Remember when the USA was #1, in education, innovation, and infrastructure, and why?

(Because you guys need this more than we do)

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p>… and unsupported assertions.  I mean, this is so all over the place that its hard to know where to start.  But, anyway,
Your tax rates over time link is nice, and useful.  Did you notice how steep the rates were – not for the rich, but for everyone else?  Did you realize that in 1978 the tax rate for a married couple making over $47K was a stunning 50%?  And for an individual making $23K it was also 50%?  And it goes up from there, of course.  If you think taxing the middle class that heavily was the wealthy “paying their fare share”, then think again.  

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p>Even putting aside the conventional wisdom that rich did not actually pay the high tax rates but rather sheltered their money, you haven’t even tried to show that the rich paid less taxes after Reagan’s tax cuts.  
http://www.irs.gov/taxstats/in…
http://www.freedomandprosperit…

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p>The latter link has a nice table at the top of page 6, summarizing portions of the former, showing a dramatic 5X increase in the amount of taxes paid by people earning over 200k (which population itself greatly increased after the tax cuts.)

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p>But, worse than that problem, you’ve failed to show any connection whatsoever between “how much the wealthy pay” and the various maladies that you’ve claimed are now among us.  One thing you might try would be to show that spending has dropped (which it hasn’t) therefore (all the problems because we aren’t spending enough).  But unfortunately for all of us, world wars aside, the federal government only ever seems to spend more and more.

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p>So, I think that pretty thoroughly refutes the first half of your post.  I don’t really have the inclination to follow your stream of consciousness into healthcare, or the impact of “higher” taxes on birthrates (!!!???) but suffice it to say, I think you need to be a little more thorough in your research.  As it is your post is like an assumptions based coloring book.  Not good.

It’s politically unlearned to believe that Eisenhower’s tax policy was good. He ran on a promise to cut taxes, but when he got in, he was captured by budget hawks who wanted to keep taxes high and balance the budget. This is how he managed to lose control of both houses of Congress two years after he was elected. He was re-elected because the competition, Adlai Stevenson, wanted to raise taxes even higher.

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p>Political victory comes not from good policy, but from having the best policy of the available choices.

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This is what happened:

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p>First, the nation poured BIG $$$$$$$$$$$$$$ into infrastructure and education, and had PROTECTIVE TARRIFFS to keep cheap imports out.

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p>We discovered things and made things.

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p>Then, we went for free trade, and all the jobs went to third world nations with slave wages. Infrastructure was neglected and has crumbled, and the cost of school has gone through the roof.

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p>And now we’re in a Depression.

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p>What can be done?

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p>Have the GOVERNMENT ITSELF start a lot of infrastructure projects. Give FREE TRAINING to the unemployed, and pay $25 per hour to work these projects.

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p>That will give people paychecks that they will spend, and will set up what needs to be set up.

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p>It’s radical, but it would work. It’s time for political rulers with GUTS that will get it right and ignore the radio-jock gasbags.

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p>To all BONEHEADS: PLEASE, insult me. Flip me off. I beg you. Your insults are nothing, getting the economy going and building the future in this nation is everything.

On a worldwide basis, the US is something like 12th of 59.  That’s pretty damned good, considering the poverty that exists in some areas.

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p>If Mass was a country, we’d be 3rd or 4th in the world, a spectacular showing.

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p>Our education system could improve, but it’s quite good.

Back in the seventies by my account.  Before we exported the electronics industry to Malasia, the end mill industry to China and the shoe machinery industry to I forget where.  Corporate can search my wife, mandate that she can not sue the company in a court of law in the country which claims she is a peasant thereof plus they can also demand injections of substances which have rendered formerly normal teens dependent wards of the state mentally on a permanent basis.  Yes that is my testimony about the H1N1 swine flu for profit marketing/compliance efforts.  For all the excellent life saving efforts the good people in the medical industry do accomplish this thing was a blight on that stellar record this baby boomer will never ever forget.

