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ARE DEMOCRATS BAD FOR THE ECONOMY??

Discussion in 'Uncategorized Threads' started by Bob Schultz, Oct 17, 2008.

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  1. Bob Schultz

    Bob Schultz Well-Known Member Supporting Vendor

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    Heck, I'll jump into this. The Democrats are wanting to raise the corporate and personal cap gains tax possibly to 25-30%, apply protectionist policies to "preserve American jobs" and potentially abandon NAFTA in order to pressure the other countries to strengthen its labor and environmental provisions.

    Obama continually has said he wants everything to be fair. And the money these hedge funds and private equity groups are making is not fair to everyone else. Well, private equity firms are taking substantial risk in order to make their money. They participate in a very important facet of the economy...funding entrepreneurs. There are so many more small businesses than larger ones in America. And they employ millions of people. If you raise the taxes and make it harder to get a reward for the risk you're taking, the seed capital will dry up. As a result, less jobs will be created for new businesses. Larry Kudlow makes a great point that you cannot have capitalism without capital.

    Furthermore, Charles Gibson pointed out at the April 16th Democratic debate, raising the cap gains tax has actually led to a reduction in revenues the gov't collected. And each time it has been lowered it has led to an increase. On the flip side, there is the argument that the lower cap gains tax is a only short term benefit and not a long term one. Ok...whatever. What I’m lacking is finding a solid reason in this current economic climate to raise them.

    What I do think could be more damaging would be the protectionist policies Hillary and Obama are considering. Like restricting free trade agreements. In this current globalization of economies, now is not the time to put up barriers or apply tariffs. NAFTA has not hurt our economy...it's helped create more jobs than it has lost. Yes, certain sectors of the economy like manufacturing have been hit. But this was inevitable due to our inability to remain competitive.

    I remember when John Kerry wanted to allocate a substantial amount of money to get back the textile jobs that were lost to China. Little did he know there was no way we could get them back. It was impossible. Chinese labor was too cheap. So cheap that India was losing its textile jobs to China as well!

    It's hard to point to a good solution on that, but, our manufacturing sector is still one of the best in the world. Maybe all those recalls in China will facilitate a resurgence to go back to America pay a premium and get high quality products that are not going to be recalled b/c of lead paint, counterfeiting or worse.

    In my opinion, the Democrat's economic policies are economically counter productive. Although Hillary and Obama may seem like they are "behind the American worker" and making it "fair" for everyone, the ramifications of these policies if they were passed would have a severe negative economic effects and create a worse scenario as a result.

    And please everyone... prove me wrong. Am I missing anything?
     
  2. gun fitter

    gun fitter TS Member

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    They have always been a good short term solution to long term problems. Their solutions usually have disasterous results long term.

    You know like our Navy having to pay China in order to go through the Panama Canal.

    Joe
     
  3. Andy Moreland

    Andy Moreland TS Member

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    No speculation or opinion needed... Democrats clearly win.

    Click on the above link and read the figures for yourself.

    Andy Moreland
     
  4. SwannyinMinn.

    SwannyinMinn. TS Member

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    My 401k was much better with clinton in office.
     
  5. m629

    m629 TS Member

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    Bob please tell me what jobs was created than is better than the manufacturing jobs that are lost. I live N E Ohio the factories are closing and people that was making 30K - 50K are now forced to work at wal-mart home depot, and low wage jobs some are working two jobs just to survive. I have a small machine shop that is running out of customers due to Bankruptcy and plant closings. 10 Years ago I bought new equipment a new truck and had money in the bank. Now I dont know how I will put my son thru college. Please tell me what other countries want to buy off the USA if it not Manufactured or grow here.Or companies can not compete with other countries that dont have regulations forced on us from our goverment. Was I better of 10 years ago ? you tell me. I make a third of what I use to. Would I vote for Bill Clinton if I could ? You bet. then I would send money to the NRA like I use to. This is the first and probley last time I expressed my opinion on here. You are the only person that I ever heard said that NFTA is good. I belive in keeping money in america not other places that dislike America Thank you Mark H
     
  6. J.Woolsey

    J.Woolsey Member

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    Swanny, that's because we had a Republican Senate and Congress when Slick Willy was Pres. I can't get over the mentality that the Pres is at fault always. Wake up! He is at the mercy of the Senate and Congress. Dems have been in the Majority for 2 years now. How's your 401K look now? Guess it's Bush's fault huh? As I recall, when asked what surpreised him the most about the office of president, Harry Truman stated "Just how little actual power he had." To really solve our problems we need to get the incumbents in the Senate and Congress that belong in a Mental Institution, Pelosi,Reid, Murtha,Frank,Dodd, etc. etc. back on the unemployed rolls. MHO By the way I am voting McCain/Palin for the good of our Country.
    J.Woolsey
     
  7. perga1

    perga1 Active Member

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    Mark H., what you should be asking is are you better off now than you were 2 years ago. I think if you dig out your old statements you will find that you were better off 2 years ago before the Dems took over Congress than you were 8 years before. BTW, it was your boy Clinton who signed NAFTA. JRM
     
  8. Chango2

    Chango2 Active Member

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    Anybody on this forum or on this thread have a degree in econ to give us a short, short, short version of econ 101? I know that trapshooting is bad for my personal economy...but worth it!
     
