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Actually, I know it because I was there. I was Andrew Benavie's teacher's assistant. He was head of the OMB in Reagan's administration. They were using the Chicago model of Macroeconomics. As an econometrics specialist, it was my job to crunch the numbers. There was a bar in Chapel Hill, called "He's not Here", pretty funny. But every Thursday the Economics department got together there to drink. The arguments between Benavie and myself were legendary. I told him that the numbers for Reagan's tax cuts didn't add up. There was a huge underestimation of the savings function when it came to aggregate demand. The tax cuts would not deliver more revenue, and in fact, would be a drag on the economy. Reagan, and Benavie, soon learned I was correct, and Reagan instigated the biggest tax increase in American history in terms of percentage of GDP. That, and Volcker, was what stopped rampant inflation. And to put icing on the cake, Benavie became a celloist with the New York symphony and withdrew from academia.
Explain how tax cuts are a drag on an economy, Winston?Actually, I know it because I was there. I was Andrew Benavie's teacher's assistant. He was head of the OMB in Reagan's administration. They were using the Chicago model of Macroeconomics. As an econometrics specialist, it was my job to crunch the numbers. There was a bar in Chapel Hill, called "He's not Here", pretty funny. But every Thursday the Economics department got together there to drink. The arguments between Benavie and myself were legendary. I told him that the numbers for Reagan's tax cuts didn't add up. There was a huge underestimation of the savings function when it came to aggregate demand. The tax cuts would not deliver more revenue, and in fact, would be a drag on the economy. Reagan, and Benavie, soon learned I was correct, and Reagan instigated the biggest tax increase in American history in terms of percentage of GDP. That, and Volcker, was what stopped rampant inflation. And to put icing on the cake, Benavie became a celloist with the New York symphony and withdrew from academia.
Every time it's been triedReagan started it. He set record deficits.
G.W. Bush tried it. He set new records for deficits.
Trump tried it again. He set new records for deficits.
Jobs have never been created due to tax cuts for the rich.
Lawrence, K., & Keleher, T. (2004). Chronic Disparity: Strong and Pervasive Evidence of Racial Inequalities. Retrieved 2020, from https://www.racialequitytools.org/resourcefiles/Definitions-of Racism.pdf
Linette Lopez, The White House is only telling you half of the sad story of what happened to American jobs, Business Insider, Jul 25, 2017, https://www.businessinsider.com/what-happened-to-american-jobs-in-the-80s-2017-
William Lazonick, The Financialization of the U.S. Corporation: What Has Been Lost, and How It Can Be Regained, 36 SEATTLE U. L. REV. 857 (2013). The Financialization of the U.S. Corporation: What Has Been Lost, and How It Can Be Regained (seattleu.edu) https://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?article=2158&=&context=sulr&=&sei-redir=1&referer=https%3A%2F%2Fscholar.google.com%2Fscholar%3Fhl%3Den%26as_sdt%3D0%252C44%26q%3Dwilliam%2Blazonick%2B2013%2Bthe%2Bfinancialization%2Bof%2Bthe%2Bu.s.%2Bcorporation%26btnG%3D
Government Spends More on Corporate Welfare Subsidies than Social Welfare Programs, Welfare Statistics: Government Spends More on Corporate Welfare Than.., original source, Time Magazine, Vol. 152 No. 19
Donald L. Barlett and James B. Steele, Corporate Welfare: Corporate Welfare, Time Magazine, Vol. 152 No. 19, Nov. 09, 1998, Corporate Welfare: Corporate Welfare
Stephen Slivinski, The Corporate Welfare State:How the Federal Government Subsidizes U.S. Businesses, Policy Analysis, No. 592, May 14, 2007, https://www.cato.org/sites/cato.org/files/pubs/pdf/pa592.pdf
Robert Reich, The Corporate Welfare During Covid-19 Pandemic Is Morally Repugnant, Wednesday, April 22, 2020, Opinion | The Corporate Welfare During Covid-19 Pandemic Is Morally Repugnant
Rob Borrow, Welfare Inequality: The Rise of Corporate Welfare, October 9, 2020, Welfare Inequality: The Rise of Corporate Welfare
Have you ever owned your own business, Init? If you had you'd know that you hire others so you can have a life. Just saying...If every single person owned their own business the nation would be stronger. You don't grow a business by hiring others.
