President George H.W. Bush: 'Who The Hell Is Grover Norquist, Anyway?' What is the Pledge?

[Keith and stuff]

President George H.W. Bush: 'Who The Hell Is Grover Norquist, Anyway?'
The Huffington Post | By Patrick Svitek Posted: 07/13/2012 11:17 am Updated: 07/13/2012 2:25 pm
http://www.huffingtonpost.com/2012/07/13/grover-norquist-george-hw-bush_n_1671106.html?ref=topbar


In an interview with Parade magazine to be published Sunday, former President George H.W. Bush pans the Taxpayer Protection Pledge, the Grover Norquist-backed anti-tax oath that politicians sign to promise they will never vote for a tax increase.

In the 112th Congress, 238 representatives and 41 senators -- all but three of them Republicans -- have taken the pledge.

"The rigidity of those pledges is something I don’t like," Bush said. "The circumstances change and you can’t be wedded to some formula by Grover Norquist. It’s -- who the hell is Grover Norquist, anyway?"


President Bush's remarks echo a similar sentiment shared by House Speaker John Boehner last year. The Ohio Republican told reporters that it is "not often I'm asked about some random person in America" when pressed whether Norquist was a positive or negative force for the House GOP conference.

The Pledge is pretty popular.

Grover Norquist, House Republicans Hold Private Meeting
By ALAN FRAM 06/21/12 06:10 PM ET AP
http://www.huffingtonpost.com/2012/06/21/grover-norquist-house-republicans_n_1616904.html


WASHINGTON — All but 13 of the 289 Republicans in the House and Senate have signed a pledge vowing to oppose tax increases. On Thursday, the author of that pledge met with some of them to help them understand exactly what it is they signed.


The pledge has been "extremely helpful" to the Republican Party, Norquist told reporters after meeting privately with Republicans for about an hour, saying it has helped Republicans define a position that is popular with voters.

Where did the Pledge come from? Mel Thompson created the Pledge when running for governor of New Hampshire in 1972. Now, the Pledge is used nationwide thanks to groups like Americans for Tax Reform and Americans for Prosperity. It is another example of pro-liberty politics in New Hampshire influencing the rest of the country.


When and where did the Pledge originate?
The first anti-tax Pledge was first used in the New Hampshire governor’s race in 1972. Since then, the Taxpayer Protection Pledge has been distributed to state-wide and state legislative candidates and incumbents in all fifty states. Similar Pledges are distributed to U.S. Congressional and presidential candidates.
http://s3.amazonaws.com/atrfiles/files/files/StatePledgeQ&A.pdf

[tangent4ronpaul]

Grover Norquist is AWESOME!

-t

[GeorgiaAvenger]

Grover Norquist is AWESOME!

-tHe is indeed.

[jkr]

stay CLASSY drAcula!

http://media.monstersandcritics.com/articles/1215902/article_images/countblahrecallshisshowbizcareer.jpg

[juleswin]

Grover Norquist is AWESOME!

-t

The man is a scam artist. He has a pledge on no tax increases and non on spending increases. The pledge is so flawed that am surprised any liberty minded person pays him any attention. How the fuck do you guys think we going to pay for all the massive spending? fairy money? There is a reason why the mainstream republican supports this fraud, they don't really care about taxes just as long as they can spend all the money they want. Your kids are the ones that are going to deal with it long after Norquist is dead and gone.

Fuck Norquist and his stupid pledge.

[erowe1]

The man is a scam artist. He has a pledge on no tax increases and non on spending increases. The pledge is so flawed that am surprised any liberty minded person pays him any attention. How the fuck do you guys think we going to pay for all the massive spending? fairy money? There is a reason why the mainstream republican supports this fraud, they don't really care about taxes just as long as they can spend all the money they want. Your kids are the ones that are going to deal with it long after Norquist is dead and gone.

Fuck Norquist and his stupid pledge.

It's true that spending is the real problem. But increasing taxes is always bad, without exception. It only makes it easier to spend more.

[juleswin]

It's true that spending is the real problem. But increasing taxes is always bad, without exception. It only makes it easier to spend more.

So why ignore the real problem? with the power to borrow and inflate, the only problem I see is spending. I will sleep better at night if only what the govt did was tax more and spend less. Just stock up all that tax money and do absolutely nothing with it but that's not what we get. We instead we have a man faking to be a fiscal conservative running around with his no tax pledge duping the gullible masses.

In fact it will be best if the govt directly taxed the people every time they wanted to spend gobs of money on some useless program so the population can feel the effect immediately than trying to disguise their spending with debt and inflation. Is it no wonder why the vast majority of republicans sign on to this pledge. I saw this flaw in his pledge even as a liberal and I even less impressed with it now as a libertarian

[Keith and stuff]

Fuck Norquist and his stupid pledge.

Interesting points. The original Pledge was for not creating a new board based personal income or sales tax in New Hampshire. That's the Pledge that the Coalition of New Hampshire Taxpayers still uses.

http://www.cnht.org/
http://www.cnht.org/images/pledge.jpg

Norquist liked the idea and helped grow it into a nationwide effort in the 1980s.

I agree that spending is a major issue. Not only did Mel Thomson create the Pledge, he also coined the term "low taxes are the result of low spending." The phrase didn't turn into a national movement, like the Pledge did. However, another phrase attributed to Mel Thomson is also used throughout the nation. His "axe the tax" was even the most commonly used phrase during the famous Tennessee Tax Revolt which happened in the 2000s.

[erowe1]

I will sleep better at night if only what the govt did was tax more and spend less

There's no such thing as that. When you account for all of the kinds of taxes there are, including printing money, it's a mathematical truism that total taxes = total spending. Every time you increase spending you increase some form of taxes.

