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The Elephant in the Room: Market Prosperity versus Republican Administration
September 20, 2008 11:26 AM   Subscribe


 


I put this together a time back.

Since 1900 there have been 15 presidents that have served at least 4 years. Ranking them according to the Dow performance in their first four years we have.

1. FRoosevelt: 267.2% increase.
2. Clinton: 118.1% increase.
3. Coolidge: 110.4% increase
4. Eisenhower: 68.7% increase
5. Bush (Sr.): 44.1% increase.
6. Reagan: 26.4% increase.
7. Johnson: 22.4% increase.
8. TRoosevelt: 18.1% increase.
9. Wilson: 15.1% increase.
10. Truman: 11.4% increase.
11. Nixon: 9.7% increase.
12. Carter: 0.2% increase.
13. GWBush: 0.5% decrease.
14. Taft: 1.5% decrease.
15. Hoover: 83.5% decrease.

Those who served less than four years:
Ford, up 23.4% in two and a half years
Harding, up 17.2% in two and a half years
Kennedy, up 12.5% in two years and ten months

When I put this together it was after the end of Bush (Jrs) first term in office. When W was inaugurated the Dow was at 10587. Depending on the day last week and the time of day, it was either slightly below that or ten per cent above. This doesn't include second term performance - I also ran those numbers, but I thought this was enough space to eat up.
posted by dances_with_sneetches at 11:46 AM on September 20, 2008 [15 favorites]


But that's no argument for voting for Mr. Obama.

Thanks, Mr. Murdoch.

Vote for Mr. McCain -- but vote for Republican senators and representatives too. When Republicans have controlled the whole government, it blows away anything Democrats can do. Stocks have averaged 17.5% and real GDP growth 3.3%.

Those numbers are doubtful. After six years of Republican-only leadership, our economy has been decimated. After their run from 2000 to 2006, this Republican-only leadership saddled us with $8.6 trillion of debt, $12 billion vanished in Iraq, and the Republicans plan to borrow another $700 billion to bail out their rich and powerful friends before the general election.
posted by Blazecock Pileon at 11:46 AM on September 20, 2008


Actually they plan to borrow up to around 1.8 billion. It's 700 billion at a single time.
posted by Lord_Pall at 11:56 AM on September 20, 2008


this Republican-only leadership saddled us with $8.6 trillion of debt

The debt ceiling will be over $11 trillion by the time Bush leaves office.
posted by ryoshu at 12:02 PM on September 20, 2008


In another vein, I looked up who is controlling the Congress. There have been surprisingly few periods in recent history when the Republicans controlled the Congress and White House. If you look at periods of when the Republicans controlled the House, the Senate and the White House for at least four years during the the last 90 years you have: 1921 to 1933 (that didn't end badly) and 2003 to 2007. (It was a back and forth affair, but it's funny how people think the Republicans controlled the Senate in 2001 and 2.)

As for why Democrats are better for the economy, I'm going to be cynical about this. They sell out for cheaper. They sell out to farmers, to poor people (money for welfare programs is more likely circulated in the community, versus rich people tax cuts which go to buy overseas built gadgets), pork barrel infrastructure.
Republicans sell out to big war (expensive), big medicine (expensive), big fear (expensive and you don't get much back on the dollar for eavesdropping), big prison (another drain for which we get nothing back).

BTW - if you want raw figures on the Dow Jones by administration, I can send these to you.
posted by dances_with_sneetches at 12:02 PM on September 20, 2008 [5 favorites]


Excuse me, did you just say that Democrats "sell out" to "poor people"?
posted by Flunkie at 12:08 PM on September 20, 2008 [5 favorites]


Yeah, it was meant to be flippant.
posted by dances_with_sneetches at 12:16 PM on September 20, 2008 [4 favorites]


>>Republicans controlled the House, the Senate and the White House for at least four years during the the last 90 years you have: 1921 to 1933 (that didn't end badly) and 2003 to 2007.


The bailout that is currently being pushed is being called, " the largest financial rescue since the Great Depression".

So, the periods of total Republican control, 1921-1933, and 2003-2007, are years that either contain the start of the Great Depression, or are on the cusp and lead up to the largest financial rescue since the Great Depression.

I'm no Sherlock Holmes, but I think this could be a clue.
posted by SaintCynr at 12:18 PM on September 20, 2008 [20 favorites]


I am excited because FiveThirtyEight has done the number crunching and found that non-cellphone polls underestimate Obama support by 2.8%. So the model currently projects an Obama win percentage of 78-80%. And during the primary season, Obama beat the polls. So there is reason to be hopeful.
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 12:19 PM on September 20, 2008 [9 favorites]


So there is reason to be hopeful.

I feel sorry for Obama if he inherits this epic clusterfuck.
posted by ryoshu at 12:31 PM on September 20, 2008 [13 favorites]


All I can think of is Lois Griffin getting sexually aroused: I know nothing I could say to you could possibly justify why I slept with Bill, except... I mean, Peter, the man presided over the longest economic expansion in U.S. History and... he reduced the percentage of Americans on welfare to it's lowest level in 33 years!
posted by thbt at 12:32 PM on September 20, 2008 [2 favorites]


they conduct polls using using landlines? i don't know anyone under 40 that has a landline.
posted by bhnyc at 12:35 PM on September 20, 2008 [6 favorites]


Okay, any economist can tell you the Dow is a far from perfect measurement of the stock market, much less the economy. It is 30 stocks which get switched off and substituted over time. However, it certainly is reasonable to remove Buggy Whips, Ltd from an economic analysis and the Dow will give you an idea about the health of the biggest of big businesses.

Putting together the numbers I learned a lot of interesting things. I was surprised that Bush Sr outperformed Reagan's first four years. War is not necessarily good for the Dow. In World War I it drove money into gold and caused stocks to drop (the money pool was smaller then). We had greater runs of posterity in peaceful years (in general) than in wartime years. (The 20s and 90s were the two great rah-rah markets. The Dow recovered for the most part in FDRs first term then held on through the war years (third term).

Here's the second term data:

For presidents who have had more than four years this isn't their whole story. Wilson, FDR and Nixon had marked downturns in their second terms (FDR made up ground in his third term). Truman (up 58.4%), Eisenhower (up 30.7%), Reagan (up 82.4%) and Clinton (up 54.9%) had very good DJIA performances in their second terms.
posted by dances_with_sneetches at 12:35 PM on September 20, 2008


Is the market the only indicator of how the nation is doing economically? I sort of am interested also in deficit, employment, infrastructure, health etc etc After all, when Hitler took over leadership in Germany, things were economically a hopeless mess but he sure got the nation busy in short order.
posted by Postroad at 12:44 PM on September 20, 2008


As for why Democrats are better for the economy, I'm going to be cynical about this. They sell out for cheaper.

i would put it a little differently, but not necessarily disagree. dems tend to sell out more to spending that promotes bottom-up economic growth--big projects that put a little more money in the hands of a lot of people. the republicans prefer projects that put a lot more money in the hands of a few people. the problem is, there's a diminishing return when it comes to how much an individual can contribute to overall economic growth.

bottom-up expansion of wealth, i suspect, leads to exponential growth in the overall economy, because even though the economic actors at the lower end of the economic scale don't end up with the kinds of enormous gains in personal wealth those at the upper-end of the scale get under republicans, just tiny gains in overall spending power at those levels make a big difference.

for example, think about the designer outfit cindy mccain wore to the republican convention, reportedly having a price tag of around $300,000. the basic raw materials and labor that went into that outfit absolutely do not account for the difference in ticket prices between it and the best look-alike sold at target. sure, the raw materials probably were more expensive, higher quality textiles, but not nearly is the difference proportional to the sale price. and the proceeds from the sale of high end retail goods like this aren't distributed equally across all levels of the socioeconomic scale either: the worker in the factory that produced the dress probably didn't earn much more than the worker who produced the knock-off version at target. they may even be the same worker. the designers and company management probably rake in the big bucks, but earners at those levels represent a relatively small segment of the overall workforce.

well, ultimately, if you took the three hundred thousand spent on the designer outfit, and gave three hundred lower income earners $1,000 to buy new clothes, you could pay the wages of hundreds or more sewing factory workers and add to the revenue growth of hundreds of different companies that manufacture discounted (though not necessarily substandard quality) garments.

in other words, luxury pricing on goods and services squeezes out capital that might otherwise contribute more to broader economic expansion. they take a massive toll on the efficiency of an economy. and economic policies that actively promote the increased concentration of wealth in fewer hands inevitably give rise to or expand existing markets for luxury goods and services. these markets are like economic heat sinks, sucking up capital in a way disproportionate to the economic value they create. so ultimately, the economic value that the wealth bound up in an economy can generate diminishes in direct proportion to the growth of luxury priced markets, i think.

one solution to this problem is bottom-up economic growth oriented policies.
posted by saulgoodman at 12:50 PM on September 20, 2008 [14 favorites]


The success of the stock market is not the same as the health of the overall economy, and the former can become predatory upon the latter if people are not careful. The events of last week sent seismic shock waves through the global economy, have forever shifted the market landscape, and the tremors are far from over, but one tentative lesson seems to be gaining consensus: if left to its own devices and under-regulated, Wall Street becomes reckless, and tends to cultivate overly volatile, unmanageable, and extremely dangerous speculative bubbles. To build a degree of manageable risk into the system is to be expected, but market fundamentals were not being heeded: the nature and amount of risk the market was being asked to bear was just too much. We now desperately need new safeguards put into place, and we need some accountability for what went wrong.
posted by ornate insect at 1:01 PM on September 20, 2008


I feel sorry for Obama if he inherits this epic clusterfuck.

