Newt or Mitt VS Obama. Can either of 'em beat him?

[Faux Pas]

From what we've seen in our recent past, the problem is that they appear to drive a very few people into affluency, and quite too many down to much lower levels if not into poverty.

Like whipping maniacally a horse: you get a short-lived sprint, then a collapse .

Have you any examples? I can offer you a couple. The internet dot com was a prime example of a bubble, housing was a bubble, in 1946 autos were a bubble.

The Kardashians are a bubble

[Anotherkiwi]

...The Kardashians are a bubble

You need new glasses - they have several bubbles! 

[BC]

There you go again, giving up.  I understand your sentiment if you believe Obama will win.      
If we can not reach 4-5% growth, we are in serious fiscal trouble as entitlement expenditures are already almost equal to all tax revenue, and increasing at a rate faster than 2-3%.
 
2012 Budget 
 
Outlays
      Appropriated (discretionary)  $1,319 Billion
      Mandatory (entitlements)        2,252
      Net Interest                              225               
      Total                                      3,796
 
Receipts   (FIT, etc,)                      2,469     
 
Deficit                                           1,327
 
Without more tax revenue, we can balance the budget only by eliminating the Federal government including military.

BC
A couple of points germane to your post you seem to look past. Bubbles come and go. That is why they are bubbles but, bubbles while they may appear artificial are generally an important ingredient to any economy. Bubbles still drive economies. Don't discount bubbles.

Even in the best of times economies are very, very fragile. Time is very much of the essence. While you are willing and satisfied for a 3% yearly growth rate in a 30 year plan, the current economy could very easily collapse from the weight of that slow growth. If the general public had any idea how fragile the US and world economy really is, we would all have bomb shelters loaded with a couple of years food.

If or when it does collapse, the experts contend that the depression of the 20s-30s could be compared as a mild recession to what will happen.

One measure to avoid such a collapse is some austerity measure while we are able. There may in fact be nothing to stop such a catastrophe but, what the experts also contend that is driving us there is debt and spending. Once the economy collapses there is no "uh oh we made a boo boo" moment and let's get a redo. There will be no redo in our lifetime.

Gator,
FP,

Try http://www.tradingeconomics.com/united-states/gdp-growth  and plug in the dates you would like to see included.

Here the recent ups and downs.. 



Historically the average is around 3.3%.. but yes Gator, tax revenue is an important factor, but remember the Bush tax cuts?.. did that not affect revenue?..

Now looking at the graph, one could construe that increased growth was higher because of the tax cuts, but lets broaden the picture a bit...



Can one now really say that the Bush tax cuts made a real improvement?  The Bush years may seem like a small boom, but consider government spending during that period..... on wars and homeland security measures...

I dunno, maybe I am just an idiot, but at least one that does not see things adding up.  My theory is that higher taxes, or at the very least blocking tax loopholes will again force loose cash producing low taxed investment income into a more 'make your money work for you' environment.  Whether or not this will happen is really quite irrelevant once one realizes that the current situation of a high stock market vs low unemployment is not sustainable and WILL crash anyway at some point in the near future.

FP,

yes economies worldwide are indeed fragile.  When indicators diverge from history is where problems begin.  A crash is forthcoming IMHO.  The imbalances within the system are very, very unique... the Stock Market reaching new highs and unemployment low?  How can that be?  I don't know about you but I would be very uncomfortable investing in the markets these days.

Yes, austerity is a tool.. but remember that it is often the case that investments are necessary to end up with a net gain.  I do believe this is the case with healthcare reform....  healthcare related services account for around 25% of GDP now and rising rapidly - without any justifiable gains in quality of life during our longer years on earth... why is that?  Why do folks in the US pay a third or even half more than the rest of the world?  Now don't blame it on the baby boomers... this has been going on for decades.  Do you really feel comfortable paying 75 bucks for an antibiotic that costs 10 in a 'socialized' health system that can use it's clout against big Pharma?

The economic system will not collapse at a steady 3% growth.. it will instead thrive.  3.33 is the magic number.... 3.33% loans in any form, 3.33% growth and a progressive tax rate with a maximum of 33.3% taxation on corporations and individuals based on their worldwide income, regardless of source..