But even if this anti-tax increase pledge allows for more deficit spending, which is really still an invisible tax increase, it still impedes spending increases by taking away one of the tools which empowers them. That's a good thing.

[juleswin]

There's no such thing as that. When you account for all of the kinds of taxes there are, including printing money, it's a mathematical truism that total taxes = total spending. Every time you increase spending you increase some form of taxes.

But even if this anti-tax increase pledge allows for more deficit spending, which is really still an invisible tax increase, it still impedes spending increases by taking away one of the tools which empowers them. That's a good thing.

Thats the problems because am not even sure less taxes impedes govt from spending any less than they are spending now but to your point about all taxes = spending, I disagree. see if all the govt did was tax and horde the tax revenue into govt coffers, the people can still be able receive their taxes back when a favorable leader comes around. Not saying Bush was a favorable leader but he did returned the "surplus" collect under Clinton back to the people, this sort of thing cannot happen with spent money.

But all this can be resolved by Grover Norquish coming out with a second pledge that says no to spending increase without tax/revenue increase but I wouldn't hold out seeing that any time soon because only about 1 or 2 politicians will sign it.

[Keith and stuff]

But all this can be resolved by Grover Norquish coming out with a second pledge that says no to spending increase without tax/revenue increase but I wouldn't hold out seeing that any time soon because only about 1 or 2 politicians will sign it.

Americans for Prosperity has a twist on the Pledge. This is the version of the Pledge it is pushing in New Hampshire.


As a candidate for public office in 2012, I pledge to you, that if elected to serve the people; I will work tirelessly in New Hampshire to:
1. Cut Taxes
2. Cut Spending
3. Cut the size of Government
4. Support the Right To Work Law
5. Uphold and protect both the New Hampshire and United States Constitution
http://americansforprosperity.org/new-hampshire/files/2012/06/TaxPledge.pdf

Who has signed this new version of the Pledge so far? Quite a few people. It is catching on. I'm not sure if I am going to sign it but I did sign the original version of the Pledge.

The New Hampshire Speaker of the House
http://americansforprosperity.org/new-hampshire/files/2012/07/June-2012-ThomsonObrien-300x225.jpg

The Tea Party candidate for the Republican Party nomination for governor of New Hampshire
http://americansforprosperity.org/new-hampshire/files/2012/07/June-2012-Ovide-300x225.jpg

The socially conservative candidate for the Republican Party nomination for governor of New Hampshire
http://americansforprosperity.org/new-hampshire/files/2012/07/June-2012-Kevin-300x225.jpg

[erowe1]

Thats the problems because am not even sure less taxes impedes govt from spending any less than they are spending now but to your point about all taxes = spending, I disagree. see if all the govt did was tax and horde the tax revenue into govt coffers, the people can still be able receive their taxes back when a favorable leader comes around. Not saying Bush was a favorable leader but he did returned the "surplus" collect under Clinton back to the people, this sort of thing cannot happen with spent money.

But all this can be resolved by Grover Norquish coming out with a second pledge that says no to spending increase without tax/revenue increase but I wouldn't hold out seeing that any time soon because only about 1 or 2 politicians will sign it.

If a government taxed without spending, that would just decrease the money supply, and increase the value of every dollar. It would essentially be a revenue neutral redistribution of wealth. But total taxes would still equal total spending.

And then if the government "horded" that money and gave it back later, then at the point that they give it back, it would increase the money supply again, and decrease the value of every dollar. The real robbing of people's wealth doesn't happen when government takes dollars from them, it happens when government spends dollars.

All that said, increasing taxes (even if you exclude the tax of printing money) is always a bad thing. And pledging not to do it is never a bad thing.

[juleswin]

Americans for Prosperity has a twist on the Pledge. This is the version of the Pledge it is pushing in New Hampshire.
As a candidate for public office in 2012, I pledge to you, that if elected to serve the people; I will work tirelessly in New Hampshire to:
1. Cut Taxes
2. Cut Spending
3. Cut the size of Government
4. Support the Right To Work Law
5. Uphold and protect both the New Hampshire and United States Constitution

http://americansforprosperity.org/new-hampshire/files/2012/06/TaxPledge.pdf

How has signed this new version of the Pledge so far? Quite a few people. It is catching on. I'm not sure if I am going to sign it but I did sign the original version of the Pledge.


I really like this new and improved version of the pledge and if these people start winning elections and actually show fidelity to it, then there is hope for this country. Thanks for sharing it, I will keep an eye on it.

[anaconda]

The man is a scam artist. He has a pledge on no tax increases and non on spending increases. The pledge is so flawed that am surprised any liberty minded person pays him any attention. How the fuck do you guys think we going to pay for all the massive spending? fairy money? There is a reason why the mainstream republican supports this fraud, they don't really care about taxes just as long as they can spend all the money they want. Your kids are the ones that are going to deal with it long after Norquist is dead and gone.

Fuck Norquist and his stupid pledge.

Seems a "no spending increase" pledge would be better.

[juleswin]

All that said, increasing taxes (even if you exclude the tax of printing money) is always a bad thing. And pledging not to do it is never a bad thing.

I agree with the 1st part of your post but the last sentence is still confusing me. Yes, tax increases is always bad but my argument is it is better than what we have now with Norquist. See, I used to be a tax and spend liberal, in fact I wore than with a badge of honor because the way I saw it, if you are going to spend, its only fair that you also have the courage to ask the people to pay for it instead of passing it along to future generations. So if somehow you are able to convince the people that they should be taxed more for X program without getting kicked out of office then you tax them. The way we have it now, citizens believe that their taxes wont be increased while spending increases giving them a feeling of getting something for free(dems and republicans like getting things for free).

