The Goat Pen

We’ve also seen revenue decreases after tax cuts (Bush 2000-2008) and revenue increases after tax rate hikes (Clinton 1992-2000). Laffer be damned! LOL

Christ now Bush was in office in 2000?

W's tax cuts were NOT fully put in place until 2003. In 2001 the 10% bracket was created and the 15% current bracket changed to 10%. The other bracket didn't change until 2006.

The 2003 cuts accelerated that from 2006 to applying immediately to 2003. The VAST majority of the tax cuts were NOT put in place in 2001 and this includes the capital gains tax cuts. Now I know numbers can be hard to follow, but these are from the frigging WHITE HOUSE OMB of OPRAMA. Not W, but OPRAMA.

Main site: http://www.whitehouse.gov/omb/budget/historicals

Table 2.1 from Main OPRAMA OMB site (above) detailing the revenue by source from 1934 to 2010 including from fed income taxes and capital gains: http://www.whitehouse.gov/sites/default ... st02z1.xls

Bush cuts were FULLY put in place from 2003 forward:

YEAR Ind Inc Tax Rev Cap Gains tax Rev
2003 793,699 131,778
2004 808,959 189,371
2005 927,222 278,282
2006 1,043,908 353,915
2007 1,163,472 370,243
2008 1,145,747 304,346

Tax REVENUE increased every year from 2003 to 2007 and didn't fall until 2008 when the economy lost about 3 million jobs. Both income rates and capital gains rates were CUT, yet revenue increased in both areas.

Lowering taxes gives more people more money that they either spend or invest which leads to MORE people hiring which leads to MORE people working which leads to MORE people paying taxes WHICH leads to MORE revenue despite tax cuts. All of which is a friggin GOOD THING.

So PLEASE quit with the lies that tax revenue declined when W's cuts were put in effect in 2003.

W INCREASED the progressivism of the tax code. The higher brackets paid a GREATER percentage of all income taxes...NOT less.



A graphical rep of income tax revenue:



Or a different one:



But the bottom line of this is JOBS and people working and paying taxes is what affects revenue, so you want MORE people working and paying taxes to have the most revenue. To do that you allow people to keep MORE of what they make and they either consume or invest. Both of which encourages people to expand or create new biz and therefore hire more people. Its not rocket science, but it sure seems to be when an idealogical brick wall is in its way.

And to by reducing uncertainty in regulations you allow biz to more accurately predict the cost of an employee will be making it more likely that they will take the RISK, and yes it is a risk, to hire someone. The constant battle and changing of regulations year after year is like a governor on the engine of hiring.

Companies aren't hiring right now because nobody knows what the regs are gonna be in 2 years let alone 10 for opramacare and it effects large and small companies but small even more-so. We are a large company and have enough work that could double certain parts of the company, but the rules and regs of opramacare are a huge risk that is preventing even moderate hiring from occurring. Throw in the deficit and debt and that is why companies large and small are not hiring like they normally would be in this portion of the biz cycle.

Big Orange Junky wrote:I stand with Puter.

Zero tolerance or hard and fast rules are stupid.

Sign on the highway with white background and black letters says the speed limit is 65 miles per hour. That is a hard fast rule for everyone. That does not mean that YOU are entitled to go faster just because you know you are a better driver than everyone else on the road. It would be stupid to think that way.

Big Orange Junky wrote:Individual decisions for each instance, numbers are just numbers. They don't mean anything without context.

Correct. Problem is we have context now. We have 2008. They looked at the numbers in the context of what exactly happened. People defaulted with horrible credit ratings. People defaulted with medium credit ratings. People defaulted with incredibly awesome credit ratings. There were defaults everywhere with every possible mortgage product, with the exception of one, all-important, circumstance. Those who put 20% or more down on their homes/commercial buildings, they didn't default. They may have re-financed, they may have sold, they may have done any number of things, but they didn't default. And those mortgages did not become "toxic."

