Obama Takes Limbaugh’s Advice

After Barack Obama won the election Rush Limbaugh gave him some advice on the economy. OK, actually Rush gave Obama a proposal which Obama ignored. Limbaugh said that we should cut the Capital Gains tax to zero for a period of time and cut the corporate income tax in half. Limbaugh also said that cutting those taxes would put more money in the pockets of Americans and businesses would have more money to hire and expand. Of course this was ignored by Democrats even though cutting taxes always increases revenue to the Treasury and stimulates the economy.

I know a number of liberals who do not believe we should cut taxes. In fact, many of them say we should pay more taxes (somehow liberals always want more taxes but find ways not to pay them – see Obama administration for examples).

It looks like Barack Obama has finally taken some of Rush Limbaugh’s advice. Obama, in an effort to stimulate job growth, is pushing to eliminate the Capital Gains tax on small business for a one year period. The cut should be more and include many others but this is a good first step.

A major part of his package is new incentives for small businesses, which account for two-thirds of the nation’s work force. He proposed a new tax cut for small businesses that hire in 2010 and an elimination for one year of the capital gains tax on profits from small-business investments. Breitbart

Obama wants to cut taxes to zero for one year in order to stimulate job growth. Listen up liberals, your leader has just told you that cutting taxes stimulates job growth.

This is not the first time a Democrat has mentioned cutting a tax to stimulate the economy or stimulate job growth and each time they say it they are admitting that conservatives especially Mr. Limbaugh are right. Saying it is one thing and doing it is another and they seldom carry through with the plan but they do admit, probably unknowingly, that the conservatives are correct.

This economy would be on the mend in a big way had Obama listened to Limbaugh in the first place. Cutting Capital Gains taxes to zero for a year would cause a massive influx of money into the economy where people would spend it. Cutting the corporate tax in half would leave companies with a lot of money to expand and hire.

And the government would get its cut because people who have more money buy things that are taxed. People who get a job pay taxes and the revenue to the Treasury would skyrocket.

I know Obama is only talking about cutting the tax for small businesses but that is better than the path he has been on.

It would have been better if he took all of Limbaugh’s advice but baby steps, a little at a time and we will get there. Once the economy picks up Obama will take the credit but he will have shown that tax cuts are a good thing.

If Obama can cut the Capital Gains taxes on small business the job numbers should improve and the economy should start to improve. But that won’t do it all.

So, here is the piece Limbaugh wrote so Obama won’t have to search around. Read it Barry and follow all of it.

Big Dog

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38 Responses to “Obama Takes Limbaugh’s Advice”

  1. Adam says:

    Limbaugh gave Obama advice that Obama didn’t follow? That’s hard to believe. I mean, President Bush had Al Franken on speed dial from the Oval Office didn’t he? Why isn’t Obama listening?!

    You say that cutting taxes always increases revenue to the Treasury and stimulates the economy but I’d love to see your evidence of this. It’s not that I think it can’t under the right circumstances. It’s the ‘always’ part that bothers me and the fact that the most recent examples of tax cuts just increased the deficit.

    “Listen up liberals, your leader has just told you that cutting taxes stimulates job growth.”

    You mock but yet you fail to note that no Democrat says tax cuts won’t stimulate to some degree. It’s just that tax cuts alone aren’t good enough and that is where you are wrong. That’s why every tax cut Obama has proposed as part of a stimulus plan has come with billions in spending.

    You forget apparently that it was not tax cuts that saved us (some argue tax cuts made it worse during Hoover) from the Great Depression but rather spending massively on WWII.

    • Big Dog says:

      Adam, I said tax cuts always increase revenue to the Treasury, not that they reduce deficits. You see, when they get more money they spend more money and that is what makes the deficits.

      Increased spending made the Great Depression worse. The increased spending of WWII was not what ended the GD, it was that the War necessitated hiring a lot of people and millions of men were put on the payroll to go off to war. Millions more had to go to work to build stuff for the war effort. But the war provided the jobs and that is what ended the GD, not the increased spending. If spending solved the problems then we would have no economic problems.

      We had huge bills after the war.

    • Big Dog says:

      But he is following part of it now…

  2. Adam says:

    “I said tax cuts always increase revenue to the Treasury…”

    Fair enough, but I’d like to see your evidence of that still.

    “Increased spending made the Great Depression worse.”

    What part of the Great Depression was worsened by spending?

    “The increased spending of WWII was not what ended the GD…”

    Where do you think the money came from to gear up for war and create the jobs that put people to work? A lot of it came from government contracts. How much debt we had is not an issue. We don’t measure recessions or depressions by debt.

