TPS

Yes, but it is an improvement, which is what I'm predicting. I'm not saying it's great, just better. When we do reach that point, the real growth determinants will be lower than the historical average because of the decline in the growth rate of the labor force.

I made my prediction earlier in this thread--growth will be slowed by the tax hikes in the first half, but will should be 2.5-3% in the second half. In normal conditions (meaning no huge debt over hang), the economy chugs along despite various tax rates and regulations.

Go back to all of the arguments GG and I had, which is where all of that was discussed ad nauseum. You won't find any discussion about tax rates there other than the cap gains rate--we were debating whether growth and income tax revenues were more important than the cap gains revenues. My comment in this thread was related to the fact that if we went over the fiscal cliff then we would go back to the same tax rates that we had during Clinton's term, when there were surpluses. That's what I said. So this argument gets caricatured by the right. That said, I stand by the fact that if all rates went back to the Clinton rates, as would've happened with the cliff, then going forward more revenues would be generated than with the current agreement, which kept all rates at the Bush rates except the top. REally, it's not that difficult, but you guys want to paint me into a corner. Fine.

Yes, higher rates generate more revenue than lower rates, just as the CBO estimates. Why do you think the CBO estimated higher revenues had we gone over the fiscal cliff? Because the rates would've gone back to the Clinton era rates. That would initially slow down growth, but as the economy recovered after that, more revenues would be generated under those higher rates. It's not real difficult stuff. If I were to put the factors in order: 1. growth 2. lower spending 3. tax rates 4. higher cap gains revenues (over and above what's taken in on average)

man, you need to improve your reading comprehension. I never said the rates caused the surplus, i said growth, and the Fed not constraining that growth, was the main cause. You make my point above. That said, for a given level of GDP, the tax rates under Clinton raise more revenue than the rates under Bush. YOU posted the CBO's new estimates. How much revenue are they forecasting from the increase in the top rate? GG, Al Gore caused the strong growth of course. It is sitting as an electronic credit on the Fed's balance sheet. It is not something physical that once created, can't be destroyed. The Fed has the power to destroy money as well as create money. Rising Inflation will mainly depend on the growth of the economy relative to unemployed resources. And what's this about a government conspiracy to lie about inflation again?

I'm glad you stated this, because it is the crux of the issue! I've got to take off for a bit myself, but this is the real discussion that won't be had in public by congress!

I'm glad that you at last understand that we won't see high inflation until the economy picks up. Btw, what's your definition of rampant? As for the "competition for g&s," with unemployment at close to 8% and most industries and foreign companies operating at below average capacity, more goods will be produced and we'll import more as the economy "kicks off." And guess what will happen to the deficit as more is produced and more people are hired? With growth, the deficit will come down to a more manageable level. Everything else is a long term issue (see below). As the economy picks up, those corps will start using their "tons of cash" to fund expansion. On the other hand, without increased demand for their goods, they'll continue to sit on that cash. As for kicking it down the road, SS is funded through 2035. Medicare is funded for about another 10 years. However, it IS the healthcare liabilities that generate the really big numbers that people use when forecasting out 25+ years. Bring the cost of healthcare in line with other industrialized countries, and 2/3 of the projected deficits go away.

In the first post you said corporate bond issuance; whereas in the quote here, you are saying fixed income funds inflows/outflows. Are you talking bonds issued by corps, or flows into fixed income funds by investors and others? If it's the latter, then that would include mortgages, which we all agree the Fed is manipulating. And that's a lot different than your first statement.

Yes, I really want you to tell me how lower oil prices lead to higher federal personal income tax revenues for a given level of unemployment in both cases. How did lower oil prices increase YOUR personal income taxes paid to the federal government? I'm willing to learn.If you can't argue using some numbers (data), then all arguments boil down to beliefs. I can't argue with your beliefs. I do agree with your point that the government will spend all revenue it takes in, so if you want it to shrink, then you need to starve it. That's a different point.

Dude, I simply point out that the Fed has "printed" trillions of dollars for 5 years now, and I ask you why haven't we seen the inflation that you've been squawking about? It's obvious that you have no clue on the cause of inflation or about how Fed policy influences the economy. Seriously, try and provide an explanation for why we haven't seen high inflation when the Fed has printed trillions of dollars, and tell me when it will happen and how? If you can't, then stop squawking about things you don't know.

