Geithner: 'Privilege of Being an American' Is Why Rich Need Higher Taxes

The auto industry would have not collapsed....your just making up alternative truths now.

As for the deficit enormous under Bush, yes, but not as much as Obama. Obama is adding 10%/year since he took office.

 

The government only goes into debt when it buys more than it has money to pay for...

 

That is not true. The Govt has the money from borrowing.

The Government only goes into debt when its tax revenues are insufficient to cover its spending.

 

I discount funny money...your answer is like the household that lives above its means by getting a bright new credit card every month.

 

Then use a better descriptor than "money".

The problem is not lack of money, but lack of tax revenues.

 

GM and Chrysler got bailouts, which they claim have allowed them to become profitable again. A few problems with that. We the taxpayers have not been paid back. The legal rightful bondholders were screwed and the companies were GIFTED to the UAW and to Fiat.

M-B, BMW, VW, Porsche, are all part of the "GLOBAL AUTOMOTIVE INDUSTRY." They were and are profitable. As are the Japanese owned auto companies.

And of course,,,,,FORD,,,,,, did not receive a govt bailout and they did not collapse. So once again, actual facts and reality trump loony liberal dreamy nonsense.

The TRUTH is that in the 8 years of Bush the debt increased by $4,899 TRILLION. $4.7 TRILLION in only 3 years of obama. BUT YOU SAID DEFICIT, NOT DEBT. So the deficit TRUTH is this:
FY2005 deficit, $318 billion-Republican
FY2006 deficit, $248 billion-Republican
FY2007 deficit, $161 billion-Republican
That is a shrinking deficit, not a deficit becoming "ENORMOUS!"
IN FY2004 IS WHEN IT WAS AT ITS WORST, $412.7 BILLION.

But for FY 2008 and FY 2009, Bush was president, but the Democrats held control of both House of Congress then and ,YOU CAN LOOK THIS UP, it is the congress, not the president that approves of and SPENDS the money. ESPECIALLY when the president and congress are of different parties.
SOOooo after Democrats took control in Jan 2007 for FY 2008, THEN the deficits BECAME enormous.

FY 2008 $458.6 billion deficit. DEMOCRAT! The highest EVER deficit and $45.9 billion higher than the highest EVER Republican deficit.
The Demospends followed that up in FY2009 with an actual enormous deficit of $1,412.7 TRILLION. DEMOCRAT! THAT is the largest deficit ever and was done by a Democrat Congress. The TRUTH is that the Democrat record highest deficit, $1,412.7 TRILLION is exactly ONE TRILLION DOLLARS MORE than the record high Republican deficit of $412.7 BILLION in FY 2004.

And the subsequent DEMOCRAT deficits are: $1,293.5 TRILLION, $1,298.6 TRILLION, and $1,299 TRILLION.

And more of your false, as in lying, propaganda. The Stimulus was NOT started under Bush. TARP was done under Bush and all but $50 billion of the TARP LOANS, reread that, LOANS have been paid back according to Geithner. 06/2011. The Stimulus was passed under obama and it failed instantly. WHY because it was NOT a Stimulus, it was a bailout of Democratic States in severe budget deficits. It was political payola.

And WHAT policies of Bush caused this collapse that loony liberals want to "BLAME ON BUSH?" You can't name any because there aren't any.

If you want to blame the collapse on the housing bubble and blame politicians of both parties, buying reelection for 4 decades, then I'll agree with that.


TRUTH, YOU can't handle the truth!

 

The evangelical hysteria (all this "truth" drivel and personal attack) in the last sentence is pitiable juvenility. Can we have an adult discussion please?

The collapse caused the deficit. It probably is to be blamed on both parties. Deficits are not daily decisions: they are long term trends. Turning them round is like turning round an ocean liner. The UK Conservative Party was elected on a platform of reeversing the UK deficit. They are cutting and cutting. The deficit is going up. To be honest it can't be blamed on them.

Bondholders took a haircut. Quite right. You lend money to an enterprise you take risks. Bondholders get a return on investment that goes witH RISK.

Second. The global automotive industry is not a simple list of companies. It is a complex global network of 1st, 2nd and 3rd Tier suppliers. This is the REALITY. This is a basic point that the Tea Party are ignorant of. It is necessary to look at the whole automotive industry SUPLY CHAIN to understand how the industry really works.