And if he does, the Republicans will spend the next four years blaming him for the mess.
posted by homunculus at 1:08 PM on September 20, 2008


All I can think of is Lois Griffin getting sexually aroused: I know nothing I could say to you could possibly justify why I slept with Bill, except... I mean, Peter, the man presided over the longest economic expansion in U.S. History and... he reduced the percentage of Americans on welfare to it's lowest level in 33 years!
posted by thbt at 3:32 PM on September 20 [+] [!]


Clinton: 35 years.
Lois: 35 years, Peter!
posted by kurmbox at 1:09 PM on September 20, 2008 [1 favorite]


This catastrophe, combined with the abject failure of the Bush administration has proven that the nixon era conservatives are intellectually, morally, and pragmatically incapable of governance.

The federal government buying out $1 trillion worth of the financial markets is a massive step towards socialism, and the fact that it was necessary shows that conservative policy is an abject failure.
posted by Freen at 1:15 PM on September 20, 2008 [1 favorite]


Could we see this performance wed to some "value of the dollar" index? I mean sure, saying the DJIA took a 10% rise during Bush' first term is all well and good, but if you bough stock shares as per their DJIA weightedness using Euros on day 1, you lost a load money by day 4381.

It is interesting to note that, starting roughly about the time of Woodrow Wilson, the mantra of the Oval Office was, "What's good for business is good for America." This went on until Hoover and the depression. In 1980 Reagan et al started beating the drum of "What's good for business is good for America."

It's almost like, well, this. (Special thanks to kliuless and this FPP.)
posted by Kid Charlemagne at 1:15 PM on September 20, 2008 [1 favorite]


I love the asshole from the WSJ in the bitter pill link flipping some the Presidents parties to change the numbers. Wish fullfilment. That will refute the facts, moron.

The fiscal conservatives in the Republican party have so thoroughly wedded themselves to the christian/social conservatives that they've absorbed the social cons inability to accept truth when it's presented with hard evidence.

Bill Maher on one of the recent Real Time called the WSJ OpEd writer (probably the same asshole, I can't remember) a cynic for championing Sarah Palin as a great VP choice - when deep down he couldn't really believe it - because her choice plays well with a certain "base".

He's not a cynic. He's a true believer. Nothing more scary.
posted by strontiumdog at 1:23 PM on September 20, 2008 [1 favorite]


from 2000 to 2006, this Republican-only leadership saddled us with $8.6 trillion of debt

It helps to state numbers like this in terms of what share belongs to each of us. In this case, its $29,000 per American.

Got a family of 4? You all owe $115,000. Or you could just say your kids do.

But don't let details like this stop you from voting Republican. That Sarah Palin, she's a tiger!
posted by Killick at 1:24 PM on September 20, 2008 [4 favorites]






for example, think about the designer outfit cindy mccain wore to the republican convention, reportedly having a price tag of around $300,000. the basic raw materials and labor that went into that outfit absolutely do not account for the difference in ticket prices between it and the best look-alike sold at target

Not to nitpick, but the bulk of the cost of Cindy McCain's outfit was her diamond earrings, valued at $280,000. Her dress cost around $3000. Of course, there's probably an argument to be made about the true cost of diamonds, which this might illustrate ...
posted by krinklyfig at 1:52 PM on September 20, 2008


I feel sorry for Obama if he inherits this epic clusterfuck.

If he does, we'll get to see the power of hope. Perhaps the O man can walk on water, and pull fish and loaves from a basket of CDOs.
posted by rough ashlar at 1:55 PM on September 20, 2008


If Obama comes in with a bunch of grand tax-and-spend plans ... Republicans will suddenly care about balancing the budget again, so really, it's win-win for the economy.
posted by wobh at 1:58 PM on September 20, 2008


Since the U.S. economy - like every economy - is immersed in a world economy, is there any way to control for that? I was just thinking that one crude way would be to look not simply economic performance (which can go up and down with world trends), but how American economic performance differs from world trends. That would be a more interesting analysis - who was setting policy when the U.S. economy grew more than the world on average, or went down more than the world on average.

But I also agree with the comment above that stocks=! the economy. And I would add that I'm not convinced economic growth is itself a measure of "a good economy". To me, an economy which is stable per capita with low economic inequality and a relatively good standard of living might be a better economy than a rapidly growing economy with high economic inequality and a lot of fluxuation -- because inequality is bad for a society, disruption and change is always difficult, and not least because I don't believe that our planet can physically sustain continued rapid economic growth. Economic growth which makes your planet uninhabitable is not a good thing.
posted by jb at 2:02 PM on September 20, 2008 [2 favorites]


It helps to state numbers like this in terms of what share belongs to each of us. In this case, its $29,000 per American.

Got a family of 4? You all owe $115,000. Or you could just say your kids do.


I don't think that actually is helpful. You don't owe $29,000. You're not on the hook for $29,000. That's not your share. You may or may not end up being hurt by the debt, but dividing the amount of the debt by the population of the U.S. isn't a good way to measure that.

Excessive national debt isn't a good thing, but there's no reason to inaccurately over-simplify, just to make things look scary.
posted by Mr. President Dr. Steve Elvis America at 2:12 PM on September 20, 2008 [3 favorites]


Wait, he said the presidential party figures were the most significant he'd found, and if I translate his "should happen by chance only 1/4 of the time" that sounds like his strongest result was significant only at the 75% confidence limit? Much as I like to pat democrats on the back, that strikes me as crap that should never see publication.
posted by agentofselection at 2:20 PM on September 20, 2008


I don't think that actually is helpful. You don't owe $29,000. You're not on the hook for $29,000. That's not your share.

In a Hollywood movie , you can say 'these are not the droids you are looking for.' Metafilter is not such a magical place, so why don't back up your claim " Mr. President Dr. Steve Elvis America " with actual data.
posted by rough ashlar at 2:20 PM on September 20, 2008 [2 favorites]


In a Hollywood movie , you can say 'these are not the droids you are looking for.' Metafilter is not such a magical place, so why don't back up your claim " Mr. President Dr. Steve Elvis America " with actual data.

I think you have this backwards. The prior poster was the one who made the extraordinary claim that we each owe our pro rata share of the national debt, without providing any explanation at all about how this works. I doubt anyone reputable has ever bothered to actually say "the residents of the U.S. do not actually each owe an amount corresponding to their pro rata share of the U.S.'s debt" because it's just silly.

I mean, have you ever heard of anyone being sued for not paying their share? Do you pay (or pay interest on) your share? Do you know anyone who does?
posted by Mr. President Dr. Steve Elvis America at 2:27 PM on September 20, 2008


Obama’s FDR Moment
posted by homunculus at 2:30 PM on September 20, 2008


so why don't back up your claim...with actual data.

I would gladly attempt to explain the reason why such hyperbole doesn't stand, however, I almost guarantee it'll fall upon deaf, hyper-liberal-election-fever ears.

Here's a link to the top 10% of income earners paying 70% of US taxes.

So, very simply, cutting the national debt by the number of people in this country and explaining that that number is their fair share is not only misleading, it's a bald faced lie. We have a progressive tax system for a reason. If it were a flat tax, you'd be right. (And even then, the system would be full of deductions aimed to help lower income people, since they are the worst hit by taxes in general.)

This entire thread reeks of misinformation, partisanship, and grandstanding. Everyone knows that the President isn't in charge of the economy, but in an election year, if things are going well, both parties take credit, and if things are going south, they point fingers. This meltdown is one of epic proportions, with both Democrats and Republicans losing 20-40% of their net worth in a year due to falling home prices. This isn't a partisan issue. It's a people issue. These same people who have now lost so much are still faced with higher prices, higher medical costs, and a significant chance of losing their job. Neither candidate has a solution, because neither side was prepared for such a disaster. So quit trying to blame people, and think of some fucking solutions.
posted by SeizeTheDay at 2:34 PM on September 20, 2008 [10 favorites]


the worker in the factory that produced the dress probably didn't earn much more than the worker who produced the knock-off version at target.

