OK, I'm all ears.

[ajwps]

Awjps,
You completly misunderstood major componenets of my argument. To begin with my argument has its foundings in Keynisian economic theory (Standard classical economics). Economists the world over have used standard classical theory as the basic framework of their anaylisis since about Adam Smith. If you would (and Regan did) like to argue against Smith that is fine, but understand that from an economic standpoint your's is the upstart and liberal theory. This is not to say that it may not someday prove to be correct (in my view unlikely) but rather that it is a new theory whose first go around under Regan failed. These are not my views alone, these are also the views of the greater economic community, including the boys in Chicago and the boys in New York.

Huckelburry you really are a funny guy. I think I understand the major componenets of your argument. The problem is that 'standard economic models' are much like 'standard world weather models.' Economics like the weather somehow have natural regulating laws that men try to theoriize by many standard models. None of which is understood by reality.

It was not only Reagan that agreed with lowering everyone's tax burdens but also President John F. Kennedy with the eventual resulant increase in disposable American incomes. All economic models are, after all, just theories of men and do not reflect the natural complexities involved in both. It really matters little about the boys in Chicago or New York or even Allan Greenspan, the man who thinks that he can control economics by increasing or decreasing interest to the Federal Reserve banks. He does more damage to American economics than if he was a natural catastrophic disaster to the earth's biosphere.

The permanent-income hypothesis was proposed by Milton Friedman in 1957 (who also a leader of the Chicago monetarist school of economics and won the Nobel Prize in 1976 for his work on the money theory and analysis on consumption behaviour).

The central idea of his permanent-income hypothesis was simple: people base consumption on what they consider their "normal" income. In doing this, they attempt to maintain a fairly constant standard of living even though their incomes may vary considerably from month to month or from year to year. As a result, increases and decreases in income which people see as temporary have little effect on their consumption spending.

The idea behind the permanent-income hypothesis is that consumption depends on what people expect to earn over a considerable period of time.

In order to test the theory, Friedman assumed that on the average people would base their idea of normal or permanent income on what had happened over the past several years. Thus if they computed permanent income as the average of the past four years, and income had been $13,000, $10,000, $15,000, and $8,000, they would consider their permanent income as $11,500,1 though our expectations of future income do not depend solely on what has happened in the past.

Both the permanent-income and life-cycle hypotheses loosen the relationship between consumption and income so that an exogenous change in consumption and investment may not have a constant multiplier effect.

This is more clearly seen in the permanent-income hypothesis, which suggests that people will try to decide whether or not a change of income is temporary. If they decide that it is, it have a small effect on their spending. Only when they become convinced that it is permanent will consumption change by a sizable amount. As with all economic theory, this theory does not describe any particular household, but only what happens on the average.

An increase in income should not immediately increase consumption spending by very much, but with time it should have a greater and greater effect.

A change in spending changes income, but people only slowly adjust to it. As they do, their extra spending changes income further. An initial increase in spending tends to have effects that take a long time to completely unfold (reveal).

The existence of lags also makes government attempts to control the economy more difficult. Policies taken do not have their full effect immediately, but only gradually. By the time they have their full effect, the problems which they were designed to attack may have disappeared.

A lefward/outward shift in the market demand curve reflects a real increase in disposable income! Read my argument.

Read and understood. But your argument on a leftward/outward shift is nothing more than theory.

Innovative tech affects marginal production costs but has no (at least in a direct sense) effect on the demand curve.

Have you any verifibable evidence that technology or quality has only minimal effect on demand curve?

Unlike a private firm the government retains no profits. All of its revenues, with the exception of foreign debt payments, are in some form (think government purchases and employee paychecks) returned to the economy.

Then what was Clinton claiming when he spoke about having a potential 2 trillion dollar plus surplus when he left office? A balanced budget would in effect have the government retaining profits for every income tax dollar after the federal budget was cleared?

No, Shifting market demand outward (Macro) has implications on the Micro level. The two are not interchangable.

If macro market shift demand has IMPLICATIONS on micro levels, then exactly how can you say they are not interchangable or in effect do not affect one another? Contradictory....

While GDP is not a measure of jobs and technically an increase in jobs in any sector have equall potential to affect GDP, I think I know what you are trying to say and I agree moreover my argument agrees as well. Why then are you arguing for a fiscal policy that is contrary to that end.

