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Robert Bennett: Contrary to Krugman, debt outlook looks dim

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  • dave4197 Redding, CA
    Aug. 21, 2014 10:44 a.m.

    Joe Blow and a few others. I'm aware that ss, medicare, and defense are the big elephants in the room. Here's my take.

    Defense, take a 50% hit. We spend more for defense than all other gov't's in the world combined, I as a taxpayer don't want to pay for their security any more. Close our remaining WWII bases in Europe and rent a space for joint military exercises. Close Okinawa in one budget cycle, the Japanese don't want us, we don't need it. Get out of Korea, this one may seem difficult but I'm 70 and I see South Korea is a teeming economy now and we continue to pay a too high cost. Read again Ike's words to beware the military industrial complex. Start making more butter, stop making guns.

    Do not cut Social Security and Medicare, they're necessities. Eliminate the cap on income subject to ss and medicare and include investment income (so called unearned income). Cap social security benefits based on a person's total income and assets. When us baby boomers fade away you can trim back the fica rate.

  • TheProudDuck Newport Beach, CA
    Aug. 20, 2014 2:11 p.m.

    Right now, Democrats are cheering because after nearly six years of Obama, deficits are finally getting to within spitting distance of the worst Bush deficits.

    Think about that.

  • Tyler D Meridian, ID
    Aug. 20, 2014 12:57 p.m.

    @SCfan – “I don't believe this can go on forever. Do you?”

    In short, no… and as we continue to recover and deficits continue their downward trend we will need to start paying down the debt (once the deficit becomes a surplus).

    But here’s why I don’t blame Obama nearly as much as Bush. The tax base was falling through the floor when he took office and even the most staunch fiscal hawk would have seen the deficit explode in 2009. Since then the deficit has been declining yet having watched the anemic recovery of nations that focused too much on austerity, Obama has been careful not to go too fast.

    Contrast this with Bush who was handed a surplus & booming economy and squandered it. His first priority should have been pay down the debt (now that he had a surplus) and even raising taxes (I’ve never understood what was so bad about the Clinton/Gingrich tax rates since the 90’s was booming) if he/we truly thought the wars (and Medicare Part D) were necessary… just like every prior generation has done.

    Reached comment limit…

  • Wonder Provo, UT
    Aug. 20, 2014 12:18 p.m.

    @Joe Capitalist -- You don't understand a 90% tax rate. It doesn't mean that their entire income is taxed at 90% as showin in your example. Instead, their income falling within the first income bracket is taxed at the lowest rate, the next income at the next rate, etc. etc. until their income hits the highest bracket, at which point that income (not the income below it) is taxed at 90%. So your sad, beleaguered rich patrons are not as destitute with a high tax rate as you may think. No fear, they can still "trickle down" plenty of money.

  • SCfan clearfield, UT
    Aug. 20, 2014 12:11 p.m.

    Tyler D

    If you read my post to the end you would have noticed I said there is a difference between deficit and debt. Yes they are two different things, but a simple definition is that the national DEBT, is the accumulation of all national DEFICITS. The deficit is a yearly thing, the debt is an all time thing. So in essense our nation using yearly budget deficits, has created a national debt of 17 trillion dollars. And that is why I say that merely lowering the amount borrowed to run the country is not getting us out of debt, only slowing down the amount of increase.
    Now. As for Bush, yes I totally agree that he doubled the national debt, taking it from about 5 trillion to 10 trillion. In 8 years in office. Obama however has taken it from the 10 trillion mark up to 17 trillion in less than 5 years. So, he has added 7 trillion to Bushs' 5 trillion, and who knows what that number will be when he hands the White House over to the new Republican President. Main point is, I don't believe this can go on forever. Do you?

  • Tyler D Meridian, ID
    Aug. 20, 2014 9:11 a.m.

    @SCfan – “One is not running a surplus when one owes money.”

    You’re confusing deficits with debt.

    Clinton (along with help from Gingrich) ran a budget surplus his last three years in office and in fact handed a surplus to Bush in 2001. Whether that surplus was used to pay down the debt, fund new programs or whatever is a separate issue.

    What we do know though is that Bush, rather than using the surplus to pay down the debt, chose to cut taxes instead. Then he went on a spending spree (unfunded wars, Medicare Part D, etc…) that would make a liberal democrat look thrifty.

    Then the economy tanked which caused tax revenues to plummet further and we’ve been trying to dig ourselves out ever since.

    By the way – it is important to note that the budget became a surplus under Clinton/Gingrich because they were willing to compromise… which is a four letter word in today’s political climate.

  • SCfan clearfield, UT
    Aug. 20, 2014 7:25 a.m.

    To all who believe deficit reduction, from say 700 billion to 500 billion is a positive thing for this country as it is now, it is like using a thimble to bail water out of a sinking ship. Someday everyone should seek to understand just what the number TRILLION actually is. 12 zeros. In our case preceded by the number 17. A billion is 9 zeros. We have many multi billionaire people and companies. We are not even close to a trillionaire. And we are paying interest on that debt. The only way this can work is if it is determined in the economic world that paying debt is not necessary. And it is OK to keep running up a national debt no matter how big it gets. If so, then why not run up a hundred trillion in debt and make us all millionaires? Anybody see anything wrong with that economic picture? Finally, Clintons surplus was a myth. There was a national debt of some 5 trillion dollars when he left office. One is not running a surplus when one owes money. Which brings me back to everyone needs to understand the difference between deficit and debt. They are two different things.

