Thread: 2012 election predictions

Originally Posted by Roosveltrepub

The problem is the common sense view that someone making 20 million a yr paying a 14 percent tax rate and proposing changes to the tax code that cut his rate further reflects an unfairness in the code.

Common sense? It's the stuff of urban legend.

Saying that it is unfair for Romney to pay only 15% of his AGI in taxes while someone who earns millions less pays 25%, is fine, but the question of fairness still remains unsettled. It takes more than a comparison of rates to decide fairness. Forget rates for a moment. If I paid $1,000 in income taxes last year and he paid $6.5 million, he paid 6500 times more than me. Is that fair? See, I can be absurd too.

Originally Posted by tgbyhn

Aren't the interest rates in the US in large part decided by the Fed? What happens if foreign countries don't wish to purchase our debt? Or sell it off in droves?

The interest rate on US treasuries are determined by supply and demand. The Fed sets interest rates on money banks borrow from it overnight. Two different animals.

I'd like to get my hands on your crystal ball.

I'd like to get my hands on your butter churn.

Originally Posted by JAD_333

Common sense? It's the stuff of urban legend.

Saying that it is unfair for Romney to pay only 15% of his AGI in taxes while someone who earns millions less pays 25%, is fine, but the question of fairness still remains unsettled. It takes more than a comparison of rates to decide fairness. Forget rates for a moment. If I paid $1,000 in income taxes last year and he paid $6.5 million, he paid 6500 times more than me. Is that fair? See, I can be absurd too.

That's why people invented %. Not to compete who can be more absurd

I am not following all this Romney thing (we have enough scandals over here).

He was taxed 14% or his companies were taxed 14%? Is it against the law? Is it higher rate then those making same...

Are you confident there are convincing mathematical models/arguments for current levels of spending, beyond partisan post-hoc analysis? I'd love to see these models.

kurgman did a back of the envelope calculation even prior to the stimulus, and called it woefully insignificant on 9 Jan 09:

Stimulus arithmetic (wonkish but important) - NYTimes.com

Op-Ed Columnist - The Obama Gap - NYTimes.com

these multipliers aren't considered partisan: the CBO referenced similar numbers when doing their assessment, years later.

So, foreign loans do not constitute invisible imports/exports?

1.) not all US public debt is foreign, 2.) holding treasury bonds over x years do NOT work the same way as imports/exports, 3.) how the loaned money is spent also influences future GDP growth, 4.) how nations borrow differ from how individuals borrow-- nations have for all intents and purposes an infinite lifetime.

Show the growth in the US economy that $5 trillion in deficit spending has created.

so much conflation here. 1.) not all the spending we've done is "deficit spending" in response to the crisis; in terms of fiscal policy, there were only two major policies that directly addressed the recession, ie TARP (which stopped the financial panic) and obama's stimulus-- a significant portion of went to the states as aid, and another portion of which were tax cuts. the direct federal spending was only a portion.

read the CBO assessment of the stimulus activities alone.

Congressional Budget Office - Economic Stimulus

moreover, public deficit spending is what enabled demand (thus continued economic growth) even as private spending went down to pay off existing debt (see falling private debt levels).

http://krugman.blogs.nytimes.com/201...ransformation/

So your position is that current levels of deficit spending are sustainable (and good policy), and we're not facing serious issues with regards to unfunded liabilities?

strawman, again.

current levels of deficit spending are, in the LONG RUN, not sustainable. unfunded liabilities are serious...also, in the long run.

however, in the short-medium term, the US has -very- considerable ability to borrow at historically-low costs, first to stimulate the economy and second to promote long-term GDP growth that will help deal with the debt problem.

thus my previous post to JAD, advocating for another immediate round of stimulus paired with equally substantial cuts to unfunded liabilities such as medicare or SS, to be automatically enacted once identified economic conditions are met.

How much debt is sustainable? $30 trillion? $40?

this depends on the structure of the debt, for instance, japan's debt is at 226% of GDP but this has little fiscal impact. the US currently is at 110%, and in terms of developed countries the US is middle of the pack.

thus, nothing i've seen indicates that the deficit is at such crisis levels that we need to worry about this more than, say, unemployment.

What happens if foreign countries don't wish to purchase our debt? Or sell it off in droves?

higher interest rates. however, there is absolutely no indication this will happen, as doing so inflicts considerably more harm on the country doing this than to the US.

No - not all government borrowing is from foreign sources. A substantial portion of it is.

