emptycooler wrote:Back to the subject then, oh thanks for the bold face i was haveing a hard time reading.
Repubs want to add 600 bilion to our deficit in the form of extending bush era tax cuts,(mostly for the wealthy) the DNC wants to add 50 billion to help out those who have lost their job at no fault of their own. whats to debate?
So you clearly do not understand the CBO budget estimating process. They could set the tax rate to 100% and it would not catch the fact that everyone would stop taking income in that form and it would show a huge income to the Federal government.
It simply is an estimate which is known to overestimate tax revenue and underestimate spending.
It does not capture the feedback of incentives on the dynamics of the economy. Obama can threaten to bankrupt the coal industry and the CBO estimate will not capture that investors will require higher rates of return to build power plants which leads to higher electricity rates all because of the added risk. There are so many dynamic feedbacks that are missed, but we know which way the bias of the estimates are and they are pretty huge errors.
So that $600B is overestimated because it does not account for the reduced economic activity. The $50B is underestimated because it does not account for the incentive to stay unemployed or at least to work under the table. For example, there are a huge number of two income households and believe it or not, most of them do not require both incomes. This is one huge source of "unemployed" in my area. Same with working under the table, which are referred to as "side jobs" around here. My cousin was going to quit her job when she had her baby, her company needed to lay someone off, so they laid her off since she was going to quit anyways. As far as I know she may still be drawing unemployment. She was going to quit her lowly job in Manhatten where she probably made $100k+ because her husband made real money
What is the real cost of the tax cuts? Probably damn close to zero when accounting for the feedback.
What is the real cost of the unemployment welfare? If we had stopped the extensions from day one, it would have saved $100's of billions and probably would have reduced unemployment rates around 2%.