How is austerity doing in Europe

[EdwardBaiamonte]

His goal was for the tax cuts to stimulate demand and kick start the economy from the bottom up.

He cut tax rates for supply-side reasons, but used Keynesian arguments to sell them.

if supply side tax cuts are bottom then you are right, but then you are never right as I recall.

Supply side cuts:The Office of Tax Analysis of the United States Department of the Treasury summarized the tax changes as follows:[2]

reduced top marginal rate from 91% to 70%
reduced corporate tax rate from 52% to 48%
phased-in acceleration of corporate estimated tax payments (through 1970)
created minimum standard deduction of $300 + $100/exemption (total $1,000 max)

 

[Kimura]

His goal was for the tax cuts to stimulate demand and kick start the economy from the bottom up.

He cut tax rates for supply-side reasons, but used Keynesian arguments to sell them.

No, it wasn't. His chief economic advisers were Arthur Okun and Walter Heller, so I suggest you adjust your talking points.

if supply side tax cuts are bottom then you are right, but then you are never right as I recall.

The Revenue Act of 1964 was demand-side. JFK also advocated increased spending, but it was politically untenable at the time.

Supply side cuts:The Office of Tax Analysis of the United States Department of the Treasury summarized the tax changes as follows:[2]

reduced top marginal rate from 91% to 70%
reduced corporate tax rate from 52% to 48%
phased-in acceleration of corporate estimated tax payments (through 1970)
created minimum standard deduction of $300 + $100/exemption (total $1,000 max)

And, what's your point? Taxes regulate aggregate demand (total net spending). If the economy is sluggish, tax cuts will help to warm it up.

 

[Kimura]

Yup. I know of no time in history when cutting spending during a bad economy has had a good impact on that economy.

it can only have a good impact because the government does not invent new products and improve the economy. That's done by the private sector so the more they spend the better and the less the gvernment spends the better.

I want you to answer a question:

What's the economy?

 

[Rshermr]

The thing is, many of the cons are stuck on hatred of the concept of tax increases. Kennedy/Johnson achieved a tax decrease at a time of pretty good unemployment numbers. The ue rate when the tax cut went into effect was 5.4%, and the rate fell to 5% by years end.
Historical Unemployment Rates in the United States

So, the whole issue for the cons is a simple one factor argument. Raising taxes is bad, according to them. I would suggest that it is hard to find a time when the ue rate was high, and lowering tax rates made any substantial difference. And I continue to believe that raising taxes to provide revenue for increased gov stimulus spending is a good deal. There is no way, with the current political situation, that you can realistically raise taxes, so we have seen the current recovery slowly move us toward a better economy, with insufficient stimulus spending. Too much of the this administrations stimulus was in the form of tax decreases, which had, according to the CBO, little effect on the ue rate. And, again, according to the cbo, unemployment was the least affected by tax cuts that went to the wealthy.

 

[itfitzme]

I'm still looking for the presentation that explain why the economy should remain at a higher level after the effect has dampened out. *

We already know that the tax multiplier is typically less than the spending multiplier. *We know that they are both transient responces. *We know that the multuplier values depend on the condition of other factors. *That's all fine and there is plenty of empirical evidence that supports the theory. *There are a number of published papers that can be found at the Federal Reserve, IMF, and World Bank. *(Mine got lost on a now defunct hard drive) And, depending on tbe state of the economy, they go from negative to positive.

It doesn't take much consideration to get that the steady state response to taxes is nothing. *It is net income that affects prices.*

Then only hole in my understanding is why the economy should stay up, once the stimulus is removed. Suppose GDP is 100k and a spending stimulus of 1k is applied. *With the spending multiplier at 1.5, GDP goes up to 101.5k. *Now, the spending is stopped. *The GDP should return to 100k.

There are two ways around this. *The first is to remove the spending at a rate slower than the transient response. *The second is to not remove it at all, just let the economy grow into that spendimg level. *That is let real outlays per capita return to the previous level by leaving nominal spending the same and let poulation and CPI catch up.

 

[itfitzme]

I'd like to see all economic data published in real dollars per capita. *Depending on the
purpose, per capita can be per employment level or per total population. *Even government outlays and reciepts only make sense in real dollars per capita.

I have to question why real dollar outlays per capita shows a steady increase. *There can be a rational reason, but nothing I've seen even get's last the "We must end taxation" thing.

