OK, I'm all ears.

[rtwngAvngr]

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



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.

People may have desires, and they may have funds, and these two together form the line. Companies set their prices. They are price setters. But either way this argument proves nothing.

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

Yes. it is.

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.

But the restaurant owner must build the extra capacity first. If the restaurant is slow because the kitchen is too small, the possibility of extra customers is eliminated, because noone likes a long wait.

Think about it. Why expand output and increase marginal cost simply because you can?

Doing more business equals more profit, profit margins being the same.

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.

And again, demand will increase if price is lowered due to increased production and economies of scale.

The trouble with supply side is that it is based entirely on graphical analysis and ignores the underlying components of that graph.

What are the underlying components you refer to.

Graphically shifting the supply curve outward does increase demand. Unfortunately, empirical evidence does not support such a claim.

yes it does.

Firms increase output when the product or service they provide is increased not the other way around.

demand is different at different prices, and the price is controlled by the firm.

This is consistent with logical business practice.

whatever.

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.

Tax cuts still stimulate economic growth. Though yes, firms are not required to reinvest the long term successful ones do. That's good business.

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.

You did fail in making your case. And of course too much deficit would lead to capital scarcity. On that we agree. But we're not there yet.

 

[rtwngAvngr]

In other words "Build it, and they will come."

 

[Huckleburry]

Right wing,
You are mixing and matching assumptions for the micro and macro markets. This is what supply side essentially is, a hodge podge of micro and macro theory, drawing on the two whenever it is convenient. Unfortunately, and history supports me, such and approach does not work. Did you happen to notice how little attention Regan's economic policies got at his funeral? While he may have he defeated communism he nearly ruined our economy. I don't blame commentators for conveniently ignoring this fact at his funeral, the man had just died and such deference was certainly appropriate. The best argument against supply side is in the history books. You can choose to read about it and avoid the trouble, or you can choose to act like a lemming and walk off the cliff. I just don't want to be there when you and your cronies go splat; the price of dry cleaning is simply too high. Of course if I experienced a rise in income I would consume more dry cleaning, thus increasing the need for a greater supply. In other words build it and they will wonder why you just built such a useless object on their way to the unemployment line.

 

[rtwngAvngr]

Right wing,
You are mixing and matching assumptions for the micro and macro markets. This is what supply side essentially is, a hodge podge of micro and macro theory, drawing on the two whenever it is convenient. Unfortunately, and history supports me, such and approach does not work. Did you happen to notice how little attention Regan's economic policies got at his funeral? While he may have he defeated communism he nearly ruined our economy. I don't blame commentators for conveniently ignoring this fact at his funeral, the man had just died and such deference was certainly appropriate. The best argument against supply side is in the history books. You can choose to read about it and avoid the trouble, or you can choose to act like a lemming and walk off the cliff. I just don't want to be there when you and your cronies go splat; the price of dry cleaning is simply too high. Of course if I experienced a rise in income I would consume more dry cleaning, thus increasing the need for a greater supply. In other words build it and they will wonder why you just built such a useless object on their way to the unemployment line.

tell me how my mixsing and maxing and assumptions means tax cuts do not stimulate business and grow the economy and provide jobs. You can't. you're wrong. Remember back when you said you saw my point? You lost the whole argument right there.


You have not made a convincing argument. Tax cuts stimulate the economy. History proves that as well. You can keep saying you're right, but you're not. Being condescending is not a substitute for being logical.

 

[Huckleburry]

Tax Cuts stimulate the economy?????
NO SHIT I have admitted as much about ten times now. Every one knows this. Now Answer one fundamental question. Tax cuts for whom? This is where the economic debate is, and this is why supply side is such a lazy argument. They never ansewer the important question. I have already explained the MPC. You have not waged a counter argument on this point because you can't. Nor can you, or any supply sider, defend Regans fiscal failure. Do so and you may gain a new convert. Until then happy hiking lemming

 

[rtwngAvngr]

Tax Cuts stimulate the economy?????
NO SHIT I have admitted as much about ten times now. Every one knows this. Now Answer one fundamental question. Tax cuts for whom? This is where the economic debate is, and this is why supply side is such a lazy argument. They never ansewer the important question. I have already explained the MPC. You have not waged a counter argument on this point because you can't. Nor can you, or any supply sider, defend Regans fiscal failure. Do so and you may gain a new convert. Until then happy hiking lemming

For everybody. Tax cuts stimulate business owners to reinvest and do more business because they keep the fruits of their labor. Tax cuts for regular joes gives them purchasing power.

Reagan was a great success. what planet are you from?


You're wrong mister ivy league.

I don't care about your abstract wonkishness and irrelevant terms.

 

[rtwngAvngr]

Think of it this way Huck. If taxes are too high, rich people will just keep their money in the mattress instead of using it to do business and grow the economy. Your scholastic notion of the real world seems to be skewed. It seems your university has attempted to eliminate the thought processes of the actual business owner from your model. How bolshevik can you get?

