CC: everyone who says “wahhhhh i don’t want to pay for your birth control”
(via rabbleprochoice)
Overall, higher taxes on the rich historically have correlated to higher economic growth for the country.
It seems self-evident that tax-cuts should stimulate the economy. It seems so self-evident, that we discuss the theory as if it were a known fact. We don’t even question the claim. But history offers us some evidence that tax cuts don’t stimulate the economy.
- In 1921 & 1925, major taxes cut were passed. In the following years a stock market bubble formed while working class wages stagnated, then in 1929 the bubble burst and the economy crashed into the Great Depression.
- In 1981 a tax cut was passed. The economy sank deeper into recession and stayed in recession for nearly two years.
- In 1987 major tax cuts were passed. By 1990 growth declined leading into the 1991 recession.
- In 2001 a tax cut was passed, and another rebate was given in 2008. From 2001 through 2008 the economy grew slower than it did in the preceding 8 while a bubble formed in stocks, housing, and executive salaries. In 2008 the bubble burst, and now the economy in sinking into the worst recession since the Great Depression.
So what do we see in the data overall? Perhaps we should look at the data more thoroughly. We start by looking at the marginal tax rate on the richest citizens.
When we look at the tax rate charged to the richest citizens, we see that low taxes correlate to slow growth. When marginal taxes on the rich were below 40% growth remained below 4.5%. When top taxes were above 65% growth tended to be higher, even going above 6%. Historically, higher taxes on the rich have correlated to higher growth.
Overall, higher taxes on the rich historically have correlated to higher economic growth for the country. It’s counterintuitive, but it is the historical fact. Just, to be certain, we can compare taxes to job creation also.
Again we see higher growth when the marginal tax on the rich is higher. It might seen odd, but that’s what history shows us.
Let’s look closer at how the economy changed after tax cuts. We can look at how both GDP and employment grew just before the tax cut, and then just after the tax cut. Did they grow faster or slower?
In the last 50 years there were 5 tax cuts to the rich. Three of them were followed by a decline in GDP growth, 3 were followed by a decline in employment growth. The evidence suggests that tax cuts do not promote growth and probably promote decline.
In the last 50 years there was just one tax increase to the rich. After that tax increase both the GDP and employment growth rates increased significantly.
The historical evidence suggests that an economic decline will follow a tax cut to the rich, and economic growth may follow a tax increase to the rich. The evidence suggests that the optimum tax marginal tax rate on the rich is higher than 60%.
Can we make similar conclusions for taxes rates on the middle class and poor?
For the lower classes, the historical data does not have an apparent pattern. The scatter is wide and fails to show a tendency in either direction.
Historically, taxes on the middle class and poor have shown no correlation to economic growth. Other factors must have greater influence than tax rates.
I was just talking about this not too long ago, it seems like taxing the very rich (and the companies they own) at a lower rate is an incentive to keep money concentrated at the top as opposed to actually letting profits “trickle down”.
Historical data seems to correlate with this.
In an earlier post, we suggested the Supreme Court health care ruling had a positive effect on stock markets. Simply put, we were wrong!
The charts above show the performance of the S&P and Dow Jones indexes in the minutes immediately after the decision was published. Clearly, markets went down, and the rebound we cited in the earlier post didn’t come around till the mid-afternoon.
Does this mean that conservatives are right, and Obamacare will depress the economy? Not necessarily. Just as we jumped the gun looking at a market snapshot before, you could jump the gun deriving an opposite trend from this one. As Jake Beckman, the Bloomberg editor who provided these charts, tells us, “I don’t claim to know for sure what moves the markets. I just watched them tank right after SCOTUS and connected the dots.”
We’re not economists, but we don’t want to be innumerate ideologues, either. So we’re simmering down now!
/mea culpa and return to our original happy Tumblin’.
Reblogging for the sake of accuracy (because I reblogged the earlier post too).
That is how devoted the Republicans are to tanking this economy over the next few months to win the election.
(via thepoliticalfreakshow)
Iceland, of course. Kitchen-sinked and cleaned-up, the Icelandic central bank has just decided to push up rates by 25 basis points to combat signs of inflation amidst “robust” domestic demand.