I think you misunderstood my statement. The Gross National Product, all national goods and services are definitely a potential and real measure of job formation and a function of demand and supply. Domestic and foreign consumption of American goods and services is a major marker of capital accumulation in the public and goverment sectors. It seems obvious that more of the American public agrees with me as demonstrated in the last Presidential election.

Competition makes quality increase.

Agreed with the codicil that improvements in technology increases quality because of demand based on production of newer, more efficient, decreased human effort and space saving products.

I know that tax cuts increase spending. No one who knows what they are talking about has ever argued against that, we all know it to be true.

Are you kidding? The Democratic party platform argues the opposite. The leftists like John Kerry argued, to no avail, that large tax increases on the RICH class who pays the majority (90%+) of the tax base increased public spending. The problem was that he considered anyone with an income of $199,999.01 to be middle to lower class and if .01 cent more earned, then that person was among the RICH. In other words, class envy and division was the direction to go. You don't like to mention the old Russian system but that is exactly what happened in the old USSR. Those rich folks are the ones who utilized our system of government to improve themselves. Anyone who desires to better themselves automatically become that despised class which is an anachronism to the American system of government.

The question is tax cuts for whom? In answering that you have to adress the marginal propensity to consume, and in turn the expansionary effect.

Are you trying to say that tax cuts for those $200,000.00 + income class are not an equal part of the consumption public? Who do you think creates jobs and goods for consumption? Take excessive taxes from those who produce goods and services, and you increase the US unemployment statistics that is always good for the leftists who need to create the dole for those unemployed they created with their fiscal policies.

Also Russia is not a good example of anything when discussing american economic policy because their economic structre was not based on the standard classical model. Leave russia out of the debate because in the economic world (unlike the political) they are a useless comparision. Except to say that Marx's theory does not work as well as Smith's.

Unfortunately that Russian bad example of anything was also an economic model which must be compared to other theories for more accurate observations of models that work more or less efficiently.

Oh really, my trickle up theory has guided our economic policy since the nations inception. Interesting.

Very funny. Then you are taking credit for the economics of the beginning centuries of this country which did not bode well for America as a world monetary power until WW2. Your trickle-up theory was then a major cause of the great depression of the 1920s. Now that that the trickle-up theory has demonstrated a history of an inferior economy, the trickle-down theory of Presidents Jack Kennedy, Ronald Reagan and G.W. Bush is just now beginning to demonstrate efficacy in our major world economic power.

Nope. Investment does not automatically translate into more wealth for everyone. That is not how the stock market works. Actaully the stock market is a function of our greater theoritical framework and is usefull becuse it is a robust and somewhat stable capital market. On the other hand increased consumer demand does automatically translate into increased supply, which may require firms to expand, which may be reflected in positive gains in the stock market as firms seek additional capital.

Now you are the one arguing for a fiscal policy and growth market that is contrary to your trickle-up theory of economics.

Your the one politicizing this. I am arguing for a sound fiscal policy, and my argument is one that most republicans agree with.

Which is trickle-up voodo economics???? I doubt the Republicans agree with your knowledgable assessment.

Again this statement is entirely false. A buisness succeeds only when people consume their product. Without consumption there can be no revenues and without revenues a buisness can not suceed. All buisness owners want revenues yet buisness' still fail. The natural conclusion then is that developing an attractive product and successfully marketing that product is more important than the wants of the particular buisness owner. Of course I am an economist not a buisness man so I could be mistaken on the latter point.

Your statement is just a bit confusing. You say that the wants of business owners are somehow different than making the greatest profit based on something other than attractive products and successful marketing? Many businesses fail for reasons other than decreased revenues alone. Changes in public demands, technology improvements making owners products or services obsolete, poor location choices, outsourcing foreign cheap labor, larger WalMart type discounting and of course on-line consumer purchases have caused failure of many industries and businesses. Without capital in the public sector in the form of reduced taxation levels exacerbate business failures.

That statement did not make sense because you do not understand how the fed interacts with the Government. Do a bit of reading (I recomend the economist) and you will see the correlation between government debt and scarcity of capital. What I will say now is that money like all things in our economy is a scare resource. When the government engages in huge spending programs they begin to consume large quantities of the availble money supplied (and no printing more does not allieviate the problem). When deficit spending begins the government litterally goes in to debt, that is what a treasury bond is, a piece of debt. Indviduals, institutions, and especially the central banks of other countries buy that debt, at a promised rate of return. As economists we assume that the people who invested in national debt would have invested else where had that option not been availible. Thus the damage to the economy is two fold. The government restricts the amount of capital availible to private enterprise, and limits the amount of additional capital that would have gone to private enterprise.

