Bush to Change Economic Team

http://www.washingtonpost.com/wp-dyn/articles/A18599-2004Nov28.html ^

[politicalvanguard.com]

President Bush plans to overhaul his economic team for the second time in two years and wants to tap prominent figures outside the administration to help sell rewrites of Social Security and the tax laws to Congress and the country, White House aides and advisers said over the weekend.

The aides said the replacement of four of the five top economic officials -- including the Treasury and Commerce secretaries, with only budget director Joshua B. Bolten likely to remain -- is part of Bush's preparation for sending Congress an ambitious second-term domestic agenda.

[Future Snake Eater]

Now the question remains: will his new staff be "Fair Tax" heavy or "Flat Tax" heavy?

[Rockitz]

Unfortunately, the economy is deceptively poor through no fault of the president. W will be fortunate not to end up his second four years as Hoover II. Why would foreign investors want to hold US bonds in a rising interest rate market in concert with the dollar in a death spiral?

[Sonny M]

Some names I'd like to see or hear thrown out there for consideration.

Former Senator Phil Gramn (who is mentioned in the article). He has a PhD in economics, is a former professor, and used to humiliate democrats on the senate floor during debates, no one is going to be able to knock him.

There's also Jack Kemp, Steve Forbes, Martin Feldstein, Bruce Bartlet, Kudlow, Pat Toomey, you could also go old school, and have Milton Friendman, and Robert Mundell, and a pick of former supple side economists who have noble prizes and of course Arthur Laffer (another winner).

If Bush could utilize all the intelectual conservative talent out there for his Economic Team, it could and would surpass his national security team, and make it extremely hard for anyone in the democratic party to obstruct not to mention easily gain traction and support across the country.

[Diddle E. Squat]

Good. Snow was a bad pick for Treasury Secretary. In his prior job as president of CSX he failed to achieve any relative movement in his company's position as the worst performing of the major railroads(both financially and operationally), nor change its well-deserved reputation for inadequate track maintenance and other safety issues. Screwed the shareholders and took a $10 million golden parachute when he left for Treasury.

Heard a rumor that Phil Gramm may get the Treasury Sec's job, which would be a vast improvement.

[paudio]

There's also Jack Kemp, Steve Forbes, Martin Feldstein, Bruce Bartlet, Kudlow, Pat Toomey, you could also go old school, and have Milton Friendman, and Robert Mundell, and a pick of former supple side economists who have noble prizes and of course Arthur Laffer (another winner).

From academia, Feldstein, Friedman, Mundell and Laffer are respectable people. The problem is that they may be too old. So is Prescott (2004 winner). Kydland is a Norwegian. Relatively young people include Ben Bernanke, or Barro. From pundits/former govs officials, Kemp, Bartlet, Toomey are good. But, like from academia, are they good 'politicans' and manager as well?

From some one who know and involve in market: Forbes and Kudlow. They're good, but perhaps a little bit too independent.

Now, we just need to think what kind of people we need for the four jobs...

[need_a_screen_name]

"Why would foreign investors want to hold US bonds in a rising interest rate market in concert with the dollar in a death spiral?"



I don't know what this death spiral business is you are talking about. Even the MSM is saying the dollar won't likely slide low enough to cause a big problem. In fact, they say a low dollar is good for American business. Even the loathsome NYT is saying that it's not all that bad:


http://www.freerepublic.com/focus/f-news/1288752/posts

[Soul Seeker]

What this administration needs more than anything is an economic visionary. It isn't enough to have skill and rattle off dry facts. The American people will be asleep before the first sentence has concluded.

You need someone that can relate economics in a manner that is relevant to daily life. It has to be optimistic, interesting, and it wouldn't hurt to tie it into a deeper theme. "Ownership Society" is a good start at packaging.

I'd expand on this theme by invoking the basic concept of freedom. Explain how the system we now have enters us into a deceptive type of indentured service with the government, in the end even retirement doesn't buy release. Tie in history and how something as basic as taxation without representation stirred this country to a revolution. Our educational system being what it is, they Might know about the event but I'd wager they lack understanding of how this unbearably infringed on individual liberties.

The Bush Administration desperately needs someone that can passionately draw people to an understanding of not only the necessity of these reforms, but that the enactment of these policies will remove a burden they aren't even conscious of since it's been on their shoulders since birth.

For me, the idea of reforming S.S. and perhaps removal of the current tax system is almost as breathtaking a step for liberty and freedom as our actions in the middle east. They just need someone that can convey this to the American people.

[jpsb]

"Even the MSM is saying .... "

Well there you go, if the MSM is saying it MUST be true.

[ONETWOONE]

Just remember it was a lot of us "old" folk that help elect President Bush, lol. Have a nice day.

