Paul Krugman slams Art Laffer & Ayn Rand-type economics

[Toro]

Also

Dubya's Double Dip?
By PAUL KRUGMAN
Published: August 02, 2002 ...

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Yeah, that worked out really well, didn't it.

Outstanding.

 

[Dorkazoid_Jones]

Paul Krugman won the Nobel Prize for Economics in 2008. He teaches economics at Princeton and writes a column for The New York Times. I am confident that he could wipe the floor with any right wing economist. Keep in mind that right wing economists like Arthur Laffer and Milton Friedman promoted the scam of supply side economics.

The countries that have responded best to the Great Recession are the Scandinavian countries, Germany, Canada, Australia, and New Zealand. They have higher taxes than the United States and single payer health plans.

Tax Tea Party Time? - Forbes

Krugman would win a debate with a right winger? Really? Ok, explain this basic irrational thought by him. If you raise income taxes, then consumers have fewer dollars to spend and that slows down business. If you raise corporate taxes, that reduces profits and slows down hiring. Yet that's what Krugman advocates to speed up the economy thru more government spending which will raise taxes. Care to explain that irrational position???

That is not irrational at all. Raising income taxes reduces disposable income, which, if you understand the multiplier effect, ultimately decreases real investment spending. Raising corporate taxes decreases real and financial business investment capital (aka profits), which rationally perpetuates businesses to decrease real wages, or, more practically, discourage hiring and encourage layoffs. Increased government spending, however, increases consumption and real investment spending, thereby increasing aggregate demand, decreasing unemployment, and increasing real GDP. Increased government spending does not require raising taxes, especially since raising taxes is a discretionary fiscal policy, and is therefore an ad hoc policy. Paul Krugman believes in increasing tax rates on the wealthy primarily as a means of ensuring public finance equity, but also because he empirically understands that the wealthy have a higher marginal propensity to save, and a lower marginal propensity to consume, meaning they contribute less to the success of an economic recovery that people in the middle or lower classes. I disagree with Krugman's approach on objective grounds, arguing that moral desires, such as equity, should not trump adherence to proper and completely effective fiscal stabilization policy.

Nonsequitor. You cannot raise government spending unless you have some way to pay for it. In the long run, taxes must be raised to pay for increased government spending. When taxes are increased business activity decreases. Government doesn't have any money on its own, it takes it from consumers and business. Therefore, saying that government creates business demand when it actually takes money out of the business cycle is like saying the alarm clock causes the sunrise. You have your cause and effect reversed...

 

[Toro]

Haring, Coolidge, Kennedy and Reagan cut taxes and the US economy flourished.

FDR and Obama raised taxes, the economy sucked.

It's not that hard, people

Clinton raised taxes. The economy boomed.

 

[Toro]

The Laffer Curve!!!!!!!!

Does anyone know how Laffer came up with this idea? In a bar, allegedly, he draws a graph on a napkin and demonstrates that if you cut taxes it increases revenue for the government, thus improving the economy. This sounds Keynesian, right? That’s because Art Laffer borrowed the idea from JM Keynes. Tax cuts are the fiscal equivalent of spending increases and support overall aggregate demand. You’ll never hear this from Kudlow or any of the other douches over at CNBC.

I agree.

Supply-side economics is Keynesianism in drag.

 

[Toro]

If we look at the data between 1970 and 2007, real hourly wages in the United States increased by roughly 4% over a thirty-six year time period. During the same time period, productivity has increased - or doubled - by like 99%. The average American worker's productivity increased twenty-five times more than his/her pay. As productivity increases, it doesn't necessarily benefit everyone. The pie gets larger, but not everyone is a beneficiary of these gains. I'm simply pointing out that we've had increased productivity and stagnant wages for the better part of thirty years.

I do agree that compensation has not kept up with productivity, and much of that gain has been captured by the owners of capital.

However, wages are only a portion of total compensation and shouldn't be used in isolation as a comparison. Total compensation has risen faster if you include all compensation, such as healthcare insurance, which has grown faster than the economy.

 

[AmazonTania]

Incomes have risen if you also include transfer payments.

 

[Dot Com]

wheres CrusaderFrank?!!!

Wheres CrusaderFrank57?

Haring, Coolidge, Kennedy and Reagan cut taxes and the US economy flourished.

FDR and Obama raised taxes, the economy sucked.

It's not that hard, people

you finally showed up. Wassamatta? You don't like Krugman?

 

[Dot Com]

The Laffer Curve!!!!!!!!

Does anyone know how Laffer came up with this idea? In a bar, allegedly, he draws a graph on a napkin and demonstrates that if you cut taxes it increases revenue for the government, thus improving the economy. This sounds Keynesian, right? That’s because Art Laffer borrowed the idea from JM Keynes. Tax cuts are the fiscal equivalent of spending increases and support overall aggregate demand. You’ll never hear this from Kudlow or any of the other douches over at CNBC. It seems as if the reactionaries are only interested in increasing income for corporations, owners of capital and extremely high earners.

In retrospect, if we look at the entire supply side era, it was a disaster. The effects were unevenly distributed throughout the economy. Wage earners really had a rough time. If we look at the numbers, real incomes decreased for wage earners in the 1980s, and they continue to decline, or fail to keep pace, under our retarded macroeconomic policies. Logically, if these supply-side policies were successful then workers would see an increase in real income. It never happened.

If we look at total business doing the 1980s, it hovered at around 10% of GDP, even with the Reagan tax cuts. However, business investments went from 4% of GDP to 8% of GDP in the 1970s – a 100% an increase. This doubling occurred even with all our satanic unions. The Obama Administration has business investments at around 15% of GDP, even after all the stimulus spending and large scale asset purchases. Supply-side is a failure.

pos-repped & friends request sent

The Laffer Curve!!!!!!!!