 

[Huckleburry]

You can't cut taxes for everyone. There is just not enough funds to do that. Regan succeeded in dismantaling communism, as an economist he got his shirt handed to him, a strong argument exists that it was regan's fiscal policy that cost Bush 1 the election. But that is really not the question. If you are going to cut taxes it is better to cut them for the middle and lower class because they are going to spend more of the tax cut, which will grow the economy faster and for a longer period of time. Also, rich people will always invest their money because inflation will demolish it if they do not.

 

[rtwngAvngr]

You can't cut taxes for everyone. There is just not enough funds to do that. Regan succeeded in dismantaling communism, as an economist he got his shirt handed to him, a strong argument exists that it was regan's fiscal policy that cost Bush 1 the election. But that is really not the question. If you are going to cut taxes it is better to cut them for the middle and lower class because they are going to spend more of the tax cut, which will grow the economy faster and for a longer period of time. Also, rich people will always invest their money because inflation will demolish it if they do not.

Ok. if you have to choose. You should target the upper clas (business owners). Which already pays a wildly disproportionate share of taxes anyway.


The economy grew like gangbuster in the 80's. That's irrefutable.

It matters HOW rich people will invest their money. They need to be incented to DO BUSINESS.

Your so-called intellect is just a pastiche of rationalizations, thinly veiling standard marxist pseudointellectuality.

How do you like the RWA brand of whoopass?

 

[rtwngAvngr]

Huck is huddled in a corner somewhere, rocking back and forth, muttering to himself.

"No. No. Reagan. Bad. Business. Risky. Too risky. MCP. MCP. BLeeble bleeble blop."

 

[Huckleburry]

I love buisness and money. I study economics, I wake up every morning and talk about how to get as much money as possible don't call me a fucking communist, do you even know who came up with supply side? I will give you a hint, it was not Regan. In fact it was one of the most liberal economists on the planet which is probably why it is so shitty. The Irony here is that you bust my balls while defending a grossly liberal theory. You know what also grew during the 80's our public debt. Now we are Japans bitch and are just sitting around waiting for their central bank to start flooding the market with dollars, and guess what when they do everyone else is going to either follow suit or watch billions of dollars be wiped off there balance sheets. That will be a great time for us, just ask the Brits how they fared after Soros dropped a few billion sterling on the global market, oh boy I hope we can go through that kind of recession, that will really make investments grow. Because I advocate CUTTING TAXES for the middle class rather than the wealthy does not mean I am communist, it does mean that would rather be employed than unemployed. Of course your probably a trust fund baby so the petty masses must not mean much.
Cheers Huck

 

[rtwngAvngr]

I love buisness and money. I study economics, I wake up every morning and talk about how to get as much money as possible don't call me a fucking communist, do you even know who came up with supply side? I will give you a hint, it was not Regan. In fact it was one of the most liberal economists on the planet which is probably why it is so shitty. The Irony here is that you bust my balls while defending a grossly liberal theory. You know what also grew during the 80's our public debt. Now we are Japans bitch and are just sitting around waiting for their central bank to start flooding the market with dollars, and guess what when they do everyone else is going to either follow suit or watch billions of dollars be wiped off there balance sheets. That will be a great time for us, just ask the Brits how they fared after Soros dropped a few billion sterling on the global market, oh boy I hope we can go through that kind of recession, that will really make investments grow. Because I advocate CUTTING TAXES for the middle class rather than the wealthy does not mean I am communist, it does mean that would rather be employed than unemployed. Of course your probably a trust fund baby so the petty masses must not mean much.
Cheers Huck

I don't care who came up with it. You still have not convincingly explained why tax cuts targetted to the investment class won't grow the economic volume and provide more jobs for people. They do. The bottom 50% of society already pays hardly any taxes at all. You can be angry and self righteous and call me names, but you're still wrong on this point.

 

[rtwngAvngr]

He's back in his corner slobbering and rocking. He drives the car in the driveway on sundays.

 

[Huckleburry]

I explained a million times, and don't know any other way of explaining it. Just don't blame the conservatives when the house of cards comes a crashing on down.
Cheers
Huck

 

[rtwngAvngr]

I explained a million times, and don't know any other way of explaining it. Just don't blame the conservatives when the house of cards comes a crashing on down.
Cheers
Huck

No you didn't.

You still have not explained how the dynamic I have repeatedly illustrated is wrong.


You must be deluding yourself.

 

[Mariner]

Right Wing. You have completely ignored the core of his argument, which is that the Supply-Sider's religious devotion to the idea that reduced taxes on business owners are automatically converted into re-investment in the business, which produces jobs, might be flawed.