The argument focuses on federal personal income taxes. Did the Bush tax cuts lead to a fall in federal personal tax revenues or not? conversely, did the higher rates under Clinton lead to an increase in federal personal tax revenues? I'm willing to listen and accept any rationally supported arguments. The problem is that most of the arguments made by those on the right tend to be vague and require a "belief" that something caused something else. I accept GG's argument that there was an increase in cap gains because the data show it. However, for the 2 best years, it added only $40 billion above the normal cap gains revenue. It helped push the budget into surplus territory, but it was income-based revenues that generated a bigger haul as unemployment came down. If you want to explain how the price of oil caused higher personal revenues, I'm all ears. However, under the government's data, excise taxes on gas fall under a different category. In addition, the tax nominal value of the tax doesn't change as the price changes--it's not a % tax, it's a fixed amount. Again, if you have an explanation that can be supported, I'm all ears. Finally, the argument about how taxes influence revenues is not mine. While supply-siders have tried to claim that lower tax rates lead to higher revenues, those who actually do the numbers in practice know better. The CBO estimates personal income tax revenues based on tax rates and wage and salary income (which they base on projected unemployment). When tax rates are increased, their estimate of revenues over time is increased; and when tax rates are cut, their estimates of revenues is decreased. This is based on the evidence (data) they have seen. Btw, I'm sure it's the huge oil bonus that you all get in Alaska....

I know this will be hard for you to understand, but here goes. As i argued with GG, economic growth and Greenspan's belief that the so-called "non-accelerating inflation rate of unemployment" (NAIRU) had fallen (due to productivity growth) meant the Fed let the recovery continue (around 1997) as the unemployment rate fell below 6% (most economists thought this was the value of NAIRU, the rate that would cause inflationt to accelerate). The number one factor that generated more revenues was the fact that unemployment fell to 4% (GG argues cap gains revenues were more important). Now, how does this square with my comment on Clinton's tax structure? The tax structure influences what's known as the full employment budget deficit/surplus. That is, if the economy was at FE, it's the estimated (by the CBO) budget value. As I've done several times here, I've compared the budget deficit for Bush and Clinton during years when both regimes exerienced unemployment of about 4.5%. On the revenue side, Bush's tax cuts added somewhere between $100-150 billion to the deficit. So, yes, when the economy is at an equivalent state (same level of unemployment), the higher taxes under Clinton generate more revenues. Why do you think the CBO is estimating more revenues from the just announced tax increases? Are they biased? If you don't believe that tax increases will generate higher revenues over time, then I guess you also must believe that tax cuts don't cause deficits, but then you would have to come up with a story to explain the 1980s and 2000s. Ok, let your insults continue. There certainly won't be a serious response; that hasn't happened since the last time the Bills were in the playoffs.....

What he said.As I said earlier in this thread, there will be cuts to SS and Medicare, even though the primary cause of any future deficit projection is healthcare. Outside of the healthcare fix, I would support a tweaking to SS if the Rs are willing to cut defense spending (I'm talking the billion/trillion $ boondoggles).

The spending decisions will take place in a couple months, and that's when the Rs will have the upper hand. It's a silly exercise to compute the impact over the next 10 years without those changes added into the equation, and they will change.

I wouldn't be surprised if former players like Thurman, Tasker, and Brown--who were at the PC, helped influence Ralph's decision. No good coach wants to be told by an owner what to do, and Ralph had a history of meddling. I think they got Ralph to take one for the team, and he was wise enough to do so.

Corp bond issuance has averaged about $500 bil (seasonally adjusted annual rate per quarter) since the end of 2010. There's no doubt that the Fed's buying of mortgage securities and long term T-bonds has pushed institutioinal investors into riskier assets, but it's a chicken and egg thing. Successive rounds of QE are tried because of the ongoing GFC. Rates are at historic lows because of the crisis (and Fed policy if it makes you feel better) and corporate CEOs have taken advantage.

You obviously misunderstand the fiscal cliff. The point was to avoid the short term austerity measures because it would cause the fragile recovery to stumble back into recession. Politicians are using the FC to barter over who will pay for the long term fiscal fix.

You should've said Hungarian forints!Cheers to 2013 and the new regime!

Duh! Why do you think the Reps will strike a deal? Defense contractors will go ballistic, so to speak....It was a great bargaining tactic.

Payable in US$, sure (my bank will take to big of a fee for a $115 exchange...)Btw, I expect the 2nd half of the year to carry the day.

Household deleveraging is reaching a turning point. Firms and households have locked into low-cost debt increasing cash flows. But biggest factor is the cheap energy boom. Double impact: energy intensive firms are expanding in the US and the trade deficit will continue to shrink as we import less.

Your common sense response doesn't work for the sky is falling crowd. There will be a fiscal patch, and the economy will grow by 2.5-3% next year. Unemployment will fall and possibly dip below 7%, and the deficit will decline by $300 bil. next year. The 10-year t-bond will end the year between 2-2.5%.. Entering the 6th year of QE policies, 3rd and tasker will continue to squawk about the coming weimar inflation rather than try to understand why they are wrong. Happy New Year PPP!

You are giving Ben too much credit. He controls the short rate. Thank the recession and a huge pool of money looking for higher yields for historically low long rates. It's a no brainer for CFOs to take advantage of it.

And the price of hot air is cheap...My radio tells me that gas prices are at a yearly low; my newspaper says the drought and ethanol demand have caused food prices to increase; my right wing friends here at ppp tell me obamacare is increasing the cost of medical care, and that tuition is driven by over-paid tenured, liberal professors.... Merry Christmas M.

Interesting, Fitzpatrick said he really didn't want to be quarterback today too....