  • louie Cottonwood Heights, UT
    Aug. 19, 2014 5:13 p.m.

    I take it, Mr. Bennett is implying that Obama is not doing enough to reduce deficits. Interesting, given the fact that recent CBO projection is estimating our deficit will indeed be about 480 billion dollars. This is about 13% of the federal budget. That is a remarkable comeback when you consider it was much higher five years ago, about 45 percent. By the way the last time our deficit was 13% or lower of the federal budget during a republican white house was during a Nixon presidency.

    Give Obama a chance and, who knows, he may even have surplus like Bill Clinton did.

  • atl134 Salt Lake City, UT
    Aug. 19, 2014 4:22 p.m.

    @wrz
    " if you give stuff away like Obama-phones"

    Program started by Reagan, switched to cell phones under Bush.

  • TheProudDuck Newport Beach, CA
    Aug. 19, 2014 4:04 p.m.

    For all the sound and fury about top tax rates, total government revenues as a share of GDP has always moved in a pretty narrow band, between 15% and 20%. There's little correlation between the instances where we hit the top of that range and times when the top tax rate was highest.

  • Hemlock Salt Lake City, UT
    Aug. 19, 2014 2:29 p.m.

    Krugman is a Fabian socialist. By increasing the debt, we pay more and more of our income to the government to service the debt interest. Finally we owe all of our disposable income to the government who in turn provides for us from cradle to grave. There is no need for a revolution. We gradually allow the government to usurp our individual choices. Yes, we need government as noted in our constitution. But the government must serve the people and not the opposite.

  • wrz Phoenix, AZ
    Aug. 19, 2014 11:18 a.m.

    @Mark l:
    "There will never be enough revenue for the democrats! They believe that they can solve all our problems if only we give them more money."

    The Democrats are not interested in solving problems. They're interested only in gathering votes so they can stay in office. They have learned, if you give stuff away like Obama-phones, people will be inclined to vote for them. And if they let in millions of illegals promising amnesty/citizenship their friends and relatives who are citizens, will vote for them. Obama is even working to get the vote of illegals by campaigning against required voter ID so that anyone (citizen or not) can vote without being required to produce an ID.

    @Shaun:
    "Money only comes into existence when debt is created."

    What? When the US borrows money from China it sends... money.

    "With out debt there wouldn't be any money."

    What? I have not debt yet I have a five dollar bill right here on my computer desk.

    "There is only one for our country to get out of debt and that is to change our monetary system."

    I suggest we use beads for moeny.

  • FT salt lake city, UT
    Aug. 19, 2014 11:09 a.m.

    @Vanceone
    "Let me ask the liberals a question: Do you know what Keynes (the second Deity in the leftist economic Trinity) said we should do--I mean, besides deficit spend? He said that we should put away money in boom times ("save it"), so we could draw on it during lean times."
    That's exactly what Bill Clinton and the Democratic Congress did when they passed legislation to reduce the deficit in 1992. That legislation was opposed by the GOP but was the foundation to the deficit reduction and economic growth we saw in the 90's. All that got turned on it's head when Bush/Chenney and the GOP took control in 2000.

  • JoeCapitalist2 Orem, UT
    Aug. 19, 2014 8:52 a.m.

    GaryO:

    You assume that all the rich people who earn $100 million (and have $10 million left over with a 90% tax rate) will do that no matter what the tax rate is.

    The truth is, almost all the people who earn $100 million do that by risking a lot of their own money (exceptions being people like the best atheletes). They see a potential business venture and weigh the risks and rewards. If the venture is wildly successful they will make a ton of money. But if the venture fails, they might lose $100 million instead of making it.

    So kind of like betting in Vegas...would you risk $100 on a bet where if you lose you lose all $100 and if you win you only get to keep 10% of your winnings. Would any sane person actually place that bet? If not, why would you expect a business person to do it then?

  • Lyn52 Saint George, UT
    Aug. 19, 2014 7:41 a.m.

    I rather believe a real economist then the good Senator.

  • Mark l SALT LAKE CITY, UT
    Aug. 18, 2014 11:33 p.m.

    There will never be enough revenue for the democrats! They believe that they can solve all our problems if only we give them more money.

  • Shaun Sandy, UT
    Aug. 18, 2014 9:27 p.m.

    Money only comes into existence when debt is created. With out debt there wouldn't be any money.

    There is only one for our country to get out of debt and that is to change our monetary system.

  • wrz Phoenix, AZ
    Aug. 18, 2014 8:46 p.m.

    @GaryO:
    "It was supposed to create jobs. Where are the jobs?"

    The jobs, if any, are being taken by illegal immigrants.

