Sunday, February 08, 2009
Been There, Done That
I linked to this fine piece in comments of a thread at American Descent. It's so good I felt it deserved a post of its own. None of the case histories listed are news to anyone paying attention. That is, to read them and be surprised isn't likely amongst conservatives. The positive effect of cutting taxes on the economy, to say nothing of the increase in federal revenues, is well understood on the right. We also understand that reducing government spending, particularly on the type of pork in this "stimulus" package, is also essential if we ever hope to reduce the national debt. It would've been nice if Bush knew that.
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36 comments:
Your guys found $6 billion in "pork" in an $800 billion bill. Let's kill it for less than 1%.
Tax cuts will do little to help THIS economy. Creating demand through spending will.
They've only started looking, Jim. But yeah, kill it. There's nothing there that will stimulate anything except the desire for more handouts.
And this "create demand through gov't spending", is this a little fantasy of yours, or did you get this from some other lib fool. Obviously you didn't read the link which pointed out how gov't spending doesn't help and tax cuts do. Pay closer attention.
You read your articles and I'll read mine. Nobel prize-winning economists say tax cuts don't help and government spending does.
So whatever.
You mean like Krugman? Sheesh! What kind of chucklehead listens to idiots who don't understand history?
As if that would matter. Federal revenues rose after every major tax cut. That's history. Read the link and tell me what isn't true about it.
You're seriously trying to tie longer life expectancy to nat'l health care rather than to personal responsibility? Are you trying for Idiot of the Year? If so, you're right on course. Keep up the good work.
OK. As we ignore a foolish comment that is off topic, let us get back to the problem of a stimulus package that is really just a bloated spending bill. Jim thinks only 1% is pork. This NRO article shows it's far worse than that. You might argue a few of their suggested cuts, but it shows that there is much wrong with the bill, aside from the fact that it won't help the economy at all.
In re Marshall's statement that tax cuts increase revenue, check this out:
" *
Even taking into account the stronger revenue growth now projected for fiscal year 2006, real per-capita revenues have simply returned to the level they reached more than five years ago, when the current business cycle began in March 2001. (March 2001 was the peak and thus the end of the previous business cycle, and hence also the start of the current business cycle.) In contrast, in previous post-World War II business cycles, real per-capita revenues have grown an average of about 10 percent over the five and a half years following the previous business-cycle peak.[5] By this stage in the 1990s business cycle, real per-capita revenues had increased by 11 percent.
*
Overall, this economic recovery has been slightly weaker than the average post-World War II recovery. In particular, GDP growth and investment growth have been below the historical average, despite recent tax cuts specifically targeted at increasing investment.
Those who claim that tax cuts pay for themselves might argue that stronger revenue growth in 2005 and 2006 represents the beginning of a new trend, and that the tax cuts could pay for themselves over the longer term. Neither the historical record nor current revenue projections support this argument."
A little longer view comes from here:
"Given the vast amount that's been written concerning tax cuts and government revenue and the broad consensus on the topic, it's difficult to believe that any major candidate could be ignorant of the work showing that tax cuts do not increase revenue. If they are ignorant of this broad consensus, or if they choose to simply ignore the evidence and adopt the party line that tax cuts pay for themselves, then questions should be raised about their ability to lead the nation in economic policy. Will they understand enough economics to implement effective policy? If they do understand, will ideology or party loyalty get in the way?"
And, finally, from that idiot who won a Nobel Prize in Economics while you were getting laid off from your job:
"Is it really possible that all the triumphant declarations that the Reagan tax cuts led to a revenue boom — declarations that you see in highly respectable places — are based on nothing but a failure to make the most elementary corrections for inflation and population growth? Yes, it is. I know we’re supposed to pretend that we’re having a serious discussion in this country; but the truth is that we aren’t."
It isn't just about "history". It's about understanding something about analyzing data. Something that a Nobel Laureate might have a bit more acumen on than you do.
I say again, Fe-odor: connecting life expectancy to the economy is idiotic, particularly when there are myriad reasons why one culture last longer than the other that wouldn't be even remotely linked to the economy. You're just stupid.