You cited Japan's 226% debt to GDP ratio - has that borrowing done Japan a lick of good? The Japanese government has pumped enormous amounts of money into the economy - and accomplished nothing. The unemployment rate has doubled over the last 20 years (a consistent, steady increase). Japan has thrown stimulus package after stimulus package ad infinitum. Killing the Japanese economy. They may as well be chucking snowballs at a bonfire.

An excerpt from Mr. Cochrane's (UChicago economist) writing on the subject (US stimulus) - the entirety is definitely worth a full read:
Fiscal Stimulus, Fiscal Inflation, or Fiscal Fallacies?

The central question is whether fiscal stimulus can do anything to raise the level of output. The question is not whether the “multiplier” exceeds one – whether deficit spending raises output by more than the value of that spending. The baseline question is whether the multiplier exceeds zero.

http://faculty.chicagobooth.edu/john...rs/fiscal2.htm

Taking a look at Mr. Taylor's (Stanford economist) "An Empirical Analysis":

In sum, this empirical examination of the direct effects of the three countercyclical stimulus packages of the 2000s indicates that they did not have a positive effect on consumption and government purchases, and thus did not counter the decline in investment during the recessions as the basic Keynesian textbook model would suggest. Individuals and families largely saved the transfers and tax rebates. The federal government increased purchases, but by only an immaterial amount. State and local governments used the stimulus grants to reduce their net borrowing (largely by acquiring more financial assets) rather than to increase expenditures, and they shifted expenditures away from purchases toward transfers.
Some argue that the economy would have been worse off without these stimulus packages, but the results do not support that view.

http://www.stanford.edu/~johntayl/JE...al%20Pages.pdf

Mr. Barro (Harvard economist) wrote:

“In the long run you have got to pay for it. The medium and long-run effect is definitely negative. You can’t just keep borrowing forever. Eventually taxes are going to be higher, and that has a negative effect,” he said.

“The lesson is you want government spending only if the programmes are really worth it in terms of the usual rate of return calculations. The usual kind of calculation, not some Keynesian thing. The fact that it really is worth it to have highways and education. Classic public finance, that’s not macroeconomics.”

Turning to the $600bn (£373bn) to $800bn US package, he added it was “mainly a waste of money”. Stimulus programmes, he said, offer little more than “rearranging the timing” of economic growth. “Possibly you could make an argument that it’s worth it. But it’s going to be a negative-sum thing overall, so you have to think it’s a big benefit for boosting the recovery.” [...]

Mr Barro argued that, taken over the long term, for every £1 spent, the cost to the economy will be more than £1 – creating what he called a negative fiscal multiplier. Orthodox thinking is that current stimulus programmes have a positive multiplier effect by creating growth.

Fiscal stimulus doesn't work, claims Harvard economics professor Robert Barro - Telegraph

Even the CBO is backpedaling on its initial rosy assessments of the "positive" impact of the stimulus package.

Originally Posted by Doktor

That's why people invented %. Not to compete who can be more absurd

Just fractions in whole numbers.

I am not following all this Romney thing (we have enough scandals over here).

It's not a scandal. It's hot air.

He was taxed 14% or his companies were taxed 14%? Is it against the law? Is it higher rate then those making same...

Those were his personal income taxes. They appear to be legitimate. His rate was lower than some and higher than others. His were capital gains taxes mostly. We tax those lower to encourage people to make long-term investment. Those are the basics.

The political issue is, is Romney too wealthy to be a good president.

Originally Posted by tgbyhn

No - not all government borrowing is from foreign sources. A substantial portion of it is.

You cited Japan's 226% debt to GDP ratio - has that borrowing done Japan a lick of good? The Japanese government has pumped enormous amounts of money into the economy - and accomplished nothing. The unemployment rate has doubled over the last 20 years (a consistent, steady increase). Japan has thrown stimulus package after stimulus package ad infinitum. Killing the Japanese economy. They may as well be chucking snowballs at a bonfire.

An excerpt from Mr. Cochrane's (UChicago economist) writing on the subject (US stimulus) - the entirety is definitely worth a full read:
Fiscal Stimulus, Fiscal Inflation, or Fiscal Fallacies?

http://faculty.chicagobooth.edu/john...rs/fiscal2.htm

Taking a look at Mr. Taylor's (Stanford economist) "An Empirical Analysis":

http://www.stanford.edu/~johntayl/JE...al%20Pages.pdf

Mr. Barro (Harvard economist) wrote:

Fiscal stimulus doesn't work, claims Harvard economics professor Robert Barro - Telegraph

Even the CBO is backpedaling on its initial rosy assessments of the "positive" impact of the stimulus package.

