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Keep Holding That Line!

by Flyovercountry ( 41 Comments › )
Filed under Debt, Economy, Politics, Special Report, taxation at December 14th, 2012 - 12:00 pm

                               

Listening to Rush this afternoon, I heard him say something that was patently wrong, and I wish to defend John Boehner, just for a moment. In playing an audio clip of Boehner proclaiming that he would not budge on his position until Barack Obama got serious about cutting spending, and then he’d talk about marginal rates of taxation, Rush gave one of his inspired sermons about the free markets and why Boehner was wrong in his position on compromising on this supposed fiscal cliff, which I still maintain we’d survive just fine should we simply just hoist ourselves over already.

So for Rush, anyone reading, and even those who are simply scanning for the highlights, here it is, truth in a nutshell.

Government spending is equal to our taxation.

That feels good to get off of my chest, and I am going to repeat it once more, so that all may come to realize the truth.

Government spending is equal to our taxation.

The tax rates, what ever they may be, are nothing more than a freak show side light attraction. It makes no difference if our top rate is 35% or 40%, if our national leaders spend as though or revenues are roughly double what they actually are. There is not tooth fairy, Santa Clause, Wizard from the Harry Potter Universe, nor even a Socialist from Chicago who will be either interested or even capable of making up the difference, not only this year, but forever. What isn’t covered through income tax revenue will be paid, by us in some other fashion. We will suffer a loss of purchasing power due to currency devaluation, new excises will be added, debt will mount, or what ever. But one thing is certain, it will be paid by us.

Focusing on those silly tax rates, which by the way the converse of Art Laffer’s work also deals with, we are missing the big picture. Fortunately John Boehner has got at least one thing right, and that is his role as House Speaker puts his stingy little hands on the purse strings. As long as he holds tough on actual cuts in spending, which so far he has, the rates of taxation are only of secondary importance at best.

Now for the dirty little secret on marginal rates and revenue. No matter where rates are, revenue will depend on GDP, and nothing else. Every economist worth his salt, from Andrew Mellon to Art Laffer, has told us repeatedly, that no matter what the marginal rates are, or how they are graduated, revenue to the federal government will always be between 18% and 21% of GDP, and where along that curve revenue is depends on the nation’s economic health. So we can soak the rich and consequently drive GDP down, but that will not help us in the slightest.

With that being said, raising rates while simultaneously cutting spending is actually going to have the effect of being a tax cut, because it will be. Why, you may ask. It is because:

Government spending is equal to our taxation.

John Boehner has this one correct, and I hope he stays right on this one. The only issue here right now is spending, and with the GOP in control of the House, Boehner is actually in a position to do the right thing here.

Cross Posted from Musings of a Mad Conservative.

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41 Responses to “Keep Holding That Line!”
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  1. lobo91
    1 | December 14, 2012 12:21 pm

    Every economist worth his salt, from Andrew Mellon to Art Laffer, has told us repeatedly, that no matter what the marginal rates are, or how they are graduated, revenue to the federal government will always be between 18% and 21% of GDP

    And we’re currently spending about 25% of GDP.

    It doesn’t take an economist to see the problem…


  2. bluliner10
    2 | December 14, 2012 12:26 pm

    It has been a big topic with Rush. He has been pushing that Boehner make Obama blink. Tax rates are tax rates and their overall impact is minimal, but truly symbolic at this point. However, Rush has implored House not to give or compromise without receiving tangible cuts to spending.


  3. 3 | December 14, 2012 12:31 pm

    @ bluliner10:

    Yep. One theme Rush has been pushing of late is that if the tax rates are raised in any way, it is tantamount to admitting that it was the Bush tax cuts in 2001/2003 that caused the economy’s downfall – in essence, making the GOP give a good mea culpa. Now, to be honest, I initially thought “oh, come on…” but the way this administration spins things, yes, I believe that lying sack of s–t Carney will show up and say just that – after all, he rewrote economic history yesterday.


  4. bluliner10
    4 | December 14, 2012 12:35 pm

    @ Carolina Girl:
    I was just saying, I did not think that Rush was wrong regarding the current budget talks, and that Boehner has been holding firm. Plenty of revenue, too much unnecessary spending. Or is obscene a better word…rhymes with shovel ready.


  5. lobo91
    5 | December 14, 2012 12:36 pm

    @ Carolina Girl:

    The entire Democrat position is based on rewriting history. People actually seem to believe their claim that the boom of the late ’90s was caused by taxes being raised, and that the subsequent recession was caused by tax cuts.


  6. bluliner10
    6 | December 14, 2012 12:37 pm

    @ lobo91:
    but Clinton did cut government spending…by about 100,000 military personnel.


  7. 7 | December 14, 2012 12:38 pm

    @ bluliner10:

    This is what VDH proposes.


  8. 8 | December 14, 2012 12:40 pm

    @ lobo91:

    On his show yesterday, Mark Levin picked apart Carney’s fiction line by line – a great job.


  9. 9 | December 14, 2012 12:41 pm

    @ bluliner10:

    Agree completely.


  10. heysoos
    10 | December 14, 2012 12:47 pm

    another massacre in Conn…at least 12 dead including kids


  11. 11 | December 14, 2012 12:51 pm

    @ heysoos:

    And right on cue, piece of crap and faux conservative Frum makes a joke.


