The notion of a capital gains tax cut as stimulus is relevant to PROSPECTIVE investments and their after tax return.

You want to use GDP ratios?

1) First, it has increased. In 1965 Fed spending/GDP was 17.2%. The 2007 figure was 19.9, basically a 3 point increase. Second, federal taxing has gone from 17% to 19% of GDP. The reason for the spending / taxing mismatch is borrowing.

2) But that stat alone misses a crucial perspective. Why should Federal spending/GDP remain the same over time? Defense spending has shown the desirable (and expected) characteristic of scaling, in round numbers falling as a percentage of GDP from 8% to 3% since 1965. Add that to the overall 3% increase and you have an 8% increase in non-defense spending/GDP since 1965.

So social spending/GDP has gone from 17%-8%=9% of GDP in 1965 to 20%-3% = 17% today. That's enormous. About a 90% increase. Said another way, almost doubling.

How's that percent of GDP thingy workin' for ya?? As I said, The Fed govt is not starved; we have a runaway social spending problem.

3) Further, although social spending in absolute dollars might necessarily increase as population grows, for it to grow forever in lock step (or in excess of) GDP tells us that the spending is not terribly effective; For example, we never solve the poverty issue, we just keep ratcheting up the expenditures.

4) Your point about two income households makes no sense, either. Unless the number of persons per household increases, (and I think it is actually the opposite since 1965) then if Fed spending per household increased, and it has, dramatically, then spending per person increases even more. The only way this cannot be true is if spending is outside the household definition.

Further, your citation about a 300% increase in two income households is off point. Per household income, which is what would be taxed, is up only about 27%.

4) Lastly, when we consider the necessary temporal changes in federal expenditures, the house of cards really comes down. One CBO estimate shows the SS, Medicaid, Medicare debacle increasing expenditures from current - as a % of GDP to keep you happy - by 10% of GDP by 2050. That's enormous.

So as I said, by any measure, we do not have a tax starved government, we have, and have had for 40 years, a huge spending problem. And I never even got to the increases in state and local government.

Now I wonder Rick DeMent, are your analytical skills that poor, or who is really the sophist?

Dear Mr. President
You only won the office of President. Read what the constitution says. You do not make the laws you execute the laws of the land. You are Commander and Chief, keep us safe. Your predecessor did.

Right. Assuming you don't count the biggest terrorist attack in American history. Overlook that, and he did a great job keeping us safe.

And Buchanan was astounding at keeping the country unified and peaceful. As long as you don't count the Civil War.

Ben´s dog
Ben's dog

See the abnormally large space in the first example? It didn't kern correctly because that's not the apostrophe.

I have no problem with infrastructure spending, which we sorely need. Yeah, there will be some waste when you're looking to spend money. But look at the actual amount - again, quite a small portion of the current stimulus proposal, less than 4%, IIRC.

2-) Tax cuts with huge deficits means tax increases in the future. Infrastructure projects CAN provide aditional stimulus, but not because you are spending money. It´s generally because you improve productivity.

Spending money on unnecessary infrastructure projects will do nothing. Another problem is that without good planning infrastructure projects becomes a drain for money(There is the Big Dig in Boston, but Mexicans and Brazilians can point out plent of these projects that went terribly wrong).

When you are building infrastructure projects *because you want to spend money* the odds are that you are not going to plan it as it should be.

3-) I know that you Americans can print dollars bills but I don´t know where you are going to find money to pay for these things....

just how do you think any of the spending in this bill helps? Is it all good spending? Because for the most part it looks like a lot of pork to me.

jm, again, go back and reread what I said... spending on infrastucture pays dividends in the future. OF COURSE the devil is in the details...

(although I think there is a good argument for cutting capital games with regards to stimulus),

HA! HAhaha heeheehee... think about it for a second... right now, no matter what you sell in the present economy, it is at a loss... WHY IN GOD'S NAME WOULD YOU GIVE A CAPITAL GAINS TAX BREAK WHEN THERE ARE NO CAPITAL GAINS????!!!!!????
Where is the benefit? I ask again, please, think... This particular "stimulus" has nothing to do with the here and now. So why push for it here and now? You are a thinking human being, I think you can figure it out.

but I am also not so sure raising taxes is the answer

I have never argued for raising taxes just now... only for fiscal responsibility...

I agree with you-the real problem we have is the spending, and the reality is that Obama and congress want to spend a lot of it, but they don't seem too keen on cutting any of it.

How many times do I have to say this: It has nothing to do with any particular individual (or party), it has to do with the system... and until we hold their feet to the fire it will not change.

I think the federal government has taken on way more than it should. Some things I think are good things for government to pay for, I am just not convinced they are something the federal government should pay for.

And these are things that reasonable people can reasonably disagree on... But I for one would like all of us to reasonably agree that from this point on, we will pay for it, whatever it is.

To re-iterate: The CG tax cut is a joke. In the present economy, nobody has any cap gains. If they do, why in the hell would they get out of this secure and safe investment at this point in time? To reinvest in garbage? As I said before:

As recent history has shown time and again, once you give a taxcut, to let it lapse is demagouged as a tax "increase".

They push this line only for when things are better for them in the future. Not now, (it sucks all over now) I am sick of the baloney. As Warren Buffet once said, "Yes, there is class warfare, and we're winning." And no, he was not talking about you and me.

Respectfully,
A voter who will listen to anyone he pleases