[bahblahbah]

I was just googling around and here is how to calculate your taxes from Gramm's 1996 flat tax proposal.

http://cgi.usatoday.com/elect/ep/epr/eprg011.htm

---

How to calculate your flat tax: To see whether you would pay, get a refund or break even, fill out the forms using figures from your 1994 federal income tax return or use figures from your 1995 W-2 forms for wages or salaries, 1099R forms for pension and retirement income and 1099 forms for interest, dividends and capital gains.

Print page for worksheet.

Mortgage interest and charitable deductions are deductible

_______ 1. Wages, salary, pension, retirement, interest, dividends, and capital gains

_______ 2. Standard deduction (select one)

o $22,000 for married filing jointly
o $11,000 for single and married filing separately
o $15,000 for single head of household

_______ 3. Mortgage interest and/or charitable contributions

_______ 4. Enter the greater of line 2 or line 3

_______ 5. Number of dependents, not including spouse, multiplied by $5,000

_______ 6. Add lines 4 and 5

_______ 7. Taxable compensation (line 1 minus line 6, if positive, otherwise zero)

_______ 8. Tax (16% of line 7)

_______ 9. Tax already paid

_______ 10. Tax due (line 8 minus 9) if positive

_______ 11. Refund due (line 9 minus line 8) if positive

---

Here is him talking about Forbe's flat tax plan

---

Q: What about the Steve Forbes phenomenon?

A: The Forbes phenomenon is a money phenomenon. Forbes is not a plausible candidate for president. In the end, he has built his campaign around a flat-tax proposal that's indefensible.

Q: Why do you say that?

A: No. 1, it's basically a tax on wages and salaries and not on investment income. Not only is it unfair, but it's inefficient because it's going to distort the investment patterns of the country away from education and training and human capital into financial capital. And No. 2, from the first day he wrote an editorial back in 1972 or 1973 until last month when he became a politician, Forbes has denounced in the most vehement terms balancing the federal budget. And as a result of not believing that deficits matter, when you work out his tax plan it almost doubles the budget deficit. I've said that as president I'll balance the budget in my first term or I won't run for re-election.

Q: Now that he is rising in the polls, do you think he'll get closer scrutiny?

A: For the first time, people are going back and looking at Steve Forbes' record. His record is that since the early 1970s, he's been writing editorials (in Forbes Magazine) and has supported a $1.50-a-gallon tax on gasoline, has supported gays in the military, opposed Ronald Reagan's election, supported giving away the Panama Canal, he has, until he became a politician, opposed the Reagan pro-life stance in the platform, he's been pro-choice. There's the Forbes of the TV commercials: slick, glossy, good. But when he has to step out from behind those TV commercials and defend his 20-year record of taking positions, when he has to defend his one position, which is the flat tax as he has proposed it, he can't defend it.

Q: Why would your flat-tax plan work and how?

A: My plan would tax all income equally. I would eliminate the inflation tax built into capital gains and depreciation schedules by indexing them so no one would pay tax on inflation. I would eliminate the dual taxation on dividends by having dividends and interest as a business expense. One of the reasons we have this rash of leveraged buyouts is that we have an inadequate supply of equity in corporate America because if you borrow through debt, the service of that debt is tax deductible; if you get equity, it's taxable.

Q: What else?

A: I would preserve charitable contributions because we want churches and charitable organizations to play a bigger role in America. I would preserve the mortgage-interest deduction because our party is the party of strong families and weak government. If we did make the changes that Forbes is proposing, it would have a very substantial impact on the value of existing homes. And I don't produce the big deficit that Steve Forbes does.

---

Just a news story about his flat tax plan.

---

DENVER - Sen. Phil Gramm (R-Texas) wants to turn back time on taxes.

The Republican presidential hopeful, promoting a modified flat tax plan, said Monday, Jan. 22, 1996, his goal would be to "go back to 1950 when families sent one out every $50 earned to Washington."

"We're now sending one out of every $4 earned," he added during a campaign stop at a printing plant here.

When the federal budget was balanced for the last time in 1969, banks' prime rate was 3.5% and the average home mortgage rate was 4%, Gramm said. A return to those interest rates would free up hundreds and thousands of dollars each year for families, he added.

"The bad news is if we don't change the policy of government, the tax burden, crime, illegitimacy...soon and dramatically, in 20 years we won't be living in the same country we grew up in," Gramm said.

Gramm said he wants a balanced budget in four years and a 16% flat tax on all earnings, allowing mortgage-interest and charitable deductions.

He criticized GOP opponent publisher Steve Forbes' 17% flat tax plan because capital gains would be tax-free.

"I can't support a flat tax...that says people who work with their hands and heads pay taxes but those who live off their investments don't."

---

[jpsb]

Steve Forbes, he is super bright and has vision. Not sure he'd work for Bush, and I don't think Bush would want him either. To bad, cause he is the one man I know that might be able to put together an economic blueprint for the nation.