[Shadow]

A crash coming or not depends mainly on ehtics and realities of corporate reporting. Having worked in the field myself, I know that when making an annual report every company is weighing their options between how much tax they wish to pay and how successful they need to be to please their investors.
At a time when business is booming, companies look for methods to reduce their reported profits. When business goes down, they use the same methods in reverse to build up their reports. This goes well until you hit the spot where you can no longer calculate away your real results.
If a company is near the spot where they have to admit having hidden bad results, a small crisis is a welcome thing, as by reporting a single higher loss 'due to global crisis' they can revert to the realistic situation of the company without getting punished for it, making the company healthy in terms of financial reporting versus reality. The problem is of course that if many companies do this it creates a larger crisis.
One of the main indicators of the future situation is the business of industry suppliers. As industry is usually working with long-term projects that can not easily be halted just because there is a crisis, their suppliers will usually be the last hit by projects being postponed. At the same time industries will be investing to keep up their production before consumers start buying, which means that suppliers are the first to benefit of an uprise in economy.
As soon as the business of industrial suppliers goes up, an uplift in the general economy is to be expected in one or two years time.

[Gator]

BC,
Good charts.  Will you please go back to 1980 and 84. 
 
Lower taxes of course free more income for personal spending, which fuels the economy.  The reduction of certain taxes is comparable to not taking the seed corn to feed the hungry and instead providing more seed corn to plant, thereby yielding a larger harvest, and the hungry will get a bigger share.  Perhaps too corny for educated liberals.   
 

Whether or not this will happen is really quite irrelevant once one realizes that the current situation of a high stock market vs low unemployment is not sustainable and WILL crash anyway at some point in the near future.

Something must give.  Either the economy improves or the stocks level off if not decline.  Why not the economy?  For now and the near future, keep in mind that stocks are very competitive in comparison with other investment opportunities.

Do you really feel comfortable paying 75 bucks for an antibiotic that costs 10 in a 'socialized' health system that can use it's clout against big Pharma?

Economists will assert that $10 drugs will not fund R&D for the drugs of the future.  You know, those drugs which have helped to increase our lifespan to something not contemplated when Social Security was created.

[BC]

BC,
Good charts.  Will you please go back to 1980 and 84. 
 
Lower taxes of course free more income for personal spending, which fuels the economy.  The reduction of certain taxes is comparable to not taking the seed corn to feed the hungry and instead providing more seed corn to plant, thereby yielding a larger harvest, and the hungry will get a bigger share.  Perhaps too corny for educated liberals.   
 
Something must give.  Either the economy improves or the stocks level off if not decline.  Why not the economy?  For now and the near future, keep in mind that stocks are very competitive in comparison with other investment opportunities.
 
Economists will assert that $10 drugs will not fund R&D for the drugs of the future.  You know, those drugs which have helped to increase our lifespan to something not contemplated when Social Security was created.

Gator,

Not corny at all.

of course no one can argue that Reagan's policies preceded many years of economic stability, but one cannot say that doing the same today would have the same results, or even be possible for that matter.  Don't have much time, but take a look at the tools available back then and those now, and consider context.

During the Reagan years, the price of oil in today's monetary value dropped from $70 to around $20, a huge bonus.  Interest rates back then were 20% after fighting the inflation battle.  The following years allowed the interest rate to drop by two thirds, another huge bonus.  What was the tax rate when Reagan took office and how much was it reduced?  Was the manufacturing segment of GDP not somewhere around 20% back then?  What was the national debt in today's monetary value?

Without spending too much time explaining, consider the tools and some given benefits Reagan had to work with at the time.  Yes taxation did provide an additional perk but it was not everything.  I am fairly certain that if tomorrow the price of oil dropped to $30.00 the economy would get a good boost as this would directly affect disposable income across the board.  Interest rates?..  Obama and the Fed only had very little in the way of flexibility, orders of magnitude less than Reagan had back then.  Taxes?.. just remember that even Reagan overstepped and had to raise taxes in the end and they went up again thereafter..  but the period of economic stability endured much longer.  Obama has much much less to work with in the way of allowing lower taxes since the Bush tax cuts already used up most of the potential despite the towering national debt.