Or Social Security Old Age Survivors and Disability Insurance tax rates and what has happened to them over time.  Focusing solely on the income tax leaves out another tax which has continued to go up to reflect a combination of increased benefits, increased life expectancies and increased SSI payments.

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p>A chart is available here http://www.ssa.gov/OACT/ProgDa…

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p>In short a self employed person would have paid a total of 2.25% in 1951, 4.51% in 1961, 6.9% in 1971, 8.0% in 1981, and 12.40% in 1991 and 2001. So there has been a shift in tax burden from income taxes to SS OASDI taxes that needs to be factored into the tax discussion, particularly for small, self employed businesses.  And, let’s not forget that this does not include medicare taxes which are over 3% for self employed as well.

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p>It is a discussion that needs to be held.  I appreciate Amber for putting it forward.  I agree with some of her points, don’t agree with others, but appreciate her willingness to put out her thoughts and argue her positions.  She regularly posts at both RMG and BMG and has always been upon to discussion and debate.  Keep it coming, it is needed from all political ideologies.

The initial post relies on the same sort of logic as does “We have had a lot of snow, and therefore global warming must be a hoax.”

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p>My great-grandpa was alive in this golden age as well, so if we could only find a way to re-animate his decaying corpse, then everything would be great.

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p>Following this is 70-something posts of ideological “did not, did too, he started it, did not, did too.”

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p>Post-war American manufacturing could afford to employ vast numbers of people, and pay them huge wages, because manufacturing everywhere else had been conveniently destroyed.  As soon as manufacturing began anew in Europe and Japan– and began at all elsewhere in the world– this position of privilege and dominance ended.  Neither taxing the bejesus out of the wealthy, nor not taxing the wealthy, will cause this golden age to return.

Today’s Krugman column about the USA being going dark, and crumbling into third world status.

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p>We can pay now – or we can continue the downhill slide while the anti-government haters of all but the rich crow, strut, and pontificate.

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p>Very clear choice, in my opinion.

Has never been as low as it was under Carter, since Carter.  

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p>http://pewsocialtrends.org/pub…

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p>Yes, that is in inflation adjusted dollars.

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p>This too:

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p>http://static.seekingalpha.com…

In this old NR article here:  http://old.nationalreview.com/…

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p>Some nice charts in there re: Reagan’s budget requests vs. what actually got spent, but my favorite stuff is about how tax receipts from the wealthy skyrocketed after the tax cuts.  For example:

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The cumulative effects of the tax legislation during the Reagan years has been a substantial increase in the share of federal income-tax liabilities paid by the wealthy. In 1981, the wealthiest – the top 1 per cent – paid 17.6 per cent of total federal individual income taxes; in 1988, their share had increased to 27.5 per cent.

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p>I also like this quote, for some reason:

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For one thing, during the eight years of the Reagan Administration, only one tax bill, ERTA, reduced taxes for upper-income individuals and corporations. The central objective of the initial Reagan program, of which ERTA was a critically important part, was to reorient national economic policy. Instead of focusing on income re-distribution and aggregate demand management of the economy, the Reagan policy aimed at reducing the Federal Government’s intrusion into the nation’s economic life. It sought to provide a policy climate in which individuals’ incentives to pursue their own economic progress would not be frustrated by government tax, spending, regulatory, and monetary policies. ERTA’s role in this economic strategy was to reduce the disincentives of high and steeply progressive individual tax rates and the biases they exerted against working, saving, and investing, and to provide more realistic and more nearly neutral tax treatment of investment in plant, machinery, and other depreciable property.

Fed spending in 1950 was about 15% of GDP.  Now, it’s closer to 20% of GDP, but you’re getting stired up becaue there’s no 90% tax bracket.

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p>Isn’t the key data point this:  how much is government spending now, versus then?  And, the answer is that we’re spending more now.