All I have been saying (and continue to say) is LEARN. We need to LEARN from what went wrong and to do what we must to prevent it from happening in the future. By and large, the free market has adjusted dramatically to what happened. It is much harder to get a mortgage with 5% down, much harder. I wish it was impossible/unlawful but there are too many forces at work (in government) for there to be a total boycott on the 5% down mortgage.

puter FINALLY responds to my call for graphs.

And again you are lumping it all together.

I gave you multiple items that you know they look at when determining loan metrics. Any one taken by itself doesn't paint a picture of the situation.

You say people with great credit defaulted and I'm sure they did, but on how much house to income ratio? Were the jackasses up there at 40/50 percent? How much other debt did they have prior? All that stuff matters when taken together. I would say that people who put down less than 20% and had little debt, low payment/income ratio, and high credit scores were not the problem in 2008.

The problem was people buying way more than they could afford, banks approving it, and then re-selling the mortgages to people who had no idea what they were buying.

puterbac wrote:And again you are lumping it all together.

Because it NEEDS to be lumped. Damn straight!

puterbac wrote:I gave you multiple items that you know they look at when determining loan metrics. Any one taken by itself doesn't paint a picture of the situation.

The only "metric" that mattered was those who had real skin, they ALL kept paying. Those mortgages that defaulted, they ALL had very little to NO skin in the game. That was the only "metric" that was "consistent"

I'm just trying to be consistent. Are you going to sit there and tell me that people who may have had riskier credit histories than you but were able to put real money down on their mortgages, added ANY fuel to the fire? We both know they didn't. They kept paying.

puterbac wrote:You say people with great credit defaulted and I'm sure they did, but on how much house to income ratio? Were the jackasses up there at 40/50 percent? How much other debt did they have prior? All that stuff matters when taken together. I would say that people who put down less than 20% and had little debt, low payment/income ratio, and high credit scores were not the problem in 2008.

The problem was people buying way more than they could afford, banks approving it, and then re-selling the mortgages to people who had no idea what they were buying.

On an individual basis, any number of things could have exacerbated the situation. Income ratio, prior debt, everything you mentioned. But the only thing that was consistent (with regards to all the toxic assets) was the 90%-100% debt leverage. If you got a mortgage in 2007, and you put 20% down in cash, and in 2009 your house was worth only 50% what you paid for it, you didn't walk away from it. You kept paying. (And they are still paying puter.) Whether they could afford the loan or not was not as important as it was NOT to walk away from investing so much of their personal assets. You can't afford your mortgage on what you are making but you just sank your entire 401K into your house, you know what you are doing? You are punching out at your day job to go wait tables at your night job and MAKING your mortgage payment. You are NOT mailing the keys to the bank like everyone else did.

Now on the lender side, there were a number of problems. The first of which, was that AIG (obviously) wasn't charging high enough in fees for taking on all that insurance risk. They sold themselves short mostly because we didn't have the data in the market place to speculate on the worst care scenarios unfolding.

This leads right into the second problem being that AIG was pretty much the ONLY private firm that was willing to insure all this crap. If there were a number of insurers (working with all the lenders and the commercial banks) then the risk would have been spread more evenly and all the insurance companies would have taken hits but NONE would have had to throw themselves on the mercy of government to save their asses. We had to save AIG because they were into EVERYTHING!

Third problem was with selling loans, there was almost no incentive to make sure the person could pay. If every bank had to manage it's own loans (instead of selling them to Wall Street) then the entire concept of the LOAN OFFICER would have had more meaning. Those banks that did choose to keep and manage their own loans, they were a bit choosier who they were loaning to and they didn't get themselves into trouble. Unfortunately, Paulson made them take the TARP money at the point of a gun (and the point of a new law) because he was afraid that if EVERY lender didn't take at least SOME TARP money, the message on the street would be that those that took it were in trouble and their stock should be dumped!

