The Evil Rich and their “Fair Share” [Reader Post]

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For years now we have let the left frame the narrative that the rich in this country don’t pay their fair share. Even our President has joined in this effort to demonize the very folks who are the engine of our economy, the small business owners.

“The revenue we’re talking about isn’t coming out of the pockets of middle-class families that are struggling — it’s coming out of folks who are doing extraordinarily well and who are enjoying the lowest tax rates since before I was born. If you’re a — if you are a wealthy CEO or a … hedge fund manager in America right now, your taxes are lower than they have ever been. They’re lower than they’ve been since the 1950s.” – President Obama, June 29, 2011.

So a wealthy CEO or a hedge fund manager are making too much money and not paying enough.

Really?

For the honest answer to that question, let us turn to an organization that isn’t always very friendly to the United States, even though it was formed, in part by the US.

The Organization for Economic Cooperation and Development (OECD) is an intergovernmental economic organization in which the 30 member countries discuss, develop and analyze economic and social policy. While all of the member countries are considered to be economically advanced and collectively produce two-thirds of the world’s goods and services, membership is limited only by a country’s commitment to a market economy and a pluralistic democracy.

The OECD was actually born to replace the OEEC, or the Organization for European Economic Cooperation which itself was created to administer the Marshall Plan. In 1961 the OECD was formed to takeover from the OEEC, with the emphasis being to develop strong economies in its member countries.

In a 2008 study released by the OECD, it found that America had the most progressive income tax system in the industrialized world. By looking at the richest 10% in each country, they found that America has the greatest share of personal and payroll taxes combined than in any other country in the world, for the richest 10%. In the US, the richest 10% pay a whopping 45.1% of their income in taxes; more than every other industrialized country in the world.

The next step is to see how much of the market income is earned by that top 10%. In America, they earn 33.5% of the market share of income. When you take those two figures and find the ratio of taxes to income, a surprising statistic pops out. Those evil rich people in America pay more in taxes in relation to their income than any other country, also.

No other country places that much of a burden on their top income earners, yet to hear the left – and our President – tell it, those evil rich people just need to turn over more of their income because it is only fair.

How dare we let the left frame the debate like this. We are not suffering from an income problem in this country; we are suffering from a SPENDING problem. But Obama still wants to increase taxes on small business owners, who are in many cases among the top 10% of income earners in America. This of course will only worsen the situation economically here in the US, for if the small business owners are afraid that more of their private property will be confiscated, then our economy will continue to drag along on the bottom.

Thomas Jefferson said it best –

“When the people fear their government, there is tyranny; when the government fears the people, there is liberty.”

http://www.fas.org/sgp/crs/misc/RS21128.pdf

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anticsrocks:

So when Obama spent the following… $787 billion stimulus package, $410 billion omnibus spending bill, $700 billion Wall Street bailout package, $3.6 trillion budget, $1.2 – $3 trillion for Obamacare

1) The stimulus package was 1/3 tax cuts. A lot of the spending was simple smoke and mirrors that replaced regular appropriations. 2) the omnibus bill was just the regular annual non-defense discretionary appropriations all bundled up together – not extra spending. 3) The TARP bailout did involve real money, but was passed under Bush and proposed by his administration. 4) We have yet to spend $3.6 trillion in one budget year. 5) We haven’t spent any trillions on Obamacare. It might happen, but it certainly hasn’t happened yet.

@Andrew: You are quite fast to throw personal insults, Andy. Is that all you’ve got?

Hey, when I cite statistics that have not been brought up before, I cite them.

What’s your excuse? You accuse me of wallowing in “ignorance and stupidity,” yet it looks as if you wish to wallow in laziness and dissembling.

Your move, jackwagon.

@Andrew: Above, FloppingAces writes: “In the US, the richest 10% pay a whopping 45.1% of their income in taxes”

You’re new here, Andrew. But please allow me to point out the obvious. “Flopping Aces” doesn’t write zipola… This blog, hosted by former Marine and FA Founding Father, Curt, is a compilation of regular authors, whom you can view info and bios above at the “authors” link, as well as “reader posts” that are submitted to Curt for publication. Curt does not, and never has, approved readers posts based on it being in harmony with his own opinion, but whether it will stimulate debate. Nor does he proofread them for accuracy and research.

Therefore, I would request that you cease and desist the class categorization of a reader’s post, or even an author’s post (which won’t say “readers post” behind it…) as the entire blog forum. This is a community, made up of individuals. The majority share some form of conservative leaning. And we also have resident liberal posters as well. I would appreciate if you would appreciate that this is not an echo chamber, but a compilation of many varying voices… therefore avoiding any group labeling.

