Norquist: "Keep Canadians on their side of the border"

[ballz]

I hate to give this plug any publicity because everything he said on the show was absolutely stupid and this is just a spit in the bucket, but here it is:

http://www.youtube.com/watch?v=YdlbRSbWdZ0

"We ought to have a national defense strong enough to keep the Canadians on their side of the border and otherwise the government ought to leave us alone."

I think I'm more surprised that Bill Maher didn't say anything than anything else. You can hear the crowd laugh at him when he says it.

 

[cupper]

I almost spit my drink out when I heard him say that last night. I had to watch the rebroadcast to make sure I was hearing it right.

I suppose the alternative comment would have stirred up too much crap.

"Gotta keep the Mexicans on their side of the border" :facepalm:

I love how Maher calls him out when he starts to give a waffle on the question, just before the clip starts.

 

[Edward Campbell]

But see here. Given the horrendous and growing pit of US budget deficits, in a very few years the only damned countries against which the USA may be able to defend itself are Canada and Mexico.

 

[Edward Campbell]

Either this:

or something like this:

is America's near term future. In either event the sentiment is the same:

America is the Greece of the Western Hemisphere: broke, lying to its creditors, lying to itself and living beyond its means ... on borrowed Chinese (and Canadian) money.

 

[Brad Sallows]

If the latest trends in migration are correct, the problem the US will increasingly face is to keep its talented people on its side of the border.

 

[Jungle]

... on borrowed Chinese (and Canadian) money.

I'm not an economist by any means, but I like the no-nonsense approach of this guy: http://www.optimist123.com/

Who published this updated pie-chart earlier this year:

According to this, the US still own 68% of their own debt; I think this is still better then a good number of countries; raw numbers sometimes do not give a good picture, as depicted here:

http://en.wikipedia.org/wiki/List_of_countries_by_external_debt

And especially here:

http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt

The US has the largest debt in raw numbers, but this has to be compared to the GDP, which illustrates the country's capacity to pay. In reality, the USA is in a better financial position than a number of countries.

I'm not trying to say that all is well in the USA, but it may not be as bad as some believe.

 

[Nemo888]

I've decided to call the imminent US immigrants/refugees to Canada "Mexicans".  The other one in the running was "green backs". Unless anyone has a better one.

 

[Edward Campbell]

The US deficit and debt problems - and they are real problems - are of the same nature as the Greek problems but not of the same order.

The US can, should and, eventually, most likely will reign in its deficit and reduce it's national debt to sensible levels (opinions differ on what that is, I like 20 to 30% of GDP). But, for the moment - until, say 2016 or even 2020 - I have more faith in Americans' ability to delude themselves than I have in their ability to see and solve their problems.

 

[Old Sweat]

Having googled Grover Norquist, I think he is a small government advocate nut, and he was making the point that the Federal Government, including the Department of Defense, should be chopped and chopped and chopped, until literally it only has enough forces to protect the homeland against a minor threat. His metaphor left something to be desired, as did his thought process, but I do not sense any hostile intent towards us in his statement.

 

[ballz]

Having googled Grover Norquist, I think he is a small government advocate nut, and he was making the point that the Federal Government, including the Department of Defense, should be chopped and chopped and chopped, until literally it only has enough forces to protect the homeland against a minor threat. His metaphor left something to be desired, as did his thought process, but I do not sense any hostile intent towards us in his statement.

I agree that it wasn't literal, but it's an unnecessary and inconsiderate analogy.

He is without a doubt a small government nut, and his arguments for supply-side economics are elementary at best, but the fact that he believes in them so much is rather scary.

 

[Edward Campbell]

Nordquist is, also, reasonably influential - especially in small government/low tax/Tea Party circles. I think the low tax/no tax increase position is the one he holds most firmly; he appears, from what (little) I have read/heard to be supporting Rick Perry's optional flat tax.

 

[ballz]

Nordquist is, also, reasonably influential - especially in small government/low tax/Tea Party circles. I think the low tax/no tax increase position is the one he holds most firmly; he appears, from what (little) I have read/heard to be supporting Rick Perry's optional flat tax.

He is, the optional flat tax is exactly what Bill Maher was discussing with him, and Norquist was trying to explain how great of a thing it was.... fail. This is truly supply-side economics at it's very ugliest.