The people who sew couture absolutely do make ~very~ good wages. And rightly so, it tales years of training to be able to produce those garments and the construction is a huge part of the price. Of course, most of them live in France or Italy (and the Target workers live in SE Asia) so arguably none of it is particularly good for the US economy.

Topic? My main problem with the Republicans is not necessarily their policies but the fact that they seem to run such utter morons for office. People who, quite literally, do not understand how money and financial systems work and cannot make sensible decisions regarding such. Maybe they can't even add. I don't know. They sure as hell can't balance a checkbook.

The Democrats just seem, on average, a little smarter and more able to grasp cause-and-effect in the real world, which is pretty helpful when you're trying to manage a complex system. Maybe it helps that they are mostly cool with basic scientific principles, leading one to believe they may have an equally basic grasp of math skills.
posted by fshgrl at 2:35 PM on September 20, 2008 [1 favorite]


If it were a flat tax, you'd be right.

Actually, I'm wrong. Even if it were a flat tax, the rich would pay a far larger proportion of the total tax generated for the government, thus leading to a disproportionate share of the national debt falling on their laps.
posted by SeizeTheDay at 2:38 PM on September 20, 2008


I'm assuming we have a psychological situation here, related to cognitive dissonance, where true believers "need" to convince others that their failed economic prophecies were really true to lessen the reality of their disappointments, and so everyone just ends up believing them in the end because nobody else is out there proselyting to overturn the realization of their failures. This lends itself to the conservative fundamentalism mention in the speculation link, of some leaders not heeding any advice because they are true believers in their own dogma.

On top of that I would add something often overlooked: low expectations in the conservative mindset, or planned failure for the majority. Conservatives are prone to believing that there must be a few winners and many losers, or it doesn't make sense to them. But if you plan on having all that poverty standing around admiring their increasing wealth, then their vision must allow for mostly failure. And so they would be the last people you'd ever want to trust with delivering pan-prosperity.
posted by Brian B. at 2:49 PM on September 20, 2008 [2 favorites]


Economics is slow. Everything builds on what's come before. The first four years of a Presidential term are only vaguely related to that President; it's not until year 5 that you really start to see the results, if any, of their policies. The American economy is a supertanker, not a speedboat, and it changes course very slowly.

The stock market is a proxy vote on what the economic powers that be THINK of the President's policies, but opinion and fact are different.

Back when the stock market was mostly the province of professionals, it was a pretty good source of opinion, but it started to disconnect from the economy sometime around 93 or 94, as the new monetary regime took hold, amateurs got into the business, and speculation ruled the day.

I would personally ignore everything after 1990. Before that timeframe, it would be most instructive to compare the stock market with Presidential terms, but then compare both with economic performance of SUBSEQUENT terms. Nixon had a hell of a time because of the fallout from LBJ's stupidity, and Carter had a hard time because Nixon sucked, but Reagan was popular because Carter got us doing the right things, even though we hated them. (well, that, and he started us on our long slide into bankruptcy, which helped in the short term a whole bunch.) After that, things felt great most years, as we borrowed ourselves into the poorhouse. It's very hard to draw solid conclusions when you have such profound stupidity at the center.
posted by Malor at 2:52 PM on September 20, 2008


Here's a link to the top 10% of income earners paying 70% of US taxes.

This is far less than the property they own. If we taxed only assets, the richest 4% would be paying over 95% of all taxes.
posted by Brian B. at 2:53 PM on September 20, 2008 [4 favorites]


Hmm. My main point was that I don't think numbers like $8.6 trillion are particularly useful, because most of us don't have past experiences that allow us to make much sense of it. On the other hand, $29,000 per person is something we all can understand.

Is it too simplistic? Perhaps. I haven't, for example, included the service costs of this debt. And doing the just silly thing of dividing the debt by the number of people ignores the fact that of course we don't each pay equal shares. On the other hand, being more sophisticated with numbers like this, and not thinking of them in terms we can grasp, allow us to be deluded into believing that the smart folks in charge have it all under control. So I'll stick with my order-of-magnitude estimate, and my naive interpretation.

So quit trying to blame people, and think of some fucking solutions.

What a crock of shit. Of course Republicans don't want to 'play the blame game', because it is hard to name the things they haven't fucked up beyond all recognition in the last 8 years. But you know what? Blaming people is actually a great way to start solving things, especially in an election year.

So by all means, keep spinning nuanced interpretations that allow you to claim that the $8.6 trillion dollar debt created by a Republican administration with the help of a Republican congress was actually not such a bad thing, and that it makes sense to you to lower taxes while starting a stupid and expensive war.

Me, I'll be out back sharpening the pitchforks.
posted by Killick at 3:04 PM on September 20, 2008 [2 favorites]


On the other hand, $29,000 per person is something we all can understand.

What difference does it make if it's easy to understand that we each owe $29,000, if it's not actually the case? I'm all in favor of thinking about things in terms we grasp and avoiding unnecessary over-complication, but you still have to get it right.

I'm not quibbling about the exact number here. The problem is that none of us owes any amount on the national debt in the sense people normally mean when they say someone "owes" a financial debt.
posted by Mr. President Dr. Steve Elvis America at 3:11 PM on September 20, 2008


So I'll stick with my order-of-magnitude estimate, and my naive interpretation.

You're right. Why stick with facts when lies sell? You rail against Republicans, yet seem to use their strategies. Odd, that.

$8.6 trillion dollar debt created by a Republican administration with the help of a Republican congress was actually not such a bad thing

And now the entire debt is the responsibility of the Bush Administration? Thanks for playing. Pick up a "YAY OBAMA" hat on your way out as a parting gift.
posted by SeizeTheDay at 3:13 PM on September 20, 2008 [1 favorite]


No single monetary index gives an appropriate measure for eight years of damage done. Economies are not wholly balanced on anything so material as gold. They're also balanced on more insubstantial measures of trust, credibility, predictability - the word of a king, the regularity of an institution. Symbols and articles of faith, really.

On those matters, we're close to bankrupt, no matter what Wall Street says tomorrow. Unlike an AIG, you cannot rapidly "bail out" international perception; unlike a Philip-Morris, America can't change its name back to something that evokes idyllic discovery. People look at us, or at our money, and think: chaos. If we stop beaming that message abroad, maybe the dollar will too.
posted by kid ichorous at 3:14 PM on September 20, 2008


STD: your definition of disproportionate and mine appear to differ.

FWIW, I'm parying for more blood on the floor in the next three weeks, because it's the only way we will see a return to sensible policy with regard to financial market regulation, taxes, and health care. FDR's work was never completed: we have a shot at finishing the job now.
posted by mwhybark at 3:53 PM on September 20, 2008


'parying' would appear to be a freudian slip for 'praying' on the part of an at-best agnostic. My apologies.
posted by mwhybark at 3:54 PM on September 20, 2008


According to this Treasury Dept. data, the total interest paid on public government debt in 2008 will be $431 billion. Divided over 300 million Americans, that's $1436 dollars of debt service per American. If you assume that the average interest rate paid on public debt remains doesn't rise (unlikely over the long term, IMHO) and that the total amount of public debt rises at the same rate as inflation (extremely unlikely over the short and long terms, IMHO), and that average life expectancy remains at about 78 years, each American will pay a mean of $112,000 in debt service over their lifetime.

Even if you're exercised over the fact that the rich will pay a much larger fraction of this than the poor, as with all government spending, it will drive up interest rates for everyone and reduce the amount of spending available for things like Medicare, unemployment benefits and, eventually Social Security, all big programs that effectively redistribute income back to the poor. There's some intermediary steps, but if you assume that government spending overall benefits the poor more than the rich, I really don't think you can deny that the national debt will be primarily paid by the poor.
posted by gsteff at 4:03 PM on September 20, 2008


Oops, this Treasury Dept. data
posted by gsteff at 4:03 PM on September 20, 2008


(and the $112,000 number is in inflation-adjusted 2008 dollars)
posted by gsteff at 4:05 PM on September 20, 2008


What kid ichorous said. The situation we're in is not ultimately quantifiable, and the market depends upon a sense of relative stability and limited risk that is psychological in nature. And things now feel like the final scene in the Wizard of Oz.