I worked for a multinational non-US Tier1/2/3 global supplier to the global automotive supply chain with operations in USA, Europe and Asia. Our smallest market was the US with the least exposure. We were exposed to all of the Big 3 Detroit supply chains (not just the end customer but also their suppliers) globally as well as Eurpean and JapanesE supply chains. 50% of our business was non automotive. We were a cash rich company with no debt and very strong profitable growth. The risk of default by one big 3 (or 2 as was the probability) would have brought the whole global supply chain down. making judgements like this is what me and my colleagues do for a living. Generally speaking we are very successful capitalists and make a lot of money for our shareholders. We don't read the global economy as "THE TRUTH". We read it as a complex interaction of diffeent factors that can have alot of different impacts on our customers suppliers and shareholders. That's why we get paid the big bucks. It's capitalism, man.

GM and then its suppliers (many of whom were already in Chapter 11) defaulting would have possibly bankrupted (I mean Chapter 7, not Chapter 11 - do you know the difference?) us and would have definitely bankrupted thousands of global companies. Ford would have been unable to get parts. It would have decimated European automotive too. Japanese companies would also have been affected but in Japan due to their incredible de facto protectionism they may well have emerged as the strongest. Of course after months of chaos some sort of Phoenix would have arisen from the ashes with all sorts of private equity charlatans picking up assets in fire sales but the damage would have been enormous as perfectly profitable companies in the supply chain would have gone down as their creditors defaulted and their employees would have been thrown out on the street.

To be honest there was no way that any sane US President would have let the automotive industry go, GOP or Democrat. The whole business outlook of my company, thousands of miles from the US, with less than 20% of its business in the US, and with less than 5% with GM, was based on the likeliness of the US government bailing out GM and any others. All automotive supply chain companies were the same. This is the real world, not an internet forum Apocalypse Now fantasy foaming at the mouth about THE TRUTH, THE TRUTH. Mistah Kurtz. He dead.

You know I really think if most people actually understood the way the Automotive industry is organized and the knock on effect bankruptcy can have in this industry on each suppliers liquidity, then the Tea Part wiouldn't exist. It exists based on ignorance, pure and simple.

A shopkeeper mentality, such as that that exists in the Tea Party - based on THE TRUTH and BELIEVE and other swivel eyed manias - cannot get its head around the interconnectedness of the world. Obama and Bush did the right thing in the face of a global catastrophe unfolding. Obama will reap the electoral whirlwind because the GOP has distanced himself from Bush's actions. Obama will win Ohio. Joe Sixpack (the type, not the GOP actor at the last show), will vote democrat.

 

Which takes us back to that credit card family...

 

Republican FY2007 deficit $160.7 billion.

Revenue $2,568.0 trillion** THE MOST REVENUE THE NATION HAS EVER HAD.

Democrat/obama FY2011 deficit $1,299.6 Trillion

Revenue $2,305.5 trillion.

Difference in revenue, DOWN 10.22% FROM THE BEST EVER.

deficit UP 808.71%

When the primaries are over and there is a Republican candidate. obama will be forced to run on obama's record. And that is the worst presidential record in history. Without incredible hard work and Herculean efforts by the left wing media, any person with obama's abysmal record would not have any chance of reelection.

My post above is true and accurate. Yours is partisan liberalistic nonsense.

 

Add in social security and the costs of the wars and Bush was still running $1/2 trillion deficits in 2007, 7 years after inheriting a surplus from Clinton.

 

The problem with today's Right is an intellectual refusal to actually deal with arguments.

Dealing with my arguments about the auto bail out and the deficit and rebutting them would look like this:

You made two main points Heroclitus, both of which I disagree with:

1. Firstly you suggested that without an automotive bailout the global automotive supply chain would have collapsed and been in ruin, causing permament damage to the Automotive industry which would have take years to recover. This is not true. Clearly Delphi, Dana, TRW, Visteon and their suppliers would be protected against bankruptcy because.... (explain how when GM stops paying these suppliers their trade receivables, and stops ordering from them, these supplier can continue to operate and pay their own trade payables.)

To disagree with this is clearly partisan, such as this wholly partisan view from management consultants AT Kearney from 2009, which alleges in a clearly partisan liberal way, that the supply chain in Automotive is very financially fragile:

http://www.atkearney.com/index.php/News-media/more-than-half-of-the-automotive-supply-base-could-go-bankrupt-in-2009.html

Clearly this is a biased report from an organization like AT Kearney whose links with the Democratic party are clear ...(explain how global management consultants like AT Kearney are partisan stooges of the US Democratic Party).