As for your 5th paragragh, INRE the tax revenues, I wouldn’t dispute much there save your characterization that it is “light”. Indeed, as you say, the majority of the nation’s tax burden falls on those that are more prolific in their endeavors. I wouldn’t say it has an undue burden on the middle class tho. Nor would I say it was light unless you want to weigh it against the determined and preordained entitlement spending that Congress, decades ago, strapped us into. Indeed, when you compare the balance of income tax-employee contribution & employer contribution for social security (Figure 0.1) to to OECD countries’ average, the US is not only not that far out of line, but that the employee vs employer ratio favors the worker over the employer.

Thus it still only confirms what I strongly believe… the problem with the US is not low taxes, or an imbalance of the progressive tax (via a liberal/socialist view…), but the amount of unchecked spending done by an irresponsible Congress for decades.

Greg and JohnGalt:

In Germany, the top 10% pay less of the total tax burden than in America precisely because they earn less money than the top 10% of America. On the other hand, a lot of the bottom 90% of society is a lot better off in Germany than in America, which is why they can pay more of the tax burden – because they make more money relative to the top 10%.

Basically, Germany has a much flatter income distribution that the US which makes it much simpler to have a flatter tax structure.

In the US, the bottom 58% of tax returns (everyone under $40,000 per year) account for 12% of total declared income while the top 15% of tax returns (everyone over $100K per year) account for 52% of the income. Basically, if you are not in the top 25% in the US, you are screwed.

Here’s the US distribution in more detail:
Top 0.1% earns 10% of all income
Top 1% earns 20% of all income
Top 5% earns 35% of all income
Top 10% earns 45% of all income

Here’s another way of thinking about it. From 1995 to 2008, US aggregate income doubled. 72% of the growth went to the top 25% and 11% went to the bottom 50%. Income for the bottom 75% declined in real dollars through the Reagan/Bush years, grew slightly during the Clinton years, and declined again during the Bush years. This shouldn’t be a shock to anyone. All of the marvelous growth in income afforded by the productivity increases of the American worker over the past 30 years has gone 100% to the Capital/Management/Ownership side of the equation, and 0% to Labor. JP Morgan notes for investors paying attention:

“As shown in the first chart, S&P 500 profit margins increased by ~1.3% from 2000 to 2007. There are a lot of moving parts in the margin equation, but as shown in the second chart, reductions in wages and benefits explain the majority of the net improvement in margins. This trend has continued; as we have shown several times over the last two years, US labor compensation is now at a 50-year low relative to both company sales and US GDP.”
http://www.investorvillage.com/uploads/44821/files/07-11-11_-_EOTM_-_Twilight_of_the_Gods__PWM_.pdf

Don’t you understand why the folks at the bottom are so mad? I assure you, its great to be up in the top, but its even better to stay there and not need to worry about pissed off folks down below coming to take away all your hard earned money. In a Democracy, you can’t expect the bottom 75% to keep running endlessly on a treadmill with no reward except to see the top 25% grow rich.

@Greg: Where income is more evenly distributed across all economic levels of society, there’s reduced need for governmental social programs to address the negative consequences of more grossly uneven distribution.

Sorry, Greg… couldn’t help it with that inane statement. Pray tell, how do you think income is “more evenly distributed” save via governmental societal programs?? It’s called forced charity, at the point of a gun.

@MataHarley, #105:

Pray tell, how do you think income is “more evenly distributed” save via governmental societal programs?

I think higher wages tend to have that effect; that is, workers receiving a larger share of the wealth that results from their mental and physical labors.

German workers have seen recent growth in real wages. In the United States the GDP has increased, but working people have received virtually none of that increase. Nearly all of that increase was distributed in a different part of the private sector. (As demonstrated by the report linked in post #9)

@Andrew, INRE your JP Morgan quotes/tidbits about the S&P. Oddly enough, it’s the S&P that’s been showing the only surprising stability thru this era. But I suspect you discount just how many Americans are actually now invested in stocks… even if passively thru their 401Ks and mutual funds… these days.

There are, however “investors” that have better-than-the-average-Bear-Stearns perks… and that would be Congressional members themselves (both parties).

But let me go back to my original observation of you, which you tended to shake off as laughable… that you are more partisan in your expression than analytical. First it was your continued attempt to dismiss Congressional involvement in budget/spending, and now it’s tying S&P performance to a POTUS as well. Call me wacky, call me zany, but isn’t this like comparing your apple pie to a red hot chili in the same contest? Each POTUS has had different economic challenges, as well as different entitlement debt with which to deal… not to mention military conflicts.

