Greece's 18-month sovereign debt crisis brought the government to the brink of collapse as public fury over savage austerity measures erupted in pitched battles with riot police on the streets of Athens.
The escalation of the Greek crisis had instant European and global impact, sending world stocks tumbling and exposing European Union paralysis over whether and how to launch a second attempt in a year to save Greece from insolvency.
George Papandreou, the socialist prime minister, announced he would seek a vote of confidence on a new government after offering to resign and broker a new national unity coalition with opposition conservatives.
He admitted failure after intense but fruitless negotiations with the conservative New Democracy party aimed at engineering a consensus behind the massive public spending cuts and wholesale privatisation programme – moves deemed necessary to secure a second bailout from the European Union and International Monetary Fund.
The opposition called for Papandreou's resignation and a renegotiation of the bailout terms with the EU, the European Central Bank, and the IMF as the price for its assent to a national coalition.
Earlier, riot police clashed with tens of thousands of demonstrators protesting in the capital against the radical austerity measures being imposed to try to secure a new bailout expected to amount to around €100bn.
Following the fall of the Irish and Portuguese governments in recent months after driving their countries into bankruptcy, it appeared that the eurozone's worst crisis was claiming another scalp. Despite the heightening sense of urgency, EU governments, the ECB, and the European Commission remained gridlocked over how to respond to the debt emergency, which pushed Greece closer to sovereign default and Europe towards a fresh banking crisis.
The ECB warned that a Greek default could spark "contagion" across Europe, causing Greek banks to implode and inflicting major damage on the big banks in France and Germany.
"It looks like a week of chaos," said a European official in Brussels. An emergency meeting of the 17 eurozone finance ministers on Tuesday failed to bridge the differences over how to construct a second bailout for Greece, senior EU diplomats said. In May last year the EU and the IMF put together a €110bn bailout for Greece, the first in a single currency country. That experiment has failed. Ireland and Portugal have since also needed to be rescued from national insolvency.
"The euro area faces a very challenging situation that comes mostly from the interconnection of the sovereign debt crisis and the situation of the banking sector," the ECB said. "Greece could have a contagion effect," added Vitor Constancio, an ECB vice-president.
Papandreou's offer of a national unity government signalled he was throwing in the towel because of an inability to push through the tens of billions in spending cuts, tax rises, and privatisation progress needed to secure the international bailout.
Europe's peripheral debt crisis has also taken a heavy political toll in the richer creditor countries of the eurozone, with anti-bailout populists making big gains in Finland and the Netherlands. The German Chancellor Angela Merkel has also suffered political setbacks at home while coming in for searing criticism abroad for her handling of the emergency.
The Americans too are exasperated with the failure of the big EU states to resolve the crisis and fear for the impact of a Greek default on the international economy. Greek borrowing costs soared to record levels as investors took fright.
Stock markets suffered; the Dow Jones industrial average in Wall Street was down 180 points, and FTSE 100 was down 60 points.
Berlin, backed by the Dutch, Austrians, and Finns, have been arguing for weeks that there can be no new bailout of Greece without the country's private creditors being forced to suffer losses on their loans. Otherwise, they argue, European taxpayers will be shouldering the costs while the international banks pocket the proceeds.
The ECB, the European Commission and other EU countries led by France argue that this could pave the way to disaster, with the financial markets decreeing the compulsory "haircuts" on private bondholders a Greek default, a "credit event" that could lay waste to the single currency.
"We are against any sort of default with haircuts and any form of private-sector event that could lead to a credit event or a rating event," Constancio said.
There was little sign that the differences had been bridged at Tuesday's emergency meeting of eurozone finance ministers.
They meet again in Luxembourg on Sunday under pressure to strike a deal on a new Greek rescue by 20 June, ahead of an EU summit next Thursday.
But yesterday in Brussels diplomats said it could take weeks, perhaps until mid-July, to reach agreement. Amid a sense that the Greek drama was moving towards a European denouement, all eyes were on a summit between Merkel and the French president, Nicolas Sarkozy.
“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."
Thursday, June 16, 2011
Where Goes Greece and the €?
Posted by Deuce ☂ at 6/16/2011 01:56:00 AM
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The Office for National Statistics (ONS) said in a statement that the number of unemployed in Britain fell by 88,000 to 2.43 million people. That was the largest decline since the three months to August 2000.ReplyDelete
However, the ONS added that the number of people claiming benefits rose by 19,600 between April and May to 1.49 million -- which was the biggest increase since July 2009.
Asian stock markets were mostly lower on Wednesday despite gains on Wall Street and positive US data overnight, but Tokyo remained buoyant after sharp gains in Tokyo Electric Power, the operator of the quake hit Fukushima nuclear plant.