Does anyone know how Laffer came up with this idea? In a bar, allegedly, he draws a graph on a napkin and demonstrates that if you cut taxes it increases revenue for the government, thus improving the economy. This sounds Keynesian, right? That’s because Art Laffer borrowed the idea from JM Keynes. Tax cuts are the fiscal equivalent of spending increases and support overall aggregate demand. You’ll never hear this from Kudlow or any of the other douches over at CNBC. It seems as if the reactionaries are only interested in increasing income for corporations, owners of capital and extremely high earners.

In retrospect, if we look at the entire supply side era, it was a disaster. The effects were unevenly distributed throughout the economy. Wage earners really had a rough time. If we look at the numbers, real incomes decreased for wage earners in the 1980s, and they continue to decline, or fail to keep pace, under our retarded macroeconomic policies. Logically, if these supply-side policies were successful then workers would see an increase in real income. It never happened.

If we look at total business doing the 1980s, it hovered at around 10% of GDP, even with the Reagan tax cuts. However, business investments went from 4% of GDP to 8% of GDP in the 1970s – a 100% an increase. This doubling occurred even with all our satanic unions. The Obama Administration has business investments at around 15% of GDP, even after all the stimulus spending and large scale asset purchases. Supply-side is a failure.

I've mostly ignore your bullshit because it's physically painful to read, but do you see evidence that wage earners are doing better 5 years into Obama than the same time in the Reagan presidency?

The thread is about Art Laughable. Real wages have been stagnant since Nixon entered the White House. What's your point? I've been very critical of this administration's fiscal policy.

^ THAT!!! Well Frank57?

 

[Dot Com]

Haring, Coolidge, Kennedy and Reagan cut taxes and the US economy flourished.

FDR and Obama raised taxes, the economy sucked.

It's not that hard, people

Clinton raised taxes. The economy boomed.

exactly. Krugman noted that in the debate.

 

[CrusaderFrank]

Haring, Coolidge, Kennedy and Reagan cut taxes and the US economy flourished.

FDR and Obama raised taxes, the economy sucked.

It's not that hard, people

Clinton raised taxes. The economy boomed.

Raising taxes built out the Internet?

Wow

The things I learn at USMB

 

[AmazonTania]

Haring, Coolidge, Kennedy and Reagan cut taxes and the US economy flourished.

FDR and Obama raised taxes, the economy sucked.

It's not that hard, people

Clinton raised taxes. The economy boomed.

exactly. Krugman noted that in the debate.

The economy boomed because of an asset bubble. Any claims to the contrary is intellectual dishonesty.

 

[Dot Com]

heres what Krugman did in the debate (I watched it). He's the one on the Left :

​

 

[AmazonTania]

So he beat down a couple intellectually lightweights? Excuse me while I neglect to find this impressive...

 

[Dot Com]

heres where George slam dunked Newt & Laffer w/ this grapic.

The top graph is the actual wealth distribution
the middle graph is what people think the distribution is
the bottom graph is the distribution that people would prefer in an ideal society

 

[Dot Com]

Art Laffer is a small, non-threatening, squirelly-looking fellow. Quite nice actually BUT Paul Krugman ripped his head off in this debate Librals won this one.

 

[AmazonTania]

Topics such as wealth inequality is generally misunderstood by most. overall wealth disparity historically has not changed. In fact, there is a very easy way for anyone in the Bottom 99% to make it among the Top 1%.

 

[AmazonTania]

Art Laffer is a small, non-threatening, squirelly-looking fellow. Quite nice actually BUT Paul Krugman ripped his head off in this debate Librals won this one.

That's nice. Everyone gets at least one.

 

[Kimura]

Haring, Coolidge, Kennedy and Reagan cut taxes and the US economy flourished.

FDR and Obama raised taxes, the economy sucked.

It's not that hard, people

Clinton raised taxes. The economy boomed.

Toro,

I tend to view it differently.

The second Clinton Administration had some good growth, low inflation, and low unemployment. However, with that being said, the CBO was forecasting like 15 years of government surpluses in their models which was sort of insane. In order for the government to run surpluses for 15 or more years, the domestic private sector would have to run deficits for thee same amount of time. The private sector can't function properly in spending more than its income year after year. The economy will inevitably enter a phase of contraction, causing the private sector to economize, and the government sector will shift back into a deficit.

If we analyze the Clinton surplus, we still had high interest rates, and the surplus didn't provide a cushion against the crash which resulted. This surplus is what caused the private sector to incur huge debt loads to finance consumption. We also had an increase in the trade deficit which meant that the only other sector which could compensate was private consumption. This helped to create the dotcom bubble and housing bubble. I should also mention that household savings disappeared under Clinton, too.

We should count our blessings we only suffered a recession at the beginning of the 21st century. It could have been terrible. History tells us anytime there is a large decrease in debt, it's followed by a depression. We need to look no further than 1819, 1837, 1857, 1893 and 1929 as examples.

My two cents worth ....

 

[oldfart]

Topics such as wealth inequality is generally misunderstood by most. overall wealth disparity historically has not changed. In fact, there is a very easy way for anyone in the Bottom 99% to make it among the Top 1%.

I assume that like you don't believe inflation statistics, you don't believe in published measures of income inequality?

 

[AmazonTania]

Topics such as wealth inequality is generally misunderstood by most. overall wealth disparity historically has not changed. In fact, there is a very easy way for anyone in the Bottom 99% to make it among the Top 1%.

I assume that like you don't believe inflation statistics, you don't believe in published measures of income inequality?

Incorrect. I find zero fault in how income inequality is measured. I just believe that the entire concept is misunderstood and blown out of proportion. At least, in the United States.

As I have said before, there is a very easy way for one who is not in the Top 1% to become a member of the Top 1%.