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Discussion: (44 comments)

  1. Does anyone have a documented estimate of how much additional income we would have in recent years, if the top marginal rate was again 39.6% instead of 35%? My back of the napkin guess is that it couldn’t be more than $50-60 billion per year, even if you were to assume the change in the rate affected nothing else. And yet some people act as if this is to blame for yearly trillion-dollar deficits. (p.s. would also be interested in estimates of the annual “cost” of all the Bush tax cuts)

    1. Max Planck

      It’s not as if this aline cures the deficit- no one says it does. BUT: it would raise over $800 billion over the next decade, and the cost to someone earning $300,000 per year is only $38 a week. That won’t tank the economy.

      If it were left up to me, I would raise the dividend tax to 20%, and increase it again to 25% in two years. I would also raise capital gains taxes and eliminate the carried interest deduction.

      Don’t believe the crap that this is “tax on small business.”

      1. $800B over 10 years? That’s $80B per year. Estimates of the annual deficit can vary that much each month. Truly trivial. To have any significant effect on the deficit over time you have to get at entitlements. That and much faster economic growth. No tax increase contemplated by the Left in their wildest dreams even comes close. That is, if the deficit is the primary concern and somehow the measure of economic wellbeing which it should not be. Growth is. Any and all taxes must necessarily depress output – employment, income, etc – which is why they are always anethema and strenuously to be avoided.

        1. Max Planck

          “Any and all taxes must necessarily depress output ”

          Sieg Heil!

          1. Right back at you.
            The Nazis were statists too.

          2. JackWayne

            Max, you’re the one with a German moniker. Projection.

          3. Max Planck

            Oh, get off it, will ya? No one is a “statist” and no one is advocating a command economy. You people are so wrapped in your own pathologies, you forget that ORGANIZATION does count for something, EVEN IN A BUSINESS. So why should government be any different?

            You fantasize that a “free market” could exist just as Marxists fantasized that a Utopian society could exist.

            Neither works, and all zealots are blind.

  2. Max Planck

    “And besides, the Obama administration has added a lot more to the national debate ($5.3 trillion) in four years than the George W. Bush administration ($2 trillion) did in eight”

    Uh, aside from the use of the term “national debate” I assume you meant “national deficit” Bush left us with $10 trillion in debt, and THEN tanked the economy.

    It was Boehner who cowardly welched on the deal he and Obama struck: 83% in cuts in spending, with 17% in revenues. Not a bad compromise, even for a conservative shill.

    Had Bush preserved the surplus, the nation might not only have escaped financial disaster, it would have had the wherewithall to fight the massive contraction Bush and his surrogates engineered.

    1. MacDaddyWatch

      Obama added more to our total national debt in just 4 years than the combined total debt of all presidents prior to Bush. His fingerprints are on about 1/3 of all our debt, yet he served in office only 1/59th of all presidential time.

      Like Joe Biden, he too is out of control.

      And its debt, not deficits.

    2. You are quite clearly misinformed on who did the welching on that deal between Obama and Boehner. It’s like you’re Joe Biden and think that you are entitled to your own facts or something.

      1. Max Planck

        I’m not misinformed at all. Boehner chickened out because he doesn’t run the House- Grover Norquist does.
        Boehner is perhaps the most impotent Speaker in US history.

        1. wow you swallow everything Obama spews don’t you?

        2. That’s not my recollection either. The deal fell apart when Obama came back for $500B more revenue.

          1. Max Planck

            Your “recollection? Were you there?

            “Why didn’t Boehner call back earlier on Friday? Any kid who has ever traded a Pokémon card knows that you don’t walk away from a negotiation without at least leaving your best offer on the table. Boehner would say that he had run out of time and was certain Obama wouldn’t budge. But there’s a more persuasive theory, which is that Boehner didn’t want to talk with Obama because he feared exactly the opposite — that Obama would respond by offering him the original terms from the previous Sunday, and that Boehner would then find himself trapped. He had to now know that, despite his sense of himself as a persuasive statesman who could get his caucus to follow his lead, he couldn’t get any deal past even his own leadership. It was safer for Boehner to walk away and accuse Obama of having sabotaged the deal than to risk that Obama would retreat to the earlier terms on which they had agreed, forcing the speaker to backtrack himself.