It was all caused by a sharp rise in the dollar (jest ask Quirk.) :)ReplyDelete
A couple of years ago I would have been making snarky comments about the Greeks, butReplyDelete
considering the mess we've got ourselves into . . . . . . .
A couple of months ago you were making Snarky comments about Wisc. Pubs and Gov Walker.ReplyDelete
Nothing but snark, I would add, and the Wisc. Supremes agree.
Wis top court
rules for Walker against unions -
The state high court ruled 4-3 that the lower court judge who voided the law on grounds that lawmakers violated Wisconsin’s open meetings law while passing it “invaded the legislature’s constitutional powers.”
“Choices about what laws represent wise public policy for the state of Wisconsin are not within the constitutional purview of the courts,” the court’s majority wrote. “The court’s task in the action for original jurisdiction that we have granted is limited to determining whether the Legislature employed a constitutionally violative process in the enactment of the act.”
Rufus sided with the Political Hack Far left Activist Judge, stating:
"She's Right, they broke the law."
This is the exact same Union vote-buying sucker-puppet, pay for play Liberal Judge, that refused to order the Madison School District’s Union schoolteachers back to work, while ignoring the fact that said Union teacher’s de-facto strike was against Wisconsin law.
Judge Sumi ruled on this at the request of another Union owned Democratic puppet, District Attorney Ismael Ozane.
In another note of irony here, Wisc. State Senator Erpenbach, (D) put his hypocritical two-cents in here by stating:
“I would hope the Republicans would take this as an opportunity to sit down with Democrats and negotiate a proposal we could all get behind,”
Just how does Democracy work in a state legislature when every single childish Democratic Senator is hiding in a hotel in Chicago ?
It is kind of late to start talking that game, and it was ludicrous to mention working together, when you hid out for weeks on end to block Democracy from being implemented in the first place.
It was all caused by a sharp rise in the dollar (jest ask Quirk.) :)
You misrepresent me. In fact, this is the exact opposite of what I have been saying.
Given an increasingly complex, inter-related world economy I have argued that there are a vast array of macro and micro factors affecting the dollar, including but not restricted to commodity prices (including those of oil), the markets, and projected growth here and abroad.
You on the other hand have argued that there is actually an answer like "42" in the Hitchhikers Guide to the Universe that is the answer to "Life, the Universe, and Everything" and that the miracle answer is "oil".
You see coorelation and assume causation. The fact that few others agree with your theory? Merely "hubris" and lack of clear thinking on their part.
In our conversation yesterday, it got sidtracked into who said what when and moved away from the real question "What moves what, oil or the dollar."
In the past, I have granted you that the price of oil affects the dollar. On the other hand, I have further argued that the price of the dollar is also driven by 'many' factors, such as, US debt, FED policy, interest rates, risk-on risk-off flights to safety, the fiscal and monetary situation in the rest of the world, projected GDP growth throughout the rest of the world, and yes, commodity prices including that of oil, etc. (ad infinatum). I argue for a complex system of cuases, you argue for the simplicity of the answer "42".
Likewise, I argue that just as oil is one factor in the price of the dollar, the value of the dollar is a factor in the price of oil along with supply and demand, speculation, the Arab Spring, etc.
You again argue the reverse, again opting for the answer "42" option.
You have a clear vision but, in my opinion, it is way too simplistic and, in fact, wrong.
Quirk opined there would be Hell to pay from the blowback, but in fact a conservative judge defeated a democrat in the following election,ReplyDelete
and some Eastern Liberal Dems have joined in the chorus to restrict collective bargaining by public emplyee unions.
The judge's decison in Wisconsin was stupid from the get-go. She was trying to reverse a legislative initiative through a minor technical issue.
That being said, the Wisconsin Supreme Court decision now allows the nmerous lawsuit that have been held in abeyance pending that decision to move forward. This is one that will likely eventually be reviewed by SCOTUS.
Just like with the 'individual mandate' on healthcare, this is one we will have to watch.
"You have a clear vision but, in my opinion, it is way too simplistic and, in fact, wrong".ReplyDelete
Au contraire, Quirk:
The entire Galaxy revolves around the production of Ethanol in the Midwest.
Iowa State University and Archer Daniels Midland serve as our unbiased source of Truth and Light on these matters.
I admit I could be wrong. Although you might think so sometimes, I am not omnipotent. After the latest ruling, the Dems in Wisconsin have been unusually restrained on such a big issue. In my opinion of course.
National groups including big labor seem to be taking it more seriously, however.
As I said, it's a big issue and likely will reviewed by SCOTUS.
"Although you might think so sometimes, I am not omnipotent."ReplyDelete
Please let me know when you are addressing matters where this is not the case.
