"Tax Cuts Don't Pay for Themselves" - GOP Economists

[Larkinn]

the orpeate phrase in my question would be "that spurs the economy". So go ahead a convince me that delivering the mail, building roads, etc. spurs the economy.

Seriously?

How the mail spurs the economy. You might of heard of a tiny company called "Ebay" that relies heavily on the postal service working. Its somewaht of a descendant of a tiny company that used to put out catalogs that you could order from...you might have heard of them as well "Sears".

As for roads...well gee, I don't know. I mean being able to get goods from all across the country might spur the economy just a little bit. Just as being able to travel spurs the economy, as does being able to live outside where one is working.

 

[Kid Pickle]

Seriously?

How the mail spurs the economy. You might of heard of a tiny company called "Ebay" that relies heavily on the postal service working. Its somewaht of a descendant of a tiny company that used to put out catalogs that you could order from...you might have heard of them as well "Sears".

As for roads...well gee, I don't know. I mean being able to get goods from all across the country might spur the economy just a little bit. Just as being able to travel spurs the economy, as does being able to live outside where one is working.

That is like saying the mere existence of currency spurs the economy. It is a means, not a catalyst. I have feet. They move me around. They alone cannot make me a marathon runner. That takes other things.

 

[Larkinn]

That is like saying the mere existence of currency spurs the economy. It is a means, not a catalyst. I have feet. They move me around. They alone cannot make me a marathon runner. That takes other things.

Yes, the existence of currency does spur the economy. And your analogy is inaccurate Feet are necessary to be a marathon runner, currency is not necessary for an economy. But it does help a lot. Same for roads, and the postal service.

The difference between a "means" and a "catalyst" in your mind seems to be the difference between things government has done in the past, and things it can do now. It already built the roads, developed currency, and the postal service. When they did they all spurred on the economy tremendously. That they don't now have an increasing upward trend does not mean they don't spur it on, it means that they are depended on.

 

[Toro]

here's a graph, if you're into that sort of thing...

Attributing the growth in revenue to the tax cuts is false causality. The US economy has grown by about 3% per year since WWII. Growth was higher in the 1960s when taxes were rising. Growth was also higher in the 1990s when Clinton raised taxes. So the idea that higher taxes has lead to more revenue over the past five years does not square with the simple fact that at other times, even more revenue came into the government coffers when taxes were going up and growth was stronger than today.

The argument that revenues are up because taxes are down severely underestimates the American people. It implies that Americans are lazy, and that they only respond to tax cuts. That's silly. Government revenues are going to rise when the economy grows. The economy is going to grow because of the industriousness and innovation of the American people, and has done so over time, not because the marginal tax rate went down 3%.

Oh, and the other problem with that graph - especially when it is promoted by economists (who are obviously politically biased) - is that, as any economist knows, fiscal policy occurs with a lag. The fact that revenues began rising at about the time the legislation is passed refutes the idea that the tax cuts caused the economy to start growing again because the fiscal stimulus doesn't occur until 6-18 months after it is initiated.

 

[Annie]

Attributing the growth in revenue to the tax cuts is false causality. The US economy has grown by about 3% per year since WWII. Growth was higher in the 1960s when taxes were rising. Growth was also higher in the 1990s when Clinton raised taxes. So the idea that higher taxes has lead to more revenue over the past five years does not square with the simple fact that at other times, even more revenue came into the government coffers when taxes were going up and growth was stronger than today.

The argument that revenues are up because taxes are down severely underestimates the American people. It implies that Americans are lazy, and that they only respond to tax cuts. That's silly. Government revenues are going to rise when the economy grows. The economy is going to grow because of the industriousness and innovation of the American people, and has done so over time, not because the marginal tax rate went down 3%.

Thank you! I knew this was wrong, but being at best a 'C' student in econ, couldn't explain why.

 

[pegwinn]

Sometimes brilliance lies in the obvious, Baron. Or, perhaps, in not choosing to be blind to it.

Here's another obvious thing. Our money does not belong to the government. It is OURS! Wrong. Not trying to pick a fight at all. Philosophically I agree 1000%. But, it is wrong. I cannot quote the case law, but the USSC recently (within the last 3 years) ruled that you and I cannot sue the .gov for mismanagement of the funds we hand over in taxes.

It belongs where we choose to put it. Perhaps the concept of personal liberty is lost on some people. When we choose to put it somewhere useful, it makes someone else money, and so on and so on. The more people making money, the more taxes people pay. The more taxes, the greater revenue.