    3. None of which has explained how Biden can simultaneously blame deficit spending of $5 trillion over 8 years for a recession, and support deficit spending of $5 trillion over 4 years as a “stimulus”….

  3. “So what, really, is Biden (and Obama) talking about?”

    ‘My school is better than your school. Nana na na nana!’

  4. Arnold Ziffel
  5. MacDaddyWatch

    Halloween arrived early for the Dems. Raddatz predictably rode in on her broom and almost immediately moderated in favor of an angry and vulgar Biden who was allowed to interrupt Ryan 82 times.

    Important events, powerfully impacting the lives of over 300 million Americans, became trivialized by an angry and disrespectful buffoon. Joe was Joe–an angry old white guy and fart, the drunk at a cocktail party who was over-energized and over-animated by the application of way too much alcohol. Biden was the cocktail party clown that everybody walks away from and tries to avoid. His bizarre antics overwhelmed his arguments. And his attempts to continue with Obama’s Libyan/terrorist coverup was shocking and beyond belief.

    All the media polls had Biden losing by a wide margin. CNN’s poll had him losing by a monster 20 points. Others were in the range of 10 points. Women despised his crude and vulgar antics and the independents didn’t like his bizarre behavior either. Bottom line–Biden blew himself in front of millions of Americans who watched in utter disbelief.

  6. Max Planck

    “So if not the tax cuts or spending, then what?I suppose Biden could have blamed Bush’s housing policies, but Democrats starting with Bill Clinton were completely on board.”

    The link Mr. Pethokoukis has pasted in his text takes to you one of Peter Wallison’s “Big Lie” screeds, where Clinton era housing “policy” is blamed for the housing pump and dump.

    Of course, there being no evidence for this, I simply continue to categorize this worthless propaganda as coming from the Joseph Goebbels School of Political Discourse.

    Mr. Wallison, in a reply to Joe Nocera, took umbrage at the comparison to the Nazi technique.

    However, Mr. Wallison stands guilty of stooping to use it. Mr. Pethokoukis stands as shamed in repeating it.

    1. Rob Benton

      It cannot be disputed that one of the roots of the great recession was Bill Clinton’s modification of the Community Reinvestment Act (CRA) which directed the GSEs fannie and freddie to buy sub prime loans. When Bush 1 left office, sub prime loans made up < 5% of all mortgages on the books. When Clinton left office, these loans made up 13%. McCain (remember the only honest guy in the Keating 5) tryed to end this insanity but was blocked by democrats (socialists by any other name).

      1. Max Planck

        Mr. Benton, everything you wrote was a lie, including the words “and” and “the,” and the reason I troll boards like this is because this lie is so ingrained in the “conservative” commentariat, only constant vigilance can hold it back.

        CRA is NOT a “Sub Prime” loan program, it never was, and if it were the sheer lack of loan volume would mean that if it had a 20% default rate, it STILL wouldn’t have affected the housing market. As it is, the default rate for CRA loans is among the lowest of all mortgage classes. For the 1000th time, I provide this summary:

        http://www.ritholtz.com/blog/2008/12/more-cra-idiocy/

        Secondly, as with most observers, you haven’t a clue how to define what a “Sub Prime” loan is.

        Lastly, the McCain story is rubbish. Once again, here is McCain’s legendary bill, S.190, that was supposed to “rein in” the GSEs. Read the bill and tell me what this would have done.

        http://www.govtrack.us/congress/bills/109/s190

        The fact remains that 86% of Sub Prime- REAL SubPrime loans were the responsibility of non GSE lenders, and had nothing to do with GSE purchases. And of course, once again: how do you explain COMMERCIAL real estate following precisely the same boom and bust track as residential did without any policy inputs?