But if you insist, below is a chart that gives an average of the S&P over the terms of each POTUS.

Reagan stepped in after the Carter fiscal fiasco, and oil woes. With his combination of both tax reform/increases for corporate, and reduction of individual income tax cuts, the economy did rebound… and with a vengence. But then came the 1987 stock market crash at the end of his terms.

Clinton, who so many speak of in hushed revered whispers, enjoyed an era of the dot.com bubble, as well as the onset of the housing bubble. But we again had a stock crash in 2000.

The full weight of the housing bubble crashed with the most recent stock market fall in 2008. But that was more than a decade in the making, with the housing prices taking a beeline up in the mid to late 90s. Pile on to that the economic repercussions of Sept 11th, and two wars. Indeed, even with the easy money and irresponsible lending criteria that was established by the GSE’s by Congressional mandates, we could have survived the housing bubble were it not for the unnatural and astronomical increase annually in real estate assets which are normally a slow growing critter. Foreclosures have been a part of our successful history. But not when the house foreclosed upon is only worth a fraction of the debt owed.

Even today, most economists are boggled by how the stock market is performing. It is surely not on the old traditional standards of prudence. But then again, the stock market is no longer made up of the financial good ol boys and their stock brokers. Everyone and their mother’s brother has access to online trading on the cheap, and gambling is a habit that many find addictive. Some do it at casinos. Others, wiling away their days with day trading. And still others just betting on those that aren’t in the know.

It’s always funny to me when people speak of “speculators” as some foreign, faceless bad guy.. when in fact, so many Americans are speculators daily. They just may not be aware of it. Those making cash in stocks in this recession/depression… altho mostly in, and using, the financial institutions who enjoy risk free, low interest tax payer provided bail out money for trading… are actually Joe Blow citizens with their 401Ks and a nominal amount of investments. It’s not just for the privileged anymore.

@Greg: I think higher wages tend to have that effect; that is, workers receiving a larger share of the wealth that results from their mental and physical labors

ah yes… another government societal program called minimum wage. Yeah.. that’s really successful and oh so voluntary /sarc

I rest my case

In the United States the GDP has increased, but working people have received virtually none of that increase.

The GDP has “increased” using what as a baseline, Greg? Or aren’t you keeping up with the revised reality, and clinging desperately to rosy predictions used to push thru yet another future entitlement program?

@MataHarley, #108:

The GDP has “increased” using what as a baseline, Greg? Or aren’t you keeping up with the revised reality, and clinging desperately to rosy predictions used to push thru yet another future entitlement program?

Refer to Table 3 on page 20 of The “Jobless and Wageless” Recovery from the Great Recession of 2007-2009: The Magnitude and Sources of Economic Growth Through 2011 and Their Impacts on Workers, Profits, and Stock Values.

Are the figures false? The conclusion unsupported? Is it all somehow meaningless, in terms of the real lives of real people?

Andrew: Spending in Fiscal Year 2010 was actually $75 billion lower than in Fiscal Year 2009. So Obama’s very first budget actually cut spending year over year for the first time since the Eisenhower administration in 1955.

There ya go again…. being partisan instead of analytical. You are, of course, aware that health care spending – our largest expenditure – was the smallest increase in 50 years because of the economic slow down and high unemployment, yes? Think that saved any cash in that spending? And is that slow down something to be celebrated?

Do you think our debt interest rates were considerably lower in that year as well, also saving some fiscal outlay?

Do you think the massive decline in revenues may have anything to do with it too?

Interesting snapshot in time you decide to use to heap praise on Obama, Andrew. Stalled economy to the point spending declines is deserving of accolades? You’re one strange puppy. Why not pull up the the charts as US Govt Spending and have a more wide view of the spending picture. But you won’t see me giving the Zero in the WH any “atta boys”.

Andrew: The Republicans in Congress keep claiming they want to do that, but they had 6 years under Reagan and 12 years under Clinton and Bush and they never proposed anything of the sort.

Perhaps you’d better have a better year by year look at the Clinton era, and when the fiscal tides started turning. It was only after a fiscally conservative GOP took over and started holding Clinton’s welfare happy feet to the fire. Oh.. the good old days. They sure lost their touch quickly, I’ll admit. However compared to the entitlement queen party, the Dems, they look positively like Ebenezer Scrooge.

