The Truth is a Sometime Thing?

On February 20, 2012, I posted my commentary "Borrowing, Taxes & Deficits – A Discussion Continued."

Please re-read for context by clicking on the title above.

Paul Shapiro of West Caldwell, NJ furnished the following view on truth-telling, which I want to share with you, and I am confining this post to that comment because my response was lengthy. Rather than burden the reader with an inordinately long post I will make this an unusually short one, and set forth my reply in my next post.

As some notable person has said, everyone is entitled to their own opinion (and, I add, whether or not the opinion is based on fact) but, everyone is not entitled to their own facts. Another notable person pointed out that facts are stubborn things. There are some people you just can’t have a conversation with. This was pointed out spectacularly when we had a columnist from the Wall Street Journal speak at Saturday morning services at our synagogue about a year ago. Very bright young man. I believe his column appears Monday or Tuesday. However, I don’t subscribe to the Wall Street Journal and I’ve forgotten his name.

 One of his duties at the WSJ is to shepherd visiting groups of journalists around the facilities and then engage them in a Q & A session. He used the occasion of a visit by a group of Egyptian journalists to describe a person you just can’t have a discussion with. She was a journalist from Cairo.

Cairo journalist:  “How does the fact that Robert Murdoch is Jewish effect what write in the WSJ? 

WSJ columnist:  “His name is Rupert Murdoch and he is not Jewish. I am Jewish.” 

Cairo journalist:  “Robert Murdoch IS Jewish.

WSJ columnist:  “His name is Rupert, not Robert, and he is not Jewish.”

 Etc. Etc. Etc. He said quite correctly that you just can’t have a conversation with someone who makes up their own facts. Facts are stubborn things.

Comments are welcome and will be distributed with attribution, unless the writer requests that he/she not be identified.

Borrowing, Taxes & Deficits – A Discussion Continued

In my post of November 2, 2011 entitled "Borrowing, Taxes & Deficits – A Discussion," I referred the reader to an article written by Professor Robert Malchman and posted on his blog entitled "Real Interest Rates," and the exchange that followed, which appears as four comments below the post. In my post referred to above, I rebutted the view of Professor Malchman, and to a greater extent those of Bunny42.

(I interrupted that exchange to focus on the controversy regarding "Contraception, Abortion and Komen.")

My rebuttal was reproduced on that blog and provoked two more rebuttals by Bunny42 below the post, which you can find here.

I thought that her rebuttal was so misguided that I feel it incumbent upon me to respond to it, and so here is my rebuttal:

Bunny, you have every right to be taken seriously because you do not run away from opinions that are contrary to yours. I can assure you that most people close their ears when confronted with contrary views, and only want to hear opinion, and indeed facts, that reinforce their views.

Furthermore, you are far more knowledgeable than most people. You are familiar with the Keynesian economic theory. Please watch this video on YouTube. You say that “(Your) impression has been (and still is) that reducing taxes on industry allows for expansion, and that includes new jobs.” It is no wonder that this is your impression, since this has been the message repeated over and over again. It is part of what is known as staying on message. But that doesn’t make it true and it isn’t. Right now corporations are sitting on $2 trillion and are not investing according to a New York Post, [a News Corporation subsidiary (i.e. Rupert Murdoch's)] article that goes on to say: “US consumers are stretched financially. Rosenblatt says there's no incentive for many companies to expand. Why go out and make 110 widgets when I can only sell 100?" he asked. Which sums up the situation.” See here. See also here.

Taxes have nothing to do with it. In fact right now we have one of the lowest tax rates in our history. When Eisenhower (R) was President (1960) the top rate for all those making over $400,000 was 91% and our economy did very nicely, thank you very much. When Ronald Reagan was President and after he sharply reduced taxes (1985) the top tax rate was 50% on incomes over $169,000 (See here) and our economy did very nicely, thank you very much. When Clinton became President he inherited a slow down and increased taxes and the economy boomed. But I said all this in my previous posts, but apparently it didn’t sink in. Impressions are hard to shake.

Consumer spending accounts for 70% of US economic activity. See here. When consumers spend, businesses make products to sell. When consumers don’t have the money to buy, business contracts, and jobs are lost. During inflationary times, when consumers want to buy more than business can produce the emphasis must be on increasing production. During deflationary times or during recessions when business capacity is greater than the demand, emphasis must be on increasing demand, not supply. That is not only economic theory. It is common sense.

