparently "massed trillions of dollars’ worth of debt" – not yet he hasn’t – as if Bush is the only politician in Washington in favor of loading up the federal budget. Newsweek doesn’t put an asterisk by that whopper, either.

The Dean media boomlet makes one thing clear: it’s going to be another trying election cycle of liberal media propaganda, bombastic and ruthless, thinly disguised as your "objective" news product.

Should we feel sorry for the press as they try, frantically, to apply a barrel of pancake makeup to Howard Dean and present this raging leftist to America as a soggy "centrist"? This is a really tough job. The entire political spectrum is going to have to be dragged off to the left of Massachusetts.

It’s hard not to snicker at the thought of newspapers like The Washington Post declaring in a Sunday front-page headline: "As Governor, Dean Was Fiscal Conservative." Liberal reporter Michael Powell (last noticed in a furious fit of powder-puffing Senator Hillary Clinton) trotted out an assortment of Vermont "liberals" to declare that Dean was far too moderate for them. It should have come with a disclaimer: "The following story was gathered in Vermont, where the acceptable middle can be defined by the persistent re-election of Congressman Bernie Sanders, a flaming socialist."

Let’s review a smidgen of what the networks and news magazines have desperately tried to explain away or paper over in the last few weeks. Dean is agnostic on the closing of Saddam Hussein’s totalitarian torture house, and has to be poked and pushed into acknowledging that Saddam was a bit of a bad egg. Dean obediently followed the leftist judicial activists of Vermont’s Supreme Court into providing gay "civil unions," which has led to a Republican electoral surge. Dean, according to the Cato Institute, led one of the nation’s highest taxing and spending states. Dean backs partial-birth abortion, and thinks the whole issue of skull-sucking infanticide is "phony."

Perhaps most ridiculously, reporters make excuses for Dean’s fierce attacks on President Bush. They make Democratic hearts "soar." They are not described as "red meat" for "Bush haters," although those words would apply. They use words like "brusque," "feisty," "testy," and "in-your-face."

What they’re not doing is dipping into the vocabulary they used for conservatives, for example Newt Gingrich. CBS called Newt "bombastic and ruthless." NBC chided his "rabid attack dog against anything liberal." ABC claimed that his "slash-and-burn rhetoric against Democrats has made him the poster boy for political resentment and rage, and he's proud of it." Network reporters wrapped these attacks in "news" stories on Gingrich, and now Dean is only "feisty."

If any of these outlets breathe a word about the need for Republican "civility" in politics, please direct them back to everything Dean has said this year already. And he’s just getting started.

In Time, Newsweek, and U.S. News & World Report, reporters piled the pages high on the Dean campaign. They were willing to acknowledge that Republicans may find in Dean’s record and daily statements a heaping helping of things which might be described by some as liberal. But for the purposes of frustrating George W. Bush in this election cycle, that labeling will not be done by the reporters. It will be attributed to the apparent hyper-partisans penning RNC press releases and making GOP ads, and then pooh-poohed by the so-called referees of the media elite.

Time’s John Cloud spun furiously that "Sure, there is a much-remarked-upon bloom of anger in his speeches, but it's petaled with irony...Dean sometimes seems not so much the angriest man in politics but the most bemused." He’s not mean or harsh or humorless. He’s "intentionally unpolished."

Newsweek’s Jonathan Alter – who flits from week to week between sharp-elbowed columns and "news" reporting – dragged out the old chestnut: "The old labels are increasingly useless." Tell that to a voter who’s looking at a presidential wannabe eager to raise his taxes, withdraw his troops from terror-backing locales, mistake "homeland security" for government-employee-union payoffs, confiscate his SUV as a planetary menace, escort his daughter for an abortion without parental consent (another apparently phony pro-life issue), and turn his local hospital into a laboratory for Hillary Clinton experiments, with "universal" recessionary results.

It’s also not promising that Dean can make "factual" statements about Team Bush that cannot be located in the realm of reality. In one answer to Newsweek, Dean claimed that Bush’s "environmental record is widely understood to be probably the worst in most people’s lives." Would anyone try to argue against the facts and say that, for instance, air quality is worse than 1970? Newsweek had no space for corrections. Bush also apparently "massed trillions of dollars’ worth of debt" – not yet he hasn’t – as if Bush is the only politician in Washington in favor of loading up the federal budget. Newsweek doesn’t put an asterisk by that whopper, either.