No one really knew what to do. There was no book to read, no history from which we could point to and say "...this is the way out of our problems." It was really scary, a fucking nightmare for people who really knew how close we were to going under, utterly. If you get a chance, watch that HBO movie Too Big To Fail, I'd say that was a dynamite dramatization of exactly what happened. And HBO did a real good job trying NOT to make that movie look political. They tried to stay specifically with the economics behind it and that is good.

Bottom line puter, and I really don't care about your personal situation, if they wanted to write just one piece of legislation that would prevent this shit from happening in the future, it would be a much bigger down payment requirement on home and commercial building lending. That would be like the sign with black letters and white background on the financial system expressway, 20% minimum down payment. Make that the fucking law and go with it. Hank Paulson would not have had to cut any checks, we wouldn't have had TARP, and Leeman Brothers and Bear Stears would still be in business.

Puter,

Did I tell you I love Megan McArdle? We didn't get my 20% minimum down payment regulation/legislation like I wanted. Here is the regulation/legislation that we DID GET as a result of the 2008 financial crisis.

http://www.theatlantic.com/business/arc ... do/240015/

Okay so what the fuck, exactly, does this new "federal" woman do? Well, apparently she is supposed to yell real loud at consumer credit companies (banks and other lenders) that write too many words on too many documents that a consumer must sign before they get access to credit/mortgage/whatever. That is what she does. The premise behind this is that the ordinary person is too ignorant to know exactly what they are getting themselves into when they sign on the dotted line and the lender is trying to "trick them into signing" by throwing so many fucking words at them.

So what Congress thinks, is that all this shit started, because borrowers were tricked into taking loans that they would NOT have taken if only there were fewer pages to read. To me, this is asinine since it avoids (utterly) the main issue (the ONLY issue as far as I'm concerned), enabling such small investment on the part of the borrower.

What Megan fears (and I think she is right) is what will happen here is this agency will try to "Sheppard" people into financial transactions that they might not want simply because they can find deals with fewer words (deals that might not offer the consumer the credit they desire.) We'll see.

Damn right I'm entitled to SS.

And Medicare too.

The assertion that it was less than 20% down payment to blame for the defaults is as silly as saying the lack of insurance is the cause of trauma victims. That's the one thing the majority of them have in common, their choice of drugs/choices etc differ but the common denominator is insurance.

That's the same kind of tangent the less than 20% down payment is. People that make those kinds of choices are more attracted to the less than 20% loans just like people that make poor life decisions chose not to have health insurance.

I know plenty of people that had less than 20% down payment but I don't know a single person that defaulted on their home.

Oh and I know at least one company that offers 100% loans on homes for professionals, still do today.

Dora wrote:Damn right I'm entitled to SS.

And Medicare too.

I plan to use my first year's SS checks to pay for a 'round the world cruise.

Big Orange Junky wrote:The assertion that it was less than 20% down payment to blame for the defaults...

You misunderstood.

Individual PEOPLE are to be blamed, not what they put down on the mortgage. PEOPLE default because if all you have to lose is your credit rating by walking away from such a dramatically unfavorable financial situation, then you have too little to lose!

That is why I want 20% down.

I suppose on some levels this whole thing is pretty funny (and its up to a small portion of the people of New York State if they want someone this silly to continue to represent them.) What isn't funny, is that Weiner is married. And (even if this isn't exactly infidelity) this type of thing does tend to damn a marriage. And that is kind of shitty.

As usual, I love what Megan said.

http://www.theatlantic.com/national/arc ... it/240023/

Megan McAcrdle wrote:Maybe it's true that infidelity is really this common--though I have a hard time believing that everyone is as blatant and reckless as Clinton. But if so, we should say that: "All powerful men cheat on their wives with as many women as they can get away with, and I don't want to waste time challenging any of them on it."