    @JoeBlow:
    "Did you know that Obama's biggest debt year was 2009. This was using the budget established in 2008 before he became president."

    What budget? All that was produced by the Congress was a CR.

    "Oh, and remember, Congress spends the money. 100% of it."

    And the president signs the spending plan into law.

    @marxist:
    "Actually the debt/GDP ratio is a good measure of how serious the debt is, and how difficult to pay down. The larger the GDP the less serious the debt and the easier to pay down."

    You can't pay down the debt knowing the debt/GDP ratio. It takes either expenditure reductions, tax increase, or some of both to pay down debt.

    "But it is a mistake for government to have no debt, because the Federal Reserve Bank historically controls the money supply by buying (expanding) and selling (contracting) Federal securities (debt instruments)."

    Not so. Money supply is controlled by the Fed's 'monetary policy' ... control of bank discount rates, bank reserve deposit requirements, and lending availability.

  • Twin Lights Louisville, KY
    Aug. 18, 2014 6:48 p.m.

    Tyler D.

    Thank you. I feel the same about you. The problem is that pragmatism does not garner votes. The extremes garner votes. Pragmatists will compromise to achieve at least part of their goal (in fact, Reagan was famous for it) but now folks want to let the whole ship sink if they cannot steer it in their precise direction. Pragmatism makes a poor battle cry.

  • Vanceone Provo, UT
    Aug. 18, 2014 5:00 p.m.

    Let me ask the liberals a question: Do you know what Keynes (the second Deity in the leftist economic Trinity) said we should do--I mean, besides deficit spend? He said that we should put away money in boom times ("save it"), so we could draw on it during lean times.

    Why do you liberals ignore that part of his teachings? It's all "Spend, spend, spend!!!!! Borrow, tax, print, we don't care: Spend the money, as fast and as much as you can, without any thought of how to repay!"

  • Irony Guy Bountiful, Utah
    Aug. 18, 2014 3:37 p.m.

    The only time in US history we were debt free was a couple of years under Andrew Jackson. His policy plunged the nation into the deepest depression of the 19th century, as the lever of gov't spending disappeared from the economy.

  • Irony Guy Bountiful, Utah
    Aug. 18, 2014 3:19 p.m.

    Bennett fails to mention that Krugman is in FAVOR of paying the national debt down, but doing it gradually to avoid the economic dislocation that the t-party approach would cause. Krugman is the realist here; Bennett is distorting Krugman's argument.

    But when rates are close to zero and deflation is the threat, Krugman's approach is the only one that makes sense. Austerity and retrenchment would automatically kick off a possibly unstoppable spiral of deflation.

  • Tyler D Meridian, ID
    Aug. 18, 2014 2:07 p.m.

    @GaryO and @JoeCapitalist2

    The classic Laffer Curve debate – one which both liberals and conservatives get wrong repeatedly.

    Liberals are wrong to think the tax rate which would generate the most revenue is anywhere close to 90% (or even 70%). The best test cases for this fact are Britain and Israel during the 70’s/80’s – both saw tremendous growth when rates were reduced below 50%.

    However conservatives (especially the nutty variety we see today) think the apex of the Laffer is around 10-15% (which is laughable) and is again why I believe they have zero credibility on this issue.

    Make no mistake, conservatives are not interested in reducing the debt or finding the true apex of the curve (which is notoriously difficult to figure out but the best guesses put it at around 40% give or take). Their sole interest is in shrinking the size of government down to something that can be “drowned in a bathtub.”

    The merits of this ideology are obviously debatable…

    @Twin Lights

    Very well said…

    I wish more people had your pragmatic common sense, but these virtues are being destroyed by today’s media.

  • marxist Salt Lake City, UT
    Aug. 18, 2014 1:51 p.m.

    And for the record the debt/GDP ratio grew fastest during the Reagan and Bush II years.

  • What in Tucket? Provo, UT
    Aug. 18, 2014 1:50 p.m.

    Thank you Mr. Bennett for a cogent commentary. You are quite right and Krugman a rather left wing economist is wrong as usual. He wanted to double the stimulus bill. As it was it did harsh things to our economy which has not recovered. We need lower taxes, less red tape and a big effort to balance the budget.

  • GaryO Virginia Beach, VA
    Aug. 18, 2014 1:32 p.m.

    Hey JoeCapitalist2 -

    "Those who advocate high tax rates never consider the metric that cannot be gathered...the amount of income that was never earned in the first place because the tax penalty was too high."

    I can't speak for anyone else, but I recognize the law of diminishing returns.

    If the tax rate is a hundred percent, then of course there is NO motivation to earn.

    But if the tax rate is 90% and you earn 100 million, you've still got a cool ten million to spend on cheek implants, a Lamborghini, and a Lear Jet, and still have money left over.

    The fact remains that when the high tax rate was 70 percent we could pay our bills, and when it was 90 percent we could pay our bills.

    But after the disaster of the Reagan administration and trickle-down economics, we are no longer able to pay our bills.

    There's a definite correlation there. The only question is whether that correlation indicates causality. I think it does.

    Trickle-down economics greatly reduces the amount of revenue we would otherwise have.