The Dean media boomlet makes one thing clear: it’s going to be another trying election cycle of liberal media propaganda, bombastic and ruthless, thinly disguised as your "objective" news product.

Should we feel sorry for the press as they try, frantically, to apply a barrel of pancake makeup to Howard Dean and present this raging leftist to America as a soggy "centrist"? This is a really tough job. The entire political spectrum is going to have to be dragged off to the left of Massachusetts.

It’s hard not to snicker at the thought of newspapers like The Washington Post declaring in a Sunday front-page headline: "As Governor, Dean Was Fiscal Conservative." Liberal reporter Michael Powell (last noticed in a furious fit of powder-puffing Senator Hillary Clinton) trotted out an assortment of Vermont "liberals" to declare that Dean was far too moderate for them. It should have come with a disclaimer: "The following story was gathered in Vermont, where the acceptable middle can be defined by the persistent re-election of Congressman Bernie Sanders, a flaming socialist."

Let’s review a smidgen of what the networks and news magazines have desperately tried to explain away or paper over in the last few weeks. Dean is agnostic on the closing of Saddam Hussein’s totalitarian torture house, and has to be poked and pushed into acknowledging that Saddam was a bit of a bad egg. Dean obediently followed the leftist judicial activists of Vermont’s Supreme Court into providing gay "civil unions," which has led to a Republican electoral surge. Dean, according to the Cato Institute, led one of the nation’s highest taxing and spending states. Dean backs partial-birth abortion, and thinks the whole issue of skull-sucking infanticide is "phony."

Perhaps most ridiculously, reporters make excuses for Dean’s fierce attacks on President Bush. They make Democratic hearts "soar." They are not described as "red meat" for "Bush haters," although those words would apply. They use words like "brusque," "feisty," "testy," and "in-your-face."

What they’re not doing is dipping into the vocabulary they used for conservatives, for example Newt Gingrich. CBS called Newt "bombastic and ruthless." NBC chided his "rabid attack dog against anything liberal." ABC claimed that his "slash-and-burn rhetoric against Democrats has made him the poster boy for political resentment and rage, and he's proud of it." Network reporters wrapped these attacks in "news" stories on Gingrich, and now Dean is only "feisty."

If any of these outlets breathe a word about the need for Republican "civility" in politics, please direct them back to everything Dean has said this year already. And he’s just getting started.

In Time, Newsweek, and U.S. News & World Report, reporters piled the pages high on the Dean campaign. They were willing to acknowledge that Republicans may find in Dean’s record and daily statements a heaping helping of things which might be described by some as liberal. But for the purposes of frustrating George W. Bush in this election cycle, that labeling will not be done by the reporters. It will be attributed to the apparent hyper-partisans penning RNC press releases and making GOP ads, and then pooh-poohed by the so-called referees of the media elite.

Time’s John Cloud spun furiously that "Sure, there is a much-remarked-upon bloom of anger in his speeches, but it's petaled with irony...Dean sometimes seems not so much the angriest man in politics but the most bemused." He’s not mean or harsh or humorless. He’s "intentionally unpolished."

Newsweek’s Jonathan Alter – who flits from week to week between sharp-elbowed columns and "news" reporting – dragged out the old chestnut: "The old labels are increasingly useless." Tell that to a voter who’s looking at a presidential wannabe eager to raise his taxes, withdraw his troops from terror-backing locales, mistake "homeland security" for government-employee-union payoffs, confiscate his SUV as a planetary menace, escort his daughter for an abortion without parental consent (another apparently phony pro-life issue), and turn his local hospital into a laboratory for Hillary Clinton experiments, with "universal" recessionary results.

It’s also not promising that Dean can make "factual" statements about Team Bush that cannot be located in the realm of reality. In one answer to Newsweek, Dean claimed that Bush’s "environmental record is widely understood to be probably the worst in most people’s lives." Would anyone try to argue against the facts and say that, for instance, air quality is worse than 1970? Newsweek had no space for corrections. Bush also apparently "massed trillions of dollars’ worth of debt" – not yet he hasn’t – as if Bush is the only politician in Washington in favor of loading up the federal budget. Newsweek doesn’t put an asterisk by that whopper, either.

