Good Morning….And is anyone paying attention?

Not really.

G’Morning, Bev. Did you happen to notice that Christy Harden Smith had a post up yesterday?

Thanks….I did see it when I was looking for Caturday. I really appreciated what she had to say + it was so good to hear her…a pleasure to read. How are you out there?

For the life of me, I cannot figure out why Krugman chooses to talk about depression right now. I spent my career as a forecaster, and timing is crucial. As long as the U.S. economy is expanding, all Krugman does by forecasting depression is lose credibility. It won’t help him change policy, which I presume is his objective. In fact, it’s likely to have exactly the opposite outcome, i.e., make deficit hawks more stubborn.

Sigh. There would have been a much more timely way for Krugman to enter the fray, and now he’s severely hampered his effectiveness.

Out here, we’re all just fine. The weather is warm, but fairly mild. No scorchers yet. Getting ready for my daughter to come and visit me from DC for four days, starting on Thursday. So, you know what I’m doing, right?

Don’t forget to donate to Firedoglake today.

Sorry. I’m one of those millions of lives that’s been blighted by the absence of jobs. I gave twenty bucks and already I’m regretting it. Paying rent is going to be tough this month and impossible next.

Why do you think he brought this up now?
Morning, eCAHN.

I got into a Facebook “argument” with a stranger about our “high taxes” this morning. I wish I was better informed or understood taxes better. Or both. She was complaining that “the more you make, the more they take” and I pointed out that our taxes are the lowest since 1950 and fall disproportionately on the lower income folks.

As for Krugman’s warning, I feel increasingly as though NOBODY who counts (and can do something) is paying attention, from the economists to the “Cat Food Commission” and Barack Obama.

Sounds like the G.W. Bush solution, “No belt-tightening, go shopping.”

Good morning Demi and eCahn and Margarate and Bev. Demi, my sister lives in San Fran (actually, East Bay) and says the weather has gone from HOT to jacket weather. I think that’s odd for this time of year — usually it isn’t very warm in N CA until fall.

Good golly, how do you argue with a stranger this early in the day?
Hi, Moll.

Why do you think he brought this up now?

Paul has been really beating the drum on it for a few weeks. He thinks the European countries (and ours) are paying too much attention to the deficit too soon and will send us into a second bad period. I hope he’s wrong.

I presume it is in response to the G20 meetings & everything O is doing with the Catfood Commish, etc.

Warning that such policies are counterproductive is one thing by discussing their consequences. Forecasting that depression is coming is quite another matter. IOW, there would have been a much more responsible way for Krugman to make what I presume is his point.

After all, there is no guaranty that the contractionary policies will actually be enacted. He should have warned now & waited to see if they happened before he made the forecast.

My daughter is looking forward to leaving the East Heat behind her. She’s booked a hotel room for just the two of us on Friday in Venice and that’s going to be a blast.

Early Morning Swim: Chris Hayes and Dean Baker Discuss Paul Krugman’s Depression Warning

even krugman doesn’t get it

we HAVE BEEN and STILL are in a depression, wages have been for a couple of decades, down and depressed, assets have been and are down and depressed, buying power is down and depressed, we have to work longer, harder, produce more to earn less

there is nothing that tells us we have NOT been in a depression unless you want to look at the few at the very top of the equation

we need to get back to real progressive policies to get out of the depression

I have a great deal of respect for you. I also have a great deal of respect for Paul Krugman. I’m not qualified to discuss the matter intelligently with you but I feel that Krugman is probably correct and this is going to be a long, slow and very painful process that needn’t be. No doubt my opinion is colored by my current financial difficulties but I don’t think dismissing Krugman is going to prove justified.

Oh it started last night. I have a fundie wing-nut coworker who posted something about the tanning tax as a result of “Obamacare” on her FB page, and I pointed out that our taxes are the lowest since 1950 and this person posted something about taxes going up with income (well, DUH) and we were off. It hasn’t been ugly at all, just a back-and-forth, but it takes no time for me to get way out of my depth on taxes. I’m trying to quote sources that are not terribly leftie political — she isn’t quoting the wingers either. But I think I will just let it drop.