How about this: the economy is not static.

One more: people who do things out of self-interest and choice, expect results. When people expect results, results happen or.

The government by and large doesn't expect results. It measures things in money spent, political capital gained. Stereotype alert!!!, Stereotype alert!!!, I only post the warning because stereotyping causes neurotransmitteratrophication. Portions of the .gov certainly do expect measurable results quick, fast, and in a hurry. DOD, USPS, EPA immediately spring to mind.

People in the government just want to keep their jobs. They keep thier jobs by spending money. It doesn't matter if anything valuable happens. In fact, if you solve the problem, you cannot be justified in asking for more funding, losing your job. Stereotype alert!!!, Stereotype alert!!! Again, that doesn't apply to the vast majority of the US Military. There are several agencies that should be removed and a plaque denoting retirement for sure. BOIA comes to mind. REA is another. I believe that you statement is most accurate when directed at Congress specifically.
Socialists seem to think that people are too stupid to handle thier own money and the government is all wise and practical. Reality is that most folks take their resources pretty seriously, trying to use them as effectively and efficiently as possible. And if they don't? Oh, well. Remember, it is THEIR money. The government is full of inexpert people with virtually unlimited funding and no real personal interest in efficiency or results because, hey, it's someone else's money. Who do you trust?

I get tired of the whining about the lack of tax revenues. If we cannot afford everything, it is time to stop spending on some things. It is time to prioritize, check results, and shut some stuff down! I know libs think that we cannot possibly survive without our myriad government programs, but it can be done. In fact it may be surprising how many things turn out not to be problems but political fodder and how many people actually try to DO SOME THINGS THEMSELVES (perish the thought)!

I totally concur with the overall tone. But, using stereotypical assertions tends to bring the loonies out. You will get folks whose sole aim is to find one flaw and claim you are discredited.

I have always thought that if you cannot trace an agency to a specific portion of the constitution, then it should only exist for say ..... two to five years at the most. Then it must be reauthorized by an increasing majority or liquidated.

Here's a blog entry I did that discussed this more lucidly. I cross posted it over at Daily Kos to get a flavor of the opposing view. Interesting results.

Take Care.

 

[Kid Pickle]

I didn't say it was a good graph.

 

[BaronVonBigmeat]

Seriously?

How the mail spurs the economy. You might of heard of a tiny company called "Ebay" that relies heavily on the postal service working. Its somewaht of a descendant of a tiny company that used to put out catalogs that you could order from...you might have heard of them as well "Sears".

As for roads...well gee, I don't know. I mean being able to get goods from all across the country might spur the economy just a little bit. Just as being able to travel spurs the economy, as does being able to live outside where one is working.

I agree that those things are important, but I think maybe what he's getting at is, just giving government a big wad of cash and turning them loose to build bridges is not going to boost the economy. Japan has proven this pretty well. Yes, you can point to the construction jobs that were created. But what's harder to do is to make a list of all the things which would have been created, had the government not consumed all that concrete, steel, and so forth.

And besides which, the private sector could easily deliver the mail if it were actually legal. UPS and FedEx already deliver packages. As far as roads go, private companies have built them too, believe it or not. The Great Northern Railroad was built entirely with private funds. It was well built, completed on time and under budget; while the other railroads built with government assistance after the civil war were noted for their shoddy construction, illogical and inefficient routes, being over budget, etc.

People in the government just want to keep their jobs. They keep thier jobs by spending money. It doesn't matter if anything valuable happens. In fact, if you solve the problem, you cannot be justified in asking for more funding, losing your job. Stereotype alert!!!, Stereotype alert!!! Again, that doesn't apply to the vast majority of the US Military.

Eh? The military is legendary for it's waste. That doesn't mean that our soldiers are horrible people; it's simply the nature of government institutions.

 

[pegwinn]

Quote:
People in the government just want to keep their jobs. They keep thier jobs by spending money. It doesn't matter if anything valuable happens. In fact, if you solve the problem, you cannot be justified in asking for more funding, losing your job. Stereotype alert!!!, Stereotype alert!!! Again, that doesn't apply to the vast majority of the US Military.

Eh? The military is legendary for it's waste. That doesn't mean that our soldiers are horrible people; it's simply the nature of government institutions.

Ah yes, the legendary 600 buck toilet seat. Puhleeese that was explained in the movie independence day. It's actually a covert hole to pour money into to finance the research on captured alien spaceships.

