Saturday, July 30, 2011
Friday, July 29, 2011
One thing to note is that I am using 2008 data (the most recent available) and so the gross income numbers this year are probably lower, meaning the effective tax rates would have to be higher (scary thought isn't it?). I am also calculating the effective tax rate on total gross income not just taxable gross income, so I am assuming certain types of non-taxable income is taxable, including interest from tax free municipals. And finally these are effective tax rates (i.e. money actually collected from the government), after all deductions so that statutory tax rates would likely be much higher.
As you can see, we can't even come close to balancing the budget by taxing "millionaires and billionaires". Things are so bad that we would have to make everyone making over $75,000 per year to give almost half their total income to the Federal government in order to balance our books. And even after that they wouldn't be home free as they would still have to pay state and local taxes. And can you imagine what these tax rates would do to our economy? I'm not sure we'd even have much of an economy left after hiking tax rates this high.
This is why we HAVE to cut federal spending as soon as possible. The longer we wait, the harder it is going to be.
Update: So I made a bit of a calculation error in the original table which overstated the tax rates on total adjusted gross income (I used the wrong denominator in the formula). I've corrected it, so the rates needed to balance the budget are a little lower. Instead of effective tax rates having to be around 40% for everyone in the economy, they now only have to be about 31%, or about 2.5 times higher than effective tax rates are now. Sorry about that, I just realized my mistake on the commute home.
GDP has now only grown 1.6% over the last four quarters which is pretty much the stall speed for the economy. Historically, the economy has two speeds, either it is growing at 2%+ or it's headed much lower. As you can see from the chart below, when the year over year change in GDP gets below 2%, trouble usually ensues.
So although our illustrious President said just about a month and a half ago that he was "not concerned about a double-dip recession", history suggests that he really should be. The momentum of the economy is clearly going the wrong way.
It really is shocking how completely clueless our fearless leader is about the economy. Not only does he not know that it is clearly slowing down, he has constantly been talking about raising taxes, not the best way to get people to invest their money to get the economy moving.
Also, the slowing economy will only make our budget situation worse. If you look at the Congressional Budget Office assumptions for our economy, they expect 3.1% real GDP growth in 2011 and 2.8% in 2012. Two quarters into 2011, the economy is now growing at half that rate, which means are deficits will likely be even bigger than they currently expect ($1.5 trillion in 2011 and $1.2 trillion in 2012).
Just bad news all around.
Thursday, July 28, 2011
However, if the Boehner bill doesn't pass the House, then I would say we should just bite the bullet, accept the Reid plan and call it a day. Yes, there will be some angry constituents out there and Bachmann will be able to make a few great speeches on how the GOP establishment sold out, but in the end the GOP would have won a major victory for the American people over the Obama's, Pelosi's and Reid's of the world. Remember, they had wanted an automatic debt limit increase without any conditions and then said they would only accept cuts if they increased taxes. To get cuts without tax increases would be a nice victory and would set the stage for a GOP sweep in 2012, which is the ultimate goal. We are in a marathon, not a sprint, there is no reason to use all of our ammo in this lap. We have lots more to go.
Tuesday, July 26, 2011
Maybe he just doesn't want any of his plan's actually scored by an objective party like the Congressional Budget Office (CBO)? Check out what the CBO said about Obama's last officially released plan, released just a matter of months ago:
- If the President’s proposals were enacted, the federal government would record deficits of $1.4 trillion in 2011 and $1.2 trillion in 2012. Those deficits would amount to 9.5 percent and 7.4 percent of gross domestic product (GDP), respectively. (By comparison, the deficit in 2010 totaled 8.9 percent of GDP.) Those deficits would exceed the ones projected to occur under current law, by $26 billion and $83 billion, respectively.
- The deficit under the President’s proposals would fall to 4.1 percent of GDP by 2015 but would generally rise thereafter. Compared with CBO’s current-law baseline projections, deficits under the proposals would be about 0.5 percentage points of GDP higher in 2012, 1.3 percentage points higher in 2013, and 1 to 2 percentage points higher thereafter. By 2021, the deficit would reach 4.9 percent of GDP, compared with 3.1 percent under CBO’s baseline projections. Over the 2012–2021 period, deficits under the President’s budget would total $9.5 trillion, compared with $6.7 trillion under those baseline projections.
So his last budget, released about 5 months ago actually increased deficits and spend more money than was expected at the time. If coming up with something grand was so important to him, why didn't he do it then? It's not like our budget situation was vastly different back then. And back to the original point, my guess is that what he was offering to the GOP (and to the American people) probably had a lot less cuts than some of the headline figures would lead you to believe and that is why he doesn't want to provide any real details to anyone.
I think there can be bi-partisan agreement on this one, don't you think? It's time to end our support of the PA now!
For the last decade, we have spent more money than we take in. In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation's credit card.
I love how 2 and a half years after taking office he still wants to tell people "it's not my fault, it was the other guy". As if Obama has been the picture of fiscal restraint, with his payoffs to his union thug buddies and desire to nationalize our healthcare system. On to the text itself. I love the phrasing, "money was spent on trillions of dollars in new tax cuts". That's a nice big government socialist way of saying we let people keep more of their hard earned money. A tax cut is not government spending. You would think someone with a Harvard education would get that, but then again, he has never released his transcripts. Then he comments on the two wars. So is he admitting that if he were President he wouldn't have done anything after 9/11? 3,000 Americans would die and he would just make some speeches and send missiles into empty tents like Clinton did after Americans were killed? I guess we all know the answer to that question. He can't even get rid of Qaddafi in Libya despite having a 4 month long intervention. The quip on the prescription drug program is completely disingenuous. I mean he just rammed Obamacare down our throats, our we to believe that he would not have subsidized prescription drugs for seniors? Puleeeeese. Now, I'm not saying W is blameless. If you remember he was a "compassionate conservative" which meant that he was not as free market as I would like and therefore did not control spending as much as he could. This is why if he were running for the GOP nomination today, he would be probably be polling single digits with his "compassionate conservative" schtick. No way the Tea party or other true believers would go for that now.
As a result, the deficit was on track to top $1 trillion the year I took office. To make matters worse, the recession meant that there was less money coming in, and it required us to spend even more – on tax cuts for middle-class families; on unemployment insurance; on aid to states so we could prevent more teachers and firefighters and police officers from being laid off. These emergency steps also added to the deficit.