It reminded of what Greg Palast wrote in 1998 before G.W. reinvented “trickle down” and Grover Norquist encouraged drowning government in a bath tub.

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p>The article was included in one of his books and is no longer available on-line, so pardon posting it in its entirety.

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Tinker Bell Pinochet and the Fairy Tale Miracle of Chile
The London Observer
Sunday, November 22, 1998
SAO PAULO – Cinderella’s Fairy Godmother, Tinker Bell and Senator Augusto Pinochet have much in common.

All three performed magical good deeds. In the case of Pinochet, he is universally credited with the Miracle of Chile, the wildly successful experiment in free markets, privatisation, de-regulation and union-free economic expansion whose laissez-faire seeds have spread from Santiago to Surrey, from Valparaiso to Virginia.

But Cinderella’s pumpkin did not really turn into a coach. The Miracle of Chile, too, is just another fairy tale. The claim that General Pinochet begot an economic powerhouse is one of those utterances, like “Labour’s ethical foreign policy,” whose truth rests entirely on its repetition.

Chile can claim some economic success. But that is the work of Salvador Allende – who saved his nation, miraculously, a decade after his death.

In 1973, the year the General seized the government, Chile’s unemployment rate was 4.3%. In 1983, after ten years of free-market modernisation, unemployment reached 22%. Real wages declined by 40% under military rule.

In 1970, 20% of Chile’s population lived in poverty. By 1990, the year “President” Pinochet left office, the number of destitute had doubled to 40%. Quite a miracle.

Pinochet did not destroy Chile’s economy all alone. It took nine years of hard work by the most brilliant minds in world academia, a gaggle of Milton Friedman’s trainees, the Chicago Boys. Under the spell of their theories, the General abolished the minimum wage, outlawed trade union bargaining rights, privatised the pension system, abolished all taxes on wealth and on business profits, slashed public employment, privatised 212 state industries and 66 banks and ran a fiscal surplus.

Freed of the dead hand of bureaucracy, taxes and union rules, the country took a giant leap forward … into bankruptcy and depression. After nine years of economics Chicago style, Chile’s industry keeled over and died. In 1982 and 1983, GDP dropped 19%. The free-market experiment was kaput, the test tubes shattered. Blood and glass littered the laboratory floor. Yet, with remarkable chutzpa, the mad scientists of Chicago declared success. In the US, President Ronald Reagan’s State Department issued a report concluding, “Chile is a casebook study in sound economic management.” Milton Friedman himself coined the phrase, “The Miracle of Chile.” Friedman’s sidekick, economist Art Laffer, preened that Pinochet’s Chile was, “a showcase of what supply-side economics can do.”

It certainly was. More exactly, Chile was a showcase of de-regulation gone berserk.

The Chicago Boys persuaded the junta that removing restrictions on the nation’s banks would free them to attract foreign capital to fund industrial expansion.

Pinochet sold off the state banks – at a 40% discount from book value – and they quickly fell into the hands of two conglomerate empires controlled by speculators Javier Vial and Manuel Cruzat. From their captive banks, Vial and Cruzat siphoned cash to buy up manufacturers – then leveraged these assets with loans from foreign investors panting to get their piece of the state giveaways.

The bank’s reserves filled with hollow securities from connected enterprises. Pinochet let the good times roll for the speculators. He was persuaded, as Tony Blair said this month in another context, “Governments should not hinder the logic of the market.”

By 1982, the pyramid finance game was up. The Vial and Cruzat “Grupos” defaulted. Industry shut down, private pensions were worthless, the currency swooned. Riots and strikes by a population too hungry and desperate to fear bullets forced Pinochet to reverse course. He booted his beloved Chicago experimentalists. Reluctantly, the General restored the minimum wage and unions’ collective bargaining rights. Pinochet, who had previously decimated government ranks, authorized a program to create 500,000 jobs. The equivalent in Britain would be a government program for 4 million workers.