    So OF COURSE we have repeated Budget deficits and a high national debt.

  • Spangs Salt Lake City, UT
    Aug. 18, 2014 1:19 p.m.

    I agree with one thing JoeCapitalist said. The flat tax does seem to be the best way to ensure everyone is paying their fair share. From what I can glean, it would increase revenue and ensure those that are skirting the current tax system pay what they should. Unfortunately I just don't think anyone, especially Republicans, are serious about it. If there was a serious push for an equitable flat tax, Republicans would see moderates like myself leaning again back toward Republicans. That is, as long as they can shake off the sick libertarian yoke around their neck!

    The scariest comment award goes to John Charity Spring, who urges social Darwinism to the extreme. If you want a society based on the powerful exploiting the weak, move to Afghanistan or Algeria. Don't get me wrong, I am all for a meritocracy. But there must be a lower threshold for how we treat our fellow citizens, even the poorest, stupidest, ugliest ones. This is what differentiates us from places like Pakistan.

  • marxist Salt Lake City, UT
    Aug. 18, 2014 1:19 p.m.

    @wrz "GDP might be a good method to measure national debt. But it says nothing about how serious the debt is or how to reduce it. "

    Actually the debt/GDP ratio is a good measure of how serious the debt is, and how difficult to pay down. The larger the GDP the less serious the debt and the easier to pay down. We should keep the ratio trending downward. But it is a mistake for government to have no debt, because the Federal Reserve Bank historically controls the money supply by buying (expanding) and selling (contracting) Federal securities (debt instruments).

    Since you conservatives don't believe in Keynes this has the effect of leaving the Federal Reserve as the only setter of economic policy. Without Federal securities to buy and sell it can't implement monetary policy.

  • Tekakaromatagi Dammam, Saudi Arabia
    Aug. 18, 2014 12:47 p.m.

    Clinton never had a budget surplus. He was borrowing from social security and not counting that as a 'loan'. Now, he did reduce the deficit, but we were never in the black.

    For anyone who thinks that the deficit is not a problem, here is one simple question: What is the plan to pay off the debt?

    (I am cheating, more questions.)
    Is it some point in the far distant future when we are all dead and future generations have to deal with it who've have not been consulted for their input? If that is an OK way to deal with the deficit, is it also a wise way to deal with global warming?

    Given that there is no plan, is it wise to keep loaning money to the US government? What would happen if someone got wise and stopped buying US government debt?

  • wrz Phoenix, AZ
    Aug. 18, 2014 12:19 p.m.

    @marxist:
    "Second, the debt is incurred through the sale of U.S. securities of various types."

    No, no. The debt is incurred through the government failing to live within its means. For sure, when we are engaged in a war federal expenditures are expected to rise dramatically. But, in peace time the debt should be reduced until it eventually goes to zero.

    "As a general rule to measure the burden of the debt, economists look at the ratio of debt to GDP. I believe that is appropriate, based on my work as an economist the last 40 years."

    GDP might be a good method to measure national debt. But it says nothing about how serious the debt is or how to reduce it.

    Regarding seriousness of the debt, I would think a debt that exceeds the total of all the county's goods and services produced over a year (GDP) is very serious.

    Further, who funds/holds a vast amount of our debt? China. The problem is, what if China gets upset with the US and decides to not support us. Our economy would immediately tank.

  • Kent C. DeForrest Provo, UT
    Aug. 18, 2014 11:51 a.m.

    Although I'm no big fan of debt, I do understand Krugman's point. What he has been saying all along is that the deficit wasn't the primary problem we should have been focusing on, and the Republicans, by making debt the only issue during the recent crisis, also prevented the economy from recovering as quickly as it should have.

    "The economists whom I trust disagree." Well, duh. But someone ought to point out (actually, Krugman has) that these economists have been wrong about darn near everything since 2007. So why should I believe Bob Bennett, who was part of the problem, not part of the solution?

    Why should I vote for a party that is still pushing Reagan's supply-side "voodoo" economics? They haven't had an original or correct idea on the economy for over 30 years. Isn't it time for Utah to stop supporting this absurdly irrational party?

  • Twin Lights Louisville, KY
    Aug. 18, 2014 11:19 a.m.

    Who got us here? We did. We elected folks who promised to be able to deliver more for less. It just doesn't work that way.

    It doesn't matter if the "more" was wars and defense spending or entitlement programs. They just promised more. The "less" was lower tax rates. Always lower because lower taxes would bolster the economy. Of course, based on that logic, zero taxes would be mean an infinitely booming economy.

    It would be preferable to be out of debt. But, if we cannot, then we must at least have a debt balanced to our ability to pay given our other wants and needs. No economy can do everything its citizenry might want. Too much debt and we are constantly constrained. And the threat of rising interest rates begins to run the national discussion.

    Simple providence. Freeze some programs. Cut others. Cut the tax loopholes. Put tax rates to long term sustainable levels (we are below our historical rates over the last few decades) and keep it that way for a decade.

  • JoeCapitalist2 Orem, UT
    Aug. 18, 2014 11:06 a.m.

