Good argument and very valid points....a tough read for a Sunday, but good none the less. That being said, however, i feel that some of historical data points they are using are just that, dated. We live in a new dynamic in economics and the investment world that disimmenate information so quick that people with authority and power can control the economy and others economy in ways that it never has. Just look at the way that Greenspan has controled inflation and the economy since he took office. Absolutely brilliant.
Tax cuts for the rich and famous have been a sore spot for so long. From what i have read, the tax cuts for the rich are necessary for one reason and one only. They spend money Xtimes faster than the middle class. Givens: Tax rate for the Rich is 30%, rate for midclass is 25%. Now lets say the tax benefit is 5%. Middle class family is making 50k, so their tax bill for 2002 was 12.5k and for 2003 is 10k. A savings of 2.5k. Now lets say the "rich" famillys income is 150k a year (i believe that is where the "rich" break is considered, help me here Volcom). their tax bill for 2002 is $45k and 2003 it is now $37.5k a net savings of $7.5. (i apologize for bad early math). The reasoning behind those cuts is that rich people, who tend not to have large amounts of debt etc etc etc, will immediately pour that cash back into the economy through purchases of goods and luxury items, thus triggering more taxes. I was all for the tax credit and tax reduction as i believed it was a perfect antitode to the slumping economy. Even Greenspan was on board at first, but now he is hacking it saying that if Bush thinks the economy is fixed just cause of that he is dead wrong.
We got the tax breaks, and they worked as plan with the money going right back into the spending sparking growth. What we need now is fiscal conservatism from the hill over the next 4-5 years and to not overspend. If we can survive that and not get a democratic leadership to unravel all the budgets by opening up huge spending policies we will be ok. The investment world is terrified of the Kerry econ plan cuase it makes NO SENSE. Rolling back tax cuts??? a little late for that.....
I noticed you cited the Mpls Fed, do you live in MN?