Other factors play in as well, like demographics.  What was the consistency of the workforce?  What was the workforce education level compared to today?  Consider the rate of technological innovations back then.. are the same leaps happening today as compared to the rest of the world?

Despite the differences, the economy although fragile has made progress and we all can only hope it keeps getting a bit better and more stable using the few tools left.

Reagan had sacks of corn to play around with, Obama, even Bush only a handful.

Does this make any sense?

[Gator]

Reagan had sacks of corn to play around with, Obama, even Bush only a handful.

Yes, and the sacks of seed corn continue to dwindle, which is even more reason to address the dwindling amount of seed corn remaining.  Obama policies are making it worse.  What is his current plan for improvement other than to take more seed corn from the planters?
 
To be candid, I am not certain about Romney's plan either as these are indeed tough times.   However, I feel that he will do a better job of helping to get more American's working and at a better wage. 

Let me discuss one example.  The retired  CEO of Intel was interviewed today on CNBC.  He explained how Intel had most of its manufacturing and R&D housed in America even though most of its sales occur outside America.  This is ideal.  However, he  explained that this is changing.  When deciding where to build its next world class facility, it would cost $1 billion more in Net Present Value to locate it in America.  The primary reason - corporate taxes. 
 
These are the types of issues that need to be deliberated by our government, a deliberation led by our President.  A cut in corporate taxes must be balanced somehow.  Hopefully it is balanced by more tax revenue from a growing economy.

 
 

[Gator]

BC, you wrote:
 

During the Reagan years, the price of oil in today's monetary value dropped from $70 to around $20, a huge bonus.  Interest rates back then were 20% after fighting the inflation battle.  The following years allowed the interest rate to drop by two thirds, another huge bonus.  What was the tax rate when Reagan took office and how much was it reduced?  Was the manufacturing segment of GDP not somewhere around 20% back then?  What was the national debt in today's monetary value?

From Wiki:

Spending during Reagan's two terms (FY 1981–88) averaged 22.4% GDP, well
above the 20.6% GDP average from 1971 to 2009. In addition, the public debt rose
from 26% GDP in 1980 to 41% GDP by 1988. In dollar terms, the public debt rose
from $712 billion in 1980 to $2,052 billion in 1988, a roughly three-fold
increase.^[4] The unemployment rate rose from 7% in 1980 to 10.8% in
1982, then declined to 5.4% in 1988. The inflation rate declined from 10% in
1980 to 4% in 1988.^[2]

 

Many economists have stated that Reagan's policies were an
important part of bringing about the second longest peacetime economic expansion
in U.S. history, and followed by an even longer 1990s expansion that began under
George H.W. Bush in 1991.^[24][25] This economic expansion
continued through the Clinton administration with unemployment rates steadily
decreasing throughout his presidency (7.3% at the start of his presidency and
4.2% at the culmination, with the lowest rate reaching 3.9% in
2000).^[26] During the Reagan administration, the American economy
went from a GDP growth of -0.3% in 1980 to 4.1% in 1988 (in constant 2005
dollars),^[27] which reduced the unemployment rate by 1.6%, from 7.1%
in 1980 to 5.5% in 1988, but with peaks of around 10.8% in
1983.^[26][28] A net job increase of about 21 million also
occurred through mid-1990. Reagan's administration is the only one not to have
raised the minimum wage.^[29] The inflation rate, 13.5% in 1980, fell
to 4.1% in 1988, which was achieved by applying high interest rates by the Federal
Reserve (peaked at 20% in June 1981).^[30] The latter contributed
to a relatively brief recession in 1982: unemployment rose to 9.7% and GDP fell
by 1.9%.

[BC]

Gator,

my effort was to try and show the difference in context and not to show whether or not Reagan was wrong or right.

A rather interesting article considering it was written in 1988 so not at all Obama related:

http://mises.org/freemarket_detail.aspx?control=488

Reagan came into office proposing to cut personal income and business taxes. The Economic Recovery Act was supposed to reduce revenues by $749 billion over five years. But this was quickly reversed with the Tax Equity and Fiscal Responsibility Act of 1982. TEFRA—the largest tax increase in American history—was designed to raise $214.1 billion over five years, and took back many of the business tax savings enacted the year before. It also imposed withholding on interest and dividends, a provision later repealed over the president's objection.