Over on the AIG thread a familiar poster links to this. I have no doubt that the best hedge fund managers have analysts with the quantitative chops to decipher such things, but one must finally ask if the complexity of most hedge funds, derivatives, credit default swaps and the like is part of the problem. Building too much complexity into a largely unregulated market is a bad idea. But all overtures at more scrutiny of the huge new capital markets that emerged in the last 10 or so years was stymied or rejected. Guys like Jim Simons and Ken Griffin and Steven A. Cohen are very, very smart guys. I'm not against smart, mathematically minded guys coming up with new ways to make money. But we've had too many examples of failed financial wizardry to continue to allow our entire economy to be sunk by unregulated markets. We need to take Wall Street back from the smoke and mirrors of the financial wizards.
posted by ornate insect at 4:10 PM on September 20, 2008 [1 favorite]


You're right. Why stick with facts when lies sell?

SeizeTheDay, that link you provided above? It's to a right-wing blog. Where does the blog get it's data? They provide a link to a newsletter from a Republican congressman. Good to know that you know where to find facts when you need them. Obama hat, indeed.

I looked at the IRS data here, and (if I am interpreting this right, I may not be) about 12.7 million, or 9.6% of the total number of taxpayers earned $100,000 or more in 2004. They paid 44.5% of the total taxes. Not 70%.

In essence, though, your argument seems to boil down to this: The rich folks will pay for this -- don't worry, it's OK!

Mr. President, on the other hand, seems to think that this money is not debt owed by Americans in the sense that people normally mean. He's probably right. But I still claim that it is useful way of putting this enormous number in perspective. And Mr. President doesn't seem willing to offer any alternatives for how this think about this number. In the meantime, what gsteff says above seems to support my estimate of what we owe, but goes into more detail about how we will end up paying it.
posted by Killick at 4:21 PM on September 20, 2008


We need to take Wall Street back from the smoke and mirrors of the financial wizards.

Replace "financial wizards" with "Gordon Fucking Geckos of the world" and I think you have it.
posted by illiad at 4:22 PM on September 20, 2008 [1 favorite]


What difference does it make if it's easy to understand that we each owe $29,000, if it's not actually the case?

Yawn. What is this nonsense? You're Simply throwing dirt on an easy to understand concept to try to obscure reality, trying to bury reality under a pile of technicalities.

Obviously, the government is not a corporation of which we are all shareholders, each responsible for a portion of the debt, but what the true 'cost' is not taxpayer dollars but rather a lack of service that the government can't provide. The $29k means $29k per person that the government cant spend on health care, can't spend on education, on building roads, can't spend on all manner of important things.

Now arguably, that's a "socialist" way to look at it, but complaining about socialism the same week that the government Nationalized Freddy, Fannie, and AIG is a bit rich.

In my view, and if I were Obama, I would pay for this with a retroactive capital gains tax for this decade, as well as creating a new (retroactive) income tax bracket for people making over $1m per year. Since the tax would be retroactive, it wouldn't affect future behavior (Hell, you could have a cap gains cut for the next few years in order to encourage investment), but that would ensure that the people profited driving Wall Street into the ground would be the ones who would have to pay for the mess.

Of course, I'm not and I'm sure that wouldn't happen.
posted by delmoi at 4:22 PM on September 20, 2008 [2 favorites]


(er, actually FNM and FRE bailouts were not this week, but you get what I meant)
posted by delmoi at 4:25 PM on September 20, 2008


so why don't back up your claim " Mr. President Dr. Steve Elvis America " with actual data.
I think you have this backwards.


No, a very simple question - and you opted to not answer it. Good thing Metafilter is filled with people who are not using evasion as argument.

http://www.metafilter.com/75020/The-Elephant-in-the-Room-Market-Prosperity-versus-Republican-Administration#2266546
Gets uprated by 4.

And A simple answer:
Here's a link to the top 10% of income earners paying 70% of US taxes.

So, very simply, cutting the national debt by the number of people in this country and explaining that that number is their fair share is not only misleading, it's a bald faced lie.

posted by rough ashlar at 4:29 PM on September 20, 2008


And now the entire debt is the responsibility of the Bush Administration?

You have confused "blame" and responsibility.

Remember when our executives said "the buck stops here?"

Seeing as the Bush administration was "elected" (debatable given the problems in 2000, of course) to be responsible - as in ACCOUNTABLE - then yes, they bare the burden of fixing th mess AND sucking it up and being held accountable. It's called governing.

Now. Seeing as how they have absolutely resisted both of the steps necessary to actually, you know, govern, I think we can safely skip ahead to blaming them for the current cluster fuck that they have now made infinitely worse than it ever needed to be.

The roots of this financial problem extend back into the 1980's. And perhaps even the mid seventies if you want to get technical. But it was Reagan that started this trickle-down justified deregulation trend in the financial markets and sparked the idiotic notion that "deficits don't matter." Then the logical extension of that was carried through under Clinton and finally put into hyperdrive by Bush II. All the while there were plenty of real smart, real respectable experts telling us what was inevitably gonna happen. And every Fed Chief, every SEC and treasury chair since has KNOWN (and some publicly stated so) these critics were right. But nobody stopped it.

In fact in 2006 Chris Cox was asked point blank by a Republican committee chair if he needed any help, any monies, any other legislative muscle, in dealing with what was a worrying trend. And he said no.

So yeah. Fuck Bush. It's his job to be blamed for this cluster fuck.
posted by tkchrist at 4:30 PM on September 20, 2008 [2 favorites]


If he does, we'll get to see the power of hope. Perhaps the O man can walk on water, and pull fish and loaves from a basket of CDOs.

I'd be satisfied with a president that doesn't grovel before Grover Norquist and his ilk, hoping for the failure of our government due to their quasi-religious beliefs.
posted by benzenedream at 4:31 PM on September 20, 2008


I looked at the IRS data here, and (if I am interpreting this right, I may not be) about 12.7 million, or 9.6% of the total number of taxpayers earned $100,000 or more in 2004. They paid 44.5% of the total taxes. Not 70%.

I don't think you're reading that right. I see that indicating that the $100,000 or more group paid 73.6% of total income tax (column 17).
posted by gsteff at 4:31 PM on September 20, 2008




Hey, just wait till the top 1 per cent get 99 per cent of the income.
Then the rich will really be on the hook for taxes. They'll gripe even more than now.

The rest of us probably won't have to pay taxes at all! Or sleep under a roof. Or eat.
posted by hexatron at 4:58 PM on September 20, 2008 [1 favorite]


No, a very simple question - and you opted to not answer it. Good thing Metafilter is filled with people who are not using evasion as argument.

No, it was a stupid question. Asking me to provide "data" showing that the individual residents of the U.S. aren't personally liable for the U.S.'s debts was just dumb. Even the original poster has clarified that he doesn't really mean that, so drop it.

SeizeTheDay's the day's answer, while perhaps "simple" and more interesting, is also off. The economic burden of the present national debt isn't going to be borne in proportion to personal income tax rates, because it's not going to be paid off solely with income tax revenue--it's also going to be whittled down by inflation.

I also tend to agree with gsteff that a high national debt makes the poor worse off than they would otherwise be, since there's less money for handouts. I think the distribution of the burden falls somewhere in the middle--if the debt were lower, the taxes on the rich would be somewhat lower (but not lower by the full amount of what is attributable today to the debt), and the poor would get somewhat more handouts.
posted by Mr. President Dr. Steve Elvis America at 5:00 PM on September 20, 2008


Obviously, the government is not a corporation of which we are all shareholders, each responsible for a portion of the debt

When you say things like that, you just sound sloppy, and it's hard to take anything else you take seriously. By and large, shareholders of a corporation are not responsible for the corporation's debt.
posted by Mr. President Dr. Steve Elvis America at 5:03 PM on September 20, 2008


I don't think you're reading that right. I see that indicating that the $100,000 or more group paid 73.6% of total income tax (column 17).

Let's not confuse income tax paid on wages earned with overall federal taxes paid now.
posted by fshgrl at 5:33 PM on September 20, 2008


I don't think you're reading that right. I see that indicating that the $100,000 or more group paid 73.6% of total income tax (column 17).

gsteff, you're right -- I wasn't reading it right, or I made a calculation error. For 2006 (the year I think you were using) people earning over $100k were 11.6% of the total taxpayers and they paid 73.6% of the total taxes. For 2004, (the year I was using) people earning over $100k were 14.3% of the total taxpayers and they paid 67.8% of the total (income) taxes collected.

SeizeTheDay, I apologize. Your number looks right, or at least in the right ballpark. (But I still think your 'quit trying to blame people' request is a crock.)
posted by Killick at 5:52 PM on September 20, 2008


Wow, that's mighty big of you. Thanks. I'll take the crock snark under advisory.
posted by SeizeTheDay at 5:55 PM on September 20, 2008


When you say things like that, you just sound sloppy, and it's hard to take anything else you take seriously.
Well, since few people take you seriously, I'm not too worried.
By and large, shareholders of a corporation are not responsible for the corporation's debt.
Wow, really? I had no idea!