Having done quite a few economics classes and a public finance class (probably the most useful class I've done in all of university... not saying much though) I'm confident I know the theory behind it, but in practice it's a total bust. In all seriousness a flat tax is regressive in nature when you look at it in terms of disposable income.

 

[vonGarvin]

The point that dude was trying to make wasn't that Canada is a threat, but he's making a call for isolationism.  In other words, the US ought not to have the world's largest (most expensive?) military, with fleets here and fleets there, but only large enough, as he says, to "...keep Canadians on their side of the border".  In other words, stop spending money on jump jets and hover tanks and lasers and and and.


No tin foil needed.

 

[cupper]

Make no mistake, he used "Canadians" knowing full well that any other phrasing would have instantly labelled him as anti-immigration at best, and racist at worst.

And to make such a statement in front of a Bill Maher audience would have been pouring gasoline on a propane fire.

 

[vonGarvin]

Not just that, cupper, but because the point is very deliberate: Canada is the US' closest ally and largest trading partner and offers no threat to the US.  This just emphasises his point that the US military ought to be tiny.

 

[a_majoor]

He is, the optional flat tax is exactly what Bill Maher was discussing with him, and Norquist was trying to explain how great of a thing it was.... fail. This is truly supply-side economics at it's very ugliest.

Having done quite a few economics classes and a public finance class (probably the most useful class I've done in all of university... not saying much though) I'm confident I know the theory behind it, but in practice it's a total bust. In all seriousness a flat tax is regressive in nature when you look at it in terms of disposable income.

Sadly the evidence is against you, I posted on this topic a short while ago (feel free to search. Check for Estonia in the World Economy thread and for the Forbes survey in the Flat Tax thread) and the numbers come up quite nicely for the nations that have incorporated a flat tax. Indeed, I have seen figures indicating that Canadians may be paying as much as $3.6 billion in after tax income to get their taxes done, a flat tax for Canada would make a huge difference (assuming that we would save some $3 billion, since there will always be "special cases" needing accounting help, this would be the resources sufficient to create up to 60,000 full time jobs).

Americans are moving north in ever increasing numbers, and in many ways this is a good thing since we are facing a labour shortage in skilled trades, and a long term demographic bust (which will simply be filled by more and more Americans seeking the higher and igher wages we will have to offer to get employees of any sort), Canada's long term future may well be as a limited Republic rather than a Westminister style parliament.

 

[ballz]

Sadly the evidence is against you, I posted on this topic a short while ago (feel free to search. Check for Estonia in the World Economy thread and for the Forbes survey in the Flat Tax thread) and the numbers come up quite nicely for the nations that have incorporated a flat tax. Indeed, I have seen figures indicating that Canadians may be paying as much as $3.6 billion in after tax income to get their taxes done, a flat tax for Canada would make a huge difference (assuming that we would save some $3 billion, since there will always be "special cases" needing accounting help, this would be the resources sufficient to create up to 60,000 full time jobs).

Your argument, if I understand you correctly, is that there would be more money left in the hands of consumers, and therefore more  spending/more demand/more jobs created. In theory that's true, but this is not related to my point. I've whipped out the ol' textbook here tonight and have concluded I'm going to have to visit my old professor before I can articulate my point properly.

That said, comparing what it did to Estonia vs what it will do to the US is apples and oranges, given the difference in income inequality. Estonia has a income quintile share ratio of 5.0, where as the US has one of about 14.5. Not even close to those of most European countries (http://www.stat.ee/29998)

If the US switches to a flat rate, or an optional flat rate (basically saying "we'll give a huge cut to the wealthy, and we won't raise the taxes for those paying less than 20%) all it is doing is putting more money into the hands of those that are already wealthy. They are not going to stir up more demand. Supply-side economics relies on people/entrepreneurs/corporations needing that extra dough to compete in the market. This is why corporate tax cuts and the like have failed. Giving more money to the wealthy in the US won't create more competition, and so it won't create more demand (well except for a few extra luxury cars being purchased, but not more demand for a Ford Taurus. Instead of having 5 Ford Taurus's demanded at 20k each, you're getting one Corvette demanded at 100k... same amount of money, but guess which one creates more demand for jobs?).