        This Big Lie is a touchstone in wingnut land, and a REAL Conservative wouldn’t buy it. But this is the political culture we suffer with today.

        1. Abolish the GSEs and you abolish the problem. Period.
          The banks were required to make these loans and the GSEs were required to buy them. By law. It was federal policy. And the government could have stopped it.
          Without the large and extensive secondary market the GSEs provided, these loans would never have been made.
          It is called ‘moral hazard.’ The S&L crisis all over again, writ large, an order of magnitude worse. $150B of taxpayer funds to the GSEs so far and still rising.
          Indeed, the Reps tried several times to rein them in but were shut down by unanimous Dem opposition which included Obama. But basically, under Bush, the Reps bought into the Dem program of universal home ownership.

          1. Max Planck

            You don’t what you’re talking about. The NON-GSE lenders were the ones who sold, underwrote, and securitized the toxic loans.

            Without the iceberg of the SubPrime loan industry, and the willingness of the NRSROs to label them AAA, you have no crisis.

        2. ‘You don’t what you’re talking about.’
          You mean I don’t know what you’re talking about. True.
          ‘The NON-GSE lenders were the ones who sold, underwrote, and securitized the toxic loans.’
          Agreed.
          ‘Without the iceberg of the SubPrime loan industry, and the willingness of the NRSROs to label them AAA, you have no crisis.’
          And agreed.

          Government required ratings by government approved ratings agencies. Everybody piled in.

          1. Max Planck

            1) Government doesn’t require ANYONE to get a rating. 2) Being designated an NRSRO is like being annointed. S&P and Moody’s, in particular, did as much damage as anyone in the crisis, by their complete lack of due diligence, and their ham handed “research.” If SubPrime mortgages were rated as they should have been, a lot of pain could have been avoided.

    2. Whether or not you agree with what Wallison said, the fact remains that Pethokoukis did not repeat it. The reference is quite clearly and obviously used to demonstrate that if (and only if) you and Biden think that such policies caused the recession, THEN such policies started under Clinton.

      The only one that should be shamed by baseless repetition is you, who repeat idiotic allusions to Naziism.

      1. Max Planck

        “Whether or not you agree with what Wallison said, the fact remains that Pethokoukis did not repeat it. ”

        Yes he did- he hot linked Mr. Wallison’s horsehockey in the article he wrote. Its 100% rubbish, and Wallison is 100% a fraud.

        1. DislikeObamaclowns..

          Oh Max you are aware that Bush told Congress 17 times about the finanical melt down that was going to take place because of what was going on.. 17 TIMES and Congress did nothing.. It all started because of the glass steagal being repeal by Billy the Giver… America’s number one hand out man..Billy would give away anything he doesn’t own just to look good..

          1. John V. Ryan

            Bill had lots of help. In fact, if my memory – and everything written about this, especially after October, 2008 – is correct, Phil Gramm was the instigator of the repeal. In fact his wife had a major lobbying role – she did way more than Bill, and the Congress that went along. A recent Time Special said:

            “As chairman of the Senate Banking Committee from 1995 through 2000, Gramm was Washington’s most prominent and outspoken champion of financial deregulation. He played a leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act, which separated commercial banks from Wall Street. He also inserted a key provision into the 2000 Commodity Futures Modernization Act that exempted over-the-counter derivatives like credit-default swaps from regulation by the Commodity Futures Trading Commission. Credit-default swaps took down AIG, which has cost the U.S. $150 billion thus far.”

            You’ll find the full article at

            http://www.time.com/time/speci… #ixzz290vVDV8h.

    3. Jon Murphy

      Max, your ability to deny facts even as they stare you in the face is approaching something amazing. It’s borderline dogmatic.

