China sales increase 25% by cutting TAXES!

[Tim Elston]

The means (cutting taxes on small car sales) producing a stat (25% increase in auto sales in China in February) is what we've taken here as remarkable and laudable.

From what I've read, China reduced its sales tax on small automobiles from 10% to 5%. People knew that the tax was coming, so the amount of sales had dropped in anticipation of the cut. That pre-cut decline in sales may account for some of the 25% post-cut sales increase. The sales cut on this single item was part of a larger economic stimulus plan that spent $585 billion.

Brooking's Assessing the G-20 Stimulus Plans: A Deeper Look says that the United States stimulus package just signed by Obama is composed of about 45% tax cuts. By contrast, the Chinese plan has "mostly proposed spending measures." Obama's stimulus included new car buyer sales tax breaks on all cars, which are admittedly tax credits and thus not as sharp per vehicle as the Chinese sales tax cut on smaller cars, but overall Obama's stimulus plan includes a total tax reduction vastly larger than the tax cuts included in the Chinese package.

Something tells me, though, that, in spite of this, Obama's tax reductions are not good enough. That something is the partisan need to make Obama out to be the bane of America's economic recovery, if not its existence. Better to showcase Obama's spending and point to a single Chinese tax cut as Obama's foil than to compare the respective stimulus packages more broadly.

[MacUser]

Something tells me, though, that, in spite of this, Obama's tax reductions are not good enough.

Tim,
Corporations are leaving the United States for other countries with less taxes and/or stable tax systems. Your blaming the Right again assumption is falling severely short as Corporations leaving the US is not a right vs left issue.. it's about them escaping the coming business disaster.

Listen to Warren Buffett and any other business leader. Obama is going to have to seriously reverse his agenda and apply some stability before we see any growth or stabilization.

Why are you the only one here believing something different?

[Tim Elston]

Corporations are leaving the United States for other countries with less taxes and/or stable tax systems.

Obama's plan is to reduce tax incentives for companies that go overseas. He wants to use federal tax policy to keep companies here. That's protectionism, and I don't agree with it, but it would address your issue here.

During the period that Bush's tax cuts were in effect, American businesses were moving to other countries. Tax cuts are not a panacea.

[Tim Elston]

Another point to be made in this thread is that the federal government does not control sales tax policy. That is in the control of the states. Obama could not reduce the sales tax on automobiles even if he wanted to do that.

I recommend that if you are concerned to reduce sales taxes you petition the nation's governors to halve, or even eliminate, state sales taxes. Your most respected Republican governors could lead the way. If they're really good, they could most closely approximate the Chinese government by bringing natural resource rights under state ownership. Alaska does this for mineral rights, and while we do pay sales taxes here, we don't pay state income tax and we get a resident dividend.

Maybe you could petition Congress to take state ownership of America's natural resources and take control of sales tax policy, and Obama could then reduce sales taxes at will, just like China.

[MacUser]

Obama, Geithner Get Low Grades From Economists
http://online.wsj.com/article/SB123671107124286261.html

U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy

*****

This is Obama's recession Tim. He has solid proven rules he could use yet fails to do so to add stability.

[Tim Elston]

This is Obama's recession Tim. He has solid proven rules he could use yet fails to do so to add stability.

If you click the "or download all data as .xls" link from the WSJ article you posted, you will see that "the NBER has dated the start of the recession in December 2007." How is it that the recession is Obama's, when it started thirteen months before he took office?

The data from the survey also show that in the aftermath of Obama's stimulus package forecasters project the end of the recession to be postponed by one quarter from earlier projections. Forty-four percent say the size of the stimulus was the right size; 31% say it was too large; 24% say it was too small. Goldilocks would presumably approve, even if she had to wait three more months before she got her bowl of porridge.

The main criticism of the stimulus plan by these economists, according to the article, is that the banks were not bailed out quickly enough. So, the primary reason for these economists giving Obama a "failing grade" is that he did not throw money at the banks when they said throw.

On that main criticism, I give the majority of surveyed economists an F, Obama a 'Thank you,' and Bush a pink slip.

[MacUser]

The main criticism of the stimulus plan by these economists, according to the article, is that the banks were not bailed out quickly enough. So, the primary reason for these economists giving Obama a "failing grade" is that he did not throw money at the banks when they said throw.

I'll agree with you on that this is just yet to be seen if it can work. I would just prefer to let a failed business model FAIL ... and deal with the aftermath rather than steal money from our young Children and GRANDKIDS. Money that isn't even earned yet. Wealth that may not even have a chance to be created. Quite a risky scheme.



****

Obama: Economic crisis 'not as bad as we think'
http://www.breitbart.com/article.php?id ... _article=1

Challenged to provide encouragement as the nation's "confidence builder in chief," Obama said Americans shouldn't be whipsawed by bursts of either bad or good news and he was "highly optimistic" about the long term.

...But Obama, speaking to top executives of the Business Roundtable, expressed an optimistic vision and called for patience.

Richard Parsons, chairman of beleaguered Citigroup Inc., asked if Obama could offer some help in a national battle "between confidence and fear."