The Plain Fact of the matter is neither the states, nor the Feds have the money.ReplyDelete
Rufus and the Organizer think we can just raise the money by raising taxes, but the result is more of the same:
Further hamstringing the economy resulting in LESS Revenue.
Calif is owned by the Public Unions.ReplyDelete
California spends 50 thousand dollars a year to house a prisoner.
Florida spends 26.
Private companies have submitted bids @ 23,000.
Jerry Browns response?
Release 40,000 felons and call for higher taxes!
Public Safety demands it, don'tca know!ReplyDelete
I'm having great luck with Internet Explorer 9.ReplyDelete
Faster than shit and not a memory hog.
Surfing was becoming impossible with IE 7, and I didn't like 8.
Son uses Chrome exclusively and says I should.
I'll give it a try one of these days.
Maybe we should engage in another war and see if 5 is our lucky number.ReplyDelete
OBAMA: WHAT WAR IN LIBYA?ReplyDelete
'No exchange of fire with hostile forces'...
Price tag projected to be $1.1 Billion this year...
NATO first to blink...
Obama is about as mediocre as they come. If he were white and from Texas he would be in the thirties in popularity.ReplyDelete
Job numbers coming up.ReplyDelete
employment flat, housing up.ReplyDelete
not much sign of a double dip. sounds like we are at a market bottom.ReplyDelete
If a frog had wings,ReplyDelete
it'd not bounce its' belly when it hops.
Does the Euro survive?ReplyDelete
That's the real question.
If the Euro does not survive, who benefits and who loses?
If the Euro does survive ...
Libya is not a war in which the US is actively involved, so says our Commander in Chief.ReplyDelete
That deal, in Libya, that's a Eurozone project.
Push back against the Islamic take over of Europe, that I've heard rumors about.
Euroopeon bombs explode in the Islamic Arc, daily. Not much counter-battery is seen or heard.
So much for Europe falling to the Islamic hordes.
Excepting the tens of thousands of Muslim refugees that have left Africa, for Europe.
AP ROME - Italy's interior minister is pressing his party's worry that NATO's bombing of Libya will drive even more refugees to Italian shores. Roberto Maroni's Northern League party is becoming a restless ally for Premier Silvio Berlusconi, ...
The Italian Interior Minister Roberto Maroni was speaking about this in Rome on Wednesday. His country is already burdened with more than 20 thousand refugees from the Libyan conflict.ReplyDelete
20,000 Muslim refugees in Italy, almost 10,000 Muslim refugees have moved into Turkey.ReplyDelete
ANKARA - Turkey called for Syria to immediately halt a violent crackdown on protesters and pass democratic reforms, in a meeting on Thursday between Turkish Foreign Minister Ahmet Davutoglu and a top Syrian envoy.
The crackdown, which Turkish Prime Minister Tayyip Erdogan has condemned as "savagery," has tested relations between the two countries, and Turkey has given sanctuary to some 8,900 Syrian refugees who have streamed across the border.
Syria, another facet of the civil war raging amongst the Muslims?ReplyDelete
By unleashing military power against mostly unarmed Sunni Arab and ethnic Kurdish protesters, Assad's regime, dominated by minority Alawites, a Shiite Muslim offshoot, has sharpened the region's ethnic and sectarian divisions.
Syrian crackdown fans sectarian flames
The Alawite-dominated Syrian regime's assault on mostly Sunni and ethnic Kurdish protesters has sharpened sectarian and ethnic divisions that may spill, along with refugees, into neighboring countries.
No, Q, it is your reading comprehension that is impaired. You just want to argue. Of course all those things affect the dollar. But, way the main thing affecting the Dollar (in non-crisis times) is trade balance.ReplyDelete
The Huge spike, yesterday, was reaction to crisis.
Reports are that the Weiner is about to resign.ReplyDelete
New York Robbed of a MayorReplyDelete
Rep. Anthony Weiner plans to resign from Congress in the wake of a "sexting" scandal with several women and lies he repeatedly told about it, a Democratic source with knowledge of Weiner's plans said Thursday.
What a freak!!ReplyDelete
Yeah, Doug, keep sucking on your $5.00 Saudi Oil over there in the islands.ReplyDelete
Q, says Saudi will take care of you.
I haven't even had my coffee yet, and I've gotta wake up to this bullshit.ReplyDelete
The scary part is that he would probably still get 40% of the vote.ReplyDelete
Prior weeks jobless claims Revised Up to 430,000.ReplyDelete
The situation sure would be different if we had followed General 'Rat and Supreme Commander Doug and rolled up Syria at the outset.ReplyDelete
Whole region hung in the balance then.
Ce La Vie, or whatever.