      Of course the housing bubble has its roots in the Clinton era. Numerous studies have shown this. Studies conducted by the FRB, AEI, Harvard, MIT, Stanford, and many independent economists. Fannie and Freddie have said so themselves. So has Greenspan. The only people who say otherwise are either willfully blind or hilariously ignorant.

    4. Jon Murphy

      I am tired of you, Max. You always do the same thing when housing comes up. You scream “I was there! You are wrong!” call us all Nazis and then storm out.

      Put your money where your mouth is. Prove it to me. Give me empirical evidence that proves you are correct. I don’t want newspaper clippings. I don’t want punditry. I don;t want insults. I want proof. It is that simple. Prove to me that George Bush started the housing bubble and caused it to crash.

      If you are so sure of yourself, then you will have no problem providing evidence. After all, if you are really a smart person, you’d carefully consider all facts and evidence.

      if you are unable to do this simple task, then I suggest you need to reexamine your views and ask yourself “am I basing my views on facts and truth, or opinion and gut feelings?” One is based from science. The other is science-ism.

      1. Max Planck

        I’ve shown you plenty of times. And if newspaper articles by respected and knowledgeable hands don’t convince you, what will?

        Here you go again:

        http://blogs.reuters.com/bethany-mclean/tag/fannie-mae/

        http://economix.blogs.nytimes.com/2012/08/14/blaming-obama-for-george-w-bushs-policies/

        http://www.bloomberg.com/news/2011-08-04/fannie-freddie-role-in-the-financial-crisis-commentary-by-phil-angelides.html

        http://www.ritholtz.com/blog/2012/10/4-year-flashback-private-sector-not-gses-triggered-crisis/

        Want MORE empirical evidence? How is it that if Fannie and Freddie were so reckless, their default rate on mortgages is only 1/5 that of non agency paper?

        The fact of the matter is people like you could be hit with a 2×4 repeatedly with the evidence, and still say “no.” And you NEED your BS narrative to make your politics work. That is why you deny evidence that is right in front of your eyes.

        Mr. Wallison was the LONE dissenter on the FCIC’s investigation into the crisis. His dissent is laughably inept, and demonstrates total ignorance of the real estate market and the underwriting process. I have challenged him publicly on his thread to defend himself, and believe me, if he did, I would make roadkill out of that liar.

        1. Jon Murphy

          Those are opinion pieces. I want papers. I said I didn’t want punditry.

          1. Max Planck

            Those are NOT “opinion pieces. ” If it is a stastical fact that over 86% of SubPrime loans had nothing to do with the GSEs, how is that an “opinion?” If the default rate of CRA/Fannie and Freddie loans is a fraction of those that were NOT written to those guidelines, how is that “opinion?”

            If the FCIC came to its conclusions with one lone dissenter, a third rate demagogues like Peter Wallison who is paid by the AEI to spread his trash, how is that an “opinion?”

            Book after book on the crisis point to the same answer.

            You’re a victim of your own willful blindness.

          2. Max Planck

            Ya want papers, huh?

            Here’s the first one, where the worst case scenario- Florida and California- are used to see if housing policy had any effect on foreclosures.

            “In this paper we examined the e ect of a ordable housing legislation on the volume, pricing,
            and performance of subprime mortgages originated in California and Florida in 2004 through
            2006. Using a regression discontinuity approach, we nd no evidence that the a ordable
            housing goals of the CRA or of the GSEs a ected any of these outcome measures.:

            http://research.stlouisfed.org/wp/2012/2012-005.pdf

          3. Max Planck
          4. Max Planck
          5. Jon Murphy

            None of these papers support your view that George Bush is the cause of all of this.

            The first paper is interesting in that is discusses the CRA and GSEs, but it is only focused on California and Florida between 2004-2006. Hardly conclusive for a national scale.

            The second paper discusses the origins of sub-prime mortgages starting back in 1995 (Bill Clinton was in office then, not George Bush).