Seriously, it's called a metaphor. There is nothing, at least that I know of, where debt is divided up among a bunch of people, so I went for a corporation where equity is divided up among a bunch of people.

It's like saying "proper regulation of financial markets can act like a catalyst that slows down emerging crises, giving people crises the opportunity examine carefully and come up with well thought out solutions"

A catalyst, obviously, is something that speeds up a reaction, and it's inverse is called a "poison", but you obviously wouldn't want to use that term because it has a negative connotation. So you use catalyst and assume people aren't too stupid to figure out what you're talking about. (that's a somewhat contrived example, I'd probably use 'break' but you get the idea).

Apparently that was a bit too complicated for you.

--

And furthermore, Stockholders might not be responsible for excess debts after a corporate bankruptcy, but it sure as hell isn't much fun for them either. Someone who lost their life savings betting on FNM or FRE earlier in the year would probably feel like they were left holding the bag, so even though losses are limited to the value of their shares, to that extent stockholders are certainly left holding the bag on debts a corporation can't pay.
posted by delmoi at 6:00 PM on September 20, 2008


Can anyone explain why the common man R voter tends to be okay with their guys ripping them off time and again? I would think that after awhile a person would get tired of getting ripped off. But R voters seem to kind of like it.
posted by tarvuz at 6:31 PM on September 20, 2008 [2 favorites]


All of a sudden the president has nothing to do with the economy and it's all coincidence?

Mention Carter around a conservative and you tend to hear exactly the opposite tale.
posted by Astro Zombie at 6:33 PM on September 20, 2008 [2 favorites]


Can anyone explain why the common man R voter tends to be okay with their guys ripping them off time and again?

I think it's because they're just not aware of how things work. They spend their time listening to Rush Limbaugh and Fox News, getting fed bullshit and it really does color their worldview. They really do believe in trickle down economics, for one thing. They really do believe what they're told.

There is, also the failure of the liberal programs in the 1960s. A lot of baby boomer and older Americans view Carter the way we view Bush, and they viewed Reagan the way we view Obama. Many people will never vote for the democrats just like I'd never vote for the republicans.

Also, keep in mind what's called the Rightwing Authoritarian mindset. Robert Altemeyer a couple books about it, one of which is online available for free. And keep in mind that for many of these people, their loyalty is not just to America, but to the republican party (which they view as "true" Americans. Just look at Konolia talk about "Real" Americans in those Palin threads).

Altemeyer's book is a good read and you really ought to check it out.

Anyway, with respect to this bailout, a TPM reader wrote this:
Is it just me? With this last enormous bail out of our Wall Street Investors/Corporate America, I have this picture in my mind of these cartoon Republicans sweeping out the last of the people's money from the vaults. It took eight years, but they managed to get it all. The War/Private Contractors, the Oil Companys, the deregulation and fleecing of America. These Republicans started their tour of duty eight years ago with the coffers overflowing, flush with cash.
And it's a little absurd right. I mean, two weeks ago these guys had no idea that anything was wrong, and now we should just hand over $700 billion dollars for them to spend however they want, with zero oversight whatsoever. It's insane. Especially when you consider Paulson is the former CEO of Goldman Sachs.
posted by delmoi at 6:52 PM on September 20, 2008 [2 favorites]


And it's a little absurd right. I mean, two weeks ago these guys had no idea that anything was wrong, and now we should just hand over $700 billion dollars for them to spend however they want, with zero oversight whatsoever.

What worries me the most is that Paulson and Bernake both have their reputations riding on whether this plan succeeds, which gives them a big incentive, I think, to purchase the so-called sludge at an inflated price. After all, if they err on the side of stinginess, there's a chance that the whole thing will fail; either no one will sell their sludge, or they'll sell but still be far enough underwater that they have no spare cash to lend out. If they err on the side of generosity, taxpayers may lose an extra $50 billion, years down the road once these mortgages are actually paid off, but in the interim Paulson and Bernake will be lauded as the saviors of the world. They're offered the choice between immediate glory and knocking maybe half a percent off the national debt years down the road. And who knows, maybe in these circumstances subsidizing the financial firms really is the right choice. But as I see it, the success of this plan rides entirely on what discount the sludge is sold at. That's been the the crux of this crisis all along- no one knows what its worth, and we're finally creating a mechanism to set a price and move on. But that will depend on the auction mechanism used, and there is ABSOLUTELY NO INFORMATION WHATSOEVER about that in the draft legislation that the NYT is publishing.
posted by gsteff at 7:13 PM on September 20, 2008 [1 favorite]


If Obama comes in with a bunch of grand tax-and-spend plans ... Republicans will suddenly care about balancing the budget again, so really, it's win-win for the economy.

Hmmm . . . Republicans do strike me as doing a better job as the "loyal opposition" rather than the party in power . . .
posted by flug at 7:14 PM on September 20, 2008


"In my view, and if I were Obama, I would pay for this with a retroactive capital gains tax for this decade, as well as creating a new (retroactive) income tax bracket for people making over $1m per year.

This is insane. People who made money, either income or capital gains, in the past don't by that fact have money to pay taxes now. They very likely have already spent the cash or in the case of corporations paid it out to shareholders. Capital gains taxes hit millions of Americans, many of whom (and more in the short term) have negative net worths. There's no way they can pay a retroactive tax.

Since the tax would be retroactive, it wouldn't affect future behavior (Hell, you could have a cap gains cut for the next few years in order to encourage investment), but that would ensure that the people profited driving Wall Street into the ground would be the ones who would have to pay for the mess."

Of course it will affect future behavior. This will happen in at least two ways. First, after paying the tax the taxpayers will have less money to spend in the future. Second, setting a precedent for such retroactive taxation will cause people and corporations to set more money aside to meet the possibility of future tax levies of the same kind. This will likely slow spending, job creation, etc.

This also violates the spirit, if not the letter, of the Constitution's prohibition on ex post facto laws.
"The sentiment that ex post facto laws are against natural right is so strong in the United States, that few, if any, of the State constitutions have failed to proscribe them. The federal constitution indeed interdicts them in criminal cases only; but they are equally unjust in civil as in criminal cases, and the omission of a caution which would have been right, does not justify the doing what is wrong. Nor ought it to be presumed that the legislature meant to use a phrase in an unjustifiable sense, if by rules of construction it can be ever strained to what is just." (Thomas Jefferson, Letter to Isaac McPherson, August 13th, 1813)
posted by Jahaza at 7:16 PM on September 20, 2008 [1 favorite]


Mr. President Dr. Steve Elvis America still cannot and will not answer the question put to him.
posted by Blazecock Pileon at 7:23 PM on September 20, 2008


1. FRoosevelt: 267.2% increase. - leading us out of a depression
2. Clinton: 118.1% increase. - driving us into a depression
3. Coolidge: 110.4% increase - driving us into a depression
posted by Rafaelloello at 7:48 PM on September 20, 2008


Mr. President Dr. Steve Elvis America still cannot and will not answer the question put to him.

What question?
posted by Mr. President Dr. Steve Elvis America at 7:57 PM on September 20, 2008


Seriously, it's called a metaphor. There is nothing, at least that I know of, where debt is divided up among a bunch of people, so I went for a corporation where equity is divided up among a bunch of people.

A metaphor? Come on. Read what you wrote: "the government is not [a corporation of which we are all shareholders, each responsible for a portion of the debt]" (brackets added).

Your suggestion is that we read "each responsible for a portion of the debt" as a metaphor for sharing in corporate equity. But this metaphor holds only within the brackets, because shareholders sharing in equity is itself used as a metaphor for citizens being responsible for governmental debt.

So basically, you have a double, nested metaphor where the literal topic of conversation is used metaphorically within the inner metaphor? And you're surprised I didn't read it this way?

Anyway, this all would've been averted had you known about general partnerships, and now you do.
posted by Mr. President Dr. Steve Elvis America at 8:13 PM on September 20, 2008


2. Clinton: 118.1% increase. - driving us into a depression

Horseshit. Bush owns this mess.
posted by ornate insect at 8:13 PM on September 20, 2008 [1 favorite]


This question:

Metafilter is not such a magical place, so why don't back up your claim " Mr. President Dr. Steve Elvis America " with actual data.

You, Mr. President Dr. Steve Elvis America still cannot and will not back up your unfounded claim, that taxpayers are not in hock for public debt.
posted by Blazecock Pileon at 8:35 PM on September 20, 2008


You, Mr. President Dr. Steve Elvis America still cannot and will not back up your unfounded claim, that taxpayers are not in hock for public debt.

Stop trolling.
posted by Mr. President Dr. Steve Elvis America at 8:52 PM on September 20, 2008 [2 favorites]


ornate insect wrote: Horseshit. Bush owns this mess.