If you want to use supply-side theories, it would have to be targeted at putting more money in the small business owner's hands, who will actually want to use that extra cash to invest and expand his business.

 

[a_majoor]

For the moment, the best thing consumers and governments can do is deleverage. They will do so anyway, either through voluntary efforts (scaling back, paying down debt, cutting spending) or involuntarily (massive inflation as currencies get debased and 60% "haircuts" on bonds like Greek creditors are facing right now).

For hard pressed Canadians, a tax cut would be wonderful; Canadians pay an average of 41% of their income to various levels of government in taxes, so extra money to do anything like pay down debt, purchase goods and services or invest is at a premium. Most business is in waiting mode, as economic uncertainty makes it very risky to invest in anything at all (the sudden slowdown in job creation in the US after the passage of Obamacare is a good example of regulatory uncertainty; what sort of new and unexpected liabilities would Obamacare generate for the employer? Ontario business has to factor in new taxes and their electricity bills to rise by 65 per cent by 2015 and 141 per cent by 2030, which puts a huge crimp in any potential hiring).

For tax cuts to happen, all levels of government would also have to cut and cut hard. At the Federal level, this could include $30 billion/year in subsidies to business, $19 billion/year wage differential between civil service jobs and the same private sector jobs, $8 billion/year in Crown Corporations, however much is spent on Government departments which overlap Provincial responsibilities as outlined in the BNA (several billion to be sure), $43 billion/year in equalization payments to the Provinces...My goodness, that is at least $100 billion/year; the resources to create 2,000,000 full time jobs (which by odd coincidence would be relatively close to the number of unemployed in Canada).

So the first order of business is to get out of debt. Supply side economics and tax cuts work and work well as demonstrated in JFK Era America, Thatcher era England, Reagan Era America, Mike Harris Era Ontario, Alberta, Saskatchewan since the rise of the Saskatchewan party, the economic turnaround being seen by the "Newly Red" American States since the 2010 Midterms...(a simple look at GDP, per capita income, and employment rates during these time periods compared to before, or even trend lines between before and after tell the story. I can pull examples even farther from history; want to see the difference between Elizabethan England and Imperial Spain? How about the Ottoman Empire vs the Serenìsima Repùblica Vèneta? Yes not everyone managed to get on the boat then, but there are lots of people who aren't getting on the boat now either...)

 

[ballz]

Really? The Reaganomics is a GOOD argument for supply-side arguments??? It's precisely the argument I'd use it against. Sure, he created jobs (so did Clinton), but that was because he wasn't balancing the budget at all. Anybody could create jobs if they're not worried about how far they're sinking into debt.

The US Public Debt from the time Reagan took office (1981) to the time he left (1989) more than doubled, and is largely the reason for the 90s recession.

http://www.brillig.com/debt_clock/inflation.gif

Bush Sr. didn't believe in supply-side economics (he referred to it as Voodoo economics) and the growth of debt began to slow down, and then the only time that any debt was reduced was the Clinton era.


But you said it best, you've made my argument for me, "for hard pressed Canadians" a tax cut would be wonderful. Like I already said, supply-side theory relies on the competition (aka the person/entity needing the money), so a tax cut for "hard pressed" Canadians (or Americans) *will* have a positive impact. A flat tax rate is not a cut for "hard pressed" people.

Who does this flat tax rate benefit? Or optional flat tax? Nobody that's hard pressed. In the US it benefits people making above $83,600, $174,400, and $379,150 the most. Guess what? Those people aren't hard-pressed, they aren't having trouble paying off their debt, and if they are they can just decide to cut down on consumption. It's the people making less than $34,500 who aren't getting any tax cut in this, and it's precisely those people who would actually use the tax cuts for paying off debt or for putting food on the table or perhaps purchasing a car so they can get to work and back, etc.

 

[cupper]

It's a moot point anyway, as a flat tax has not chance of ever getting through Congress, regardless of the party in power, or who is in the White House.

It's been tried many times over the years, and ended up dying a slow and agonizing death because no member of Congress can afford to jeopardize their campaign contributions because there are no more loopholes for corporations to lobby for.

http://www.politico.com/news/stories/1011/67132.html