It is not a coincidence that in 1929 just before the great depression the income disparity was huge just as it is now, or to quote from the Center on Budget and Policy Priorities, “Taken together with prior research, the new data suggest greater income concentration at the top than at any time since 1929.” See here. Henry Ford, not known as a left wing radical said, “One's own employees ought to be one's own best customers. Paying high wages is behind the prosperity of this country.” See here.

But as I write this, I begin to wonder if I am giving you too much credit, Bunny. It seems like I am going over much of what I covered in my last post, which essentially you ignored, as undoubtedly you will ignore the facts here, because they do not comport with your “impressions.”

You say that, “One of our problems involves not having enough skilled labor available to fill those jobs.” This is not the major problem in our economic malaise, but it illustrates another problem in our society – we are not spending enough money on education, we have fallen way behind the rest of the world in educating our young, and college education, has become far too expensive. When I climbed out of poverty to a prosperous upper middle class existence, my college was free. Without that I could not have moved up. But we no longer have those rungs on the ladder.

Bunny, you are entitled to your opinions, but not if they are based on misconceptions. You talk about a slippery slope. But you ignore that the slippery slope has been in the opposite direction. It’s not a little tax there and a little tax here. It a big tax cut and another big tax cut. I have shown you how much taxes have been reduced over the years, but it makes no impression on you. You refuse to focus on the facts.

“Remove Incentive” worries you. But nothing in the present or the past would remove incentive. Look at the facts!!! “(You) dispute my assertion that most of the wealthy have inherited their money. According to Forbes “The top 0.1% -- about 315,000 individuals out of 315 million -- are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.” What does that mean. It means that the very rich are making their money, not by working, but from the returns on their wealth. Now where did they get their wealth? By working? Not likely! Even the “captains of industry” make only millions. Billions are acquired on a multigenerational basis, i.e. through inheritance. Yes, some like George Soros and Warren Buffett and Bill Gates have made it in one lifetime, but most inherit it and they live off their money. Nothing makes money more easily than money, and because of that more and more wealth concentrates at the top, and when we tax such money at a lower rate than money earned working, it exacerbates it all the more.

What we are getting is something very similar to the inherited monarchies that we rebelled against. A permanent, wealthy aristocracy and their subjects, with elections getting more and more meaningless because money controls that too. Power goes to money, and money goes to power, ad infinitum.

From the Gotham Gazette:

The median personal income of those who do not receive any unearned income is $15,000 while for those that do, it is at least $191,200 (and may be much higher.) Only about one-quarter of those who are receiving such income are working, and about 10 percent are making more than $100,000, so many members of the group choose to spend their time in other ways. Indeed, very few report social security income, business or farm income, retirement income or wages and salaries. In short, their investment income is their main source of income. They are substantially older than all New Yorkers older than 15, but even among the younger ones only a small fraction work.

Unfortunately, we can not put together a picture based on the statistical data of how they spend their time, though we know that only a few are working full-time. Some undoubtedly volunteer their time, spend time at vacation spots, or work at jobs that pay relatively low wages, such as docents in art museums or other rewarding pursuits. There are very few surveys that would have enough information to even begin to depict the idle rich.

Donald Trump pretends that he made his money, but what he shows is how to “make yourself richer when you inherit an established business and have millions of dollars plunked into your waiting hands after your Dad has sent you to Wharton.” See here.

You mention that your mother depended on Medicaid. Do you really want that eliminated? It’s taxes on the rich that make it possible. It isn’t funded by Bill Gates, nor could it be. Nor could our schools, or our libraries, or the agencies that protect our health, and our food and our children’s toys. Yes, you are entitled to whatever philosophy suits you, but you shouldn’t base a philosophy on total misconceptions of facts.

Now let me take your comments on Social Security and Medicare, and how you paid into them all your life. Yes you did, but unless you die early you would get a multiple of what you paid in. The way it works is that each succeeding generation supports a previous generation. You are not being paid out of the money you paid in. That was used to pay another generation. Your payments come out the money accumulated by generations later than yours and that money is there. They have not been “pillaged, misused and depleted.” How can you have sound opinions when your facts are so wrong? That money has been invested in Treasury bonds, the safest investment in the world with the Full Faith and Credit of the US behind it. The same bonds China invests in. The problem Social Security faces is that with people living longer, the baby boomers coming into the age where they draw on Social Security, and our young population not growing fast enough to meet the demands, the disbursements of the trust fund are projected for the first time ever to become larger then the income being generated. This means that the SS payment are coming out of the trust fund, or soon will be, and the trust funds assets will slowly be depleted.