Outlays and taxes also should be viewed by splitting out the self funded programs. OASDI, Medicare Part A, B, C, and D, along with DI are not comingled with other revenues and outlays. They can and should be examined seperately.

I found FYONET in the Federal Reserve data for graphing. *I remain unclear as to exactly what it is. *It is, though, the one online data that can be presented in terms of real dollar per capita federal expenditures.

Never the less, lacking anything better, real dollar net fiscal outlays per capita looks like this.

Look at the early trend, project it, and compare that to where it ended up.

What concerns me is that the reason it goes up is because it must, given everything else, AND no*one in Congress has a clue. *Everytime that a Congress and President lower the tax rate to improve the economy, they shortly follow it with increasing outlays. *Reagan did it. Bush II did it. *

Bush I and Clinton were the only ones that didn't. And then Bush II *came in after and had to return it to the long turn trend line. *

For all the whining, promises, and attempt, the thing goes in one long run direction. *In my experience, people often think they are doing one thing while they are [b[really[/b] doing something else.

It reminds me of tuning older carburetors. *They have an air screw, a fuel screw, and a throttle set point. By the time some people get done, the air and fuel screws end up cranked all the way out with the throttle screw all the way in. *Good job!!

So sixty years of fiscal and monetary policy has taxes way down, spending way up, and the M2 money supply at four to five times that of M1 while the average worker has little savings and the median income is half the average.

Something just feels like a really bad job of balancing the fuel mixture.

 

[Rshermr]

If you look at the economy that we are living with, and did not pay attention to anything but gnp and growth in general, we would look like we are in a really great situation. And, if you are among the top earners, that would be true. The problem that we have is one of income distribution. The middle class in particular, is decreasing as a percentage, while the percentage below poverty are increasing. The increases in income growth has been great over the past 20 years or so, but that growth is going to the upper 1% of income earners:

Top 1% Got 93% of Income Growth as Rich-Poor Gap Widened - Bloomberg

So, by decreasing tax rates for the wealthy, and continuing to see that demographic get larger and larger pieces of the pie, you have an end game, all else being kept the same, that makes for ONE very wealthy person, and a lot of very poor. So, in this hypothetical situation, if GNP is just a little better than it is today, the conservative view seems to say "good for the guy who got it all, and let the rest live as a subsistence level".

So, to me, I have to key in on the ue level. It is the only way we can see things improve, under the current political situation. And that, in my estimation, requires stimulus spending.

 

[itfitzme]

Well, this is GINI

1 is maximum inequality and zero is perfect equality.

My contension is there is a sweet spot between zero and one that allows for the best growth.

I have no idea how to quantify it. I have no real quantification sense of Gini. That generally has required being forced to under threat of a test grade. That college education process is pretty incredible. I've seldom been able to replicate it alone. Never for a sustained period of time.

 

[Rshermr]

Well, this is GINI

1 is maximum inequality and zero is perfect equality.

My contension is there is a sweet spot between zero and one that allows for the best growth.

I have no idea how to quantify it. I have no real quantification sense of Gini. That generally has required being forced to under threat of a test grade. That college education process is pretty incredible. I've seldom been able to replicate it alone. Never for a sustained period of time.

I'd put money on that!!!!!!!!!!!!!!!!!!!!!!!!!1

 

[itfitzme]

So here is a 2012 IMF study of fiscal multipliers vs various countries and varying economic conditions. *Not surprisingly, multipliers are larger during recessions than expansions.

Spending multipliers range from 0 to 2.1, with a mean of 0.8. *Revenue multipliers range from -1.5 to 1.4 with a mean of 0.3.

The spending multiplier near 2 is a typical estimate for recessions.

The authors express surprise that few studies focus on distinguishing between downturns and expansions for multipliers. *I agree. It seems obvious and an issue that would easily result in no findings if expansions cancel downturns.

http://www.imf.org/external/pubs/ft/wp/2012/wp12286.pdf

 

[itfitzme]

Here is a paper on Gini and growth.

http://wesscholar.wesleyan.edu/cgi/...n&client=safari#search="gini economic growth"

It explores state by state growth under Gini and other measures. *The paper presents findings of examination of political control vs growth.

 

[EdwardBaiamonte]

My contension is there is a sweet spot between zero and one that allows for the best growth.

but as a liberal you will lack the IQ to have a contention?? China has many new billionaires, and many millions working for high wages in the major cities, and still many many millions still living at substance back on the farms. This diversity is a sign of growth. When everyone was still on the farms they had communist equality and no growth. So much for your Gini liberal BS.