In reality, the .mil is far more efficient fiscally, logistically etc than most other .gov agencies. But, thier occasional fiscal fuckups are spec-tac-U-lar.

The key culprit to guiltless waste, fraud, abuse is actually a process known as MILSPEC. If you need a hammer, they can milspec that sucker down to the amount of angels dancing on the embedded pin. Which means the vendor will tool up for an exclusive run on a one-of-a-kind part. Hence the Area 51 price tag in some cases.

 

[Bern80]

Seriously?

How the mail spurs the economy. You might of heard of a tiny company called "Ebay" that relies heavily on the postal service working. Its somewaht of a descendant of a tiny company that used to put out catalogs that you could order from...you might have heard of them as well "Sears".

As for roads...well gee, I don't know. I mean being able to get goods from all across the country might spur the economy just a little bit. Just as being able to travel spurs the economy, as does being able to live outside where one is working.

That could be the worst attempt at an explanation I've ever read. In your first, it isn't the post office (government) spurring the economy, it's eBay.

I don't even no where to start with the second. Your contention is that when government spends money on roads there is more interstate commerce. Find me a link that directly correlates that please.

 

[Shogun]

Erm...provided them?

just like it provides the Fire protection? The Police force? capitolism is not a cure all. We don't turn to private law enforcement or fire protection for the same reason we SHOULDN'T rely on a profit margin to maintain a minimum quality service. There is no money in nursing homes that allows for a decent standard of living. Likewise, we don't rely on capitalism to solve police and Fire because we believe that they should apply to more people than who can afford the subscription cost. If what we have now is the apex of what capitolism has to offer the geriatric care industry then it has FAILED.

 

[Shogun]

the orpeate phrase in my question would be "that spurs the economy". So go ahead a convince me that delivering the mail, building roads, etc. spurs the economy.

You don't think that salaried jobs provided in the USPS and DOTs has a massive impact on the economy? Indeed, every paid American would probably spur the economy along better if they were making a quarter above minimum wage or competing with the mexican deck builders of road work.



yikes.

 

[Bern80]

You don't think that salaried jobs provided in the USPS and DOTs has a massive impact on the economy? Indeed, every paid American would probably spur the economy along better if they were making a quarter above minimum wage or competing with the mexican deck builders of road work.



yikes.

no I don't because they are predominantly inefficient in how they spend money.

 

[Bern80]

You don't think that salaried jobs provided in the USPS and DOTs has a massive impact on the economy? Indeed, every paid American would probably spur the economy along better if they were making a quarter above minimum wage or competing with the mexican deck builders of road work.



yikes.

According to 2004 statistics roughly 85% of paid americans already make over the minimum wage. That and given the various demographics that make that group, there is little reason to think that if that small percantage made a quarter more that it would spur the economy

 

[Shogun]

According to 2004 statistics roughly 85% of paid americans already make over the minimum wage. That and given the various demographics that make that group, there is little reason to think that if that small percantage made a quarter more that it would spur the economy

Id need to see your source. You realize that "over the minimun wage" can mean anything from 100K to 5 cents, right? Perhaps you don't see a difference between salaried jobs that allow families in the middle class to support themselves on more than pittance wal mart service jobs (the clear direction job opportunities are going) but it is my position that America and her economy is strongest when more people have more money to spend. Capitolism requires the minimization of wages via competition. Thus, the disparity between the worker and those who OWN the means of production (say what you will, Marx saw through the bullshit) which leads to a diminished economy. Say something funny to me like how, in 2007, our American economy is thriving with MORE employment opportunities that allow a family to support itself than it did in the mayberry 50s when a postal employee was hometown respectable work. Tell me somthing hilarious like UPS and FED EX employees making LESS than USPS employees have MORE spending power with their minimal wages and lack of family benefits.


But, i'll bite. Show me your source that says 85% of paid Americans make above the minimum wage so I can see how, EXACTLY, they come to that number.

 

[Larkinn]

I agree that those things are important, but I think maybe what he's getting at is, just giving government a big wad of cash and turning them loose to build bridges is not going to boost the economy.

Its not the building of the bridges which boosts the economy, although that does marginally. Its the new infrastructure which allows people quicker access to places than before.

Japan has proven this pretty well. Yes, you can point to the construction jobs that were created. But what's harder to do is to make a list of all the things which would have been created, had the government not consumed all that concrete, steel, and so forth.