Shouting fire in a crowded theater? Thanks, Paul.

we need to get back to real progressive policies to get out of the depression

I think he does get it and I think he understands how unlikely it is that our current crop of legislators are going to get back to progressive policies. Hence the term “Long Depression”.

Krugman does not get your point across about how workers have been ground down economically by talking about overall depression. Especially when the corp media only care about corp profits which are doing just fine. If workers are what Krugman is getting at, he should focus on workers.

Progressive Policies? What’s that?

If Krugman believes we are headed for recession, it is his responsibility to say so.

I agree that tax rates are lower than they were in some years past, but what do you mean by “fall disproportionately on the lower income folks”?

There’s usually some “point of view” explanation for this type of statement, that’s why I ask.

The numbers on the other hand are rather straight forward:

Tax Year: 2010
Filing Status: Married filing jointly

If your taxable income is between… your tax bracket is:
0 and 16,750 you pay 10%
16,750 and 68,000 you pay 15%
68,000 and 137,300 25%
137,300 and 209,250 you pay 28%
etc.

Payroll taxes are highly regressive & quite high for low income households.

Why is Krugman referred to as ‘The Shrill One’?

IIRC, about six months ago, Krugman said something that completely shot his crediblity with me, but I have forgotten what the issue was.

After I’d pegged Krugman as a sellout, I forgot the reason why. Hugh has the info, no doubt.

Sorry, I normally agree with you, but not on this. Krugman has had enough of Barry’s double talk about the need for deficit reduction. He believes we’re headed for depression and he feels strongly he needs to say so.

This self-fulfilling-prophecy argument that one can’t speak his or her mind because that might bring on the event or worsen it was exactly the argument used in the run up to the Iraq war.

INMHO, if he believes it, he has an obligation to write it.

Why has President Obama betrayed his promise to end the Afghan War? Is Obama hoping for large payoffs from war profiteers. Certainly Rahm Emanuel wants a piece of the warmonger pie.

Even if you believe in Al Qaeda, there are only a hundred Al Qaeda in the place where empires go to die. We can declare VICTORY! But the Taliban, assuming there is any difference between it and AQ, is controlled by our ally Pakistan.

Yes I am obsessed with stopping these wars that are making me poor. But President Obama, I am beginning to think you are insane.

Last weekend, though, he scorned the “obsession around this whole issue of when do we leave,” saying he was focused on making sure the troops were successful. The July 2011 deadline he set was intended to “begin a process of transition,” he said, but “that doesn’t mean we suddenly turn off the lights and let the door close behind us.”

Did Krugman ring in on the mis-named “Health Care Reform Bill” saying it was a good thing?

Mornin’, BT, pups

Krugman is talking about a third depression because the deficit hawks are pushing for spending cuts in everything but the military. We’re still losing close to a half million jobs a month. When the durable goods numbers come out they’re positive only because of aircraft sales. Working people aren’t spending money because their future at work is uncertain. People who are already financially secure can’t make up that difference in consumer spending. Other than cars and war toys we don’t make much. We import most of what we buy. Hugh has been saying that the economy will really tank next year and I agree.

How can we be in a depression when the pentagon and afford this?
Oh, make no mistake, I am depressed.

The point is that if you make $200,000 a year, it much easier for you to pay 28% of that in taxes and still live comfortably than it is for someone making $65,000 a year and paying 15%. By the time you get down to people making $15,000 a year, every penny of that ten percent represents food out of their childrens’ mouths, a put off medical appointment, a choice between food and medicine and utility bills, etc.

That’s what I meant. Plus there are lots of non-income taxes, such as sales taxes, that hurt lower income people more than the wealthy. I am not wealthy, but I’m reasonably comfortable and the 7% sales tax is less important than it would be if I were buying a necessity with an income that’s a fraction of mine.

I cannot discuss taxes intelligently with anyone, unfortunately.

Shhhh..you’re not supposed to say that out loud…dont’cha know? Good morning. How are the kids?

I had the crying-wolf phenomenon in mind.