Geoffrey,
I'll have to delve into my voluminous financial library before I respond at length, but to begin for the time being, I'll just say that I'm not in the least concerned with whether tax cuts "will pay for themselves". We're freakin' taxed too much and the money is spent on crap in which the feds should have no part. "Deficit-financed" tax cuts? Reagan cut taxes to force Congress to stop spending so much. They wouldn't reduce it on their own. His cuts forced them to. That alone is a great reason to cut taxes. And your link didn't deny that stimulus is provided by cuts. It worried itself with "paying for itself".
It also liked to focus on two areas:
1) The years of Bush 43. Keep in mind the incredible costs due to 9/11, Katrina (which was only one of the worst of the major hurricanes for which federal dollars was spent) and the war. I didn't see anywhere in any of the links where they adjusted for that.
2) The difference between the 80s and 90s. It is not surprising to me that revenues would appear to be greater in the 90s after the positive effects of the Reagan cuts had taken hold and growth had occurred. I didn't see anything that accounted for that. You see if business is booming, and there are more businesses around, to increase the tax rates means that there is more to tax to begin with. They didn't mention that very obvious detail.
And of course, like I said, they didn't deny stimulus occurred from past cuts. Even more to the point, none of your linked stuff suggests that BHO's bill will have the desired effect of stimulating the economy, which is the point of this post.
Still, the points made in my link still suggest that cuts are the way to go. It doesn't really matter what the "per person" or "per capita" numbers are if the country is cruisin' as a result of the cuts, as in Ireland, for example.
But anyway, I'll be diving in once again. Thanks for providing something on which to chew.
Oh, and BTW, Geoffrey. My job loss was more a matter of poor salesmanship and shakey management than the economy.
The name calling is appropriate as long as you insist on posting stupid comments. If I described them, and you, in any other way, I'd be a liar.
That France was mentioned in the article does not give you license to go off on an irrelevant tangent. In addition, the article did not refer to Reagan's economics as "free market purity", so what words can I use to desribe one who criticizes that which doesn't exist? Of course you do as much with your Biblical interpretations, so it doesn't surprise me that you'd do it here. Furthermore, Sarkozy is moving away from the type of economy Mitterand pushed towards a more conservative, one might say, Reaganish form, so there ya go. So come back when you've got something intelligent to add.
I like my stimulus bill much better. And it's even more Socialist than Obama's!
I thought Geoffrey was done debating us. Isn't that what he said? Why don't you keep your promises, Geoffrey?
Feodor,
Can't you read? The author wasn't calling Reagan a zealot, he said Reagan was considered a zealot. Bit of difference there, but you jumped on it to disparage in any case. That and your inability to have a point shows you've got nothing.
A proper economy is for the individual to give him the opportunity to achieve what he can to the best of his ability without interference. Whether that individual puts his devotion into that which moths and rust destroy is up to him, not up to the feds and goofy libs like yourself.
As to France, the article merely states the fact that France did not achieve as well as us at the time discussed. And yes, if you ever decide to pay attention, you'll find that Sarkozy is a bit more right leaning economically than those who preceded him.
You're not even in a stadium with your points of view.
One doesn't debate with people who are clueless. Marshall simply stated that tax decreases increase revenue, and there is not now, nor ever has been, any empirical evidence to back up this claim. I merely pointed that out with links and words of real people who know what they're talking about.
I don't debate people who claim as factual things that are not actually facts. I merely point out they're wrong, then sit back and laugh while they continue to make claims that have no basis in fact. I realize you don't know the difference, Mark, because you're one of those people I point at and laugh all the time.
Oh, and Marshall, just so you'll know, my brother was laid off yesterday from a very well-paid job as an engineer. Like you, he also insists the economy had nothing to do with his job loss. When I pointed out that it may not have been the most important reason, but certainly might have played a role, he insisted it was all (office) politics.
At some point, with the unemployment rate skipping up a percentage point per month, the office politics and crappy management take a back seat to systemic problems in the whole economy.
Finally, on Feodor's point about the role of the economy in life-expectancy, etc. - he's right, that was part of the argument in the linked article (as was the comparison with nasty old socialist France under Mitterand). How odd that you didn't even get the point of the article you linked to.
Or not.