The deficit for 2008 was $458 billion. The deficit for 2009 was $1.4 trillion. The deficit for 2011 is estimated to be over $1.6 trillion. So the deficit was on track for $1 trillion and he tacked on another $400 billion and then continued his wild spending spree. Remember his $862 billion stimulus package which cost about $1.3 million per job created? Wasn't the complete and utter failure of that program his fault? Couldn't he have thought of a better use of cash? Well, he probably could have but then he wouldn't have been able to pay off his union buddies, both inside and outside of government.
Because neither party is blameless for the decisions that led to this problem, both parties have a responsibility to solve it. And over the last several months, that's what we've been trying to do. I won't bore you with the details of every plan or proposal, but basically, the debate has centered around two different approaches.
What does he mean "we"? Just 4 weeks ago he said he has been too busy to deal with the debt ceiling issue. And he doesn't want to bore the American people with the details of the plans because he doesn't want to point out that he has never actually submitted a plan that cut the deficit. His 2012 budget plan, which was defeated unanimously in the Senate, actually made spending worse!
The first approach says, let's live within our means by making serious, historic cuts in government spending. Let's cut domestic spending to the lowest level it's been since Dwight Eisenhower was President. Let's cut defense spending at the Pentagon by hundreds of billions of dollars. Let's cut out the waste and fraud in health care programs like Medicare – and at the same time, let's make modest adjustments so that Medicare is still there for future generations. Finally, let's ask the wealthiest Americans and biggest corporations to give up some of their tax breaks and special deductions.
This balanced approach asks everyone to give a little without requiring anyone to sacrifice too much. It would reduce the deficit by around $4 trillion and put us on a path to pay down our debt. And the cuts wouldn't happen so abruptly that they'd be a drag on our economy, or prevent us from helping small business and middle-class families get back on their feet right now.
There's a plan that cuts domestic spending to Eisenhower levels? Where? The entire Federal budget in 1960 was $92 billion, which in current dollars is about $700 billion (why did we get off the gold standard again?) while the current budget is $3.8 trillion. I guess this all depends on what he means by "domestic spending" and "lowest level" and, of course, "is" (sorry, couldn't resist). Also, didn't Obamacare already cut the waste and fraud from Medicare? How can you cut the same thing from the same program twice, I realize that we are talking about a government program but if it were so easy to cut waste and fraud, we would have already done it. On asking the wealthiest Americans to give up tax breaks, aren't the Bush tax cuts already expiring at the end of 2012? Aren't there special excise taxes in Obamacare that the rich are going to be paying? We already have the most "progressive" tax system in the world and you want to loot "wealthy" people's bank accounts even more? I also love the "cuts wouldn't happen so abruptly" line as that means that all the cuts are basically smoke, mirrors and hand waving with almost no actual cuts in 2012. So basically this approach would definitely raise people's taxes in exchange for a promise of lower spending. We've seen this movie before, we know how it ends.
This approach is also bipartisan. While many in my own party aren't happy with the painful cuts it makes, enough will be willing to accept them if the burden is fairly shared. While Republicans might like to see deeper cuts and no revenue at all, there are many in the Senate who have said "Yes, I'm willing to put politics aside and consider this approach because I care about solving the problem."
Has nobody told him that the Reid plan doesn't include tax hikes and is cuts only and therefore, according to Obama, "unbalanced"? I guess this speech was written before it came out and Obama didn't want to bother to fix it.
So the debate right now isn't about whether we need to make tough choices. Democrats and Republicans agree on the amount of deficit reduction we need. The debate is about how it should be done. Most Americans, regardless of political party, don't understand how we can ask a senior citizen to pay more for her Medicare before we ask corporate jet owners and oil companies to give up tax breaks that other companies don't get. How can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries? How can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don't need and didn't ask for?
Why is he harping on the corporate jet owner thing so much, seriously. First, his family goes on vacation on the ultimate corporate jet for free and secondly, even liberal commentators have agreed the corporate jet depreciation schedule is a drop in the bucket compared to the real changes we need. And are hedge fund managers paying taxes at a lower rate than secretaries? Really? How is that even possible? Does he actually have any data to back that up? Or is it just a stupid throw away line? Considering that according to IRS data the bottom 90% of incomes pay an effective tax rate of under 10%, I'm going to think it is the latter.
We all want a government that lives within its means, but there are still things we need to pay for as a country – things like new roads and bridges; weather satellites and food inspection; services to veterans and medical research.
Somehow I bet we can pay for all of those and live within our means at the same time. How about cutting salaries and benefits for government employees so they are more in line with the private sector? I don't see why there should be premium pay for a bureaucrat. Also, don't the pharma and biotech companies make enough money to do their own medical research? It's obviously a profitable endeavor so I don't see why the government needs to be involved.
Keep in mind that under a balanced approach, the 98% of Americans who make under $250,000 would see no tax increases at all. None. In fact, I want to extend the payroll tax cut for working families. What we're talking about under a balanced approach is asking Americans whose incomes have gone up the most over the last decade – millionaires and billionaires – to share in the sacrifice everyone else has to make. And I think these patriotic Americans are willing to pitch in.
In the same paragraph he talks about those making $250,000 a year and millionaires and billionaires in the same breath. Those are not the same thing. You're going to be taxing a lot of small business owners at the $250,000 a year level and if they have less money, they will be hiring less. Also, as I mentioned above, their taxes are already going to go up substantially after 2012. So you want to loot them some more? Sounds like a recipe for a never ending recession. And I'm sorry, what sacrifice is everyone else making? Most Americans don't get any direct government payments, other than tax refunds? Sorry, Barry, your SEIU friends don't count as "everybody". And who says they are willing to pitch in? You? If they were so willing they would already be doing so. There is nothing stopping anyone from giving money to the government. The fact that they aren't means they don't want to.
Understand – raising the debt ceiling does not allow Congress to spend more money. It simply gives our country the ability to pay the bills that Congress has already racked up. In the past, raising the debt ceiling was routine. Since the 1950s, Congress has always passed it, and every President has signed it. President Reagan did it 18 times. George W. Bush did it 7 times. And we have to do it by next Tuesday, August 2nd, or else we won't be able to pay all of our bills.