You say that government debt is somehow related to a scarcity of capital. To whom do you think the federal government has greater debt to in the form of those IOUs (treasury bond notes). Is it foreign purchasers or simply Americans who hold the greatest proportion of those interest bearing treasury notes? Which country in this world has the greatest accumulation of capital in its banks and institutions?

Why is that foreign capital flows into the United States? Is it possible that foreign investors consider the US to be the safest place for their assets because of the stability of the US economic system that now develops with the largest accumulation of the stable dollar even though the Euro has increased lately in value in comparison to our dollar.

I am talking about the welfare state not the welfare system. Know the difference if you want to argue about economics.

You are correct.

"The idea of the "welfare state" means different things in different countries.

An ideal model. The "welfare state" usually refers to an ideal model of provision, where the state accepts responsibility for the provision of comprehensive and universal welfare for its citizens.

State welfare. Some commentators use it to mean "welfare provided by the state". This is the main use in the USA.

Social protection. In many "welfare states", social protection is not delivered by the state at all, but by a combination of independent, voluntary and government services. These countries are still usually thought of as "welfare states".

In reading your argument a few things are pretty clear. The first is that you are not an economist. The second is that what little knowledge you do have of the economy comes from the popular media who in an effort to make things easier to understand skip over the more nuanced parts of economic debate. If you want to debate me fine. But in doing so you are going to need alot more than a hodge podge of economic catch phrases that you heard on the evening news. You should understand the MPC and what the GDP measures and why that measure is important, know how the money supply works and how the fed opperates. I am not spewing liberal sewage, quite the contrary my argument is increadibly conservative. And unlike your's argues for less government intervention not more. The propents of your fiscal plan have thus far refused to acknowledge reality, and the proof is in the pudding. For all of the boasting the "comeback" has been quite modest and has come at a abnormally high price. In the coming year we are going to witness the continued slide of the dollar against other world curriencies, this has nothing to do with muslims or terrorism, this is not because the EU is plotting against us or using dirty tricks. The demise of the dollar is a direct result of our own fiscal lunacy, lunacy which you support even though you can't articualte why. Our postion as the worlds reserve currency will continue to slide as investors seek higher rates of return and greater stablity else where. This will limit our ablitlity to carry on spending and will make deficit spending increasingly more expensive (through a rise in interest rates). Probably, you will answer this post with some witty remark about my intelligence, sexual orientation, or physical appearence. What you are far less likely to do is respond with a sound economic argument, beacuse that would require educating yourself, and if that is achieved you will not have any reason to post a response other than to say "oops my mistake, you are correct our fiscal policy is ludacris. Happy hunting
HUCK

No I am not an economist and you apparently are one. Therefore I am at somewhat of a disadvantage. And you as an economist are apparently mired in theories and models instead of that economic reality in which you find me lacking.

You seem to prophecise the inevitable slide of the American dollar because of the lunancy of the current adminstration's fiscal policies. You, as a learned economist, seem to believe that the world will seek higher rates of return and more stability for their assets and bring the American dollar down because of an outflow of foreign investments.

Obviously I disagree. I choose not to use invectives or deride your self super-opinion ideations and concepts about things that cannot be explained precisely in models or theories of economics. There are external and internal events that can change financial events to come. Therefore I choose not to foretell future events of changes in world monitary ebbs and flows.

You place a great deal of weight on your own education in the field of micro and macro economics. Ultimately I do not feel that US fiscal policy is lunacy but is now on track for having an even greater role in the world as the instabilty in the major nations of the world are based on monetary policies ultimately to end in collapse. A prime example is the Euro which is based on the common denomiation of a group of European nations with very weak and some more powerful monetary producing nations. The common denominator will ultimately be a very weak currency based on conflicts between the haves paying the load for the have nots.

Your judgement about the US economic policy of growing federal deficits being a zero-sum-gain is wrong on its face. You just might find yourself rechecking your models in the event that the US remains the world monitary center.

You are the expert, not me.