Weiner can remain married to the Muslim or find a dishwashing job.ReplyDelete
Hillary will advise she stand by her man.
Philly Fed Down 7.7ReplyDelete
employment flat, housing up.
Thu Jun 16, 08:31:00 AM EDT
not much sign of a double dip. sounds like we are at a market bottom.
Har de har har.
Please spend just a LITTLE bit of time perusing Doctor Housing Bubble dot com.
You will be disabused of your fantasies.
Foreclosures have been artificially restrained by lawsuits.ReplyDelete
That logjam is breaking up, and the flood of underwater properties will be hitting the market shortly.
The Shadow inventory is immense
It will be many years before Real Estate rebounds.
That will be proceeded by prices coming into balance with incomes..;
So, it's the Sunni that are being relocated, by the Shiite and Europeon military action.ReplyDelete
Hillary to Huma:ReplyDelete
Pull that Weiner out.
Huma promised Weiner a Hummer.ReplyDelete
The Phillie Fed was in the forties in March. That's when I said the economy died.ReplyDelete
In April it was down to 3.9 or somesuch, and May we're looking at Minus 7.7. (it comes out in June, but it's really a May number.)
Manufacturing was the "bright spot," and it's rolling over.
All scenarios that anticipate the downfall of Assad, however, depend on the Sunni-dominated army splitting, while Western military intervention such as in Libya is unlikely in Syria because of the regional risks.ReplyDelete
Analysts say the risks are high that Syria, an ally of Iran and Lebanon's Shi'ite Hezbollah guerrillas and with a sectarian and ethnic mix of Sunni, Kurdish, Alawite and Christians, could slip into war.
Syria, they add, can make trouble in the region by trying to incite another war between Hezbollah and Israel. Recent demonstrations on the Israeli-Syrian frontier, which had been quiet for 38 years, were encouraged by Syrian authorities in an attempt to broaden the conflict.
"The Syrians have their fingers in many pies. They have many levers to put pressure on their neighbors and create problems between Hezbollah and Israel, between Sunni and Shi'ites in Lebanon and the PKK (Kurdistan Workers Party) and AKP (Prime Minister Tayyip Erdogan's party) in Turkey," the diplomat said.
The 15-point decrease is the consumer expectations index’s biggest one-month drop since December 2008. The outlook over the past month deteriorated most among households making from $15,000 to $40,000 a year and among older Americans.ReplyDelete
“Working-class households indicated a growing dissatisfaction with the direction of the economy likely due to rising inflation and an elevated rate of unemployment,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “This group is likely experiencing the most difficulty in adjusting to the higher costs of necessities and the inability to draw on credit due to the relatively tight credit conditions that persist.”
Could have destroyed the Syrian armor, back in the day.ReplyDelete
Then folded the country into the Jordanian Kingdom, while splitting it into its' regional components, which would be more autonomous, similar to that of the Kurds in Iraq.
No, Q, it is your reading comprehension that is impaired.
"Oil drives the dollar."
"Oil is the prime mover."
"Oil is the only thing that can be used to make Accurate Predictions."
It would not be hard to find a dozen similar over the past six months.
It is your rhetoric, your words. There is no hedge or doubt in any of your statements. if you indulge in hyperbole, please do not accuse me of lack of reading comprehension when I take you by the words you speak not by what you think you are saying.
I must be getting old. These days I take a certain pleasure in relatively trivial events.
Dallas beats LeBron James and the 'best team money can buy' for the NBA championship.
Boston beats a thoroughly arrogant Vancouver team for the Stanley Cup and once again Canada fails to win the prize in the game they invented. Better yet, Don Cherry is ready to spit.
Anthony Weiner decides to resign.
Okay, let me dum this down as much as I can. By far, the largest factor in currency valuations is Trade Balance.ReplyDelete
The largest part of our hugely negative trade balance is Oil.
Thus, a 3, 4, 500% Rise in the price of oil has a very large negative affect on our trade balance, and thus "the strength of the dollar."
It's the little things alright. Moscow City Council approves magaloads through town. Counter demos planned.ReplyDelete
One World Cafe folk can't do anything about it, the wheels of American Industry move on.
Megaloads of oil industry equipment destined for Montana and the tar sands of Canada. They came up the Columbia and the Snake to the Port of Lewiston from Portland. Built in Asia.
I swear when you guys die you still be arguing this stuff in heaven, over in a corner, by yourselves, the transcendental values of otherworldly merchandise, the trade balance with Purgatory, imports from the Inferno, that sort of thing.ReplyDelete
(notice I put you both in heaven)
I think you have misplaced at least one of us. :)ReplyDelete
At least one.
