lksseven

Mid-Year Report: Is a Summer Turn-around Still Possible?

Phil, you say "we don’t have an economic crisis in this country so much as a crisis of leadership. We already see new leaders rising to the challenge, people in Congress, people in Finance, ... are not going to sit idly by while the whole world falls apart and polls suggest the American people aren’t going to stand for it either." ...............
Who, exactly, are the new leaders in Congress who are NOT sitting idly by ? What exactly have the "new leaders" (Phil-speak for "Democrats") in Congress accomplished in the last 2 years they've been in control? Which party is calling for drilling in the Outer Continental Shelf, in ANWR, and fast-tracking new nuclear power plants, new refineries, as well as big pushes in solar and wind? (hint - it isn't the Democrats). It's too bad Congress (both Democrats and Republicans) in 2001 didn't heed VP Cheney's energy plan - we'd be enjoying tremendous prosperity now, and much much lower oil prices, and much less dependence on foreign oil ... witness www.usatoday.com/news/...

Vice President Cheney offered a preview Monday of a Bush administration energy plan that will be long on increased development of domestic oil, natural gas and nuclear power, but short on conservation.

Also missing will be what he called "quick fixes which never fix anything": price controls, use of strategic reserves and new federal agencies.

Among Cheney's proposals:

• Increased domestic production of crude oil.

• Stepped-up construction of natural gas pipelines.

• Massive expansion of the electrical power grid.

• Renewed construction of nuclear, hydroelectric, oil- and coal-fired power plants.

Cheney, a former oil services company executive, called alternative fuels such as ethanol or solar power promising but still "years down the road."

He said the administration will push for oil drilling in the Arctic National Wildlife Refuge. He said advances in technology drastically reduce the risks of harming the environment. But getting that oil to market will likely be years down the road as well.

"As a country, we have demanded more and more energy. But we have not brought on line the supplies needed to meet that demand," the vice president said.

The plan was called "shortsighted" and "leaning too heavily to the oil side" by Rep. Jerry Costello, D-Ill., a member of the House subcommittee on energy. "We need to conserve energy and explore alternative fuels such as ethanol and clean-coal technology."

Speaking in Toronto at an annual meeting of the Associated Press, Cheney outlined what may be the most ambitious energy plan since the late 1970s when President Carter promoted conservation to combat Arab oil embargoes.

Cheney said telling Americans to do more with less is not enough. "Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy," he said.

Democrats and environmentalists say Cheney's energy plan is more about rewarding contributors to the Bush campaign. Reps. John Dingell of Michigan and Henry Waxman of California have asked federal Comptroller General David Walker to investigate whether private interests are influencing Cheney's Energy Task Force, which has been meeting in secret.

Investing Changes Under a New Tax Regime

the historical evidence doesn't support Xyrus or Nate C's viewpoint - as usual, political passion neutralizes otherwise normal or above-normal IQ levels ... www.nationalreview.com...


For the facts, here is the first part of the article ...
June 27, 2005, 9:02 a.m.
The Rapidly Declining Deficit
How’s it happening? Look to the tax-rate cuts of 2003.

By Michael T. Darda

According to the Treasury department, the U.S. government took in a single-day record $61 billion in tax receipts on June 15. This surpassed the previous single-day high of $56 billion set on December 15, 2000. The recent surge in tax revenues is not just a one-day event. Fiscal year to date, total government receipts are up 15.5 percent, the fastest rate of increase on a comparable FYTD basis since 1981. The difference between the growth rate of tax revenues and the growth rate of government spending has widened to 8.4-percentage points, the largest since late 2000 when the budget was in surplus.




Not surprisingly, the recent tidal wave of tax receipts has ignited a furious debate about whether or not the Bush tax cuts are responsible for stimulating economic activity enough to actually boost overall tax-revenue collections. Classical economists refer to this as the Laffer curve, or the revenue-reflow, effect. In simple terms, if a tax cut stimulates the underlying activity being taxed, a revenue reflow will result. The reflow can offset or even surpass the volume of revenues that would have been collected under the higher tax rate and smaller tax base. Pro-growth tax-rate reductions on labor and capital in the 1920s, 1960s, 1980s, and then again in 1997 and 2003 all exhibited revenue-reflow effects, although some were stronger than others.

Despite the avalanche of historical evidence, some economists and policymakers question the validity of incentive-based revenue reflows and assert instead that the recent surge in tax-receipt growth has been caused by an increasing fraction of the workforce being ensnarled by the alternative minimum tax (AMT). They also argue that annual comparisons were made extremely easy due to the huge drop in revenues due to the 2000-02 stock market implosion and the 2001 recession that accompanied it. While there is some truth to these claims, they overlook several key facts. ...

In Light of Peak Oil, Financial Diversification Is a Bad Idea

He might be guessing right, he might be guessing wrong ... but about the future he's guessing. And he's definitely politically unhinged. Econ 101 .... Law of Supply and Demand. When demand goes up, supply either gets more plentiful or more expensive. Has this guy heard of a couple of little places called China and India? That's on the Demand side of the equation. And where was he 10 years ago? ... championing the cause of more nuclear energy plants in the US, and drilling and collecting known huge oil reserves in ANWR, and in the deep water off the coasts of Florida and California? No, I didn't think so ... that would have been the increased Supply side of the equation. He was ranting against those moves, so he really has no intellectual ground to stand on here.
ps - does he blame the huge runup in dry bulk shipping rates on Bush too? Michael - you can't claim, out of both sides of your mouth at the same time, that 1) Bush is an idiot, and 2) that he's smart enough to be manipulating the entire global economy and all of its players. Puhleeeeeeeeeeeeeeeze.