Thus unless we find a way to either decrease the disbursements, e.g. increase the retirement age, or increase its income, i.e. increasing the top income from which taxes must be paid, (it is now capped at $106,800 of gross wages, and capital gains income is exempt) it will not be possible to continue paying the benefits after a certain time. No Bunny, “Government run amok has (not) created this problem.”

Your idea of voluntarism sounds wonderful, but it doesn’t work in the real world. If taxes were voluntary, very few would pay them. Social Security could not exist if all people were not required to pay their FICA taxes. The military could not function, if only volunteers were sent to the front. They obey orders. Our government could not exist with voluntary taxes, and could never get enough revenue without getting it from those who can afford to pay it, without hardship.

Bunny, it isn’t a question of your being entitled to have whatever opinion you choose. But your opinions should be based on an understanding of the facts, not on misconceptions. Horatio Alger was an author who wrote fictitious stories of people coming out of poverty into the middle class. These happen occasionally in real life, but the chance I had, was because of a government that gave me my chance with a free education, and cheap public transportation. Sadly, this is long behind us, and Republicans are trying to make it harder and harder to succeed unless you are born into it or, as Rick Santorum did, by being elected to Congress, and after retiring from it, selling your connections. See here.

If you truly want a country where your status in life is determined by who your ancestors are, and where very few overcome the barriers keeping them from rising up in our class structure, then I have no problem with your views. What do you think your chances, or those your children, of making it to the top are?

Comments are welcome and will be distributed with attribution, unless the writer requests that he/she not be identified.

Contraception, Abortion and Komen – Discussion

On February 9, 2012 I posted my commentary "Contraception, Abortion and Komen" and on February 13, 2012 I posted my commentary "Contraception, Abortion and Komen (Continued)." I urge readers to re-read these commentaries before reading the discussion, which follows.

Albert Nekimken of Vienna, Virginia, enthused:

I read your original blog after receiving today's comments on it. Bravo to you for exposing this covert religious effort to demean and endanger women by eviscerating hard-won rights.

Irving Lesnick Esq. of Boca Raton, Florida brought us this insight:

On the subject of when human life begins, there is a statement in the Bible on the subject:  Genesis Chap 2, Verse 7: And the Lord God formed man of the dust of the ground, and breathed life into his nostrils the breath of life; and man became a living soul.” This seems to say that a fetus becomes a human when it starts breathing, which is when it is born alive.

I never understood why this verse is never referred to in the "when does life begin argument."

To which I responded:

Thanks so much for your input. 

It is startling to find that not only does the Bible not support the theory that life begins at conception, but it actually supports the view that life begins when the fetus begins to breath on its own, i.e., when the umbilical cord is cut.

It appears that the fundamentalists not only ignore science, but even the Bible, that they claim to revere.

Finally Professor Robert Malchman of Brooklyn, NY made this contribution:

"I think that even during the time when abortion was always illegal, and even birth control was a violation of law; it was when the fetus is capable of existing outside the womb, i.e. when the umbilical cord is cut." If I recall correctly, there was also a distinction made when the fetus "quickened," that is, could be felt to move. Killing of a quickened fetus had more substantial penalties than pre-quickened abortions. Now, of course, a fetus can live as a baby outside the womb by the third trimester. Roe v. Wade allows states to prohibit abortion in the third trimester and although viability is not the sole basis for the trimester system Roe creates, it has a logic to it. If the fetus can live, one shouldn't have the right at that point to choose an extraction process that kills it. What will be interesting is when science, as is inevitable, can grow a fetus outside a woman, a true "test-tube" baby. At that point, it will be interesting to see if extraction is permitted, but abortion forbidden (i.e., the woman has a right to remove the fetus, but not to terminate it), or if the debate shifts from a woman's right to control her body to the right to choose whether to bring a life into the world. If it becomes the latter, it will also be interesting to see what rights, if any, fathers may acquire -- of course as it stands now in the body-control regime, there are none.

