Obama v McCain -- Closest to the Pin

[Qsaint]

Another Battleground State:

Georgia (15) - In 2004 this state went to Bush 58-41, and 55-43 in 2000. Fast-forward to 2008 and current polling shows that McCain is leading Obama 51-41. A ten-point lead 6 months ahead of the final poll had not stopped Obama in the past (ie. Clinton had a substantial lead over Obama 6-months before the Georgia primary). I think that if Obama can bring out a large number of younger and african-american voters, and win a third of white voters this state is his.

Population is 30% Black but then you have to find whites that will vote for a black man.

 

[medusala]

It's ideology med. The fact that you have to compare it to the most extreme case of high taxation demonstrates the weakness of your argument. It doesn't surprise me that the laffer curve's maximum point is south of 95%. But I don't for a second believe it's south of 35%. Not even close.
.

35% is the top federal rate, there are state taxes on top

If you dont think the Laffer Curve works at that point there is evidence to suggest it does ie from Clintons raise and the cut by Bush.

You can also look at Australia where after tax cuts the budget surplus was always ahead of forecast.

A top rate of 35% is hardly some right wing flat tax that you make it out to be.

Its not ideology its common sense based on real world experience

 

[Diesel_2000]

When you add in a tanking economy, a disastrous war, a broken health care system, rising costs of petrol, a sinking USD, an increasingly widening Budget Deficit, not to mention the grossly underwhelming McCain, then I think many whites from Dixie may consider voting for Obama (the privacy of voting also allows white folk to vote for Obama, then tell everyone afterwards they went for McCain )

Also add in the Libertarian candidate Georgian Bob Barr, and the race becomes a lot more open. Lets use the 58-41 result from 2004 and take between 5-6% of the vote from McCain that Barr will grab and it becomes 52-41. Add 4% to Obama from the Young and African American voters, and take 4% from McCain for the negative GOP stench and you're left with an open 48-45 race.

Factor these points into the equation and I think most GOP organisers will be hoping that McCain makes plenty of stops in Georgia.

 

[Refried Noodle]

It's pretty hard to give an accurate prediction at the moment pretty much based off who the presumed cadidates are. We're yet to know the full affect of the bitter Clintonites, the Libertarians, Veeps, conventions etc. May I make another prediction after Veep's have been chosen and we're settled into the campaign post conventions? Anyway here's how I see it at the moment.

VP Choices
Obama - Webb
McCain - Not a clue

General Election Winner
Obama

Margin [Total Electoral College votes: 538. Needed to win: 270]

Obama 291
McCain 247

I didn't bother with the margins in the states:

Biggest Surprise of the Campaign
Oh I don't know,.....Obama scoring a perfect 300 at ten pin bowling?

Biggest Issue of the Campaign?
It's gotta be the economy specifically energy and petrol prices. The war is quieter as it has been in the past and is showing improvement (form a very, very low base that is). And with economic problems, less and less people begin to care about others, the environment, the planet etc and just want to get by. McCain will hammer Obama about being the tax man and Obama will hammer McCain about his apparent lack of economic credentials and being the 'third term of Bush's economics' among other things.

 

[waspy]

SUSA Washington poll out today shows a 89-7 lead for Obama among registered Democrats and a 17 point lead overall. Rewind to mid-May and in that SUSA poll he was leading by 12 with 81-15 among registered Democrats. This is the first poll done entirely after the Clinton withdrawal. If there's a post-Clinton swing like this in every state then you can pencil in close states such as OH, PA, VI, MI, WI, NH and maybe a couple more as fairly safe Obama territory. However, i think it might be slightly less dramatic than what happened in WA.
The next week will tell us a lot!

By the way, that Georgia poll was pre-Clinton withdrawal.

 

[DaveW]

If you dont think the Laffer Curve works at that point there is evidence to suggest it does ie from Clintons raise and the cut by Bush.

You appear to be willfully ignoring the evidence in this instance.