The Dean media boomlet makes one thing clear: it’s going to be another trying election cycle of liberal media propaganda, bombastic and ruthless, thinly disguised as your "objective" news product.

Jason McCullough wrote:

And what's Bush's position on the SS demographic problem? The individual retirement accounts switchero sure as hell isn't going to fix it, unless by that he secretly means "cut benefits way back while we're at it."

Actually letting younger workers opt out would probably fix much of the problem but certainly not all. The reason being that since each worker is promised more in benefits than they are paying in FICA payroll taxes (which is why Social Security has an unfunded liability in the trillions), it costs more to keep a worker in the plan and have to pay them benefits even if you no longer get their “contribution.” So the individual retirement account plan would actually benefit the system by reducing its unfunded liability.

As far as making benefit cuts – I’m all for raising the retirement age, lowering COLAs, and means testing for a start but let’s be honest about something. Letting younger workers opt out of the ponzai scheme by diverting part of their FICA dollars into individual accounts probably means that we will have to make fewer benefit cuts rather than more.

Do you think the working stiff crippled up at 64 wants to work until 70?
Thats a hard sell to a working man.

And CoLa caps don't sit well with the union man, who happens to be a big contributor to the Dems

Well, Adam, that's very nice that he wants to keep more troops in Iraq, but that puts us rather farther from balancing the budget, doesn't it?

I don't care what Dean's positions are at the moment. My point is that if he wants to balance the budget, clawing back the tax cuts and waiting for the recession to end will be insufficient. He is going to have to propose big tax hikes over and above the Clinton hikes -- and the more he proposes to spend, the more he is going to have to tax. There is a marginal rate of tax beyond which you do start to see Laffer effects, and if he wants to keep or increase the progressivity of the tax code, the tax hikes necessary to first balance the budget, then pay for his new spending proposals, and finally put SS into actuarial balance are likely to cross the line. Because of their impressive ability to shift income into tax favored forms, and because wealthy married women are disproportionately likely to respond to tax hikes by taking dramatically lower-paying jobs or leaving the workforce entirely, raising taxes on the wealthiest Americans already produces, percent-for-percent, the smallest increase in tax revenues. That well is certainly not dry, but it's within sight of the effective limits where higher tax levels start having dramatic economic effects.

"Jason, you're incorrect. Both the CBO and the OMB are now saying that if it hadn't been for changes in the structure of the revenue base introduced by the late 1990's boom, Clinton's budgets would have been in deficit, not surplus. The recession will end, but even if all tax cuts and spending increases are reversed (but the farmers and teacher's unions are going to be awful mad. . .) the budget won't go into surplus without slashing spending or raising income taxes substantially higher than they were when Clinton left office, substantially higher even than they were after the 1993 tax hike. And that's before Dean gets to propose one drop of new spending, do anything about SS/Medicare, or explains to the world why he's summarily pulling our troops out of Iraq."

I'm unable to find anything useful from the CBO, and I don't trust the OMB's reporting anymore. Got any links?

And the "we can't tax the wealthy any more without actually causing revenues to drop" thing seems a bit contrary to past experience; tax rates were awfully high '60-'80. Are you saying the tax rates of, say, 1980 were on the wrong side of the Laffer curve?

"Actually letting younger workers opt out would probably fix much of the problem but certainly not all."

Thorley, it'd have no effect whatsoever; it's just moving money around. The "rate of return" of private investments is only higher because you're pretending no one has to pay today's existing liabilities.

Jason McCullough wrote:

Thorley, it'd have no effect whatsoever; it's just moving money around. The "rate of return" of private investments is only higher because you're pretending no one has to pay today's existing liabilities.

You seem to be switching gears here. I was talking about the Social Security’s unfunded liability problem which is because the system in its current form promise each person more in retirement benefits then it collects from them in taxes.

Rather than trying to prop up the pyramid system (and make it worse) with new marks who will also be promised more in benefits then they pay in taxes, it makes sense to let the younger workers opt out and reduce the system’s unfunded liabilities.