Greg… lawdy, guy. GDP historical figures

Year GDP-US
2000 9951.5
2001 10286.2
2002 10642.3
2003 11142.1
2004 11867.8
2005 12638.4
2006 13398.9
2007 14061.8
2008 14441.4
2009 14119 8
2010 14508.2

GDP down in 2009, barely above the crash year of 2008 in 2010. As I said, what the heck are you using as a baseline? Our GDP, in theory, would always be apt to grow with expanding population and technology over the decades. However, as you’ll see at the US Govt Spending site states, the Bush years GDP growth left the Clinton years in the dust, and the Zero years have been a decidedly lackluster “recovery”. As a matter of fact, it appears to be the first decline in GDP history in six decades under Obama. While you’re there, using the graph and source stats, why don’t you show us where there was a decline in the GDP after previous recessions in the 20th Century, Greg. Hint.. there wasn’t. Because none of those POTUS had idiots as economic advisors.

One more thing, Greg…. since you insist upon moving the goal posts. You said:

In the United States the GDP has increased, but working people have received virtually none of that increase.

First I have shown you that the GDP has *not* increased but, for the first time in 60 years, declined following a recession thanks to idiotic economic policies and unfettered additional spending. But then you tie it to your favored obsession, the wealth gap, by noting that “working people have received virtually none of that increase”.

And to prove your point, you link to the Table in your PDF link. Let me ask you this… have you got a clue what the increasing percentages mean in the column marked “Corporate Profits Share of Growth in National Income”?

Who is the corporation, Greg? Who profits from a corporation’s growth? They’re called shareholders. Shareholders are comprised of everyone from Joe Blow at Walmart to teachers, firemen, pensioners, 401K holders…. employees who often have a piece of the pie of the company they work for, or who’s pension or 401K funds are invested in other companies.

You always suffer from the same problem. You look only at wages when an employees salary is made up of many sources of income… from their salaried take home pay to their pensions, investments, and health benefits provided. It’s almost a business barter system. When something disappears from one column, it most often shows up in another. Providing incentives is how employers attract good talent. However now the incentives are starting to disappear, the fiscal threats are on record, and companies are now learning how to make do with shadow staff and part timers to beat the tax and regulations system.

@MataHarley, #110:

Am I missing something?

The GDP for 2008 from that historical chart up above doesn’t actually look like an off year, does it? In fact, it seems to represent the highest figure of any of the 8 GWB years. The crash is first reflected in the 2009 annual GDP total, not 2008. You’re actually using the highest recent pre-crash year as the baseline, and finding post-crash increases wanting by comparison. You’ve got to start measuring post-crash growth and income increases from a new starting point–which, unfortunately, was in the basement.

The figures cited by the Center for Labor Market Studies report covered a period of consecutive quarters corresponding to the post-crash turn around; specifically, the period “between the second quarter of 2009 and the fourth quarter of 2010”. During that period, they state, real nation income increased by $528 billion; of that increase, working Americans basically got squat. The lion’s share– $464 billion–took the form of corporate profits. This would fall into the period of all those consecutive quarters of record corporate profits, I imagine. I’m actually not sure if that run has been broken yet. I haven’t looked it up.

Duh.. yes, Greg.. you’re missing something. Crash happened in Sept 2008. Hint to the wise… don’t depend on pictures. The source data and numbers provided for the chart are below. Try reading instead of visual pics.

GDP down in 2009… wow, great stimulus and shovel ready, eh? LOL 2010 is up, but far below the Zero’s boasted expectations. In fact, even in the 20th century recessions.. including Reagan following Carter in, we never had a decline in the GDP. That’s an accomplishment distinctively Obama. Don’t be lazy.. go ahead. Pull up the stats from 1900 on. Let me know when, in our history and thru any recession in the 20th century, did our GDP decline?

Only with da zero.

Don’t care about the figures cited by the CLMS. And again, I will remind you… you are clueless to who “the corporations” are, and their increase in the profits. You are simply too tunnel visioned in the real world.

Well, jeez… I look at that number for 2008, and it still seems like the highest number on the list. Yep, the economy hit the skids in September 2008, but there’s a time lag in the numbers. Looking at totals by calendar years can be very misleading, I think.

I agree, having “fiscal years” is difficult. But you have to divide it somewhere, somehow. But 2008 is high because they didn’t start doing the chicken little dance until fall. Sometimes I look back on that and wonder how much was real, and how much was fabricated. It wouldn’t be the first time the US taxpayer has been hosed.