But this was just the beginning. In 1982 Reagan supported a five-cent-per-gallon gasoline tax and higher taxes on the trucking industry. Total increase: $5.5 billion a year. In 1983, on the recommendation of his Spcial Security Commission— chaired by the man he later made Fed chairman, Alan Green-span—Reagan called for, and received, Social Security tax increases of $165 billion over seven years. A year later came Reagan's Deficit Reduction Act to raise $50 billion.

Even the heralded Tax Reform Act of 1986 is more deception than substance. It shifted $120 billion over five years from visible personal income taxes to hidden business taxes. It lowered the rates, but it also repealed or reduced many deductions.

According to the Treasury Department, the 1981 tax cut will have reduced revenues by $1.48 trillion by the end of fiscal 1989. But tax increases since 1982 will equal $1.5 trillion by 1989. The increases include not only the formal legislation mentioned above but also bracket creep (which ended in 1985 when tax indexing took effect—a provision of the 1981 act despite Reagan's objection), $30 billion in various tax changes, and other increases. Taxes by the end of the Reagan era will be as large a chunk of GNP as when he took office, if not larger: 19.4%, by ultra-conservative estimate of the Reagan Office of Management and Budget. The so-called historic average is 18.3%.

[Gator]

BC,
 
Interesting.  Good summary.
 
So taxes essentially stayed the same under Reagan.  I would expect that.  Even if Romney won, I would expect tax revenue to increase.  As I stated before in my budget summary, the only way to balance the budget is to eliminate all of government including the military.  That will not happen.  So cuts and tax increases are both needed.  Hopefully the tax increases come from more jobs and higher wages.
 
The question under Reagan is who paid what taxes.  Were the Reagan tax changes an effective form of economic engineering to spur growth?  Do the Obama tax increases do the same?
 
You and I were not educated in economics.  What do the economists say?   This CNN survey says of 17 "top economists" surveyed, 9 selected Romney as best for the economy, 3 selected Obama and 5 said neither would lift the economy (your opinion).
 
http://money.cnn.com/2012/09/30/news/economy/romney-obama-economists/index.html?iid=Popular
 
Notice the title chosen for the article even though Romney received 3X more votes.   The media's treatment of Obama is another issue.
 
 

[Gator]

I just mentioned media's favorable treatment of Obama.   
 
Before the administration admitted that the Libya attack was planned by terrorists, the media was echoing the Obama line.  GQ cited one daily that did not (incidentally that source is owned by a Russian oligarch).
 
Here is a short video clip of what one Obama turncoat had to say, claiming the media has become the enemy of the American people.
 
 
 
 

[BC]

BC,
 
Interesting.  Good summary.
 
So taxes essentially stayed the same under Reagan.  I would expect that.  Even if Romney won, I would expect tax revenue to increase.  As I stated before in my budget summary, the only way to balance the budget is to eliminate all of government including the military.  That will not happen.  So cuts and tax increases are both needed.  Hopefully the tax increases come from more jobs and higher wages.
 
The question under Reagan is who paid what taxes.  Were the Reagan tax changes an effective form of economic engineering to spur growth?  Do the Obama tax increases do the same?

You and I were not educated in economics.  What do the economists say?   This CNN survey says of 17 "top economists" surveyed, 9 selected Romney as best for the economy, 3 selected Obama and 5 said neither would lift the economy (your opinion).
 
http://money.cnn.com/2012/09/30/news/economy/romney-obama-economists/index.html?iid=Popular
 
Notice the title chosen for the article even though Romney received 3X more votes.   The media's treatment of Obama is another issue.

Gator,

Although we are not educated in economics, I am quite sure we both understand some of the fundamental concepts involved.  That economists still argue over the issue just goes to show no one is really an expert. - all are guessing based on their knowledge.  No one can predict the future.

As far as Reagan goes, it seems he did lower taxes on the wealthy to make the tax system more progressive which in itself is not bad.  This was countered by closing loopholes.  Globalization however created a whole new realm of loopholes and strategies along with additional 'benefits' added over the years when the economic situation was healthy.  Obama if I understand him correctly does want to lower corporate taxes, but close the loopholes as well.  Considering the resistance in Congress it's almost as if the loopholes are worth much much more than we know.  Effective corporate taxes are lower than they have ever been but the major factor seems to be that business emphasis has shifted from brick and mortar to 'virtual' and financial services which do less to drive employment.