  12. heysoos
    12 | December 14, 2012 12:52 pm

    up to 27 dead now…sorry to to go OT…
    this is really sad


  13. bluliner10
    13 | December 14, 2012 12:54 pm

    @ heysoos:
    No, this is tragic.


  14. 14 | December 14, 2012 12:56 pm

    @ heysoos:
    @ bluliner10:

    Progressives will use this for political gain. Ban guns for the children, watch!


  15. lobo91
    15 | December 14, 2012 12:58 pm

    Rodan wrote:

    @ heysoos:
    @ bluliner10:
    Progressives will use this for political gain. Ban guns for the children, watch!

    We need to ban crazy people.

    Of course, we’ll hear that it was Reagan’s fault that all the crazy people were deinstitutionalized. Never mind that it was actually done by the left.


  16. bluliner10
    16 | December 14, 2012 12:59 pm

    @ Rodan:
    It is why I will get my carbine this weekend, my conceal carry next week and a handgun shortly thereafter.


  17. waldensianspirit
    17 | December 14, 2012 1:01 pm

    David Frum is a low life scum


  18. 18 | December 14, 2012 1:04 pm

    OMG. My stomache’s turning.
    Details emerging – reporting that the shooter was the father of one of the kids. There’s a press conference – I have the live stream going in another window.


  19. waldensianspirit
    19 | December 14, 2012 1:05 pm

    drudge has link saying it was father of student


  20. 20 | December 14, 2012 1:07 pm

    heysoos wrote:

    up to 27 dead now…sorry to to go OT…
    this is really sad

    It’s hard to fathom and I’m sure we’re in store for fresh calls for gun control…..as though Connecticut is a hotbed of gun-toting hillbillies.


  21. 21 | December 14, 2012 1:07 pm

    bluliner10 wrote:

    @ Rodan:
    It is why I will get my carbine this weekend, my conceal carry next week and a handgun shortly thereafter.

    Yup, they are already trying to call the NRA a terrorist organization. They are looking for a pretext.


  22. waldensianspirit
    22 | December 14, 2012 1:08 pm

    now saying 18 were kids


  23. taxfreekiller
    23 | December 14, 2012 1:09 pm

    Of some note:

    The Republicans via We The People (Tea Party Voters) took the house for the R’s in 2012.

    The Speaker of the House should have used those votes right then to cut spending. For sure every week cut someting of Obama Care.
    Push Back, but no,,,, sit on his ass and wait for a hurry up end of the year “have to deal cuting.”

    Boneher is not a fighter end of story.


  24. waldensianspirit
    24 | December 14, 2012 1:09 pm

    MacDuff wrote:

    I’m sure we’re in store for fresh calls for gun contro

    David Frum mocks Second Amendment supporters


  25. taxfreekiller
    25 | December 14, 2012 1:10 pm

    2010

    crap


  26. waldensianspirit
    26 | December 14, 2012 1:10 pm

    taxfreekiller wrote:

    Boneher is not a fighter end of story.

    He’s a cryer


  27. bluliner10
    27 | December 14, 2012 1:10 pm

    @ Rodan:
    DHS says I am already a potential terrorist.


  28. taxfreekiller
    28 | December 14, 2012 1:10 pm

    2010 , tfk dumb ass @ taxfreekiller:


  29. 29 | December 14, 2012 1:11 pm

    bluliner10 wrote:

    @ Rodan:
    DHS says I am already a potential terrorist.

    Well, if you’re a man, you’re also a potential rapist according to some feminist groups.


  30. bluliner10
    30 | December 14, 2012 1:14 pm

    @ MacDuff:
    I am everything bad. Gun loving, woman-hating, racist…semi-Catholic…


  31. 31 | December 14, 2012 1:15 pm

    @ waldensianspirit:

    Frum’s shithole remarks are going “viral” on Twitter.
    Appears that there were two shooters. So the father got a second inhuman monster to help him apparently.


  32. 32 | December 14, 2012 1:19 pm

    @ waldensianspirit:

    Fuck David Frum.


  33. 33 | December 14, 2012 1:22 pm

    @ Carolina Girl:

    What I am reading has “unconfirmed” reports of a second shooter. Either way, armed teachers could have made a big difference here.


  34. 34 | December 14, 2012 1:26 pm

    heysoos wrote:

    another massacre in Conn…at least 12 dead including kids

    I hope the dead motherfucker is a Demo☭rat!


  35. 35 | December 14, 2012 1:27 pm

    Rodan wrote:

    Progressives will use this for political gain. Ban guns for the children, watch!

    Just like the Effeminates did in the UK.


  36. waldensianspirit
    36 | December 14, 2012 1:27 pm

    Iron Fist wrote:

    @ Carolina Girl:
    What I am reading has “unconfirmed” reports of a second shooter. Either way, armed teachers could have made a big difference here.

    David Frum needs to go away; retire and not be given any time to voice ‘conservative’ positions.


  37. 37 | December 14, 2012 1:29 pm

    New Thread.


  38. waldensianspirit
    38 | December 14, 2012 1:30 pm

    Michael Moore joins David Frum


  39. 39 | December 14, 2012 1:31 pm

    waldensianspirit wrote:

    Michael Moore joins David Frum

    In hell?


  40. 40 | December 14, 2012 1:33 pm

    MacDuff wrote:

    waldensianspirit wrote:

    Michael Moore joins David Frum

    In hell?

    What about Download City?


  41. 41 | December 14, 2012 1:34 pm

    I moved this one to special report.


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