To which I responded:

Thanks for your comment. You raise some interesting questions. I don't think I agree with some of your moral conclusions. I don't agree with the Sup. Ct. holding that viability controls. Even then I wouldn't want to criminalize it. As for a test tube baby, I would assume if it became possible, it would be made illegal. As for the father, that opens up a whole new debate, but I don't believe that under any circumstances, anyone but the person who is carrying the fetus should be allowed to determine how her body is to be used. The fundamental right has to be the women's right to control her own body and all that resides within it.

Additional comments received on or before February 20, 2011 will be distributed with attribution, unless the writer requests that he/she not be identified. 

Contraception, Abortion and Komen (Continued)

I posted my commentary entitled "Contraception, Abortion, and Komen" on February 9, 2012.

In response thereto one of my subscribers who does not want to be identified commented:

Excellent letter. I think that women have just gotten tired of trying to talk to men with closed minds; the men do not want to hear what really happens at Planned Parenthood. I volunteered for a year after retiring as a nurse, and gave it up because I could no longer stomach the youngsters coming in with STD's; many of them had more than one, and they were so out of touch. Pregnancies were few, and requests for abortion even less frequent. But women who work with women know the facts and I think that is one of the reasons that there was such an outcry. Women could not believe and could not accept that a women’s organization did not know what Planned Parenthood is all about---which is women’s health care. Komen made a big mistake---turning their back on women who need help. I am not sure that they will be quickly forgiven. Omit my name please---I like talking with you, a breath of sanity in a world of viciousness. 

Allow me to add:

Comments are welcome and will be distributed with attribution, unless the writer requests that he/she not be identified.

Since then the controversy has escalated, and now swirls around the Health Insurance Reform, under which, among many other provisions, all insurance policies must include coverage for pre-existing conditions, primary care, and birth control, at no additional cost. Opponents of birth control now have escalated this into a religious issue because the Department of Health & Human Services has refused to exempt religious institutions from its provisions. Let me make clear that no institution is required under this law to provide contraceptive services. This is only about insurance. If you choose to sell or provide insurance to your employees all must comply with the law.

Nevertheless, the administration has now exempted religious institutions from having to pay or insure women for birth control. This will be done only by insurance companies, but will, in fact have no cost in the long run, because like all preventive health care, it reduces the cost of health care in the long run.

But the hysteria on the part of Republican Presidential candidates has, if anything, escalated. According to Planned Parenthood:

Mitt Romney told his supporters "This same administration said that in churches… that they have to provide for their employees, free of charge, contraceptives, morning-after pills — in other words abortive pills…  

 This is flat out untrue. 

Here's the truth. Nearly every sexually active woman — including 98 percent of Catholics — will rely on birth control at some point. It's basic preventive care — not just as a contraceptive, but for women who use the birth control pill to manage ovarian cysts, endometriosis, and other conditions. The health care reform law requires employers to provide coverage for preventive care with no co-pays. While churches, mosques, and other religious institutions do no have to abide by this requirement, the Obama administration has decided that religiously affiliated hospitals and universities with large numbers of employees of different faiths can't impose their ideology on those employees. It's simple: your boss can't decide whether you have access to birth control with no co-pays.

The Republican agenda becomes more and more radical, and more and more oppressive. The liberties, not only of women, but of all are at stake. Romney, the ultimate opportunist, is willing to sell his soul in his lust for power and prestige, to add to his billions of dollars.

Finally, I have been trying to understand where the fundamentalists get their concept that life begins at conception. In this connection I entered into a discussion on this with a friend a while ago. 

Without going into what prompted my discourse I think my response may be of interest:

What I think you are suggesting is that the point of the Right's position on abortion is to require women to be continuously pregnant, i.e. to be plentiful, and there is support for this in the Bible. Genesis 1:28 “Be fruitful and multiply and fill the earth and subdue it and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.” 

           

But what I hear them saying, does not suggest that to me. I rather hear an anti-sex message. More than anything I hear abstain from sex outside of marriage, and this too has support in the Bible, 1 Corinthians 7:1-40 and to have sex only to procreate.

           

But while I think this underlies their views, they rely on the idea of "when life begins," for which I can find no support in the Bible. Furthermore, the idea that "life" must be protected is silly, since life exists in the form of a mosquito, and surely they do not mean that mosquitoes, or for that matter bacteria, which too is life, must be protected. What they must mean, though they never seem to say it, is that human life must be protected. They then postulate that human life begins when the sperm fertilizes the egg. But that is completely arbitrary. The egg looks no different after fertilization than before. If they argue that this ultimately leads to human life, than it can equally be argued, that the sperm itself, or the egg itself, leads to human life, and there is no doubt that the sperm is alive, even before it enters the egg. 