 

[shadrack]

It was not only Reagan that agreed with lowering everyone's tax burdens but also President John F. Kennedy with the eventual resulant increase in disposable American incomes.

Kennedy's tax cuts weren't supply-side. They were Keynesian. Kennedy was attempting to end, not exacerbate, trade deficits and his intention was focused on the macro-economic effects of an inflation-employment trade-off.

Kennedy's tax cuts reduced incentives to shelter income which in turn reduced economic distortion and broadened the tax base. The top bracket was 90%, which no one paid because of loopholes and deductions. He reduced it to 65% and eliminated the "special preferences and provisions".

 

[ajwps]

Kennedy's tax cuts weren't supply-side. They were Keynesian. Kennedy was attempting to end, not exacerbate, trade deficits and his intention was focused on the macro-economic effects of an inflation-employment trade-off.

Kennedy's tax cuts reduced incentives to shelter income which in turn reduced economic distortion and broadened the tax base. The top bracket was 90%, which no one paid because of loopholes and deductions. He reduced it to 65% and eliminated the "special preferences and provisions".

Actually you may be reading and copying material that is not factual.

http://www.ncpa.org/edo/bb/2004/bb-20040128.htm

Of course, liberals don't deny that Kennedy wanted to cut taxes. But they say that Kennedy was only interested in expanding the budget deficit to give a boost to consumption--pure Keynesian economics. This is the gist of recent articles by historians David Shreve and David Greenberg .

While there is no denying that most of Kennedy's economic advisers were Keynesians, it is worth remembering that he exiled his most Keynesian adviser, Harvard professor John Kenneth Galbraith, to India , where he served as ambassador. In his book, Ambassador's Journal (1969), Galbraith tells how he tried to talk Kennedy out of the tax cut. He wanted to raise the deficit and give the economy a Keynesian kick by boosting government spending, not lowering revenues.

Greenberg and Shreve really have no good explanation for why Kennedy didn't implement Keynesian theories by raising spending, implementing a temporary tax cut or some kind of tax credit scheme, rather than reducing marginal tax rates. Most Keynesians would say that reducing marginal rates--especially for the rich and for capital gains--is just about the worst possible way of stimulating aggregate demand. Indeed, they made this same argument against the Bush tax cuts.

I think Kennedy was a better economist than his advisers. He cut tax rates for supply-side reasons, but used Keynesian arguments to sell them.

You can actually hear President Kennedy talk about cutting taxes at this same site.

Kennedy's thinking about taxes. This fact is clearly evident in recently released tapes of meetings in the Oval Office in 1962. The transcripts are now available on the Internet.

http://www.whitehousetapes.org/pages/listen_tapes_jfk_mtg.htm

 

[rtwngAvngr]

Huck, business people have a huge effect on the economy and whether or not it expands or contracts. They will seek to do MORE business and hire MORE people when they are ALLOWED to keep more profit. A business person can manipulate demand if he can lower prices. A sufficiently low price stimulates demand. An item not purchased by anyone, may be purchased by everyone at a certain price point. I've presented two cases where suppliers do, in fact, have an effect on the volume of the economy. In other words, you're full of shinola.

 

[rtwngAvngr]

Huck. Come on. Show me where I'm wrong, ya pusscake.

 

[shadrack]

Actually you may be reading and copying material that is not factual.
http://www.ncpa.org/edo/bb/2004/bb-20040128.htm
You can actually hear President Kennedy talk about cutting taxes at this same site.
http://www.whitehousetapes.org/pages/listen_tapes_jfk_mtg.htm

He used a lot of demand side justifications.

In his address to congress in 1963 you can read his own balancing of supply and demand side forces which motivated the tax reduction, and the awareness that too large a tax cut would be inflationary. I would call it, more accurately, Keynesian over a classical framework. Say was wrong when he said overproduction doesn't affect real output and employment. I think Kennedy believed this.

However, I couldn't get the white house tapes link to work that you provided. The tapes might change my view.

 

[ajwps]

He used a lot of demand side justifications.

In his address to congress in 1963 you can read his own balancing of supply and demand side forces which motivated the tax reduction, and the awareness that too large a tax cut would be inflationary. I would call it, more accurately, Keynesian over a classical framework. Say was wrong when he said overproduction doesn't affect real output and employment. I think Kennedy believed this.