The CEO of Cummins was on CNBC. Asked about the U.S. workforce, he basically said, "It' Crap." Lousy Math Skills. Lousy Science Skills. Aren't capable of operating modern machinery.ReplyDelete
He said they're going to hire 2,000 in the U.S. this year, but you could tell he wasn't looking forward to it.
Feinstein amendment to end the Ethanol Tax Credit, and tariff on imported ethanol passes 73-27ReplyDelete
No more whining about "subsidized" ethanol, buckos.
ALERT TO MELODY AND QUIRKReplyDelete
Vote For Your Sexiest Vegetarian Celebrities Here
Action alert from PETA.
Though I don't know what she looks like, I kinda like the name Robin Quivers among the female entries.ReplyDelete
Kinda Shakespearean, that Robin Quivers.
Here's Robin QuiversReplyDelete
She got my vote.
Good God, what the fuck was that?ReplyDelete
Warn us when you do shit like that.
Just in case you're keeping score:ReplyDelete
Oil/Gas Subsidies - firmly in place
Ethanol Subsidies - No More
I posted an article about the coming "Magaloads" several months ago.ReplyDelete
Farmer Bob had no comment.
Probly was quoting The Bard.
Or diddling MLD, Weiner-Style.
Time shall tell who will burn in Hell.
(I'm a poet, don'tcha know it.)
Baucus Not Ending Oil Subsidies but Implementing Tax HikesReplyDelete
Senator Max Baucus (D–MT) isn’t shy about picking winners and losers.
Last December, he led the charge to keep in place a subsidy of $6 billion per year to the ethanol industry. Now he’s picking the oil and gas industry as losers by proposing to eliminate subsidies for big oil and using the increased revenue to subsidize a different set of political winners. Baucus would provide even more incentives for more fuel efficient vehicles and alternative energy fueling stations.
But what Senator Baucus labels as an oil and gas subsidy is not an oil and gas subsidy. Baucus proposes removing the tax deduction under Internal Revenue Code Section 199 for oil and gas and reducing a tax credit for royalty payments U.S. companies pay to foreign governments. These policies are broadly available and are not specific tax breaks for oil gas producers. Repealing or reducing these tax deductions for the oil and gas industry would be a punitive, targeted tax hike that would likely reduce supplies and increase prices in the years ahead by discouraging investment in domestic production of oil and natural gas.
The domestic manufacturing tax deduction that oil and gas companies receive is a general tax deduction that goes to all domestic manufacturing. Producers of clothing, roads, electricity, water, and many other goods produced in the United States are all eligible for the manufacturer’s 9 percent tax deduction. EA Sports receives the deduction to make the Madden video games. Even Hollywood and The New York Times receive the 9 percent deduction. In fact, Congress already imposed a tax hike for oil and natural gas companies by freezing the deduction at 6 percent for just that industry. Eliminating the tax deduction entirely for oil and gas would clearly be an even larger, industry-specific tax hike. If anything, Congress should make the deduction available to all domestic production activities.
The foreign tax credit is a critical feature of the worldwide tax system that prevent the U.S. corporate income tax from double taxing and thereby further crippling the international competitiveness of U.S. companies. Foreign tax credits are not unique to the oil industry, so the Baucus proposal is just another punitive, targeted tax hike.
Baucus’s proposal would significantly increase taxes paid by U.S. oil and gas companies competing abroad, subjecting more U.S. foreign income to double taxation and severely undermining their ability to compete abroad and grow at home. Instead, Baucus should be advancing the competitiveness of all American companies and workers by proposing to eliminate the U.S. tax on foreign source income.
Sadly, the Montana Senator wants to use taxpayer money to invest in more fuel efficient vehicles and alternative fuel vehicle infrastructure. The press release on the Senate Finance Committee is headlined, “Baucus Unveils Plan to End Tax Breaks for Largest Oil and Gas Companies, Invest in Cleaner, Cheaper American Energy.”
This raises the question: If it’s cheaper, why do you need taxpayer money to invest in this energy? With gas prices as high as they are, if these alternate sources of energy need the government’s crutch, there’s a good chance they’re not going to help the American consumer. Economic alternatives to gas-powered vehicles will reach the market when they’re cheaper without government intervention. Such alternatives are not new technologies, nor are they cheaper. Stop trying to force them into the marketplace.
We need oil, and we can ramp up production quickly in areas like the western Gulf of Mexico, where production has dropped nearly one-third of a million barrels since last April. Increasing the supply of oil can help offset rising demand, and it can be a huge boon for the American economy
"These policies are broadly available and are not specific tax breaks for oil gas producers. Repealing or reducing these tax deductions for the oil and gas industry would be a punitive, targeted tax hike that would likely reduce supplies and increase prices in the years ahead by discouraging investment in domestic production of oil and natural gas.ReplyDelete
The domestic manufacturing tax deduction that oil and gas companies receive is a general tax deduction that goes to all domestic manufacturing. Producers of clothing, roads, electricity, water, and many other goods produced in the United States are all eligible for the manufacturer’s 9 percent tax deduction. EA Sports receives the deduction to make the Madden video games. Even Hollywood and The New York Times receive the 9 percent deduction. In fact, Congress already imposed a tax hike for oil and natural gas companies by freezing the deduction at 6 percent for just that industry."