None of that precludes that we’ve had stock crashes and recessions before. Including the Great Depression. And still the GDP did not decline over the end of the year. Especially after Congress and this POTUS pushed a pile of cash into the system, and bought a car manufacturer to give to his union thugs… er…. buds. It’s quite obvious, as even Obama admits, that the stimulus did not work. It just paid the salaries of many a local government employee, delaying the inevitable.

The housing incentives are also damaging and the repercussions still ringing thru the courtroom foyers…. with companies like B of A being sued for their abuse of HAMP/HAFA etc. Housing is in the toilet, and will remain there for quite some time…. and would have been much better off if Obama and Congress had not tried to “help”. Instead, they tried to artificially inflate the bubble and not let the values fall as they must do. The tax credits created a boatload more toxic assets. Once they raise rates, lending will be shaved down to a ghost of itself because no one will be able to refinance their homes with 4-5% rates, and few will be able to sell for what they paid. They have a $200K loan balance at 4-5%. If the rates go back to 7-8%, who can afford that $200K loan?

Yeah, real improvement.

@Andrew: You said:

All of the marvelous growth in income afforded by the productivity increases of the American worker over the past 30 years has gone 100% to the Capital/Management/Ownership side of the equation, and 0% to Labor.

Oh jeez, here we go again. Looks like Greggie has a buddy in that old Marxist song and dance, “Them evil richies be gettin’ all da dough!”

You are all in favor of less of an income gap as long as it means that no one gets wealthier. So you want to keep the poor, poorer? Wow.

That’s compassion!!

anticsrocks:

“You said”

No, Sir. I quoted a JP Morgan research report for wealthy investors and gave you a link to it and pointed out what it is saying. You know JP Morgan right? Its a large and venerated Wall Street invesment banking house.

I don’t blame you for getting upset about it being publicly aired, but the IRS income stats show the same thing, and, well, there it is.

I think you are setting up a false dichotomy of: “Either the top 25% gets all of the income growth, or there is no income growth at all.” There are more choices than that, and Republicans once upon a time proudly supported trade and tax and immigration policies that were aimed at and succeeded in getting business to invest in America and pay Americans the best salaries in the world, instead of prioritizing the China trade and the delivery of our hard earned money to Arab oil sheiks and the Chinese Communists.

The deficit was rapidly climbing before Obama entered the White House in January 2009. That was already the case by mid-2008. Federal revenues were already rapidly falling by that point. Rising spending plus falling revenue equals increased deficits. You don’t suddenly turn either around on a dime. Particularly when it looks as if the whole thing is coming down around your ears.
The stimulus package kept the economy from collapsing. No one thought it would return the economy to pre-2008 conditions overnight.

Yet you excuse obama and the dems pushing for insane levels of spending that DID NOTHING but raise the debt.
As for obama not having enough time, that is a hoot coming from a leftist. It was leftists who blamed W for the recession that started under Clinton. It was leftists who blamed him for 9/11 despite having even less time in office than he should due to gore trying to steal the election. NOW you want to whine about not enough time? Tough.

Republicans may demonstrate what would have happened if federal spending had been cut in 2009 by producing the same effect next month. They could effectively cut the funds flowing into a weakened economy by 40% almost overnight. If that happens, I predict that very few people will like the results.

And I predict you will be proven wrong by history…AGAIN! The stimulus did nothing but waste money. Historians have shown that the efforts the dems and obama are making are the same ones that EXTENDED the Great Depression. The left is desperate to re-live what is a lie. They have convinced themselves it was their greatest success. Some of us who have bothered with history don’t care to repeat it for the sake of your ego fix.

@ MataHarley:

I am well aware of the widespread nature of stock ownership. Most of this is buy and hold investment in 401K’s and the like, as you note. Most of the market volume is speculative high velocity trading.

“Indeed, even with the easy money and irresponsible lending criteria that was established by the GSE’s by Congressional mandates, we could have survived the housing bubble were it not for the unnatural and astronomical increase annually in real estate assets which are normally a slow growing critter.”

Just like getting pregnant, it takes two to create irresponsible loans. For every bank handing out money that will never be repaid there was a complete idiot who thought it was a great idea to lie about his income and buy a house with a variable rate ballon loan at a price that was six times his income. Its hard to feel sorry for any of these people or the banks. As a sober and responsible person who lives below his means and considers worst case scenarios, I think the greedy bastards are all getting what was coming to them.

“Even today, most economists are boggled by how the stock market is performing.”

Frankly, most economists are idiots who do not understand the basics of their own profession. That is why they are slaving away as low-paid economists and not sitting pretty on top of millions. If they really understood how the market and economy behaved as they claim they do, they should be able to make a killing in securities.

