Didn't Conservatives staple teabags to their faces because of this very thing?

[LV426]

A tax cut made people save less and go farther in debt? How does that work?

Simple: The increase in medical costs and education costs was not balanced 1:1 by the nominal increase in after-tax income.

So great, so you increased after-tax income with a tax cut, but the pace of education and health care costs rising was greater.

So that's how people ended up in debt after a tax cut.

Mortgage Equity Withdrawals were the only thing that was driving Bush's economy. So people were borrowing against the value of their homes to send their kids to college, and/or pay medical bills. How do you reconcile this with the supposed economic benefit of a tax cut:



Whaddya know? Cutting taxes doesn't increase revenues...it just increases debt.

How can it be that the Bush Tax Cuts increased after-tax income, yet the economy grew because of borrowing against the value of their homes?

Now, what does that have to do with the deficit reduction that happened in 2013?

 

[LV426]

Think how little they would save and be even farther in debt if they had less income!!

Why do you think the chart shows growth in household debt at the start of tax cuts?

The problem is that you cut after-tax income, which cut revenues, which resulted in spending cuts, which increased costs for middle class folks.

The best example of this is what happened in Kansas; they cut taxes in 2012, their surpluses were erased, to pay for that tax cut, they cut education spending, so the State Board of Regents in Kansas had to raise tuition costs, which raised borrowing costs, in order to make up for the loss of revenue thanks to the tax cut.

So, they cut taxes, which results in less revenues, which results in less spending, which results in more borrowing, which results in higher debt levels.

 

[LV426]

It is very bad faith on your part to ignore the fact that the federal debt was affected by the recession which was not caused by the tax cut.

Ah, but the Bush Tax Cuts did cause the 2007-9 recession, and I'll show you how:

First, you have Bush campaigning in 2004 on his tax cut being responsible for the growth of Housing. Now, remember the year "2004" because it's going to be important after this quote:

Bush Ties Policy to Record Home Ownership
Touting his tax cuts as the economy's savior — and pointing to the strong housing market as proof — Bush said "more people own their own home now than ever."
https://www.foxnews.com/story/bush-ties-policy-to-record-home-ownership

Got that, Flash?

OK.

Then, you have Bush's Working Group on Financial Markets and The Federal Reserve both say the cause of the turmoil was the reduction of lending standards for subprime loans, beginning in 2004 and extending through 2007:

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”
http://www.treasury.gov/resource-cen...s update.pdf

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf

So...Bush's tax cuts were growing a housing market that Bush's own people (and the Fed) said was responsible for the collapse.

 

[Flash]

Why do you think the chart shows growth in household debt at the start of tax cuts?

The problem is that you cut after-tax income, which cut revenues, which resulted in spending cuts, which increased costs for middle class folks.

The best example of this is what happened in Kansas; they cut taxes in 2012, their surpluses were erased, to pay for that tax cut, they cut education spending, so the State Board of Regents in Kansas had to raise tuition costs, which raised borrowing costs, in order to make up for the loss of revenue thanks to the tax cut.

So, they cut taxes, which results in less revenues, which results in less spending, which results in more borrowing, which results in higher debt levels.

You have been yelling (like you are concerned) about the increasing deficits. The reason for those deficits is that the federal government continues to increase spending even if revenues decline. They don't cut spending, they just borrow more money and increase the debt. Household savings and debt were not caused by federal tax cuts.

I don't know much about Kansas, but most states are required to have a balanced budget which requires spending cuts is revenue declines--not so for the federal government. That is a bad faith comparison on your part.

Plus, the trend in household debt and savings were long term trends that were trending in the same direction long before the Bush-Obama tax cuts--even during the 1990's when you told us the Clinton tax increases created the strong economy. You are telling us tax increases also cause household debt to increase and savings to decrease.

 

[Flash]

Simple: The increase in medical costs and education costs was not balanced 1:1 by the nominal increase in after-tax income.

So great, so you increased after-tax income with a tax cut, but the pace of education and health care costs rising was greater.

So that's how people ended up in debt after a tax cut.