That's not true, it does allow Congress to spend more money and if they raise it, they definitely will. Also, remember how Obama kept insisting on at least an 18 month debt ceiling extension? Well if you look at the numbers he has quoted, Reagan had to increase the debt ceiling on average every 5.3 months of his term while W raised it every 13.7. So why is it such a big deal for him to have to raise it again next year? Oh yeah, I forgot, it would get in the way of his campaigning and fundraising and we can't have that.
First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result. We know what we have to do to reduce our deficits; there's no point in putting the economy at risk by kicking the can further down the road.
But there's an even greater danger to this approach. Based on what we've seen these past few weeks, we know what to expect six months from now. The House will once again refuse to prevent default unless the rest of us accept their cuts-only approach. Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions. Again, they will demand harsh cuts to programs like Medicare. And once again, the economy will be held captive unless they get their way.
Again, Reid has a cuts only plan out there right now, so it's not just Republicans with this sort of plan. Also, the Republicans are only suggesting a short term deal because you have been so unserious about actual spending cuts. It's all back end loaded and might not translate into real savings, like the budget deal for 2011 which had a headline cut of $38 billion but actually was just a bunch of gimmicks. They can't do that again. Maybe if Obama was more honest the first time, the Republicans would trust him more. He's kind of like the guy in the bus station who always needs just a few dollars to get his bus ticket home. You might be fooled once...
History is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed. But those are not the Americans we remember. We remember the Americans who put country above self, and set personal grievances aside for the greater good. We remember the Americans who held this country together during its most difficult hours; who put aside pride and party to form a more perfect union.
Didn't Lincoln have a "rigid" ideology for his day? Didn't he go to war rather than compromise on slavery? If one side is right and the other is wrong, why compromise the right to make it less right? Taxes are already scheduled to go up massively in 2013, do we really want them to go up any more? We will never get out of this recession if that happens, that is pretty clear. Obama's former Chair of the Council of Economic Advisers, Christina Romer, found that the multiplier on taxes is 3. So for every $1 in tax cuts, $3 is added to the economy. It doesn't take a rocket scientist to realize the reverse is true. For every $1 in tax increases, $3 is taken from our economy. And as Robert Barro points out, the multiplier on government spending is probably less than 1. So for every $1 in government spending only $0.80 gets into the economy. That seems true doesn't it? If it were greater than 1, our economy probably would be zooming right now given the level of stimulus. Instead we are still in the doldrums. So doesn't it make more economic sense to cut spending and not raise taxes?
Anyway, another speech, another heap of festering bullcrap. Hasn't Obama noticed that his approval rating has been suffering more now that he continues to spew his garbage publicly on an almost daily basis?
Monday, July 25, 2011
- No debt limit increase - He believes that the GOP would be blamed for his which will give him a polling boost. Also, he can then blame any negative economic data on this ad nauseam during the 2012 campaign. See Obamacare, increased regulation and his constant talk of higher taxes have nothing to do with the recovery taking much longer than usual, it's all the Republicans fault because they wouldn't close the loophole for corporate jets.
- A debt limit increase using his framework with increased taxes. He knows that if he gets the GOP to accept this, he comes out the winner. The Republicans pretty much swore on the bible during the 2010 campaign that they won't increase taxes, and if they agree to this deal, the GOP base will know their politicians lied right to their faces and will probably not turnout in as great of numbers in 2012. On top of that, the Democratic base will like the fact that Obama stood up to the Republicans and won. All this talk of a "grand bargain" is a bunch of crap and was simply used by him in order to get tax increases on the table. If the President really cared about medicare reform, he wouldn't have raided it to the tune of $500 billion to fund his pet project, Obamacare.
On the bright side of all this is that to some Democrats Obama's extremely cynical style of governance is pretty transparent. Here is what Dan Loeb, a contributor to Obama, Dodd and Reid just wrote:
There has been much said about who is allegedly the "adult in the room," but President Obama has yet to speak to Americans as adults, insisting instead on his preferred technique -- stirring up class warfare.
Scaring senior citizens about the possibility of not receiving their Social Security and Medicare checks, lambasting the corporate jet industry, and calling for higher taxes on managers of private partnerships is not a constructive approach to handling a multi-trillion dollar problem that will have a multi-generational impact.
It's increasingly difficult to avoid that conclusion that while Washington burns, President Obama is fiddling away by insisting that the only solution to the nation's problems -- whether unemployment, the debt ceiling or deficit reductions -- lies in redistribution of wealth.
Perhaps the difference between President Obama and many Americans is that the president sees prosperity as a sign of "unfairness" that needs to be corrected by government via higher taxes and increased regulation. Perhaps a plan that led the way forward by expanding oppportunities rather than redistrbuting incomes and emphasizing growth and prosperity for all would be met with less political resistance.
Friday, July 22, 2011
- This is the third "solution" to the Greek crisis that European leaders have announced in the last 14 months (previous ones were in May and September 2010). European leaders seem to like to do just enough to calm investors for a few months, but not actually do anything to solve the problem.
- Even with the reported 21% haircut on Greek debt, which puts Greece in default, Greece still has a debt-to-GDP ratio of 130%, which is still an unsustainable debt level for a country like Greece. It would be one thing if Greece had a balanced budget as the terms of the EFSF gives Greece debt at extremely attractive terms (Supposedly minimum 15 year terms at 3.5-4.5%). But the Greek economy is in shambles and will only get worse following their austerity plan, which could cause tax revenues to miss targets. If tax revenues miss targets, it's possible that the current austerity plan won't be enough to satisfy the IMF and the EU (especially the Germans). Remember, they previously passed an austerity plan last year, which worked so poorly that the IMF was holding up a tranche from their original bailout, requiring them to pass another austerity plan.
- The EFSF was just empowered to do a lot more than it has been doing but there was no mention of more funds going into the EFSF. Given the size of the markets we are dealing with, this could create a major problem. My guess is that any increase in the EFSF would need parliamentary approval from the member states that contribute to it and that is definitely not a certainty. Governments might be brought down by such a vote and the EU politicians know it.
- It's been made clear that Greece is getting a unique deal and that governments in Ireland, Spain, Portugal and Italy can't expect the same. My guess is that their first question is "why not?". It's not like Greece is in this position through no fault of their own. It's actually completely and utterly their fault (they even purposely lied about their level of debt on a regular basis, and may be still doing so), so from a moral and ethical standpoint it doesn't seem to make sense to put Greece in a special category. Though the idea of private investor haircuts across Euroland is very scary.