However, I couldn't get the white house tapes link to work that you provided. The tapes might change my view.

Quote from the Kennedy Speeh, 12/14/1962:

"It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough jobs or enough profits."

Remarks to the Economic Club of New York, December 14, 1962, Public Papers of the Presidents: 1962, p. 879.

 

[ajwps]

He used a lot of demand side justifications.

In his address to congress in 1963 you can read his own balancing of supply and demand side forces which motivated the tax reduction, and the awareness that too large a tax cut would be inflationary. I would call it, more accurately, Keynesian over a classical framework. Say was wrong when he said overproduction doesn't affect real output and employment. I think Kennedy believed this.

However, I couldn't get the white house tapes link to work that you provided. The tapes might change my view.

Okay here is the John F. Kennedy speech in question. You might get a little insight into another tax cut and trickle-down Presient who took the actions he spoke about.

http://www.presidency.ucsb.edu/ws/index.php?pid=9057&st=&st1=

 

[Huckleburry]

Huck, business people have a huge effect on the economy and whether or not it expands or contracts. They will seek to do MORE business and hire MORE people when they are ALLOWED to keep more profit. A business person can manipulate demand if he can lower prices. A sufficiently low price stimulates demand. An item not purchased by anyone, may be purchased by everyone at a certain price point. I've presented two cases where suppliers do, in fact, have an effect on the volume of the economy. In other words, you're full of shinola.

Unfortunately firms do not determine the demand curve (price, marginal revenue and average revenue) in a system of free market capitalism. This is because the numbers of firms (and the Sherman act) prevent firms from exercising that level of market power. Under our current system firms are considered to be price takers not price setters. All that aside, I see your point. If firms are able to pay fewer taxes then the marginal cost curve would shift down. For a time the firm would earn an economic profit signaling, in the long run, to other firms that they should enter the market because of the higher than normal expected rate of return. The increase in market supply will cause the supply curve to shift down, thus more will be consumed at a lower price. This of course will have numerous micro level effects including job creation. While this is not wrong it is needlessly risky. Some firms will shift those profits to investors, others will not. Either way the expansionary effect of the cuts will be hard to predict because of the nebulous nature of firm behavior. Moreover firms require no additional motivation to maximize their profit. Unlike individuals the purpose of each firm is clear. Maximize profits. Firms do not face a labor leisure trade off; they do not have families, religion, sex, booze, cigarettes or any other fantastic distraction facing individuals. All firms were created to maximize profits and when they fail to do so they either fail, or restructure (thus providing the human incentive to work hard). Lastly you actually illustrated two instances where consumers were able to consume more, thus stimulating demand. In both cases though the success of the firm depended on the consumer, not the other way around.

 

[Huckleburry]

The permanent-income hypothesis was proposed by Milton Friedman in 1957 (who also a leader of the Chicago monetarist school of economics and won the Nobel Prize in 1976 for his work on the money theory and analysis on consumption behaviour).

This still does not adress the radical difference in the marginal propensity to consume between the rich and the poor. Cutting taxes on the middle class will still have a larger expansionary effect than tax cuts for the rich. Granted it may take a bit for the change in real income to sink in, it will not change the spending patterns of these different groups.

Then what was Clinton claiming when he spoke about having a potential 2 trillion dollar plus surplus when he left office? A balanced budget would in effect have the government retaining profits for every income tax dollar after the federal budget was cleared?

and do you remeber what the major economic debate of the day was? It was about how best to spend that two trillion dollars.

If macro market shift demand has IMPLICATIONS on micro levels, then exactly how can you say they are not interchangable or in effect do not affect one another? Contradictory

How so? Macro predicts what will happen across the economy at large. Micro predicts the behavior individuals. How is saying that will be true for the economy at large may not be true for absolutly every firm in the economy a contradictory statement?

The Gross National Product, all national goods and services are definitely a potential and real measure of job formation

First you said GDP not GNP the two are not the same and measure rather different things. Second, if GNP is a potential and real measure of job formation than how do you explain the phenom of only a few years ago when we witness the "jobless recovery" where GNP recoverd slightly but unemployment remained unchanged. GNP measures just that. It is not a measure of job creation, that is what the unemployment rate is for.

Are you kidding? The Democratic party platform argues the opposite.

I am not a democrat.

