5 lies economists are telling you....

[IndyPragmatist]

http://money.msn.com/exchange-traded-fund/5-lies-the-economists-are-feeding-us-mirhaydari.aspx

1: Inflation isn't a threat
2: 'Core' inflation is all that matters
3: The Fed isn't making it worse
4: The 'output gap' will keep inflation down
5: Unemployment is below 9% -- and the old jobs are coming back


Reading this article made me laugh out loud, but it is pretty scary. I have a bachelors in economics (working on a masters now) and I've heard these lines thrown out by the administration multiple times. My education has allowed me to realize how full of it they are.

Sadly, I don't have much faith in either party to fix it. Democratic leadership is attacking corporations and capital owners because they have spent years telling people that corporations are evil and are hurting the middle class. They want to fix the deficit on the backs of business, which may bring the government revenue, but at the expense of jobs.

Republicans aren't the party of corporations (as some say), they are the party of the wealthy. They constantly want to give tax breaks to rich individuals and constantly ignore common sense economics that show how counter productive that is. They keep taxes high on businesses, hindering their ability to grow and create jobs, and allow wealthy individuals to have more personal income.


"With all due respect, U.S. policy is clueless." German Finance Minister Wolfgang Schaeuble 11-5-10

[ixion]

1. and of course, the 800 lb gorilla: That we're in a 'recovery' phase

which is easy to debunk if you happen to be paying attention.

[xchrom]

2. Recommend

[rfranklin]

3. Most corporations pay no taxes

So how can corporate taxes prevent hiring?

Most firms pay no income taxes - Congress
Study finds that the majority of domestic and foreign corporations in the United States avoid paying federal income taxes.
By David Goldman, CNNMoney.com staff writer
Last Updated: August 12, 2008: 4:38 PM EDT

NEW YORK (CNNMoney.com) -- Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes, according to a congressional report released Tuesday.

The Government Accountability Office (GAO) examined samples of corporate tax returns filed between 1998 and 2005. In that time period, an annual average of 1.3 million U.S. companies and 39,000 foreign companies doing business in the United States paid no income taxes - despite having a combined $2.5 trillion in revenue.

The study showed that 28% of foreign companies and 25% of U.S. corporations with more than $250 million in assets or $50 million in sales paid no federal income taxes in 2005. Those companies totaled a combined $372 billion in sales for the largest foreign companies and $1.1 trillion in revenue for the biggest U.S. companies.

http://money.cnn.com/2008/08/12/news/economy/corporate_taxes/

[upi402]

10. + 1,000!

Deserves a thread of its own.

[CanonRay]

4. "Democratic leadership is attacking corporations" WTF?

Who? Where? The Democratic leadership is doing nothing but kissing corporate ass. I do agree with your economic conclusion the optimistic pronouncements we hear are 100% pure BS, and that neither party knows what the hell to do (and/or lacks the will) to fix it, but to say democratic leadership are attacking corporations is ludicrous. Corporations are the problem, not the solution, my friend, which is why neither party can or will do much.

[kenny blankenship]

8. Yeah. You can stop reading right there.

Author is a liar or moron or both.

[fasttense]

5. The writer of this article is a bit stupid.

"Democratic leadership is attacking corporations and capital owners because they have spent years telling people that corporations are evil and are hurting the middle class. They want to fix the deficit on the backs of business."

Oh really. Democrats are attacking businesses? News to everyone else in the world. Is that why Democratic leadership gave businesses a tax break in what remains of the stimulus bill? Is that why oil industry gets billions of tax dollars in welfare? Is that why Exxon Mobile got a $150 million tax rebate (while paying NO taxes)? Is that why the Democratic President continued with the bushes policies of bailing out banks and Wall Street firms (not to mention bailing out a few Insurance giants while they were at it). Is that why the Democratic President gave GM a loan? Is that why the Fed funnels money to banks?

This writer would like to have it both ways. He claims you can't count the tax give aways to the uber rich because the uber rich and their businesses (or corporations) are 2 different things. But they are one and the same. The wealthy get rich from their corporation. Cut off their corporations and they have no wealth.

This guy seems to be spinning RepubliCON talking points in a new and idiotic way.

[IndyPragmatist]

6. interesting assertion....

Exactly, Democrats are giving tax breaks to individual corporations. This is the problem. Individual businesses gain favor with parties through donations and are rewarded with tax breaks. While those that did not support the party are stuck paying some of the highest tax rates in the world..

"While the official U.S. corporate tax rate is 35 percent, one of the world's highest, "the average rate of our major trading partners now is in the high 20s," Geithner said. "And to make a meaningful difference, you want to get it down substantially toward that level."

Read more: http://www.upi.com/Top_News/US/2011/02/16/Geithner-Cut-US-corporate-tax-rates/UPI-77721297846800/#ixzz1GImqirn8

Because of our uncompetitive rates, numerous corporations have shifted their revenue to more competitive nations. Look at Google. They are a company that was founded in America, makes most of their money in America, but because of our tax rates, they shifted all their revenue to Ireland and other nations. Thus, leaving the US government without tens of billions in tax receipts that we would have if we were competitive.

Governments are representatives of the people and not businesses. I know that I am more of a laissez faire person that most on here, but I believe that our government should avoid as much influence on business as possible. In a global economy, many jobs can be done anywhere in the world. So when we keep high tax rates, we are just begging for corporations to move overseas. Americans are used to a high standard of living, much, much, much higher than most of the world, so we demand higher wages than foreign workers would. This adds to the costs of production, combined with high tax rates, making it difficult to do business in America.

To assert that I am a Republican is quite ignorant. Those that constantly attack differing viewpoints as "idiotic", while proving that their understanding of market forces in preceding sentences is nonexistent, are often blind followers of a party.

The American tax code is one of the most convoluted code in the world. It is filled with favors for individual corporations and people at the expense of others. Remember, nearly 50% pay 0 taxes in the United States. While you want to allow the poor to keep as much of their income as possible, allowing a "free ride" causes many to lose their understanding of the costs and benefits of certain programs. I am not saying they should pay the same tax rates as the wealthy, that would be a terrible idea. However, I am saying that everyone needs to pay at least a portion of the tax burden or they will not understand the true cost of government.

[jtown1123]

7. I agree with you. The points he posts are all over the place

Corporations and wealthy people have tons of tax breaks and incentives and yet hiring hasn't picked up. It won't until we can get the government to spend.

Inflation really isn't a problem because we are severely lacking demand.

yes, the jobs probably are never coming back.

This is a bizarre post.

[The Northerner]

9. K&R