I believe you need to try again. Yes, the tax system in the United States is regressive in the sense that the ultra-wealthy pay a lower percentage of their income in taxes than the moderately wealthy, and in some cases, even the middle class. John Kerry and Mitt Romney consistently have paid a lower percentage of their income in taxes than say, Biden or Obama. While Obama and Biden might be millionaires, both Kerry and Romney are worth more than a "unit". Of course, you don't know how much a "unit" is, which reveals how uneducated you are concerning this issue.
And yes, trickle down is based on a Macroeconomic fallacy called "supply side". Supply side is based on Say's Law, which simply put means, "supply creates its own demand". Consumption plus investment equals aggregate demand, or so the theory holds. Here is a great explanation as to why that is not always true,
The fallacy of Say’s Law is revealed by Keynes’s division of aggregate demand into investment and consumption for purposes of income analysis (Y = C + I). Keynes points out that the factors which determine consumption are quite different from the factors determining investment but together they constitute the aggregate demand and determine the level of income. Consumption is a function of current income, but it does not increase as much as the increase in income.
Investment, on the other hand, depends upon technological developments and the marginal efficiency of capital. It is, therefore, clear that the determinants of consumption and the determinants of investments are not interconnected in such a way as to ensure adequate aggregate demand.
11 Criticisms Against the Say’s Law of Market
Read this article to discover the eleven major criticisms against the Say’s Law of market. 1. Possibilities of Deficiency of Effective Demand: It is assumed in Say's Law that whatever is earned is spent either on consumption goods or on investment goods, thus, income is automatically spent at a...www.economicsdiscussion.net
The problem here is "savings". Savings are not investments, a clear example is the stock market. When you purchase a stock on the exchange you are not investing, you are saving. You are purchasing a certificate that you plan to sell, in the future, at a profit. No company is getting any capital to invest. Now, if you buy a lawnmower, trailer, and pick-up to start a lawn mowing business, you are investing. Investing can create demand, but savings can stifle demand. So, aggregate demand is equal to Consumption plus investment MINUS savings. That savings is the fallacy in "trickle down" economics. And that savings has led to the obscene expansion in the wealth held by the ultra-wealthy. It is locked up in paper wealth, stocks, treasuries, hell, even art and baseball cards.
Every publicly traded company should buy their stock back.If every single person owned their own business the nation would be stronger. You don't grow a business by hiring others.
In the rental real estate business if you hire a management company to do the work they will take all the profits.Have you ever owned your own business, Init? If you had you'd know that you hire others so you can have a life. Just saying...
I've owned rental property for quite some time, Woodnutz and made quite a bit of money from doing so. If your property management company is taking "all" of the profits then you've gone with the wrong company!In the rental real estate business if you hire a management company to do the work they will take all the profits.
Reagan started it. He set record deficits.
G.W. Bush tried it. He set new records for deficits.
Trump tried it again. He set new records for deficits.
Jobs have never been created due to tax cuts for the rich.
