Democrats can't grow the economy

Discussion in 'Economy' started by Dorkazoid_Jones, Feb 23, 2009.

  1. Dorkazoid_Jones
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    Dorkazoid_Jones Active Member

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    Don't you love the false narrative about the Clinton Years. He grew the economy yadayaday. Ah, no by definition he couldn't have grown the economy. When you raise taxes, as he did, you slow the economy. Suppose you and I owned a business. When costs go up for various reasons, among them taxes, our profits go down. How in the hell does raising costs in my business grow anything?? I don't see how anyone can argue that rising costs hurt business. So how can anyone claim Clinton, who had a huge tax increase, grew anything???
     
  2. Agnapostate
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    Capitalism in general will fail because of its tendencies toward market concentration.
     
  3. movingtarget69
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    movingtarget69 Rookie

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    You're right, kind of. Higher tax rates can slow an economy, but since most businesses don't pay taxes that's not as significant as one might think. Personal tax rates would have a dampening effect, sure. I'm no expert on how Clinton raised taxes. I thought Bush I had the largest tax increase in history, but I guess size is kind of subjective anyway, are we talking dollars raised or people affected?

    Anyway, what is many times more important than corporate tax rates is interest rates. All businesses borrow, and raising interest rates is much more damaging than raising tax rates as for as economic activity is concerned.
     
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  4. Dorkazoid_Jones
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    Dorkazoid_Jones Active Member

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    "Capitalism in general will fail because of its tendencies toward market concentration. "

    I don't know what this means. Are you saying that initially there may be 50 airlines but now there's only 10 so things are more expensive? Obviously that's not the case. Microsoft dominates the market, but I'm not sure they are a good example of capitalism. Monopoly doesn't represent good capitalism for the most part. I think if capitalism as competition. If there's no competition, then what the heck good is capitalism??
     
  5. Agnapostate
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    Agnapostate BANNED

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    Very little good actually, considering that the competition that exists is imperfect as a result of asymmetric information about products and market exchanges existing.
     
  6. mash107
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    mash107 Active Member

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    Market concentration only occurs when the government encourages it, as the case with college tuition and this housing bubble. Otherwise, the market will simply focus on what consumers demand.
     
  7. Agnapostate
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    That analysis relies on a utopian understanding of political economy. Given that matters are far more complex (the aforementioned asymmetric information problems, as well as agency costs, can never be overemphasized), a capitalist economy will allocate resources rather inefficiently in comparison to a libertarian socialist economy, for instance.
     
  8. Dorkazoid_Jones
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    Dorkazoid_Jones Active Member

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    "Very little good actually (comes from capitalism) , considering that the competition that exists is imperfect as a result of asymmetric information about products and market exchanges existing. "

    Capitalism tries to fulfills peoples needs. Therefore, whatever glitches/problems are more than offset by focusing the economy on what people want.
     
  9. PeterS
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    PeterS Active Member

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    By definition? If that is true then GDP does not measure growth, nor length of business cycle, nor income, nor capital investment, nor retained earnings, nor job creation all which were records, or near records, for a single business cycle. And did you check the shift upwards in AGI for the wealthy elite during the Clinton years? Again record levels...levels destroyed during the Bush 'tax cut' years.

    The only false narrative is the one you just wrote...
     
  10. johnrocks
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    johnrocks Silver Member

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    Free markets have not existed in this nation in our lifetime, they don't exist , I imagine, because each time the economy has a slight down tick or someone has a "boo boo", government is their "solution". I got more faith in black markets than I have in government.
     

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