  3. Blake says:

    When tax cuts are in place, that increases the opportunities for increasing employment, and for every worker (provided he is legal) that is added to the employment rolls, there are more taxes incrementally. It is simple logic, really, Adam- more workers equal more tax revenue, less workers, less revenue.
    There shouldn’t need to be specific “examples” of such simple logic- if you truly need these specific numbers, then you cannot follow the easiest logic possible, and I believe that you can, so do not pretend to be obtuse- it reflects poorly on you, and I do not believe it for a moment.

    • Adam says:

      Let me rephrase Blake’s last comment for anybody out there confused by the nonsense he just wrote:

      No, I can’t give you a actual example of what I believe working in the real world, but what I can do is pretend that this whole thing is just so simple and basic that your requirement of proof just shows how illogical or obtuse you are.

  4. Big Dog says:

    Adam, the unemployment rate stayed high up to the war even with massive spending and social programs. The war was partly paid for with war bonds (something I would like to see now) and that war put millions of men to work in the military. I would be happy to lower unemployment by making all you people who have never served go int he military and serve.

    I bet that won’t happen.

    • Adam says:

      You’re saying unemployment was worsened by the spending? Unemployment was high throughout much of the depression because it had become so high in the first few years. The truth is except for the increase between 1937 and 1938 unemployment started at about 25% in 1932 and steadily declined to 10% by the time we started making money off the war in early 1941. By the time Japan attacked us unemployment was under 5%.

      • Big Dog says:

        10 years of spending by both presidents did not help unemployment. Yes, over time it was reduced and that was artificial because many people were on the dole working for the government. You know, one group digs holes and another fills them in. The spending policies never got unemployment below 10% and your graph shows it at that when Japan attacked (1941). The thing that stopped the decline was a conservative approach and elimination of New Deal policies:

        By May 1938 retail sales began to increase, employment improved, and industrial production turned up after June 1938.[77] After the recovery from the Recession of 1937–1938, conservatives were able to form a bipartisan conservative coalition to stop further expansion of the New Deal and, when unemployment dropped to 2%, they abolished WPA, CCC and the PWA relief programs. Social Security, however, remained in place. Wiki

        Read the article. Spending was not the way out. The government did the same things it is doing now, stimulus, home loan programs, foreclosure deals, and all the rest. The war brought us out because millions were employed to fight or support the war effort but if you look at the 10 years preceeding the war you will see that things went up and down but were no real improvement.

        If 10% unemployment is a good thing then we are OK right now.

        • Adam says:

          No, 10% is not good if you’re coming from ~5% like we typically have. But 10% compared to 25% is a drastic improvement you seem to be pretty eager to ignore. Unemployment was not 10% when Japan attacked since they attacked in December of 1941 not January when it was near 10. Still, the drop between 1940 and the attack though is attributed partially to the start of a war economy that was brought into high gear after Pearl Harbor.

          It’s amazing how stubborn you are that you’ll misrepresent the end of that paragraph while ignoring the front that shoots holes in your argument.

          By 1936, the main economic indicators had regained the levels of the late 1920s, except for unemployment, which remained high at 11%, although this was considerably lower than the 25% unemployment rate seen in 1933. In the spring of 1937, American industrial production exceeded that of 1929 and remained level until June 1937. In June 1937, the Roosevelt administration cut spending and increased taxation in an attempt to balance the federal budget. The American economy then took a sharp downturn, lasting for 13 months through most of 1938. Industrial production fell almost 30 per cent within a few months and production of durable goods fell even faster. Unemployment jumped from 14.3% in 1937 to 19.0% in 1938, rising from 5 million to more than 12 million in early 1938.Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels. Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. As unemployment rose, consumers’ expenditures declined, leading to further cutbacks in production. By May 1938 retail sales began to increase, employment improved, and industrial production turned up after June 1938. …

          When FDR scaled back the New Deal spending the economy tanked again. After the recovery from that 2nd recession then conservatives stepped in to cancel pieces of the New Deal.

          Employment wasn’t 2% until mid 1942 and in fact WPA went away in 1943, well into the war. The conservative approach had nothing to do with recovery. It was the war spending, the same as the New Deal spending, that stimulated the economy and ended the depression.

          It’s funny that you call New Deal jobs artificial but the jobs created by the war that went away after 1945 are what? It had the same affect. The point of a jobs program is not to create permanent jobs but rather employ people to get GDP rising again until the market improves and real jobs are created.

  5. Barbara says:

    Even if everything was proven, Adam would not accept it as he is too egotistical to ever agree with a conservative. I see him as an unhappy person.