Bush turned the biggest budget surplus into the biggest budget deficit with his reckless fiscal policies.

QED

 

[medusala]

You appear to be willfully ignoring the evidence in this instance.

Bush turned the biggest budget surplus into the biggest budget deficit with his reckless fiscal policies.

QED

not at all, you need to differentiate between tax and spending (which you arent). The spending side isnt relevant to the laffer curve equation.

http://www.independent.org/newsroom/news_detail.asp?newsID=31

Since 2001, even with record low inflation, U.S. federal spending has increased by a massive 28.8% (19.7% in real dollars)—with non-defense discretionary growth of 35.7% (25.3% in real dollars)—the highest rate of federal government growth since the presidencies of Richard Nixon and Lyndon Johnson. This increase has resulted in the largest budget deficits in U.S. history, an estimated $520 billion in fiscal year 2004 alone. Furthermore, the projected spending for 2005 is a conservative estimate, since it doesn’t include at least $50 billion for the 2005 cost of the Iraq occupation.


This from Heritage (yes they are flat earthers but they do provide decent evidence from decent sources ie CBO)

http://www.heritage.org/research/taxes/bg2001.cfm


Nearly all of the conventional wisdom about the Bush tax cuts is wrong. In reality:

The tax cuts have not substantially reduced cur_rent tax revenues, which were in fact not far from the 2000 pre–tax cut baseline and over the 2003 pre–tax cut baseline in 2006;

Economic growth rates have more than doubled since the 2003 tax cuts; and
The tax cuts shifted even more of the income tax burden toward the rich.



The best way to measure the swing from surplus to deficit is by comparing the pre–tax cut budget baseline of the Congressional Budget Office (CBO) with what actually happened. While the January 2000 baseline projected a 2006 budget surplus of $325 billion, the final 2006 numbers showed a $247 billion deficit—a net drop of $572 billion. This drop occurred because spending was $514 bil_lion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts). In other words, 90 percent of the swing from surplus to deficit resulted from higher-than-projected spending, and only 10 percent resulted from lower-than-projected revenues



Furthermore, tax revenues in 2006 were actually above the levels projected before the 2003 tax cuts. Immediately before the 2003 tax cuts, the CBO pro_jected a 2006 budget deficit of $57 billion, yet the final 2006 budget deficit was $247 billion. The $190 billion deficit increase resulted from federal spend_ing that was $237 billion more than projected. Rev_enues were actually $47 billion above the projection, even after $75 billion in tax cuts enacted after the baseline was calculated.[6] By that standard, new spending was responsible for 125 percent of the higher 2006 budget deficit, and expanding revenues actually offset 25 percent of the new spending.

 

[medusala]

*Sigh* America, when will you ever learn, you are not the center of the world now.

evidence of their creeping influence is everywhere.

 

[DaveW]

This drop occurred because spending was $514 bil_lion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts). In other words, 90 percent of the swing from surplus to deficit resulted from higher-than-projected spending, and only 10 percent resulted from lower-than-projected revenues

So even by the most generous analysis, the tax cuts had still had a negative effect on the budget bottom line. (And I don't disagree that increased spending is a problem; but it's only half the problem.)

Think how much more revenues could have grown if the old tax scales were left in place. But no, the Bush policy is cut taxes and to hell with the consequences.

Why doesn't the Right believe in balanced budgets any more?

 

[medusala]

So even by the most generous analysis, the tax cuts had still had a negative effect on the budget bottom line.

a) its not generous its the CBO prediction

b) few claim that tax cuts will always pay for themselves 100% just that they cost far less than the immediate revenue foregone

(And I don't disagree that increased spending is a problem; but it's only half the problem.)

No, spending is much, muich more than half as per above

Think how much more revenues could have grown if the old tax scales were left in place.

very little

While the January 2000 baseline projected a 2006 budget surplus of $325 billion, the final 2006 numbers showed a $247 billion deficit—a net drop of $572 billion. This drop occurred because spending was $514 bil_lion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts).