Most economists do not appear to understand the basics of investor sentiment, timing investments, valuing securities, the relation of profits to cash flow to long term stock prices, the driving forces of population growth, natural resource extraction and agricultural production behind all economies, and other basic concepts. I watch economists making all manner of unrealistic projects, especially endless projections of exponential growth curves, missing important trends until 10 or more years after they started, and obsessing about unprovable projections of the effects of minor changes in fiscal policy or regulation instead of understanding the big picture drivers of the world economy as a whole.

There is nothing boggling about the stock market’s performance. It was way overpriced in 2006 to 2008, signalling a great time to take money out of the market while the suckers were piling in and generally straighten up your finances in preparation for bid problems. It was vastly oversold in winter of 2009 as those same suckers panic sold their holdings for a major loss, so it was a perfect time to take your cash bundle off the sideline and pile in for a ride to multi-hundred percent gains in wealth in any number of hundreds of very sound stocks. This has been one of the most exciting times to be an investor in a very long time – I would say since 1994, maybe even 1987. You just don’t get opportunities like this very often to hit the cyclical wave at the trough and ride it up. Any economists who didn’t understand that and clean-up over the past three years, well, I simply can’t respect their knowledge of their own profession. They were probably too busy obsessing about Bush and Obama and McCain and whatever minor tweaks tweedledum and tweedledee might make in Washington. The worst are the morons who thought that the election of Obama guaranteed a new depression and so panic-sold in the 2008-2009 winter and then sat on the sideline of the market for the past two years as it doubled in value.

Why is the market going up? Because if it had continued down to where some people were predicting it would go, dividend yields would now be something on the order of 7-10% on an average stock versus long term interest rates of 4%, and high yield stocks (say, AT&T or Exelon or Altria) would be yielding 15% or more. How realisitic is that? Obviously not very.

@ Mata Harley:

“Perhaps you’d better have a better year by year look at the Clinton era, and when the fiscal tides started turning. It was only after a fiscally conservative GOP took over and started holding Clinton’s welfare happy feet to the fire.”

The slow-down in spending started in Fiscal Year 1991, 5 budget cycles before the Fiscal Year 1996 budget, which was the first budget of the Republican congress. The FY 1991 budget that implemented the much hated 1990 budget deal that raised taxes and slowed spending growth. There was no difference in spending growth before the Republicans took congress in 1995 and after until Bush came to office. Numbers are here:

FY 1981-1991 – avg. spending growth 7.25% (Reagan’s 8 years + first 2 years of Bush)
FY 1991-1995 – avg. spending growth 3.43% (Bush’s last two years and Clinton first two)
FY 1995-2001 – avg. spending growth 3.51% (Clintons last 6 years/first 6 years of Republican Congress)
FY 2001-2009 – avg. spending growth 8.27% (Bush’s 8 budget years in office)
FY 2010 ——– avg. spending growth -1.81% (First Obama budget)

Year over year growth by Fiscal Year:
1988 – 5.93%
1989 – 7.59%
1990 – 9.42%
1991 – 5.75%
1992 – 4.31%
1993 – 2.01%
1994 – 3.69%
1995 – 3.76%
1996 – 2.96%
1997 – 2.60%
1998 – 3.21%
1999 – 3.10%
2000 – 4.98%
2001 – 4.23%

Remember, the Republican wave election was in 1994, they were seated in 1995 in the midst of fiscal year 1995, and passed their first appropriation bills in the fall of 1995 for fiscal year 1996. Its tough to see how the Republicans elected in 1994 had any affect on the budgets passed before that election.

@ Mata Harley:

The current dollar GDP numbers you cite are an average of the 4 quarters of the calendar year. They are therefore subject to selection bias for showing what year had a drop because you are not using a moving average and comparing any set of 4 consecutive quarters regardless of where they fall relative to the calendar year. The effect of low inflation in any given year will also cause biases. 2009 was a year with deflation because of the collapse in oil prices. So it is not surprising that during a recession with deflation, current dollar GDP would drop. The early 1980’s were a terrible time economically, but current dollar GDP kept right on growing because inflation was over 10%. Back before the 1970’s-1980’s inflation, current dollar GDP dropped during the recessions in 1949, 1953, and 1957. The drop in 2009 was from a peak in the 3rd quarter of 2008 at 14.484 trillion to a trough in the 2nd quarter of 2009 at 14.034 trillion. This corresponds very closely to the time frame of peak to trough oil prices.