So in conclusion, pledging not to increase taxes while voting for spending increases year after year allows big govt pols to avoid any serious discussions with their constituents(most of them not born or too young to vote) being burden by this spending increase. And this is infinitely worse than increasing taxes on the people

[musicmax]

President George H.W. Bush: 'Who The Hell Is Grover Norquist, Anyway?'

Someone who knows what a barcode scanner is. Hope someone sabotages your next parachute.

[Agorism]

The man is a scam artist. He has a pledge on no tax increases and non on spending increases. The pledge is so flawed that am surprised any liberty minded person pays him any attention. How the fuck do you guys think we going to pay for all the massive spending? fairy money? There is a reason why the mainstream republican supports this fraud, they don't really care about taxes just as long as they can spend all the money they want. Your kids are the ones that are going to deal with it long after Norquist is dead and gone.

Fuck Norquist and his stupid pledge.



He was a main speaker at Paul's Rally for the republic.

he was also instrumental in making sure CPAC was run fairly over the past 5 or so years.

[Agorism]

Norquist would make a great candidate for president I think actually.

[Anti Federalist]

LOL - this coming from the "read my lips" guy.

He knows who Norquist is.

Lying CIA head, drug running, NWO spouting is lying.

[juleswin]

Norquist would make a great candidate for president I think actually.

Maybe he will make a great president, who knows? but if you are going by the fact that he promotes the no tax pledge then you are going to be burnt. Remember, George W Bush actually cut overall taxes for all Americans but was still able to double the deficit while doing it. The pledge is completely worthless, smokes and mirror used to drum up support for fake fiscal conservatives pols.

And i bet you that Norquist himself knows this. If it actually restrained the behemoth govt in substantial way, this many republicans wouldn't have signed it

[nano1895]

Seems a "no spending increase" pledge would be better.

yeah, no increases on the already proposed increases right? :p

[Origanalist]

I agree with the 1st part of your post but the last sentence is still confusing me. Yes, tax increases is always bad but my argument is it is better than what we have now with Norquist. See, I used to be a tax and spend liberal, in fact I wore than with a badge of honor because the way I saw it, if you are going to spend, its only fair that you also have the courage to ask the people to pay for it instead of passing it along to future generations. So if somehow you are able to convince the people that they should be taxed more for X program without getting kicked out of office then you tax them. The way we have it now, citizens believe that their taxes wont be increased while spending increases giving them a feeling of getting something for free(dems and republicans like getting things for free).

So in conclusion, pledging not to increase taxes while voting for spending increases year after year allows big govt pols to avoid any serious discussions with their constituents(most of them not born or too young to vote) being burden by this spending increase. And this is infinitely worse than increasing taxes on the people Well said.

[Victor Grey]

I understand what Juleswin is saying and I support it completely.

[erowe1]

Remember, George W Bush actually cut overall taxes for all Americans but was still able to double the deficit while doing it.

But if he had not cut taxes, it would have been even worse. His tax cuts were good things regardless of his spending increases. And without them the spending increases would have been even bigger. Tax increases are always bad, without exception, even if they're ostensibly just to balance the budget. We need to starve the leviathan.

[Brett85]

Remember, George W Bush actually cut overall taxes for all Americans but was still able to double the deficit while doing it.

Yes, and Bush should be praised for the tax cuts and criticized for the massive spending increases. Bush got it half right and half wrong.

[Brett85]

I can't believe that even Grover Norquist isn't good enough for some of these extreme libertarians. Grover actually is a libertarian, as he opposes the war on drugs and supports bringing our troops home from Afghanistan. He would be a liberty candidate if he were to ever run for office.

[muzzled dogg]

LOL - this coming from the "read my lips" guy.

He knows who Norquist is.

Lying CIA head, drug running, NWO spouting is lying.

Lol this^^^

And thanks for the history Keith

I heard about the pledge a while ago, never knew it originated in nh

[Cowlesy]

The man is a scam artist. He has a pledge on no tax increases and non on spending increases. The pledge is so flawed that am surprised any liberty minded person pays him any attention. How the fuck do you guys think we going to pay for all the massive spending? fairy money? There is a reason why the mainstream republican supports this fraud, they don't really care about taxes just as long as they can spend all the money they want. Your kids are the ones that are going to deal with it long after Norquist is dead and gone.

Fuck Norquist and his stupid pledge.

He is not a scam artist. Norquist focuses his business and time in Washington around taxation. I am glad he's there, scaring politicians away from walking into the compromise camp on taxes. He has been allied with Ron Paul on many occasions, and as someone above my posts notes, helps to keep CPAC somewhat hospitable to traditional conservatives.

Also, you should note that neo-conservatives, and the retail anti-islam people on the right, hate Grover Norquist with a passion. He is married to a muslim woman who is also political, so they try and daisy-chain associations together to make it seem like Grover hates America. I mean they get really hateful and offensive with it, for a guy who, from what I can tell, is as red-blooded an American as many of us. Frankly, I recall many overtures to non-intervention coming from Grover over the years, although he doesn't focus his work there.

The Democrats hate him, the Neoconservatives hate him, so he must be doing something right.




http://www.unitedliberty.org/articles/10461-profiles-in-liberty-grover-norquist-anti-tax-warrior

MN: As a proud father of two, what are the three most important things you want your children to learn from you?

GN: I have two wonderful daughters, now three and four years old. I want them to learn to love to read and learn and work hard. And to never steal anything nor to ask the government to steal for you.

[Keith and stuff]

Lol this^^^

And thanks for the history Keith

I heard about the pledge a while ago, never knew it originated in nh

The Pledge is a way of life in New Hampshire. Of course, people are more anti-tax in NH than anywhere else in the US. Polls show that a plurality of Democrats are against the introduction of a general sales tax. Polls show that the plurality of Democrats are against a person income tax in NH. That is likely partly due to the Pledge. Several Democratic candidates for governor have signed the Pledge. The current governor, Governor Lynch signed the Pledge. One of the 2 leading candidates for the Democratic nomination for governor (she was in the lead in the Democratic polls but because show supports the Pledge all of the unions are endorsing her opponent) signed the Pledge.