As stated in my prior posts, innovation has leveled out with more competition.  The only way to combat that is education, a painful, expensive long term process.  Yes, a big investment, but bang for buck it can't be beat..  Sadly fewer and fewer can afford it.

Jobs is a result of demand.  It is much harder to create demand when the customer is credit shy, even enjoying living more credit free.  That is the bottom line I see.

The economy is readjusting, but even that is hard with the ground moving under your feet.  It seems the more you mess with trying to fix things the more things get broken. OTOH business it seems has not been able to handle deregulation in a responsible manner.  Ethics have been thrown out the window for profit.

That's all I have time for now, but do appreciate your thoughts and insight.

[edit]

Some information seems to indicate that Reagan increased taxes for the middle class.  Remember that the middle class during his time was also the prime 'baby boomer' working years.  Now the baby boomers are starting to retire en masse - also a huge difference of context.

[Gator]

Some information seems to indicate that Reagan increased taxes for the middle class.  Remember that the middle class during his time was also the prime 'baby boomer' working years.  Now the baby boomers are starting to retire en masse - also a huge difference of context.

A very important point.  I am serious.
 
Because the boomers did not replace themselves, I guess us seniors must rely on a wave of immigrants, legal and illegal, to create a young base to the demographic pyramid and fund our medicare and social security.   I am not serious.

[GQBlues]

I love presidential debates! My favorite one-liner tonight...

“Mr. President, you are entitled to your own airplane and your own house but not your own facts.”

Obama looked like a shagged beaten dog tonight and I really do hope come November they'll let this sleeping dog lie.

Even CNN's Wolf Blitzer can't spin on what happened tonight. I love the fact Mitt brought up the silly $90 Billion Green Initiative raping of this country benefiting Obama's campaign donors to his face.

Romney CLEARLY displayed who's the better mind to right this country's economic woes.

[ML]

I was becoming pretty pessimistic about Romney's chances based on what all the 'experts' were saying the past several months.

But after the just finished 'debate' I think there is the starting of a glimmer of hope for Romney. 

His CEO skills were showing, and it seemed Obama's charisma was not quite up to par, at least on this night.

Not a knock out punch by Romney, but I think it got him back into the race.

Likely Ryan can eat Biden's lunch when they match up.

I also think the 90 Billion dollar spending on some failed companies controlled by Obama contributors is something that Romney should hit a little harder.

It is clear that there is a major difference between a candidate who appeals to our 'rugged individualism' and a 'welfare/socialist' outlook.

Unfortunately, we have a lot more 'takers' than 'givers,' so Romney starts out with a substantial 'golf handicap.'

[Eduard]

I love presidential debates! My favorite one-liner tonight...

"..but you can't own your own facts!"

Obama looked like a shagged beaten dog tonight and I really do hope come November they'll let this sleeping dog lie.

Even CNN's Wolf Blitzer can't spin on what happened tonight. I love the fact Mitt brought up the silly $90 Billion Green Initiative raping of this country benefiting Obama's campaign donors to his face.

Romney CLEARLY displayed who's the better mind to right this country's economic woes.

+1000000000000000000000000000000000000000!!!!!

[Eduard]

[size=78%]Likely Ryan can eat Biden's lunch when they match up.[/size]

[size=78%]No doubt!!![/size]

[Faux Pas]

I saw some serious bitch slapping of Obama by Romney and Obama had not defense or retort. I looked in on MSNBC afterwards and they were admitting the same. A defeat for Obama of course with all sorts of attacks on Romney/Ryan and Republicans. The suit is empty and the debate was a view of it

[BC]

The 'winner' of a debate does not a President make.

Remember Kerry won his first debate.

As to tactics, Obama might be playing the sleeper, to let Romney overreact giving a number of promises to debunk down the line. The next weeks of ads and campaign speeches will be full of fact checking slams, mostly against Romney.

Some of this will come out in the upcoming debates as Romney clearly oversold himself, especially now that some parts of his 'plans' are on the record and irrevocable.