2. The second point you made was that deficits tend to be hard to turn around quickly and that there is a time lag between actions to reduce the deficit and an actual deficit reduction. Your example from the UK, where cuts in public expenditure by a Conservative government have not reduced the deficit because the global economic downturn has reduced tax revenue to the government, does not apply in the US (even though Dan40's statistics show it to be exactly the same reason that the deficit is not down in the US) because...(explain).

What tends to happen with the Tea Party right is that instead of argument that actually counters the points made against them, they respond with abuse and statistics that are just shouted out and that do not address the specific points being made. The quote above from Dan is interesting because it analyzes precisely that it is revenue more than spending which has led to the increase in the deficit under Obama. Revenue is driven by tax revenues which fall as economic perfomance declines; economic perfomance is not generally regarded by any serious person as something which Presidents can operate control over in the short term, there is a lag between decisions taken by politicians and the performance of an economy.

For most Tea Party people it doesn't even occur to them to link the statistics which they spit out with a coherent argument. They seem to think statistics stand all by themselves, as if they are at some sort of sports event. The only thing to mix with randomly selected statistics, is abuse.

We saw this in John McCain's campaign where it got so abusive that McCain has to disavow the extremist thuggery of his own supporters. Of course I am unlikely to be partisan as I am not even American and so have never even voted in the USA. My input was as a professional insider from the automotive industry and as a businessman who works within the global economy and who is interested in global economic developments, where the US is a key player. I think I made it pretty clear that I thought the crash was caused by both parties. Maybe partisan is a word in America which does not relate to "parties". Maybe I am a freedom fighter in the hills. who know? Or more likely it was just empty windy abuse.

As to the dishonesty of the Right that is becoming clearer every day. Look what happened in the Michigan primaries concerning the very subject that I raised. Santorum got people to phone GOP primary voters to tell them that Romney was against the auto bailout and they should vote Santorum. And yet Santorum was also against the auto bailout. So it's clear that in Michigan even the GOP, even Santorum, knows that GOP voters understand that the auto bailout was not just about the comparatively small number of people who work for GM, but also about the whole supply chain which impacts millions of people in the rust belt of the USA. So dishonest are the GOP that they will sing one tune to the base down in Dixie and quite another to the base in the industrial heartlands where even republicans see it just like I do. They lie. And they get caught lying as here in Michigan.

Real world politics. The Tea Party should try it. And the GOP base should realize what fools their leaders take them for. The rest of America already understands this and despite a lacklustre Presidency by Obama where he has actually done very little, they will elect him because the alternative is to elect a bunch of liars and charlatans who prefer abuse and insult to argument and debate.

 

<<< Mod Edit: Personal Insult of Member >>>

You say deficits are hard to turn around "quickly."

DEMOCRAT deficits, $458.6 billion, $1412.7 TRILLION, $1,293.5 trillion, and $1,299.6 TRILLION. WHAT TURN AROUND? View that from the position of the largest Republican deficit in history. $412.7 BILLION. followed by 318 billion and 248 billion and 161 billion. Obviously deficits are hard to turn around AT ALL by DEMOCRATS. The Republicans seemed to be doing it quite well.

Auto bailouts,,,,,FIRST we have in place a bankruptcy process. That process was usurped in favor of political payola. Had the normal bankruptcy process been allowed to run its course there is every possibility that both GM and Chrysler would be stronger today and better financed. Instead, in exchange for political manipulations, the UAW owns 42% of Chrysler and 11% of GM for no cost. And the supply chain was SAVAGED, not saved.And the taxpayer is on the hook for $40 billion from GM that is likely NEVER to be recovered. And that doesn't count the billions wasted on the Volt bunko scam car.

And MI robocalls?? Santorum didn't get "people" to make calls, a computer made calls. And you're looking for fair play in politics?? Hopelessly naive. But then you believe the lies that obama and the DNC are crapping into your brain.

Reality, as the pendulum swings back to sanity, liberals are going to be traumatically shocked.

 

Cheap personal abuse.