Yep. Although some would say Clinton shares (some) of the blame, I'd agree it's horseshit. While we had bubbly and inflationary policies during the Clinton administration, the Bush administration, as with nearly everything else he's done, took it beyond any logical extreme. Pushed us over the brink, really.

We can withstand a deficit and a bunch of inflation and a big bubble. We can't withstand a ginormous deficit, ridiculous inflation and several of the largest speculative bubbles the world has thus far seen.
posted by wierdo at 8:57 PM on September 20, 2008


No, it was a stupid question.

Huh. You've went from evasive to 'it was dumb' What's next? Saying there was no question?

What question?

Yup - there it is.
posted by rough ashlar at 9:37 PM on September 20, 2008 [1 favorite]


So basically, you have a double, nested metaphor where the literal topic of conversation is used metaphorically within the inner metaphor? And you're surprised I didn't read it this way?

Of course I'm not surprised, you're an idiot. I'm confident most people were able to understand it, just as they would understand the catalyst example. And I have no idea why you think it's recursive.

A simpler example would be saying something like "An air conditioner isn't like a heater that doesn't require venting to the outside." The difference being highlighted is that an air conditioner needs to be vented to the outside (or have some other heat sink) while a heater does not. Your comment would be the equivalent of someone following with "Duh you MORON heaters HEAT THINGS up and air conditions COOL THINGS DOWN!"
posted by delmoi at 9:57 PM on September 20, 2008


Stop trolling.

Please just answer the question put to you without your usual rhetorical bullshit.
posted by Blazecock Pileon at 10:05 PM on September 20, 2008


I don't think you're reading that right. I see that indicating that the $100,000 or more group paid 73.6% of total income tax (column 17).

Let's put a few things about income inequality and taxation into perspective. This graph of average annual after-tax income growth in 2005 by percentile provides a good overview of the state of income growth inequality in America. Most households barely even register as reporting an income, compared to the top one percent. Much of the analysis I've seen on income inequality lumps the entire top quintile together into a single group, but even within the top quintile, the divide between the top 1 percent and the rest of that percentile is pretty stark. The numbers for 2006 seem to be much worse.

Here are some more interesting factoids to fill out the picture of current-day American income distribution:
  • In 2005, the top 1% of income earners accounted for 15.6% of all the taxable income reported in America. (Cite: Center on Budget and Policy Priorities - PDF report). By 2006, this figure had grown to 22.1% (Cite: Tax Foundation -- Note: Not sure if this site has an ideology or not, but its numbers seem to check out). In other words, 6.5% of all potentially taxable income in America--the equivalent of six dollars out of every 100 dollars earned--shifted from the rest of the population into the coffers of the top 1%).
  • Another way to look at it is that the top 1% of earners accounted for more than one-fifth of all the income reported in America in 2006. We in the remaining 99% of the population barely held our own against them, despite outnumbering them in the workforce by a ratio of nearly 100 to 1. Man those guys/gals must really work harder and smarter! Consider the income of the top 1% together with all the other earners in the top quintile, and it becomes obvious 80% of the earners in the US are either hopelessly lazy, incompetent, or both, because only about 50T earners in the top quintile
  • Also interesting to note: Approximately 400 ultra-high-flying earners alone accounted for a total of more than 1 percent of all the income reported in America in 2005. At those income levels, it would take only 40,000 people earning comparable incomes to match the entirety of the reported taxable income of every household in America. (Cite: The Nation)
posted by saulgoodman at 10:20 PM on September 20, 2008 [5 favorites]


A simpler example would be saying something like "An air conditioner isn't like a heater that doesn't require venting to the outside."

No, that's a quite different construction. A heater really doesn't require venting to the outside. You mean "venting to the outside" quite literally in your example.

What you said before was, "the government is not a corporation of which we are all shareholders, each responsible for a portion of the debt". The difference here is that you don't mean "responsible for a portion of the debt" literally with respect to "a corporation," but you do mean it literally with respect to "the government", even though the phrase "a corporation of which we are all shareholders, each responsible for a portion of the debt" as a whole bears a metaphorical relationship with respect to "the government".

This is why I described it as nested metaphors, and I think I'm correct.

A parallel construction using your heater example would read something like this: "A refrigerator is not a heater, which requires venting to the outside" to mean "a refrigerator doesn't need to be vented to the outside".

In my example, I suppose "venting to the outside" would be a metaphor for "venting in front of the heating element" with respect to the heater, but "venting to the outside" would be meant quite literally with respect to a refrigerator, even though it's buried in the heater metaphor. My example, which I think quite closely tracks your original, reads very strangely, though, since neither a heater nor a refrigerator require venting to the outside.

The difference being highlighted is that an air conditioner needs to be vented to the outside (or have some other heat sink) while a heater does not.

But in your original example, neither the citizens of the U.S. nor the shareholders of a corporation are liable for the entity's debts. Your metaphor was of the form X is not a Y, which Z, where Z describes a similarity between X and Y, not a difference.
posted by Mr. President Dr. Steve Elvis America at 10:40 PM on September 20, 2008


I'm sorry, I mean where Z is similarly false across X and Y.
posted by Mr. President Dr. Steve Elvis America at 10:42 PM on September 20, 2008


Uh, in that second bullet item, "because only about 50T earners in the top quintile" was supposed to be: "because the collective efforts of that 80% of the income earners didn't even amount to half of what earners in the top quintile took home."

Or something. It's late.
posted by saulgoodman at 10:48 PM on September 20, 2008


In 2005, the top 1% of income earners accounted for 15.6% of all the taxable income reported in America. (Cite: Center on Budget and Policy Priorities - PDF report). By 2006, this figure had grown to 22.1% (Cite: Tax Foundation -- Note: Not sure if this site has an ideology or not, but its numbers seem to check out).

I don't think those two numbers are comparable. First, 15.6% is an after tax amount, according to your link, but 22.1% is a pre-tax amount. Second, the 22.1% number seems to come from Table 3 at the link (divide "Top 1%" by "Total" for the relevant year). The 2005 number can be calculated the same way, and it's 21.2%. An increase, but not as dramatic.

It appears that overall AGI grew by 8% from 2005 to 2006, but the top 1%'s AGI grew 13%.
posted by Mr. President Dr. Steve Elvis America at 10:59 PM on September 20, 2008


And because I know that worthless troll will not answer the question put to him directly, I will address his trolling directly:

The problem is that none of us owes any amount on the national debt in the sense people normally mean when they say someone "owes" a financial debt.

If any of you have ever had to pay off a credit card with interest accrued, you know that interest accumulates on principal and prior interest, and that you are obligated to pay the balance of that interest just as much as you are legally obligated to pay the debt itself. Most credit cards offer the ability to pay an incomplete balance while charging interest on remaining principal.

Most reasonable people would agree that credit card debt is a typical "financial debt", as described above, and that the obligation of credit card debt builds in the manner described.

For any American taxpayer who doubts who is responsible for the payment of interest accrued on the public debt, please refer to the back of your 1040 instructions, where you'll find that 8% of the 2006 budget was allocated to paying interest on prior debt accrued. This last fiscal year, that is 431 billion that taxpayers never see again, debited directly from the payroll and other taxes collected from the American workforce.

The money for this debt service didn't grow on trees: It came out of your pocket through taxation. Further, that public debt increased from roughly $5 to $11.5 trillion over the Bush administration, and will go up another $700 billion when well-to-do shareholders are bailed out next week.

It is only inaccurate to say that the debt obligation of every American is $29,000 to point out that, by not paying down the debt, the debt obligation is exponentially higher — if not made indefinite — by continued borrowing against prior debt.

Much like credit card debt, not paying the principal means that prior interest becomes today's new principal and tomorrow's debt service. And unless you're into tax evasion, that increased financial obligation will be paid for out of your paycheck tomorrow, in the very same manner it is being paid for today.

The blame for increased debt service lies exactly with the people who have been in charge. And those people were not only in charge of all three branches of government for six years, but they were handed a debt obligation that was not only in control but was being reduced.

The elephant in the room is that these people were in charge and they fucked us over. Badly. And now they don't want to play the blame game because the music has stopped and suddenly everyone's nervous. Instead, we'll have their lackeys and trolls play meaningless word games that ignore the reality of the situation.

In the end, if you're not rich, you pay taxes — or, rather, you know intimately what chunk of your salary goes to taxes — and more of it will go towards the Republican Party's debt service tomorrow. And yet more will go to pay interest on that debt the day after that. And then your children will be in hock for more. And their children. So when you read let's-not-play-blame-games or it's-not-really-debt, then think about your kids. And their kids. And where you were when you let these asshole liars play their stupid games with your future and the future of those you care about.
posted by Blazecock Pileon at 11:13 PM on September 20, 2008 [1 favorite]


Nice troll. The excess verbiage can't hide the equivocation on the word "responsible" in the fifth paragraph, which the whole thing turns on, though.
posted by Mr. President Dr. Steve Elvis America at 11:20 PM on September 20, 2008


Can we just shoot the retard already?
posted by trondant at 11:30 PM on September 20, 2008


Nice troll. The excess verbiage can't hide the equivocation on the word "responsible" in the fifth paragraph, which the whole thing turns on, though.