 

[Rshermr]

Here is a paper on Gini and growth.

http://wesscholar.wesleyan.edu/cgi/...n&client=safari#search="gini economic growth"

It explores state by state growth under Gini and other measures. *The paper presents findings of examination of political control vs growth.

Perhaps, in order for some of the mentally challenged reading this thread, we should not use actual concepts backed by studies. Understanding the concepts of Gini, for instance, requires at least a fourth grade education, or equivalent. Those with the mental capacity of a toad will have difficulties.

 

[itfitzme]

My contension is there is a sweet spot between zero and one that allows for the best growth.

but as a liberal you will lack the IQ to have a contention?? China has many new billionaires, and many millions working for high wages in the major cities, and still many many millions still living at substance back on the farms. This diversity is a sign of growth. When everyone was still on the farms they had communist equality and no growth. So much for your Gini liberal BS.

So how you doing on;

Cournot ologopolies of m firms?

when capitalism first began to be undermined?

A historic example of a nation that was predominately seperate capitalism and gov't.

Name the time when cutting spending during a bad economy had a good effect on that economy?

We're all still waiting. Last I checked, China is still a socialist government and a predominantly socialist economy. So there goes your pure capitalism theory down the tubes.

Got a better example of pure capitalism, or are you still all about strawman arguements?

BTW, what exactly is you IQ and how's that econ 101 class coming? Surely you've completed it by now.

 

[EdwardBaiamonte]

Last I checked, China is still a socialist government and a predominantly socialist economy.

so you're now saying the the vast inequality is caused by socialism, or don't you know, as a liberal, what you are saying??

So there goes your pure capitalism theory down the tubes.

if I had a pure capitalism theory I'll pay you 10,000. Bet or run away with you liberal strawman between your legs.?

 

[EdwardBaiamonte]

Name the time when cutting spending during a bad economy had a good effect on that economy?

dear,

1) why not name the times when we cut spending meaningfully while spending at all levels of government has always been increasing?? Slow??

2) of course government spending cuts help an economy because government does not invent new products. We got from the stone age to here thanks to private sector growth. The last thing you want to do in bad times is cripple the engine of growth.

3) A similar jeremiad was heard in 1943 when economist Paul Samuelson, whose Keynesian assumptions have trickled down to Obama, said postwar cuts in government would mean “the greatest period of unemployment and industrial dislocation which any economy has ever faced.”

Federal spending did indeed shrink an enormous 40 percent in one year. And the economy boomed.

No need to feel slow, you're a liberal and its natural.

 

[itfitzme]

Same thing, different day. IQ, liberal.... Econ 101, Cornnut ologopoly.. Blah blah blah .zzzzz

And all I gotta see is "This message is hidden because EdwardBaiamonte is on your ignore list." because it's the same old same old. Boring

 

[Rshermr]

Same thing, different day. IQ, liberal.... Econ 101, Cornnut ologopoly.. Blah blah blah .zzzzz

And all I gotta see is "This message is hidden because EdwardBaiamonte is on your ignore list." because it's the same old same old. Boring

Ed is paid to post. He has no other job. Just a drain on the economy. He simply posts his dogma, bores the hell out of people, and kills threads he does not like. Con Troll, And he still can not name a time when cutting income taxes across the board and cutting spending ever helped a bad economy. Totally beyond him.

 

[itfitzme]

This paper presents the case that declining middle income levels are associated with top income earner gains.

http://www.federalreserve.gov/pubs/feds/2012/201276/201276pap.pdf

This paper makes the case that income inequality and Republican control are associated with lower economic growth.

http://wesscholar.wesleyan.edu/cgi/...n&client=safari#search="gini economic growth"

Put them together and what have you got, bipity bopity boo.

 

[itfitzme]

Same thing, different day. IQ, liberal.... Econ 101, Cornnut ologopoly.. Blah blah blah .zzzzz

And all I gotta see is "This message is hidden because EdwardBaiamonte is on your ignore list." because it's the same old same old. Boring

Ed is paid to post. He has no other job. Just a drain on the economy. He simply posts his dogma, bores the hell out of people, and kills threads he does not like. Con Troll, And he still can not name a time when cutting income taxes across the board and cutting spending ever helped a bad economy. Totally beyond him.

I'll happily post bs for a buck. How do I sign up?