Team politics does not interest me. I'm not a Democrat. I'm not even American. I am talking about deficits in general and that they take time to turnaound. The US deficit is quite a big one right now, in world terms. If you can desist from abusing me, I would ask you to explain how you turn around a deficit quickly when the global economy is contracting and your tax revenues are falling. Your advice would be very useful to the UK Conservative government who are desperately cutting expenditure but see the deficit in the UK increasing as tax revenues fall. SHOUTING at me with a lot of partisan statistics that do not deal with this point doesn't do it.

I think here you are trying to engage with my argument but this here is couched in so much rage that it is unintelligible. The bankruptcy process - I presume you mean filing for creditor protection under Chapter 11, and not filing for liquidation under Chapter 7 - would have made creditors take a haircut or a delay on their payments. This would have had knock on liquidity impacts deep into the supply chain as suppliers and their suppliers didn't get paid. That's what Chapter 11 bankruptcy is - protection against being sued by your suppliers for their trade receivables. You haven't explained how this wouldn't have had a knock on effect. I can tell you as an industry insider that all of us, liberal and conservative, expected massive supply chain bankruptcies if there had been no auto bailout. We looked at our exposure to the whole Big 3 supply chains. We didn't decide whether we were liberals or not first. We all did it. We all were pleased that there was a bailout as it protected good companies with good cash flow and profits from going under. It was touch and go for all of us.

Yes I'm looking for fair play in politics. I have faith in people and I think the American electorate will reward those who play the fairest. If Democrats play rough, they will lose too. But that is only one point I am making. The other one is that in the rustbelt, where many elections are won, the American people, Democrat abnd Republican, already see the auto bailout like I do. Shouting "*******" or "partisan" at people like me doesn't seem to be persuasive to the GOP base in Michigan. Which is why Santorum has to pretend to agree with it. To get GOP primary voters to vote for him. It might be dishonest, but it's smart. He knows the truth even if he lacks the integrity to face it in front of an economically illiterate base in the South.

Blind belief and partisan drollery. Says nothing.

 

You continue to post blind partisan silliness and accuse me of doing it. Sorry I'm not part of your 'mirror thinking." You are accusing me of your basic faults. A common error of the easily swayed.

And me advising the UK about anything. Are you an American citizen? Or a Brit?
I know from extensive research why the US got in our fix. I neither know nor am much interested in the UK's problems and how they came to be.
But a key to solving many problems, perhaps most, is to correctly identify how the problem came to be. That doesn't mean reversing the process is the best or any solution. But knowing what the problem actually is is step one. I see no indications that liberals especially, but politicians in general, have even correctly identified the problem and how it came to be.

 

More personal abuse. Please post ad argumentam posts and not ad hominem ones. Your assertion that I am "easily swayed" is just lazy, groundless abuse. By "mirror thinking" you mean presumably my requests that you actually answer the points made to you in a debate?

Please read my posts if you are going to reply to them. If you had read my posts you would know the answer to this question. Do you just post without actually reading the arguments that you are replying to? I cannot believe that you would ask this question.

Deficits are deficits. I am asking if you have an argument or suggested course of action that can show politicians how to get out of the deficit. Your statistics - as I have pointed out - show that the US deficit is growing for exactly the same reason as the UK one, that tax revenues are falling due to a weakening economy. What does a government do in these circumstances? Either a US government or any government. What should it actually do?

You see the Tea Party take on things is that spending is the problem. But you have correctly identified that it is falling tax revenues that is the problem. The Tea Party solution: cut taxes. It's difficult to see how this will work, and if you can put a supply side economic argument for it (I'm giving you some help here), it is very difficult to see how this would work in the short term. And yet it is on the basis of the short term that you judge Obama.

The key problem is that an economic downturn, probably caused in the US by bipartisan housing policies and poor regulation of financial services globally following that, has reduced tax revenues in all major economies in the world. This has exposed very high levels of public expenditure in developed economies caused by a mixture of military spending, welfare (Medicaid and Medicare in the US) and waste (govt got fat and happy). Obama has not solved the problem. My point is that it is being solved slowly through a fiscal stimulus that has generally been applied across the US and all industrial nations including China. This will sustain demand and generate growth which will increase tax revenues eventually and then the deficit will fall. At this time governments should start to reduce overall public expenditure and taxes. But not now. Improve public sector efficiency, but don't cut expenditure because this will cut demand. You respond to this not with argument, but with abuse (that I live in a Utopia). Why do you see abuse as your main argument? What SHOULD Obama do and how would that fix things?

I see you've given up on the Auto Bailout discussion?