So yes, while there will still be an unfunded liability in the system, it would be much lower than if we didn't let people opt out.

How the rate of return compares to private sector investments isn’t really Germaine to how letting workers opt out reduces the program's unfunded liability.

Thats like saying if everyone crashed their car, the insurance company would go broke, which it would. old age social Security however, doesn't really work that way.The number of people paying in always exceeds the number collecting. The death rate before, and after the age of when you can draw benefits keeps the balance. Plus it becomes eroded if you have other income sources
It could be improved by better fund investment though.

Jane,

I'm surprised you are peddling the utterly discredited idea that raising taxes will result in less revenue, as you seem to be doing.

Jason, given that the OMB is one of the two main reporting agencies on the budget, deciding to throw out any evidence from them is going to make it awfully hard for you to learn much about the budget. One may take issue with their forecasts -- I do -- but their historical work is tends to err on the conservative (as in, cautious) side. At any rate, the CBO's analysis shows essentially the same thing -- look over their past publications, and you'll find it. Two years ago, tax cuts dominated the change in the budget picture, but the effect of tax cuts is dwarfed by the effect of a smaller-than-effective economy, and falling levels of tax revenue per percentage of GDP. That latter sort of change is called technical change, and if you go through the CBO numbers, you'll see that it dominates their analysis.

GT, raising taxes does produce less revenue -- at some level of taxation. Not the current level. But put, say, a 55% tax on the top income bracket, and IMHO you'll see widespread evasion, avoidance, and increased leisure consumption among marginal users. No economist disagrees with Laffer (nor with the seminal analysis on inflation that he originally got the idea from); they just disagree about the point at which the income effect gets swamped by the substitution effect, the income-switching effect, and the underground economy. If you've gotten the idea that Laffer is thoroughly discredited, you're either reading bad sources, or misreading the sources you have. What has been discredited is the idea that at the level of taxation that existed under Reagan (or now), marginal tax cuts produced higher tax revenues. The specific case is not generalizeable to all cases, and Reagan's tax cuts were comingled with tax simplification measures that took back large hunks of the tax cuts from the rich. No one doubts that if you raised effective tax rates to, say, 70%, you would hurt GDP and probably cost yourself net tax revenue in the medium-to-long term. The argument is all about the level, not the process.

Jane,

I don't disagree with anything you said.

But who is talking about going to 70%+ marginal rates?

As you point out even at the rate levels that existed prior to Reagan you still hadn't crossed the hump. To say that Dean's tax increase proposal is flawed because if marginal rates are 70% or 80% it will reduce revenues, when he has never ever said that the wants to raise it anywhere near that level, is a bit disingenous. No?

Well, to raise taxes back to Clinton levels, the top folks will be in the 40% range.

Raise it again to cover the budget deficit, assuming you mainly want to stick it to them, and you'll have to get it a lot higher, both because those folks only make about 1/3 of national income, and because they have a lot more ability to shift, delay, etc. their income -- that's why Clinton's tax hike fell well short of what it was expected to bring in. Let's call it 45%.

Then you have new spending that Dean is like hell going to roll back -- 47%

Then we have the troops extra troops in Iraq. 49%.

Then we have Mr Dean's promise not to touch social security. Now, the fiscal tightening from SS payouts is not, contrary to popular belief, going to start when the trust fund is exhausted. It is going to come when the SS surplus peaks and the boomers start to retire. The first boomers will be eligible to retire in 2008. We'll need to tack on at least 3% for that if we believe in the Rubinomics legend that long term low expectations for the budget deficit are what make traders happy. 52%

Then there's Mr Dean's fabulous new health care promises. I'm giving him at least 8% for those. 60%

And while we're at it, let's not forget our generous new prescription drug plan for seniors. Let's call that another 5%. 65%

Maybe I'm over. But not by more than 5%, because the wealthiest Americans are historically the hardest to tax. And before the liberals on the board say something silly like "Well, we need tough new laws to make them pay", let me point out that such an enterprise is extremely expensive, because it requires new staff and capital at the IRS and the courts, and also, we and every other country on the planet have been looking for such magic laws for the past seventy years without success. What such laws end up doing is clobbering people who make $200,000 a year with a big mortgage and three kids in college who can't afford a high priced lawyer to fight off the taxman. The more you go after the rich, the more you kill off the upper middle class, erecting a nice permanent barrier between them and us.