In other words, Chile was pulled from depression by dull old Keynesian remedies, all Franklin Roosevelt, zero Margaret Thatcher. (The junta even instituted what remains today as South America’s only law restricting the flow of foreigncapital.)

New Deal tactics rescued Chile from the Panic of 1983, but the nation’s long-term recovery and growth since then is the result of – cover the
children’s ears – a large dose of socialism.

To save the nation’s pension system, Pinochet nationalized banks and industry on a scale unimagined by Communist Allende. The General expropriated at will, offering little or no compensation. While most of these businesses were eventually re-privatised, the state retained ownership of one industry: copper.

For nearly a century, copper has meant Chile and Chile copper. University of Montana metals expert Dr. Janet Finn notes, “Its absurd to describe a nation as a miracle of free enterprise when the engine of the economy remains in government hands.” (And not just any government hands. A Pinochet law, still in force, gives the military 10% of state copper revenues.)

Copper has provided 30% to 70% of the nation’s export earnings. This is the hard currency which has built today’s Chile, the proceeds from the mines seized from Anaconda and Kennecott in 1973 – Allende’s posthumous gift to his nation.

Agribusiness is the second locomotive of Chile’s economic growth. This also is a legacy of the Allende years. According to Professor Arturo Vasquez of Georgetown University, Washington DC, Allende’s land reform, the break-up of feudal estates (which Pinochet could not fully reverse), created a new class of productive tiller-owners, along with corporate and cooperative operators, who now bring in a stream of export earnings to rival copper. “In order to have an economic miracle,” says Dr. Vasquez, “maybe you need a socialist government first to commit agrarian reform.”

So there we have it. Keynes and Marx, not Friedman, saved Chile.

But the myth of the free-market Miracle persists because it serves a quasi-religious function. Within the faith of the Reaganauts and Thatcherites, Chile provides the necessary genesis fable, the ersatz Eden from which laissez-faire dogma sprang successful and shining.

Half a globe away from Chile, an alternative economic experiment was succeeding quietly and bloodlessly. The southern Indian state of Kerala is the laboratory for the humane development theories of Amartya Sen, this year’s winner of the Nobel Prize in Economics. Committed to income re-distribution and universal social services, Kerala built an economy on intensive public education. As the world’s most literate state, it earns its hard currency from the export of technical assistance to Gulf nations. If you’ve heard little or nothing of Sen and Kerala, maybe it is because they pose an annoying challenge to the neoliberal consensus.

This week, the international finance Gang of Four – the World Bank, the IMF, the Inter-American Development Bank and the International Bank for Settlements – offered a $41.5 billion line of credit to Brazil. But before the agencies hand the drowning nation a life preserver, they demand Brazil commit to swallow the economic medicine that nearly killed Chile. You know the list: fire-sale privatisations, flexible labor markets (i.e. union demolition) and deficit reduction through savage cuts in government services and social security.

Here in Sao Paulo, the public is assured these cruel measures will ultimately benefit the average Brazilian. What looks like financial colonialism is sold as the cure-all tested in Chile with miraculous results.

But that miracle was
in fact a hoax, a fraud, a fairy tale in which everyone did not live happily ever after.

Things have gotten far out of hand.  Eisenhower would now be considered a kooky wuss, way more marginal than Kucinich.

http://www.gpoaccess.gov/usbud…

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p>Great data in there.  Unfortunately not much to support Amber’s worldview re: government spending.

“keep the lights on” or “pave the roads”…

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p>Globe

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Despite an economic downturn and widespread job and wage cuts for many workers, outgoing state Auditor A. Joseph DeNucci has awarded a 5 percent raise to his staff, retroactive to July 1.

A DeNucci spokesman defended the raises, which he said would cost about $350,000 through the end of the year, as just compensation for a staff that has not seen a pay boost in nearly four years and has taken 11 furlough days over the last two years, a concession equivalent to a 4 percent