- What happens to all the credit default swap (CDS) insurance on Greek debt? With a 21% haircut, can't they be triggered? What happens then? US banks have about $34 billion in CDS exposure to Greece, does that mean US banks are on the hook for billions now? The potential seems to exist for some sort of unintended consequence from the haircut causing massive problems somewhere (though we don't know for sure where).
- Because the US is a major contributor to the IMF, we are probably on the hook for $15-20 billion on this bailout. Won't this appropriation have to pass Congress? I think an argument can be made for us not to approve that additional funding. After all, we have to issue debt to pay this money (assuming the debt ceiling is raised) so does it make sense for us to mortgage our children's future for the sake of people thousands of miles away in another country who have been living well beyond their means for years (and retiring 5-10 years ahead of the average American)? Also, wasn't the Euro created, at least partially, to challenge US Dollar hegemony. So why are we bailing them out? I can definitely see us balking at this.
Let's see how long the band-aid stays on this time.
Thursday, July 21, 2011
Wednesday, July 20, 2011
Then came the "Brian Ross" incident, where, according to Michael Crowley at Time, two "Bachmann men" pounced on Brian Ross after he tried to ask a question about her migraines. Of course the leftie journalists and blogs started to pounce on this one as it clearly shows, in their eyes, she doesn't have the fortitude to be President (maybe there will be an article coming up that she gets moody during 5 day stretches and pops a lot of midol). But once again, those targeting Bachmann are making a mountain out of a molehill. Brian Ross himself has said that the charges that he was "roughed up" are "far overblown" and that he was simply pushed aside when he tried to go up to Bachmann after repeatedly asking her if she missed any votes in Congress due to migraines (I wonder if he asked Obama how many votes he skipped in the Senate). You can even see him supposedly after being "roughed up" at the 1:58 mark of this video, where he doesn't look roughed up at all. And personally I wouldn't blame her for not wanting to take his questions as he has already attacked her husband and her husband's homosexual counseling services in a hatchet job of a story (I do agree with Ross that homosexuality cannot be counseled away but if I were a reporter, it would make sense to at least try to show both sides). He clearly is not exactly an objective reporter (just ask Toyota) and really does seem to have some sort of vendetta against Bachmann and her family.
"Like nearly 30 million other Americans, I experience migraines that are easily controlled with medication. I am a wife, a mother, a lawyer who worked her way through law school, a former state senator who achieved the repeal of a harmful piece of education policy in Minnesota, and a congresswoman who has worked tirelessly fighting against the expansion of government and wasteful spending.
"Since entering the campaign, I have maintained a full schedule between my duties as a congresswoman and as a presidential candidate traveling across the nation to meet with voters in the key, early primary and caucus states of Iowa, New Hampshire and South Carolina. I have prescription medication that I take whenever symptoms arise and they keep the migraines under control. Let me be abundantly clear – my ability to function effectively has never been impeded by migraines and will not affect my ability to serve as Commander in Chief.
"The many questions I have received on this subject have allowed me to discuss this important condition that impacts individuals in nearly one in four households. However, as a presidential candidate and office holder, I am focused on performing my job, which has never been more important given the state of our economy and the millions of Americans that are out of work. While I appreciate the concern for me and my health, the greater concern should be the debate that is occurring in Washington over whether or not we will increase our debt, spending and taxes."
Anyway, it seems that both the left and members of the right have tried to take Bachmann down with the migraine story and its aftermath but I think they have failed miserably. In fact, I think they have made her appear even stronger than before. She really is a force to be reckoned with. She doesn't have my vote yet, but she is getting there.
Tuesday, July 19, 2011
Now, let's take a look at the "immediate" section of the plan:
- Impose statutory discretionary spending caps through 2015.
- Implement numerous budget process reforms.
- Shift to the chained-CPI (a more accurate measure of inflation) government-wide starting in 2012, along with the following specifications for Social Security: (1) exempt SSI from the shift for five years, and then phase in the shift over the next five years; and (2) provide a minimum benefit equal to 125% of the poverty line for five years. (According to CBO, the shift to chained-CPI would result in the annual adjustment growing, on average, about 0.25 percentage points per year slower than the current CPI.)
- Repeal the CLASS Act.
- Enact concrete policy changes that lock-in additional savings, including freezing Congressional pay and selling unused federal property.
- Require GAO and the Department of Labor to report to Congress on establishing a more effective unemployment insurance trigger.
Do you see any actual cuts there? Any at all? For every dollar we are taking in, we are spending $1.50 and all these guys can come up with are caps on spending and changing the way CPI is calculated (which might not even reduce the deficit if inflation is higher than current estimates)? This is such a non-serious festering turd of a cost cutting plan.
And now let's go to the "comprehensive" section of the plan which begins with:
- Require committees to report legislation within six months that would deliver real deficit savings in entitlement programs over 10 years
- Finance would permanently reform or replace the Medicare Sustainable Growth Rate formula ($298 billion) and fully offset the cost with health savings, would find an additional $202 billion/$85 billion in health savings, and would maintain the essential health care services that the poor and elderly rely upon.
- Reform, not eliminate, tax expenditures for health, charitable giving, homeownership, and retirement, and retain support for low-income workers and families.
I also don't understand the need to "reform" charitable giving deductions. Isn't giving to charity a good thing? Does the government really think it has better use for that money? That it somehow is more efficient? Don't make me laugh.
On the mortgage interest deduction, I do understand that it is a big line item but reforming it or getting rid of part of it isn't the answer. Mortgage interest has been deductible since the first federal income tax law in 1913. Over the course of the last almost 100 years, it's made houses at the same price point more affordable than they would otherwise be, hence acting as a tailwind on housing prices. Basically, because buyers could afford to pay more, sellers have generally sold their houses for more. So I don't think any of us today are actually been benefiting from it the way we think we have. If it were never enacted, real estate prices would be lower across the board, probably putting your monthly payment around where it is now, with the deduction. So the house you might have paid $400,000 for, would actually have been $300,000 without the deduction. So while we probably have not benefited from it, cutting it would have a disastrous impact. Housing prices would immediately take a hit as they would become less affordable. This would send many homeowners underwater or further underwater, making any sort of refinancing impossible. Also, banks still have quite a bit of mortgage debt on their books, so any change in the mortgage interest deduction would have an immediate impact on banks and would probably cause ANOTHER banking crisis. Seriously, it's amazing how these politicians don't think things through. Now on to the next and final "reform" that I want to comment on:
- Maintain or improve the progressivity of the tax code.