           

What really drives this, outside the hard-core fundamentalists, is that traditionally, abortion was frowned upon, and the physician who performed them illegally was looked down upon as the lowest of the low. But this always coexisted with the dangerous back-alley abortion, or self induced abortion, and the abortion sought by those with the means to go to a jurisdictions where it was legal. 

Just as we have learned, that many prejudices of the past don't make sense, whether it was that left handed is unacceptable, to that being gay is not normal, or that contraception is immoral, so it is simply moving with the reality that abortion is simply a late term contraception.

           

The question is not when does life begin, but rather when does human life begin. While abortion was frowned upon in past generations, it was never considered the killing of a person. It was never murder. The introduction of the idea that a human life begins at fertilization of the egg, inevitably leads to claims of murder, but it has no basis either in the past, or in logic.

           

The fertilized egg is no more a human that a tadpole is a frog, or a fertilized hen egg is a chicken, and I think few, if any, would claim that to be so.

When does human life begin? I think that even during the time when abortion was always illegal, and even birth control was a violation of law; it was when the fetus is capable of existing outside the womb, i.e. when the umbilical cord is cut.

           

Any other approach has no basis in religion, in the Bible or in precedent. 

Contraception, Abortion and Komen

I think most of my readers are by now well aware of the storm that was raised by the decision of Susan G. Komen to defund Planned Parenthood. What they may not be aware of, is that this is a very small part of what can only be dubbed as the war on women. What used to be the Republican Party’s determination to end the right of women to have control over their own bodies, has now descended into an attempt to turn abortion into a capital crime, for logically, if human life indeed begins at conception, which was never the concept before, then the taking of that life is a capital crime, and it turns the millions of women who have always turned to abortion to end an unwanted pregnancy into “murderers."

           

But what has now happened is that they are no longer content to stop at trying to end abortion under any and all circumstances, including rape and incest, and even under conditions where the life of the mother is endangered. They are now determined to take away from both men and women the right to contraception. The Komen incident is but the tip of the iceberg.

           

This prompted me to write a Letter to the Editor of my local newspaper and to the Star Ledger. My local newspaper will print it. The Star Ledger will not. I did not write to the New York Times because I have given up on their ever printing one of my letters again. 

The letter I wrote follows:

The Arab Spring has arrived in the US. We have now discovered that we, the people of the US have people power, no less potent than that wielded by the people in Arab lands.

           

When Congress was about to restrict our freedom on the Internet, we followed the lead of Facebook and Google and others and protested. The legislation was withdrawn almost immediately.

           

When we discovered that insider trading was rampant among our Congressmen and Senators, we rose up and Congress is about to pass legislation that may put a stop to it.

           

Most recently we discovered that Komen, under pressure from right wing sources opposed not only to abortion, but to all forms of birth control, had defunded Planned Parenthood to the tune of $680,000, we rose up and Komen reversed course and refunded Planned Parenthood.

           

But we appear to have missed out. For this defunding has been going on for a long time and it appears to have gone under the radar. Planned Parenthood spends a $1 billion a year providing services to poor and middle class women throughout the US. $487 million, or 46 percent of its revenue, came from government health service grants and reimbursements. But defunding throughout the US is under way.

           

New Jersey, under the leadership of our Governor, Chris Christie, defunded Planned Parenthood completely to the tune of  $7.4 million, far more than the $680,000 that might have been lost through Komen defunding. These services included life saving cancer screenings, birth control, prevention, and treatment for sexually transmitted infections (STIs), breast health services and pap tests, and was not used for abortion services. In 2009, this funding helped support services for over 136,000 patients including over 70,000 breast exams and 65,000 pap tests, but there was no outcry.

           

Other states have taken similar action and have defunded Planned Parenthood to the tune of $80 million, far, far more than the $680,000 that might have been lost through Komen defunding, but there was no outcry

           

Last year, the House GOP voted to zero out the entire $317,000,000 Title X family planning budget - including about $75 million that would have gone to Planned Parenthood's preventative care and treatment programs for low-income women, far more than the $680,000 that might have been lost through Komen defunding, but there was no outcry.