It's kind of hard to hit such a vague and moving target as Romney so getting firm points gathered from the first debate will help out in the two subsequent debates.

This looks like a fair assessment of the overstatements both by Romney and Obama.

http://www.nydailynews.com/news/politics/obama-romney-truth-debate-article-1.1174495

What surprised me the most was that once the onion was peeled and tears washed away, they were both saying pretty much the same thing in roundabout ways.

Obama is not stupid.  He's playing chess and not checkers.

It's not over till it's over.

[GoodOlBoy]

Mitt treated Obama like a "red headed stepchild" last night (politely of course). 
 
I am really curious as to how Newt would have done against Obama last night. I have always been impressed with Newts debate skills and eloquence.
 
I guess we will never know.
 
GOB

[ML]

As to tactics, Obama might be playing the sleeper, to let Romney overreact giving a number of promises to debunk down the line.

Obama is not stupid.  He's playing chess and not checkers.

I think there may be some truth to this.

Or just the simple idea that Obama's people will whip him into shape.

[BC]

I think there may be some truth to this.

Or just the simple idea that Obama's people will whip him into shape.

Or could be another long or all nighter because of the Turkey/Syria situation.  I did note he had to leave very quickly after the debate.

[GQBlues]

 Yeah…reminds me of Tyson’s quote, ”Everyone has a plan until they get hit!”

To say Obama’s flop on this debate as some sort of strategy is being disingenuous. You don't rope-a-dope when you have your opponent half-conscious.

1. This should’ve been the very best opportunity to make Mitt obsolete. Days following the DNC, the Obama campaign had literally had Romney on his heels leading up to this debate. They flooded the airwaves with negative publicity almost making the Republican nominee as an after-thought.

2. They need as much leverage and advantage leading up to next week’s Vice-Presidential debate.

Obama faced a guy bred for these types of dialogue through his years of executive experiences. He had no clue how quick AND prepared this guy can be. I bet neither did Obama’s advisers. Mitt royally schooled Obama for what he is, an empty suit. He had nothing to rebut Romney with his attack on his policies. How can he?  Obama’s policies the past 4 years are so atrocious even Obama and his platform is desperately campaigning someone else’s policies 15-20 years ago. How pathetic is that?

As a Reuters news reporter accurately remarked after the debate, said; ”Mitt Romney so overwhelmed Obama, he made him look like a college kid the day of his English final term exam who obviously didn’t study days prior and simply reasoned  *I already know English*”

Mitt should’ve made the point when the conversation went into banks, housing and mortgage loans being approved when they shouldn’t have. He should’ve pointed out it was Obama, then-acting attorney for ACORN, sued banks and the federal government on the grounds of discrimination when unqualified applicants were denied home loans.

True, this is one debate and likely Obama’s circles will throw in a more pro-active stance with the next two. One debate doesn’t lose the presidency bid. Bush and Reagan proved that. But my delight is seeing someone blast Obama for what he truly is in front of (Inter)National TV ~ an idiot.

I play chess BC and for the life of me this is not a strategy…this is a classic blunder. The suit got blitzed!
 

[Shadow]

In chess one would call this a sacrifice. In the Grand Theater of American politics its called a work.
Obama beating Romney in a first debate would not be very news worthy. His rhetoric skill are known, so people would not want to watch. Nor would it draw votes if Obama outspeeches Romney from the first try.

By this 'loss' many more people are going to follow the next rounds. More voters to influence, more stories in the news. That is the real deal about this debate, it is mostly to stir up interest in people to be involved.

[Faux Pas]

GQ

Very appropriate Tyson's quote. It would appear Obama's entire strategy was "duck and move". There is no defense for his failed leadership and floundering policies. That should continue to stay Romney's focus point of attack. That is the major issue facing Americans today. Part of a longer term strategy? Pul-eeeeeze. Obama is teeth in an empty suit. Promise the world, deliver dic. He is the epitome of "Campaigner in Chief".

I was surprised at the left hammering him on his performance. That is generally, something they will not budge on. No debate to my knowledge ever put a man in the WH but, BO leg's are wobbly like a mofo. It'll be interesting to see if Romney goes for a KO on the next Debate