I would suspect the market in concrete and steel are large enough that the prices would not go up just because the government is building a bridge.

And besides which, the private sector could easily deliver the mail if it were actually legal. UPS and FedEx already deliver packages.

But would it be a monolopy? If you could get enough to do it then fine. By the way UPS and FedEx haven't driven the USPS out of the package-delivering market yet...

As far as roads go, private companies have built them too, believe it or not. The Great Northern Railroad was built entirely with private funds. It was well built, completed on time and under budget; while the other railroads built with government assistance after the civil war were noted for their shoddy construction, illogical and inefficient routes, being over budget, etc.

Private companies can build them. But without government interference they will either be wildly redundant or massively overpriced.

 

[Bern80]

Id need to see your source. You realize that "over the minimun wage" can mean anything from 100K to 5 cents, right?

Sure do

Perhaps you don't see a difference between salaried jobs that allow families in the middle class to support themselves on more than pittance wal mart service jobs (the clear direction job opportunities are going)

You have more control over what your job opportunities are then job opportunities have over you. As with many lefties you think people have little to no control over their future. Your future (financially, economically, etc.) is what you make it, period.

but it is my position that America and her economy is strongest when more people have more money to spend. Capitolism requires the minimization of wages via competition.

Would you rather have some jobs at low pay or no jobs at all? Would you rather cost be cut somewhere else, say the brakes in your car? For the record there is no tenant of capitalism that requires that.

Job opportunities, or perceived lack of them has more to do with what human nature has evolved to since the 50s than the 'crumbling' economy.

But, i'll bite. Show me your source that says 85% of paid Americans make above the minimum wage so I can see how, EXACTLY, they come to that number.

http://www.bls.gov/cps/minwage2004.htm

I'm sure you can do the math in the first bullet

 

[Larkinn]

That could be the worst attempt at an explanation I've ever read. In your first, it isn't the post office (government) spurring the economy, it's eBay.

eBay would not exist without the mail system. Hence the USPS allows eBay to exist and be profitable. Hence it spurs on the economy allowing more businesses to open.

I don't even no where to start with the second. Your contention is that when government spends money on roads there is more interstate commerce. Find me a link that directly correlates that please.

No, my contention is that when the government builds roads there is more interstate commerce (tsk tsk...don't assume). Trucks deliver most of the goods in this country, many of which go across state lines. Would be a hell of a thing to do without roads.

I doubt there is any study out there which says that without roads the US would be much more inefficient than it is now. But then I don't think there are many studies saying that the sun rises every day either. Why study what is so incredibly obvious?

There is, as there often times is, diminishing returns. That is once we have a few roads to the same place, another one won't spur on the economy overly much. But the government built them in the first place, which spurred on the economy.

Lets also talk about the justice system. Go out and make a contract with someone. Would you do that if you didn't trust the US justice system to enforce it? Would you do that if it was unclear what the rules meant? There are companies which deal exclusively in Europe who use NY State Contract law. Why? Because it is some of the most complex and the best in the world. This allows companies a greater deal of predictability which allows them to save money.

 

[Bern80]

Its not the building of the bridges which boosts the economy, although that does marginally. Its the new infrastructure which allows people quicker access to places than before.

Do you think you can actually quantify that? I doubt it.

But would it be a monolopy? If you could get enough to do it then fine. By the way UPS and FedEx haven't driven the USPS out of the package-delivering market yet...

It already is a monopoly. The government has two of the largest monopolies there are in the USPS and education. Your not so much oppossed to a monopoly as to who has it.

Private companies can build them. But without government interference they will either be wildly redundant or massively overpriced.

Totally backwards. Government shows time and time again they spend way more in projects then what it would cost to pay for the same in the free market.

 

[Larkinn]

Do you think you can actually quantify that? I doubt it.

I don't need to, its fucking obvious. Ask any economist and they will tell you. Africa isn't poor because it lacks resources, its poor because it lacks infrastructure. Its poor because it lacks a legal system, predictability, and decent government.

It already is a monopoly. The government has two of the largest monopolies there are in the USPS and education.

Umm, no. Ever heard of private school?

Your not so much oppossed to a monopoly as to who has it.

There is a huge difference between a state run monopoly and a private monopoly.

Totally backwards. Government shows time and time again they spend way more in projects then what it would cost to pay for the same in the free market.

We aren't talking about how much they spend in projects, we are talking about how much they *charge*. And by the way having a monopoly is not the "free market".