Are you trying to say that tax cuts for those $200,000.00 + income class are not an equal part of the consumption public?

Not quite. I am saying that those in the $200,000 plus income range will spend marginally less of an increase in real income.

Very funny. Then you are taking credit for the economics of the beginning centuries of this country which did not bode well for America as a world monetary power until WW2. Your trickle-up theory was then a major cause of the great depression of the 1920s. Now that that the trickle-up theory has demonstrated a history of an inferior economy, the trickle-down theory of Presidents Jack Kennedy, Ronald Reagan and G.W. Bush is just now beginning to demonstrate efficacy in our major world economic power.

Of course you are ignoring the fact that the world wars effectivly eliminated the competition and left ours as the only sound financial system on the globe. Nations in desperate need of capital had little choice but to borrow from the US. Thus the role of world creditor, and the dollars replacement of the sterling as the reserve currency were direct results of the world wars. Comparing the beggining of the 19th cantury to the end of the 19th century is not really possible. The variable are too numerous for such a comparison to be worthwhile. If you want to compare apples to apples than you should compare the economic performance of Regan to Clinton. That is a far more interesting comparison. Interestingly enough the staus of the dollar as the worlds reserve currency has only be in doubt twice since the end of world war two. The first was during trickle down economics round one under Regan. We are currently in the second under GW, interestingly enough both were propents of trickle down economics.

You say that government debt is somehow related to a scarcity of capital. To whom do you think the federal government has greater debt to in the form of those IOUs (treasury bond notes). Is it foreign purchasers or simply Americans who hold the greatest proportion of those interest bearing treasury notes? Which country in this world has the greatest accumulation of capital in its banks and institutions?

Japan

Why is that foreign capital flows into the United States? Is it possible that foreign investors consider the US to be the safest place for their assets because of the stability of the US economic system that now develops with the largest accumulation of the stable dollar even though the Euro has increased lately in value in comparison to our dollar.

This tend is beginining to faluter. Currencies other than the dollar are begginging to look down right attractive. BUMMER

 

[rtwngAvngr]

Unfortunately firms do not determine the demand curve (price, marginal revenue and average revenue) in a system of free market capitalism. This is because the numbers of firms (and the Sherman act) prevent firms from exercising that level of market power. Under our current system firms are considered to be price takers not price setters. All that aside, I see your point. If firms are able to pay fewer taxes then the marginal cost curve would shift down. For a time the firm would earn an economic profit signaling, in the long run, to other firms that they should enter the market because of the higher than normal expected rate of return. The increase in market supply will cause the supply curve to shift down, thus more will be consumed at a lower price. This of course will have numerous micro level effects including job creation. While this is not wrong it is needlessly risky. Some firms will shift those profits to investors, others will not. Either way the expansionary effect of the cuts will be hard to predict because of the nebulous nature of firm behavior. Moreover firms require no additional motivation to maximize their profit. Unlike individuals the purpose of each firm is clear. Maximize profits. Firms do not face a labor leisure trade off; they do not have families, religion, sex, booze, cigarettes or any other fantastic distraction facing individuals. All firms were created to maximize profits and when they fail to do so they either fail, or restructure (thus providing the human incentive to work hard). Lastly you actually illustrated two instances where consumers were able to consume more, thus stimulating demand. In both cases though the success of the firm depended on the consumer, not the other way around.

They don't determine the supply demand curve but they DO determine the price of their products. Something that wouldn't sell at a high price might sell like hot cakes at a lower price, so their pricing philosophy does effect market volume.

"Considered to be " price takers only? By whom? That's just a lie. They do set their prices based on their philosophies, boutique/highprice or low price/high volume.

You see my point. SO you see how supply side does work.

Needlessly risky?


Yes the consumers consume, but only if the decisions made by the firms are consistent with what the consumer wants and can afford. That's the key. The best firms serve people above all else. I know this is getting into your lib moral superiority terriitory.

You failed huckleberry. You're totally wrong and ended up agreeing with supply side economics.

 

[rtwngAvngr]

The people will not be denied.

 

[rtwngAvngr]

Ok. Mariner. You were all ears. Did any of this cut through your massive earwax deposits?

 

[rtwngAvngr]

Something's wrong with the university system when a laymen such as myself can put it to an econ phd candidate in this manner.

 

[nakedemperor]

Something's wrong with the university system when a laymen such as myself can put it to an econ phd candidate in this manner.