Once again, Geoffrey, your link showed that tax cuts don't pay for themselves, not that they don't increase revenues. That's two different things. Revenues can increase, and can increase more than revenues before the cuts, without reaching a level by which some idiot Nobel prize winner, who thinks Social Security is working just fine, thinks has paid for themselves. Also, I'm not yet convinced of the conclusions along the lines of what was illustrated by the revenues during the three time periods, because it doesn't look as if all the relevant factors were included, as I mentioned in my last comment on the subject. However, I'm not yet at the point where I'm prepared to state categorically on the issue in either direction. Still researching.
As to the article upon which this thread is based, your tax link doesn't address the point of which more stimulates the economy, federal spending or tax cuts. As things stand right now, it seems apparent to me that federal spending is merely the spending of OUR money at the gov't's discretion. The point is that if WE spent the money, as a result of getting to keep more of that which is ours through tax cuts, WE would direct the spending and it would go to private enterprises of all sorts, such as groceries, utilities, clothing, entertainment and other sundry destinations which actually constitute the freakin' economy that is hurtin'. Payoffs to political supporters and bail outs for poorly run businesses and around 500 billion dollars worth of non-stimulative ends won't get anything done. These, like the case studies in the article, ARE facts. To laugh at them is to be mentally deficient.
BTW, thus far in my research, Krugman's study that garnered him the Nobel is not necessarily dismissed by conservative economists. But that study does not mean he's right about tax cuts and their obvious benefits to the economy. More on that later, as I've completed my research.
I can't speak for your brother, but it's likely he knows his business better than you, as I know mine. If you have any idea of what makes a good salesman, of what it is they actually do to "sell", you'd understand that my industry has very few real salesmen.
Finally, I re-read the article I posted and even several of the links within it. There is nothing in there dealing with life-expectancy. I'll give you props if you can show me where you're seeing this. That is, if you're actually seeing it. In any case, life expectancy is definitely NOT the point of the article. How NOT odd that you would think otherwise.
Geoffrey,
Regarding your man-crush on Krugman, a couple of points.
First, he won the "this means you can't argue with me" Nobel prize for his work on trade theory, not monetary economics. This means, I can certainly critique his comments on taxation and their bennies to the federal coffers.
Secondly, your link to his piece about the Reagan tax cuts likes to focus on "per capita" differences, as if this makes a difference to whether more revenues were generateed or not. It's basically a question of gross vs net, but the bottom line is that more revenues were generated.
He also fails to mention that the tax hikes in the early 90's, and the revenues generated, were based on a bigger pie than was available for Reagan. His tax cuts, which stimulated economic growth through it's making more money available for the private sector, resulted in more business and more profits from which to tax. Likely, with no change in tax rates, the "per capita" might have been higher anyway in the 90's for that reason. I don't see that he addressed that possibility, unless I missed it. So, raising taxes when there is more businesses making more money (as well as population growth) will generate more revenues initially, but what it does to productivity down the road is what is important. In the same way, cutting taxes will initially lower revenues, like right away, but what it does for growth must be measured later, not right away. The growth brings about the increase in tax revenues.
Thanks for the push to read Krugman stuff. The more I read, the easier this gets.
Please try and explain the difference between a tax cut "paying for itself" and "increasing revenue". If a tax cut increases revenue, then, by definition, it pays for itself in the budgetary balance sheet. That's the whole point. The theory is that, by decreasing taxes, more private monies are freed up for investment, savings, and consumer spending, all of which increase sales taxes, create jobs that provide income, etc. Empirically, however, this has never been the case. The explanation that a cut in taxes does not pay for itself means that the loss of public revenues due to the initial cut in taxes means . . . revenues don't increase because of the tax cut! As Krugman pointed out in the linked piece, all the revenue increase during the Reagan years could be accounted for by changes in other variables that are simply not counted by those who make the argument that tax cuts increase revenue.
But he also doesn't explain why those variables should be counted.
But my point with the notion of tax cuts paying for themselves is in the argument of whether or not those "lost" revenues belong in the federal coffers to begin with. It is also a matter of prophesy to determine whether or not revs would have been higher if the cuts were not enacted. Krugman, who is a hack if ever there was one and bends his economics to match his liberalism, rather than alter his politics to match his perception of economics, also fails to account for what increased taxes, spending and regulation does to block the attracting of foreign companies to our shores. Hell, even Mario Cuomo understood that to help New York's economy, he needed to attract business with tax incentives. Why would that be? Because he knew that their presence would help bring in dollars to the the state coffers, as well as provide more jobs for New Yorkers, who would also add to the coffers through their state income taxes.