Agreed. The only reason that the economy seems to be expanding is because the wealth has been so concentrated into the hands of the upper income people and THEY are doing just fine, thank you. We are still shedding manufacturing jobs except for defense and if it weren’t for laws that keep manufacturing weapons systems in country, we’d be shedding those too.

Believing something & using his considerable skills to convince people are two separate matters.

Msmolly,

You have done a great job discussing taxes generally. Your knowledge of taxes probably exceeds that of the average American 100 fold.

Shouting “Fire!” in a crowded theater when the theater is on fire seems reasonable to me.

From Brad deLong (link doesn’t work, unfortunately, and I haven’t got time to chase it right now).

http://www.AndrewSullivan.com – Daily Dish: I have long found Paul Krugman an insufferably pompous, shrill, Bush-bashing pseudo-populist…

The accusation–the only line of critique–is that Paul “only sees what’s wrong with the other side, in fairly crude terms,” or–in shorthand–is “shrill.”

God alone knows why they thought this line of attack would do anything other than shred their own reputations. God knows why others took up this line of attack. But take off it did, both as a narrowly-focused attempt to degrade the reputation of Paul Krugman, and as a broader attempt to marginalize all who pointed out that the policies of the Bush administration were (a) stupid, and (b) justified by lies, and it took off both among the yahoos of the right and also among the denizens of the center-left.

I see what you’re saying now.

Mornin’. Kids be fine. Kismet at the vet yesterday and came home with a clean bill of health. Weight’s up, RBC is at 34% and rising, appetite’s excellent, vocalizing like crazy. Everybody’s been Vectra’d. Bunch o’ happy campers.

Thanks, hackworth, but I’m not, really. I was an economics complete dud in college, and the intervening 40 years haven’t helped.

I do know how to use teh Google, however… LOL.

On edit: well, exceeds the average American might be accurate, but…that’s faint praise ;-)

Except that it causes panic and then people get trampled.

Fair enough.

I can get behind that.

The only way a flat tax would make any sense is if goods and services were on a sliding scale but the problem is that a $20,000 operation costs $20,000 whether you are ultra rich or are dirt poor. Same goes for food, clothing, transportation, utility bills, etc. Sure some in the middle class are guilty of living beyond their means but that’s no reason to visit their sins on the poor. The poor have no “means” to live beyond.

People usually get trampled when the exit doors have been locked. That’s when panic sets in.

SD, did you ever try my FB page again? You said you couldn’t get to it, and I had no trouble clicking the FB symbol by my name, and we’re FB friends anyway, so I was puzzled.

Lady Gaga? O noes.

The flat tax is the biggest scam goin’ for the rich.

If workers are what Krugman is getting at, he should focus on workers.

Krugman: “After all, unemployment — especially long-term unemployment — remains at levels that would have been considered catastrophic not long ago, and shows no sign of coming down rapidly. And both the United States and Europe are well on their way toward Japan-style deflationary traps.”

Hear! Hear! Not only reasonable but it’s the only responsible thing to do.

Being behind is safe. It’s the ones in the front that get run over. I’m not sure how to safely empty a crowded theater that’s on fire, to be honest with you. I’m not sure how we’re going to “make it” if the economy takes a worse turn next year. I could sell my house and go on a permanent camp out, but no one is buying houses in my community.

Just clicked on it and get the same “page not found” trip. Clicked on demi’s and it works fine. Dunno.

Lady Gaga? Where’d that come from?

If that’s a metaphor, I gotcha. But, people get stampeded outside sometimes.

I’m not saying he doesn’t talk about workers at all. I’m saying that is not the headlines he gets by talking about overall depression. And the headlines should be focusing on workers.

Sad to say but many people have never been exposed to a fire drill since school. When was the last time anybody here participated in a fire drill in a large building?

And how many people in positions of wealth or authority who read the NYT give a rat’s ass about workers?

Don’t forget state and local taxes. Obviously, sales taxes fall disproportionally on the poor, even in states where food is exempt. Same with property taxes. EVERYBODY pays property taxes, either to the local taxing authority or to the landlord. Then there are all the service fees. Licenses, etc. In Texas they charge sales taxes on the labor for auto repairs. Why not sales taxes on services such as legal fees, sales taxes on the sale of real estate, or on advertising?