[jpsb]

And Phil Gramn (whom I like) was running against Steve Forbes, the center piece of BOTH champagnes was a flat tax plan and you expect Gramn to give an honest objective opinion of his opponent plan? What planet are you from?

[Sonny M]

Kemp, Bartlet, Toomey are good. But, like from academia, are they good 'politicans' and manager as well?

Bartlet's got the whole ideal background. Work in acadamia, work in the private sector, and work in government. The ideal triple threat, with experience everywhere.

Kemp has experience in politics, but also is a co-founder of a think tank, and has built up credentials in the acadamia world, his stint in the cabinet before certainly helps him. Bartlet and Kemp have perfect backgrounds.

I like Ben Bernanke, but I don't think he wants to leave the Fed, and alot of people think he's one of the 2 canidates to likely replace Greenspan (the other is Feldstein, and thats because of his unbelievable media connections, side note, Paul Krugman was once his graduate assistant, and personally likes him, so that scares me).

Forbes would be really good, I forgot about Kudlows past, there is no way he would ever be allowed on in any kind of white house capacity do to his past history with drug abuse. I'm in awe of Bob McTeer, the head of the dallas fed, he's simply brilliant, and has an awesome background, not to mention a gift for taking complex issues and explaining it in a way that even a 2nd grader would understand.

I like John Taylor, Greenspan is definatly keen on him, and uses the Taylor rule with interest rates, but I don't know what his current situation is.

I wouldn't mind seeing Glenn Hubbard brought back in some capacity.

[alessandrofiaschi]

Prof. James Poterba would mean a great appointment. He is surely one of the leading economists in the World. I like also Prof. Ben Bernanke (monetary economics...), if he approves Bush's plan. Or, again, Prof. Glenn Hubbard (probably the next Governor of the US Federal Reserve).

For Mankiw's slot, the White House has courted Massachusetts Institute of Technology professor James Poterba, an expert on Social Security and taxes.

JAMES POTERBA

Short Biography James Poterba is the Mitsui Professor of Economics and the Associate Head of the Economics Department at the Massachusetts Institute of Technology, where he has taught since 1982. He is also the Director of the Public Economics Research Program at the National Bureau of Economic Research and a Fellow of the American Academy of Arts and Sciences and the Econometric Society. He has served as a Director of the American Finance Association, and is currently a member of the Executive Committee of the American Economic Association. Dr. Poterba's research focuses on how taxation affects the economic decisions of households and firms. His recent work has emphasized the effect of taxation on the financial behavior of households, particularly their saving and portfolio decisions. He has been especially interested in the analysis of tax-deferred retirement saving programs such as 401(k) plans. In addition to carrying out research on these issues, Dr. Poterba serves as a member of the MIT 401(k) Plan Oversight Committee. Dr. Poterba edits the Journal of Public Economics, the leading international journal for research on taxation and government spending. He is a member of the advisory boards of the Journal of Wealth Management and the Investment Management Consultant's Association Journal. He is the editor or co-editor of Global Warming: Economic Policy Responses (1991), International Comparisons of Household Saving (1994), Empirical Foundations of Household Taxation (1996), and Fiscal Institutions and Fiscal Performance (1999). He is a co-author of The Role of Annuity Markets in Financing Retirement (2001). Dr. Poterba studied Economics as an undergraduate at Harvard, and received the Doctor of Philosophy degree in Economics from Oxford University, where he was a Marshall Scholar. He has been an Alfred P. Sloan Foundation Fellow, a Batterymarch Fellow, a Fellow at the Center for Advanced Study in Behavioral Sciences, and a Distinguished Visiting Fellow at the Hoover Institution at Stanford University.

[alessandrofiaschi]

Why not Professor Sowell?

[Sonny M]

And Phil Gramn (whom I like) was running against Steve Forbes, the center piece of BOTH champagnes was a flat tax plan and you expect Gramn to give an honest objective opinion of his opponent plan?

In 1992, there was a democratic governor running for the presidential nomination (some hippie nut), I know a big part of his platform was a flat tax. It might have been Jerry Browne, do you know any details of it?

[Sonny M]

Why not Professor Sowell?

I'm actually embarrassed now. I just bought a couple of his books and love his writings, he would make an excellent pick.

He would also give liberals hysterical fits, a beautifull bonus.

[jpsb]

You are correct Jerry Brown was running, and promising tax reform, can't remember the details, but I do remember him hauling the tax code in a wheel barrel (LOL) and saying stuff like "How much of this garbage do you suppose Congress wrote for your benefit", I was kinda hoping the Dems would nominate him, but no such luck.

[alessandrofiaschi]

I'm thinking to this "combination" of great black personages (a pour of gall for the rats):

C. Rice - Segretary of State
C. Thomas - SCCJ
T. Sowell - chairman of the Council of Economic Advisers.