As you can see, the plan is a completely idiotic monstrosity that probably will end up doing more harm than good. Luckily, it's only an outline at this point and has just about zero chance of going anywhere (hopefully).
Monday, July 18, 2011
Well, here's our problem. There are a host of opportunities for expansion in Las Vegas, a host of opportunities to create tens of thousands of jobs in Las Vegas. I know that I could do 10,000 more myself and according to the Chamber of Commerce and the visitors convention bureau, if we hired 10,000 employees, it would create another 20,000 additional jobs for a grand total of 30,000. I believe in Las Vegas. I think its best days are ahead of it. But I'm afraid to do anything in the current political environment in the United States. You watch television and see what's going on on this debt ceiling issue. And what I consider to be a total lack of leadership from the President and nothing's going to get fixed until the President himself steps up and wrangles both parties in Congress. But everybody is so political, so focused on holding their job for the next year that the discussion in Washington is nauseating. And I'm saying it bluntly, that this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it and I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right. A President that seems, that keeps using that word redistribution. Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they are frightened of this administration. And it makes you slow down and not invest your money. Everybody complains about how much money is on the side in America. You bet and until we change the tempo and the conversation from Washington, it's not going to change. And those of us who have business opportunities and the capital to do it are going to sit in fear of the President. And a lot of people don't want to say that. They'll say, God, don't be attacking Obama. Well, this is Obama's deal and it's Obama that's responsible for this fear in America. The guy keeps making speeches about redistribution and maybe we ought to do something to businesses that don't invest, their holding too much money. We haven't heard that kind of talk except from pure socialists. Everybody's afraid of the government and there's no need soft peddling it, it's the truth. It is the truth. And that's true of Democratic businessman and Republican businessman, and I am a Democratic businessman and I support Harry Reid. I support Democrats and Republicans. And I'm telling you that the business community in this company is frightened to death of the weird political philosophy of the President of the United States. And until he's gone, everybody's going to be sitting on their thumbs.
I've devised a fail-safe way to bring her to a state of cognitive paralysis. This method will require some travel on her part. Bachmann's destination: the Tel Aviv gay-pride parade.
Goldberg's logic is that since she loves Israel so much but also is anti-gay, the fact that their are proud homosexuals in Israel will cause her to short circuit. Huh? She has definitely made her share of anti-gay statements but I haven't heard her say that they shouldn't be allowed their rights to freedom of speech or freedom of assembly (unlike Goldberg's friend Castro, who actually sent gays to internment camps in the 1960's), so I don't see why a Tel Aviv gay pride parade would make her love Israel any less. In fact, Israeli policy is relatively close to what she believes in as same sex marriages cannot be performed in Israel (though they do recognize same sex marriages performed outside of Israel after a court ruling).
Later in the article, Goldberg makes a statement which should be viewed as an embarrassment to journalists:
Of course, Bachmann would not be surprised by Israeli society's laissez-faire attitude toward gay rights if she knew very much about Israel. But she doesn't seem to know much at all, apart from what she reads in the Bible.
It wouldn't have been very hard to do a little research and find out that Bachmann has actually been in Israel 4 times, including a four month stint as a teenager on a kibbutz right after the Yom Kippur War (she has said about the experience, "We worked on the kibbutz from 4 am to noon. We were always accompanied by soldiers with machine guns. While we were working, the soldiers were walking around looking for land mines," sounds like she knows quite a bit about the reality of life in Israel). But actually trying to do research on this subject would probably just hurt Goldberg's narrative, so why do it?
Goldberg then writes:
The Israel these "Christian Zionists" support is the uncompromising Israel of its most right-wing ideologues... Organizations such as the Rev. John Hagee's Christians United for Israel lobby in Washington for a particularly right-wing vision of the Middle East, in which Israel would keep every one of its West Bank settlements.
My god, what right wing fanatics, they promote the status quo! How horrible! Run for the hills! Puleeeese. It seems to be pretty easy in Goldberg's universe to be considered a fanatic unless you are Fidel Castro, of course. Hey Jeffrey, just because you and your friends all believe one thing doesn't mean that people who disagree with you are fanatics. I think one could argue more reasonably that people who demand Israel give up land to a group that will, with 100% certainty, launch attacks from that land upon Israel are left wing fanatics and promoters of ethnic cleansing (after all nobody seems to think Jews should be allowed to stay in Palestine, as they have been cleansed from much of the Middle East already).
Then he makes a very ludicrous argument, implying the Christian right will turn on Israel if it "makes peace".
How will the Christian right feel if Israel does, in fact, make compromises for the sake of peace by "betraying" its biblical birthright?
Considering that Israel will only give in to Palestinian demands (loss of the Western Wall, a return to 1967 borders and a right of return for Palestinian "refugees") if forced to by external actors, I highly doubt that the Christian right will turn on them as it will be understood that they only did so due to threats and pressure placed upon them by the anti-Israel forces in Europe, the US State Department and the current White House. I'd say the bigger threat to Israel's future are people like Jeffrey Goldberg and his friends who continually pressure Israel to sign its own death warrant.
Friday, July 15, 2011
A new poll from the Palestinian Center for Public Opinion and the Israel Project sheds light on the highly racist beliefs of the Palestinians (okay, not ALL Palestinians but a vast majority of them). Some highlights:
- 66% said that their leadership should agree to a 2 state solution but then move to a one state solution (all Palestinian). I'm assuming the Jews will be killed or expelled.
- 92% said Jerusalem should be the capital of Palestine and not Israel. Only 3% are willing to have it be the capital of both countries. So much for the City of David.
- 72% backed the denial of thousands of years of Jewish history in Jerusalem. I guess if they accepted it then they would realize that they are the invaders and colonizers.
- 62% backed the kidnapping of IDF soldiers, who are typically no more than teenagers. Like poor Gilad Shalit.
- 53% are in favor of teaching songs about hating Jews in school. And many in America think a simple prayer or moment of silence is a big deal.
- 73% agree with the following quote from the Hamas Charter, "the Day of Judgement will not come about until Muslims fight the Jews (killing the Jews), when the Jew will hide behind stones and trees."