The tax cut was federal income taxes. The cost of education and healthcare are not determined by federal income tax revenue. Most (94%) education is a state issue not affected by federal income revenue and most health care costs are private.

So the increased cost of education (which would only affect parents with kids in college) and medical care might not have kept pace with after tax income, but they are not related. If anything, the increased after tax income due to the Bush-Obama tax cuts provided more after-tax income to pay their debts, not less.

 

[LV426]

You have been yelling (like you are concerned) about the increasing deficits.

Flash, you're fucking up again...you're not listening to me.

I said that my concern isn't the deficit, but Conservatives posturing over the deficit.

I've said this at least a dozen times now, and every time you either ignore it, or you are willfully blind to it because you have a bad faith narrative you want to push (all sides are the same) and my statements run in conflict with that.

So why are you acting so dishonestly?

 

[LV426]

The reason for those deficits is that the federal government continues to increase spending even if revenues decline.

Spending increased by 32% during Clinton, yet the deficit was erased and Clinton handed Bush the Dumber a $127B surplus in 2001.

So explain that.

 

[LV426]

Household savings and debt were not caused by federal tax cuts.

Yes, they very much were.

The tax cuts reduced revenues, which produced deficits, which resulted in spending cuts...particularly in areas like health care and education...costs that are localized to communities.

 

[LV426]

I don't know much about Kansas, but most states are required to have a balanced budget which requires spending cuts is revenue declines--not so for the federal government. That is a bad faith comparison on your part

How is it bad faith, Flash?

I showed you exactly how tax cuts result in household debt.

I took you through an example.

You simply brush that aside because...because...it ruins the narrative you've been constructing and coddling.

 

[LV426]

Plus, the trend in household debt and savings were long term trends that were trending in the same direction long before the Bush-Obama tax cuts

So...you don't seem capable of reading a chart.

See how there are spikes to the growth of household debt? To what do those spikes all correspond? I see a big spike in the mid-80's, and a bigger spike in 2001. Now, what does that correspond with? TAX CUTS.

 

[LV426]

even during the 1990's when you told us the Clinton tax increases created the strong economy

Which they did, and which household debt barely grew, and actually slightly declined toward the end of the decade.

You are telling us tax increases also cause household debt to increase and savings to decrease.

Can you read a chart? No? Shocking.

 

[LV426]

The tax cut was federal income taxes. The cost of education and healthcare are not determined by federal income tax revenue.

Pell Grants, Student Loan Rates, and Medicaid isn't determined by federal income tax revenue? They're all federal spending. Medicare too.

Most (94%) education is a state issue not affected by federal income revenue and most health care costs are private.

1. 65 million people are on Medicare.
2. 30 million people are on Medicaid.
3. Pell Grants are a federal program.
4. Federal Student Loans are handed by which agency?

So the increased cost of education (which would only affect parents with kids in college)

Which are how many families/people?

and medical care might not have kept pace with after tax income

And neither did medical spending, particularly on Medicaid. See the below chart; what happens to Medicaid spending beginning in 2003 and what happens by 2006? Be honest.

If anything, the increased after tax income due to the Bush-Obama tax cuts provided more after-tax income to pay their debts, not less.

Yet, Household debt increased.

So something isn't squaring with your belief system here, Flash.

Despite what you think it centrist common sense, cutting taxes didn't reduce anyone's debts, nor did it increase anyone's personal savings. We know because we have the data.

So you insist it does, yet the data shows it doesn't.

So what am I to believe? Your ignorant arrogant insistence, or the empirical evidence laid before us?

 

[Flash]

Which they did, and which household debt barely grew, and actually slightly declined toward the end of the decade.




Can you read a chart? No? Shocking.

View attachment 9272

Yes, look at the long-term trends, not temporary increases or decreases. You mistakenly believe any tax changes immediate show their effects when in reality it is often 2-3 years.

 

[LV426]

Yes, look at the long-term trends, not temporary increases or decreases.

What "temporary" increases or decreases?

Is time not linear now?

When you see this chart, do you not see two big spikes in the mid-80's and the early 00's?

