Where is the US economy headed?

http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf
Year………FEDERAL DEFICITS
1980.......$0.074 trillion [CARTER]
1988….….$0.155 trillion [REAGAN]
1992........$0.291trillion [BUSH41]
2000.......SURPLUS $0.236 trillion [CLINTON]
2008.......$0.410 trillion [BUSH43]
2010 (June)........$0.160 trillion [OBAMA]

Yeah, but wait until all the seniors discover that the dividend payments from their mutual funds will be taxed at 36% instead of 15.

If Congress takes no action, the top rate on long-term capital gains will remain 15% in 2010, but will automatically rise to 20% in 2011. The top rate on dividends is scheduled to rise to 39.6% in 2011.

401Ks are a fairly recent invention. There are many seniors who live off of the dividend income from mutual funds that aren't tax deferred. I don't think your $250,000 is correct. The rate for anyone with an income over $250,000 is 39.6%

From the WSJ

Quote:

If Congress takes no action, the top rate on long-term capital gains will remain 15% in 2010, but will automatically rise to 20% in 2011. The top rate on dividends is scheduled to rise to 39.6% in 2011.

That means hardly anyone that is retired will see all their dividends taxed at the 36%.

GM, the company, isn't tied to the worthless stock.

GM is currently making a profit.

DETROIT — General Motors Co. will buy AmeriCredit Corp. for $3.5 billion, a deal that allows the automaker to expand loans to customers with poor credit and offer more leases, key areas where GM must grow to accelerate its car sales.

But the acquisition, announced Thursday, also means that GM, which is 61 percent owned by the U.S. government, is getting back into the business of making risky loans. AmeriCredit is an independent auto financing company that already works with about 4,000 GM dealers.

GM executives have said for months that they were missing sales opportunities due to lack of credit for lease deals and financing for subprime buyers, those with credit scores below 620 on a 300-to-850-point scale. About 40 percent of U.S. customers have below prime credit scores, said Chris Liddell, GM's chief financial officer.

"Clearly there's an opportunity to bring more people into our showrooms and help them with finance," he said.

snip

Liddell said the acquisition is a helpful, but not essential for GM's planned public stock offering. The company plans to sell stock to the public, perhaps in the fourth quarter. The sale would help the government get rid of at least part of its ownership stake in the company.

"I'll describe it as another useful building block in the foundation for the IPO," Liddell said. Source

The higher tax rates for all those folks wealthier than I am, will affect the standard of living of all those folks who are just as wealthier as I am, because the economy will enter an additional recession.

Op-Ed Columnist
Addicted to Bush
By PAUL KRUGMAN
Published: July 22, 2010

For a couple of years, it was the love that dared not speak his name. In 2008, Republican candidates hardly ever mentioned the president still sitting in the White House. After the election, the G.O.P. did its best to shout down all talk about how we got into the mess we’re in, insisting that we needed to look forward, not back. And many in the news media played along, acting as if it was somehow uncouth for Democrats even to mention the Bush era and its legacy.

The truth, however, is that the only problem Republicans ever had with George W. Bush was his low approval rating. They always loved his policies and his governing style — and they want them back. In recent weeks, G.O.P. leaders have come out for a complete return to the Bush agenda, including tax breaks for the rich and financial deregulation. They’ve even resurrected the plan to cut future Social Security benefits.

But they have a problem: how can they embrace President Bush’s policies, given his record? After all, Mr. Bush’s two signature initiatives were tax cuts and the invasion of Iraq; both, in the eyes of the public, were abject failures. Tax cuts never yielded the promised prosperity, but along with other policies — especially the unfunded war in Iraq — they converted a budget surplus into a persistent deficit. Meanwhile, the W.M.D. we invaded Iraq to eliminate turned out not to exist, and by 2008 a majority of the public believed not just that the invasion was a mistake but that the Bush administration deliberately misled the nation into war. What’s a Republican to do?

You know the answer. There’s now a concerted effort under way to rehabilitate Mr. Bush’s image on at least three fronts: the economy, the deficit and the war.

On the economy: Last week Mitch McConnell, the Senate minority leader, declared that “there’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy.” So now the word is that the Bush-era economy was characterized by “vibrancy.”

I guess it depends on the meaning of the word “vibrant.” The actual record of the Bush years was (i) two and half years of declining employment, followed by (ii) four and a half years of modest job growth, at a pace significantly below the eight-year average under Bill Clinton, followed by (iii) a year of economic catastrophe. In 2007, at the height of the “Bush boom,” such as it was, median household income, adjusted for inflation, was still lower than it had been in 2000.

But the Bush apologists hope that you won’t remember all that. And they also have a theory, which I’ve been hearing more and more — namely, that President Obama, though not yet in office or even elected, caused the 2008 slump. You see, people were worried in advance about his future policies, and that’s what caused the economy to tank. Seriously.

On the deficit: Republicans are now claiming that the Bush administration was actually a paragon of fiscal responsibility, and that the deficit is Mr. Obama’s fault. “The last year of the Bush administration,” said Mr. McConnell recently, “the deficit as a percentage of gross domestic product was 3.2 percent, well within the range of what most economists think is manageable. A year and a half later, it’s almost 10 percent.”

But that 3.2 percent figure, it turns out, is for fiscal 2008 — which wasn’t the last year of the Bush administration, because it ended in September of 2008. In other words, it ended just as the failure of Lehman Brothers — on Mr. Bush’s watch — was triggering a broad financial and economic collapse. This collapse caused the deficit to soar: By the first quarter of 2009 — with only a trickle of stimulus funds flowing — federal borrowing had already reached almost 9 percent of G.D.P. To some of us, this says that the economic crisis that began under Mr. Bush is responsible for the great bulk of our current deficit. But the Republican Party is having none of it.

Finally, on the war: For most Americans, the whole debate about the war is old if painful news — but not for those obsessed with refurbishing the Bush image. Karl Rove now claims that his biggest mistake was letting Democrats get away with the “shameful” claim that the Bush administration hyped the case for invading Iraq. Let the whitewashing begin!

Again, Republicans aren’t trying to rescue George W. Bush’s reputation for sentimental reasons; they’re trying to clear the way for a return to Bush policies. And this carries a message for anyone hoping that the next time Republicans are in power, they’ll behave differently. If you believe that they’ve learned something — say, about fiscal prudence or the importance of effective regulation — you’re kidding yourself. You might as well face it: they’re addicted to Bush.

Yep, cyclops' favorite producer of unbaised opinions, the liberal rag New York Times and Democrat apologist Krugman that calls himself an economist.

By the way, I am about to finish the book by Alan Greenspan, and I have also read Thomas Sowell's book on the Basics of the Economy, and both have more sense than Krugman apparently does, that is if he agrees with most of what you post here, cyclops.

Greenspan: Bush tax cuts should expire
By Jordan Fabian - 07/15/10 04:05 PM ET

Former Federal Reserve Chairman Alan Greenspan said Thursday that President George W. Bush's tax cuts should be allowed to expire because of the ballooning budget deficit.

"I think they should follow the law and let them lapse. … Taxes go up," he told Bloomberg television in an interview to air Friday. "The problem is, unless we start to come to grips with this long-term outlook we're going to have major problems. I think we misunderstand the momentum of this deficit going forward."