Dobbs says "one could argue reasonably" Obama admin. is "socialist," agrees with Kudlow that tax cuts are effective stimulus
November 20, 2009 12:26 am ET
From the November 19 edition of CNBC's The Kudlow Report:
Please upgrade your flash player. The video for this item requires a newer version of Flash Player. If you are unable to install flash you can download a QuickTime version of the video.
Mr. News
This is not the approach our country needs - it will only create a larger spread between the upper and lower class citizens of our society and provide even less tax revenue to take care of our peoples immediate needs in these desperate times.
The most wealthy of our citizens and businesses that have benefited from previous tax breaks will have to step up to the plate pretty soon or even their mighty empires of wealth will begin to crumble. Without tax revenues to maintain our infrastructure and transportation systems we will soon lose our competitive advantage in the world market place.
You would think that businesses and wealthy individuals would do this on their own accord using their own funds and only ask of us fellow countrymen to repay them with tax credits when conditions turn around. Isn't it ironic that we have to ask people in foreign countries for help because our wealth is tied up buy a small percentage of our population and they will not use it to improve the conditions of fellow countrymen?
So, Think, People.........
Bush was a big backer of a free market system and believed that it was being hampered by the leash of government oversight. That is why Fannie Mae and Freddie Mac began pumping so much money into the economy primarily in the housing industry. Never before in the hisory of our country could citizens obtain such large amounts of money without sizable down payments and a credible repayment history.
Many people with limited financial skills seen this as an opportunity to buy a house as an investment with little money upfront. Most thought they could make the payments without any problem because the defered interest would not kick in until down the road a ways. By that time the valuation would have increased to the point that they could sell the house and make a nice profit, and some did. I worked for a large Engineering Firm in Phoenix Arizona at the time and I got to see the whole thing unfold. At one time we had nearly 40 subdivisions in one phase or another of development and there were many firms in the Phoenix area. Tens of thousands of houses were being built each year and this was happening all across the country.
Because loans were so easy to obtain it created a housing boom. It got so bad in the Phoenix area that real estate investors were making random calls from numbers out of the phone book and asking people if they would like to sell their house. There were more people looking for houses than houses.
This went on for several years until the market was absolutely saturated with over priced houses. Finally the demand began to fizzle and at about the same time the defered interest rates starting kicking in. Soon the valuation began to fall because people could not meet their payments and could not sell their houses for a profit anymore, so they began unloading them at whatever price they could get out of them just get out of the contract. When people realized what was happening then everybody starting dumping them in fear of losing their total investment. This even drove the valuation down further.
Many of the Banks and Loan Companies after making their cut on the loan origination fees etc. sold the mortages in large blocks to investment companies, some of which were represented in the stock exchange. So even these companies were not isolated from the impact.
To make things even worse many of our citizens, state retirement accounts, college schloraship indowment funds, etc. etc. began investing in the housing market because of the perceived short term good rate of return.
There were many economists that weighed in on what was happening at the time but the government was so h**l bent on letting private industry show the world how to make an economy strong they ignored their advice. Oversight regulations serve as a safety net for people who do not have the skill levels to follow all the concepts of complex financial documents that often get signed in haste. This does not justify their lack of knowledge for sure, but it does help to avert the problems we are facing now.
There are many other departments of government that have had their oversight responisblities stripped away by the last administration. We are working to correct the problems and mitigate whatever damage was caused by those actions.
This is all just my opinion based on what I actually seen with my own eyes. We all have different opinions and I respect that.
The problem with giving the upper-class tax cuts, is that they spend it on stocks and speculate on commodities/currencies. Investment in companies is good because it means they can expand and increase production. However, you can only produce so many goods before you over saturate a market because no one can afford (or wants) to buy them.
As for speculation, it does not lead to real economic growth and does not sustain an economy. All speculation does is to drive up the cost of goods. So next time you fill up your tank with gas and it is $4, you can thank the speculators that drove up the cost by buying tons of oil in the hope that the price would go up and then they could sell it.
Consumer purchases, on the other hand, drive our economy and establish growth by providing jobs and a market to sell those goods. Ford had the right idea by paying his workers more to produce cars than other manufacturers were willing to pay their assembly line workers. By paying them more, he gave them money to spend, which prompted many to buy a Ford automobile.
http://correspondents.theatlantic.com/conor_clarke/2009/06/what_socialism_looks_like.php
I keep hearing that business will use the tax savings to hire people, but why would they hire people to stand around, since no one is buying what they are making?
There is one thing about business that has held true down the ages, they will not spend one dime on anything unless they get more than a dime back, including hiring people. They will hire more people when there are more people buying whatever they make.
Obama has this right, give the people making less, and they will spend it. Cut taxes on the rich, and they will gamble the money in the oil market, and make everyone else pay $4.00 a gallon so they make more money, while their income keeps going down.
Do the people in this country need a few more years of trickle down economics to finally figure this out, I am afraid the answer is yes. My fear is that we won't have much of a country left, if we get more years of trickle down economics.
If we think our lawmakers are out of touch with reality, Kudlow and Dobbs are even more out of touch with reality. You think either one of them care when they fill up thier car its costs 50 or 60 dollars. If you think that, I have a bridge to sell you on very good terms and cheap!
Just so you right wing crackpots think I will directly benefit with lower taxes on the middle and lower class in this country , you would be wrong. I will pay more taxes, but I will know that the people that are choosing between gas to go to work and clothes for thier kids, might have a little easier time.
So far, he's tried to lead the anti-immigration movement and failed and then moved on to the birther movement and failed.
Both of these movements are mob ruled, they have no leaders only angry TV hosts.
One could argue reasonably that Lou should just go back to his horse farm and leave America's future to those who have something constructive to add to the debate.