Mississippi Agitprop Sound-Byte Man notwithstanding.
No, what happened is Saudi Arabia, Kuwait, UAE, Nigeria, and the rest quit calling them "royalties," which they are, and starting calling them "income taxes," (which they're not,) so the oil companies could "Credit" them off their U.S. Taxes.ReplyDelete
It worked pretty well, since U.S. Major Oil Companies basically don't pay any U.S. Income Tax (if you'll look closely at their statements, they specify "income taxes," NOT U.S. Income Taxes.
In any case, ALL the Oil Company Tax Credits, Allowances, and Subsidies are still in place.
And, the Ethanol Subsidy is history.
Enjoy that $5.00 Gasoline, Pineapplehead.
As soon as This recession is over, it will get worse.
Your side won, Doug. Be happy.ReplyDelete
Have a Mai Tai.ReplyDelete
Saudi Arabia's going to send you some more oil. Any day now.
Q told me so.
Your link doesn't work, Bob.ReplyDelete
Everything explained in under two minutes.
It's that simple folks!
Moveon.org just told me so :)
Reich is Right.ReplyDelete
As far as he goes, anyway.ReplyDelete
This comment has been removed by the author.ReplyDelete
Anyone who would quote the Heritage Society as an unbiased arbiter on anything associated with big business and taxes is obviously a troubled GOP'er or on his third pina colada.
I find it amusing that Heritage, as part of their argument for the US to maintain huge subsidies to the oil companies, argues that subsidies are actually bad for alternative energy. Where is the consistency?
More libertarian and GOP pushing for lower taxes at whatever cost.
Once again, Heritage brings up the canard of the US having the highest income tax rate in the world. The government has itself reported that in 2005, when things were going pretty good, a full 25% of the countries largest companies paid no income tax. A full majority, in fact, most of the companie paid a lower tax rate than the average American. The 'tax rate' is meaningless. It is the 'effective tax rate' that counts.
Paul Ryan in his budget argues for deep cuts in programs to help the deficit; but then proposes signigicant tax cuts at the same time. And how does he propose to pay for them? Through cutting loopholes. One can imagine what those loopholes will be. The deduction on homes, the deduction on charitable contributions, etc. You know the deductions that would effect you and me. Cutting business deductions? You've got to be kidding. They have gone on record against cutting subsidies to big oil. Do you really think they would cut deductions for their other business interests?
Don't get me wrong. I am no fan of Baucus, His bill went so far and merely benefitted his chosen constituency just like any other pol. In my opinion, all loopholes and deductions, yes I said ALL, should be cut which would allow for a flatter and likely lower 'real' income tax rate.
What Ryan and the GOP offers is the same as the Dems offer in their budgets, more pie in the sky, words to quiet the peasants.
"Cutting Loopeholes", almost as ubiquitous as the infamous billions in savings projected from cutting "fraud and abuse". The problem is it just never seems to happen.
And despite decades of evidence showing this stuff as mummery, there are still those suckers who buy it.
Kindly, someone tell ol' Bob, who simply doesn't follow such things, stewing about the wolves, and thinking bout such small mattes as life after death, the nature of reality, and other such frivolous issues, just what are the 'subsidies to big oil' and etc.ReplyDelete
If you drill a well, and it comes a crapper, you write off the cost of the operation, the machinery and such. Just how are we subsidizing big oil, and what are the 'tax loopholes' that are talked about?
The GOP has been spouting the 'lower taxes' mantra since the days of Reagan. They argue that lower taxes are good for the economy, jobs, and revenues. They cite certain periods as evidence. Yet, it is just as easy to find and point out periods of rising taxes when the economy was humming and job increases and revenues were just as good or even better.
The GOP's lower tax mantra is built on philosophy not facts. It's popularity can be traced back to the days of Reagan when Art Laffer, sitting around after his second martini at lunch, drew a diagram of the normal curve on a cocktail napkin and called it the Laffer Curve, a pretty much meaningless illustration of a common sense idea that has limited applicability for the purposes he proposed.
Laffer said that the curve represents that the less the tax rate the more money people have for investment, a common sense statement. Unfortuately, he then went on to hypothesize that the curve proves, therefore, that lower taxes result in more employment from the additional investment and that lower taxes actually result in higher revenues. What could be more simple? And the intellectually challenged bought it.