[juleswin]

He is not a scam artist. Norquist focuses his business and time in Washington around taxation. I am glad he's there, scaring politicians away from walking into the compromise camp on taxes. He has been allied with Ron Paul on many occasions, and as someone above my posts notes, helps to keep CPAC somewhat hospitable to traditional conservatives.

Also, you should note that neo-conservatives, and the retail anti-islam people on the right, hate Grover Norquist with a passion. He is married to a muslim woman who is also political, so they try and daisy-chain associations together to make it seem like Grover hates America. I mean they get really hateful and offensive with it, for a guy who, from what I can tell, is as red-blooded an American as many of us. Frankly, I recall many overtures to non-intervention coming from Grover over the years, although he doesn't focus his work there.

The Democrats hate him, the Neoconservatives hate him, so he must be doing something right.

Ok, he may not be a scam artist but what he is selling with his pledge is a virtually a wash in the grand scheme of things. His no tax pledge will never and I mean never in a million years lead to balancing the US budget or reduction in spending in any meaninful way. Because for it to have any effect, it has to be coupled with no spending increases but its not.

And please spare with the neo conservatives and retail anti-islam people hate it, yes they hate him bu somehow the majority of the neocon and anti-islam congressmen/women end of signing his pledge. I am tired of half measures and am only interested with ideas that will actually make a difference, good for him that he had our backs with the CPAC people but that doesn't make his pledge anymore effective than it is.

[Brian4Liberty]

LOL - this coming from the "read my lips" guy.

...

You beat me to it!

[GeorgiaAvenger]

Some of the responses in this thread show how foolishly far people will go to be contrarians.

You want an anti-spending pledge, YOU make it. Don't attack somebody for working on anti-tax activism for most of his adult life.

Norquist on Ron Paul: http://reason.com/blog/2011/12/21/grover-norquist-ron-paul-is-the-most-con




"Ron Paul is the most consequential guy running for president," said Grover Norquist, an anti-tax activist and Republican organizer. "All the other guys are basically saying the same things, and one gets to be the nominee. But Ron Paul has changed the nature of the modern Republican Party and brought into it discussions not only of non-interventionist overseas policy but monetary policy."

Norquist addressed Paul's alternative 2008 convention and calls it "one of the McCain era's tactical errors" not to embrace the congressman and his supporter base that year — in effect discounting a potentially energized group of campaign volunteers. He said Paul, unlike his rivals, was drawing new people to the GOP, just as Pat Robertson helped lure millions of evangelical voters into the party with his 1988 presidential bid and the tea party movement attracted more activists in 2010.

"I hope to be there to watch [Paul] speak from the main stage in prime time" at the 2012 GOP convention, Norquist said.

[Keith and stuff]

Ok, he may not be a scam artist but what he is selling with his pledge is a virtually a wash in the grand scheme of things.

No one can argue that the Pledge fundamentally changed politics in NH. Nationally, it may not have fundamentally changed politics but it has saved taxpayers billions of dollars. That's a good thing :)

[erowe1]

His no tax pledge will never and I mean never in a million years lead to balancing the US budget or reduction in spending in any meaninful way.

Why should anyone care about balancing the budget?

[Zippyjuan]

GHW Bush was at least willing to recognize that the deficit was growing and that reductions in spending were not going to change that so to reduce it, taxes needed to be raised. Ronald Reagan did the same thing- without directly saying he would not raise taxes. If they want to say "no new taxes" they should also promise to not spent one penny more than they currently do- but they won't do that. People like spending (on things they like) and don't like taxes (ie actually paying for the spending). This allows the Republicans, despite claims they want to balance the budget (they really don't want to do that but want to make voters THINK they want to) to blame the "other guy" if they try to make any steps towards paying the bills and reduce the deficit.

The issue between Clinton and GW Bush on the issue was that Clinton wanted to use any surplus money to actually try to reduce the deficit. GW said we should cut taxes. So he did. And he cut them again. And he started two wars which caused spending to soar. He expanded drug coverage in Medicare which also cost lots of money and after a brief moment when we had a shot at fiscal responsiblity, instead the deficit was more than doubled in eight years.

The "No Tax" pledge is not because they care about the deficit but because they know it is what voters want to hear.

[Keith and stuff]

Listening to and doing what voters want usually isn't a bad thing. It is great that AFTR, AFP, CNHT and others were able to work together and save people in America billions of dollars in taxes. I consider any increase in any federal tax completely immoral. I'm glad that there are people trying to prevent or reduce tax increases. If taxes were higher, the economy would be even less productive and Americans would be worse off.

Thank god for tax Pledge politics. Pay that the Pledge increases in use and influence :)

[Zippyjuan]

See, they promise not to raise YOUR taxes. But your kids will face higher taxes to pay for all of the borrowing they are doing instead.

[Anti Federalist]

See, they promise not to raise YOUR taxes. But your kids will face higher taxes to pay for all of the borrowing they are doing instead.

LOL - Right, because we all know how responsible government will be with all that added tax revenue in paying down debt.

[anaconda]

yeah, no increases on the already proposed increases right? :p

Good point. A few careful definitions would have to be enumerated on such a pledge document. :D

[Brett85]

GHW Bush was at least willing to recognize that the deficit was growing and that reductions in spending were not going to change that so to reduce it, taxes needed to be raised. Ronald Reagan did the same thing- without directly saying he would not raise taxes. If they want to say "no new taxes" they should also promise to not spent one penny more than they currently do- but they won't do that. People like spending (on things they like) and don't like taxes (ie actually paying for the spending). This allows the Republicans, despite claims they want to balance the budget (they really don't want to do that but want to make voters THINK they want to) to blame the "other guy" if they try to make any steps towards paying the bills and reduce the deficit.

