Reply from Congressman Emanuel Cleaver concerning OrphanWorksActof 2008

[Jon Pruente]

On Wed, Aug 13, 2008 at 10:56 PM, Jim Herrmann <kclug at itdepends.com> wrote:
> What has busted the budget is an illegal war entered into using known lies
> by an administration that should be tried in the Hague for war crimes and
> crimes against humanity.  Eliminate the war spending, which is borrowed from
> China, and you eliminate about half of the deficit.  Eliminate another 20%

Total spending on the war is 1% of GDP:
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/07/AR2007050701582.html
Costs as a percentage of GDP in other wars:
http://money.cnn.com/2003/02/05/commentary/column_hays/hays/index.htm

It's tying the first Gulf War as one of the cheapest as a percent of
GDP.  Where's your proof?

> of a military budget that is larger than all the rest of the world combined,
> and we have a balanced budget.  Unfortunately, the next president, Obama,
> has been doing a bunch of sabre rattling about Afghanistan.  That won't be
> cheap.  So, I don't hold out much hope for that 20% reduction I'm talking
> about, but at least he'll get us out of Iraq soon.

The defense budget is 4% GDP.  Cutting it by 20% would bring it to
3.2%, that's still above the pre-war levels.  GDP is on the rise, up
1.9% from .9% in the previous quarter:
http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

> Plus, Obama's campaign is running Linux severs!  :-)  Mandatory Linux
> content.
>
> Plus, Jon, the economics you are espousing is supply side, aka trickle down,
> aka voodoo economics.  That's been proven, twice now, that it doesn't work.
> Raising the taxes on the people who have more money than anyone needs does
> not hurt the macro economy.  Cutting taxes on the wealthy just let's them be
> richer.  It doesn't generate more GDP.  Putting more of the rich people's
> money in the hands of the poor and middle class generate GDP, and thus
> jobs.  Supply side economics is about to die, at least for awhile, thank
> goodness.  The second gilded age is about to come to an end.
>
> Peace,
> Jim

Taxing the actions that help grow the GDP (captial gains, and income
to investors, who are typically the wealthier classs) removes money
from the pool used for investing.  Investing is what drives business
and allows the GDP to rise.  How does taking money from investors and
giving it to spenders generate GDP, when the spenders merely consume?
If demand rises and supply does not, prices rise - but not wealth or
value.  The link above points out that Gross domestic Purchases are
down .5%, but the GDP grew more.  That's not what you say happens.
The rich got a tax cut (and so did the poor!) and GDP went up.  Supply
side.  GD Spending went down, even though the tax burden on the poor
was lower - meaning the had more money to spend, along with the tax
rebates. Demand side.  Care to find facts for your side of the point?

You guys seem to argue that the rich get money and just sit on it.
When the rich have money they put it to work earning interest in
investments.  Talk to any wealthy person about their investments vs
the cash on hand.  Nearly all of their money is being invested
somewhere and almost NONE of it is sitting around doing nothing.  Even
money put in the bank is being invested, even by the bank itself.
Cheer about the death of supply-side economics if you want, but you
haven't proven anything.

Jon.