  9. pendennis

    pendennis Well-Known Member

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    Chango2 - I have a degree in finance and economics.

    This zeal for the President to do something about keeping "American jobs", borders on insanity. Protectionist legislation to prevent companies from moving jobs off-shore has never worked, and it never will.

    Right after the stock market crash in 1929, and the onset of the Great Depression, a Republican-controlled Congress passed the Smoot-Hawley Tariff Act. The law enacted protectionist tariffs against foreign goods, at a time when the various national economies were starting to globalize. Every credible economist at the time warned President Hoover, and Congress of what would happen. Hoover's veto would have stood up since there weren't enough votes to override. Hoover signed, and the predictable result was that the U.S. could not export goods, further reducing corporate income, and exacerbating an already critical problem with manufacturing capacity. You all know what happened during the next ten years. The U.S. economy did not recover until the start of World War II, when excess capacity was finally used to produce wartime goods.

    Just what would a Democrat do to keep jobs from leaving the U.S.? Tax breaks to attempt to keep jobs here will do very little, since the resulting tax increases to support increasing government spending levels will offset any miniscule gain in jobs. It's a self-defeating doctrine.

    NAFTA was passed with Democrats in control of Congress and the White House. Now this same bunch wants to repeal it? What happens if Canada and Mexico retaliate? The barrel price of oil will rise sharply, and since we get a great deal of oil from them, how do we pay for these inglorious government programs.

    Socialism/collectivism feeds on itself, and it will bankrupt this country. The Soviet Union, East Germany, and the rest of the eastern-bloc countries all went through bankruptcy to fund socialism. The only difference will be that a different set of idiots will try it here.

    During the Great Depression, President Franklin Roosevelt attempted to apply Keynesian economic models. These models said that government spending would be able to overcome excess capacity in the markets, and save the economy. However, all the alphabet soup of government programs (CCC, WPA, NRA, TVA, RECC, to name a few), could not save the U.S. economy. For all its bluster, the only two programs which worked at all were Rural Electrification (RECC), and the Tennessee Valley Authority (TVA). The rest were just make-work, feel-good projects that failed to spur the economy.

    We are facing the same problem today. We have excess capacity in the economy. The cost of a small business to hire someone who makes $35k/yr, is more than $50k, including employer Social Security, and other costs. Obama promises them a tax credit of $3k for small businesses to hire someone. That's the same as the WPA, and it will have the same effect.

    Economies are led by demand, not supply. Markets are not created to take excess labor capacity, and put it to work. That the market demands cars, houses, appliances, and other goods is what fuels the economy. The economy will balance itself, without government intervention.

    Dennis
     
  10. m629

    m629 TS Member

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    Perga1 This started way more than 2 years ago. Are poltician are to blame every one that puts themselves and there buddys before America I am so tired of dems and reps fighting and blameing each other and nothing good happens. How many polticians said that they screwed up on the bank bailout? With all the smart people in the USA we end up with these blowhards.
     
  11. perga1

    perga1 Active Member

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    My sentiments exactly but I know I was better off 2 years ago. Jim
     
  12. SwannyinMinn.

    SwannyinMinn. TS Member

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    Waasn't East Germany/Soviet Union Communist, not socialist? There is a huge difference in the 2 concepts.
     
  13. halfmile

    halfmile Well-Known Member

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    2 democrats very bad for the economy:

    Bill clinton, signed the repeal of the Glass-Steadman act, deregulating banks and allowing the birth of the meltdown we are experiencing now.

    Janet Reno, promised to prosecute any bank, mortgage broker or other lender that denied any low income or minority applicant a home mortgage.

    Thanks, Democrats!

    Next week they will stop by and pee in your chicken soup so it lasts longer.

    HM
     
  14. pendennis

    pendennis Well-Known Member

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    SwannyinMinn - Socialism is the end result of communism. Communism is only the means to an end. None of the Soviet-bloc countries ever attained true socialism. Both concepts ignore consumer demand and needs.

    The Soviets had planned economies, both in manufacturing and agriculture. However, they chronically had shortfalls in every sector, because there was never an incentive for anyone to be successful. There was always a reason for failure - drought, machinery and infrastructure breakdowns, and just plain "I-don't-have-any-reward-for-exceeding-expectations". For the worker, he couldn't be punished any worse than being below horse-sh!t in the grand scheme of things already. He didn't have enough to eat, and problems with diseases like alcholism were, and still are, in epidemic proportions.

    Cambodia also tried communism by completely breaking down society, punishing professionals such as teachers, doctors, lawyers, and others, by putting them in huge "re-education" facilities, which were really death camps.

    History is replete with examples of communistic-type zeal. It's always resulted in total collapse, because leaders turn to terror and dictatorial powers to try and make the concepts work. The leaders, in turn, get occupied with the power, and the experiment fails. Greed at the top is the downfall of most of these social experiments.