            The third article discusses what we already know: sub-prime mortgages were rising during the 2000’s.

            Seriously, man, did you even read these things or just type it into Google and paste the first three links that came up?

            You are constantly asserting all this is George W. Bush’s fault. You have yet to provide any shred of evidence this is true.

          6. Max Planck

            What a dodge!!! What a totally disengenuous dodge! You were blaming this mess on “government housing policy” and now that I’ve p*wned you with independent research, you’re running away.

            First off, using radioactive zones like California and Florida PROVE THE POINT ALL THE MORE. I’ve got news for you, Skippy. If you take out California, Florida, Arizona and Nevada, the numbers don’t look so bad. The authors DELIBERATELY chose the worst case areas with the highest default ratios to butress their case. Of course, you decided to turn it into a negative. Not too bright.

            The second paper reiterates the point that NON AGENCY mortgages were the source of the defaults and the dislocation of the markets. The third piece shows the share of GSE securitization plummeting, EVEN AS HOME PRICES WERE BEING THROTTLED UPWARDS.

            Where’s your case, dude?

            Want to hang Bush with any of this? Fine. One, we’ll hang him just like you hang any Democrat for sunspot activity or anything else beyond his control. Secondly, it was Bush’s SEC and Treasury- whose job it is to monitor this stuff and make corrections when it sees a market going into Pluto like this, for gross inaction. Greenspan deserves a lot of blame here for his policies (including publicly cheerleading for adjustable rate mortgages) and the SEC certainly deserves blame for it’s antics leading up to this crisis, including repealing the Net Cap rule and stating that banks were “well capitalized” even as Bear Stearns was teetering. I see March Thiessen cynically leveraging the death of four Americans for his own purposes for something that happened in LIBYA. Apparently, Florida is off limits!

            Let’s face it, pal. The entire wingnut narrative has been founded on the basis of Federal housing policy being responsible for the crisis. I have just blown that out of the water for you, and any of the AEI hacks who might be reading this.

            That narrative is dead. It was the gangster economy you people dream about that brought us to ruin, and you betray your own ignorance by not being able to counterpoint anything I’ve posted.

    5. Arnold Ziffel
  7. Jon Murphy

    If war saved the US economy from the Great Depression, then it cannot possibly be the cause of the Great Recession. Even Paul Krugman has said so.

  8. Big truck joe

    If Joe Biden thinks the great recession was caused simply by overspending in Bush years, what does he think is going on now? Our Vice President makes absolutely no sense!

  9. What the hell are you talking about? The only thing you’ve done here is try to fuel yet another blame game. If the incompetent bastards that we have filled the supposedly responsible positions of government with would actually focus on finding solutions, standing by them regardless of what may happen in the next election, and stop all of this bipartisan blaming shit, then we might actually get somewhere! It doesn’t matter who caused or prolonged what, because they’re all f-ed! Take for instance, drug-testing welfare recipients: many states have implemented this and why? Because the voting majority said “we shouldn’t be paying someone’s bills if they’re not doing right by us or themselves in the first place, and this might save us some money and help our state’s economy too”. So how was it implemented? Many of these states simply added 3 questions to their welfare application and any idiot who answers “yes” to one of them will be tested. 3 questions! Not a mandatory drug test like the voting majority was lead to believe, but 3 questions most people would lie to anyway. So tell me, sir, if this is the kind of competence we’re left with, why does it make a difference who did what because like I said, it appears that they, and thus us, are all f-ed!

  10. Unbelievable

    The blame game is so old and tiresome! Yes, Bush messed up bad, and so has Obama. Spending is out of control, this recovery is a joke (regardless of what MSN, NBC and ABC say), we need elected officials who can reach across the aisle and get this mess fixed and not worry about their reelection. This disaster was definitely NOT caused by one party. This thread was started because Biden lied. Can we at least agree to that? I have my silly liberal friends posting his comments as fact without doing any research. Embarrassing.

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