I'm not playing your word games. You made a claim without evidence and it's up to you to back it up. Your comments are ill-informed up until that point.
posted by Blazecock Pileon at 11:43 PM on September 20, 2008 [1 favorite]


I'm not playing your word games.

You're playing nothing but word games, and that's why I think you're a troll. I used "responsible" once, clearly in the context of "legally liable to pay". But you used "responsible" in a very different sense, trying to conflate the obligation to pay taxes with the obligation to pay the debts that are paid with tax revenues. The two obligations are not the same thing.

The word game your playing is exploiting the different meanings that a word like "responsible" can have.
posted by Mr. President Dr. Steve Elvis America at 12:01 AM on September 21, 2008


To state Blazecock Pileon's point more succinctly, since we are the government's source of income (and since taxes are not optional, as is a purchase from a corporation), we are indeed responsible for paying its debt, like it or not.
posted by wierdo at 12:03 AM on September 21, 2008


bhnyc said they conduct polls using using landlines? i don't know anyone under 40 that has a landline.

I'm under 40, and have made it a point to own a land line; moreover, I've made it a point to own a corded telephone for a number of reasons: I'm better prepared to make emergency contact in a catastrophe because of this precaution - my phone doesn't require independent transmission towers, or even a secondary power source. I'm harder to overhear using police scanners or CBs. My attached "telezapper" disables and disconnects any mechanically-originated calls.

Because I'm unlisted, on the "do not call" list, and cautious about the people I give my home number to, I also receive very few unsolicited calls, and those I do receive are almost exclusively wrong numbers.

I love my land line. When it rings, I know it's either an important call or a wrong number for the quarry up the street. Either way, I'm happy.
posted by Graygorey at 1:29 AM on September 21, 2008 [1 favorite]


oh man mpdsea, you are DEDICATED.
posted by tehloki at 1:35 AM on September 21, 2008


And having posted what I posted, prior to reading the rest of this thread, feel a bit like a dinghy in the midst of a naval battle... but still doing my part to represent the position of the dinghies...!
posted by Graygorey at 1:44 AM on September 21, 2008


Aside from the issue of whether we're going to get a statement with our names at the top and 29000 at the bottom is there anything particularly wrong with specifying the US debt in "per capita" terms in much the way we'd specify other national quantities (like GDP or wealth or income)?
posted by Wood at 1:52 AM on September 21, 2008


is there anything particularly wrong with specifying the US debt in "per capita" terms
Yes. "Per capita" is, definitionally, the arithmetic mean "share" of the relevant figure. This is useful when looking at a the normal distribution, because you can take a typical individual out of the sample, measure his/her "share", and expect it to be near the mean. This is a somewhat tautological observation: if you knew nothing about the data set in question, but just randomly set about measuring individuals, you would end up with a normal distribution. Heights are a good example of this: measure people's heights, and you'll end up with a normal distribution.

However "shares" of anything financial tend to be distributed in a Lorenz curve. There are a great many people with nearly nothing, and a very few people with nearly everything. Thus if you randomly set about investigating people's financial affairs (making for the purpose of the exercise, the assumption you could do so as readily as you could measure their heights), there is a high probability that you would never investigate a truly wealthy person. There is also a high probability that if you did happen to randomly measure one, his/her wealth "share" would outmatch the total "shares" of all other persons so measured.

Thus per capita measurements whether applied to debt or GDP or almost anything else of a financial nature are not just an error, but outright misleading, and I would argue that this is deliberately made so, in order to obfuscate--at least from the casual observation of a typical member of the public--the true nature of wealth distribution. I don't mean, by making this observation, to imply that anything can necessarily be "done about it" as such. For every society that can feasibly measure wealth, if that wealth is graphed, it will have this general shape (cf Zipf's Law, Pareto distributions). It's a consequence of the nature of economic transactions that this is so.

What can be done is flattening out of the curve a bit, and making individual motion on the curve easier (of course, easier upwards implies easier downwards too). This is, broadly speaking, moderation of income inequality, and is one of the most important factors that could potentially be pointed to as "the real difference between Republicans and Democrats". Republican policies increase income inequality, Democrat policies reduce income inequality. Both can be said to be attempting to raise average income. The actual results, as per the linked articles, speak for themselves.
posted by aeschenkarnos at 2:38 AM on September 21, 2008 [2 favorites]


Republican policies increase income inequality, Democrat policies reduce income inequality.
Citation (PDF), and the Washington Monthly's article about that paper in 2005.
posted by aeschenkarnos at 2:55 AM on September 21, 2008 [1 favorite]


Billions for Bailouts! Who Pays?:

While the middle class collapses, the richest people in this country have made out like bandits and have not had it so good since the 1920s. The top 0.1 percent now earn more money than the bottom 50 percent of Americans, and the top 1 percent own more wealth than the bottom 90 percent. The wealthiest 400 people in our country saw their wealth increase by $670 billion while Bush has been president. In the midst of all of this, Bush lowered taxes on the very rich so that they are paying lower income tax rates than teachers, police officers or nurses.

Now, having mismanaged the economy for eight years as well as having lied about our situation by continually insisting, “The fundamentals of our economy are strong,” the Bush administration, six weeks before an election, wants the middle class of this country to spend many hundreds of billions on a bailout. The wealthiest people, who have benefited from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd. This is the most extreme example that I can recall of socialism for the rich and free enterprise for the poor.

posted by ornate insect at 4:11 AM on September 21, 2008




"the government is not a corporation .... as a whole bears a metaphorical relationship with respect to "the government".

Many portions of 'the government' do have incorporation papers.

Thus not 'metaphorical'.

since we are the government's source of income (and since taxes are not optional, as is a purchase from a corporation), we are indeed responsible for paying its debt, like it or not.

President Dr. Congressman Ron Paul wanted the IRS to stop being able to collect taxes for individuals. Thus 'we' would not have a direct payment on this bailout debt.
posted by rough ashlar at 6:12 AM on September 21, 2008


President
Ha! Like that would or could happen.

Dr.
Yes, he has a title. He's a medical doctor. His fawning supporters insist on always using it. Maybe they hope it'll transform into an economics PhD.

Congressman Ron Paul wanted the IRS to stop being able to collect taxes for individuals.
And I want a puppy dog. One of these desires will be granted during the lifespan of the USA as a functional entity.

Thus 'we' would not have a direct payment on this bailout debt.
If wishes were horses, then beggars would ride. Which is more apropos than usual, under the circumstances.
posted by aeschenkarnos at 6:38 AM on September 21, 2008 [1 favorite]


ornate insect: "772. Clinton: 118.1% increase. - driving us into a depression

Horseshit. Bush owns this mess.
"

Check out S&P 500 historical P/E ratios over the last 150 years. You will see only two gigantic spikes in P/E on the entire chart, one in the 20's, one in the 90's. Stocks became outlandishly expensive under the watch of Clinton and Coolidge. After the dot-com bust, they just never retreated to where they should be. They will now. I'm sure you won't check though. Nobody pays any attention to P/E any more. The Dow is treated like some monolith that must always go up. Have the Dow go down for several years? It can't, it's too big to fail. Wrong, just wrong.
posted by Rafaelloello at 7:24 AM on September 21, 2008


Rafaelloello--Clinton's not entirely off the hook in my book, and under his watch the dot com bubble, NAFTA and continued banking/financial deregulation (a trend begun under Reagan) all occurred. But Bush has had eight years to address these issues, and has made them all worse. His reactions to the Enron bubble and financial scandals has been, to put it mildly, insufficient. Under Bush, the middle class has shrunk, the deficits have ballooned, the debt has skyrocketed, the culture of greed and corruption has flowered, and now it appears that our entire economy is on the brink. Passing the blame-buck back to Clinton is just not supported by the facts. Eight years is a long time: where the fuck was Bush?
posted by ornate insect at 9:54 AM on September 21, 2008






Democrats would be stupid to agree to a bail out to save the Republicans before an election. All they have to do is go back to the Reaganite Savings and Loan debacle for this one (250 Billion), which the Bush family was involved in directly, and they still control the White House. Anytime Republicans solve a problem, their friends profit from it. Leaked word is that the properties being bailed out are inflated. If so, that will create a new problem down the road, as they probably wish to do.