The issue between Clinton and GW Bush on the issue was that Clinton wanted to use any surplus money to actually try to reduce the deficit. GW said we should cut taxes. So he did. And he cut them again. And he started two wars which caused spending to soar. He expanded drug coverage in Medicare which also cost lots of money and after a brief moment when we had a shot at fiscal responsiblity, instead the deficit was more than doubled in eight years.

The "No Tax" pledge is not because they care about the deficit but because they know it is what voters want to hear.

You sound like a hardcore Democrat. Clinton wanted to use any surplus money to spend even more money, as all liberals want to do. They want to raise taxes in order to spend that money, not reduce the debt.

[Keith and stuff]

LOL - Right, because we all know how responsible government will be with all that added tax revenue in paying down debt.

Trust me. I come from NH where anti-tax rhetoric is more commonly used than any other state in the US. If the government didn't keep tax increases in check, it would just increase spending by that much more :(

[rpwi]

The pledge is pretty stupid and should have been about spending to start with. This one little pledge (no exaggeration) is to a great degree responsible for a lot of our deficits and national debt. Jack Abrahmoff talks about this in his autobiography (he was a close friend of Grover Nortquist).

This is debt that will be repaid with EVEN MORE taxes or inflation. Norquist should 'release' these politicians from their narrow-minded guilt ridden philosophies by declaring that one could raise taxes if they reduced spending.

Debt and deficits are a much greater evil than taxes and always must first and foremost be addressed before taxes (first course before dessert!).

[rpwi]

But if he had not cut taxes, it would have been even worse. His tax cuts were good things regardless of his spending increases. And without them the spending increases would have been even bigger. Tax increases are always bad, without exception, even if they're ostensibly just to balance the budget. We need to starve the leviathan.But without constraints on non-tax forms of government finance, constraints on taxation are pointless and in fact dangerous.


Why should anyone care about balancing the budget?Are you a fan of MMT? Your economic philosophy seems very MMT/Mosler'ish. There are of course three ways to finance a budget.

Taxes, debt, MB creation.

If I have a 100 million dollar budget bill...the taxes owed will be 100 million.

If I finance this with debt...say payable as a balloon payment in 10 years at 10% interest. Then the total obligation is 110 million. This is more than direct taxation (which is why direct taxation is better). It also distorts the investment markets at large.

Say I refinance the debt (in perpetuity...and perhaps not by choice as it has grown too large). Being unable to repay the debt, I government am totally dependent on the faith of creditors to finance my debt. This is now ponzi-finance and will result in a spectacular bankruptcy or mega-inflation as the interest compounds. This is worst than direct taxes.

Then the budget can be financed by MB creation. A very popular method now-days! The government first creates the t-bill...sells it to the public...the public sells it to a 'primary dealer' and the primary dealer sells it to the Fed for brand new MB (under the guise of keeping the fed funds rate in check...which is influenced to start with by the treasury issuing securities). This is a very round-about and inefficient way to finance government. The MB inflation not only has to cover the cost of the initial securities created, but the over-head to send the securities through the market then back to itself. The market only buys/sells securities for profit...so that profit is a loss to the government. Furthermore, new MB allows private banks to create much more money than just the MB by the process of fractional banking. In truth, the private banks enjoy much more seniorage from MB creation than the Fed does. Of the security profits from the Fed, much is churned and wasted on Fed overhead, and less than what should be is returned to the treasury (even though they are the ones who are largely paying this debt to themselves).

[XTreat]

There is a pic of RP with that axe if I am not mistaken.

[thequietkid10]

The Pledge is BS, if it actually controlled spending, sure it would be awesome. All it does now if offer politicians a convenient excuse to smother dump voters with goodies that they don't have to pay for, in exchange for votes. And instead of actually making voters pay for all the crap in government, they just kick the can down the road and let the next generation (i.e mine) pay for it.

Think about this, if they're was a bill which slashed entitlements beyond Paul Ryan's first budget, cut military spending in half and cut the deficit, cut out lobbyist bought tax exemptions, the bill would never get off the ground because ending the tax exemptions would violate the Norquist pledge.

[Keith and stuff]

The pledge is pretty stupid and should have been about spending to start with.

Stupid? Do you want New Hampshire to have a personal income tax and a general sales tax? I don't think NH should go down the same road NJ and CT went down. I think it made a lot of sense. Preventing a sales or income tax makes a lot of sense to me.


This one little pledge (no exaggeration) is to a great degree responsible for a lot of our deficits and national debt. Jack Abrahmoff talks about this in his autobiography (he was a close friend of Grover Nortquist).

The federal government is going to spend money anyway. It's immoral. However, so is taxing us for it. It is better that 1 wrong happens than 2.


This is debt that will be repaid with EVEN MORE taxes or inflation. Norquist should 'release' these politicians from their narrow-minded guilt ridden philosophies by declaring that one could raise taxes if they reduced spending.

Raising taxes is never the answer to anything. I am completely on board with cutting spending. However, tax increases don't cut spending, they lead to increased spending. Spending is a major problem, it should be addressed.

[erowe1]

But without constraints on non-tax forms of government finance, constraints on taxation are pointless and in fact dangerous.

No they aren't. If they were pointless we wouldn't even have an income tax. They'd just be able to spend without limit and finance it all with deficit spending.

[erowe1]

There are of course three ways to finance a budget.

Taxes, debt, MB creation.

I'm saying those 3 are all the same (and they're really all taxes). There's no reason to treat deficit spending as though it's somehow worse than taxes.

The number that matters is how much the government spends. Since higher taxes makes it easier for that number to go up, higher taxes is bad.