First of all, the curve itself is meaningless since at the extremes you would either have no activity since all profits would go to taxes or on the other end chaos since there would be no government to take care of essential services.
And even though you truncate the curve, there is no way to know where on the curve is the optimal level of taxes to achieve the most revenue. In fact, given the complexity of our economy there probably is no optimal, it is always changing depending on circumstances.
But to the idealogues it is simple and an easy way to illustrate and promote their philosophy to the untutored.
Bob, google "oil depletion allowance." Yes, it is still operable.ReplyDelete
Also, $13 Billion for Deep-water Drilling.
Also, my comment, above, re: Royalties = Income Taxes.
Of course, that $150 Billion + that we spend guarding the oil patch in the ME shouldn't be sneezed at, either.
Reagan was a Johnny come lately, Quirkcus:ReplyDelete
JFK didn't need Laffer to understand that confiscatory tax rates are counterproductive.
You simpletons seem to think a one dollar increase in the "effective rate" always brings one dollar in additional revenue.
As if we live in a static World where decisions are not made about how to spend one's time when taxes reach 94%!
One of JFK's key economic plans included massive, across-the-board tax cuts, similar to those of Reagan. It was these tax cuts that led to the Golden Kennedy-Johnson years.
Pro-tax lobbyists claim that Kennedy's tax cuts were significantly different than the tax cuts of Reagan, and the proposed tax cuts of Bush.
They claim that Kennedy's tax cuts benefited low-income families, while Republican tax cuts only benefit the wealthy. On the contrary, they are quite similar. To an extent, Kennedy's tax cuts benefited the upper and upper middle classes even more. By the time Kennedy took office, the top income tax rate had reached 94%. Kennedy originally asked for it to be reduced to 65%, but Congress slashed this down to 70%.
During a speech, JFK stated, "the current tax system exerts too heavy a drag on growth …reduces the financial incentives for personal effort, investment and risk taking." Without a question, it is mostly the middle and upper classes that undertake risky purchases and investment.
As expected, the tax revenue from the top 1%, the top 5%, and top 20% surged as a result of income growth from the tax cuts. Tax revenue from the rich increased from almost 12% in 1963, to 15% by 1966.
Reagan picked up where Kennedy left off, slashing the highest tax rate from 70% down to 50% as part of his Economic Recovery Tax Act of 1981.
His plan cut taxes across-the-board by 25% - this was not a tax cut solely for the rich.
The top tax rate was further lowered to 28% in 1986. What resulted was the largest peacetime expansion in the history of the United States, and record lows for inflation and unemployment. Income tax revenue soared 16.3% from 1982 to 1989. Kennedy's own words concur this: "It is a paradoxical truth, that tax rates are too high today, and tax revenues are too low, and the soundest way to raise the revenues in the long run is to cut the tax rates".
No doubt if Kennedy had raised the Rate from 94% to 100%, the Feds would have been innundated with revenue from the surging economy.ReplyDelete
In the fevered minds of the simpleminded, at least.
Let'a Regulate and Tax our way to prosperity!ReplyDelete
Re-Elect the Organizer in 2012!
You just wait:ReplyDelete
Thousands of pages of additional regulations and more rules and regs from unelected "Health Panels" will bring new levels of efficiency to our health care systems.
Jeeze, how fucking STUPID do you have to be to believe that?
Rufus level stupid.
Doug, the government is confiscating 15% of GDP.ReplyDelete
The Richest (or 2nd richest, depending on what particular day) Man in the World pays 17.2% effective tax rate.
As he has said, many times, his Secretary pays almost twice the effective rate as he does.
GE didn't pay any U.S. Taxes last year. Exxon didn't in 2009 (no one's published their taxes for 2010-2011.)
American Corporations have over $2 Trillion sitting in offshore accounts (where it will stay,) because to bring it home would mean paying taxes on it.
We lose not only the taxes, but the Investments that might have been made with that money.
12,000 People, with incomes over $200,000.00 filed, but had NO Tax Liability last year.
The effective tax rate on U.S. Corporations, so far this year, is 5%.
We have another deficit in the $1.3 Trillion, range.
And, you think we should "Lower" Taxes?
Oh, in the last poll in Massachusetts (which I linked to here,) Romneycare's approve/disapprove rating is up to 63/21.ReplyDelete
And, it's increased their State Budget by 1%.
3 to 1, Bubba
I don't guess any of those crazy right wing blogs that you read mentioned that never in our history have we had tax collections for two years in a row come in as low as 15%, did they?ReplyDelete
As if we live in a static World where decisions are not made about how to spend one's time when taxes reach 94%!