Deciding that this plan wasn't disastrous enough, the House also passed an amendment to eliminate all federal funding to Planned Parenthood, an estimated total of $363 million, far more than the $680,000 that might have been lost through Komen defunding. Much of this goes to care for the Medicaid patients who make up almost half of Planned Parenthood's clientele. Fortunately, the bills died in the Senate, where Democrats are in control. The amount that Komen would have cut from Planned Parenthood's women's healthcare was significant-- but the amount that House Republicans were prepared to cut was 500 times larger, but there was no outcry.

           

Now that we know that we have people power, isn’t it time for us to be heard.

           

Comments are welcome and will be distributed with attribution, unless the writer requests that he/she not be identified.

Borrowing, Taxes & Deficits – A Discussion

In my last post "Soaking the Rich” – A discussion" I set forth a discussion with various subscribers to my blog, which was initiated by an article written by Christopher Caldwell, a senior editor at The Weekly Standard the magazine founded by William Kristol, and a response thereto by a professor at the University of Warwick, Coventry UK.

One of my subscribers, Professor Robert Malchman of Brooklyn, NY has now prompted me into another discussion by sending me a post to his own blog I Am Not Bob.

I urge the reader to go that site and read both his post and the comments, which were exchanged between him and a reader who identified herself (I think it was a she) as bunny42. 

After reading those exchanges I found myself in disagreement with both of them, and accordingly wrote:

I find myself in disagreement with both the post by Robert Malchman and the comments posted by “bunny,” whoever she might be.

Professor Malchman posits a beautiful theory under which the US government is better off the more it borrows and “deficits don’t matter.” This is the first time I have heard this theory since VP Cheney declaimed this sentiment. See here.

Of course Cheney had no basis for his claim, since Reagan neither proved this, nor believed it. After a huge cut in taxes, Reagan worried enough about the deficit that resulted, that he instituted the biggest tax increase in history, “the Tax Equity and Fiscal Responsibility Act of 1982. TEFRA — which was designed to raise $214.1 billion over five years, and took back many of the business tax savings enacted the year before.” See here.

But Professor Malchman points out that conditions are now so unusual that the ordinary rules don’t apply. He points out that with interest rates below the rate of inflation, the government actually makes money by borrowing. But what Malchman overlooks is that if the funds obtained by this borrowing are spent, it will not be possible to pay back the T-Notes, except by further borrowing when they fall due. If at that time the present unusual situation no longer holds then the government would be forced into borrowing at a rate not advantageous. The only way new borrowing can be justified is because it is necessary to cover existing debt, or it is to be invested in projects that by the time the notes become due return a larger return than the cost of long range borrowing, not on the basis of temporary conditions. Investing in infrastructure, undoubtedly, meets this test, and other projects might, but this has to be the test, not temporary deviations from the norm.

Now Bunny is even more off base! She misinterprets Professor Malchman’s comments as recommending that people should buy these instruments. Just the opposite is true. Malchman is pointing out that people who buy these instruments are making a bad investment, since rather than making money, they are losing it. She then goes into a rant about the CRA, which I assume refers to the Community Reinvestment Act, passed in 1977, and which provides among other things, that loans “should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution. See here.

In any case there is no evidence that the agency required the type of predatory lending that brought about the housing crisis. All the available evidence indicates that banks and credit facilitators made and encouraged stupid loans, because they believed that with housing prices going up ad-infinitum, the real risk was much smaller than the apparent risk, and with the high rates of return, it was a very profitable business. “They made me do it” is a children’s excuse, and not one for adult sophisticated bankers. In any case if they felt they were being made to do something they didn’t want to do, no one ever heard their protests, Congressman Paul’s allegation notwithstanding.

Malchman then makes an unfortunate comment that has nothing to do with lending, i.e. that if the deficit needs to be cut (according to Malchman it need not be cut) it should not be “cut by eliminating spending (but) by raising taxes on millionaires.” My main concern with this is that it does not define millionaires. Is a millionaire one who has net assets over a $1million, or one who has an annual income of over $1 million? That makes all the difference in the world. But Bunny never raises this question. Instead she goes into a rant saying, “Historically, taxing the rich (the numbers I heard started at $250K) has caused them to circle their wagons and save their shekels.” for which she offers no evidence. In fact the evidence is just the opposite.

“… across the board, today's tax rates are low by historical standards--and for the rich they're very low.” See here. 