    GaryO: "When the high tax rate was over 90% we kept deficits relatively low, and we even had surpluses from time to time..."

    Liberals love to quote an astronomical tax rate of the past and pretend that anyone actually paid it. Sure, a few unsuspecting wealthy people may have been caught up in that tax net for a year, but anyone who suddenly found out the government was taking 9/10 of their income would either find a way not to pay it, or would just not bother to generate the income.

    Those who advocate high tax rates never consider the metric that cannot be gathered...the amount of income that was never earned in the first place because the tax penalty was too high.

    In the grocery business, if you jack up the price of milk to $20 per gallon you might find a few rich people who would pay for it without thinking, but how do you guage how many people look at the price and walk out of the store without making a purchase?

  • FT salt lake city, UT
    Aug. 18, 2014 11:05 a.m.

    @Vanceone
    Go back and check the facts. Congress actually spend less than Reagan requested in 5 out of the 8 budgets he submitted to them. Reagan was not a fiscal conservative, he talked the talk but did not walk it.

  • patriot Cedar Hills, UT
    Aug. 18, 2014 10:50 a.m.

    "Krugman looks at interest rates in Italy, Spain and Japan and is reassured. I look at their stagnant levels of economic activity and am alarmed"

    17 trillion in debt and Krugman tells us "what me worry"? The US receives its first credit DOWNGRADE under Obama and the reason given was the banks looked at the gigantic size of our debt and saw no solution for paying it down. This is nothing new - if we ran our own credit cards to the max and expected to then get a loan we would find that our credit rating (or risk assesment) would be such that we couldn't get a new loan.

    To suggest the size of the debt means nothing is to suggest that running up credit card after credit card and never paying them off has no effect on your credit rating...which is obviously nonsense. Krugman is a far far far left radical who has a Socialist economic mindset...the same mindset that sent Greece into bankruptsy and desperation and forced other European countries to have to bale them out. America will be facing the same future unless we have sanity restored to the White House.

  • Vanceone Provo, UT
    Aug. 18, 2014 10:41 a.m.

    Let's look at Reagans tax cuts, shall we? He got Congress--wholly run by Democrats, do remember, to sign off on lowering the taxes. Economic boom resulted. The other part of the deal was to cut federal spending. The Democrats reneged on the deal--as they always do-- and did not uphold THEIR end of the bargain. So spending stayed the same, and we see the liberals here attacking Reagan for not cutting spending. Well, the Democrats lied to Reagan, and now try to blame him for their actions. Yeah, Reagan is to blame... for believing anything a liberal ever says. Leftists lie; it's only news when they actually tell the truth.
    The same thing now. We were told that the stimulus package was a one time deal. Well, the Democrat controlled Senate has refused to pass a budget except maybe once since then... so we've funded our government on continuing resolutions... basically dumping a stimulus package every year into our debt. It's not stimulated the economy, it has just allowed Obama a blank check of slush money to, in essence, raid the treasury for leftist friends.

  • Joan Watson TWIN FALLS, ID
    Aug. 18, 2014 10:30 a.m.

    There is interesting counsel from the Lord that is given to the Israelite newly established nation that is: ....."thou shalt lend unto many nations, and thou shalt not borrow". Deuteronomy 28: 12. As we can attest to in our day - it would seem debt that is allowed to accumulate becomes a big problem for everyone and may even become disastrous.

  • JoeBlow Far East USA, SC
    Aug. 18, 2014 10:28 a.m.

    "While they are way better than tax and spend liberals, they are more Dem 'lite' than anti-Dem on the spending front."

    They are not "dem lite". They are run-of-the-mill Republicans.

    Many on the right talk about Rinos and Dem lite. But, the reality is that the GOP has never been fiscally conservative. Yes, they want to lower taxes as Reagan and Bush did, but didn't modify their spending habits. What, other than increase deficits could possibly happen? What DID happen?

    Big spending Republicans are just that. Typical "lower taxes and increase spending" Republican.

    Just like every Republican in my lifetime. Including Reagan.

    It is a rare Republican that does any real spending cuts. If you disagree, please point out any meaningful GOP spending cuts?

    out of posts.

  • The Real Maverick Orem, UT
    Aug. 18, 2014 10:19 a.m.

    There are some who believe that corporations are the new Kings. They can rule and black mail us at will.

    According to them, government was created for their well-being and not people.

    We truly are in a new Gilded Age. What a perverse perception the actor gave us when he became President in the 80s.

  • GaryO Virginia Beach, VA
    Aug. 18, 2014 10:06 a.m.

    JoeCapitalist2 -

    " . . . but liberal proposals to take more than half of anyone's income will never generate more tax revenues."

    NONSENSE

    History does NOT support your incredible assertions.

    When the high tax rate was over 90% we kept deficits relatively low, and we even had surpluses from time to time. The same was true when the high tax rate was over 90%.

    But after Reagan lowered the high tax rate to about half that, he TRIPLED THE DEBT.