Lawrence, K., & Keleher, T. (2004). Chronic Disparity: Strong and Pervasive Evidence of Racial Inequalities. Retrieved 2020, from https://www.racialequitytools.org/resourcefiles/Definitions-of Racism.pdf
Linette Lopez, The White House is only telling you half of the sad story of what happened to American jobs, Business Insider, Jul 25, 2017, https://www.businessinsider.com/what-happened-to-american-jobs-in-the-80s-2017-
William Lazonick, The Financialization of the U.S. Corporation: What Has Been Lost, and How It Can Be Regained, 36 SEATTLE U. L. REV. 857 (2013). The Financialization of the U.S. Corporation: What Has Been Lost, and How It Can Be Regained (seattleu.edu) https://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?article=2158&=&context=sulr&=&sei-redir=1&referer=https%3A%2F%2Fscholar.google.com%2Fscholar%3Fhl%3Den%26as_sdt%3D0%252C44%26q%3Dwilliam%2Blazonick%2B2013%2Bthe%2Bfinancialization%2Bof%2Bthe%2Bu.s.%2Bcorporation%26btnG%3D
Government Spends More on Corporate Welfare Subsidies than Social Welfare Programs, Welfare Statistics: Government Spends More on Corporate Welfare Than.., original source, Time Magazine, Vol. 152 No. 19
Donald L. Barlett and James B. Steele, Corporate Welfare: Corporate Welfare, Time Magazine, Vol. 152 No. 19, Nov. 09, 1998, Corporate Welfare: Corporate Welfare
Stephen Slivinski, The Corporate Welfare State:How the Federal Government Subsidizes U.S. Businesses, Policy Analysis, No. 592, May 14, 2007, https://www.cato.org/sites/cato.org/files/pubs/pdf/pa592.pdf
Robert Reich, The Corporate Welfare During Covid-19 Pandemic Is Morally Repugnant, Wednesday, April 22, 2020, Opinion | The Corporate Welfare During Covid-19 Pandemic Is Morally Repugnant
Rob Borrow, Welfare Inequality: The Rise of Corporate Welfare, October 9, 2020, Welfare Inequality: The Rise of Corporate Welfare
That is easy, and was already explained. I will try again. First, the government spends every single penny that it takes in, we can all agree with that. But, when taxes are cut, depending on whose taxes you cut, not all the money is spent or invested, some is saved, and therein lies the drag.Explain how tax cuts are a drag on an economy, Winston?
Savings accounts are investments that earn interest.That is easy, and was already explained. I will try again. First, the government spends every single penny that it takes in, we can all agree with that. But, when taxes are cut, depending on whose taxes you cut, not all the money is spent or invested, some is saved, and therein lies the drag.
The entire theory of "trickle down" or as I prefer, "horse and sparrow", is that the savings from tax cuts directed at the wealthy will be invested. While there may be some investing going on, most of it is saved. What is certain is that the amount of the tax cut exceeds the total increase in aggregate demand and total investment. That difference, when expressed as a percentage, is called the Marginal Propensity to Save, MPS when plugged in to a Macroeconomic model. If that number exceeds the enhanced productivity from generated investment it actually contracts the frontier curve.
Let's put forth an example. After almost every tax cut directed at the wealthy the stock market rises. Purchasing stock is not investing in real economic terms, it is saving. And as the market rises it displaces an ever larger amount of dollars, locked up in the market instead of turning the wheels of the economy. This also has a number, market cap to GDP ratio, sometimes called the Buffet indicator after Warren Buffet.
That is easy, and was already explained. I will try again. First, the government spends every single penny that it takes in, we can all agree with that. But, when taxes are cut, depending on whose taxes you cut, not all the money is spent or invested, some is saved, and therein lies the drag.
The entire theory of "trickle down" or as I prefer, "horse and sparrow", is that the savings from tax cuts directed at the wealthy will be invested. While there may be some investing going on, most of it is saved. What is certain is that the amount of the tax cut exceeds the total increase in aggregate demand and total investment. That difference, when expressed as a percentage, is called the Marginal Propensity to Save, MPS when plugged in to a Macroeconomic model. If that number exceeds the enhanced productivity from generated investment it actually contracts the frontier curve.
Let's put forth an example. After almost every tax cut directed at the wealthy the stock market rises. Purchasing stock is not investing in real economic terms, it is saving. And as the market rises it displaces an ever larger amount of dollars, locked up in the market instead of turning the wheels of the economy. This also has a number, market cap to GDP ratio, sometimes called the Buffet indicator after Warren Buffet.
No, we need to tax the savers more so we can invest the money and grow the economy, du huh.First, the government spends every single penny that it takes in, we can all agree with that. But, when taxes are cut, depending on whose taxes you cut, not all the money is spent or invested, some is saved, and therein lies the drag.
Exactly!
That's why we need to give all our savings to the government, so they can spend it.
It's the best way to grow the economy........durr
No, we need to tax the savers more so we can invest the money and grow the economy, du huh.