But I can't sign up for this. I don't think that cheating on your wife, or lesser betrayals like sexting, are minor marital pecadillos, of no more public interest than whether you remembered to pay the gas bill or unload the dishwasher. I don't think it's the government's job to punish infidelity, but that doesn't imply that society has no interest in whether people keep their vows. Marriage is a valuable social institution. There are good reasons that society should buttress it. So I'm not sure it's a waste of time, in the face of these sorts of allegations, to use a few of our precious news hours to say, "Hey, not okay!" Moreover, in the age of the internet, you cannot simply decline to report this as a neutral act. Instead, you send an affirmative message: "We don't really think he did anything wrong."

I am fighting a powerful urge to point out that virtually all of the people urging us to move on to something more important are men. But obviously, I'm losing the fight.

OK, so by 2006 Bush's massive tax cut was fully in place. So why did tax revenue start to decline?

Another point of interest. Everyone look at the two lines on this graph, The bottom line is Federal Income Tax by itself, the top line includes the payroll tax. Which line is moving up faster? One of the dirty little secrets conservatives never mention is that while the rich pay a large percentage of Income tax, poor and middle class tax payers pay a disproportionate share of the Payroll tax and that tax is going up much faster as is reflected on the chart.

Lies! Damn Lies! And Statistics!

The charts posted by puterbac, which claim the CBO as a source, are actually products of The Heritage Foundation, a conservative political propaganda organization. It may seem like nit picking on my part to point this out, since the chart's creators likely did gather data from the CBO, but the distinction is important because while the CBO is a nonpartisan organization, the Heritage Foundation is not. The Heritage foundation has a point of view and a purpose; their reason to be is to promote a particular political agenda. In short, the Heritage Foundation exists for the purpose of convincing people to support conservative economic political positions.

I'm not saying the Heritage Foundation's charts are frauds, I'm just saying that when you look at material from a partisan organization, be it conservative or liberal, always keep in mind their POV and what they are trying to do.



This chart purports to prove that Bush’s tax cuts shifted the tax burden from the poor and middle class to the wealthy, but what the original poster doesn’t say is exactly which taxes this chart is showing. If the chart includes Capital gains tax revenue, which I’d bet it does, then the result is skewed by Bush’s 2003 capital gains tax cut that caused many wealthy investors to sell off capital assets taking advantage lower rates and resulting in a temporary spike in the tax receipts from the wealthy.

This might explain why the Heritage Foundation chose this data. Otherwise, the choice of years, 2000 and 2004 strikes me as odd. I mean, why did they pick those specific years? Why not 2000 & 2005 or 2006? Or better yet, why didn't they use a range of years like comparing Clinton 1994-2000 & Bush 2001-2007?

I'd bet money that they didn't use other years because if they used different years the result would show that the Bush tax cuts actually favored Wealthy tax payers.

But that's just a guess.



Always check to see where your information is coming from. You can do a lot of things with statistics. A careful fraud might well prove that the earth is flat if he picked his data carefully.

When I edited the above post, the last sentence was accidentally left broken. It should read:

A determined fraud might well prove that the earth is flat if he picked his data carefully.

Question: The CBO projected in 2001 that the federal income tax would generate about $9 trillion in revenue from 2002 to 2007. This was before President Bush enacted his first round of tax cuts that year, saying it would spur growth. How much tax revenue was actually generated from 2002 to 2007?

Answer: $7 trillion. Income tax revenue from 2002 to 2007 was $2 trillion less than CBO projected in 2001 before the first round of Bush tax cuts passed.

Source: Center For American Progress

So much for the idea that Bush's tax cuts increased Tax receipts.

Note: the Center For American Progress uses data from the CBO, the same government office that the Heritage foundation used to gather data. It's not what you got, it's how you use it.

Think You Know Our Nation’s Budget Problems?

Take the quiz yourself at:

http://www.americanprogress.org/issues/ ... _quiz.html

I got only 8 of 12 questions right, but I still bet few can beat me.

Congrats gule. Color me impressed!

10 of 12, (of course, two Red posted the answers but I think I would have gotten those two anyway).

"wow a jewish girl who sucks [bleep]!" Weiner replied. "this thing is ready to do damage."



I guess it did.