What are you refering to as Payroll Taxes?

Income tax, Social Security tax, and Medicare?

FL tried to tax legal services, etc a few years ago. Got nowhere. We’re one of the states that has sales taxes on everything but food. Yachts, however, have a much lower sales tax rate than clothes.

Never. For some reason, I usually make an exit strategy when I’m in an enclosed space. Even, when I’m on the beach, I think, what would I do if a huge tsunami hit right now. Just last week, I had a discussion with security about the locked gates at the pool. One of the locks was broken, so they had chained it. I pointed out the security risk on that.

Then there are all the service fees. Licenses, etc.

Exactly! In Texas a driver’s license costs $16 bucks, (I think. It did the last time I got one), and that’s whether you make a million dollars a year or $10,000 a year. For the guy making a million dollars a year, that’s not even chump change. For the guy making ten thousand, that’s his food budget for two or three days and in our culture, the poor guy needs that license much more than the rich person.

Have ‘em in Manhattan all the time.

In fact when CS First Boston moved into a newly refurbished building, the fire bell kept issuing false alarms. After 3-4 of those, to which no one responded, I called the NYFD & told them what was happening. The fire warning system soon was working properly after my call.

I also found that you can get out of burning bldg. Was lunching with 3 others on the 50th floor. Saw smoke. Maitre d’ was running around opening closets looking for the source. I quietly walked back to the table and the four of us headed down the fire stairs. Turns out it was a waste basket fire on 46th floor which was quickly quelled, but why take chances?

Also called an ex-secy who was working in the WTC when it was bombed. I asked her why she was still in the bldg & she said that’s what the PA told them they should do. I encouraged her to look after her own life & forget the PA.

Was pretty amazing how many people filed, in a orderly way, out of the lower floors of the WTC on 9/11.

I do that nor will I stay above the second floor in hotels.

I don’t think that’s correct about auto repairs, but plenty of other services.

http://www.window.state.tx.us/taxinfo/taxpubs/tx96_259.html

SS & Medicare are collectively referred to as payroll taxes.

For some reason, I’m usually make an exit strategy when I’m in an enclosed space

That’s always a good idea. I do the same thing. Especially in a crowded space. One of my worst experiences was a flight from DC to Texas in which every seat was taken. Scariest thing I’ve ever done and I usually love to fly.
How was your vacation gf? :-)

FL driver’s license went up to almost 50 bucks this year. The only thing they don’t get ya for is walking through the door.

Focusing on overall depression when corp profits & the rich are doing well will not advance Krugman’s point either. The only way to get the point across is to talk about the point, whether they want to hear it or not. That’s the role of a public intellectual.

There’s a scientist who does that very well. I forget his name. Krugman, not so much.

I see. And by regressive you mean 6% from dollar one to dollar 60,000 and nothing above that? (or whatever the numbers are).

Now I understand.

Yep. And don’t forget employers’ contributions look exactly the same, which lowers the demand for low income workers.

Actually, we have them occasionally, usually at the most inconvenient time. And I am on a college campus.

They have them on a very regular basis here. We probably have 2 or 3 a year, and get graded.

Your FB page says you “like” Lady Gaga.

I still have no trouble getting to my page from the little “f” symbol…but of course it is MY page. Go figure.

Oh, I just remembered that we did have fire drills when I worked at Warner Bros. Fairly regularly. Don’t know why I forgot that. I was one of the team leaders, or some such title. Had an emergency first aid kit and flash light under my desk. And, I also kept tennis shoes there too. One time we had to leave the building and when we got back to our desks we found out that some one had burned popcorn in the microwave.

Payroll taxes are the social security tax and medicare tax.

The social security tax is 12.4% on the the first $106,400 of earned income. In the employer/employee situation the employer pays half and the employee pays half.

The medicare tax is 2.9%. All earned incme is subject to it. In the employer/ employee situation the employer pays half and the employee pays half.

Self-employed people pay the entire social security tax and medicare tax with a slight adjustment.