My uncle owns a successful business in Houston. He has a cool office in a skyscraper, a big house, and a very nice car. When his taxes went down, his profits went up--and so he now works less and spends more time with his wife and son. He didn't hire anyone additional--his business doesn't need to be any bigger than it is for him to live as well as he wants.

This example is a lot like Huck's restaurant-owner example, and provides a very good counter-argument to S-S assumptions about business owners' priorities and behavior. Remember that a huge amount of American business is small business, whose first priority is not always maximum profit and size.

As for your argument that only companies set prices, that just doesn't make sense. If I offer you Wonder Bread at $10 a loaf, you'll buy it? Send me a check,

The Mariner Company
"Bread at our prices."

 

[rtwngAvngr]

Right Wing. You have completely ignored the core of his argument, which is that the Supply-Sider's religious devotion to the idea that reduced taxes on business owners are automatically converted into re-investment in the business, which produces jobs, might be flawed.

My uncle owns a successful business in Houston. He has a cool office in a skyscraper, a big house, and a very nice car. When his taxes went down, his profits went up--and so he now works less and spends more time with his wife and son. He didn't hire anyone additional--his business doesn't need to be any bigger than it is for him to live as well as he wants.

They won't always do it, of course. We need to make it attractive for them to do it however. They're not slaves.

This example is a lot like Huck's restaurant-owner example, and provides a very good counter-argument to S-S assumptions about business owners' priorities and behavior. Remember that a huge amount of American business is small business, whose first priority is not always maximum profit and size.

As for your argument that only companies set prices, that just doesn't make sense. If I offer you Wonder Bread at $10 a loaf, you'll buy it? Send me a check,

The Mariner Company
"Bread at our prices."

They still must take into consideration the demand curve. A 10$ price of bread would most likely be a stupid pricing decision.

You have presented no convincing arguments, either.

 

[ajwps]

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.

The "radical difference in the marginal propensity to consume between the RICH and the POOR CLASSES." What are you talking about? Aren't you supposed to be some kind of economist professor?

Disposable income for everyone induces the spending patterns of everyone. Those people of modest income with more disposable income to spend more on their own families needs and those of greater income (RICH) don't spend in proportion to the proletariat (you call poor) but they do not bury their assets in the ground or under their mattresses.

The RICH spend their money by investing in stocks and bonds (Industrial growth) and by creating jobs for those who work for their daily bread. Without jobs which create products to demand for those new workers, GDP goes down and the number of poor increase. 'Consumption' is simply a word that can be defined along a continuum.

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

Isn't that always the case? There was in fact no two trillion dollar surplus, for the US Government owes nearly 100 trillion dollars in promissory notes of one type or another.

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 statement, "No, Shifting market demands outward (Macro) has implications on the Micro level. The two are not interchangable ." The contradiction lies in the fact that (MICRO individual spending behavior TOTALLY affects the market spending and production demands of the economy at large (MACRO). The two are ALWAYS INTERDEPENDENT and INTERCHANGABLE.

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.

Easily explained.... Job creation does not occur SPONTANEOUSLY with GNP but follows a rising curve. As the demand for goods and services increase, existing surpluses are used to supply that demand until the point that industry LATER requires more jobs and people to go to work to satisfy that rising demand. In your example, GNP recovered slightly then diminished based on not enough disposable income in the private sector to sustain that demand. Is that difficult to understand?

I am not a democrat.

Then you must be a trickle up Republican tax and spender. A real dichotomy?

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

Then exactly what are you saying?

Of course you are ignoring the fact that the world wars effectively 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 status 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 proponents of trickle down economics.

Comparing any century with another in the realm of economics is ludicrous on its face. Yes you are correct in the fact that the status of the dollar as the worlds reserve currency has been in decline during the Kennedy, Reagan and Bush administrations. But economy 101 teaches that monetary changes do not occur spontaneously with fiscal policy. All the aforementioned Presidents inherited the disastrous policies of their democratic Congress predecessors and their tax and spend philosophies. LBJ and Clinton rode in on the rising economic crest produced by the preceding president and Congress and at the end of their tenures, the economy was trending downward. So you blame the conservatives when the reality is that the democratic policies have proven disasters for the USA.

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

So it would seem. But not is always as it appears. As the dollar declines against the EURO and other world currencies, it becomes more expensive to buy foreign goods which will decrease the trade deficit and American made products will be less expensive as the dollar inflates creating a greater GDP and GNP right here in the States.

Then the natural wave cycle will again occur which will bring up the dollar and lower the US trade deficit. Forget those theories and paradigms that you treasure, for there are natural laws of gravity, time, matter and economics. Men make tinker with them and for a time bring recessions and depressions, but they always turn around in a world of reality.

 

[rtwngAvngr]

Aj. You know what's scary? This guy told me he was phd candidate in economics. That was when he thought he could intimidate the truth away.

 

[rtwngAvngr]

Huck. is it still fun for you? You were having such a blast before.