The "paying for itself" angle also depends on a strict one-to-one accounting that isn't reality. One dollar lost to a cut made up for by one dollar generated by the cut. It's never quite so even. More importantly is that the cuts provide for a far better business climate which is where the real growth takes place.
Krugman can play with the numbers all he wants, but history shows, as indicated by the linked article, that government spending does NOT help, and less gov't inteference, less taxation, less spending does.
How does the saying go? Those who refuse to learn from history are doomed to repeat it.
I have to clarify one aspect of my last comment, when I spoke of whether or not the money belongs in the federal coffers or not. Obviously, the left believes the government is capable of taking care of everything, thus, to lose revenues at all means they must cut some of their goofy programs or entitlements. Most of these programs put in place by lefty politicians are not the job of the federal government in the first place. Thus, to "pay for" tax cuts is lib-speak for how they mean to keep the pork flowing.
At the same time, though revenues will rise with the growth of the economy, the Krugmans of the left will try to show that "per capita", the income is less when in reality it is more. That is, where there might have been one dollar there is now two. To clarify further, the botttom line is, is there more money coming in since the tax cuts vs how much would come in by raising them or keeping them the same?
The far bigger picture problem we have is with a manufactured/planned scarcity. Our agenda and goal should be to create and force a focus on abundance. Not through economic maneuvers but through science and technology and productivity. When the law of supply and demand kicks in on that we all prosper and less is needed to have an abundant life. It sounds like a big job but my investigations tell me that we actually have the ability to manifest much of this today.
Ron,
Please elaborate on your last. What do you mean by "manufactured scarcity"? The law of supply and demand works best with a true free market that has the least government interference.
Marshall, when people limit the energy supply to drive up prices that is manufactured scarcity. When we continue to use old technology when new technology would give us abundance and sustainablility that is manufactured scarcity. When free energy(investigate tesla from the late 19th century) is possible and likely avaliable today but it is kept off the market so corporations can make profits that is manufactured scarcity. And it doesn't stop with energy. Hydroponically grown food is another example.
We have overwhelming government/corporate interference and that is an agreed problem. If you think the technology we have is the best avaliable in a multitude of areas then the puppets have your strings firmly in hand. All the government has to do is claim something has defense applications and they can keep it quiet and out of the market.
I have had lots of time to do some investigation. Sitting here by myself able to do little else during my extended period of unemployment. Do the same and you will find things that will make the hair on your neck stand up. Think you are mad now. Get out of your box of conventional thinking. Explore with an open mind. You'll be seathing.
Hmmmm. I think Ron is Feodor.
not feodor, don't know feodor, don't even know if that is a compliment or a smear. Click on my name for my profile.
Mark, marshall doesn't even seem to be able to grasp my concepts. He by the way is not alone there..Show me mark, can you think outside the box or are you too stuck in us vs them brainwashed political slogans that we have all been trained into repeating over and over again for years on end?
I'm desperately looking for someone to share ideas with of any stripe. I consider Marshall one of the more intelligent people I have discussed with so I thought I would give him a shot. No luck. Not even a pinhole of light got through the box.
Ron,
Thanks, I think, for the compliment, which you followed with an insult. Not a even a pinhole of light? Seems your initial comment was but a pinhole itself. Sorry I couldn't easily decipher your code.
Your follow up, however, raises another question, which is, what does it have to do with the disussion here? The post has to do with trying what has been tried in the past and the fact that it has never worked. How does your input regarding manufactured scarcity factor in to this discussion? Do you now have a discussion on manufactured scarcity on your blog? If so, would you like me to visit and comment? Simply ask. I'd prefer to stay on topic and resist tangents, though they too often occur.
This entire thread is a tangent Marshall as are most on all blogs. back and forth, back and forth and nobodies minds ever gets changed. My point is we need to break through that to an actual solution that we can actually build on together. For that one has to break through the box and throw away the tangents. I'm sorry you don't see that little ray of light and sorry for messing up your blog.
You are welcome to visit, read, discuss and view the video on my blog any time my friend.
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