These taxes are very regressive. First, they are flat. Second, the social security tax maxes out. Third, investment income is not subject to the tax.

Better to leave the bldg on account of burning popcorn than to stay in the bldg if it’s a real fire. Something about the magnitude of the consequences!

Off to swim in the great capitalist cesspool.

US KIA Irak: 4,408

US KIA Afghanistan: 1,144

Iraki and Afghan casualties: estimates vary to over 1.5M

US MBS 2010: 22,196 and counting

Brother, Can You Spare a Dime?

Be good to yourselves, and all other living things.

Namaste

New post up top…

Oh. Yeah, I like Lady Gaga. Like Imogen Heap too.

It was really nice to get away. Funny how the first two days, I thought all the little kiddies riding around on their skateboards and bikes were so cute, so refreshing. The campers next to us were a group of deaf men on a bachelor party outing. They were adorable. And, quiet. When they moved on, a family with the most obnoxious kids moved in. They were loud and I went to bed early to read. With my radio in my ear playing classical. At about 11 o’clock, the brats starting singing 99 Bottles of Beer on the Wall. I thought “I’m in Hell!” Fortunately my mister’s project was completed and we were able to leave the next day. :) Other than that, it was great. The near full moon over the bay was gorgeous.

Oh, we never complained about a fire drill. Half hour of not being at the desk. *g*

Let’s not forget that while Social Security taxes max out, eligibility apparently does not. Lots and lots of wealthy people draw Social Security though they don’t need it at all.

My entire income last year was unemployment, less that the $16,750 figure. Thanks to Ronald Reagan I had to pay taxes on that. I also had medical bills to pay and damn little left over. After untilities, which are taxable, and a little food, I’m not exactly ass-deep in money. I get a warm fuzzy feeling by shopping at garage sales and escaping IN’s 7% sales tax. When I was born, the tax rate on the wealthy was 91%. Instead of paying taxes they invested in their businesses, now they put it in an offshore bank.

Perris is right. The damn depression never ended. We haven’t yet hit bottom.

Take comfort in the fact that they eventually moved on and their parents had to deal with their lack of disciplining them in the closed space of their car. Glad you (mostly) had fun. :-)

Take it easy, dude.

I’ll have to wait until I get to work to look it up cuz I don’t do payroll but FICA is not 12.4%. Workmen’s Comp is also a payroll tax.

We could have a whole discussion on what a disappointing job of parenting plays out these days. Scares the hell out of me that these children will be running the world in the future. But, again, that’s a whole debate we can have at a later date.
I’m out. There’s dishes to clean. Furniture to dust, and a new book to read.
Hugs to all.

Mine too. I went from making $39,250 a year to around $18,000 (on UI benefits) but my bills remained the same or went up. They went up largely to no longer having medical insurance. I’ve managed to bring my bills down by about 20 percent through austerity while my income has dropped 54 percent. It doesn’t take a Krugman to figure that out.

Where are you in IN, OHJ? I’m in South Bend…

I tend to agree with you on this, but when I’ve made that point others argue that the SS system was set up for everybody so that those who really need it wouldn’t be considered “on welfare”, because everyone receives SS.

I’m not sure that’s good logic though.

One of my bugaboos:
rich people double-triple-quadruple-dipping federal “entitlement” monthly checks: social security, medicare, military pension and federal salary! I can name some legislatures and they get lobbyist perks too.

Why is Krugman the “shrill one”?

Krugman is too willing to see horrendously bad policy passed for the sake of political convenience, which hurts his credibility when he complains about the effects thereof, but he is still very good at defining and explaining the problems.

I’m not far from you. About 35-40 miles south, smack dab in the middleof Amish country. I’m south of Nappanee a little. My neighbors on both sides are Amish, and absolutely lovely people.

Since I don’t shop anymore, I don’t make it up there much, but take the Tribune daily.