[juleswin]

Stupid? Do you want New Hampshire to have a personal income tax and a general sales tax? I don't think NH should go down the same road NJ and CT went down. I think it made a lot of sense. Preventing a sales or income tax makes a lot of sense to me.



The federal government is going to spend money anyway. It's immoral. However, so is taxing us for it. It is better that 1 wrong happens than 2.



Raising taxes is never the answer to anything. I am completely on board with cutting spending. However, tax increases don't cut spending, they lead to increased spending. Spending is a major problem, it should be addressed.

No, nobody is saying NH should go ahead and institute a state tax. The point I think hes trying to make is that state and federal govt are not the same when it comes to raising revenue. Scranton PA just started paying their workers minimum wage because the cannot raise enough money either via taxes or selling of municipal bonds, several counties in CA are filling or on the verge of bankruptcy because of the same reason. Now the federal govt who is in a worse situation is even spending more money with no sign of slowing down. Now do you know why this is the case? One has a fricken printing press that will buy up their bonds when they run out of money and the other doesnt, so until your state gets a printing press to devalue your money, stop state budgets into the discussion. Its apples vs oranges

Next you asked: is it better that 1 wrong happens instead of 2? the answer is yes. Because the 1st wrong should have prevented the 2nd from happening when the people start feeling the pain of taxation. The idea is that they will kick the politician out of office when they over taxed em, just like a horse will buck off the rider when he/she rides it too hard. Do you think average liberals love to be over taxed? No they dont, they want their tax cut but will tolerate tax increases for some folk 2-3 tax brackets above him. If they decide they want a new war or some social program then summon the IRS and workout a tax plan that will really really hurt everybody equally(say.5 increases for everybody). That is the only way spending will ever going to slow down. Also doing it your way is no guarantee that only 1 wrong will be done\, just like Ron said in one of the debates, spending is just another way of taxing the people because every money spend is going to be paid back via taxes.

So yea, I will do a flip on my previous post, Grover Norquist is indeed a fraud. I have no respect for him and I cant for the life of me see how anyone who reads this board takes this man seriously.

[juleswin]

No they aren't. If they were pointless we wouldn't even have an income tax. They'd just be able to spend without limit and finance it all with deficit spending.

It is done for show, Kabuki theatre, smokes and mirror, blowing smoke up our collective arses etc etc. That is why they are doing it, cos if they had any guts at all, they will live within their means and only spend whatever they can tax.

[rpwi]

Stupid? Do you want New Hampshire to have a personal income tax and a general sales tax? I don't think NH should go down the same road NJ and CT went down. I think it made a lot of sense. Preventing a sales or income tax makes a lot of sense to me.The tax pledge is completely different for state governments than the Feds. Most states have balanced budget clauses that prevent them from running deficits (like NH). Also, the states can't create dollars...so if a state taxes less...than they spend less. That is mostly good. I don't know the 'intricacies' of the tax pledge and if it 'allows' one to repeal privileged tax breaks. This might be seen as a tax increase, but would be a good thing to repeal. For example...we could have a George W. Bush tax break...in that all people who share that name don't have to pay taxes. If we repeal that tax, we are raising taxes. Bad thing? Of course not.


The federal government is going to spend money anyway. It's immoral. However, so is taxing us for it. It is better that 1 wrong happens than 2.Debt and money creation aren't evil though?


Raising taxes is never the answer to anything. I am completely on board with cutting spending. However, tax increases don't cut spending, they lead to increased spending. Spending is a major problem, it should be addressed.Congress could care less about their source of financing. They'll spend as much as they want to 'stimulate' the economy, 'create jobs' and buy off their special interests. So all things being equal, taxation doesn't effect spending for the feds...it just affects the ratio by which they borrow and create money. The latter two are more inefficient and therefore will generate a greater 'tax' than if we had just been taxed directly.

[Bastiat's The Law]

Ron Paul endorses the pledge,

http://www.thegrownupsarefighting.com/wp-content/uploads/2011/10/ronul.jpg

[rpwi]

I'm saying those 3 are all the same (and they're really all taxes). There's no reason to treat deficit spending as though it's somehow worse than taxes.

The number that matters is how much the government spends.
But with debt or monetization...the government does spend more!

Say the tax bill is 1 trillion dollars a year.

Scenario A - Government uses direct taxation:

Year 1: 1 trillion in spending
Year 2: 1 trillion in spending

Total government spending = 2 trillion.

Say B - Government borrows the first year...repayable in 1 year + 5% interest

Year 1: 1 trillion in spending
Year 2: 1 trillion in spending + 50 billion spent on interest payments

Total government spending = 2.05 trillion dollars. Borrowing has clearly increased government spending.

With monetization...you in essence have the same spending increases for interest...+ plus you have the lost face-value from the securities being churned + you have inflation from MB creation + you have inflation from banks expanding the money multiplier off of the larger MB.

Very clearly, direct taxation leads to the smallest amount of government spending. What we really need is a promise to never vote for a debt ceiling increase...a cheesy promise like that would be much more effective for a narrow minded representatives than the debt ceiling statues we have now. THAT would do more to curb spending than an anti-tax pledge.

[erowe1]

But with debt or monetization...the government does spend more!

Sure, and with debt, monetization, and taxes, they spend even more than that. Anything that impedes one of those tools is a good thing.

I agree that it would be great if they never increased the debt ceiling because that would impede another of the tools. But if they balanced the budget by raising taxes that would defeat the whole purpose of balancing the budget.


ETA:
I don't really buy the math of your example, because you're comparing dollars one year with dollars another year and trying to make a mathematical point about that, as though those numbers use like units when they represent how big the government's burden on the economy is.