Wednesday, July 13, 2011
At least Obama must have made the Arab world change their view of the United States after his Cairo speech and his acceptance of the Palestnian position as his own. Afraid not. According to this poll conducted by Zogby for the Arab American Institute Foundation, current attitudes towards the US are the same or lower than they were in Bush's last year in office, despite spiking considerably higher following Obama's election (how could they not like the fact that someone named Barack Hussein Obama was elected President of the United States). There are two main lessons from this, first, Obama is a complete and utter failure at governing who has only been able to achieve one thing in politics, getting elected. In terms of actually getting things done, his record has about as much substance as Justin Beiber's. Second, appeasement doesn't work. Obama has pretty much accepted the Palestinian negotiating position as his own and has even promoted the ethnic cleansing (nonviolent) of Jews from the West Bank and East Jerusalem (remember how he opposed the building of apartments for Israelis on Jewish owned land in East Jerusalem and opposes the very idea of the existence of Jewish settlements on historically Jewish land?). He has pretty much done everything he could do, yet the Arab world still hates him and thinks he should be doing more. That's why you can't let someone bully you to appease them, they will always want more.
Tuesday, July 12, 2011
On another point, I'm getting the feeling that the product of all these negotiations might not be what we think it might be. How could we possibly reform Medicare, Medicaid, Social Security and the general budget by August 2nd? Just writing the bills to do so would probably take longer than that. My guess is that a debt ceiling increase will be exchanged for nothing more than promises to tackle them later on. As if they will be tackled going into an election year. I'm hoping I'm wrong and that we at least get hard spending caps, but the rumor of a "contingency" plan from Senate Republicans is giving me a sinking feeling. Republican voters will go nuts if they back down. After all, we didn't elect the GOP to capitulate on deficits, we elected them to shrink the size of government.
Update: Apparently the Democrats were only offering $2 billion in discretionary spending cuts next year. Talk about a very unserious set of negotiations.
Monday, July 11, 2011
I really just don't see how this makes sense to anyone. Why does it need the additional tanks? Egypt only borders 3 countries, Libya, Sudan and Israel. Libya is in the middle of a civil war and is clearly no threat. Even if Qaddafi wins and decides to attack Egypt for some unknown reason, his tanks are mostly old T-55 Soviet tanks, which would be no match for Egypt's current military. I also don't believe Sudan is any threat to Egypt as they have their hands full with South Sudan plus its tank corps seems even weaker than Libya's. So if these tanks are ever used in a future conflict, that future conflict will most likely be with Israel.
Congress has until August 4th to object to the deal. Let's hope someone there is paying enough attention enough to do so.
Friday, July 8, 2011
Anyway, so I decided to check out exactly who this Richard Falk guy is. He almost seems like a villian in an Ayn Rand novel, he is that obviously misguided or just plain evil. Anyway, here are the highlights (from Wikipedia):
- In 1973, he defended a domestic terrorist who murdered a math researcher at an Army research center, saying Americans had 'a right, and perhaps a duty' to oppose the Vietnam War. So somehow in his looney tunes world, peace activists could resort to violence for the sake of peace. I don't think there is enough LSD in the world to make that make sense.
- In 1979, he defended Khomeini, saying he "created a new model of popular revolution based, for the most part, on nonviolent tactics, Iran may yet provide us with a desperately-needed model of humane governance for a third-world country." How long after that meeting did Khomeini create a violent dictatorial theocracy? You really can't make this up.
- Falk is a truther who believes that neocons and/or the US government had something to do with 9/11. In other words, a complete paranoid lunatic.
- He has compared Israeli actions to those of the Nazis.
- He was on the advisory boards of the World Federalist Society and American Movement for World Government, which basically believes he wants the UN to rule the world.
This is why the reported number looks lower than reality. By kicking people out of the labor force, a greater percentage look employed, or conversely, you can't be counted as unemployed if you aren't counted in the labor force.
So what happens if you assume a constant 66% labor force participation rate (it was at or above 66% since the late 1980's) since November 2008? Well, you get a much higher unemployment rate, as you see in the graph below, where the red line is the official rate while the blue line is what is probably the "real" rate.
In case you don't believe me and think I'm resorting to statistical shenanigans, check out the official employment-to-population ratio which is a statistic which does not account for the size of the labor force, just the total population over the age of 16.
These jobs numbers are disastrous and have nothing to do with the deficit talks, as Obama claimed. Nor will they be fixed by more infrastructure spending. As these charts show, the previous round of infrastructure based stimulus had almost no effect on employment in this country. It's really amazing how Obama really has nothing new to say or to propose on the subject of jobs creation, it's just always about helping out his union buddies and higher infrastructure spending.
Thursday, July 7, 2011
--Abraham Lincoln, Gettysburg Address
"I'm going to make history here as the first President to live tweet."
--Barack Obama, Twitter Forum
I wonder which President will be remembered longer and will have achieved more? Okay, no I'm not.
THE PRESIDENT: I'm going to make history here as the first President to live tweet.
Shouldn't the announcer be saying something like that? Does Obama have a shred of self-deprecating humor in him or does he have to be a self-promoting machine all the time? "I'm going to make history!" What a boob. You would think that someone who has already been elected President could give his ego a little bit of a rest instead of banging his chest all the time. He might be the first President to live tweet but in terms of humanity, how many millions of spots down are you? By the way, check out this analysis of his use of "I" here.
MR. DORSEY:And this one comes from William Smith: "What mistakes have you made in handling this recession and what would you do differently?"
THE PRESIDENT: That's a terrific question. When I first came into office we were facing the worst recession since the Great Depression.... I think that -- probably two things that I would do differently. One would have been to explain to the American people that it was going to take a while for us to get out of this. I think even I did not realize the magnitude, because most economists didn't realize the magnitude, of the recession until fairly far into it, maybe two or three months into my presidency where we started realizing that we had lost 4 million jobs before I was even sworn in.
The other area is in the area of housing. I think that the continuing decline in the housing market is something that hasn't bottomed out as quickly as we expected. And so that's continued to be a big drag on the economy.
We've had to revamp our housing program several times to try to help people stay in their homes and try to start lifting home values up. But of all the things we've done, that's probably been the area that's been most stubborn to us trying to solve the problem.