The only way it would make sense is if there was no upper limit on contribution. Since the individual contribution maxes out, the rich, (who will never need SSI), pay proportionally much less of their income than a poor person, (who will RELY on it just to live), the tax is incredibly regressive. I don’t care if the rich draw SSI but I’d rather them pay their fair share while they are paying into it. $1,000 a year is 10 percent of someone’s income who makes $10,000 a year but it’s 0.1 percent of the income of someone making a million dollars a year. Who can afford to pay it more? Now consider that $1,000 from the lower earner’s pay leaves him $9,000 to live on but even if we charge 50 percent of the millionaire’s income in taxes, (we don’t, not even close but let’s keep it simple if over the top), that person still has $500,000 to live on for that year. Instead we charge that person the same $1,000 and he has $999,900 to live on! Make sense?

IIRC some reichwing pundit called him “shrill” some time back. We use it as a term of endearment.

You don’t have to wait until you get to work. The social security tax is 12.4%. Here it is.

http://ssa.gov/pubs/10003.html

Austerity has become a way of life. On the upside, I’ve come to the realization that I don’t need “stuff”. But medical issues are a definite problem. Luckily my dr. is still young and sltruistic and did my colonoscopy for half-price be cause he realizes it is a life saving procedure.

Yep, they disparage entitlements to people who need them yet mooch off of them themselves though they need them like a Texas swamp needs mosquitoes.

Ditto. My doctor has made a few allowances for me too but drugs are a REAL problem!

I agree with you overall. Except they don’t take $1000 from both groups.

SS is 6.2% which is $620 from $10,000. and $6,386 if you earn $103,000 or more.

But I agree, it’s way easier to live on $96,614 than $$9,380.

eCAHN, perhaps you can help me understand something. I’ve had a very difficult time wrapping my mind around Krugman’s insistence that Fed Rates stay at essentially 0%. I understand why, in theory, he’d advocate that, but when one realizes that the expansion isn’t hitting the domestic market, and is instead being used to accelerate a huge Dollar Carry Trade (providing exactly zero productive economic utility), it just doesn’t make any sense.

6.2% on earnings up to $106,800

That’s from your link. If you’re counting the employer’s matching the tax it comes to 12.4% but the employee pays 6.2%. Big difference.

See my #41. Andrew Sullivan, among others.

Virtually every fee collected by government is regressive as hell – like fines.

A couple hundred buck fine for speeding, for example, could leave a poor person unable to buy food or pay rent, whereas a rich guy will never notice it. Similarly, fines in criminal cases can devastate a family. Most defendants are poor anyway and the ones who are incarcerated and getting stuck with a large fine (last I heard, the fine for murder was 10k in Texas) doesn’t hurt them a bit – except by proxy. They’re in jail anyway. It destroys a family already devastated by the loss of a breadwinner. My understanding is that fines in criminal cases, along with incarceration, is becoming the new normal as various jurisdictions raise money any way they can.

To be fair, a fine would have to be a percentage of net worth – or paid off in menial labor. If deterrence is the goal, it has to hurt the rich as much as the poor to deter anything.

I had an interesting tax discussion this weekend, too, with a conservative lawyer who works for himself. He told me that he pays approx $100k per year in taxes, and it really “steams” him that he has to pay for all those “poor people.” He mainly seemed ticked off with local gov’t “unions” (I’m not so sure it’s the unions, but whatever) who have set up stupid pension benefits (some of them have done stuff that I really don’t like, so I don’t completely disagree with him).

I’m not sure how much he makes, but I would guess well over $300k AFTER the taxes are taken out. Possibly even closer to $400k after taxes.

These people simply don’t get it what it’s like for those at the lower end of the income scale and how regressive a lot of taxes and fees are. That said, I went in with guns blazing about: you’re money is not really being “wasted” on poor people and stupid union tricks, the biggest waste is in terms of the MIC and money being spent on these ridiculous wars.

I didn’t even get into the moral aspects of the wars – simply the money wasted, and how I felt that HIS $100k was going directly into the pockets of the excessively wealthy, etc. He didn’t totally disagree with me, but he did start WHINING (only way to characterize it) about how all of those benighted uber rich had to pay Soooooo much in taxes and it was sooooo unfair yadda yadda. I said: ya gotta be kidding me! You REAlLY think the top 2% pay a lot in taxes? Seriously? Yes, he really really thinks that.