None of those excerpts address the question of whether redirecting revenues from some government programs to a massive infrastructure renewal project would benefit the economy.

First off, perhaps the posts talking about the federal budget, government spending, QE, stimulus, et. al. should be spun off to a separate thread? It seems it's become a quite separate issue from "2012 election predictions" and the Republican primaries/caucuses.

But what? Slashing SS and Medicare and spending it on highways and high-speed internet?

Hypothetically - reform of those those entitlement sectors would be great - but they always prove to be a third rail.

I'm very critical of stimulus and Keynesianism in general (a la the 2009 stimulus, 20 years of Japanese stimuli).

I don't mean to be Captain Obvious here - but the problem with social security is not so much that it was an intrinsically flawed model as it is the government spent the surplus to fund deficit spending for over 70 years. But I suppose we're neither here nor there - we blew it, we spent every dollar of the social security surpluses. The SSA has been left with a few trillion in checks/IOUs they can't cash. And now we face a major problem.

I don't see any realistic efforts in the near or medium term to tackle the issue besides broadening the base and perhaps upping the rate.

How about lowering income taxes up to $106,800 and the corporate tax rates by both 2.5% across the board, respectively, for a 5% increase (combined employee/employer) in the SS/Medicare/Medicaid withholding rate while continuing payments and their increases according to the current model for a few years while coming up with a sensible plan? It's a bit of arithmetic magic, but which could be passed off politically and to the electorate as an "even swap".

Currently we don't even take in enough in payroll taxes to pay for mandatory SS/Medicare/Medicaid expenditures. It would at least stabilize revenues to meet expenditures for that part of the budget, and it would reduce the deficit to the point where infrastructure spending could be considered.

Originally Posted by tgbyhn

The last couple of Florida polls over on RCP have Newt at +5 and tied with Romney, whereas a couple immediately after SC had Newt at +8 and +9 over Romney.

And Romney leaps to +2 over Gingrich in the latest poll from CNN.

RealClearPolitics - Election 2012 - Florida Republican Presidential Primary

My $0.02

Personally I consider Gingrich to be unelectable. And Romney veering close to it. (I'm predicting Romney on the Republican ticket.)

So, despite historical precedents that basically predict an Obama defeat in 2012. I'm calling this one for Obama.

Originally Posted by TopHatter

My $0.02

Personally I consider Gingrich to be unelectable. And Romney veering close to it. (I'm predicting Romney on the Republican ticket.)

So, despite historical precedents that basically predict an Obama defeat in 2012. I'm calling this one for Obama.

Last election, I got about ten people out to cast votes for McCain who weren't going to vote in the election otherwise (not including three that came with me to the caucus), regardless of my personal views as to how it would turn out. Five or six for Bush in '04. I suppose if I can this time around, I'll do the same for Romney. That's my basic attitude as far as elections go. Set aside my perceptions and convince 5 or 10 people of the worthiness of voting for a candidate, and get them to cast their votes for said candidate.

Unfortunately too many people resign themselves to a perception and don't even go out themselves.

That all being said - Republican chances look good as it stands now. Too early to call the election.

Originally Posted by tgbyhn

That all being said - Republican chances look good as it stands now. Too early to call the election.

tgb, it's definitely early but unless something catastrophic happens to Obama (a la Jimmy Carter and Operation Eagle Claw for example), the Republicans simply don't have somebody that can and/or will energize their voter base or sway the independents that are otherwise casting a wary and suspicious eye on the guy they put into office 3 years ago. They simply don't have an all-star to throw against the Messiah.

It's not so much that Obama will win as the Republicans will lose.

I'm going to wait until I see voter turnout in the upcoming primaries/caucuses before coming to a decision on whether the Republican base is "energized" or not. Especially independent/moderate turnout in the open primaries.

The latest polls have Romney ahead in North Carolina, Florida, Virginia, New Hampshire, and Missouri. Swing Ohio, Romney wins.

Originally Posted by tgbyhn

The latest polls have Romney ahead in North Carolina, Florida, Virginia, New Hampshire, and Missouri. Swing Ohio, Romney wins.

Agreed, as I said I think Romney has the nomination. It'll be interesting to see who he picks for VP.
Hopefully he'll do a better job than McCain. That was simply painful all around.