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CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Sunday, March 08, 2009
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
Previous Posts
- Big Oil, Big Taxes
- Free Trade: Hope Over Fear
- Welcome Univ. of Michigan-Flint MBA Students
- What Does $1 Trillion Look Like?
- Climate Change: Science vs. Religion
- Record Crowds Pack Detroit's Autorama
- An Entrepreneur Stimulus Plan
- Peru's Recession Proof Economy is Booming
- Company Layoff Plans Expected to Decline
- Have Job Layoffs Peaked in January?
18 Comments:
The Obamanomics income tax plan is really, really scary in the big picture. Not.
The Obamanomics income tax plan is really, really scary in the big picture. Not.
Wow, I guess that when you compare him to other big spending, tax raising liberals of the past, he has a ways to go before they erect his statue on the mall.
Just one thing though, how high was the CO2 tax back then? And the payroll tax?
98% of small businesses make less than $250k per year and will not see a tax increase under Obama's plan. In fact, they'll see a tax cut.
Barrack essentially wants to reinstate Clinton's tax rate on the nation's wealthiest citizens. Clinton’s tax increase on the wealthy drew a lot of criticism in the early 1990s, particularly from Republicans who claimed it would "cause a recession." This came after Bush I’s tax increase; no one will dispute the Republicans' prophecy was proven wrong.
If anybody wants to complain about raising taxes on the wealthy, they should look no further than the 1950s (a tax rate of over 90% on the top 1%) and the 1960s (which saw the top 1% pay over 70%) - both considered to be decades of enjoyable affluence and prosperity for many.
If history’s a good indicator, raising taxes on the nation’s wealthiest citizens by a few percentage points will not cause mass exacerbation. In fact, considering the country’s need for fresh infrastructure, a new grid system and an upgrade to alternative energy, the argument should be that it doesn’t go far enough.
How can one claim 2 trillion in savings of which 1.6 trillion is later revealed to be the savings from not continuing the Iraq troop surge until 2019. This is a full 11 years after Bush ended the Surge and 8 years after even Bush would have withdrawn troops from Iraq. Then there is the little matter of 8,570 earmarks from a president who eskewed all earmarks.
The kind of money needed to pay for this exercise in profiligacy will have to come from broadbased tax increases. Everyone likes the idea of taxing the rich but it just isn't enough to close the funding gap. In the words of the late Senator Russell Long:
"Don't tax me. Don't tax thee. Tax that man behind the tree."
Dedicated to anon @ 12:33 AM
As the CEO of this business that employs 140 people, I have accepted the fact that Barack Obama is our new President,
and that our taxes and government fees will now increase in a BIG way.
To compensate for this additional overhead, I figure that the clients will have to see an increase in our fees of about 8% but
since we cannot raise those prices right now due to the dismal state of our economy, we will have to lay off several of our
employees instead.
This unfortunate economic reality has really been eating at me for a while, as we believe we are family here and I didn't
know how to choose who will have to go.
After giving it considerable thought, this is what I did: I strolled thru our parking lot and found 11 Obama bumper stickers on
our employees' cars and have decided these folks will be the first to be laid off.
I can't think of a more fair way to approach this problem.
They wanted change; I gave it to them.
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"This came after Bush I’s tax increase; no one will dispute the Republicans' prophecy was proven wrong"...
Says who and on what planet?
Ten Myths About the Bush Tax Cuts
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"Wow, I guess that when you compare him to other big spending, tax raising liberals of the past, he has a ways to go before they erect his statue on the mall"...
LOL! Even the libs over at PBS know different...
"It" was a $3.5 trillion blueprint for government spending, the largest ever. And it projected by far the largest deficit ever, at $1.75 trillion, more than four times the red ink for this year...
This is dedicated to the Bloggin' Brewskie:
From Kevin Hassett @ Bloombergs: ‘Manchurian Candidate’ Starts War on Business
Back in the 1960s, Lyndon Johnson gave us the War on Poverty. In the 1970s, Richard Nixon launched the War on Drugs. Now that we have seen President Barack Obama’s first-year legislative agenda, we know what kind of a war he intends to wage.
It is no wonder that markets are imploding around us. Obama is giving us the War on Business.
Imagine that some hypothetical enemy state spent years preparing a “Manchurian Candidate” to destroy the U.S. economy once elected. What policies might that leader pursue?
He might discourage private capital from entering the financial sector by instructing his Treasury secretary to repeatedly promise a brilliant rescue plan, but never actually have one. Private firms, spooked by the thought of what government might do, would shy away from transactions altogether. If the secretary were smooth and played rope-a-dope long enough, the whole financial sector would be gone before voters could demand action.
(there's more)
Shyte
The financial wizards have dug the country into a hole SO deep that we will be lucky to emerge without a violent revolution taking place and all you people can do is bitch about having to clean up the mess (pay taxes). Go to some low tax country like Ecuador and see how many business opportunities there are and the standard of living.
annoy whines: "The financial wizards have dug the country into a hole SO deep that we will be lucky to emerge without a violent revolution taking place and all you people can do is bitch about having to clean up the mess (pay taxes)"...
Hmmm, which financial wizzards are you talking about?
The ones' that brought on the socialist nanny state programs like Social Security, Medicare, Medicaid, Medicare Part B, Fannie Mae, Freddie Mac and all those other constitutionally questionable extortions of the wealth people actually work for?
Speaking of holes, how about you take a running jump into one of these Amazing Holes?