If there is any doubt that Republicans even know how to solve a simple problem related to the economy, they should look at their supply-side policies in regards to their projects: environmentalism (complete denial), immigration (fence building), the drug war (prisons, automatic sentencing), the Iraq and Afghan wars (privatization and tax cuts), health care (profitcare/anti-prevention), education (byzantine loans from the government through banks, rationing knowledge), abortion (welfare cuts). They are incompetent to lead the majority in these areas because they simply have no clue to demand-side solutions, because they naturally see the majority in negative terms and naive people often think that these fiascos are mistakes made in good faith.
posted by Brian B. at 10:23 AM on September 21, 2008


The invisible hand metaphor originates with Adam Smith in The Wealth of Nations (1776).

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Bernard Mandeville made a similar point with his Fable of the Bees (1705), which fancifully describes human society as a wondrously productive bee hive, even though each bee is as selfish as can be.

And the whole hive prospers as the bees exist on the EXCESS of their environment.

How does such 'logic' work today?

Smith was critical of Mandeville and presented a more nuanced view of human nature in his Theory of Moral Sentiments (1759), but modern economic and political discourse is not about nuance. Rational choice theory takes the invisible hand metaphor literally by trying to explain the length and breadth of human behavior on the basis of individual utility maximization, which is fancy talk for the narrow pursuit of self-interest. For the general public, unfettered competition has been turned into a moral virtue and "regulation" has become a sin.

Err the 'invisible hand' was in reference to support of your nation's people, not the people of other nations.

The bail out looks to help out other nations to the penalty of the US tax-paying citizen.
posted by rough ashlar at 10:31 AM on September 21, 2008




Under Bush, the middle class has shrunk,

But now he's firmly re-establishing it. Everybody who makes $50K-$250K will now be making payments to the multi-millionaire's who wrote the bad loans and also to the poor schlubs who bought them, if Shumer has his way. It's going to be a great time to be either rich or poor and fiscally irresponsible, but wait 'till you see what they do to the rest of us that didn't bite off more than we could chew. Time for a force-feeding for us.

One thing that politicians, both sides of the aisle, have in common is that they both either have money and/or are connected to money. And everyone who has money has real estate. That's why both sides are fine with illegal immigration, it keeps the real estate market up, for a time. That's why they're both fine with bail-outs, it keeps the markets up, for a time. The smart people all know and have known the market must crash, but if they can whip-saw it to the bottom, the pain for the rich will be that much less as they can buy every rally and sell every dive. They've even done a great job of pushing the dollar up to wonderful highs over the last two months, just so they can take it down with the latest bail-outs.

I'm fine with what they're doing for myself financially. I'm doing great. I've been short the market (actually double-short the Nasdaq 100) for several months until Monday & Tuesday. I then took all my winnings and went long on Crude, Oil Companies, Swedish Krona, and Australian Dollars and still maintain a nice short position(Since July) on WaMu. This is a fantastic market for people who aren't billionaires (they can't move their massive assets fast enough) if you understand the big picture and know how to trade it. If they let it crumble to the ground I couldn't continue to do as well as I'm doing.

Anybody who wants to play along, I'll even tell you where the next big playground will be. Airlines. The dollar will get killed, oil will go up, unemployment will continue to rise and the hedge funds need new prey now that they can't short financials.

Back to the main thrust of this thread. My best hope for the long-term prosperity of this country is that grassroots movements spring up over the next few weeks to vote out every single incumbent, Dem and Republican, no bias. Just get as many of them out on the curb as we can. Except Ron Paul. I'm not even a Ron Paul supporter, but in hindsight he's the only one who has been spot on telling the truth. After that, hopefully people will be awake enough to get involved and stay involved with local politics. That's where we need to make some big changes first, then move on up the line. Every 4 years I'm asking myself the same tired question:

Are these really the best two people we have in this entire great country as candidates for the most important leadership position in the world?

If you've been sitting on the sidelines, like me, waiting for great things to come from inside the current political machine (and there's only one, not two), it won't. Change has to come from the outside. I hope some others will consider using their votes to at least show the insiders some powerful writing on the wall, and then stay in the game after November, no matter what.
posted by Rafaelloello at 12:11 PM on September 21, 2008


Here's a link to the top 10% of income earners paying 70% of US taxes.

Which is, of course, meaningless without knowing what their share of the total income is. And, of course, your link doesn't give that, because, of course, it has an ax to grind.
posted by Mental Wimp at 3:37 PM on September 21, 2008 [1 favorite]


Bush’s Legacy Of Squandering Taxpayer Money

He's not squandering it. The right people are getting it.
posted by Mental Wimp at 3:44 PM on September 21, 2008


http://www.metafilter.com/75020/The-Elephant-in-the-Room-Market-Prosperity-versus-Republican-Administration#2266873

Mr. President Dr. Steve Elvis America:

I don't think those two numbers are comparable. First, 15.6% is an after tax amount, according to your link, but 22.1% is a pre-tax amount. Second, the 22.1% number seems to come from Table 3 at the link (divide "Top 1%" by "Total" for the relevant year). The 2005 number can be calculated the same way, and it's 21.2%.

On the first point, good catch. I should have used the pre-tax amount, which is 18.1%.

On the second point, on review I should have used a single source for both statistics. The one I made does look like an apples-to-oranges comparison once I look more closely. In my late night stupor I just assumed the two sources cited were calculating the top 1% share of total income the same way. The CBO report cited doesn't have numbers for 2005, but all the different estimates I've seen (obviously, all based on slightly different definitions of income) put the total income share of the top 1% in the 20--21% range.

Here's a link to the top 10% of income earners paying 70% of US taxes.

Which is, of course, meaningless without knowing what their share of the total income is. And, of course, your link doesn't give that, because, of course, it has an ax to grind.


Incidentally, the top 10%'s share of total pre-tax income was 40.9% in 2005, according to this Congressional Budget Office report.
posted by saulgoodman at 7:59 PM on September 21, 2008


Here's a link to the top 10% of income earners paying 70% of US taxes.

Which is, of course, meaningless without knowing what their share of the total income is. And, of course, your link doesn't give that, because, of course, it has an ax to grind.

Incidentally, the top 10%'s share of total pre-tax income was 40.9% in 2005, according to this Congressional Budget Office report.


Which also shows that they only pay 53% of Federal taxes, not 70%. The 70% refers to income taxes. So, more spinning.
posted by Mental Wimp at 10:20 PM on September 21, 2008 [1 favorite]


And I have to say one more thing. There is a constant drum beat from some of the wealthiest in this country about how much they are overtaxed, and they can't even tell the truth about it, they feel the need to exaggerate how much they actually pay. But what is really amazing to me is that there are many not in that income class who are willing to take up the call, as though they were some underprivileged group that needed support from the larger society to protect their interests. These water carriers even repeat their inaccuracies faithfully. I don't understand it.
posted by Mental Wimp at 10:26 PM on September 21, 2008


At this late point in the game, aeschenkarnos is definitely angling for the win. Especially here.

Good, I say. Because that "10%-pay-70%" argument device was really beginning to stink like fish gone bad.
posted by humannaire at 12:38 AM on September 22, 2008


Mr. P. Elvis:
I doubt anyone reputable has ever bothered to actually say "the residents of the U.S. do not actually each owe an amount corresponding to their pro rata share of the U.S.'s debt" because it's just silly.

Robert Reich:

The public doesn’t like a blank check. They think this whole bailout idea is nuts. They see fat cats on Wall Street who have raked in zillions for years, now extorting in effect $2,000 to $5,000 from every American family to make up for their own nonfeasance, malfeasance, greed, and just plain stupidity.

So, yeah, no one reputable would do something so silly.
posted by Killick at 5:31 AM on September 22, 2008


Mental Wimp These water carriers even repeat their inaccuracies faithfully. I don't understand it.
My theory is it's a variation on the Stanford/Milgram observations. In the minds of these people, the wealthy are authority, and people have a strong tendency not just to do what authorities say, but also personally take on a belief system that justifies the authority's orders. As might be expected, these people are intensely conservative and/or rather stupid, which makes them the ideal Republican water carriers.
posted by aeschenkarnos at 6:13 AM on September 22, 2008 [1 favorite]


Sen. Bernie Sanders argues for an emergency shift of more tax burden to the wealthy to help pay for the bailout: I have proposed a four part plan to accomplish that goal which includes a five-year, 10% surtax on the income of individuals above $500,000 a year, and $1 million a year for couples; a requirement that the price the government pays for any mortgage assets are discounted appropriately so that government can recover the amount it paid for them; and, finally, the government should receive equity in the companies it bails out so that when the stock of these companies rises after the bailout, taxpayers also have the opportunity to share in the resulting windfall. Taken together, these measures would provide the best guarantee that at the end of five years, the government will have gotten back the money it put out.
posted by Brian B. at 6:51 AM on September 22, 2008 [1 favorite]




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