But no, the Bush policy is cut taxes and to hell with the consequences.

The tax cuts ARE NOT the problem. Spending IS.

Why doesn't the Right believe in balanced budgets any more?

Many on the right have always believed its better to cuts taxes and have a deficit than to have higher taxes and a balanced budget

The logic for this is simple

Tax cuts => higher growth => greater revenue => deficit lessens.

 

[DaveW]

Yes. This is exactly the point.

The Republicans cut taxes without finding a way to pay for them. What they leave is a mess.

Bush will leave behind a terrible state of affairs for his successor to clean up.

That's why the Democrats can present themselves as fiscally disciplined. Because they're the only party that believes in balanced budgets.

 

[Clay Davis]

Yes. This is exactly the point.

The Republicans cut taxes without finding a way to pay for them. What they leave is a mess.

Bush will leave behind a terrible state of affairs for his successor to clean up.

That's why the Democrats can present themselves as fiscally disciplined. Because they're the only party that believes in balanced budgets.

Exactly.

Half of the growth since late last year has come from state and city government spending. They have been spending based on revenue streams that existed before the housing downturn. The magnitude of the housing downturn in some states is causing budgets to be slashed. These actiones will probably cause the US to finally topple into recession.

http://www.nytimes.com/2008/06/01/weekinreview/01uchitelle.html?_r=1&oref=slogin

I doubt cutting taxes is an option at the moment.

 

[medusala]

Yes. This is exactly the point.

The Republicans cut taxes without finding a way to pay for them. What they leave is a mess.

I am not sure whether you just arent reading my links or arent following it

The tax cuts of $188bn only led to a $58bn revenue shortfall!!!

The budget deficit is virtually ALL DUE TO SPENDING

While the January 2000 baseline projected a 2006 budget surplus of $325 billion, the final 2006 numbers showed a $247 billion deficit—a net drop of $572 billion. This drop occurred because spending was $514 bil_lion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts).

Bush will leave behind a terrible state of affairs for his successor to clean up.

Terrible? Even with iraq costs its under 3%. Hardly good but a) big one off factor b) he cut taxes and c) check out Euroland (and the UK in particular)

http://www.whitehouse.gov/omb/budget/fy2007/overview.html

For 2007, the Budget forecasts a decline in the deficit to 2.6 percent of GDP, or $354 billion.

That's why the Democrats can present themselves as fiscally disciplined.

Really? And how much of the deficit is due to the democrats effort in the House?

http://www.reuters.com/article/latestCrisis/idUSN05297656

WASHINGTON, June 5 (Reuters) - The Democratic-controlled Congress on Thursday adopted a $3 trillion U.S. budget for next year as the House of Representatives put the finishing touches on a measure to eliminate deficits by 2012 while exceeding President George W. Bush's domestic spending request.

Besides setting broad goals for federal spending and taxes, this budget also would raise the government's debt limit to $10.615 trillion, from the current ceiling of $9.815 trillion.

Republicans, who boycotted this budget, tweaked Democrats, saying their plan adds significantly to the federal debt after years of chastising Republicans for doing so

-------

Havent you defended Red Kens budgeting in the past?

 

[Palmer Stoat]

Right. The Republicans have controlled the executive branch for nearly eight years and have controlled both branches of congress for most of this decade, yet the deficit is the Democrats' fault.

 

[medusala]

Right. The Republicans have controlled the executive branch for nearly eight years and have controlled both branches of congress for most of this decade, yet the deficit is the Democrats' fault.

Obviously you miss the point

Its a bit rich of the democrats to claim fiscal responsibility when they present a bigger spending budget than Bush

 

[medusala]

http://www.nytimes.com/2008/06/01/weekinreview/01uchitelle.html?_r=1&oref=slogin


from the link

Government has to step in, Keynesians argue, when private spending is not enough to lift the economy, despite the nudge from tax cuts or lower interest rates or rebate checks. This downturn might be one of those moments, involving as it does the bursting of a huge housing bubble.