(via questionall)
America has become a country not ‘with justice for all,’ but rather with favoritism for the rich and justice for those who can afford it — so evident in the foreclosure crisis, in which the big banks believed that they were too big not only to fail, but also to be held accountable.
This is an amazing article by Joseph E. Stiglitz, a Nobel laureate in economics
America likes to think of itself as a land of opportunity, and others view it in much the same light. But, while we can all think of examples of Americans who rose to the top on their own, what really matters are the statistics: to what extent do an individual’s life chances depend on the income and education of his or her parents?
Nowadays, these numbers show that the American dream is a myth. There is less equality of opportunity in the United States today than there is in Europe – or, indeed, in any advanced industrial country for which there are data.
This is one of the reasons that America has the highest level of inequality of any of the advanced countries – and its gap with the rest has been widening. In the “recovery” of 2009-2010, the top 1% of US income earners captured 93% of the income growth. Other inequality indicators – like wealth, health, and life expectancy – are as bad or even worse. The clear trend is one of concentration of income and wealth at the top, the hollowing out of the middle, and increasing poverty at the bottom.
It would be one thing if the high incomes of those at the top were the result of greater contributions to society, but the Great Recession showed otherwise: even bankers who had led the global economy, as well as their own firms, to the brink of ruin, received outsize bonuses.
A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence – either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).
Likewise, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top, in such cases, are enriched at the direct expense of those at the bottom.
It might not be so bad if there were even a grain of truth to trickle-down economics – the quaint notion that everyone benefits from enriching those at the top. But most Americans today are worse off – with lower real (inflation-adjusted) incomes – than they were in 1997, a decade and a half ago. All of the benefits of growth have gone to the top.
Now, claims that only austerity can pacify bond markets have proved every bit as wrong as claims that the confidence fairy will bring prosperity. Almost three years have passed since The Wall Street Journal breathlessly warned that the attack of the bond vigilantes on U.S. debt had begun; not only have borrowing costs remained low, they’ve actually fallen by half. Japan has faced dire warnings about its debt for more than a decade; as of this week, it could borrow long term at an interest rate of less than 1 percent.
And serious analysts now argue that fiscal austerity in a depressed economy is probably self-defeating: by shrinking the economy and hurting long-term revenue, austerity probably makes the debt outlook worse rather than better.
But while the confidence fairy appears to be well and truly buried, deficit scare stories remain popular. Indeed, defenders of British policies dismiss any call for a rethinking of these policies, despite their evident failure to deliver, on the grounds that any relaxation of austerity would cause borrowing costs to soar.
So we’re now living in a world of zombie economic policies — policies that should have been killed by the evidence that all of their premises are wrong, but which keep shambling along nonetheless. And it’s anyone’s guess when this reign of error will end.
(Source: sarahlee310)
Bring up the wrongs of religion (be it the ‘relatively benign’ individual cruelties the churches and religious schooling have visited on the young and feeble – or the truly murderous), and the default knee-jerk retort, the most powerful in the whole arsenal or religion’s defense force, will be launched; a ‘weapon of mass distraction’:
“Yes, but look at atheism’s murders”… They’ll yell – and the rap sheet of totalitarian communism(?!) and it’s fascist cousins will be read out; “Mao, Hitler, Pot, Stalin.”
I’ve heard this “atheist murders” claim a thousand times, yet, the nonsense of it never ceases to stun me for a moment; can the faithful truly be that confused? Or are they simply being devious?
Clearly, the motivation for communism’s opposition to religion has nothing to do with the motivations intelligent and informed atheists have against superstition.
Let’s get the facts and issues straight:
· Communism is an economic doctrine; it is not a philosophic one.
· More to the point: Communism is definitely not a scientific enterprise!
· The proponents of communism did not come to an atheistic conclusion by following any ‘evidence’; they arrived at that conclusion by decree – a decree that is motivated by the grab for power.
In truth, Marxist communism and evolutionary knowledge are at opposite ends of almost any spectrum on which you care to plot them.
Since the beginning of the Arab Spring, Saudi King Abdullah almost doubled his Kingdom’s budget, committing billions in subsidies, pensions and pay raises in an effort to keep his subjects from storming the palaces.