No matter how much the government spends in any year, that amount represents an amount of all the goods and services in the whole economy that are being allocated by the government rather than free individuals (leaving aside for now other ways the government allocates goods and services, such as by telling people what they can and can't spend their money on). That amount that the government spends, no matter how the government finances it, equals the same amount of goods and services not being allocated by free individuals. That taking away from all those free individuals their ability to allocate their own goods and services is a de facto tax. This is true whether that be an income tax, borrowing, or printing greenbacks. The harder it is for the government to spend that money the better. The harder it is for the government to finance that spending the better. The harder it is to tax the better, always with no exceptions. The harder it is to borrow money the better. And the harder it is to print money for itself the better.

[erowe1]

Ron Paul endorses the pledge,

And he opposes any attempt to decrease deficits by doing anything other than cutting spending.

[erowe1]

For example...we could have a George W. Bush tax break...in that all people who share that name don't have to pay taxes. If we repeal that tax, we are raising taxes. Bad thing? Of course not.

I would say, yes, that tax increase would be a bad thing, because it would increase federal revenue. I'd be for repealing that tax break and commensurately reducing federal revenue with an across the board cut in tax rates, so that it ends up being revenue neutral. But even that I wouldn't be crazy about. Revenue neutral tax reform is never as good as reducing federal revenue.

[rpwi]

I don't really buy the math of your example, because you're comparing dollars one year with dollars another year and trying to make a mathematical point about that, as though those numbers use like units when they represent how big the government's burden on the economy is.You have to do that. You don't know how much or at all the economy will grow. It could shrink! You don't know what future treasury security interest rates will be...or if they will even be refinanced outside of monetization.

Plus, if the free market truly feels that paying taxes will really dampen growth prospects in 2012...they already have a solution. Borrow from the private security market. Each business (and individual) has their own comfort level for how much they want to borrow. For government to swoop in and artificially dictate that the business will go in debt at X amount because it is 'in their best interest' creates serious economic distortions. So if a business'es natural level of borrowing is 1 million dollars, and the government decides (indirectly) that they should be borrowing 2 million dollars...this difference results in economic loss which has a market value.

Lastly, delayed taxation (if we're not talking about Greece style runaway ponzi-refinancing nor monetization) will result in serious market distortions. Markets like stability and predictability. Paying X amount of taxes consistently per year for 10 years for example allows them to plan accordingly. If they pay 0 taxes each of the 10 years and then 10x taxes + interest this represents a huge shock. Businesses would have chased artificial profits during the no-tax years to create mal-investment...and this mal-investment would not be adequately prepared to pay the piper.

[rpwi]

I would say, yes, that tax increase would be a bad thing, because it would increase federal revenue. I'd be for repealing that tax break and commensurately reducing federal revenue with an across the board cut in tax rates, so that it ends up being revenue neutral. But even that I wouldn't be crazy about. Revenue neutral tax reform is never as good as reducing federal revenue.Let's take this a step further. In your opinion then, would it be wrong for government to borrow and give that as free money to any individual or company? What if this amount was equal to or less to the amount they paid in taxes?

It is very difficult to find commensurate tax cuts to balance out-special interest tax exemptions... Are you saying if the government only taxed males and made females tax exempt...and could not get an agreement to balance the tax load for both genders...that you would oppose any type of taxes on females?

In my mind...it is silly to sweat the details in regards to trying to balance tax-cuts with tax-hikes. The system should be made consistent and fair first...then the percentage that the system took in can be calibrated later. It is very difficult to do this in reverse.

[erowe1]

Are you saying if the government only taxed males and made females tax exempt...and could not get an agreement to balance the tax load for both genders...that you would oppose any type of taxes on females?

If the government only taxed males, I would support cutting the tax rate by 50% at the same time as expanding the tax base to include females, so that it's revenue neutral. But I wouldn't support keeping the rates the same and expanding the tax base to females, because that would increase federal revenue, it would effectively be a huge tax increase.



In my mind...it is silly to sweat the details in regards to trying to balance tax-cuts with tax-hikes. The system should be made consistent and fair first...then the percentage that the system took in can be calibrated later. It is very difficult to do this in reverse.

Consistency and fairness are secondary. The most important thing is that the government spends less. And as far as the role taxes play in that, the most important thing is less taxes as measured by lower federal revenue. If you can make taxes more fair without increasing federal revenue, fine. But if you're going to do it with what amounts to a net tax hike, that would be bad. It would only give them license to spend even more money.

[rpwi]

If the government only taxed males, I would support cutting the tax rate by 50% at the same time as expanding the tax base to include females, so that it's revenue neutral. But I wouldn't support keeping the rates the same and expanding the tax base to females, because that would increase federal revenue, it would effectively be a huge tax increase.Say you are a member of congress. You want to close one tax exemption and reduce spending...how do you do that? It is almost impossible to create such offsetting tax changes...

Hypothetical question for you. You have to choose exclusively from these two scenarios...which do you prefer?

A: Those under 30 must pay 990 billion in taxes. Those over 30 must pay 10 billion. Total tax expenditures = 1000 billion.

B: Those under 30 must pay 501 billion in taxes. Those over 30 must pay 501 billion in taxes. Total tax expenditures = 1001 billion.

You are saying you would (all things being equal) prefer scenario A over B, just because government spent a little more? To me this is crazy. In fact if a bill was introduced to change the tax system from A to B, you would oppose it because you signed the no new tax pledge?

Remember...these choices are exclusive...which represents real life. If you don't have access to the budget committee or aren't a party leader...you don't have a ton of say over what goes into the budget unfortunately (certain congressmen being more equal than others has greatly contributed to the mess we have now).

[erowe1]

Lastly, delayed taxation...

I don't think there's really any such thing as delayed taxation. There is only so much stuff in the entire economy, and in order for the government to control the allocation of that stuff it has to take it away from its owners somehow. It can't delay the taking of it. The taking of it happens at the same time as the allocating of it.