I think that’s a big issue: how those still hanging on in the middle class have really drunk the Kool Aid that the uber rich are being “taxed to death” and how incredibly “unfair” that it for our obscenely wealthy.

The conversation was interesting. This guy doesn’t believe in WMD in Iraq; he was clear headed enough to think we went in to get the oil. I said: ok. But WHERE is the oil? What happened to your “investment” in that? I don’t see no stinkin’ Iraq oil. Do YOU really think that “investment” was worth it?

On the topic of Afghanistan, he had no come back for why we were there, much less why we were spending so much money on it.

It would be nice to think that this guy (who’s smart) would consider this. I did try to push him to consider that perhaps he was being “conned” by the MIC, and that his annual $100k was being wasted on wars for no reason… and that his $100k was basically a wealth transfer to the uber rich… not a wealth transfer to “teh poorz.”

He didn’t really want to believe that, but, well, I did what I could.

Conservatives really want to belive Rush Limbaugh, etc, that all the evils in life are perpetuated onto them by poor people. Rush has been very good at distracting conservatives from who’s really ripping them off.

“our taxes are the lowest since 1950 and fall disproportionately on the lower income folks”

Not quite. Lower income folks pay virtually no income taxes. In addition they rake in big credits (think earned income credit of about $7,000 per year)

Only about 50% of us do at the moment…and the percentage is getting smaller. Every American should pay some income taxes.

Sorry, but your lawyer friend is right.

It makes no sense to me either.
By keeping the rates artificially low Obama is killing retirees. They should be getting 6% on a one year CD but instead are getting maybe half a percent.
The hope is low rates will spur home buying but that’s a folly. Home prices will fall for at least another two years so who in their right mind would buy one.
We’re following the same path Japan took 20 years ago. It didn’t work for Japan and it will not work for the US.
We need to cut much of our government spending…until it hurts.

Regarding the statements of our G20 leaders, I think shakespear said it well:

“Words fly up, thoughts remain below: Words without thoughts never to heaven go”.

What the G20 advocates is senseless and needless economic destruction of the worlds population. They clean it up with responsible sounding economic terms but one could simply call it a mass murder plot.

About what is he right?

I’m not arguing about how much money he’s paying in taxes. My argument is that his taxes are going more to the benefit of the obscenely wealthy in terms of paying loads of money for unnecessary wars, than for benefits for poor people.

I also disagree that the uber wealthy (the top 2 – 3%) are paying *most* of the taxes in this country. They’re not. They have loads of loopholes and/or if they’re hedge funders, they’re paying 15% at most (if that) on their earnings. That’s simply specious to say that the top percenters are paying most of the taxes. They’re not. But you and I and my lawyer friend are (btw, he readily admits that he doesn’t declare all of his income, so he’s getting away with self-created loophole. I don’t feel sorry for him at all).

If we cut out a lot of the egregious spending on wars on the DOD budget and pentagon out of control, drunken sailor spending, this country would be a lot better off. And everyone’s taxes would be going for the betterment of all, not the enrichment of those at the very top.

Yes, but the first place to cut is the DOD and the Pentagon. If we got of the wars immediately, we’d have a lot more money to spend on more worthwhile programs benefiting all citizens, not just the obscenely wealthy. That’s where the waste mostly is.

For ex, rather than paying for Blackwater and Xe, we could be investing in our infrastructure, which would create at least *some* jobs for US citizens (while making much needed improvements domestically). Building a high speed rail line would also be a good idea, but we can’t afford it because all the $$$ is going to Iraq and Afghanistan. WHY? What is the purpose of tossing all of your hard earned tax dollars away in the middle east?

I agree about the interest rate; it’s criminal. Those of us who have been “good savers” all of our lives are making almost nothing on our safe investments right now. It’s really stupid, but I think it’s mostly to push us into investing in that casino called Wall ST bc that’s the only place where you *might* make something on your investment… then again, you just might LOSE it all. Because as we all know, with casinos, the house always wins.