And yet the rich “are savi(ng) shekels”. Using Bunny’s logic they should have been spending it. Yet they sent us into the worst recession since the ’29 depression. When Clinton became President (1993) he raised the marginal tax rate from 31% to 39.6% for those making over $194,000, and from 31% to 36% for those making over $108.696. See here. The economy boomed, coming out of a recession that led to the slogan “It’s the economy stupid.” Now I don’t believe that the tax increase caused the boom by itself - but the tax increase reduced the deficit, causing the Fed, under Allen Greenspan, to lower interest rates. Now interest rates are at an all time low, so reducing the deficit would not have the same beneficial effects, but neither would it do any harm if we returned to the rates under Ronald Reagan at say the beginning of his second term, in 1985 when they were 50% for those making over $169,000. Ibid.

As even Bunny should be able to see there is no correlation between taxes and economic expansion. After 1985 taxes went down drastically, and yet we had an economic slowdown, which was not addressed adequately until Clinton.

Bunny says: “So, just tax more? Why not just print more money. You'll get the same result.” No Bunny, printing money, frequently, though not always, leads to inflation, increasing taxes never does. But as you say, “whadda (you) know?

Let me see Bunny – in your second post you posit that increasing taxes on the rich would not make your life easier. No it wouldn’t – but cutting spending in many areas would make your life harder. Would you like your food to be unsafe, the water you drink unsafe, or have your children play with unsafe toys. Would you like your elderly parents to have no income, unless they made enough money to have a big 401K, or to be denied health care because they weren’t wealthy enough to afford the incredibly expensive health insurance at market rates? Or if they are younger, and they have health insurance through their employer, would you want them to go bankrupt because they got sick, lost their job and with it their health insurance. I could go on ad infinitum. Yes, our so-called entitlements are out of whack and need reform, and Ronald Reagan made Social Security reforms that saved the program, and we need to do something like that again. But Ryan’s plan would effectively do away with it, and still increases the deficit by $6 trillion over ten years. See here.

Bunny, you talk about “the self-made millionaires, … having worked for their success” - yes some have, but most inherited money, which they invested and made more from, and paid less taxes than people who actually do work. The people who work the hardest are the ones who make low wages and work on two jobs to make ends meet, and don’t have health insurance or pensions from their employers.

Please understand, Bunny, that employers aren’t hiring, not because taxes are too high, or because regulations are onerous, those have been around through good times and bad, they aren’t hiring because there is no demand. If you had a business and you couldn’t sell the goods you made, would you hire people to make more goods? It wouldn’t matter how cheap that labor is, or how much taxes are lowered, you wouldn’t hire until the demand was there. And if the demand was there you would hire regardless of taxes or regulations. If you double your gross, and taxes were 40% you would still be ahead of the game. If taxes were 40% and you made 10% more you would still be ahead of the game. You would simply have less of an increase. If you make $10,000 more and you pay 40% of that to the government you still have $6,000 more. Would you forgo that $6,000? I am all for cutting. God knows there are many places where we spend money foolishly, on our war on drugs, on subsidies for ethanol, etc. etc. etc. But we have to have enough revenue for the country's legitimate needs, and we have to get that money from those who can afford it – not because we hate them, but because they can afford it. Even half of 250,000 isn’t bad, half of a million isn’t bad. And half of a billion, I only wish. But nobody is advocating anything anywhere near an effective tax rate of 50%. Even a marginal tax* rate of 50% doesn’t amount to anywhere near an effective tax rate of 50% and nobody is advocating a marginal tax rate anywhere near 50%, though in 1945 the marginal tax rate was 94% on all incomes over $200,000. See here.

 A slightly higher marginal tax rate than we have now, would not hurt those who have so very much, and the point is not to hurt anyone.

*Marginal Tax rate is the tax owed on income above a certain amount. Thus taking the Clinton tax rates as of 1993 on someone making $300,000, we find that the marginal tax rate is 39.6%, which according to the table comes to 39.6% on all incomes over $250,000. With an income of $300,000 that comes to $50,000, or a tax of $18,800; 36.0% on all income over $140,000 but below $250,000 which comes to $110,000 at 36% and a tax of $39,600; 31% on all income over $89,150 but below $140,000; 28% but on all income over $36,900 but below $89,150 and 15% on the remaining income. If my arithmetic is correct, the marginal tax rate is 36.9%, but the effective tax is 31.86%.

Comments are welcome and will be distributed with attribution, unless the writer requests that he/she not be identified.