If you want to represent all that stuff with a number of dollars, and if you want to imagine the government allocating where some of those dollars go by spending them, then it is a mathematical truism that the taxing happens as the spending happens. If they finance the spending by borrowing money, then the way that tax is levied is by the instant devaluation of everyone's money. But there are natural limits placed on the government's ability to finance spending with debt. The lenders only lend because they think they'll get their money back and it will be worth as much as they hope it will. In order to be able to do this the government has to rely on taxes to fund part of its spending. Thus decreasing the government's ability to raise revenue through taxation does decrease their ability to spend money.

[erowe1]

You are saying you would (all things being equal) prefer scenario A over B
Yes.

Under scenario A, I'd be all for cutting the taxes of those under 30. But I wouldn't be willing to do that if it means raising the taxes of those over 30 by even more than I'm cutting taxes for those under 30.

[rpwi]

I don't think there's really any such thing as delayed taxation.In the literal sense there is. If I borrow money to finance government, government will have to spend more in the future to cover the cost of repaying principal + interest. This is delayed taxation. The only other option is perpetual ponzi-finance...in which a country is ultimately dependent on the whims of investors to refinance their bloated debt year after year (or they face monetization). Greece was big into ponzi-refinancing...and that blew up in their face... The US is going down the same path if we're not careful.


There is only so much stuff in the entire economy, and in order for the government to control the allocation of that stuff it has to take it away from its owners somehow. It can't delay the taking of it. The taking of it happens at the same time as the allocating of it.I agree that a purely debt financed country would certainly extract wealth from the private sector immediately and hand it to the public sector. It would do so in the form of inflation as treasury bills can be viewed as a form of credit/store of value/money. The MMT/Mosler theory is very big on this. The problem is it TOTALLY ignores interest. So it is not fair to conflate debt financing with tax financing because while they may extract the same amount of wealth from the economy initially (one through inflation, one through direct taxation), debt finance will ultimately extract more because you add in the interest cost.

Interest payments are this year alone probably going to exceed 500 billion. The amount of national debt interest we've been paying has been growing at about a 10% clip per year (our politicians really need to pay attention to Greece!). The issue with this 500 billion (inherited from MMT/Krugman/Keynesian types who don't think debt matters...is that this is 500 trillion we will have to pay each year into perpetuity (unless we monetize which creates unexpected side-effects). This creates onerous taxation or ponze-refinancing that has to collapse or get monetized. Not to mention that we are benifiting hugely from low interest rates. If we have to refinance/reissue our debt at double the interest rates...that is trouble.


If you want to represent all that stuff with a number of dollars, and if you want to imagine the government allocating where some of those dollars go by spending them, then it is a mathematical truism that the taxing happens as the spending happens. If they finance the spending by borrowing money, then the way that tax is levied is by the instant devaluation of everyone's money.The inflation is a cost that kicks in now true...but the government has setup future spending as well (much of it on treasury securities) and that has to be factored into any equation. I mean if I buy a car with a payment of 1k this year and a promise to pay 100k next year...this doesn't mean it's a good deal. You always have to factor in future considerations with any contract...and this includes federal taxation and debt policy.


But there are natural limits placed on the government's ability to finance spending with debt. The lenders only lend because they think they'll get their money back and it will be worth as much as they hope it will. In order to be able to do this the government has to rely on taxes to fund part of its spending. Thus decreasing the government's ability to raise revenue through taxation does decrease their ability to spend money.In a real world this would be true (it is kind of true for states). But with the Fed, monetization is set to auto-pilot sadly. This is a shame as this ramps up FRB and creates all sorts of problems.

What happens with monetization is that government could issue 10 trillion dollars in securities and hardly have any takers. No problem, because the Fed controls the open market. With the lack of demand for new securities this would be reflected as higher inter-lending rates for reserves. The Feds would try to push the rates down to its target fed-funds rate by buying securities from primary dealers. Primary dealers only really sell treasury securities...so to make the easy profits, they would have to buy-tbills from other investors or from the government. This artificially ramps up demand for t-bills and enables the treasury to issue as many t-bills as they want. Kind of pathetic, but in this matter, monetization is set to auto-pilot and the US will never really default on its debt...although hockey-stick inflation is certainly (and most probably) an end result.

[erowe1]

In the literal sense there is. If I borrow money to finance government, government will have to spend more in the future to cover the cost of repaying principal + interest. This is delayed taxation.

Or the government could just repudiate the debt.

But let's say the government did pay it pack, then when they did that and decreased the money supply again, it would increase the value of every dollar. At that moment it would be a wash. The moment where the real taxation happened wasn't then, when they paid the debt back, it was earlier, when they spent the money.

[rpwi]

Or the government could just repudiate the debt.We definitely should do that to the public owned portion. The private owned portion would be tricky...many foreign countries who held massive amounts of US securities as reserves would be kind of upset. Could start a trade war or run on the dollar to say the least. Not the worst option though...


But let's say the government did pay it pack, then when they did that and decreased the money supply again, it would increase the value of every dollar. At that moment it would be a wash. The moment where the real taxation happened wasn't then, when they paid the debt back, it was earlier, when they spent the money.If national securities had no interest...then yeah...issuing them and then recalling them would be a simple matter of inflation/deflation accounting. Granted it would be very disruptive to the markets to have inconsistent signals to deal with...

The issue is that if the debt is paid back...this is done with taxes...so we would have a super tax + interest when the principal was due. All in all, we end up paying more taxes because of debt and we distort the markets (unless we don't repay the debt in case we have inflation above what taxation would have costed and other interesting side-effects).

[Bastiat's The Law]

I kinda like Grover. He's much better than Neil Boortz