One of JFK's key economic plans included massive, across-the-board tax cuts, similar to those of Reagan. It was these tax cuts that led to the Golden Kennedy-Johnson years.
Absurd is the operative word here Dougo. You say that the Kennedy cuts were similar to Reagan's and project from that that more tax cuts now would be a good thing.
I already stated that confiscutory tax rates at 94% were counterproductive. That is, if they were being paid. Like today, most weren't.
With regard to Reagan, he cut taxes in 1981 and 1986 bringing the top rate down to 28% from 70%. However, you seem to forget that he also raised taxes. The payroll tax increase was a huge tax on the middle class. However, I give Reagan credit for walking the walk. Under Reagan two bills passed in 1982 and 1984 that amounted to what some call the "biggest tax hike in peacetime" ever.
Under Reagan, 'base broadening' was instituted when he reduced tax breaks and closed loopholes. The tax hikes he instituted with base broadening pretty much offset the tax decreases he instituted.
Ronnie was a pragmatist. He understood you have to pay the bills somehow. He cut spending but he also knew revenue was important.
But that was Ronnie. Looking around I don't see many Reagans out there in public life today.
As for simpletons, you seem to assume that tax cuts inevitably lead to more jobs, higher GDP, and more revenue. You accept it on faith. This in spite of evidence to the contrary.
Bush provided one of the biggest tax cuts in history inordinately skewed mostly to the wealthy 'producing class'. Yet over his term, the economy only generated 8 million jobs. That doesn't even meet the bogey economists set for keeping up with the growth in the working age population. Half the jobs that were created were created overseas.
The Bush tax cuts have continued and Obama has cut even more. Now the GOP wants to cut even more. And what has it done for us? Tax revenues actually dropped.
The Kennedy tax cuts pointed out the absurdity of having tax rates set at the confiscatory level. The current GOP strategy points out the absurdity of pushing tax rates to the other extreme.
The useful tools buy into it. Frankly, my friend, I would be careful throwing around terms like simpleton.
In today's GOP caucus, Reagan would have been considered a RINO for his policies even if no one actually had the guts to say it.
Taxes revenues are low because SPENDING as a percentage of GDP has surged to over 25% scaring the crap out of everyone with a stake in the future.ReplyDelete
Oh, and a brain, but I forgot...
Somehow we got by for 40 plus years spending around 18 to 20 percent of GDP.ReplyDelete
Obviously present spending levels bring unprecedented prosperity...
...and similar raises in taxes to "balance the budget" will just bring more riches and joy.
Reagan's Big Government has shrunk under the influence of the draconian cuts of the Radical Right that is today's GOP.
La la land.
I love it when everybody calls everybody else an idiot.ReplyDelete
You seem to forget Dougo, that it was Reagan who initiated Reaganomics and supply-side economics. It was Reagan who paid for his spending by the social security 'fix' when he upped payroll taxes and then put those taxes in the general fund in order to pay for his deficits.
It was Bush and the GOP, most of which are still in Congress in leadership roles that started us off with the escalating rise in government size and debt. Ever heard the term, "emergancy appropriation bill"? It was Bush and these same GOP dicks who decided you could fight a war without paying for it. Now they complain about the Dems doing the same type things. The hypocrisy is palpable.
More tax cuts? What have the tax cuts over the past 10 years done for us?
Please tell me. have they created more jobs? I mean jobs here not overseas. Have they increased revenues? Have they assured a smooth running economy? have they increased GDP over say the Clinton years. And the regulations you complain about. Bush sure cut regulations. And how did that turn out?
Obviously present spending levels bring unprecedented prosperity...
Once again you bring up a non-sequiter. The conversation was about taxes. No one argues that spending doesn't have to be cut.
The Dougo Creed, if you can't win one argument try talking about something else.
<a href='http://cleantechnica.com/2011/06/16/wind-power-in-europe-more-reliable-than-nuclear-power-in-japan/">Neat Little Video about Windmills</a>ReplyDelete
My very very favorite tax is the capital gains tax on real estate. Just love it!!~ReplyDelete
A tax on the passage of time, very creative tax.
The mere passage of time gets taxed.
Time, one of our modes of perception, which the physicists like Eiinstein, and guys like Kant too, say doesn't really exist. :)
I'm getting taxed on space too, and on buildings, and I pay the State of Idaho 6 or 7% of whatever I pay Uncle Sam. And if I have a smoke or drink to relax, and try to forget about taxes, I'm taxed on that too.
So far they've gotten Zero outta ol' bobo on the time tax cause he ain't giving nuttin' to Uncle Sam he don have to.
1031 escape hatch.
Which keeps me from selling something and actually buying something I want, like, say, a jet boat, which would of course be highly taxed.
This grown man cries.....weeps....