    Reagan Tripled the debt in SPITE of the fact that the price of world oil dropped to less than 1/3 the price it had been during the Carter administration (no thanks to Reagan). The booming economy that resulted from that huge drop in energy prices would have filled the nation's coffers if Reagan had not lowered taxes for his high-earning friends.

    Nothing supports your tax-policy claims other than "Conservative" wishful thinking.

  • GaryO Virginia Beach, VA
    Aug. 18, 2014 9:51 a.m.

    JoeCapitalist2 -

    "You could argue that the "evil Bush Tax Cuts" have added a few hundred billion to the deficit over the past 10 years, but that is a tiny sliver of the huge $Trillion dollar deficits."

    Oh really? Think so huh? Bush's tax cuts added TRILLIONS to the deficit.

    GW Bush set a precedent for lowering taxes during war time, and we had two VERY EXPENSIVE wars to pay for.

    GW Bush and his Republican administration is the ONLY American administration who was so criminally irresponsible as to lower taxes during war time. Other administrations logically RAISED taxes during wartime.

    Responsible Americans of the past realized they shouldn't make future generations pay for their wars. But Bush and his irresponsible and greedy "Conservative" followers obviously didn't care about that.

    The irresponsibility and greed of "Conservatives" and their leaders continues to amass damage for this nation.

    It is their identity now, and some of them seem to be proud of it.

    It's what they do. They cause damage to American.

    American Right Wingers are America's Enemy Number ONE.

  • JoeCapitalist2 Orem, UT
    Aug. 18, 2014 9:42 a.m.

    JoeBlow: "But, While I see the GOP pushing for tax cuts, tax cuts, tax cuts, I never see them make any significant spending cuts."

    On the tax front, the GOP believes that if you have reasonable tax RATES that the government will maximize its tax REVENUES. Obviously, you can't get the rate too low and still generate enough money, but liberal proposals to take more than half of anyone's income will never generate more tax revenues. Rich people will just spend more time and energy looking for tax loopholes. A flat tax of about 15% for all income above the poverty line would spur economic growth and maximize revenues.

    You are right about the GOP doing too little to stop the growth of government spending. While they are way better than tax and spend liberals, they are more Dem 'lite' than anti-Dem on the spending front.

  • george of the jungle goshen, UT
    Aug. 18, 2014 9:38 a.m.

    Before the Federal Reserve there wasn't any inflation. after they took control every thing started to increase. Then we went off the gold standard. Things went into outer space. When you make $25. an hour and spend $35 dollars an hour then think that to not spend $8 is going to fix the problem.

  • Tyler D Meridian, ID
    Aug. 18, 2014 9:22 a.m.

    @JoeBlow – “While I see the GOP pushing for tax cuts, tax cuts, tax cuts, I never see them make any significant spending cuts.”

    Because that’s not the GOP plan – their plan is to “starve the beast” and come to the rescue when the economy tanks. It’s a reckless and dangerous plan made all the more difficult by facts on the ground (i.e., the tax cut policies have not lead to long term economic growth and in many ways have simply created a less stable economic environment complete with 1920’s style faux-booms & busts).

    The GOP has zero credibility on this issue and only found religion on it the day after Obama took office.

    That said – both Cheney and Krugman are wrong about debt. It does matter if for no other reason than it is morally wrong to force your children & grandchildren to pick up your dinner tab.

  • JustGordon Cottonwood Heights, UT
    Aug. 18, 2014 9:01 a.m.

    Our former senator accuses Professor Krugman of "cherry picking" dates for comparisons, but conveniently ignores the professor's comments about those who are debt-phobics, like the senator, were warning about inflation and hyperinflation that never happened. Folks from the senator's own party were lamenting that we were on the road to becoming the next Greece, yet the senator cavalierly dismisses Greece now as "too small." That snacks of being two faced, senator! Your party brought us the Great Recession and then did nothing to help the Nation fix it! Your concern and advice rings hollow!

  • JoeBlow Far East USA, SC
    Aug. 18, 2014 8:58 a.m.

    "The reason we are in debt is because we spend way too much"

    JoeCap

    I can agree with that.

    But, While I see the GOP pushing for tax cuts, tax cuts, tax cuts, I never see them make any significant spending cuts.

    Cutting taxes is easy. It cutting what those taxes cover that gets tough.

    SS, Medicare and Defense are the deficit drivers. What has the GOP done to cut costs of those while they push for tax cuts and more defense spending?

    What did the GOP house and senate do under Bush? Cut taxes, go to war and pass Medicare part D.

    Hardly the party of fiscal responsibility.

    I am not suggesting that the dems are fiscally responsible. But it is unreasonable to blame them without looking at the historical realities of what the GOP has done.

    Both parties overspend. But one wants to do it while lowering taxes.

  • Invisible Hand Provo, UT
    Aug. 18, 2014 8:48 a.m.

    @marxist: Make "abandonment" illegal? You might as well reinstate slavery. You want to make business owners continue to operate where you tell them to and they aren't allowed to stop working lest they be charged with abandonment. How about we try more freedom instead of less. Lower the corporate tax rate, simplify the regulatory regime and make America a place where people WANT to do business instead of forcing them to do it here.