  6. Big Dog says:

    I misrepresented nothing. That coalition was formed in 1938 and helped bring the unemployment down. The unemployment was 2% in 42 because we drafted millions of people.

    Here is what you need to remember:

    In June 1937, the Roosevelt administration cut spending and increased taxation in an attempt to balance the federal budget. The American economy then took a sharp downturn, lasting for 13 months through most of 1938.

    Cut spending but to what? He had already increased it greatly so was the cut to levels that were still elevated but not as much. And tax increases. Look what happened after that, DOWNTURN.

    Many of the jobs that show the decline in the unemployment numbers were government jobs doing menial work and that did not last. If we had not gone to war the rate would have been up and down for more years.

    The government programs extended the recession and depression and made the Great Depression. The article discusses government intervention and what was good and what was bad. All the spending of money we DID NOT HAVE is cited as a problem and the debt/deficit are cited as causing problems.

    Does it sound familiar?

    Inflation is on the way. Remember, you will owe me an apology when it gets here.

    • Adam says:

      “That coalition was formed in 1938 and helped bring the unemployment down.”

      What policy did the coalition implement or prevent that lead to lower unemployment?

      “The government programs extended the recession and depression and made the Great Depression.”

      You have still not made that case. You listed unemployment as worse but it wasn’t. It declined 15% even with the recession in the middle. GDP grew steadily as well. What can we measure that was made worse by the programs?

      • Big Dog says:

        They were false measure created by government jobs programs that were not sustainable. Dig holes fill holes. Not meanigful jobs. Only the private sector can create job growth that has meaning.

        I have laid this out before but I suggest you read a few books on the subject. Try some Austrian economists.

        • Adam says:

          You have laid it out before as much as you have laid it out today. You don’t make a case you just insist you are right despite all data to the contrary and the opinion of historians and economists. The truth is the New Deal stimulated the GDP growth and created jobs during the Great Depression. Saying otherwise is just a work of fiction.

      • Big Dog says:

        Why did the US have a Great Depression when the rest of the world just had a depression?

        • Adam says:

          Why did the US have a Great Depression when the rest of the world just had a depression? I don’t know what you’re talking about really when you ask that. Most developed countries in the world were hurt as badly as the US. How a country was affected by the depression depended on the nature of their economy before hand.

          There were countries hit harder than the US. Things were so rosy in Germany for instance in the 1930’s that they decided to give Chancellor Hitler a shot. Australia? Try 29% unemployment, double digit drop in GDP. The list goes on and on.

  7. Big Dog says:

    Yes and Hitler kept printing money so that the Mark was worthless. Sound familiar?

    • Adam says:

      No, it does not sound familiar. First of all Hitler never printed money as far as I can tell. That period came before Hitler’s rise to power. Second, you can’t say the US is printing money any more than you’d say you printed money when you went out and got a bank loan.

  8. Big Dog says:

    No Adam, liberal historians and revisionists way that the New Deal was good. Austrian economists disagree.

    There is no mountain of evidence except evidence that the government spent money and did not fix the problem.

    Let the market fix it and we would have been done with it much earlier.

    • Adam says:

      “No Adam, liberal historians and revisionists say that the New Deal was good.”

      Well, we do know that reality has a well known liberal bias.

      “Let the market fix it and we would have been done with it much earlier.”

      This is of course a claim that you can’t back up.

  9. Darrel says:

    The idea that tax cuts always increase revenue is holy rightwing dogma but it is of course patently false. We recently covered this but lets do it again:

    ***
    January 16, 2008

    Question: “Have tax cuts always resulted in higher tax revenues and more economic growth as many tax cut proponents claim?

    Answer: No. In fact, economists say tax cuts do not spark enough growth to pay for themselves.
    This economic theory is what George H.W. Bush called “voodoo economics.” We called it “supply-side spin” when we wrote about Republican presidential contender John McCain’s claim that President George W. Bush’s tax cuts had increased federal revenues. We found that a slew of government economists – from the Congressional Budget Office, the Treasury Department, the Joint Committee on Taxation and the White House’s Council of Economic Advisers – all disagreed with that theory, saying that tax cuts may spur economic growth but they lead to revenues that are lower than they would have been if the cuts hadn’t been enacted.”

    Factcheck

    Note the date. The “White House’s Council of Economic Advisers” are GW Bush’s people.

    More here:

    http://www.factcheck.org/taxes/supply-side_spin.html

    Bigd: “Austrian economists disagree.”

    DAR
    Yeah, and Mexican economists, with more credibility than your Ludwig von Mises loons (another cult), disagree with your Austrian economists.