 

I have yet to see anything worth discussing. Nothing personal, just the value of your posts.

Fix deficits?

http://www.fiscalcommission.gov/sit...files/documents/TheMomentofTruth12_1_2010.pdf

 

Another tawdry surrender to argument and deduction. Tattybye.

 

Hey Timmy.....you and your rich liberal friends just need to quit cheating and pay the taxes you owe and that would help out a lot.

Wonder how much the rich libs lilke Buffet and his cohorts spend on lawyers and accountants to make sure they pay the LEAST amount of federal income taxes they can!!

CAN WE HAVE THAT NUMBER.....PLEASE???

 

It should be noted that the GM/Chrysler bailouts were done with TARP money and originated with the Bush Adminstration and not the Obama adminstration.

http://www.politico.com/news/stories/1208/16740.html

 

Bush didn't sell out my Grandfather's GM stock leaving him a penniless pauper after 30 years of hard work in GM management and split the remaining value of the company between the UAW and himself. Obama did that.

Every single executive, manager and foreman who retired from GM, becuase they were non union, lost their entire retirement and lifesavings while the UAW line workers lost nothing. Who should I blame?

 

Maybe you have a point. But that is criticism of the way the bailout was done. It forced haircuts on people and maybe the unions didn't take enough. But that's not the point really being debated here. People are opposed to the bailouts per se, even if the pain had been split 50:50 between your grandfather and the UAW, the conservative right would still be against it.

On a separate note: why did GM management have their entire 401ks invested in GM? Surely it would be their choice and they could even sell most of their employee stock and re-invest in other stocks? Is it not illegal in the USA for an employer to require an employee to hold his retirement savings in the company? I think it is. If people choose to leave their entire investments in GM, then that is rather foolish is it not? GM was going down without a bailout. Any equity holder was going to be left undone. That's how it should be: owners take the biggest risk and get the biggest rewards. They go down with the ship too.

As for the union pension plans, I understand that the employees do not have the right to pull their investments out of GM, were not equity holders, and so for this reason - that the risk was not their decision as it was the managers - the liability was with the Company. The Company owed the UAW their pensions according to contract. Did the UAW not take a haircut on this and by having their debt swapped for equity (rather than just being funded by the bailout) was this not a wise thing to link the employee pensions to the future of the Company? It converted the employees from creditor to owner and changed the risk profile of their pension for the worse.

In short the UAW (employees) were creditors of the Company who ranked ahead of the bond holders, and rightly so. Suppliers were creditors and ranked ahead of bondholders too. And rightly so. Both ranked ahead of equity holders. And rightly so. This is how capitalism works. Investors take more risk than employees and suppliers and in liquidation/ bankrupcy have to take the pain first. Protecting the employees and the suppliers is what keeps the company going, either in a bailout or a US bankruptcy process.

 

This was authorized by the Bankrupcy Court under GM's Chapter 11 re-organization plan and not by the Obama Adminstration. The Office of the President does not control the Bankruptcy Courts or the decisions of those judges.

We can rightfully condemn both Bush and Obama for federal intervention at all as I would oppose both but it really was a Bush initiative that Obama simply followed up on after he took office but when it comes to bailouts, all of which I opposed, that was a Bush initiate.

We can blame Obama for the Stimulus Package which was a gross waste of money if we want to exclusively focus on Obama. Of course the US government has been adversely involved in the economy for decades under both Republican and Democrat adminstrations. They are merely opposite sides of the same coin in this regard. This isn't partisan Democrate v Republican issue and it is wearying when some like to place it in that context. If we want to get the government out of the economy the first thing we need to do is shut down the Federal Reserve or better still, drive it into bankruptcy by forcing it to redeem Federal Reserve Notes in American Eagle coins as required under Title 12.

 

No one at GM was forced to hold their retirement savings in GM. There might have been incentives for doing that such as company matching funds but the election to invest in GM was always a decision by the employees. While I don't know the details it does remind me of Enron where the company provided financial incentives for employees to invest in Enron. They weren't required to but they did and then whined about it when Enron went belly-up.

What part of "diversify your investment portfolio" that every investment expert advises did these people miss?

 

That makes sense as not all stakeholders in a business rank pari passu in a bankruptcy/restructuring. Nor should they.

That makes sense too. Sometimes there are "long term incentives" or "options" that are trapped but if your company goes belly up you lose these too.

This is how capitalism works. And always has.