1 said:
Dedicated to anon @ 12:33 AM
As the CEO of this business that employs 140 people, I have accepted the fact that Barack Obama is our new President,
Trying to stifle concerted speech there? I don't think so - and hope it backfires on everyone who tries it.
To 1,
I was referring to the first Bush presidency, the man who was forced by a Democratic congress to raise taxes; and the excellent economic success of the 1990s proved the critics of the Clinton tax increase - those who said it would “cause a recession” - wrong. The 1990s economic expansion saw the creation of 23 million jobs vs. the economic expansion of George W., which saw 4.8 million jobs created. While the Clinton tax increase did not lead to a recession as prophesied, the George W. tax cuts, in contrast, have not prevented the current economic malaise.
The 1950s and ‘60s were also decades that saw a massive buildup of national infrastructure: airports, power plants, and roads - particularly the Interstate Highway System, the largest public works project in the history of the world. I’ve said this before and I’ll say it again: can anyone imagine Wal-Mart, or for that matter, “just in time delivery” operating without it?
While the Clinton tax increase did not lead to a recession as prophesied, the George W. tax cuts, in contrast, have not prevented the current economic malaise. The high tax rate on the wealthy experienced in the late 1940s recession after WWII (90%+) did not prevent the “Fabulous Fifties” from occurring; it’s doubtful a slight tax increase on America’s wealthiest citizens will cause a major meltdown today.
Derrhh... was referring to the Interstate Highway System when I wrote "can anyone imagine Wal-Mart, or for that matter, 'just in time delivery' operating without it?"
... the excellent economic success of the 1990s proved the critics of the Clinton tax increase - those who said it would “cause a recession” - wrong.
Nice try. The economy didn't pick up in until the Republicans took over Congress, cut spending and balanced the budget.
sethstorm makes this bizzare statement: "Trying to stifle concerted speech there? I don't think so - and hope it backfires on everyone who tries it"...
Ha! ha! ha! Oh please! Quit whining...
Regarding your Think Progress Propaganda, well its spotty and very questionable at best...
Consider viewing the BLS data from 1994 through 2002
To 1,
President George W. Bush had a Republican congress to work with for six years - what happened to the record surplus? This decade's economic expansion hasn't generated anywhere near the number of jobs the 1990s expansion did. Why is this?
"President George W. Bush had a Republican congress to work with for six years - what happened to the record surplus?"...
Record surplus?!?!
None the less I still think its an excellent question...
George W wasted a lot of EXTORTED dollars on socialist nanny state programs in the mold of FDR, LBJ, Slick Willie...
I mean just look at the wasted money on those parasites who were to dumb to move out of New Orleans with the onset of Katrina for instance...
You get the picture...
1,
I think I can compromise with you on the Katrina issue:
The levee system that fell under Katrina’s might was an antiquated system built in the 1960s. It was designed to withstand a Category 3 Hurricane; government officials for decades - Democrat and Republican - knew a stronger system would be required for a stronger hurricane, and did nothing.
A relatively modest sum of money spent on an adequate levee system could have saved mountains of cash later, and saved the U.S. from a catastrophe and a global embarrassment. It’s similar to basic car maintenance. Both this neglance, and the mismanagement during and after Katrina are signs of gross government irresponsibly, not good government conduct.
Cheers
"A relatively modest sum of money spent on an adequate levee system could have saved mountains of cash later, and saved the U.S. from a catastrophe and a global embarrassment"...
Why should the US have been embarrassed at the acts of grown adults in one city who were acting like lost children?
Well Bloggin' Brewskie that's an interesting article there and since I was living in New Orleans at that time I can that the article you sighted though NOT incorrect has left out some salient facts...
Consider the following from the L.A. Times: A Barrier That Could Have Been
But the project, signed into law by President Johnson, was derailed in 1977 by an environmental lawsuit. Now the question is: Could that barrier have protected New Orleans from the damage wrought by Hurricane Katrina?
"If we had built the barriers, New Orleans would not be flooded," said Joseph Towers, the retired chief counsel for the Army Corps of Engineers New Orleans district.
Tower's view is endorsed by a former key senator, along with academic experts, who say a hurricane barrier is the only way to control the powerful storm surges that enter Lake Pontchartrain and threaten the city. Other experts are less sure, saying the barrier would have been no match for Katrina.
The project was stopped in its tracks when an environmental lawsuit won a federal injunction on the grounds that the Army's environmental impact statement was flawed. By the mid-1980s, the Corps of Engineers abandoned the project.
The project faced formidable opposition not only from environmentalists but from regional government officials outside of New Orleans who argued that the barriers would choke commerce and harm marine life in ecologically sensitive Lake Pontchartrain. (there's more)
So Bloggin' Brewskie as you might guess this all caused quite an uproar at the time...
For me personally I thought it was more than a good enough reason to leave New Orleans after hurricane Frederic (actually ended up hitting Alabama hardest) showed me that what was in place wasn't going to work out very well and with U.S. District Judge Charles Schwartz, Jr ready to stop any construction at the behest of tree huggers & root kissers, well it was only a matter of time...
Don’t be too judgmental toward the masses who were doused by Katrina. New Orleans has one of the highest poverty rates in the country, a near 30% of the time of the hurricane. A fair portion of those people cannot afford cars. Were the panicked citizens of New York City acting like “lost children” on 9/11?
Good decesion getting out of New Orleans. Alot of people who had the means of leaving obviously didn't have the sense to do so.
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