This expensive response effectively raised the price of oil needed for the Saudis to balance their budget from under $70 a barrel before 2011 to at least $110 a barrel by 2015.
Like it or not, the bill for keeping the Persian Gulf monarchies in power is now being footed by every American. Every time we fuel our car we send an extra 35 cents per gallon, or roughly $6 per fill up, to the Save the King Foundation. Since oil goes into everything we buy from food to plastics, this adds about $1,500 annually to the expenditures of the average American family.
Paradoxically, we are forced to fund social programs for other nations at the very same time we are engaged in a heated debate about cutting social services and entitlement programs at home. It is a sad state of affairs that in the 21st century the world’s most strategic commodity is still being controlled by a cartel.
Cartels, by definition, exist to maximize the profits of their members. OPEC members, which last year raked in $1 trillion in oil revenues, are doing that masterfully.
No amount of U.S. drilling or efficiency measures will change that. The cartel’s financial needs will drive it to respond to counter moves by its clients: When we drill more oil at home, OPEC can drill less to return to a tight supply-demand relationship. When we use less, OPEC can drill less.
To change this vexing dynamic, consumers must be able to substitute for petroleum by purchasing competing fuels, like alcohol fuels, biodiesel, natural gas or electricity, if they are less costly on a per mile basis. But as long as our vehicles are able to run on nothing but oil, keeping oil monarchs on their throne will remain our national side job.
(Source: sarahlee310, via writtenmemory4)
The President’s senior adviser takes the wind out of Mitt Romney’s “economic heavyweight” sails by reminding voters just how thoroughly his policies have destroyed Massachusetts’ job creation numbers.
Put aside the fact that contraception is used to treat conditions that have nothing to do with sex (this was Fluke’s actual point). Put aside that a woman’s ability to control whether or not she is pregnant is about as fundamental and important as the right to health gets. (I’ve never been pregnant, but it sure seems like a more serious medical condition than a lot of the things we expect health insurance to pay to prevent, such as the flu.) Put aside that it’s only if we assume all women are abstinent or should be that female contraception is about promoting sex instead of protecting health, and that no society in history has ever made this assumption. Even put aside that O’Reilly and Limbaugh don’t complain about male contraception such as vasectomies, and they definitely don’t complain about “paying for people to go skiing,” which is exactly what happens when your health care premiums go toward fixing all those broken legs.
Even if you reject all of the above, you should still want health care to cover female contraception, and you should be excited about paying for it. This is because health care subsidies on birth control actually save you money — a lot of money. Every dollar that our society spends on preventing unintended pregnancies produces us “savings of between two and six dollars,” according to a new report from the Brookings Institution. The savings come from averting health care, child care, and other costs associated with unplanned pregnancies. That’s a rate of return of 100% to 500%, making it one of the safest and most profitable investments anywhere.
“Unintended pregnancies are disproportionately concentrated among women who are unmarried, teenaged, and poor,” the report finds. Those are all groups of people who could probably use help affording contraception. If you happen to dislike the idea of your money going to help poor, unmarried, or teenage women, consider the fact that you will not just get your money back, you’ll at least double it and at most quintuple. You’ll enjoy this profit in the form of lower health care costs and lower taxes.
The reverse may also be true: spending less money on contraception services leads to higher health care costs and higher taxes. When Texas cut $73 million from state family planning services, the increase in unplanned pregnancies ended up costing $230 million in additional Medicaid burdens, according to the nonpartisan state Legislative Budget Board. The other result was more unintended pregnancies and, presumably, more abortions. Other states are considering similar measures.
As an added bonus, you’ll also reduce the number and rate of abortions, 90% of which are estimated to be for unintended pregnancies. And you’ll reduce the number of unwed mothers (if you happen to think this is a number that should be reduced), who carry 70% of unplanned pregnancies.
There are a lot of unplanned pregnancies in America (almost half of U.S. pregnancies are unintended) and these pregnancies cost all of us money. If you’re thinking to yourself that unplanned pregnancies are only costly because of social safety net programs, think again. “Unintended pregnancy and childbearing depress levels of educational attainment and labor force participation among mothers and lead to higher crime rates and poorer academic, economic, and health outcomes among children,” the report notes. It’s not just about Medicaid spending, although the report says health care immediately related to unintended pregnancies cost the program $12 billion annually, or about 3% of Medicaid’s total spending. It’s about the productivity of our economy, which is something we’d all like to see improve.