I doubt cutting taxes is an option at the moment.

Because Keynesianism worked so brilliantly in the banking crisis in Japan (which was caused largely by a property bubble)

 

[Palmer Stoat]

I am not sure whether you just arent reading my links or arent following it

The tax cuts of $188bn only led to a $58bn revenue shortfall!!!

The budget deficit is virtually ALL DUE TO SPENDING

While the January 2000 baseline projected a 2006 budget surplus of $325 billion, the final 2006 numbers showed a $247 billion deficit—a net drop of $572 billion. This drop occurred because spending was $514 bil_lion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts).

It's nonsensical to say the budget deficit is 'all due to spending'. Spending can only be judged relative to revenue. They're two sides of the same coin.

I don't think you'll get much argument if you say that the Republicans 'governed' (and I use that term loosely) beyond their fiscal means, but this was exacerbated by the fact that they cut back too much of their revenue streams while doing so.

 

[medusala]

It's nonsensical to say the budget deficit is 'all due to spending'.

No its not. Read the link. If you want to disagree with the CBO then I'd sure like to hear your reasoning.

Spending can only be judged relative to revenue. They're two sides of the same coin.

again, nonsense. By this logic it would be ok for Rudd to get rid of the budget surplus because revenues have risen so much. It would also mean you think spending should be cut in a recession when revenues are falling.

I don't think you'll get much argument if you say that the Republicans 'governed' (and I use that term loosely) beyond their fiscal means, but this was exacerbated by the fact that they cut back too much of their revenue streams while doing so.

ONCE AGAIN

This drop occurred because spending was $514 billion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts)

 

[Clay Davis]

Because Keynesianism worked so brilliantly in the banking crisis in Japan (which was caused largely by a property bubble)

The crisis in Japan has mostly been led by demographic changes.

Both monetarism and Keynesian economics have failed there.

 

[Palmer Stoat]

Obviously you miss the point

Its a bit rich of the democrats to claim fiscal responsibility when they present a bigger spending budget than Bush

My point was that given the surplus when Clinton left office, and given the appalling job that the Republicans have done, I think you're drawing a false equivalence.

 

[Palmer Stoat]

No its not. Read the link. If you want to disagree with the CBO then I'd sure like to hear your reasoning.

Logic is not your strong point, is it? Spending doesn't happen in a vacuum. There ought to be a push-pull relationship between revenue and spending. If there isn't, over time you'll accumulate ever-increasing debts, or ever-increasing surpluses that you don't use for anything.

again, nonsense. By this logic it would be ok for Rudd to get rid of the budget surplus because revenues have risen so much. It would also mean you think spending should be cut in a recession when revenues are falling.

Not at all. I don't have any problem with Keynesianism that'd see stimulus packages in times of recession, for instance. (Just the kind of idea that Obama has recently floated.) But over time there there has to be adjustments to restore equilibrium -- otherwise you get the spiralling debts/surpluses scenario.

ONCE AGAIN

This drop occurred because spending was $514 billion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts)

ONCE AGAIN, no one's arguing that the Republicans haven't spent beyond their means. But one of the reasons they've spent so far beyond their means is because they cut their revenue streams. Geddit? That $188 billion of taxes that they didn't collect would have offset some their extravagant spending.

I'll say it again: it's absurd to act as if somehow spending can be viewed in isolation to revenue collection. They're two sides of the same coin.

 

[medusala]

Logic is not your strong point, is it? Spending doesn't happen in a vacuum. There ought to be a push-pull relationship between revenue and spending.

There is no reason large increases in revenue should be matched by large spending increases.

Howard was justifiably criticised for this

If there isn't, over time you'll accumulate ever-increasing debts, or ever-increasing surpluses that you don't use for anything.

for a) see the UK

for b) see Australia

But over time there there has to be adjustments to restore equilibrium -- otherwise you get the spiralling debts/surpluses scenario.