  • Mike Richards South Jordan, Utah
    Aug. 18, 2014 8:46 a.m.

    Marxist,

    You may believe that the government owns a company's private property, but the Constitution doesn't support you. The Federal Government is limited to "owning only a ten-mile square District, and the land and buildings required for forts, magazines, and federal buildings. In other words, your idea is unconstitutional.

    People have no requirement to provide jobs for others. People have no requirement to keep their businesses inside the United States. Private property does not become public property just because you want to redefine words.

    Government got us into this mess when FDR started promising people that the government would be responsible for their personal welfare. Most presidents since then have continued to misuse tax revenue. Instead of obeying the constitution and only handing duties in the 17 areas authorized by the constitution, they have squandered America's wealth by signing pork projects - vote buying.

    Government cannot save itself by increasing taxes. If it hopes to survive, it must decrease spending and it must stop paying people to NOT work. Tax revenues come from income taxes. Income taxes are paid by people who work.

  • FT salt lake city, UT
    Aug. 18, 2014 8:45 a.m.

    This has to be one of the Senator's weakest editorials that is poorly supported with few facts or references. Looking back over the past 6 years most everything Krugman had predicated has played out. The GOP is not concerned about our debt but they are concerned about the tax rates and social spending(income redistribution). They simply use the debt as a bogey man to encourage support for distributing less of their wealth to the balance of society.

  • marxist Salt Lake City, UT
    Aug. 18, 2014 8:25 a.m.

    Re: Mike Richards "If Obama taxes the rich, the rich will shut down their operations or move those operations to nations that have a more favorable tax rate. Companies have no reason to stay in a country where they are seen as the problem instead of being seen as the solution."

    That's an easy one. Let's have Obama and the House Republicans pass a law making such abandonment illegal. Companies are all-powerful only to conservatives like yourself.

  • JoeCapitalist2 Orem, UT
    Aug. 18, 2014 8:16 a.m.

    Some people want to pretend that our deficits are caused by tax rates being lower than they should be. If you want to know the real story, google "federal tax receipts" and see the amount the federal government has collected and spent each year for the past 60 years.

    The reason we are in debt is because we spend way too much. Period. The federal government now spends twice as much each year as it did just a dozen years ago.

    The population has certainly grown, but it hasn't come close to doubling in that time. Total tax receipts have also continued to grow and the government takes in more each year than it ever has, but like the population, tax receipts haven't come close to matching the explosion in spending.

    You could argue that the "evil Bush Tax Cuts" have added a few hundred billion to the deficit over the past 10 years, but that is a tiny sliver of the huge $Trillion dollar deficits.

    We can go after "rich people's money" all day long, but until we get our spending under control the appetite of "the beast" will drive us to bankruptcy.

  • JoeBlow Far East USA, SC
    Aug. 18, 2014 7:57 a.m.

    " Obama ran up our national debt more than all other Presidents combined and that after he increased taxes on the "rich""

    Did you know that Obama's" biggest debt year was 2009. This was using the budget established in 2008 before he became president.

    The debt is almost entirely caused by lower revenue and higher "mandatory spending". This can be verified on several charts at the Heritage Foundation website.

    Guess what? Had Romney been elected (or McCain) the debt would have still skyrocketed. That is just a verifiable reality.

    Oh, and remember, Congress spends the money. 100% of it.

  • Mike Richards South Jordan, Utah
    Aug. 18, 2014 7:48 a.m.

    If Obama taxes the rich, the rich will shut down their operations or move those operations to nations that have a more favorable tax rate. Companies have no reason to stay in a country where they are seen as the problem instead of being seen as the solution.

    Most revenue comes from income taxes. Income taxes are generated when people work. People work when companies hire them. Companies hire employees when the need for their product or service increases. Obama's threats have made businesses reluctant to hire full time employees. Those companies don't know how much ObamaCare is going to cost them, so they refuse to hire new employees.

    Obama created the mess. He is responsible for stagflation. His policies caused it. His rhetoric pushes it. His lack of business experience and his refusal to listen to business leaders destroys any trust he might have had with the business community when he entered office. Businesses will wait until he is out of office before expanding their operations.

  • Invisible Hand Provo, UT
    Aug. 18, 2014 7:46 a.m.

    @Kass: If you want to read economists who disagree with Krugman start with Rhinehart and Rogoff. Read "This Time is Different" for a realistic look at what debt levels like the current one have done historically.

    @Marxist: You are attributing high tax collections to high tax rates. It's more accurate to say that high tax collections came because of a fast growing economy. The economy grew fast after WWII not because taxes were high but because there was massive growth in population around the world and a big bounce from depressed levels. The other instance of growth you cite was the internet boom. Neither of these can be fairly attributed to high tax rates. You can't just cherry pick a few instances where high tax rates DIDN'T appear to slow the economy and give the tax rates credit for everything good that happened in the complex economy at that time.

  • Mountanman Hayden, ID
    Aug. 18, 2014 7:37 a.m.