Oh the common sense! It hurts! It hurts!!
(Source: sarahlee310)
So, the government cuts spending, then what?
For example. When I lost my job and had to take one making less, my household budget got smaller. I cut out unnecessary spending, one of the first things I stopped doing was going to the car wash.
I used to go to the car wash at least twice a month,…
The problem with this model is that it is inherently unsustainable. For everyone to have money, it needs to continually be injected into the system - as population steadily increases, so too then must the money supply, and you’ve gotta create jobs for everyone so everyone can make money and contribute, and you’ve gotta give money to the people that don’t have jobs (whether they’re unemployed or retired) so they can do the same. Where does all the money come from? Debt. It is impossible to escape debt in a centrally banked fractional reserve monetary system. You can’t pay down the debt because all money in circulation is debt, and was only brought into circulation through debt. If nobody owed anybody anything, there would be no money. So for there to be lots of money, there must inherently be lots of debt. Our national debt is ~$15 trillion. That’s a fucking ridiculous figure. And it’s only going to grow, until the monetary system breaks.
It doesn’t have to go on forever. You don’t have to put everyone on equal footing once you have a strong working class spending money and in less need of government assistance. More people spending means more demand for business, which means more jobs, more jobs mean more tax revenue.
Even as the population grows as long as there is a demand for business, as long as people aren’t being stretched beyond their means, business is going to continue to grow.
You take retirement into account, if you have a strong working class you’re going to have people that actually can save back for retirement like you’re “supposed” to.
I can’t even begin to imagine what it would be like if the entire monetary system just “broke”.
You can’t run a national economy, or even a state economy the way you run a household.
So, the government cuts spending, then what?
For example. When I lost my job and had to take one making less, my household budget got smaller. I cut out unnecessary spending, one of the first things I stopped doing was going to the car wash.
I used to go to the car wash at least twice a month, then all at once I stopped. I bring this up because I’ve noticed as the economy was getting worse, several car washes around where I lived went out of business.
There were a lot of other people, just like me who were cutting back on their household expenses, and luxuries like going to a fancy car wash are one of the first things to go.
Now, less people were coming to the car wash and they weren’t making enough money to pay their employees and keep up with business expenses. They close, there’s two or three more people out of work. This doesn’t just affect the employees at the car wash, it affects the owner, then affects any businesses the employees or owner might patronize, as they are now in a worse financial situation too.
This happens enough times and there is a chain reaction right up the economic line, all the way up to there being one less business (or in the case of my neighborhood, three less businesses) the city is receiving tax revenue from, everyone loses over all.
What needs to happen is people who are going to go to the car wash every few weeks need to have the money to be able to do it. The car wash employees then have a job, they have money to spend, the owner is bringing in money that they will also being put back into the economy, people start spending again and business thrives all around.
I’m all for cutting unnecessary spending in government. There’s a lot of redundancy that could be cut out, but that’s for another discussion.
Once you get the money flowing again, you are collecting more taxes on more people working, more taxes on businesses who are now in better shape and bringing in more taxable revenue, then you start paying down debt while (optimally) streamlining government spending that may not be unnecessary any more now that money is flowing in again.
Paul Krugman: it’s time to put delusional beliefs about the virtues of austerity in a depressed economy behind us
Last week the European Commission confirmed what everyone suspected: the economies it surveys are shrinking, not growing. It’s not an official recession yet, but the only real question is how deep the downturn will be.
This downturn is hitting nations that have never recovered from the last recession. For all America’s troubles, its gross domestic product has finally surpassed its pre-crisis peak; Europe’s has not. And some nations are suffering Great Depression-level pain: Greece and Ireland have had double-digit declines in output, Spain has 23 percent unemployment, Britain’s slump has now gone on longer than its slump in the 1930s.
Worse yet, European leaders — and quite a few influential players here — are still wedded to the economic doctrine responsible for this disaster.