Which happens on a regular basis.

See Japan for what happens when the ghost of Keynes is dredged up to fix a banking crisis.

ONCE AGAIN, no one's arguing that the Republicans haven't spent beyond their means. But one of the reasons they've spent so far beyond their means is because they cut their revenue streams. Geddit? That $188 billion of taxes that they didn't collect would have offset some their extravagant spending.

This simply isnt correct as revenues only fell by $50bn

No point you talking of $188bn

I'll say it again: it's absurd to act as if somehow spending can be viewed in isolation to revenue collection. They're two sides of the same coin

This simply isnt correct.

How many real world examples do I have to give you? I gave you the US, you completely ignored that, I can give you plenty of others.

As for being two sides of the same coin

In boom times revenues increase on higher profits and spending should fall due to lower social security payments

and vice versa

=> same side of the coin?

 

[DaveW]

Michigan is a worry - but I think his numbers will improve there.

New Rasmussen poll: Obama 45-42 in Michigan.

http://www.rasmussenreports.com/pub.../election_2008_michigan_presidential_election

 

[waspy]

New Rasmussen poll: Obama 45-42 in Michigan.

http://www.rasmussenreports.com/pub.../election_2008_michigan_presidential_election

A lot of that improvement came from independents, registered Dems went from 70% Obama last time to 74% this time. Still plenty of room for improvement there with a strong campaign.

 

[Palmer Stoat]

There is no reason large increases in revenue should be matched by large spending increases.

No, I suppose it doesn't HAVE to be. But what's the point in governments continuing to accumulate massive surpluses if they're not gonna plough that money back into the community in the form of infrastructure, benefits, research, training etc? Governments aren't there to make profits. In the inconceivable circumstance that the country has all the research, training, infrastructure, and benefits it needs at least cut taxes. Massive surpluses for their own sake are of use to... who?

for a) see the UK

for b) see Australia

I've said this to you before, but if you're gonna make an argument... make an argument. I find your enigmatic three- or four-word responses singularly unenlightening.

Which happens on a regular basis.

It hasn't happened quickly enough in the US -- just look at their debt. The Republicans are gonna leave a fine old mess for the next Democratic administration to clean up.

See Japan for what happens when the ghost of Keynes is dredged up to fix a banking crisis.

Yes, that's true. Although Krugman while noting the deficiencies of the Keynesian response to the Japanese crisis in the 90s does say "One can identify a number of occasions, most notably Japan in the 1990s, where depression-like conditions might well have returned without the guidance of Keynesian economics.". So perhaps it's not clearcut.

This simply isnt correct as revenues only fell by $50bn

No point you talking of $188bn

Medusala, what I'm saying is clear, you're just being deliberately obtuse.

This simply isnt correct.

How many real world examples do I have to give you? I gave you the US, you completely ignored that, I can give you plenty of others.

No, I didn't ignore your example. I'm just making the completely sensible -- and easy-to-understand point -- that you should calibrate your spending relative to your revenue. While fluctuations are to be expected and aren't a big deal, if you let one get dramatically out of whack with the other for too long, you just end up with massive surpluses or debts, and I don't think either is ideal.

As for being two sides of the same coin

In boom times revenues increase on higher profits and spending should fall due to lower social security payments

and vice versa

Well, you're making a big assumption here. Who says the benefits of economic growth always reaches the bottom economic layer of a society, the layer that relies on benefits? The benefits of economic growth don't always 'trickle down', so I don't know if you can say social security payments will necessarily decrease in a growing economy.

But that's not really my point. My point is that if you have more revenue you can increase expenditure. If you have less revenue, cut expenditure. One axis depends on the other. You could increase expenditure by 15% in a year, but that wouldn't cause any problems if you had the revenue to cover that kind of increase. And this is why it's false to fixate on only spending, when it only makes sense to talk of spending and revenue collection at the same time. It's only when one axis is way out of whack with the other that you start to get problems -- especially if this is allowed to persist over a long period.