Reply from Congressman Emanuel Cleaver concerning OrphanWorksActof 2008

[Jon Pruente]

On Wed, Aug 13, 2008 at 12:39 AM, Jeffrey Watts
<jeffrey.w.watts at gmail.com> wrote:
> On Tue, Aug 12, 2008 at 5:10 PM, Jon Pruente <jdpruente at gmail.com> wrote:
>>
>> Fuel costs aren't tied to the tax rate, but rather the value of the
>> dollar (through equity adjustments) and market rates.  Food costs have
> Fuel costs are DIRECTLY affected by the value of the US dollar.  The US

Isn't that what I wrote, right above you?  Stop arguing if you agree with me.

> dollar has been plummeting in recent years due to the increasing debt load
> of the US government and the subsequent devaluation of US Treasury bonds.
> The tax breaks dramatically increased that debt load, and therefore
> contribute to the devaluation of the US dollar.

You still haven't made any point of how the tax breaks have done
anything to the economy, though you keep *saying* it.  Got any direct,
verifiable proof?  Debt is tied to borrowing and spending, not taxing.
 You can't create money by taxing it, only move it.  If the govt needs
money to pay debt, raising the tax *rate* does not help, but raising
tax *revenue* does.  The amount of tax revenue is tied fairly close to
GDP (averaging 18.6% or so for nearly the last 50 years) *not* the tax
rate, which has been all over the place.  Have you ever been taught
economics, at all?

> The dropping dollar increases fuel costs (as oil is traded in dollars),
> which not only affects costs of basic goods (as they must be shipped) but
> also dramatically increases the cost of cereal food products such as wheat,
> corn, soybean, etc as farmers are planting corn in droves to be used in
> ethanol production, which due to the high fuel costs is now very lucrative.

These are valid points, but they explain nothing of your position that
the tax cuts have ruined the economy.

> So yes, the tax breaks and poor fiscal management of the GOP and Bush have
> directly lead to higher fuel prices and basic goods costs.  Yes, speculation
> and increasing demand also contribute, but the poor financial footing the US
> government has right now is a major problem, one that will only get worse as
> we spend spend spend and yet are foolish enough to want lower taxes.  Can't
> have both.

Speculation has existed since the markets began.  Speculation is most
assuredly *not* a bad thing.  Speculation is what drives market forces
in free markets.  Again, tax revenue is not tied to the tax rate, but
to the GDP.  The ills we face are due to massive increases in govt
spending, not tax cuts.  You still haven't provided any proof, you
just keep saying "it's this way" with no data.

>> You still haven't answered what I asked: How did the tax cuts (that
>> have brought more revenue to the treasury) ruined the economy and done
>> anything to the war?
>
> Tax cuts while spending billions on a war is something this country has
> never done before.  You must either cut expenditures or raise taxes, should
> you choose to engage in warfare.  This is common sense, and the failure of
> our government, lead by the GOP, to do this has lead to our historically
> high national debt and the devaluation of the US dollar.

You must cut expenditures or increase tax *revenue*.  See above.  Our
situation is due to massive spending increase, not due to tax cuts.  I
still see no proof.

> Of course you aren't, because people that voted for him now want to pretend
> that they didn't.  The GOP put us in the hole by cutting taxes and

I voted for him because the alternative was crap, not because I liked him.

> increasing spending.  Unfortunately given the challenges this country faces
> I don't feel that we can get ourselves out of it quickly.  The levers of
> power are manipulated by government largesse, and until there's a balanced
> budget amendment to compel Congress and the President to be fiscally
> responsible that won't happen.

Yes, it's spending that is the problem.  I still see no proof of tax
cuts causing economic problems.

> But at least with the Democrats in power we won't keep up the tax breaks for
> the wealthy.  Trickle-down economics is bunk.  Taxes need to go up, spending
> needs to go down.  Operating at a deficit can no longer be allowed to
> continue.

Have you ever studied how much tax relief the Bush tax cuts have given
the lower and middle class?  Repeal them or let them expire and, holy
cow, the bottom 40% might actually *pay* taxes instead of getting free
money from the IRS. Really, have you actually read data on the tax
situation, or do you just spout "tax cuts are bad, let's tax the
rich!" as a feel good line?

Jon.