Huck, you should be flattered. Homeboy thinks your a grad student. Maybe someday...if you quit the doublin' fistin' 4 nights a week :alco: RWA, I'm a 'laymen as well', but even I can tell your "examples" are rife with generalizations, ignored variables, and micro-implications applied at macro levels.

 

[freeandfun1]

Huck, you should be flattered. Homeboy thinks your a grad student. Maybe someday...if you quit the doublin' fistin' 4 nights a week :alco: RWA, I'm a 'laymen as well', but even I can tell your "examples" are rife with generalizations, ignored variables, and micro-implications applied at macro levels.

typical lib reply..... "you're wrong, cuz I say you're wrong. i'm not gonna back it up with any proof or facts, I am just tell'n ya you're wrong and if you don't agree, well, you're still wrong cuz I say so."

Might as well ad the "na na na na naaaaaaaaaa" :baby:

 

[rtwngAvngr]

Huck, you should be flattered. Homeboy thinks your a grad student. Maybe someday...if you quit the doublin' fistin' 4 nights a week :alco: RWA, I'm a 'laymen as well', but even I can tell your "examples" are rife with generalizations, ignored variables, and micro-implications applied at macro levels.

yeah. because he told me he was working on his thesis.

Care to find one example of the alleged generalizations, ignored variables, or micro implications, which, when considered, should change my conclusions? No? Then stfu.

 

[rtwngAvngr]

Naked, huck was here for awhile, read my answer and wussed out bigtime. I bet he won't be back.

 

[Huckleburry]

Sorry Right Wing,
This is way too much fun for me.

They don’t determine the supply demand curve but they DO determine the price of their products

True, firms do determine the price of their products, but it is consumers that decide if that price is acceptable. Thus while firms may choose what price to charge it is consumers who choose what price they are willing to pay. In this way firms are price takers not price setters.

Something that wouldn't sell at a high price might sell like hot cakes at a lower price, so their pricing philosophy does affect market volume.

that is true but that is still not an argument for supply side economics.

Yes supply side is needlessly risky. As I outlined earlier the problem stems directly from the unpredictability of firms. Consider a restaurant owner. Uncle Sam comes along and announces that this person gets a nice fat tax cut thus increasing their real income. Supply side argues that this person will reinvest that extra income, say by building a bigger kitchen. Standard economics asks the question why? I argue that the owner has no incentive to build a bigger kitchen if no additional customers come along. Think about it. Why expand output and increase marginal cost simply because you can? Does this seem like sound business practice to you? Why not but a Ferrari, save for a child's education, pay down your mortgage or any number of other things. Without increased demand firms have no incentive to expand output. The trouble with supply side is that it is based entirely on graphical analysis and ignores the underlying components of that graph. Graphically shifting the supply curve outward does increase demand. Unfortunately, empirical evidence does not support such a claim. Firms increase output when the product or service they provide is increased not the other way around. This is consistent with logical business practice.

Yes the consumers consume, but only if the decisions made by the firms are consistent with what the consumer wants and can afford.

You are confusing micro and macro consumption. Macro consumption will persist regardless of the actions of individual firms. If firms stop delivering the needs of consumers on a macro level then we would be witnessing a massive breakdown of the macro economic system, in such a scenario a tit for tat argument about fiscal policy would quickly become irrelevant.

That's the key. The best firms serve people above all else. I know this is getting into your lib moral superiority territory.

I disagree. The best firms maximize profits and deliver the highest rates of return to their share holders. If that coincides with providing people with great service, terrific, if not, eh...oh well. So long as firms are maximizing profits, and delivering high rates of returns to investors than in my view it is doing a superb job.
If by failure you mean that I was unable to accept debunked economic theory as worthy of a second chance you are right. If however you mean that I failed to present a viable counter argument against Supply Side economics then I am afraid you are mistaken. I have explained why now several times now, conveniently none of you supply siders have chosen to address the meatier parts of my argument, namely the MPC including its relation to the expansionary effect, and the problem of capital scarcity as a result of reckless government spending.

 

[Huckleburry]

Also I am working on, and with the grace of god, will soon finish a thesis. It is not however my Ph.D although the expanded thought might someday turn into it. I am going to Costa Rica over xmass break to see if the empirical evidence supports my thesis.