Did you actually read what Paul Krugman said? He specifically states that it is possible to have economic expansion in the midst of a depression, and goes on to say why this is irrelevant. You come along saying you don’t know why he’s saying depression when the economy is expanding. Sounds almost surely as if you didn’t read what he said, much less his book The Return of Depression Economics. Economic forecasters like you are the reason why nothing substantive has been done. Just keep treating the problem like a garden variety cyclical recession. It isn’t.

You said it, so I didn’t have to.

The interest rate is just another (incredibly huge) gift to the banks, who are getting huge spreads when they loan out money they get essentially for free. Nice work if you can get it. Meantime savers are screwed.

Agreed on the war. That money would come in handy elsewhere.
And yes, Wall Street always wins. It’s just like the insurance/annuity industry coming up with new products to drain you dry.
One good place to store ones wealth is gold/silver but the tax laws discriminate against such things since the gains are taxed at almost twice the rate of gains on stocks. The argument was investing in gold didn’t help Wall Street and was therefore not productive. They would prefer you invest in derivatives.

I know someone well who buys prescription medication ffrom India. maybe online.

Big difference, but the 6.2% your employer pays could be going to your paycheck. So yuo are paying both sides in effect. Also you really get hit if you are self employed.

Do you really think an employer would pay that money to workers? Give. Me. A. Break.

If that money was available for workers it could become part of competitive compensation vs. other employers. It all depends on how sought after the job skills are.

Krugman’s failing is that he mistakes the cart for the horse. He thinks that insufficient government spending is the cause for our inevitable double-dip depression, when too much government spending and debt expansion is what caused it. We’ve already thrown trillions of dollars at the problem, with only a fake and very short-lived ‘recovery’ to show for it. Krugman’s answer is always to throw more money at the problem. Keynesians like Krugman will never understand that their economic ideology is wrong, that problems of over-spending and debt can’t be solved with more spending and debt. He will watch the economy collapse and then say “I told you so, we only needed to spend 20 trillion to prevent this”, when in the end, no amount of spending would solve the problems of over-spending.

I think Krugman needs to take his ideology and apply it to drug-addicts. He can give them drugs until the addiction is cured, or they die.

timing as to when to express an opinion and give advice or warning has always been one of my many weak points.

I see nothing wrong about saying what Krugman said at this point in time.

But I do see your point as I once lost a bonus after a talk with the CEO where he said “folks don’t like someone who is always correct” – of course I was not always correct – but it seems that there is a limit on the amount of even “good” advice that CEO’s will accept.

But if my experience is any indication of the future – he may lose a bonus and not be listened to

Which I guess was your point.

too much government spending and debt expansion is what caused it.”

nope – learn some economics

Those Austrians can’t demonstrate real life cases of their theories that allow for all inputs in the demonstration. And the Chicago school must keep changing the lag between monetary change and GDP change. Only Keynes survives real world data. Only Fox News – and the GOP – treat stimulus as something that did not help.

Fox News and the GOP had no trouble hailing Bush’s second stimulus (remember when you got a check for $600?) and TARP as helpful.

Keynes is also the only game in town, with plenty of examples of how destructive its policies can be to the long-term health of an economy. Japan has a 200% debt to GDP ratio thanks to ridiculous Keynesian stimulus, make-work programs, and Quantitative Easing after their debt bubble burst 20 years ago. The Nikkei is still more than 75% lower than it was in 1990. We are headed down the same road not because of a lack of stimulus, but because of it.

Spoken like a true capitalist. Competition means the capitalist has to sell his product for less than his competitors. Where is the price reduction made up from? Wages, first and foremost. Surplus value is generated by labour. Competition is the capitalist’s greatest buggaboo. They give it a lot of lip service but no company/corporation really wants competition. Easier to buy up the competitor, keep wages low, make enormous profits.

I agree Mr. Dragon. But is American Democracy failing because capitalism is greedy and evil? Or is it that the pressure for growth in profits every quarter for public companies is so intense and the consequences are so enormous, that the amount of money generated swamps the public sector?

Is capatilism inherently evil or is it a slave to the pressure for growth in quarterly profits?