A wealth tax would help alleviate the disparity of wealth in this country. Both Warren and Sanders have put forth proposals. 8% tax on wealth over ten billion dollars is the highest proposed amount, and it seems a fair price to pay. The past forty years have proven, that 8% would be better spent by the government than in the hands of those billionaires. The value of "stores of wealth", rather it be Yu Gi Oh cards or modern art, have skyrocketed. Tell me, where is a dollar better for the economy, purchasing a Yu Gi Oh card or buying grandmother's insulin?Exactly!
100% tax on savings.....for the children!
The government is much better at spending money for my kids than I am.
A wealth tax would help alleviate the disparity of wealth in this country. Both Warren and Sanders have put forth proposals. 8% tax on wealth over ten billion dollars is the highest proposed amount, and it seems a fair price to pay. The past forty years have proven, that 8% would be better spent by the government than in the hands of those billionaires. The value of "stores of wealth", rather it be Yu Gi Oh cards or modern art, have skyrocketed. Tell me, where is a dollar better for the economy, purchasing a Yu Gi Oh card or buying grandmother's insulin?
A wealth tax would help alleviate the disparity of wealth in this country. Both Warren and Sanders have put forth proposals. 8% tax on wealth over ten billion dollars is the highest proposed amount, and it seems a fair price to pay. The past forty years have proven, that 8% would be better spent by the government than in the hands of those billionaires. The value of "stores of wealth", rather it be Yu Gi Oh cards or modern art, have skyrocketed. Tell me, where is a dollar better for the economy, purchasing a Yu Gi Oh card or buying grandmother's insulin?
That is easy, and was already explained. I will try again. First, the government spends every single penny that it takes in, we can all agree with that. But, when taxes are cut, depending on whose taxes you cut, not all the money is spent or invested, some is saved, and therein lies the drag.
The entire theory of "trickle down" or as I prefer, "horse and sparrow", is that the savings from tax cuts directed at the wealthy will be invested. While there may be some investing going on, most of it is saved. What is certain is that the amount of the tax cut exceeds the total increase in aggregate demand and total investment. That difference, when expressed as a percentage, is called the Marginal Propensity to Save, MPS when plugged in to a Macroeconomic model. If that number exceeds the enhanced productivity from generated investment it actually contracts the frontier curve.
Let's put forth an example. After almost every tax cut directed at the wealthy the stock market rises. Purchasing stock is not investing in real economic terms, it is saving. And as the market rises it displaces an ever larger amount of dollars, locked up in the market instead of turning the wheels of the economy. This also has a number, market cap to GDP ratio, sometimes called the Buffet indicator after Warren Buffet.
Wow...I'm not even sure where to start with that, Winston! First of all Government spends money whether it takes it in as tax revenues or simply prints it. Secondly when liberals try and tax the wealthy the wealthy's time tested response is to put their money into tax shelters instead of investing it in businesses. If you want to see the result of your type of misguided fiscal policy look no further then when New Jersey enacted a "millionaires tax"!That is easy, and was already explained. I will try again. First, the government spends every single penny that it takes in, we can all agree with that. But, when taxes are cut, depending on whose taxes you cut, not all the money is spent or invested, some is saved, and therein lies the drag.
The entire theory of "trickle down" or as I prefer, "horse and sparrow", is that the savings from tax cuts directed at the wealthy will be invested. While there may be some investing going on, most of it is saved. What is certain is that the amount of the tax cut exceeds the total increase in aggregate demand and total investment. That difference, when expressed as a percentage, is called the Marginal Propensity to Save, MPS when plugged in to a Macroeconomic model. If that number exceeds the enhanced productivity from generated investment it actually contracts the frontier curve.
Let's put forth an example. After almost every tax cut directed at the wealthy the stock market rises. Purchasing stock is not investing in real economic terms, it is saving. And as the market rises it displaces an ever larger amount of dollars, locked up in the market instead of turning the wheels of the economy. This also has a number, market cap to GDP ratio, sometimes called the Buffet indicator after Warren Buffet.