    D.

    • Darrel says:

      Bigd: “every time taxes were cut (even when Kennedy did it) the revenue to the Treasury increased.”>>

      DAR
      Utter, complete, rubbish. Note:

      “After Reagan’s income tax cuts took effect in 1982, real income tax collections took a long fall, despite the fact our economy continued to grow.

      The simple fact is that there was a 5 year drop in tax collections, which was extremely uncharacteristic of a growing economy. And during that time we incurred a trillion and a half dollars in debt, so the alleged value of such a tax policy is refuted outright.”

      …The Kennedy tax cuts are another favorite supply-side myth; many claim that once the tax cuts went into effect in 1964, income tax collections grew. But as you can see from the chart below, growth in income tax collections sharply dropped off:…”

      DAR
      Why don’t you just take a few moments and read this nice introductory article I excerpted above here.

      It’ll set you straight. You really shouldn’t be getting your info from Rush. He’s a big fat liar.

      Bigd: “I would rather read…”

      DAR
      Yes, I know you “would rather read” things that agree with your carefully nurtured biases, tickle your ears and support your house of cards worldview. But that’s how you got so politically far out in the bushes and insulated from reality in the first place isn’t it? If you would like to start living up to your banner claim about the “Big Doggy being right,” (I left out “always” on purpose) you need to sign up with the reality based community.

      D.
      —————–
      “By contrast, almost all tax hikes have seen dramatic and indisputable growth in tax collections.” –ibid

  10. Big Dog says:

    Yes Adam, I can say Hitler printed money (Germany under his leadership did) and it was devalued to nothing. Look it up. I can say we are printing money. Where do you think it is coming from?

    There will be inflation. That is one way to pay off massive debt and collapse an economy.

    Darrel, the banner claim is a double meaning statement. right does not always mean correct. I can also be conservative so one way or the other I am always right.

    What you are saying is that I will be right and enlightened if I espouse the Darrel world view.

    No thanks. I have made it this far without it and am quite successful.

    As far as the conservative view blah blah. Gay rights, abortion and all the others are state’s rights issues. The feds have no business involved in them. That is my view and it is the correct view.

    It is not rubbish, the WSJ is a much better source than ibid.

    But a source to you is only good when it agrees with you…

    If tax increases always lead to increased revenue how do you explain the continued deficits when liberals raise taxes? I know part of it is because they spend more but part is because people adjust to reduce their tax burdens.

    It is smart planning to keep from being raped to pay for people who want as much as you have without doing the work you did.

    • Adam says:

      I looked it up already to try and verify it. I couldn’t. Since it’s your assertion I think you should look it up for us.

      Where do I think the money is coming from? Mostly from T-bills. I don’t know what you’re talking about when you say it’s just printed money. But again, you can call it printed money if you would call it printing money when you go to the bank and get a loan.

    • Darrel says:

      Bigd: “WSJ is a much better source than ibid.”>>

      DAR
      “ibid” is not a “source.” Note:

      “ibid” is short for ibidem, Latin for “in the same place.” It’s an expression used in bibliographies when authors repeatedly cite the same source.”

      Bigd: “how do you explain the continued deficits when liberals raise taxes?”>>

      DAR
      Note:

      “The only presidents to add to the debt since WWII have been Reagan, GHW Bush and GW Bush: http://zfacts.com/p/480.html

      “All other presidents since WWII have contributed nothing to the Gross Federal Debt,…”

      This will change with Obama. Why? He is paying for Bush disasters and profound fiscal irresponsibility.

      And look at that Obama DOW eh? Up 4,000 since spring. What a guy.

      D.

  11. Big Dog says:

    I think you might be right Adam, Germany inflated its currency and did so prior to Hitler taking charge. The currency was inflated by printing a lot of money to cover debt and that led to a glass of beer costing 4 billion Marks.

    Hitler led an expansion by spending on his war effort and though inflation continued it decreased drastically when he introduced a new currency. The cost of living increased 25% under Hitler and the war was probably one of the things that helped them bring about increased production. It did not work out well for the country in the end. The rebuilding efforts probably saved the country and kept its economy strong.

    I got my time line wrong and the person responsible wrong but the printing of the money and the hyperinflation are correct.

    The Fed is printing money in effect by adding debt tot he balance sheet:

    How does the Fed get its money? It doesn’t need to borrow it; it merely creates an entry into its balance sheet. All the Fed requires to “print” money is a keyboard connected to a computer. The difference between the Fed and the Treasury issuing money is that the Treasury needs to get permission from Congress before selling bonds. In this context, it shall be mentioned that physical cash (coins, bank notes) are entered as liabilities on the Fed’s balance sheets; they are rather unique liabilities, however, as you can never redeem your cash: if you went to a bank, the best you can hope for in return for your dollar bill is a piece of paper that states that the bank owes you one dollar. While it is possible for central banks to remove cash in circulation, they are not obliged to do so.