You mistakenly believe any tax changes immediate show their effects when in reality it is often 2-3 years.

Well, Flash, if you had taken the time to actually look at the chart instead of instinctively and compulsively dismissing it, you'd see that the spike in household debt starts in the mid-80's, a couple year after they were put into effect.

Likewise for the 2000's!

You really need help reading charts, it seems.

 

[Flash]

Pell Grants, Student Loan Rates, and Medicaid isn't determined by federal income tax revenue? They're all federal spending. Medicare too.

1. 65 million people are on Medicare.
2. 30 million people are on Medicaid.
3. Pell Grants are a federal program.
4. Federal Student Loans are handed by which agency

Which are how many families/people?

And neither did medical spending, particularly on Medicaid. See the below chart; what happens to Medicaid spending beginning in 2003 and what happens by 2006? Be honest.

Yet, Household debt increased.

So something isn't squaring with your belief system here, Flash.

Despite what you think it centrist common sense, cutting taxes didn't reduce anyone's debts, nor did it increase anyone's personal savings. We know because we have the data.

So you insist it does, yet the data shows it doesn't.

So what am I to believe? Your ignorant arrogant insistence, or the empirical evidence laid before us?

Medicare and Medicaid are entitlements. Everybody who qualifies gets the money--it is not based on appropriations. So, a tax cut does not cause spending cuts. And, any increased cost of health care and education are due to increased costs, not government spending cuts (which did not occur) caused by tax cuts.

Pell Grants are federal student loans were not affected by tax cuts.

Your charts do nothing to connect increased household debt or savings with tax cuts (or tax increases). As your charts show, those trends go up and down but you have done nothing to show any direct cause other than go with your preconceived economic belief that only good stuff happens with tax increases.

Tax increases do nothing to lower household debt or increase savings because those things are not connected to federal spending. You are trying to attribute economic changes with one variable. Poor economics.

 

[LV426]

Medicare and Medicaid are entitlements. Everybody who qualifies gets the money--it is not based on appropriations

Entitlements = federal spending.

Medicaid spending increases dropped off in the mid-2000's as personal savings declined and household debt increased.

Do you think they have anything to do with one another?

 

[LV426]

So, a tax cut does not cause spending cuts

Yes it does!

We saw this happen in Kansas, and I even linked you the proof of the Board of Regents raising tuition specifically because of funding cuts the state made because of the tax cuts. IN fact, they literally said that was the reason in the link that you didn't bother to open.

More bad faith from Flash.

Last year the university system lost 4 percent of its budget. This month — after scuttling Brownback’s signature 2012 tax policies to raise an estimated $1.2 billion in extra revenue — the Legislature agreed to restore in the next two fiscal years about a quarter of what the universities had lost.

 

[LV426]

And, any increased cost of health care and education are due to increased costs, not government spending cuts (which did not occur) caused by tax cuts

Clinton increased spending by 32% from 1993-2001, yet he managed to erase the deficits and produce surpluses.

Explain that.

 

[Flash]

Clinton increased spending by 32% from 1993-2001, yet he managed to erase the deficits and produce surpluses.

Explain that.

Clinton attributes to the compromises he made with the Republican Congress to keep spending down.

But what does that have to do with my post that "any increased cost of health care and education are due to increased costs, not government spending cuts (which did not occur) caused by tax cuts"?

 

[LV426]

Your charts do nothing to connect increased household debt or savings with tax cuts (or tax increases).

Yes they do; you're just refusing to admit it.

Bush cut taxes in 2001, and we see in the chart that personal savings decreased and household debt massively increased.



We also see in this chart, that Medicaid spending increases decreased down to as low as 1.5% by 2006. Was 2006 a magical year where people didn't get sick or something?



We also see in this chart, that MEW's were the primary driver of Bush's economy. And what are MEW's but simply borrowing against the value of your home.



So I've built a very strong argument that the reduction of revenue caused a lower increase of spending on Medicaid, and to fill that gap, people took out equity on their homes or liquidated their savings.

You haven't been able to counter any of that.