    In early 1620's Plymouth, Massachusetts, an experiment in communism was tried, and very nearly led to failure of the colony. The leaders assumed that by allowing folks to only work their own plots of land, that everyone would survive. However, the division of labor was so small, that no one could take advantage of any scale. When one person's crops didn't do so well, they would starve, because there was no surplus to cover the shortage. When people were allowed to practice self-determination, some grew more crops; others raised more cattle.

    Best,
    Dennis
     
  15. ivanhoe

    ivanhoe Well-Known Member

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    halfmile that comment "Next week they will stop by and pee in your chicken soup so it lasts longer." is to funny. Two thumbs up.

    Bob Lawless
     
  16. pendennis

    pendennis Well-Known Member

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    Not to belabor the previous points, but any protectionist acts, whether in the U.S., or abroad, WILL cause a world-wide recession, perhaps even depression.

    Labor costs always seek equilibrium, whether in the U.S., or abroad. Labor is one of the few efficiencies available in a totally free market. When labor costs are expensive in one place, they naturally move to where cheaper labor makes a company's products more price competitive. Selling prices are extremely inflexible. As an example, different store chains often sell the same item for the same price. Even at several hundred dollars in price, a couple of dollars makes the difference in profitability and loss.

    Material costs, during stable times are relatively inflexible. For instance, lead sells world-wide for less than $.75/pound on all metals exchanges. Unless a company in the U.S. can process this with some edge, U.S. labor rates are generally higher than the rest of the world. Now, where would you go, so your products could be manufactured, and priced competitively world-wide; stay here, or go to Mexico, where labor rates are far cheaper? Then, when Mexican labor rates are higher than those of Singapore, what do you do next?

    The labor costs are but one factor. Taxes, health care costs, labor contracts, pensions, 401k's, etc., all have an effect. And countries form their foreign policy to take advantage of, or guard against, another country's laws and policies.

    Transportation costs can be one of these concerns. Until recent times, it was cheaper to ship parts to remote automotive assembly plants from central manufacturing locations. Makers never wanted to back-haul vehicles. That was a no-no. However, with the advent of non-union and foreign component makers this became less of an issue.

    If this seems complicated, it is - beyond most peoples' understanding. This is not a slam against anyone. It's just a fact of life. For the same reason most of us don't understand astrophysics, or molecular biology, economics is the same. You have to be schooled in its laws, nuances, and changes. Each person is gifted in a particular area of understanding and desire, and it's extremely foolish to short sell those talents.

    Best,
    Dennis
     
  17. SwannyinMinn.

    SwannyinMinn. TS Member

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    I never said I was a socialist. I have never said it in a post, nor do I subscribe to the thought or theory of it. I am totally against giving people free rides. I've seen the lack of productivity, and pride, it produces. So don't go calling me a socialist by any stretch asshole! Feel free to go f@!k youyrself Fred.
     
  18. Dove Commander

    Dove Commander TS Member

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    Swammy...tsk,tsk, You insult people every day on TS.com and your pissed about being called a socialist? When you promote and vote for a socialist, it sure as hell doesn't make you a libertarian!
     
  19. crusha

    crusha TS Member

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    Let me start by saying that I don't think Obama will intentionally set out to mess up the economy. In fact, it may well end up getting better, and he will get the credit for it, just like Bill Clinton did.


    Furthermore, I don't think he _wants_ to harm the economy. I think he realizes that NAFTA was overall good for the economy, although it did devastate some industry sectors.


    However - he learned a sharp lesson in his primary battle against Hillary Clinton - "worker angst" can be harnessed to get votes, and can be the difference between victory and defeat. It almost propelled Hillary past him, and it's a lesson he won't soon forget.


    So you get this talk about how "trade agreements must be fair," etc. He's "feeling the worker's pain" by saying stuff like that. It will get him votes. And those votes can be gotten fairly cheaply. Once in office, he can go back on most of those promises with impunity, knowing that those voters won't pay attention, won't remember, and won't punish him.


    He doesn't have to _do_ the protectionist stuff. He just has to "sound the right notes" to get votes. He can get Joe Plant Worker to vote for him, while continuing to advance the new world economic order in his policies in office - in essence, giving himself the best of both worlds. Both parties will "do it" to the American worker - but Obama is more convincing, when he says he feels their pain. So, they hold their nose and vote for him and hell, it can't be any worse than what we got, right?


    Remember - these people are _employees_, and Barack Obama is the Employees' Candidate, not the Entrepreneurs' Candidate.


    Witness how Obama said we "need to renegotiate" NAFTA in his battle with Hillary Clinton - then his campaign promptly called Canadian officials and said, "Don't worry - it's just campaign rhetoric."


    That's the sort of governance you can expect from Obama. He will neither help the economy, nor destroy it - he will simply do whatever meets his own objectives at the moment.


    In short - he's just like any other politician. The people voting for him don't see it yet...but they will.
     
  20. BIGDON

    BIGDON Well-Known Member

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    Swammi; You protest to loudly. I fear you are which you state you are not. Remember associate with those who have fleas and you will surely have fleas also.

    Don
     
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