"A smidgen of good news and suddenly everything is doing great. A little bit of bad news and ooohh , we're down on the dumps," Obama said.

******


Btw.. notice that Obama is getting the message from talking down the economy and all the doom and gloom. Now the forecast isn't as dire as Obama first thought, eh? Do we call this learning on the job or a slowing down of some of his agenda? I wonder if this sudden reversal means that he has wasted a good crisis?

Either way I'm very glad he is getting the message.

[Full Quiver]

I spoke with a young lad today about all the inventions that Americans and Israelis have invented. He mentioned that Jews will travel 2 more miles down the road to buy from other Jews. I guess he thought that was a bad thing. I told him that they are typically very talented and wealthy and maybe we could learn from them.

Anyhow my point was that in free societies people get creative and invent. In socialist and especially communist countries that is not so much so. Just look up the numbers. The reason is that in these other nations the govt. strips away the promise, wealth, and therefore incentive to be creative and share talent. America has never been that way.

I am afraid however that if we continue down this path that we are so quickly tumbling down that this may very well happen. Take for instance the debt that we are leaving for the future generations of this nation. As mentioned above we are spending wealth that has not yet been created, it's being printed alright but not created. If our children and grandchildren see that their creative efforts will only be wasted to pay down OUR DEBT then they may sit idle and not invent, not create, not use their talents or at least not in this country.

[Tim Elston]

Anyhow my point was that in free societies people get creative and invent. In socialist and especially communist countries that is not so much so. Just look up the numbers. The reason is that in these other nations the govt. strips away the promise, wealth, and therefore incentive to be creative and share talent. America has never been that way.

I am afraid however that if we continue down this path that we are so quickly tumbling down that this may very well happen. Take for instance the debt that we are leaving for the future generations of this nation. As mentioned above we are spending wealth that has not yet been created, it's being printed alright but not created. If our children and grandchildren see that their creative efforts will only be wasted to pay down OUR DEBT then they may sit idle and not invent, not create, not use their talents or at least not in this country.

The concern about debt is fine and good, but let's be clear that our exponential debt growth is directly caused by our monetary system, which is capitalist, not socialist. Our monetary system demands growth, which it defines as debt. If we were to eliminate every single social program our monetary system would still require that our debt grow exponentially.

[Full Quiver]

Here's the way i see it Tim but who am I.

Under economic boom the govt. should take the tax revenue and PAY OFF the national debt instead of spending it and more. If I can live off what I make and do well then so can the govt.

[Tim Elston]

Here's the way i see it Tim but who am I.

Full Quiver, I'm no expert in this subject, either. Not even close. I wish I were, because these times deserve to be understood much better than I understand them.

Under economic boom the govt. should take the tax revenue and PAY OFF the national debt instead of spending it and more. If I can live off what I make and do well then so can the govt.

I completely agree. The only problem is that in our monetary system economic growth equals debt growth. Growth equals money creation equals debt creation. Without debt creation there is no growth. Our system is such that debt expansion must happen in order to grow. This is the brick wall of our monetary system. There is no circumventing it without changing the system itself. That is, money has to become something other than debt, or else we have to keep expanding debt. And the problem with debt is that it is charged interest, so debt expansion has always to be enough to pay for existing interest, and this debt expansion to pay for existing interest leads to the need for more debt expansion at least at a compounded rate equal to that of the average interest rate.

We have to change the monetary system. Mistaking symptoms for the cause won't help anything.

[Full Quiver]

I totally disagree Tim.

Andrew Jackson payed off the national debt and another may have also, IKE (maybe). To me, it's insane to think that you have to have debt to grow. When you have debt you are not growing. One does not have to spend MORE that they make to make more.

We want to spend all our revenue and more with the thought that other nations want to invest in America (and they do) but America could and should get in the position that we are debt free and investing in other nations. Now there's thought for you.

[Tim Elston]

To me, it's insane to think that you have to have debt to grow.

It's not an opinion; it's a fact. The insanity of which you speak is the actual insanity of our monetary system. In our monetary system, MONEY IS DEBT. Money does not exist except as debt. Growth is defined as an increase in money, and since money is debt, growth is an increase in debt. It's not an opinion. It is a fact about our monetary system, and, yes, it is insane.

When you have debt you are not growing.

That is true of individual entities within the system, but it is not true of the aggregate of all entities within the system. Money does not exist within the system except as debt, so if an entity within the system has no debt, then the system itself is growing as a result of the incurring of debt by other entities within the system. That's why governments are compelled to incur massive amounts of debt when private borrowing dries up during recessions. If debt growth goes negative within the system as a whole, then the system contracts.

Andrew Jackson payed off the national debt

Jackson was not operating under our current monetary system.

and another may have also, IKE (maybe).

Eisenhauer was president before Nixon canceled the direct convertibility of the US dollar into gold. It was the last significant action that fundamentally redefined our monetary system into a system of debt based growth.

WATCH: Money as Debt (47 mins.)
WATCH: The Crash Course (3 hrs, 23 mins)