    The national debt when Bush left the White House was about $10.6 trillion. When Obama leaves the White House it will be over $20 trillion! Obama ran up our national debt more than all other Presidents combined and that after he increased taxes on the "rich"! His foolish experiment with income redistribution came at the expense of our granchildren! They won't mind that Obama mortgaged their futures will they? Obama has purchased votes and got himself elected with entitlements paid for with borrowed money!

  • John Charity Spring Back Home in Davis County, UT
    Aug. 18, 2014 7:36 a.m.

    Now is the time of the great battle for Americas economic future. Sadly, the left-wing proponents of entitlement programs are currently winning.

    Charles Dunoyer famously stated that"one consequence of the industrial regime is to destroy artificial inequalities, but this only highlights natural inequalities all the more clearly." Dunoyer continued "superior abilities . . . are the source of everything that is great and useful . . . Reduce everything to equality and you will bring everything to a standstill. " This is why state intervention of any kind must be rejected. Natural inequalities such as differences in physical, intellectual, and moral capabilities are crucial to an economy of growth and innovation.

    That is the problem. The left-wing egalitarian system attempts to put everyone on the same level, regardless of effort or ability. There is only one way to make everyone achieve an equal result, and that is by reducing everyone to the level of the lowest common denominator. Shame on those who are fostering mediocrity.

  • GaryO Virginia Beach, VA
    Aug. 18, 2014 6:58 a.m.

    “Conservatives” continually harp now about the debt. But when Reagan TRIPLED the debt and when GW more than DOUBLED it again, they didn’t say a peep.

    In fact, it was Dick Cheney who famously said, “Deficits don’t matter.”

    Low Revenue – High Spending = High yearly deficits = High Debt

    The problem is either high spending or low revenue, or a combination of both.

    High Spending? Well yes. America spends more on our military then the next 8 highest spending nation’s combined. In fact, the over 50 BILLION dollars we spend on military retirement (for those who have served 20 years or over) is more than the ENTIRE military budget of Canada.

    Low Revenue? Absolutely. In 1969 when we fought the cold war and the Vietnam war, spent billions on necessary social programs, and went to the moon, we still balanced the budget because we had enough revenue. Back then the highest tax bracket was 71%. Now it’s down to 38% because of trickle-down-economics forced upon us by the Reagan administration.

    It was supposed to create jobs. Where are the jobs?

    We need to stop coddling the rich and increase the high tax bracket again.

  • Esquire Springville, UT
    Aug. 18, 2014 6:44 a.m.

    Sadly, early in the Bush years, the Republicans gave us a tax cut, sending small checks to most of Americans in an amount that didn't really mean that much except to take out and spend for dinner and a movie, and not much more. Those checks took billions out of the federal treasury, and were accompanied by a permanent tax cut. While none of us like to pay taxes all that much, we also know that various government services, whether national security or a variety of domestic services, are important and wanted. So, most people don't want these services significantly cut. Now, take this tax cut, add to it the most costly foreign wars in history, ones we started, by the way, and increase other spending because it's good politics, and the GOP took a budget surplus and destroyed it. Bob Bennett was part of that fiasco. The lesson to be learned is don't let the Republicans be in charge of the budget. They talk a big game, but reality tells us a far different story. From Red Ink Ronnie to the modern era, the GOP is bad, bad, bad for the economy.

  • JoeBlow Far East USA, SC
    Aug. 18, 2014 6:15 a.m.

    current and future debt is driven overwhelmingly by 3 issues.

    Medicare
    Social Security
    Defense

    Everything else pales in comparison.

    Rising health care costs, baby boomer retirements and our penchant to inject ourselves in every world conflict are the drivers of our debt

    So, next time someone complains about the money spent on foreign aid, unemployment benefits or Obama's vacations steer them back to the real issues.

    Would you rather attack the problem, or make insignificant political rants?

    Focus on the real issues.

    SS, Defense, Medicare

    Fix those first, then hunt for the pennies.

  • marxist Salt Lake City, UT
    Aug. 18, 2014 2:31 a.m.

    Why does the Federal debt grow and how? First, the Federal debt grows when revenues (taxes) do not rise to the level of expenditures. Second, the debt is incurred through the sale of U.S. securities of various types.

    As a general rule to measure the burden of the debt, economists look at the ratio of debt to GDP. I believe that is appropriate, based on my work as an economist the last 40 years.

    What has been the pattern of debt to GDP over the years since WWII? The debt to GDP ratio peaked in WWII. It fell steadily through the 50's, 60's and 70's. Why? Largely because taxes on the wealthy and corporations remained high. With the arrival of Reagan and his tax cuts for the top end, the debt to GDP ratio climbed steeply thorough the Reagan years and Bush I. It leveled off and began to decline under Clinton, because Clinton taxed the rich.

    Of course the debt to GDP ratio grew rapidly under Bush II with his high end tax cuts.

    The ratio is now declining under Obama. Conclusion: tax the wealthy! It's good for them and us!

  • Kass SLC, UT
    Aug. 18, 2014 12:33 a.m.

    How about naming some of the economists whom you trust so we can do our own evaluations of their opinion and yours?