So when asked what mistakes HE made and what HE would do differently, he starts by blaming his predecessor for the recession. He even blames economists for not realizing the magnitude of the recession. Again, this is a question about HIS mistakes. Out of his 421 word answer to a pretty simple question all he admits to is that he didn't explain the severity of the recession to the American people well enough. Really? That's the only mistake? You didn't communicate well? How about all the time you spent on Obamacare instead of focusing on jobs? How about blowing the first stimulus package? Also, last I checked people can't eat the President's speeches, especially if they read them on an IPad. It's amazing that after 2 and a half years he thinks his only mistake is communication.
MR. DORSEY: Mr. President, 27 percent of our questions are in the jobs category, as you can see from the screen over here. Our next question has to do about jobs and technology. It comes from David: "Tech and knowledge industries are thriving, yet jobs discussion always centers on manufacturing. Why not be realistic about jobs?"
THE PRESIDENT: Well, it's not an either/or question; it's a both/and question. We have to be successful at the cutting-edge industries of the future like Twitter. But we also have always been a country that makes stuff. And manufacturing jobs end up having both higher wages typically, and they also have bigger multiplier effects. So one manufacturing job can support a range of other jobs -- suppliers and the restaurant near the plant and so forth. So they end up having a substantial impact on the overall economy.
This answer really makes no sense. Manufacturing jobs have higher wages than tech and knowledge industries? Don't tech jobs pay really well? According to the Bureau of Labor Statistics, the median computer engineer makes $92,430 per year while the median manufacturing worker (aka an "assembler") makes $12.32 per hour or $25,625 per year. Even if Obama is thinking of auto workers, who are the highest priced assemblers, their median wage was $24.91 per hour, putting their yearly salary at a bit more than $50,000 per year. Also, why would they have higher multiplier effects? Don't tech workers go to restaurants too? Don't they have vendors? What a lame excuse for promoting the people who generally will be more likely to vote for him, manufacturing oriented union workers.
MR. DORSEY: So our next question is coming up on the screen now, from Patrick: "Mr. President, in several states we have seen people lose their collective bargaining rights. Do you have a plan to rectify this?"
THE PRESIDENT: The first thing I want to emphasize is that collective bargaining is the reason why the vast majority of Americans enjoy a minimum wage, enjoy weekends, enjoy overtime. So many things that we take for granted are because workers came together to bargain with their employers.
Now, we live in a very competitive society in the 21st century. And that means in the private sector, labor has to take management into account. If labor is making demands that make management broke and they can't compete, then that doesn't do anybody any good.
In the public sector, what is true is that some of the pension plans that have been in place and the health benefits that are in place are so out of proportion with what's happening in the private sector that a lot of taxpayers start feeling resentful. They say, well, if I don't have health care where I only have to pay $1 for prescription drugs, why is it that the person whose salary I'm paying has a better deal?
I'm sure there are quite a few people "enjoying" minimum wage because closed union shops have hiked up wages and limited employment for workers. So in that way the President is correct. He makes it sound like all of us would be toiling 7 days a week for pennies if it weren't for his trusted constituency, unions. I believe the vast majority of people had at least one day off thanks to the sabbath (which I believe was technically invented 3,000 years ago) even when toiling in the mines. Also, less than 5% of workers are getting the minimum wage at any one time, with about half of them being under 25 (remember those minimum wage after school jobs?). I think one can argue that collective bargaining is a net drag on the rest of us. It drastically increases costs per employee, in terms of wages, benefits AND pensions which all of us have to pay for.
It's also demeaning when he says that those of us who are anti-union are only like that because we are "resentful". That reminds me of how he demeaned small town Americans by calling them "bitter" during his infamous San Francisco speech. See people who disagree with him and his worldview are just doing so because they are negative people who have things going wrong in their lives. It is NOT because they just want what is best for this country. He should check out this article about what happened after public sector collective bargaining ended in Wisconsin. One town was able to go from a deficit to a surplus through some minor tweaks to employee contribution levels (an added 2.6% towards healthcare benefits and 5.8% to pensions) as well as through negotiations with their healthcare provider. The collective bargaining agreement forced the town to buy benefits only from the provider started by the union. Naturally the rates were noncompetitive. So once the town was allowed to negotiate with others, the union provider immediately cut their cost estimate. Tell me how having to buy benefits from one provider benefits anyone outside that provider? Oh yeah, unions are great.
MR. DORSEY: Mr. President, 6 percent of our questions are coming in about housing, which you can see in the graph behind me. And this one in particular has to do with personal debt and housing: "How will admin work to help underwater homeowners who aren't behind in payments but are trapped in homes they can't sell?" From Robin.
THE PRESIDENT: This is a great question. And remember, I mentioned one of our biggest challenges during the course of the last two and a half years has been dealing with a huge burst of the housing bubble.
What's happened is a lot of folks are underwater, meaning their home values went down so steeply and so rapidly that now their mortgage, the amount they owe, is a lot more than the assessed worth of their home. And that obviously burdens a lot of folks. It means if they're selling, they've got to sell at a massive loss that they can't afford. It means that they don't feel like they have any assets because the single biggest asset of most Americans is their home.
So what we've been trying to do is to work with the issuers of the mortgages, the banks or the service companies, to convince them to work with homeowners who are paying, trying to do the right thing, trying to stay in their homes, to see if they can modify the loans so that their payments are lower, and in some cases, maybe even modify their principal, so that they don't feel burdened by these huge debts and feel tempted to walk away from homes that actually they love and where they're raising their families.
We've made some progress. We have, through the programs that we set up here, have probably seen several million home modifications either directly because we had control of the loan process, or because the private sector followed suit. But it's not enough. And so we're going back to the drawing board, talking to banks, try to put some pressure on them to work with people who have mortgages to see if we can make further adjustments, modify loans more quickly, and also see if there may be circumstances where reducing principal is appropriate.
The "several million home modifications number" is pretty much an outright lie. According to Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program, the administration is counting people who have only received offers for modifications, not actually had their mortgages modified. The audit of the Home Affordable Modification Program (HAMP) from Barofsky was from early 2010 but he said that while there were, at the time, 1.3 million offers for modification, only 170,000 mortgages were actually modified.
Also, notice that once again, Obama did not answer the question, which was about people who aren't behind on their payments but are "trapped in homes they can't sell." This is NOT about people living in houses they can't afford, but I guess Obama didn't have an answer for this person so decided to toot his own false horn. All he had to do was say something about his plans for reinvigorating the real estate market. I guess he doesn't have any. I guess that would require economic growth and we all know how incompetent he is at that.
