Cactus gives Us a Post which should be read twice by Anyone interested in the impact of taxes upon economic growth. He wanted to make the point that the total percentage of Income paid as taxes went up every year of Democratic administration, and declined in every year of Republican administration. He did not point to the effect of increasing and decreasing Tax percentages as a factor of economic stimulus. The Outline of that Effect may best be seen in the Third Tax Year after the alteration of the Tax percentage. Tax percentage increases seem almost universally to stimulate business activity, Tax percentage decreases appear to present no stimulus of business activity. Is this only an unmoderated casual effect, or does the harsher impact of Taxes incite the business community to greater efforts to raise revenue; maintaining their after-tax Income levels?
Here is another Gem from Cactus; I am picking on him today, but it is simply forwarding of the comments of others. My first Statement on the commentary is it is unfair to suggest the Airbus 330 Tanker is for either mid-air refueling, or for Troop transport. It is most definitely not to bankrupt CRAF; the Air Force would feel slighted, if detailed to transport Troops. The real reason for the Airbus 330s is Air Force fear; doubt that the Navy can protect Sea routes for ocean-going tanker fleets. The Air Force does not want to be caught on the ground because of lack of fuel; the real reason for 197 of the beasts. The real Question becomes ‘Can these things safely land with 210,000 lb. of fuel aboard?’ I would suggest that a fleet of 1000 planes capable of carrying 40,000 lb. of fuel aboard would be much safer, and actually more Cost-effective.
Calculated Risk tells Us that the Fed Beige Book is downbeat, and provides comparison with the December 1990 Beige Book as criteria for a recessionary outlook. My commentary to it all states that it is not as bad as it looks, but Everyone seems to insist that We make this a recessionary Election year. My own personal Thought is that We already had Our recession, starting in July of last year, and ending last January. New Orders in manufacturing do not seem to be so much down, as level with the first of last year. Housing is tanking, but wait until Home prices equal 2005 prices; then I will start to get scared. We know that Corporations have more Cash on hand than ever before; it seems that it is only those deadbeat Mortgage-holders who are filing for bankruptcy. It seems that even the Construction industry is holding to some degree of full employment. Now I know that things look bad, and Retail Sales are down, but Time can only be eating up Credit Card debt. We already have the Stimulus Package, and Everyone will get their bac’kish for Voting, so can We cut down on the morbidity? lgl