I don’t know why you are working with current dollar GDP. Constant dollar is much more interesting to show actual economic growth and decline free of the effects of inflation and deflation. Real GDP in 2005 dollars shows a peak in the 4th quarter of 2007 at 13.364 trillion and a trough in the 2nd quarter of 2009 at 12.810 trillion where it returned to the size it had been in the 4th quarter of 2005. We are currently at 13.444 trillion in the 1st quarter of 2011, so the economy as a whole has increased in size by 5% in 7 quarters and returned to the size it was before the recession began in the winter of 2007.

Not to rain on the parade of either forgetting history or re-writing it, do you think that perhaps some of those low deficits that Clinton gets credit for happened in a large part because of the end of that pesky little 45 year event called the Cold War? Remember something called the “peace dividend”? Do you think those nice small deficits would have happened if we were still fighting the Cold War? We would have spending a lot more on the military. Go back in there and add several hundred billion dollars in military spending that would have been needed to fight the Cold War in the ’90’s and you’d probably see deficits under Clinton totaling over a trillion dollars as well. Add to that an economy that was in overdrive because of the dot.com surge, the Y2K scare, and an overinflated housing market compliments of giving out bad loans all of which came full circle after he left office. And let’s not forget, we weren’t at war because it was decided that it was best to look the other way with regards to OBL. Ignoring that threat worked out real well on 9/11 didn’t it? But hey, not spending the funds needed to take him out in the ’90’s helped keep the deficits lower. I wonder how much that comes out to per life on 9/11.

As for rewriting very recent history by claiming Obama had absolutely nothing to do with the deficits being run up despite his signature being on those budgets, oh well, the messiah can do no wrong. Keep on blaming everyone else. Since the only president to have ever gotten us to be being debt free was Andrew Jackson, it probably won’t be too long before Obama’s disciples start blaming Martin Van Buren for the deficits Obama has piled up.

@Andrew: @Greg:

I believe that you guys are missing a very important point that has, literally, nothing to do with the actual tax rates in place.

After perusing and studying various tables on all manner of income statistics, tax statistics, and GDP statistics, something jumped out at me. During periods of decent to high economic growth, income disparity becomes greater, regardless of the tax rates in place, and during periods of low to no to negative economic growth, the disparity in shares of income contracts. That is, when economic growth is high, the shares of income for the top 50%, and in particular, the top 1%, grows while the share for the bottom 50% shrinks. And when economic growth is low to negative(as seen from 2007-2008), the income share for the top 50% shrinks and the income share for the bottom 50% grows.

And, as one would expect, the share of income tax burden reacts similarly.

And remember, I said that this happens regardless of what the actual tax rates for the various brackets are, at the time. This effect can most clearly be seen in the two periods of 00′-01, where the GDP grew at only just above 1%, and 07′-08′, where the GDP growth was actually negative, and comparing those to the previous years of GDP growth. Both periods had different tax rates, one being the Clinton era tax rate and the other being the Bush tax rates. One can also see the effects following any year to year drop in GDP growth of less than 2%.

What does this mean? Well, what it tells me, is that during periods of low to no to negative economic growth, that the bottom 50% tend to retain more of their income, in dollar figures, than the top 50%( or whatever other percentage within that top 50%). This can be seen clearly in the 07′-08′ period, where the AGI of the top 50% shrunk 4.77%, while the AGI for the bottom 50% shrunk only 0.28%. And if we go back to the 00′-01′ period, we see that the top 1% had their AGI shrink by 18.2% while the bottom 50%’s AGI actually grew by 3.36%. In other words, the bottom 50%, while having no employment growth, or even shedding some jobs, the people working in that group tend to retain their current wages while the top 50% drop wages.

Is this really that “unfair” to the lower income earners? What I see is more volatility at the top, depending on the economic circumstances at the time, and more stability at the bottom. And all of this is regardless of the current marginal income tax rates. And so, while the bottom 50% does not see their income rise by all that much during times good or better economic growth, they also don’t see their incomes lose all that much, if anything at all, during economic downturns.

Here are the links that I looked at;
http://www.taxfoundation.org/news/show/250.html
http://www.data360.org/dsg.aspx?data_set_group_id=353
http://forecast-chart.com/chart-gdp-rate.html

another vet,
hi, he had OBL in the palm of his hand, ready wrap to pick, and yes did not want to bother,
but he save a lot of moneys , at the expanses of 3000 lives,
I always wonder how come those LEADERS, don’t figure the consequence of their actions or decisions

@ilovebeeswarzone:

I always wonder how come those LEADERS, don’t figure the consequence of their actions or decisions

It’s because many of them do not want to take the responsibility of their actions or decisions, but only want the credit for something “good” happening under them. That’s why many “leaders” don’t make the hard decisions

It is easy to claim your righteousness when you cherry pick, Andy. You look at one variable and claim success in your viewpoint. Debating with you is like debating with a 5 year old, you only see one metric.

