1. The “business cycle” incorporates both down-turns, and a natural recovery. “This is why the average recession in the U.S. since World War II has been only 10 months, with the longest, until now, being 16 months.”
2. What is the correct manner of address for downturns? “Keynesian economics and rising effective tax rates produced four worsening inflation/recession cycles in and around the 1970s: 1969-1970, 1973-1974, 1979-1980, and 1982.”
a. “The current recession was officially scored by the National Bureau of Economic Research (NBER) as starting in December, 2007. It was caused by excessively loose Federal Reserve monetary policy from 2001 to 2006, and the liberal policies creating the subprime mortgage market, resulting in the catastrophic housing bubble."
b. “But Reaganomics was so successful that it all but abolished the business cycle for a generation. The economy took off at the end of 1982 on a 25-year economic boom interrupted by only two, short, shallow recessions in 1990-1991 and 2001. Reagan's shockingly successful supply-side economics….That is why today we no longer recognize the natural workings of the business cycle.”
3. So, what has been the record of Keynesian policy? The Bush/Pelosi stimulus bill of February, 2008: no positive effects. “President Obama and Congressional Democrats came back with the almost $1 trillion stimulus bill, promising that it would stop unemployment from climbing above 8%.” Aside from the totally illusory and fabricated ‘jobs created or saved,’ no positive effects, slow and weak recovery from the recession, which has lasted almost two years (a postwar record) …as compared to “tax rate reductions that were the focus of Reaganomics and supply-side theory, which fundamentally change economic incentives.”
a. [The] “Obama Administration came into office knowing that the economy would ultimately recover as the business cycle turned up naturally, and planned to reap the political credit, enabling still greater leaps of neo-socialism.”
b. “[O]ver the past 40 years, every time capital gains tax rates have been cut, revenues have increased, and every time capital gains tax rates have been increased, revenues have declined.”
4. Arthur Laffer has popularized the idea that there is a tax rate that maximizes revenue, and the rate is knowable and at a much lower level than previously believed. (Major findings show that the bellshaped Laffer curve is statistically significant and that the revenue-maximizing tax rate is between 32.67% and 35.21%.ScienceDirect - Journal of Socio-Economics : Estimating the laffer curve and policy implications*1)
a. “The positive effect of the enormous Fed monetary expansion will be petering out. Monetary expansion does not create long-term economic growth. The Fed has to press the accelerator faster and faster to maintain the same stimulative effect. But if it does, then inflation starts to arise, accelerating faster and faster if the Fed continues. Indeed, the runaway expansion of the monetary base the Fed has already engineered will generate explosive inflation if the Fed does not pull it out in time.”
b. “These purely ideological abuses of economic policy will end up punishing working people nationwide. The top income tax rate is scheduled to increase by close to 20%, the capital gains tax rate by at least 33%, and the top dividends tax rate by 164%. Further tax increases in the pending health care legislation would raise these tax rates still more. Laffer adds that starting at the end of 2010,
‘the U.S. will have a payroll tax rate increase, an estate tax increase, and income tax increases. There's also a tax increase coming in 2010 on carried interest [further discouraging investment]. This rate will rise from its current level of 15% to 35%, and then it will rise again in 2011.’
The American Spectator : The Coming Crash of 2011
It should be noted that the rich do not pay when taxes are raised. As reported by Andrew Mellon, 'In 1924, Mellon noted: "The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business.' 1920s Income Tax Cuts Sparked Economic Growth and Raised Federal Revenues | Veronique de Rugy | Cato Institute: Daily Commentary
Only workers are left to pay higher taxes!
2. What is the correct manner of address for downturns? “Keynesian economics and rising effective tax rates produced four worsening inflation/recession cycles in and around the 1970s: 1969-1970, 1973-1974, 1979-1980, and 1982.”
a. “The current recession was officially scored by the National Bureau of Economic Research (NBER) as starting in December, 2007. It was caused by excessively loose Federal Reserve monetary policy from 2001 to 2006, and the liberal policies creating the subprime mortgage market, resulting in the catastrophic housing bubble."
b. “But Reaganomics was so successful that it all but abolished the business cycle for a generation. The economy took off at the end of 1982 on a 25-year economic boom interrupted by only two, short, shallow recessions in 1990-1991 and 2001. Reagan's shockingly successful supply-side economics….That is why today we no longer recognize the natural workings of the business cycle.”
3. So, what has been the record of Keynesian policy? The Bush/Pelosi stimulus bill of February, 2008: no positive effects. “President Obama and Congressional Democrats came back with the almost $1 trillion stimulus bill, promising that it would stop unemployment from climbing above 8%.” Aside from the totally illusory and fabricated ‘jobs created or saved,’ no positive effects, slow and weak recovery from the recession, which has lasted almost two years (a postwar record) …as compared to “tax rate reductions that were the focus of Reaganomics and supply-side theory, which fundamentally change economic incentives.”
a. [The] “Obama Administration came into office knowing that the economy would ultimately recover as the business cycle turned up naturally, and planned to reap the political credit, enabling still greater leaps of neo-socialism.”
b. “[O]ver the past 40 years, every time capital gains tax rates have been cut, revenues have increased, and every time capital gains tax rates have been increased, revenues have declined.”
4. Arthur Laffer has popularized the idea that there is a tax rate that maximizes revenue, and the rate is knowable and at a much lower level than previously believed. (Major findings show that the bellshaped Laffer curve is statistically significant and that the revenue-maximizing tax rate is between 32.67% and 35.21%.ScienceDirect - Journal of Socio-Economics : Estimating the laffer curve and policy implications*1)
a. “The positive effect of the enormous Fed monetary expansion will be petering out. Monetary expansion does not create long-term economic growth. The Fed has to press the accelerator faster and faster to maintain the same stimulative effect. But if it does, then inflation starts to arise, accelerating faster and faster if the Fed continues. Indeed, the runaway expansion of the monetary base the Fed has already engineered will generate explosive inflation if the Fed does not pull it out in time.”
b. “These purely ideological abuses of economic policy will end up punishing working people nationwide. The top income tax rate is scheduled to increase by close to 20%, the capital gains tax rate by at least 33%, and the top dividends tax rate by 164%. Further tax increases in the pending health care legislation would raise these tax rates still more. Laffer adds that starting at the end of 2010,
‘the U.S. will have a payroll tax rate increase, an estate tax increase, and income tax increases. There's also a tax increase coming in 2010 on carried interest [further discouraging investment]. This rate will rise from its current level of 15% to 35%, and then it will rise again in 2011.’
The American Spectator : The Coming Crash of 2011
It should be noted that the rich do not pay when taxes are raised. As reported by Andrew Mellon, 'In 1924, Mellon noted: "The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business.' 1920s Income Tax Cuts Sparked Economic Growth and Raised Federal Revenues | Veronique de Rugy | Cato Institute: Daily Commentary
Only workers are left to pay higher taxes!
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