The top marginal tax rate was 70% or greater up until the Reagan tax cuts. This was coupled with so many possible tax shelters that I wouldn't be surprised if billionaires had a lower effective tax rate than minimum wage workers, but the ill effects of that marginal rate were still present. It simply made a lot more sense for the rich to pursue tax shelters than to create wealth. Maybe Reagan cut it back too far - if you think citizens exist to create wealth for the government to grab, that is...

Jane,

Off by 5%?

I have no idea and neither do you. You could be off by 25%.

In any case I would suggest we compare the records rather than the words. How does Dean's fiscal record in Vt compare with Bush's, in TX and in the WH?

"'Well, we need tough new laws to make them pay', let me point out ... we and every other country on the planet have been looking for such magic laws for the past seventy years without success. What such laws end up doing is clobbering people who make $200,000 a year with a big mortgage and three kids in college..."

and

"The top marginal tax rate was 70% or greater up until the Reagan tax cuts. This was coupled with so many possible tax shelters that I wouldn't be surprised if billionaires had a lower effective tax rate than minimum wage workers..."

Both quite correct.

Well, the effective tax rate of billionaires wasn't lower than that of minumum wage workers, but the richest did pay a lower effective tax rate than those poorer than them.

When tax rates go up high enough you have to create all sorts of exceptions to the rules to keep the economy running -- and so many incentives to do so are created that Congress *just can't help itself* from enacting way more even than are really needed! ;-)

This is why even such a paleo-Keynesian as Nobelist William Vickery (who was so progressive he wanted to impose universal wage and price controls *and* run trillion dollar annual deficits to eliminate unemployment) was in favor of adopting basically a flat tax. He saw that the "progressive" income tax of his era was in fact often regressive, as well as arbitrary and unfair, having very unequal effects on people in like situations. And that an awful lot of expense was incurred to keep it that way.

BTW, the same thing is true of the estate tax today. The very largest estates pay a lower average tax rate than smaller ones, and a number of the very largest estates pay $0.

(It's not so hard for Warren and Bill not to oppose the estate tax when they know their estates are going to pass tax-free into charitable trusts that will be run by their family members who will charge a market rate for managing the trust assets. The market rate for managing billions of dollars of assets is quite substantial. And the power to manage them and make distributions from them also gets one a lot of perks, from seats on corporate boards to opening night tickets to the opera and museum exhibitions and many other good things. Just ask the Kennedys and Rockefellers, whose estates have been depleted by estate tax rates as high as 70% for generations. )

GT, if I'm off by 25%, then you're saying that Howard Dean will keep the top tax bracket just what it was under the Clinton administration, yet still raise spending and balance the budget? When do we get to see him walk on water?

Hehe.

Come on Jane, I was just throwing out numbers.

BTW, He is expected to start walking on (frozen) water around January of next year.

GT, if I'm off by 25%, then you're saying that Howard Dean will keep the top tax bracket just what it was under the Clinton administration, yet still raise spending and balance the budget?

by repealing the Bush tax cuts - and Dean has said during the Tim Russert interview that the best way to increase government receipts to pay for the programs is to increase all revenue - ie, the rising tide. That's teh real solution and he hasnt promised nay magic bullets, he has accounted for every drop of his current spending proposals.

Also the increased troops in Iraq - he wants to get more UN troops, not American ones. His argument is that he can do better than Bush in convincing our allies to help us. We might actually be able to reduce our troop commitment there - a net savings.

Aziz, we've just gone through -- exhaustively! -- why repealing the Bush tax cuts will not be sufficient to balance the primary budget, much less put SS and Medicare in balance or pay for the extensive new spending Dean is promising.

Just to summarize: when Democrats make proposals, you're supposed to scream foul if they're not accurate to 10 significant figures. When Republicans make proposals, you should support it as long as its a tax cut.

Oh, and the evidence for Dean as a "wild spender" doesn't really exist in his record.

Comments are Closed.