I don’t think you can claim to score any points when you try to frame the debate to make it lean your way. Either use all the facts, or none at all.

Nice try, very Alinsky-like.

@ilovebeeswarzone: Sometime after the Cole attack, there was a front page article in the Sunday Chicago Tribune featuring an interview with someone from the Clinton administration, I believe it may have been his press secretary, all I remember is he was someone well known in the administration. They asked him about the OBL problem and he pretty much stated that the only way to get rid of him was with military action and that required ground forces in Afghanistan which would lead to American casualties and they didn’t want to risk political backlash for that. That gets back to the point johngalt made in 125 about leaders and why our current President doesn’t make the grade. Someone who kicks the can down the road and always blames others for his/her shortcomings is not a leader.

@another vet, #127:

Obama didn’t kick the OBL problem down the road. He kicked OBL off the planet.

AnotherVet and Greg Eliminated with extreme prejudice and dropped in the middle of the deep blue sea. No “kicking down the road”
like previous admins.

GREG, he back down at the last few hours, He wanted to sleep on it,
and PANETTA took the initiative away from him and order the mission to get ahead,
and so they did. because the mission was ready to go,
how can you when all is ready decide to think about it?
and go sleep on it, creating a danger of a leak that could have killed everyone doing the mission for you,

@Greg: Actually our military kicked OBL off the planet. I did give Obama kudos for authorizing the mission. I’m referring to the debt and host of other issues. He’s not the only culprit by any means, but blaming others and not taking responsibility for the deficits he has run up doesn’t cut it as a leader.

@rich wheeler: How did he accomplish that in D.C. when OBL was in Pakistan? That’s like saying Bush killed Hussein’s kids. Credit goes to the military. Good to see that his fan club is still giving him credit as opposed to those who put their lives on the line to make it happen though.

@rich wheeler: You said:

No “kicking down the road”
like previous admins.

So the policies and protocols put in place by Bush that directly led to OBL’s death had nothing to do with it?

Don’t you think that view is just a bit short sighted?

Here is Something about the “Rich” Mr Obumbles wants everyone on the “Left” to Bash to continue the Class Warfare mime in order for Obumbles and the Left to create the Socialist Utopia that never worked anywhere… ever…

“Many of the world’s richest such as Google’s Sergey Brin and Larry Page…NBA’s most valuable player for several years LeBron James and Pop Star Justin Bieber (to name a few) …gained their wealth by making extraordinary contributions to their communities either through the products they invented, or the entertainment they provided. They became ” rich” NOT AT THE EXPENSE OF OTHERS, but through voluntary exchanges that have enriched our society.” As with and so true of many “Rich” people in our Society…we as a society have continually reaped the rewards of the rich who have enriched our lives by their innovation(s) … these are innovations are ‘things’ that make our lives easier not harder…. Would we be having this debate if it were not for uber rich Bill Gates? Who by the way has DONATED millions by way of “giving back” to society?…
(a-hem, where he stands now however, is not the point)

Liberals don’t really care who’s hard earned money they “steal” …. tell me – how can ‘stealing’ make someone “feel good” ?? Oh, right… I forgot who the ‘someone’s’ are….the Liberals/Progressives…

The Liberals are such “Parrots” for the likes of Obumbles…it’s a sad sad Left side of America…

FAITH 7, HI,
WOW, YOU HIT THE NAIL
hope they read that smart comment,
they would learn more here than in the MARXIST BOOKS THEY HAVE STUDIED
WITH SUCH INTEREST, AND TRYING IT TO THIS AMERICA, ON THE
EVER TOLERANT PEOPLE WHICH NOW HAVE MORE THAN ENOUGH OF THEM.

@ Faith 7

Bill Gates did not invent the internet. Or the web browser. Or the computer.

You wouldn’t be having this debate without the US Government having funded the creation of the internet through the funnelling of money to pointy headed intellecutals in the academic ivory tower. Don’t forget that as you busy yourself attacking our government.

@Andrew: The internet, or DARPA was around for decades before Bill Gates and good old fashioned capitalism made it available to John Q. Public.

Much the same as Henry Ford made the automobile available to those of modest means.