    Here

    Just how much money is the U.S. government printing to meet its debts? Steven Horwitz, professor at St. Lawrence University, and co-author of The Austrian Economists blog, explains that the amount of money printed in the past few months since the October economic crisis, has been absolutely unprecedented in U.S. history. “Since September, the ‘monetary base,’ which is the measure of currency plus bank reserves, has doubled from about $850 billion to $1.7 trillion, about $600 billion of which is in the form of bank reserves,” he says.

    And here

    Pay attention tot he last part of it:

    According to both Horwitz and Anderson, there is a great danger of inflation in the coming months due to the Federal Reserve’s massive expansion of the money supply. The most inflationary period in U.S. history, according to Horwitz, was the end of the 1970s when “inflation rates were as high as 14%,” while the least inflationary was in 1929-1933 when massive deflation caused the Great Depression to be so long. Anderson notes that the government of Weimar Germany printed money to meet its post-WWI debts, which led to massive hyperinflation.

    (a little note that I got the timeline wrong but got what happened right). It was related to WWI, not Hitler and WWII.

  12. Adam says:

    You are correct of course that there was hyperinflation in Germany but to compare it to the US situation now isn’t an easy thing.

    My point about printing money is that it is not the same as in Germany since we back it with bank loans and T-bills which is something you point out in your quotes as well. Your first quote talks about it being an entry on a balance sheet but even that is backed by a bank loan which the quote simply points out is no longer an overnight deal but has been extended many days sometimes.

    We won’t see hyperinflation because the Fed has ways of controlling it. It would take 50%+ inflation to be at that stage. Some form of inflation is always an option though since the amount of money Fed can take from circulation depends on changing interest rates and other wonkish stuff beyond my understanding at this point.

    You often speak of an apology I will owe you but at what level of inflation would that be due?

    • Big Dog says:

      The US is putting money into the system. The more dollars there are (regardless of how thay are backed) the less they will be worth.

      The Fed controlling things is one of the reasons for the problem.

      The Fed, BTW, is unconstitutional. Congress gave away its Constitutional power.

      • Adam says:

        Out Federal Reserve system is the envy of the world and the only thing that has kept us afloat in the last century.

        You ignore the Fed’s ability to take money back out of circulation. It’s not perfect but it is what it is.

    • Darrel says:

      ADM: “You [Bigd] often speak of an apology I will owe you but at what level of inflation would that be due?”>>

      DAR
      Bigd has been predicting a big inflation problem since the moment Obama was elected (I checked).

      This chart shows how his accuracy is going so far:

      http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?symbol=USD

      D.

  13. Big Dog says:

    LBJ’s own words. What a Great Society:

    “These Negroes, they’re getting pretty uppity these days and that’s a problem for us since they’ve got something now they never had before, the political pull to back up their uppityness. Now we’ve got to do something about this, we’ve got to give them a little something, just enough to quiet them down, not enough to make a difference. For if we don’t move at all, then their allies will line up against us and there’ll be no way of stopping them, we’ll lose the filibuster and there’ll be no way of putting a brake on all sorts of wild legislation. It’ll be Reconstruction all over again.”

    American Thinker

    Just give them a little something something so they will feel appeased and we can keep them on the plantation…

  14. Big Dog says:

    The ability to take it out causes contraction and rising interest rates. The Fed is not a good thing.

  15. Big Dog says:

    Darrel, Big Dog has been predicting that there will be inflation NEXT YEAR since before Obama was elected when the TARP was being discussed.

    It will happen next year. I have said double digit not a specific number.

    I know you all think the Fed can keep it in check. That is what they thought EVERY other time we had high inflation.

    Just watch.

    Darrel, the chart you provide means nothing because it cannot tell you what will happen next year which is when I said it will happen.

  16. Big Dog says:

    And Darrel is drinking the Kool Aid and blaming Obama’s out of control spending on Bush. How precious, keep licking his boots.

    TRIPLED!!!

    And it all started when Dems were in control of Congress. Look over history and see who was in control when this happened.

    Also look at the boom of social spending. FDR’s was hidden in the debt of the war. Johnson forward, social debt. Democrats keep racking up social bills.

    Health care and cap and trade will add to the debt for generations and they are not Bush’s fault but keep believing that Darrel.

    You cute with the tin foil…