MR. DORSEY: "After embarking on a record spending binge that left us deeper in debt, where are the jobs?"
THE PRESIDENT: Well, look, obviously John is the Speaker of the House, he's a Republican, and so this is a slightly skewed question. (Laughter.) But what he's right about is that we have not seen fast enough job growth relative to the need. I mean, we lost, as I said, 4 million jobs before I took office, before I was sworn in. About 4 million jobs were lost in the few months right after I took office before our economic policies had a chance to take any effect.
And over the last 15 months, we've actually seen two million jobs created in the private sector. And so we're each month seeing growth in jobs, But when you've got a 8 million dollar -- 8-million-job hole and you're only filling it 100,000-200,000 jobs at a time each month, obviously that's way too long for a lot of folks who are still out of work.
There are a couple of things that we can continue to do. I actually worked with Speaker Boehner to pass a payroll tax cut in December that put an extra $1,000 in the pockets of almost every single American. That means they're spending money. That means that businesses have customers. And that has helped improve overall growth.
We have provided at least 16 tax cuts to small businesses who have needed a lot of help and have been struggling, including, for example, saying zero capital gains taxes on startups -- because our attitude is we want to encourage new companies, young entrepreneurs, to get out there, start their business, without feeling like if they're successful in the first couple of years that somehow they have to pay taxes, as opposed to putting that money back into their business.
So we've been able to cooperate with Republicans on a range of these issues. There are some areas where the Republicans have been more resistant in cooperating, even though I think most objective observers think it's the right thing to do. I'll give you a specific example.
It's estimated that we have about $2 trillion worth of infrastructure that needs to be rebuilt. Roads, bridges, sewer lines, water mains; our air traffic control system doesn't make sense. We don't have the kind of electric grid that's smart, meaning it doesn't waste a lot of energy in transmission. Our broadband system is slower than a lot of other countries.
We haven't gotten the kind of cooperation that I'd like to see on some of those ideas and initiatives. But I'm just going to keep on trying and eventually I'm sure the Speaker will see the light.
I love the use of the phrase "resistant to cooperating". He sounds like a borg or something (also, is his opinion supposed to represent "the light"?). Maybe Republicans are resistant to cooperate because spending $2 trillion on infrastructure is a dumb idea??? His first infrastructure based stimulus plan was a complete failure, now he wants an even bigger one??? He couldn't even deliver broadband to rural areas without wasting almost 90% of the money. And his 16 tax cuts to small businesses are peanuts compared to the massive hike in spending that will be required to deal with Obamacare. My company had premiums rise by almost 30% last year thanks to his "reforms". Does anyone know any small business owner who says "thank God for Obama, he is really looking out for me"? I'd also want to question his jobs "created" number. As I have shown before, the unemployment rate is actually much higher than is reported thanks to some statistical manipulation and is actually barely off its peak.
MR. DORSEY: So speaking of taxes, our next question is coming from us -- from Alabama, from Lane: "What changes to the tax system do you think are necessary to help solve the deficit problem and for the system to be fair?"
THE PRESIDENT: Well, I think that, first of all, it's important for people to realize that since I've been in office I've cut taxes for middle-class families, repeatedly. The Recovery Act cut taxes for 95 percent of working families. The payroll tax cut that we passed in December put an extra thousand dollars in the pockets of every family in America.
And so we actually now have the lowest tax rates since the 1950s. Our tax rates are lower now than they were under Ronald Reagan. They're lower than they were under George Bush -- senior or George Bush, junior. They're lower than they were under Bill Clinton.
The question is how do we pay for the things that we all think are important and how do we make sure that the tax system is equitable? And what I've said is that in addition to eliminating a whole bunch of corporate loopholes that are just not fair -- the notion that corporate jets should get a better deal than commercial jets, or the notion that oil and gas companies that made tens of billions of dollars per quarter need an additional break to give them an incentive to go drill for oil -- that doesn't make sense.
But what I've also said is people like me who have been incredibly fortunate, mainly because a lot of folks bought my book -- (laughter) -- for me to be able to go back to the tax rate that existed under Bill Clinton, to pay a couple of extra percentage points so that I can make sure that seniors still have Medicare or kids still have Head Start, that makes sense to me. And, Jack, we haven't talked about this before, but I'm assuming it makes sense to you, given Twitter has done pretty well. (Laughter.)
I think that for us to say that millionaires and billionaires can go back to the tax rate that existed when Bill Clinton was President, that doesn't affect middle-class families who are having a tough time and haven't seen their incomes go up. It does mean that those who are in the top 1-2 percent, who have seen their incomes go up much more quickly than anybody else, pays a little bit more in order to make sure that we can make the basic investments that grow this country -- that's not an unreasonable position to take. And the vast majority of Americans agree with me on that.
That doesn't mean that we can just continue spending anything we want. We're still going to have to make some tough decisions about defense spending, or even some programs that I like but we may not need. But we can't close the deficit and debt just by cutting things like Head Start or Medicare. That can't be an equitable solution to solving the problem. And then, we say to millionaires and billionaires, you don't have to do anything. I don't want a $200,000 tax break if it means that some senior is going to have to pay $6,000 more for their Medicare that they don't have, or a bunch of kids are going to be kicked off of Head Start and aren't going to get the basics that they need in order to succeed in our society. I don't think that's good for me; I don't think it's good for the country.
Well he starts that one with another lie. We don't have the lowest tax rates since the 1950's. The top tax rate was only 31% in 1992, before Clinton raised them. What Obama is actually referring to is tax revenues as a % of GDP but that is lower thanks to the recession moving people into lower brackets. And it is in his power to raise this number without any tax law changes by instituting pro-growth policies, though I am seriously getting the impression that he is allergic to anything that might actually help the economy grow. Especially if it doesn't involve specifically paying off his friends and constituencies. Also, how much does he think the top 1-2% make anyway? We are not talking about "millionaires and billionaires". The top 1% income cutoff was $380,000 in 2008, and I'm assuming when he mentions the top 1-2% he is referring to those making $250,000 and up. How many of those have a $200,000 tax break? They wouldn't even owe that much in taxes. "millionaires and billionaires" are a very small % of the country and therefore would not actually help that much in solving the deficit problem. How much money could you possibly squeeze out of a fraction of a percent of the population? He really needs to stop the class warfare and actually start thinking about real solutions.